Initial Environmental Examination Mongolia: Sustainable Tourism

Initial Environmental Examination

Project Number: 51422-002 May 2021

Mongolia: Sustainable Tourism Development Project (Phase 2)

Prepared by the Ministry of Environment and Tourism of Mongolia for the Asian Development Bank.

CURRENCY EQUIVALENTS (as of 20 May 2021)

Currency unit – togrog (MNT) MNT1.00 = $0.00035 $1.00 = MNT2,820.00

ABBREVIATIONS ADB – Asian Development Bank KNNP – Charges nuur national park Aimag and Soum Centers Regional ASDIP – KUNNP – Khar Us Nuur National Park Development Investment Program ATBNP – Altai Tavan Bogd National Park MET – Ministry of Environment and Tourism COVID-19 – coronavirus disease MNS – Mongolian national standard CPP – consultation and participation plan NP – National Park CSC – Construction supervision company O&M – operation and maintenance Petroglyphic Complexes of the Mongolian CSO – civil society organization PCMA – Altai DEIA – Detailed Environmental Impact Assessment PIU – Project Implementation Unit DPAM – Department of Protected Area Management PPE – personal protection equipment DTPC – Department of Tourism Policy Coordination PSC – project steering committee EBA – Environmental Baseline Assessment RANCC – Rock Art and Nomadic Culture Center EHS – Environmental, Health and Safety SCS – Stakeholder communication strategy EIA – Environmental Impact Assessment SPS – Safeguard Policy Statement EMP – Environmental Management Plan TDS – Total Dissolved Solids GEIA – General Environmental Impact Assessment TOR – Terms of Reference GRM – Grievance Redress Mechanism TSC – Tsenkher Cave IEE – Initial Environmental Examination UVSPA – Uvs Nuur Strictly Protected Area JFPR – Japan Fund for Poverty Reduction UVTC – Uvs Tourism Complex KKNP – Khan Khukhii National Park

WEIGHTS AND MEASURES °C degree Centigrade m3 cubic meter g or gm Gram m3/d cubic meters per day h Hour m3/s cubic meters per second ha hectare mg milligram km kilometer mg/l milligrams per liter Km² square kilometer mg/m3 Milligrams per cubic meter l liter mm millimeter LAeq Equivalent continuous A-weighted sound pressure level pcu/h passenger car unit per hour m meter t metric ton m/s meters per second t/d metric tons per day t/a metric tons per annum

NOTES

In this report, "$" refers to United States dollars.

This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of Asian Development Bank's (ADB) Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section on ADB’s website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the ADB does not intend to make any judgments as to the legal or other status of any territory or area. TABLE OF CONTENTS EXECUTIVE SUMMARY I I. INTRODUCTION 1 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 3 A. Overview 3 B. Mongolia’s Environmental Policy and Legal Framework 3 C. Protected Areas 6 D. Environmental Standards 11 E. Mongolia’s Occupational Health and Safety Standards 16 F. ADB Safeguard Policy Statement 16 III. DESCRIPTION OF THE PROJECT 19 A. Rationale and Environmental Benefits 19 B. Project Outputs 19 C. Design Schemes and Construction Methods 28 D. Associated, Existing, and Linked Facilities 34 IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE) 38 A. Bayan-Ulgii Aimag Subproject 38 B. Khovd Aimag Subproject 51 C. Uvs Aimag Subproject 68 V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 89 A. Approach 89 B. Site-specific Environmental Risks and Mitigation Measures 93 C. Mitigation Measures to be Applied to All Construction Works 109 D. Indirect, Induced, and Cumulative Impacts 113 E. Climate Change and Greenhouse Gas Emissions 115 VI. ANALYSIS OF ALTERNATIVES 118 A. No Project Alternative 118 B. Site Locations 118 C. Design Considerations 118 VII. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE 126 A. First Round of Public Consultation and Information Disclosure 126 B. Second Round of Public Consultation and Information Disclosure 134 C. Future Information Disclosure and Public Consultation Program 144 VIII. GRIEVANCE REDRESS MECHANISM 145 IX. ENVIRONMENTAL MANAGEMENT PLAN 145 X. ASSURANCES 145 XI. CONCLUSIONS 147 APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN 148 APPENDIX 2: GROUND SOURCE HEAT PUMPS FOR THE TOURISM COMPLEXES 194 APPENDIX 3: COVID-19 – PROJECT HEALTH & SAFETY PLAN (DRAFT GUIDELINES) 196 APPENDIX 4: SAFEGUARD SCREENING CRITERIA FOR THE COMMUNITY REVOLVING FUND 199 APPENDIX 5: SURVEY RESULTS FROM THE TWO PUBLIC CONSULTATIONS 202 APPENDIX 6: PROTECTED AREA LEGISLATION IN MONGOLIA 221 APPENDIX 7: KEY POINTS FROM CURRENT AIMAG DEVELOPMENT PLANS 223 APPENDIX 8: CONFIRMED LIST OF SMALL FACILITIES IN PROJECT FIELD SITES 225

EXECUTIVE SUMMARY

A. Introduction

1. The Government of Mongolia has requested the Asian Development Bank (ADB) to provide investment and technical assistance support for the Sustainable Tourism Development Project (Phase 2) (the project). The project will be supported by a loan of $30.0 million from the Asian Development Bank (ADB) and grant of $2.0 million. The proposed project focuses on three aimags (provinces) of western Mongolia: Bayan-Ulgii, Khovd, and Uvs. The designs comprise structural and non-structural components including: institutional strengthening to improve tourism planning and management; the establishment of two tourism complexes and two tourist streets, and supporting infrastructure (power, water, access, sanitation, and solid waste management); and small tourism and management facilities in five field sites: four protected areas and one cave system. The project designs are focused on nature-based and cultural heritage-based tourism (“ecotourism”) and aim to improve tourism planning and management and the visitor experience, while also strengthening the management of tourism risks and impacts to biodiversity and cultural heritage. The project builds upon an existing ADB loan-funded tourism project (“phase 1”) which is supporting tourism management at two national parks in north and northeast Mongolia.

2. The project executing agency is the Ministry of Environment and Tourism (MET), acting through the Department of Tourism Policy Coordination (DTPC; for the loan-funded components) and Department of Protected Area Management (DPAM; for the grant-funded components) (the implementing agencies). The project is categorized B for environment, pursuant to ADB’s Safeguard Policy Statement (SPS, 2009) which requires that an IEE, including an environmental management plan (EMP), is prepared for the project. This IEE has been prepared in accordance with the SPS. It was based on: (i) field reconnaissance surveys, stakeholder consultations, Government partner discussions, and desktop review by a consulting team (NAREE International Limited [Hong Kong] in association with HIDRIA Ciencia ambiente y desarrollo S.L. [HIDRIA, Spain], and Mongolia Water Forum Uskhelts - MWF-USKH, Mongolia), recruited by ADB to coordinate preparation of the project designs and due diligence; and, (ii) a domestic environmental baseline assessment, conducted by a national certified firm, Environ LLC Mongolia. The project environmental safeguards work was undertaken between September 2020 and March 2021.

B. Background

3. Western Mongolia borders the People’s Republic of China and the Russian Federation. The region is characterized by extreme remoteness, small populations, and limited economic development. Rural communities largely depend on subsistence agriculture. The area also has a unique cultural heritage – the richest and most well-preserved rock art (ancient images on rock) in northern Asia, the highest number of ethnic groups in Mongolia, and a network of protected areas which include two World Heritage Sites and four Wetlands of International Importance. These rich natural and cultural features provide an opportunity to help alleviate local poverty through tourism. Visitor numbers to western Mongolia are small, but prior to the coronavirus (COVID-19) pandemic were increasing rapidly, principally from domestic visitors and tourists from central Asia. The project will help catalyze tourism to benefit local livelihoods through establishing facilities at sites in Bayan-Ulgii, Khovd, and Uvs, while strengthening the protection of cultural heritage and the region’s conservation values. The project is aligned with the National Program on Tourism Development (2016–2030), which prioritizes ecotourism development.

C. Project Components

4. The expected outcome is that sustainability and inclusiveness of ecotourism in western Mongolia is increased. The project has four outputs, as follows.

5. Output 1: Inclusive planning and capacity for community-based tourism enhanced. This output will strengthen the institutional framework for tourism and increase the number of local beneficiaries from tourism. The project will (i) prepare the first tourism master plan for western Mongolia. This will define limits for tourism development, based on stakeholder consensus and growth projections, travel routes which maximize benefits for communities, and actions to support post COVID-19 sector recovery; (ii) strengthen the three aimag tourism plans, to establish targets for livelihoods, conservation and sanitation aligned with parallel ADB projects on health and border procedures; (iii) establish the first tour camp concession manual and certification program for western Mongolia to embed social and gender targets and environmental standards in commercial operations, strengthen links with local goods and services, and provide a stable business framework for about 45 tour camps with 117 employees; (iv) construct two tourist streets in the Khovd and Uvs aimag centers and nine women-led markets, to showcase and sell local products; and (v) implement a pilot tourism development program for communities and MSME, comprising vocational training, a community revolving fund (CRF), youth incubator, and the establishment of about 13 community-based organizations (CBO).1 About 8,162 residents (50% women and 30% youth) will benefit from tourism-related businesses and value chains. The IEE focuses on impact assessment for construction and operation and maintenance (O&M) of the two tourist streets.

6. Output 2: Enabling infrastructure constructed. This output will (i) construct the first tourism center in western Mongolia, the Uvs tourism complex (UVTC) in Uvs Aimag; (ii) establish supporting infrastructure for the UVTC, including car parking and extension of the aimag power line to the site; (iii) establish traffic management plans, safety signs and barrier gates, and upgrade 12 small carparks for a total capacity of 240 vehicles at five protected areas and cultural heritage sites to control public access and halt off-road vehicle damage; and (iv) develop institutional arrangements for operation and maintenance (O&M) of the project facilities. The UVTC will help catalyze tourism development for the western region and will have an operational mandate focused on education, cultural heritage, and nature. It will prioritize local employment and community goods and services and work closely with the community beneficiaries and MSME under output 1 for tourism planning. The designs apply a best practice green standard for water and energy efficiency, low-carbon emissions, and the use of cost-effective local materials.2 The IEE focuses on impact assessment for construction and O&M of the UVTC and supporting infrastructure, and small traffic management facilities in the five project field sites.

7. Output 3: Sanitation and waste management improved. This output will (i) facilitate the installation of about 60 low-cost and gender-sensitive toilet systems at tour camps, campsites and project-funded car parks at five protected areas and cultural heritage sites. The project will replicate successful JFPR-funded toilet designs and O&M procedures from phase 1, including

1 The pilot tourism development program will focus initially on rural communities at five protected areas and cultural heritage sites (para. 5) and be developed in partnership with aimag youth employment centers, regional universities, and tour camp operators. The revolving fund will apply a successful design piloted with previous JFPR support and will be the first such fund for community-based tourism in western Mongolia. The youth incubator will comprise (i) training venues for youth in two tourism complexes (outputs 2 and 4), as safe learning spaces to foster innovation and entrepreneurship; and (ii) tourism-related training and links with local enterprises to develop tourism goods and services. The CBOs will help implement the program and coordinate community participation. 2 The infrastructure designs apply the Excellence in Design for Greater Efficiencies standard. iii

CBO-led management of the campsites and toilets, and sustainable financing from campsite fees; (ii) establish waste disposal procedures for the project facilities, including safe transport and treatment at rural and urban wastewater treatment plants and landfills to be upgraded under ADB’s Aimag and Soum Investment Development Program (ASDIP); and (iii) implement a water, sanitation and hygiene (WASH) program. This will establish sanitation, health and safety standards and procedures for the project communities and facilities as well as for tour camps. The WASH program will be planned with aimag health and border agencies, integrated in the aimag tourism plans (output 1), and aligned with guidelines of the World Health Organization for infection prevention and control.3 These measures will strengthen post COVID-19 resilience for over 16,296 residents and 36,000 visitors per year to these protected areas. The IEE focuses on impact assessment for construction and O&M of the toilet systems at the five project field sites, and sanitation and solid waste management for all the project facilities.

8. Output 4: Management of cultural heritage sites and protected areas strengthened. This output will (i) construct the first rock art and nomadic culture center in Mongolia, including a ‘digital museum,’ and will be located in Khovd Aimag. It will include high-quality two- and three- dimensional virtual displays of the rock art of the TSC and other sites, establish a digital inventory for rock art, and develop an online platform to promote digital tourism for cultural heritage. The center, museum and access to the TSC will be managed in an integrated approach including O&M, entry fees, and guided visits to and protection of the TSC; (ii) establish at least 35 small management facilities at five protected areas and cultural heritage sites, comprising public campsites, information centers, public cooking cabins, bird watching towers, ranger stations, and fee collection stations, to protect habitats and improve facilities in locations subject to high visitor use; (iii) strengthen site management plans to integrate O&M procedures for the project facilities; and (iv) train about 120 residents and 12 local agencies to implement the revised site plans. The project facilities will be operated and maintained by about 13 CBOs in coordination with the park administrations, generating about 176 jobs (40% women). Overall, these measures will help strengthen the management of five globally important protected areas. The IEE focuses on impact assessment for construction and O&M of the RANCC, facilities at the TSC, and small facilities at the five field sites.

9. The locations of the two tourist streets and tourism complexes are within or near the aimag urban centers of Khovd and Uvs (see below). The four protected areas and cave system which the project will support are as follows. Altai Tavan Bogd National Park (ATBNP) (630,000 ha; designated in 1996) includes one World Heritage Site, the Petroglyphic Complexes of the Mongolian Altai (11,300 ha; 2011): both sites are in Bayan-Ulgii Aimag. Khar Us Nuur National Park (KUNNP) 850,272 ha; 1997; Khovd Aimag) and the Uvs Nuur Special Protected Area (UVSPA) (424,298 ha; 1993; Uvs Aimag) are Wetlands of International Importance; the latter is part of the Uvs Nuur Basin World Heritage Site (898,064 ha; 2003). Khan Khukhii National Park (KKNP) (221,598 ha; 2000; Uvs Aimag) includes Khyargas Lake, a popular tourism destination. The TSC is an unprotected cave system in Khovd Aimag and contains the oldest rock paintings in Mongolia. These sites encompass over 2.1 million hectares (ha) of wilderness, unique biodiversity, and rock art. In 2019, these sites received about 36,339 visitors. These sites are in 13 soums, which in 2020 supported 113,106 residents (40.5% of the population of western Mongolia) and received about 36,339 visitors (about 35.7% of total visitor numbers to western Mongolia).

10. The project components are summarized in Table ES-1. Design details and quantities are provided in Table 9 (Section III.B).

3 World Health Organization. 2020. Infection prevention and control guidance (COVID-19). iv

Table ES-1: Summary of Project Components No. Output / Component Activity / Quantity Benefits Loan / Grant Output 1: Inclusive planning and capacity for local tourism businesses enhanced 1.1 Institutional framework 1.1.1 Regional tourism  Prepare first tourism master plan for western Mongolia  Consistent regional Loan master plan – Design features: brand for western western Mongolia  Best practice principles for inclusive and sustainable Mongolia (Bayan-Ulgii, Khovd, tourism, including for waste, water, energy, and  Consistency between Uvs Aimags) management of heritage sites and protected areas regional- and Aimag  Based on visitor and population growth projections, level tourism plans consensus on limits of acceptable change, and carrying and other Aimag capacity of key sites development plans  Establish measures to promote sector recovery from  Consistent and COVID-19 and resilience to future disease outbreaks e.g., improved regional waiving of entry fees, license fees for tour operators, and tourism standards border fees for regional visitors; information campaign about  Social and domestic status of COVID-19 and control measures; environmental increased online marketing for operators standards and targets  Promotional strategy linked with health management that for community-based reassures travelers of health and sanitation protocols tourism, poverty  Alignment with Aimag tourism plans alleviation, and tour  Multi-stakeholder consultative process, including key local operations in cultural agencies e.g. Bayan-Ulgii Tourism Association heritage sites and  To include assessment of procedures for issuance of tour protected areas camp licenses in protected areas (>400 inactive licenses – “speculative” registrations which create uncertainty/risk of low standards) 1.1.2 Aimag tourism plans  Revise the 3 existing plans to integrate targets for  Strengthen the Aimag Loan (Bayan-Ulgii, Khovd, livelihoods, conservation, sanitation, hygiene, and waste tourism plans Uvs) management, and risk management procedures (e.g.,  Ensure their assessment, insurance, emergency planning, integration into communications) to respond to unforeseen crises e.g., development planning COVID-19  Integrate Aimag tourism plans into Aimag development plans Design features: As above 1.1.3 Tourism concession  Establish and pilot a manual covering at least 5 sites:  Strengthen MET Loan manual ATBNP including PCMA (Bayan-Ulgii); KUNNP and TSC concessions (Khovd); KKNP and UVSPA (Uvs) management  Establish a baseline of the 45 tour camps present in western  Social, environmental Mongolia in 2020 and the skills and jobs of the ~117 targets embedded in employees, and measure how these jobs and number of procedures workers change following the tourism concession manual  Build on lessons and project trainings learned from MON- Design features: 3787/3788 Loan  Apply lessons learned from MON-9183 Grant and MON- Loan 3787/3788 Loan and other donor projects  Apply best practice UNDP guidelines developed for Mongolia  Coordination with CSOs e.g., WWF Mongolia in KUNNP 1.1.4 Eco-certification  Expand program being developed under MON-Loan  Recognition of Loan program for tour 3787/3788 to at least 5 sites: ATBNP including PCMA operators camps (Bayan-Ulgii); KUNNP and TSC (Khovd); KKNP and  Promotion of western UVSPA (Uvs) brand Design features:  Build on experience  Certifications to include social and environmental targets from MON-3787/3788  Apply international ecotourism standards of GSTC (which is Loan supporting MET to prepare national tourism standards) v

No. Output / Component Activity / Quantity Benefits Loan / Grant  Draw upon extensive available international best practice e.g. here 1.2 Destination management and promotion 1.2.1 Community-based  Establish and/or train about 13 CBOs for at least 5 sites:  Inclusive tourism Grant organizations ATBNP including PCMA (Bayan-Ulgii); KUNNP and TSC planning co-led by (Khovd); KKNP and UVSPA (Uvs) communities, with  The CBOs will (i) be responsible for O&M of the small public focus on local goods facilities to be constructed in the protected areas and and services heritage sites (component 4.3), (ii) lead the community  Alignment with site participation in procurement package described in PAM management plans Sections VI.B.3 and VI.C.6 (total of 13 contracts: 1 contract per CBO) to coordinate and lead additional community-led tourism activities in these sites and procure materials and mobilize labor as needed, (iii) mobilize and coordinate the communities to participate in the project trainings (to be provided by the PIU and livelihood consulting services) to achieve these tasks  Operational arrangements, roles and responsibilities, community-led selection of the CBO committee and members, and financing of the CBOs, including CBO salaries, will be (i) developed in consultation between the PIU, local government, protected area administration, and CBO upon CBO establishment, (ii) established within tripartite contracts between the CBO, protected area administrations, and local governments, (ii) funded by the project for the first 4 years of CBO operation, (iii) funded by domestic sources (e.g. visitor entry fees) for the remaining years of project operation and after the project  These tasks will be coordinated by the PIU and livelihoods consulting services (PAM Appendix 2 – TORs for the PIU and consulting service package CS6) Design features:  Collaborative approach to manage tourism at key sites  Replicate MON-9183 Grant 1.2.2 Tourist streets in 2  Establish 2 tourist streets in Khovd and Uvs Aimag centers  Promotion of Loan Aimag centers  To include women-led market stalls, seating, sidewalks, community goods and information services, Wi-Fi stands, shops services  Install power, water, sanitation, and solid waste  Strengthen links management between Aimag Design features: centers, tourist sites,  Catalyze Aimag capitals as gateways for visitor arrivals, and protected areas venues for events, and links to cultural heritage sites,  Enrich visitor protected areas experience  Tourism promotion to link with online sources e.g., CAREC tourism portal (under preparation); MET online platform; “Discover Bayan-Ulgii” (https://discover-bayanolgii.com/) 1.3 Pilot tourism development program – improve local competitiveness to benefit from tourism  Increase competitiveness and capacity of MSMEs and communities, including youth, to benefit from tourism  Design features: Holistic plan including business, training, microfinancing and to ensure synergy between the livelihood activites under the loan and grant. This will be within a quality jobs and livelihoods strategy andwill include the following components 1.3.1 Community revolving  Establish fund for communities for 5 sites: ATBNP including  Sustainable financing Grant fund PCMA (Bayan-Ulgii); KUNNP, TSC (Khovd); KKNP, UVSPA for community-based (Uvs) tourism  Link loans to protection of cultural heritage and nature  MON-9183 Grant well- Design features: Replicate MON-9183 Grant received by stakeholders vi

No. Output / Component Activity / Quantity Benefits Loan / Grant 1.3.2 Women-led tourist  Establish 9 women-led markets: at 2 tourist streets (output  Gender-inclusive Grant markets 1.2) and about 5 sites: ATBNP (Bayan-Ulgii), KUNNP and community-based TSC (Khovd), KKNP, and UVSPA (Uvs) tourism Design features: Replicate MON-9183 Grant  Management of women-led markets at the 2 tourist streets to prioritize stalls for communities from the project protected areas  Replicate MON-9183 Grant 1.3.3 Youth-led initiatives  Tourism business incubator, focusing on supporting and  Youth-inclusive Grant mobilizing the initiative, innovation, and participation of community-based youth tourism  Two incubators will be established by these project. These will comprise learning spaces within the 2 project-funded tourism complexes (components 2.1.1 and 4.1). These room spaces are already included in the preliminary architectural designs for each complex  An additional 5 youth incubator learning spaces for the project are tentatively also to be included in 5 agribusiness centers to be constructed in western Mongolia under the ASDIP. These centers will be located in rural soum centers and aimag urban centers of Bayan-Ulgii, Khovd, and Uvs aimags  Establishment of the youth incubators and youth training will be designed and coordinated with the aimag youth employment centers and build upon previous short-term government training in tourism conducted in western Mongolia in 2019 1.3.4 Local  Vocational training for residents, MSMEs to develop tourism  Tourism goods, Grant competitiveness and goods, services, jobs at tour camps, and apply for revolving services, and staff capacity to obtain funds sourced locally tourism jobs Design features:  Improved reliability,  ‘Quality jobs and livelihoods strategy’ incorporating the quality of goods, and tasks above and specific livelihood targets in the DMF, GAP, services and SDAP and for synergy between the loan- and grant-  Sale of local products funded activities  Link with social, environmental targets and standards (output 1.1)  Collaboration with Khovd University tourism course Output 2: Enabling infrastructure constructed 2.1 Tourism complex and supporting infrastructure 2.1.1 UVTC (to be located Construct 1 tourism center. Including:  Iconic tourism Loan outside Uvs Aimag 1. Water supply: 2 wells, with total daily capacity of 55.4m3/day. landmark – catalyst for capital) To meet 100% of projected demand local tourism 2. Sanitation: (i) 28 toilets within the complex, (ii) 22 portable  Inclusive planning with toilets (to meet extra demand for large events and festivals), communities (iii) 1 on site Biofilm wastewater treatment system-WSB®  Multiple objectives – clean of 60 m3 capacity. Sludge from the plant will be tourism, events, transported to Ulaangom treatment plant (to be upgraded education by ADB ASDIP)  Showcase for green 3. Solid waste management: litter bins, waste collection design containers; and transport to Ulaangom landfill (upgraded by  In situ protection of on ADB ASDIP) site cultural heritage 4. Power and heating. For power: (i) 1.2 km transmission line values with 10 kV capacity and 800 kW substation (to provide 71%  Linked with protection of projected demand, of which 20% will be for operation of of at least 2 protected the GSHP) and (ii) solar panels (9%) (to provide 3% of areas, KKNP, and power supply for the main building and 100% of power UVSPA supply for outdoor lighting). For heating: (i) GSHP with 680  Synergy with ADB kW capacity (92%) and (ii) solar for hot water (8%) ASDIP project vii

No. Output / Component Activity / Quantity Benefits Loan / Grant 5. Interior furnishing including for solid 6. O&M, including sales, marketing, promote heritage, waste and sewage conservation treatment Design features:  Mandate on promoting local goods, services, cultural heritage  Visitor capacity based on tourism and growth projections  Eligibility for IFC EDGE certification (https://edgebuildings.com) for green building designs  WWTP and solid waste collection based on projected waste volumes, water efficiency, proven designs elsewhere in Mongolia  Reuse treated wastewater (per MNS 6734-2018) for: (i) toilet flushing (20% of total required water) and (ii) watering of site plantings (13% of total required water): significant water savings  Sludge, solid waste disposal at Aimag facilities upgraded by ASDIP  Work with PPDCs established under MON TA-9066 2.2 Traffic management and safety at key tourism sites 2.2.1 Establish access  UVTC: construct 1 access road (0.3 km); and 1 car park with  Vehicle parking Loan – roads and car parks area of 6,656 m2 and capacity for 10 buses and 145 cars regulated UVTC, for 2 tourism  RANCC: upgrade 1 access road (3 km); and 1 car park with  Improved visitor RANCC complexes; and area of 5,951 m2 and capacity for 12 buses and 148 cars satisfaction improve traffic  At 5 protected areas: upgrade 12 car parks, for total  Sites linked with Grant – management at 5 capacity of 240 vehicles. ATBNP–4 carparks (100 cars), women’s tourist 5 sites protected areas KKNP–2 (30 cars), KUNNP–2 (30 cars), TSC–1 (20 cars), markets (output 1) UVSPA–3 (60 cars)  Off-road impacts Design features: reduced  Regulate visitor flows, site access, and safety; protect  Dust pollution reduced cultural heritage sites and protected areas; improve visitor  All-weather vehicle experience access  Climate-resilient road and car park designs  Vehicle parking  Safety–pedestrian crossings, speed humps, barrier gates regulated  Designs based on traffic projections  Improved safety Output 3: Sanitation and waste management improved 3.1 Water, sanitation,  To include: sanitation standards for tour camps and  Tour camps comply Grant and hygiene community-led tourism service providers, awareness with MET sanitation (WASH) program raising for hygiene measures, integration with local and standards national measures for disease risk management, border  Improved protection of health screening, emergency response water quality of lakes Design features: and rivers  Apply best practice measures for WASH  Visitor satisfaction  Alignment with national measures for disease risk improved management  Resilience to future  Alignment with Aimag level measures e.g., border health disease outbreaks is screening strengthened 3.2 Sanitation systems  Sanitation systems designed under MON-9183 Grant  100% coverage of Grant for tourist camps adopted by about 12 tour camps (Khovd Aimag–4; Uvs camps Aimag–7)a  Visitor satisfaction  Facilitate tour camps to install improved toilet designs improved  Designs integrated in concession manuals (output 1.1.3)  Tour camps comply Design features: with MET sanitation  Dry toilets and/or minimum flush toilets standards  Comply with national standards  Improved water quality  Replicate toilet designs piloted under MON-9183 Grant protection of wetlands  Complement measures planned by MET and KfW e.g., Uvs, and Khar Us lakes viii

No. Output / Component Activity / Quantity Benefits Loan / Grant  Resilience to future disease outbreaks is strengthened 3.3 Sanitation systems  Install about 60 public toilets at the 5 protected areas:  100% coverage of Grant for public places  Bayan-Ulgii Aimag: 22 toilets (ATBNP including PCMA–22) public places in the  Khovd Aimag: 18 toilets (KUNNP–14, TSC–4) five selected protected  Uvs Aimag: 20 toilets (KKNP–8, UVSPA–12) areas Design features:  As above  Dry toilets (non-flushing for water-saving, low-cost)  O&M by CBOs  Sustainability–CBO salaries paid from campsite fees 3.4 Wastewater  Establish wastewater and solid waste management  Efficient waste Loan collection and procedures for project-funded facilities management for all treatment  Procure 6 suction pump trucks to transport sewage and key public access solid waste from project sites to landfill and wastewater locations in 5 treatment plants protected areas Design features:  Improved protection of  Treatment methods and capacity based on assessment of lakes and rivers existing and projected waste volumes, cost, capacity, local  Improved visitor materials satisfaction  Designs comply with national standards  Resilience to future  O&M to be linked with ASDIP-funded WWTPs and landfills disease outbreaks is strengthened Output 4: Management of cultural heritage sites and protected areas strengthened 4.1 Rock art and Construct 1 tourism center. Including:  First national center Loan nomadic culture 1. Water supply: 2 wells, with total daily capacity of 44 m3. To for rock art heritage center (RANCC) meet 100% of projected demand including Digital 2. Onsite sanitation: (i) 20 toilets within the complex, (ii) 1 on Museum (component site Biofilm wastewater treatment system-WSB® clean of 4.2) 45 m3 capacity. Sludge from the plant will be transported to  Regional tourism Khovd treatment plant (to be upgraded by ADB ASDIP) identity 3. Solid waste management: litter bins, waste collection  O&M linked with containers; and transport to Khovd landfill protection of 2 cultural 4. Power and heating supply: (i) 5.4 km transmission line with heritage sites: TSC 10 kV capacity and 800 kW substation for electricity (to and Manchu fortress provide 73% of projected demand, of which 19% will be for  Linked with women-led operation of the GSHP) and (ii) solar panels (5%) (to tourist markets (output provide 3% of power supply for the main building and 100% 1) of power supply for outdoor lighting. For heating: (i) GSHP  Showcase for green with 610 kW capacity (91%) and solar for hot water (9%) design 5. Interior furnishing 6. O&M, including sales, marketing, promote heritage, conservation Design features:  Mandate on promoting local goods, services, cultural heritage  Specific focus on financing protection of TSC and Manchu fortress  Visitor capacity based on tourism and growth projections  Eligibility for IFC EDGE certification for green building designs  WWTP and solid waste collection based on projected waste volumes, water efficiency, proven designs elsewhere in Mongolia  Reuse treated wastewater (per MNS 6734-2018) for: (i) toilet flushing (29% of total required water) and (ii) watering of site plantings (18% of total required water): significant water savings ix

No. Output / Component Activity / Quantity Benefits Loan / Grant  Sludge, solid waste disposal at Aimag facilities upgraded by ASDIP  Work with PPDCs established under MON TA-9066 4.2 Rock art Digital  2- and 3-D digital displays, virtual tours, photographic  First Digital Museum in Loan Museum – to be collection of Mongolian rock art sites, replicas of key sites Mongolia for rock art housed at RANCC Design features:  Management  Application of high-level technology integrated with  Complement existing resources e.g., University of Oregon protection of TSC website – Bayan-Ulgii Aimag rock art  Platform for tourism, (https://mongolianaltai.uoregon.edu/) local jobs, and entrepreneurship 4.3 Site protection and  Install about 35 small management facilities at 5 protected  Public access Grant public access areas and cultural heritage sites (ATBNP, KKNP, KUNNP, regulated TSC, UVSPA): comprising 6 campsites, 3 information  Natural values centers, 11 information points, 2 birdwatching towers, 2 protected public cooking cabins, 3 ranger stations, 6 fee collection  Reduced damage of stations, and upgrade of 2 existing public trails rock art  O&M arrangements: (i) the protected area administrations  Improved visitor will manage the fee collection stations and ranger stations, experience (ii) the CBOs established with project support will manage  Improved collection of the other project-funded facilities. O&M procedures will be site entrance fees and developed for each site and included in the tripartite revenue contracts to be established between the CBOs, protected  Job creation for local area administrations, and local government (see component communities 1.2.1)  Sustainability –  See Appendix 8 for list of these facilities campsite fees pay for Design features: CBO salaries  Strategic selection of sites and locations to address existing and projected increases in visitor numbers  Facilities tailored to site-specific needs  Materials selected for cost, durability, local availability, aesthetics  Facilities to be managed by CBOs (component 1.2.1), with training, and personal protective equipment provided  Complement support by WWF, The Nature Conservancy, KfW, and GIZ at KKNP, KUNNP, and/or UVSPA  Aligned with landscape-level “cluster approach” of KfW BACCP Phase II/III: holistic land management within and outside protected areas. Project sites consistent with KfW project areas, which were selected based on TNC regional classification 4.4 Site management  Facilitate revision of management plans for 2 sites: ATBNP  Integrated Grant plans including PCMA (Bayan-Ulgii Aimag); TSC (Khovd Aimag) management of  Contribute to KfW-led revision of management plans for 3 tourism, livelihoods, sites: KUNNP (Khovd Aimag); KKNP and UVSPA (Uvs waste, conservation Aimag)  Complement and build Design features: on planned support by  Incorporate–for the first time–site-specific actions and KfW to revise targets for tourism, traffic, and waste in the site protected area management plans management plans  O&M procedures and costs for project facilities  Revised plans are a  Financing sources for project facilities model for protected  4-year action plan and budget for each site area management  Revised internal site zoning (if needed)  Integration with soum development plans 4.5 Capacity building  Train government personnel, operators of project facilities,  Staff trained Loan CBOs, and other stakeholders to implement the revised site  Project facilities and management plans and for O&M of project facilities maintained Grant x

No. Output / Component Activity / Quantity Benefits Loan / Grant Design features:  Management  Collaborative approaches; CSO participation effectiveness increased ADB = Asian Development Bank, ASDIP = Aimag and Soum Centers Green and Resilient Regional Development Investment Program, ATBNP = Altai Tavan Bogd National Park, CAREC = Central Asia Regional Economic Cooperation, CBO = community-based organization, CSO = civil society organization, HLT = high-level technology, GSTC = Global Sustainable Tourism Council, km = kilometer, KKNP = Khan Khukhii National Park, KUNNP = Khar Us Nuur National Park, m2 = square meter, m3 = cubic meter, MET = Ministry of Environment and Tourism, O&M = operation and maintenance, PCMA = Petroglyphic Complexes of the Mongolian Altai UNESCO World Heritage Area, PIU = project implementation unit, PPDC = public-private dialogue council, RANCC = rock art and nomadic culture center, TSC = Tsenkher Cave, TOR = terms of reference, UVSPA = Uvs Nuur Strictly Protected Area, UVTC = Uvs tourism complex, WWTP = wastewater treatment plant. Source: Asian Development Bank estimates.

D. Project Benefits and Features

11. The project will: (i) contribute to the improved management of four protected areas (including two UNESCO World Heritage Areas and two Ramsar Wetlands of International Importance) and one unprotected cave system, collectively supporting the protection of over 2.1 million hectares (ha) of globally important natural and heritage values; (ii) establish minimum standards and procedures for the management of sewage and solid waste in these sites; (iii) support the livelihoods of rural communities in these sites; and (iv) improve regional health and safety for post COVID-19 resilience to the risk of future disease outbreaks.

12. The new project facilities, especially the two tourism complexes: (i) have been designed to meet best-practice green building standards for energy and water efficiency; (ii) apply the use of renewable energy (including solar panels) and rainwater storage to partly offset demand from mains power and water; (iii) apply non-flush dry toilet designs for protected areas (to avoid generation of wastewater); and, (iv) include O&M procedures for the collection and safe disposal of sewage and solid waste at urban and rural wastewater treatment plants and landfills that will be upgraded under the ADB-funded Aimag and Soum Investment Development Program, ensuring safe and appropriate treatment and disposal. The project designs and safeguards have been developed in an integrated approach to avoid and minimize risks to natural and heritage values, including the need for all facilities to meet the following site selection criteria: (i) no works within the strict protection zones of protected areas (all works to be limited to multiple-use zones or outside the protected areas); (ii) no works within 200 m of lakes or rivers, in accordance with national requirements for protected areas; and, (iii) no land acquisition or resettlement (Section V.A). The project facilities in the protected areas are on existing, cleared lands, within sites zoned for multiple use and already subject to similar land use as for the project planned use; and the project activities are consistent with the legal zoning limited, and management objectives, for these locations.

13. In addition to the Uvs Tourism Complex, the RANCC, and the two tourist streets, which will be located in urban or peri-urban areas, the project will support the following facilities in the selected protected areas, all of which will enhance visitor control and environmental management in areas currently quite heavily used by tourists:

Table ES-2: Number and type of new facilities in protected areas to be supported by the project. All locations are within multiple-use and/or tourism zones. Ranger Information Info Women-led Campsite Station Center Point Car park Toilets Market Place Other xi

Fee Bird (each with 4-6 Collection Capacity Watching stalls) Station No (vehicles) Tower 5 (2 cabins, 6 6 3 3 11 12 240 60 2 7 2 trails, 1 lighting)

E. Baseline Environment

14. The baseline environment was assessed on the basis of (i) field visits by the project team in October–November 2020, (ii) field surveys and baseline environmental sampling in November 2020, by a certified domestic firm, Environ LLC, (iii) public consultations in the project areas, and (iv) review of secondary data. The two tourist streets and the tourism complexes (UVTC and RANCC) will be located near the aimag urban centers. The remaining project facilities will be located within or near four protected areas and one unprotected cave system, the TSC. All proposed project activities are located in areas that currently are visited by domestic and foreign tourists, with one exception: the RANCC west of Khovd town (the UVTC site, east of Ulaangom, is used for horse racing and the two tourist street sites are characterized by residential development and a street system). Thus, the biophysical context of each project site (with the one exception) already incorporates human activities, which define these project areas to a large extent.

15. Detailed information on the baseline environment in western Mongolia was collected and interpreted to set an environmental context for the impact assessment. The generalized environmental information was then validated for the specific project sites, to inform the assessment and development of required mitigation measures. Only the key details regarding environmental sensitivities are noted in this summary (full details can be found in Section IV; note that air quality, noise levels, and current water quality at all sites are all below the acceptable Mongolian standards; i.e., in relatively pristine condition).

16. Aside from the project facilities to be located within the four protected areas (ATBNP, KKNP, KUNNP, UVSPA), the facilities for the TSC will be near one other protected area, Mankhan Nature Reserve. All of these sites support globally important biodiversity values, and the planned locations of the small facilities at the TSC are near the distribution range of the Mongolian Saiga (Saiga mongolica), a threatened mammal with a disjunct (separated) population occurring in the region of the TSC. This population is small and fragmented, and numbers fluctuate due to climate and disease. The red deer (Cervus elephus) (globally “Least Concern”, but Critically Endangered in Mongolia) lives in forests, ridges, mountain steppes, groves, and lowlands and occur in Bayan- Ulgii Aimag (in the southern tributary of the Khovd river) and west and south of Uvs Lake. These are the only two mammal species in the project areas that present a concern (addressed in the impact assessment and mitigation measures). Uvs and Khovd support important bird habitats (a key reason there are visitors in this area). The project sites and facilities (excepting bird watching towers) are located away from shoreline habitat (where many bird species occur in the summer), in dry grassland steppe areas that already have public access. The aggregated area of facilities development near lakes/rivers (11 sites of 14 in or near the PAs) will be less than 5 hectares – an extremely small percentage of the total bird habitat in Uvs and Khovd (about 0.0016% of the cumulative Important Bird and Biodiversity Areas near the project sites).

17. Uvs, Khovd and Bayan-Ulgii Aimags are rich in archaeological values, especially those from the Old Stone Age. In addition to the protected petroglyphs (rock art) of the ATBNP and PCMA, and cave paintings of the TSC, other significant physical cultural resources within 10 km xii of the proposed project sites include the Manchu fort walls (in Khovd), deer stones near the RANCC, and khirigsuur (tombs) west of Ulaangom.

18. The population in the three aimags is low, with the highest densities in the aimag centers, and low and dispersed seasonal populations (mostly herders) in the steppes in the summer.

F. Potential Impacts and Mitigation Measures

19. The project civil works comprise three broad scales: (i) construction and operation of tourism complexes (the UVTC and RANCC) – the major project works in terms of construction activities and potential operational impacts; (ii) the construction and operation of the tourist streets (Khovd and Uvs) – a slightly smaller scale of physical works and operational impacts in peri urban areas; and, (iii) construction and operation of campsites and ecotourism amenities (such as bird watching towers) in the selected protected areas, with no upgrading of associated facilities, such as access roads – these are the least obtrusive project activities, in the construction phase, but have the closest proximity to the habitat and biodiversity features that define the protected areas. Except for the location of the RANCC, all project locations are in areas which already support existing visitor facilities or are used by visitors anyhow (with no facilities); they are characterized by dry grassland steppe vegetation and do not have mammal or bird habitat importance. All site locations were based on strict selection criteria to avoid critical habitat, strict protection zones, and other sensitive values (Section V.A); and building design standards were applied to use green building concepts, maximize renewable energy use, adaptation measures for climate change (resilience embedded within the designs), compliance with national building standards, and compliance with international guidelines for the management of visitors in protected areas and protection of heritage.

20. The environmental impact assessment process for each project site involved: definition of the specific project actions; delineation of the zone of influence of those project actions (pre- construction, construction, and operation phases); itemization of the environmental and socioeconomic features and sensitive receptors at the project site; examination of the interactions and possible immediate environmental impacts (both negative and positive), with consideration of significance and reversibility; determination of cumulative, induced, and linked impacts (mostly emanating from the operational phase); definition of the required mitigation measures to reduce residual negative impacts to acceptable levels; and, specification of the required monitoring program, to support compliance with required mitigation measures, and to observe unintended environmental effects, allowing corrective actions.

21. Before finalization of the project sites, the various alternative sites (that were in consideration due to aimag and MET preferences and concerns about service proximity and access, for the tourist streets and the tourism complexes) were filtered through an environmental safeguards review. This process ranked sites that had the highest level of environmental vulnerabilities, so that they could be eliminated from further consideration. Only those sites that complied with the safeguards criteria remained in consideration and were then assessed for environmental impacts and mitigation measures. This process was applied in several iterations for the UVTC, once the environmental issues had been filtered out, to optimize logistical aspects.

22. Construction phase. The 18 project sites have common issues of temporary generation of noise and dust during construction, to varying extents, depending on the scale of works. The tourist streets and tourism complexes will be larger-scale works, to be extended over at least two construction seasons (reflecting the limited construction season in Mongolia due to harsh winters), so noise, dust, and potential traffic congestion (in urban areas) will be larger issues, compared to xiii all the small works in the protected areas. At all sites, dust generation and sedimentation will be addressed with covers over exposed sediment piles and use of drainage channels on the site perimeter, and silt curtains to keep mobile sediments on site (11 of the sites are sloped and have waterbodies - a lake, river, or stream - within one kilometre of the facilities, the main concern during construction is that mobile sediments will wash into those waterbodies, especially during and after weather events). Noise disturbance is a low risk (except for workers), as most sites are remote; the Uvs and Khovd Tourist Streets are the only project sites within an aimag urban center, and works will be prohibited at night and planned in consultation with residents and business owners. With regard to potential disturbance of wildlife, only the project construction activities at the TSC (using road access from the east across the Mankhan Nature Reserve) poses a risk. Measures have been defined to control vehicle registration, set speed limits (20 km/hour), and prevent travel at night, to address this issue during construction (the same measures, and others, have been defined for the operational phase); additional measures include requirements to turn off equipment and vehicles when not in use, and to limit engine idling to a maximum of 5 minutes.

23. Operational phase. A key concern during the operational phase is the risk of impacts resulting from increased visitor numbers (about 3,250 more visitors/day in the summer, due to the project-supported facilities at 18 sites, assuming full capacity use). The main visitor pressure, due to the project, will be in Khovd Aimag, where the facilities are designed for a maximum daily capacity of 1,579 visitors per day (85% of these going to the RANCC and Tourist Street, near the urban area). Uvs facilities will handle up to 1,315 visitors per day, with 74% of these going to the Tourist Street and Tourism Complex in and near Ulaangom. Bayan-Ulgii facilities supported by the project will accommodate 360 visitors/campers per day. The design approach to address this potential issue is: (i) the establishment of maximum daily capacities for the project facilities (these are clearly specified for each site, based on assumptions about number of vehicles, number of people per vehicle, and duration of visits), and (ii) the improved site management, facilities, and capacity of park administrations and community-based organizations resulting from the project, which will improve visitor flows and waste management, and restrict off-road access and disturbance. Visitor numbers to project facilities will be managed to reflect maximum capacity, through pre-bookings and operational planning and management. The risk of induced impacts to Khar Us, Durgan, Sogoo, Uureg, and Uvs lakes (within the project locations of KUNNP, KKNP, and UVSPA) due to increasing visitor numbers, has been minimized by the restriction of project facilities to at least 200 m from lake shorelines, in compliance with national regulations.

24. For the TSC, a potential concern during the operational phase is noise and/or visual disturbance to the Saiga antelope population in the Mankhan Nature Reserve. The TSC facilities are intended to improve existing visitation to the site, which is currently unregulated: mitigation measures will include strictly-controlled vehicle access to and from the main highway to the TSC (with an option to use an electric-powered bus and a 20-km/hour speed limit; no driving at night), along an existing unsealed road. This will result in improved protection of the hills and plain either side of the access road, reducing the risk of collisions with wildlife and other disturbance.

25. All project sites and construction activities will be subject to noise controls, waste management, location of worker camps to avoid watercourses or sensitive habitats, and environmental health and safety, including COVID-19 safety procedures and regulations, and are included in a project environment management plan (Section J).

G. Analysis of Alternatives

26. Analysis of alternatives included consideration of the “no project alternative”; site locations for the tourism complexes and tourist streets; and arrangements for power and water supply, and xiv waste management, for the project facilities. For the small works in the protected areas, locations were based on criteria to restrict works to existing sites and avoid undisturbed sites. Due to rising visitor numbers to western Mongolia (excluding 2020, due to the COVID-19 pandemic), the “no project” alternative was not assessed to be an option. There is a clear requisite to improve facilities at existing sites and to ensure that those facilities operate with proper visitor controls, waste management systems, sanitation management, water conservation, and use of renewable energy, to the extent possible. These are all facilitators for conservation enhancement.

27. For selection of sites for the tourism complexes and tourist streets, a key consideration was proximity to services, such as existing power, water, and heating, and visitor flows and accessibility. The main consideration was to have sites fairly close to the aimag centers, taking advantage of services, but not crowding out growing urban areas. For the UVTC, seven locations were considered, west and east of Ulaangom. Sites west of the town were generally too far from services, had higher risks of flash floods, and were interspersed with a fairly high incidence of physical culture resources. There were no particular habitat or biodiversity concerns at any of the seven sites. The selected location – east of Ulaangom – has proximity to services, easy road access to Ulaangom and the UVSPA, and groundwater availability. For the Uvs tourist street, few alternatives were required for consideration, given the designation of an ideal site on the southern side of Ulaangom: access to a road and services, no habitat or biodiversity issues, no apparent flood risk, and adequate buffer area. For the RANCC, site selection was guided by proximity to Khovd town, on a cleared site with dramatic views of the adjacent mountains and steppe, river, and town to the south, and khirgisuurs (tomb stones) in the vicinity. The site does not support habitat or biodiversity values.

28. For the Khovd tourist street, two alternatives were assessed: (i) within an existing heritage site, an ancient fort of which only a wall (Sangin wall) is remaining, in Khovd town. Despite suitability as a tourism location, the site retains older remains and artefacts in the soil, a small cemetery, and some small settlements. These issues posed significant safeguard risks and the site was not selected, and (ii) a cleared and empty parcel of land on the south side of Khovd town, with no environmental concerns and proximity to services and access roads: this site was selected.

H. Climate Change

29. A climate risk vulnerability assessment (CRVA) for the project area was conducted to identify the risk climate change presents to project viability, assuming a design life of 50 years. Regional meteorological data for Western Mongolia were compiled and indicate: (i) annual mean air temperature has increased by 2.1–2.8oC since the 1960s, which for Khovd and Uvs Aimags is higher than the national average temperature increase, (ii) summer precipitation has increased slightly in the Altai mountains (compared with decreases elsewhere in Mongolia), but overall, annual precipitation has decreased by about 10 mm in Khovd and Bayan-Ulgii Aimags, while there has been a slight decrease in Uvs Aimag, (iii) the frequency and magnitude of extreme climate events has increased since the 1950s, including heavy snowfall, dust storms, rain and flash floods. In 2018, a storm had wind speeds exceeding 40 m/s, causing the collapse of 210 gers, power outages, and damage or loss of roofs of schools, kindergartens, hospitals, and buildings in 52 soums. The frequency of forest fires (34 in Uvs Aimag in 2015) and flash flooding has increased; floods in 2020 in Uvs Aimag damaged roads and stranded travellers. Climate projections (RCP8.5 “extreme case” scenario) indicate that between 2035 and 2070: winter air temperature will increase by 1.2–2.2oC, summer temperature will increase by 1.0–2.1oC, winter precipitation will increase by 10–40%, and summer precipitation will increase by 8–10%.

30. The project has included climate change adaptation measures in the designs of the two tourism complexes, tourist streets, campsites, carparks, and toilet systems, to address the risk of harsh winters, flash floods, fire, stronger winds, and/or subsurface slumping due to seasonal freeze/thaw cycles. These include: (i) siting to avoid locations zoned as moderate or high risk for flooding or fire, (ii) drainage systems and roof designs to avoid snow accumulation and for rapid drainage of melting snow and ice, (iii) non-flush dry toilets situated on shallow concrete bases, to minimize soil disturbance, and (iv) rainwater collection to contribute to annual water needs and offset reliance on groundwater wells (at field sites) or mains water supply (for the two tourist streets). For the two tourism complexes, additional designs to provide resilience to stronger winds and storms include (i) reinforced concrete in the structural framework and roof, (ii) inclined roof forms, reduce wind shear (and also improve shedding of snow), and (iii) triple glazing on windows, for added strength and durability, including against wind-blown sand. In the absence of energy- saving measures, total project greenhouse gas (GHG) emissions are estimated to be about 7,324 tons CO2e. The project energy efficiency measures (design and orientation that maximize passive heating and cooling; use of solar panels; and, for the RANCC, access to geothermal energy) will reduce GHG emissions annually by 3,931 tons CO2e, resulting in net GHG annual emissions of 3,393 tons CO2e per year. These levels are below ADB’s threshold of concern for GHG emissions (100,000 tons CO2e per year).

I. Public Consultation and Grievance Redress Mechanism

31. Two rounds of consultation were undertaken. The first round (11–29 November 2020) comprised public meetings at town halls with 178 (88 female and 90 male) residents in 10 project soums. This round comprised a project introduction (20 minutes) and circulation of a questionnaire to participants and focused on disseminating information about the project and gathering views of herders and soum center populations. The second round (10–24 March 2021) comprised follow-up meetings with 297 residents and government stakeholders (101 female and 196 male). This round focused on providing specific information about the project components and facilities and identifying any public concerns and measures to address these. To ensure meaningful consultations, the presentations and questionnaires were prepared and made in Mongolian language (all except two soums) and Kazakh language (for two soums of Bayan-Ulgii Aimag, where Kazakh minority dominates). To manage the risk of COVID-19 spread, especially to remote rural communities, the following measures were implemented for all meetings: spacing between participants, small group sizes, and provision of masks and sanitizer for all participants. Feedback from participants included project support for community-based tourism, job creation, and improved environmental protection; and at the same time, concerns over possible habitat damage due to higher numbers of tourists were raised. Measures to minimize these risks have been incorporated into the project environment management plan (EMP).

32. A project grievance redress mechanism (GRM) has been designed and will be established to receive and facilitate the resolution of complaints during the construction and operation phases. The GRM will include the procedures for receiving grievances, recording/documenting key information, and evaluating and responding to the complainants in a reasonable timeframe. Any concerns raised through the GRM will be addressed quickly and transparently, and without retribution to the affected persons.

J. Environment Management Plan

33. An environment management plan (EMP) (Appendix 1) has been developed to ensure: (i) implementation of identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environmental impacts; (ii) implementation of monitoring and xvi reporting against the performance indicators; and (iii) compliance with ADB’s SPS (2009) and relevant national environmental laws, standards, and regulations. The EMP includes an environmental monitoring plan to monitor the environmental impacts of the project and assess the effectiveness of mitigation measures, and a capacity building and training program focused on health, safety, and environment. Organizational responsibilities and budgets are clearly identified for implementation, monitoring, and reporting. The EMP will be updated after detailed project design, as needed.

K. Risks and Key Assurances

34. The executing agency, the MET, has increasing experience with ADB projects (including the current ADB loan-funded Sustainable Tourism Development Project under implementation, ADB grants, and other large donor grants), but does not have the technical or staff resources to implement the project at the daily level; and the governments of Bayan-Ulgii, Khovd, and Uvs Aimags have some experience in the implementation of ADB-funded loan projects and knowledge of ADB safeguard procedures and requirements, but also has low implementation capacity or resources. These issues may result in the limited implementation of the project EMP and inadequate operation of the project facilities. These risks will be minimized as follows: (i) project implementation will be managed by a full- time project implementation unit (PIU); (ii) the PIU will include a qualified national environment safeguard specialist (part-time status in the initial stages of implementation, increasing to full-time status during civil works; (iii) three PIU aimag coordinators, that will help coordinate safeguard requirements on a daily basis; (iv) clear roles and responsibilities of all relevant agencies for EMP implementation, including contractors and construction supervision companies; (v) capacity building for EMP implementation; and (vi) the recruitment of an environmental monitoring agency to implement the external environmental monitoring described in the EMP. Environmental assurances have been developed and are included in the loan and project agreements.

L. Conclusions

35. The project will improve the visitor experience in the project areas and the management of four protected areas and one unprotected cave system. The infrastructure designs apply green building standards to minimize environmental impacts and demand on water and energy resources. The project sites are dispersed over 18 locations in three aimags, representing a low- density distribution of facilities which minimizes resource demands in individual locations. Key risks from construction and operation have been assessed. Selection criteria were applied to exclude works in strict protection zones and disturbance to critical habitats and lakes. The project works comply with the site management plans for the four protected areas and TSC and are aligned with Mongolia’s laws for protected areas, buffer zones, and water resources, and comply with ADB’s SPS requirements for works in and near protected areas. The project will not result in the damage or disturbance of critical habitats or to threatened species. Meaningful public consultation has been conducted in accordance with Mongolia’s regulations and ADB requirements. Public consultation will continue throughout project implementation. A project GRM has been developed and will be implemented at the aimag and soum levels. Based on the information presented in this IEE, and assuming full and effective implementation of the EMP, loan assurances, and training, potential adverse environmental impacts are expected to be minimized and/or mitigated to acceptable levels.

I. INTRODUCTION

1. This initial environmental examination (IEE) is for the proposed Sustainable Tourism Development Project (Phase 2) (the project). The project will be supported by a proposed loan of $30.0 million from the Asian Development Bank (ADB) and proposed grant of $2.0 million funded by the Japan Fund for Poverty Reduction of the Government of Japan. The proposed project focuses on three aimags (provinces) of western Mongolia: Bayan-Ulgii, Khovd, and Uvs. The designs comprise structural and non-structural components, including: institutional strengthening to improve tourism planning and management; the establishment of two tourism complexes and two tourist streets, and supporting infrastructure (power, water, access, sanitation, and solid waste management); and small tourism and management facilities in six protected areas. The project designs are focused on nature-based and cultural heritage-based tourism (“ecotourism”) and aim to improve tourism planning and management and the visitor experience, while also strengthening the management of tourism risks and impacts to biodiversity and cultural heritage. The project builds upon an existing ADB loan-funded tourism project (“Phase 1”) which is supporting tourism management at two national parks in north and northeast Mongolia.

2. Western Mongolia borders the People’s Republic of China and the Russian Federation. The region is characterized by extreme remoteness, small populations, and limited economic development. Rural communities largely depend on subsistence agriculture. The area also has a unique cultural heritage – the richest and most well-preserved rock art (ancient images on rock) in northern Asia, the highest number of ethnic groups in Mongolia, and a network of protected areas which include two World Heritage Sites and four Wetlands of International Importance. These rich natural and cultural features provide an opportunity to help alleviate local poverty through tourism. Visitor numbers to western Mongolia are small, but prior to the coronavirus disease (COVID-19) pandemic they were increasing rapidly, principally from domestic visitors and tourists from central Asia. The project locations are shown in Figure 1.

3. The project executing agency is the Ministry of Environment and Tourism (MET), acting through the Department of Tourism Policy Coordination (DTPC; for the loan-funded components) and Department of Protected Area Management (DPAM; for the grant-funded components) (the implementing agencies).

4. The project is categorized B for environment, pursuant to ADB’s Safeguard Policy Statement (SPS, 2009) which requires that an IEE, including an environmental management plan (EMP), is prepared for the project. The IEE was prepared based on (i) field reconnaissance surveys, stakeholder consultations, Government partner discussions, and desktop review by a consulting team (NAREE International Limited [Hong Kong] in association with HIDRIA Ciencia ambiente y desarrollo S.L. [HIDRIA, Spain], and Mongolia Water Forum Uskhelts - MWF-USKH, Mongolia), recruited by ADB to coordinate preparation of the project designs and due diligence, and (ii) a domestic environmental baseline assessment (EBA), conducted by Environ LLC, Mongolia. The environmental safeguards work was undertaken between October 2020 and March 2021. The IEE, EMP, and EBA will be disclosed on ADB’s website.

5. The IEE comprises the following sections: Introduction (background and context; this section); Review of the policy, legal, and administrative framework (Mongolia and ADB); Description of the project, with site-specific details, as noted above; Description of the baseline environment; Assessment of potential environmental impacts and required mitigation measures; Review of the alternative analysis process; Overview of climate change aspects, as they affect project activities and structures; Public consultation process and results; Environment management plan (EMP) (Appendix 1); and, Supporting appendices.

Figure 1: The project area in western Mongolia

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

A. Overview

6. The project is classified as environmental Category B under ADB’s SPS (2009), requiring preparation of an IEE and EMP. This IEE has been prepared in accordance with ADB’s SPS and national environmental standards and regulations. Mongolia has a range of laws, regulations, technical guidelines, and standards that govern the way in which environmental protection and environmental impact assessment for projects must be implemented, including for pollution prevention and control of air, noise, water, ecology and solid waste, and technical guidelines on assessing ambient air, noise, surface water, groundwater, and ecological impacts. A domestic environmental baseline assessment (EBA) was completed for the project, in accordance with the Law on Environmental Impact Assessment (2012) and other guidelines, as described in the following sections.

B. Mongolia’s Environmental Policy and Legal Framework

7. Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation, and strategies in place to manage protected areas, comply with its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia comprises the Constitution, international treaties and environment and resource protection laws.4

8. The main policy documents are the National Environmental Action Plan of 1996, the State Environmental Policy of 1997, the National Plan of Action to Combat Desertification, the Biodiversity Conservation Action Plan, and the National Plan of Action for Protected Areas, all developed under MET, as well as the Mongolian Action Program for the 21st Century. The National Environmental Action Plan was updated in 2000 and the National Action Plan for Climate Change was added in the same year. Several program documents (e.g., National Water Program, National Forestry Program, Program of Protection of Air, Environmental Education, Special Protected Areas, and Protection of Ozone Layer) were also completed in 2000/2001. A state policy on EIA was implemented in 1998. Other guidance documents which include environmental management were developed under other ministries and these include the Roads Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan. Other documents, such as the annual Human Development Reports have increasingly incorporated environmental aspects.

9. A fundamental principle of the Mongolian state environmental policy is that economic development must be in harmony with the extraction and utilization of natural resources and that air, water and soil pollution will be controlled. In April 1996, Mongolia’s National Council for Sustainable Development was established to manage and organize activities related to sustainable development in the country. The country’s strategy is designed for environmentally friendly, economically stable, and socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

10. The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem where the ecoregions of the Siberian taiga, the Central Asian steppe, the high Altai Sayan, and

4 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar and Wellington.

4 the Gobi Desert converge. The project area is in the Altai Sayan ecoregion. In recognition of its global responsibilities, Mongolia has acceded to several international environmental conventions (Table 1). Each convention places obligations on signatory governments ranging from the provision of a legislative basis for implementation, to adherence to the requirements and conditions of each convention, to monitoring implementation performance on a regular basis, to reporting on a regular basis to the conference of parties.

Table 1: International Environmental Conventions Signed by Mongolia Year of Convention Accession International Labour Organization – Core Labour Standards 1989 World Heritage Convention 1990 Convention on Biological Diversity 1993 UN Framework Convention on Climate Change (UNFCCC) 1994 Kyoto Protocol 1999 UN Convention on Combating Desertification (UNCCD) 1996 Convention on the Protection of Wetlands of International Importance (Ramsar) 1998 Vienna Convention for the Protection of the Ozone Layer 1996 Montreal Protocol (regulating substances that deplete the ozone layer) 1996 Convention on International Trade in Endangered Species of Fauna and Flora 1996 Convention on the Transboundary Movement of Hazardous Waste (Basel) 1997 Rotterdam Convention on the Prior Informed Consent Procedure for Certain 2000 Hazardous Chemicals and Pesticides in International Trade Stockholm Convention on Persistent Organic Pollutants (POPs) 2004

11. The Government of Mongolia undertook a major environmental law reform in 1990 including the law of land, protected areas, water, forest, wildlife, and native flora resources. The legislation base is extensive (Table 2).

Table 2: National Environmental Laws Name of the Law Year Adopted The Constitution of Mongolia 1992 Law on Environmental Protection 1995, 2006, 2008 Law of Land 2002 Law on Land Cadastre and Mapping 1999 Law on Land Fees 1997 Law on Land Possession 2002 Law on Special Protected Areas 1994 Law on Buffer Zones 1997 Law on Water 2004 Law on Water and Mineral Water Resource Fee 1995 Law on Forests 1995 Law on Prevention of Steppe and Forest Fires 1996 Law on Reinvestment of Natural Resource Use Fees for Conservation 2000 Law on Natural Plants 1995 Law on Protection of Plants 1996 Law on Fauna 2000 Law on regulation of export and import of endangered species (flora, fauna) 2002 Law on Underground Resources 1994 Law on Mineral Resources 1997, 2006 Law on Petroleum 1991 Law on Air 1995 Law on Hydrometeorology 1997 5

Name of the Law Year Adopted Law on Protection from Toxic Chemicals 1995 Law on Environmental Impact Assessment 1998, 2002, 2012 Law on Tourism 1998 Law on Solid Waste 2003 Law on prohibiting export and transportation of Hazardous Waste 2000

12. The EIA requirements of Mongolia are regulated by the Law on EIA (1998, amended in 20024F5 and 2012). The terms of the law apply to all new projects, as well as rehabilitation and expansion of existing industrial, service or construction activities and projects that use natural resources. The most recent amendment to the law was adopted in 2012 and was brought into force in 2013, implemented through a new Environmental Impact Assessment Regulation6. The purpose of the EIA law is environmental protection, the prevention of ecological imbalance, the regulation of natural resource use, and the assessment of environmental impacts of projects and procedures for decision-making regarding the implementation of projects. The EIA process in Mongolia is summarized in Figure 2.

13. The type and size of planned activities define responsibility, for either MET or the aimag government, which is stated in the annex of the Law on EIA. There are two types of EIA defined in the Law: (i) General EIA (GEIA) (screening; with a letter issued by MET). To initiate a GEIA, the project proponent submits to MET (or aimag government) a brief description of the project including feasibility study, environmental baseline report, technical details, drawings, and other information. The GEIA leads to one of four conclusions: (a) no detailed EIA necessary; (b) project may be completed pursuant to specific conditions; (c) Detailed EIA is necessary; or (d) project cancellation. Review and approval of the GEIA usually takes up to 14 working days. The scope of a DEIA is defined by the GEIA and must be produced by a Mongolian company authorized by MET based on certification criteria. Preparation of a DEIA may take at least three months. An expert involved in preparation of the GEIA will be involved in review of the DEIA within 18 working days and present the results to MET (or aimag government). Based on the conclusion of the expert, MET (or aimag government) issues a decision on approval or disapproval of the project.

14. The DEIA includes the following chapters: (i) environmental baseline data; (ii) project or technology alternatives; (iii) recommendations for minimizing, mitigation and elimination of potential and adverse impacts; (iv) analysis of extent and distribution of adverse impacts and their consequences; (v) risk assessment; (vi) environmental management plan to include environmental protection (mitigation) plan and environmental monitoring program; (vii) opinions and comments of affected households in the project area; (viii) if applicable, other issues regarding cultural heritage in the project area and special nature of the project; and, (ix) rehabilitation plan, if applicable.

5 Law of Mongolia on Environmental Impact Assessments (1998, amended in 2002). Unofficial translation available from http://cdm-mongolia.com. 6 The new EIA Regulation revokes 2 Regulations and 1 Guideline document which do not meet the requirements of the EIA Law. The revoked legislation is: Regulation on the Environmental Impact Assessment Committee (2006); Guidelines on Formulating EPPs and EMPs (2000); and Regulation on Detailed EIA Appraisal (2006). These regulations are superseded by the EIA Law. 6

Projects Requiring EIA Screening New projects, renovation/expansion of industrial, service & construction activities. projects using natural resources

Project Implementer submits documents to MET or aimag Project description. Technical & Economic Feasibility, Environmental baseline report, drawings, other related documents

MET or aimag expert Conducts General EIA (screening) within 14 days Makes 1 of 4 decisions

Decision -1 Project can progress Project can be implemented without DEIA

Decision -2 Project can progress with Project can be implemented with specific conditions conditions

Decision -3 Project implementer selects certified Detailed EIA required company for DEIA

Decision -4 Submit DEIA to MET expert decision Project rejected because of non-conformity or impacts within 18 days

DEIA = Detailed Environmental Impact Assessment, EIA = Environmental Impact Assessment, MET = Ministry of Environment and Tourism. Source: Asian Development Bank. Figure 2: Environmental Impact Assessment Process in Mongolia7

15. The DEIA is submitted to MET for review, which is expected to issue a conclusion within 18 working days (or may be extended, if necessary). The public is ensured of access to the DEIA Report. The MET will approve or disapprove a DEIA based on the conclusion of the review and taking into consideration public opinion. Projects that are not approved to implement may redesign a project to conform to the “unmet” environmental requirements, and submit a revised DEIA for a re-assessment, for public consultation and eventually for approval.

C. Protected Areas

16. Mongolia has one of the world’s oldest traditions of protected areas. In 1778, the introduction of a formal ban on logging and hunting at Bogd Khan Mountain, south of Ulaanbaatar, created one of the world’s oldest continuously protected areas. Similar bans were imposed for other important mountain areas in Mongolia. In 1911, the Mongolian government established Bogd Khan Protected Mountain Administration. During the Socialist Era, the national constitution stated that all land, forests, water, and wealth was the property of the state and people. This nationalization of land helped continue the practice of land protection under state ownership. In 1972, the Decree on the Rational Utilization of Natural Resources and the Protection of the Natural Environment was passed by the government. This declared that every person is required

7 Government of Mongolia. 2001. Compendium of Laws: A Mongolian Citizens Reference Book. Vol. 1. Ulaanbaatar. 7 to act for the good of nature and for the protection of natural resources. The first legislation specifically on protected areas was enacted when the Procedure on Strictly Protected Areas was approved in 1975.

17. As part of its commitment as a signatory to the Convention on Biodiversity, the Government of Mongolia has made a legislative commitment to set aside 30% of its territory (46.9 million ha) as protected areas by 2030. The Biodiversity Action Plan (1996) and National Program on Protected Areas (1998) provide the legal basis for this extension of Mongolia’s protected areas network. This commitment was made again under a Millennium Development Goal resolution in 2005 and remains a target for government. The current policy and legal framework relevant for protected area management in Mongolia are described below.

18. The Constitution of Mongolia (1992). The fundamental rights of Mongolian citizens are set out in the Constitution of Mongolia, adopted on January 13, 1992, including “the right to a healthy and safe environment, and to be protected against environmental pollution and ecological imbalance”. The constitution imposes on its citizens a sacred duty “to protect nature and environment” and empowers the government “to undertake measures on the protection of the environment and on the rational use and restoration of natural resources”. More specifically, the constitution imbues the State with the right to hold landowners responsible “in connection with the land, to exchange or take it over with compensation on the grounds of special public need or confiscate the land if it is used in a manner adverse to the health of the population, the interests of environmental protection or national security”.

19. The Law on Special Protected Areas (1994) provides for the establishment of protected area systems at national and local levels and establishes management regulations for national level protected areas. The purpose of the law is “to regulate the use and procurement of land for special protection and the preservation and conservation of its original conditions in order to preserve the specific traits of natural zones, unique formations, rare and endangered plants and animals, and historic and cultural monuments and natural beauty, as well as research and investigate evolution”. Sources of financing for protected areas are specified in the law and include: (1) state and local budgets; (2) income from tourism and other activities and services; (3) donations and aid by citizens, economic entities, and organizations, as well as; (4) income from compensation for damage caused by persons who violate the legislation on protected areas.

20. Amendment of the Law on Special Protected Areas (draft 2017). The draft has been in discussion within MET, protected area administrations and related institutions. As of today, significant changes in the draft document include new requirements for detailed description of legal terms, integration of the Law on Protected Area’s Buffer zones as a chapter within the updated Law, and updated consolidation with other updated laws and regulations. The draft clearly defines the description of protected area administration as a government administration or any legal entity that is officially responsibility for Protected Area management and its implementation, which opens the opportunity for all who can take care of its management. The law also designates collaborative approach for the protected area management involving all stakeholders as well as water basin administration, which is the new structure responsible for areas of water bodies. Moreover, the law ensures easy access for development of trans-boundary protected area cooperation, simplifying inter-government procedures at the local level. Moreover, the document introduces a set of criteria (ecological, social) in nominating protected areas and related zoning. There are also additional clauses mentioning exclusion of areas from the State protection, which might be justified due to several occurrences in recent years in Mongolia because of overlap of mining and development project areas with the state protected areas. The original law and proposed amendment clarify that park administrations are not permitted to earn 8 profits. In general, the draft amendment recognizes protected areas as a state value and basis for sustainable development of the country, emphasizing adequate financing for PA management (see Appendix 6 for details on permitted uses in the different zones of national parks and strictly protected areas).

21. The Law on Environmental Protection (1995) regulates relations between the State, citizens, economic entities, and organizations, to guarantee the human right to live in a healthy and safe environment, as well as ecologically balanced social and economic development, the protection of the environment for present and future generations, the proper use of natural resources and the restoration of available resources. It also clarifies ownership of natural resources. According to the law, “the land, its underground resources, forests, water, animals, plants and other natural resources shall be protected by the State and unless owned by citizens of Mongolia, shall be the property of the State”, and “unless otherwise provided by law, citizens, economic entities, organizations, foreign citizens and legal persons may use natural resources upon the payment and collection of relevant fees in accordance with any contract, special permit, or license”. Under this law, State environmental inspectors are conferred the authority “to require citizens, economic entities and organizations to eliminate adverse impacts or to suspend their activities for a certain time if they affect the environment in breach of legislation on environmental protection, standards and permissible maximum levels” and “to impose administrative penalties on those in breach of legislation on environmental protection as provided by law”.

22. The Law on Buffer Zones (1997). The establishment of protected area buffer zones is provided for by Article 4 of the 1994 Law on Special Protected Areas. This provision was expanded by the Mongolian Law on Buffer Zones, promulgated on 23 October 1997. The purpose of this is to “regulate the determination of Special Protected Area Buffer Zones and the activities therein”. Article 3 provides for the establishment of buffer zones to “minimize, eliminate and prevent actual and potential adverse impacts” to protected areas. For Strictly Protection Areas, Nature Reserves and Monuments, buffer zones lie outside of the protected area; for National Parks, they may overlap with the limited use zone of the National Parks. Article 6 of the Law on Buffer Zones provides for the establishment of voluntary “Buffer Zone Councils”, for the purpose of “advising on the development of buffer zones, the restoration, protection and proper use of natural resources, and the participation of local people” in protected area management. Buffer Zone Councils have a right to “develop proposals and recommendations regarding land and natural resource use in the Buffer Zone and to develop a Buffer Zone Management Plan”.

23. Article 7 permits Buffer Zone Councils to create “Buffer Zone Funds”, which can be used for various purposes, including restoring environmental damage and minimizing degradation”, to provide support for local people’s livelihood” and “to conduct training and public awareness activities regarding nature conservation. These funds can receive income from various sources, including “donations from foreign and domestic organizations, economic entities and organizations” and “a certain amount of revenue from projects, activities and services conducted within the Buffer Zone”, with the precise amount in the latter case being determined by the Soum Citizens Representative Khural. Hence, this article provides for the capture of revenue streams from mining and tourism projects conducted within the buffer zones of protected areas.

24. The Law on Natural Resource Use Fee (2012) defines the percentage and extent of fees paid for natural resources use to be applied for the protection of the environment and the restoration of nature. According to the law the fee collected in local government fund is increasing every year, but according to the performance evaluation, specified expenditures have been low in the last four years. Yearly income from the fee of natural resource use is estimated at 9 approximately 50-70 billion tugriks, but the implementation of the law estimated 49.0% in 2014, 8 41.7% in 2015 and 33.0% in 2016. F

25. The Law on Land (2002) replaced an earlier law dating from 1995. The purpose of the law is to regulate the ownership and use of land by citizens, organizations, and other entities. The definition of “Land” under Article 3 encompasses “the land surface, its soil, forests, water and plants”; it does not include subsoil, the ownership and use of which is regulated by the 1988 Law on Subsoil (updated in 1995). Of particular significance to environmental protection is the creation of a special category of land, called Special Needs Land, which is the property of the state and may not be given for private ownership. Special Needs Land includes Special Protected Areas at state and local levels. The prohibition on private ownership of Special Needs Land reinforces the prohibition of mining activities within protected areas under the Law on Special Protected Areas.

26. Land use rights (gazar ashiglakh) in Mongolia consist of the right to use land pursuant to the Land Law article 3.1.1. This defines land use as a “legitimate and concrete activity to make use of some of land’s characteristics in accordance with contracts made with owners and possessors of land”. The right of land use duration and land area size rights vary (for instance, foreign citizens and stateless person may only use up to 0.05 hectares and an additional 0.1 hectares for cultivation of vegetables and fruits, and the duration of land use is limited to five years, with an additional extension of up to five years.) In practice, Mongolian citizens and Mongolian legal entities are often using land illegally in state special protected areas under this provision, as they cannot possess or own land in these areas.

27. The Law on Land Fees (2007). The purpose of this law is to charge citizens, business entities, and organizations using state-owned land, and to regulate fees paid to the state budget. Mongolian citizens, business entities, or organizations possessing or using land based on contracts made according to the terms and conditions of the Land law, and foreign diplomatic missions and consular offices, representative agencies of international organizations, foreign legal bodies and citizens and can all enter agreements for the use of state land by paying land fees. This law is used extensively at local level by aimags and soums to assess and collect land fees from tour operators operating ger camps (traditional tents)9 and other resort facilities. Four PAAs have made agreements with the aimag to share land fee revenues to cover some costs of the PA.

28. In 1997, the Government of Mongolia determined, through the 152nd Rule, the highest and lowest standard of land fees for each year. In the city, depending on the location, land fees for 1 meter square vary from 44 to 440 MNT. Land fees are the most expensive in the cities. Land fees in the outskirts of the city are however cheaper. In distant districts, land fees are around 40 to 80 MNT. Land fees in provinces vary depending on the population. For provinces with a population of 30-50 residents, land fees for 1m² are estimated from 5 to 10 MNT. In provinces of 15-30 inhabitants, land fees for 1m² are estimated from 4 to 8 MNT. Land fees for 1 m² in villages 10 and bigger soums are 0.8 MNT. For small soums, the fee is 0.5 MNT8F

29. The government’s orders determine the year’s lowest land fees for agricultural land, pastureland, and hay-field land as per four zones: Khan-Khentii mountainous land; Altai mountainous land; Gobi mountainous land; and steppe zones. Each zone has specific land fees. For instance, agricultural land annual fees in the Khan-Khentii’s zone for 1 ha is 386 MNT; in Altai,

8 Government of Mongolia. Environmental State Report of Mongolia 2015-2016. Ulaanbaatar. 9 A ger is a traditional round-shaped dwelling. Tour camps in rural areas frequently provide ger accommodation. 10 Government Order. 1997. 2nd Annex of 152nd Government Order. Ulaanbaatar. 10

11 1 ha is 225 MNT; in the Gobi, 1 ha is 174 MNT, in the steppe, 1 ha is MNT384 9F Herders are exempt from paying fees for pastureland and hay fields. Only Mongolian citizens are exempt from paying 90% of their land fees for up to 0.07 hectares of land possession and use for residential purposes. Kindergarten lands, nursing homes, children’s camps, secondary schools, and orphanages, regardless of ownership, are also exempt from land fees.

30. The duration of land use contracts in special protected areas is five years, with one possible extension of up to five years; and land fees in those areas are three times higher than regular fees, while land fees of lands in forest or water reservoirs, are double the regular fees.

31. The Law on Forests (2012) was promulgated on 17 May 2012, replacing an earlier law dating from 2007. The purpose of the law is to “regulate relations from protection, possession, sustainable use and reproduction of the forest in Mongolia”. The management regulations for forests within protected areas are provided by the Law on Special Protected Areas. For certain other protected forests, all activities are prohibited “except for the construction of roads, bridges, water, power and telecommunications lines, fire lines, as well as forest regeneration, cleaning activities and use of non-timber resources”.

32. The National Program on Protected Areas was developed and approved by the Parliament (Ikh Khural) in 1998 with the main objectives of achieving the establishment of more protected areas in Mongolia, targeting 30% of its total territory. The National Programme on Protected Areas recognized this goal and aims to establish and maintain comprehensive, effectively managed, and ecologically representative networks of protected areas covering 30% 12 of Mongolia by 201510F The Programme provides 10 key elements for its implementation, such as the establishment of a national program, the necessary legal framework, as well as needs targets related to governance, human capacity, management, research, public awareness and education, public participation, funding and infrastructure, and international cooperation. These elements align with the goals of the Convention on Biological Diversity’s Programme of Work on Protected Areas. The Government of Mongolia has elaborated and adopted also “The Action Plan for the Implementation of the National Programme on Protected Areas” in 1999.

33. A number of other important policies are also important for protected areas management and conservation of biodiversity in Mongolia. They include the following.

34. Mongolian Action Programme for the 21st Century (MAP-21). MAP-21 is the country’s national agenda on sustainable development for the 21st century. It covers activities at the national and provincial levels. It provides an overall framework for sustainable development activities based on the country’s natural resources and ecosystems. The MAP-21 document was approved by the Government in November 1995 and formulated with assistance from UNDP. MAP 21 is structured into four main subjects, including sustainable social development, sustainable economic development, proper use of natural resources and protection of nature and the environment, and means for implementing Mongolia’s System of sustainable development. Other Action Plans such as the National Environmental Action Plan (NEAP), Biodiversity Action Plan, and the National Plan of Action to Combat Desertification (NPACD) are complementary to and contain integral parts of MAP-21.

11 3rd Annex of 152nd Government Order, 1997. 12 If local protected areas (PA) are included, Mongolia has already achieved this target. As of 2017 there were 2,347 local PAs, covering over 57.9 million ha, equivalent to over 37 percent of the national territory. 11

35. National Environmental Action Plan (NEAP). Mongolia initiated a National Environmental Action Plan (NEAP) in 1993. The NEAP covered actions to the year 2010. The Plan focuses on the following three major parts: (i) principal environmental issues, which has four sub-parts: environmental protection, management of natural resources, conservation, and natural disaster mitigation; (ii) social and economic dimensions; and (iii) other mechanisms and responses. NEAP raised issues that include: land degradation, the wildlife population decline, eco-tourism promotion, and institutional capacity, including regulations, co-ordination, and human resources. The National Environmental Action Plan (NEAP) calls for the integrated development of the natural resource law to support Mongolia’s efforts in sustainable development.

36. Biodiversity Conservation Action Plan (BAP). Biodiversity conservation is one of the priority issues in Mongolia. The BAP exercise was initiated in 1993. The detailed planning exercise, including the preparation of the action plan, was undertaken in August 1995. The objectives of the BAP are to protect biodiversity and to restore damaged areas. BAP covers: (i) establish a complete PA system representing all ecosystems and to protect endangered species. This may require joint actions with the Russian Federation and the People’s Republic of China; (ii) implement an effective environmental impact assessment program; and (iii) establish a research program to improve knowledge of biodiversity and other issues.

37. Millennium Development Goals. When setting its national level Millennium Development Goals, Mongolia gave high priority to improving its protected area system. In 2005 it issued a parliament resolution that included the commitment to the country-specific Millennium Development Goal to have 30% of its land covered by the protected area system. In 2008 it issued another resolution committing the country to expand the network of specially protected natural areas, create sound structures for its administration, and introduce a modern-day security management system.

38. Mongolia also is a signatory to international conventions relevant to protected area management, wetlands, species conservation and climate change (Table 1). Article 10.3 of the constitution states that international treaties to which Mongolia has signed up will become effective as national legislation upon signature, but in practice this is not applied. Many national laws include a similar reference.

39. Government Action Plan 2021–2024 and Vision 2050. The Government Action Plan 2021-2024 and Vision 2050 (the government’s long term national development strategy) were released in 2020. Both documents emphasize: (i) the development of nature- and cultural heritage- based tourism as a priority for national development, focusing especially on the national protected area network; (ii) -Reduction of soil pollution in tourism regions through implementation of an “Eco Toilet” program and promotion of environmentally friendly and efficient consumption and production and recycling of solid waste as well as contribution to international climate change and mitigation efforts by developing a low carbon, productive and inclusive green economy.

D. Environmental Standards

40. Mongolia has national standards for a range of environmental parameters. Standards that were applied for this IEE are: (i) surface water quality standard (MNS 4586:1998); (ii) ambient air quality standards (MNS4585:2016); (iii) soil quality, soil pollutant elements and substances standard (MNS 5850:2019); (iv) ambient noise standard (MNS 4585:2007); (v) occupational health and safety standard (MNS 5002:2000), and (vi) treated water for reuse (MNS 6734:2018). Comparison with the World Bank Group’s Environmental, Health and Safety (EHS) Guidelines is 12 shown below. Where the national standard is higher than the EHS standards, or where no EHS standard is available, the national standard is applied for the project.

41. Soil Quality Standard. The soil quality standard of Mongolia is presented in the table below. No comparable standard is identified in the World Bank Group’s EHS Guidelines, and the national standard is followed for this project.

Table 3: Soil Quality Standard (MNS 5850:2019) MNS 5850: 2019 Parameter Soil Mechanical Composition Maximum Acceptable Amount Clay Loamy Sandy Pb 100 70 50 100 Cd 3 1.5 1 3 Hg 2 1 0.5 2 As 20 15 10 20 Cr 150 100 60 150 Cr6- 4 3 2 4 Sn 50 40 30 50 Sr 800 700 600 800 V 150 130 100 150 Cu 100 80 60 100 Ni 150 100 60 150 Co 50 40 30 50 Zn 300 150 100 300 Mo 5 3 2 5 Se 10 8 6 10 B 25 20 15 25 F 200 150 100 200 CN 25 15 10 25

42. Drinking water. The following table summarizes Mongolian drinking water standards MNS 0900: 2018 and international standards by the EHS and World Health Organization (WHO). Mongolian standards are more stringent than international ones and are followed for this project.

Table 4: Mongolian Drinking Water Standard Parameter Unit MON Standard WHO/EHS Standard Physical Quality pH mg/l 6.5-8.5 6.5-8.5 (milligrams/litre) Hardness mg equivalent/l 7.0 Total Dissolved Solids (TDS) mg/l 1000.0 Turbidity mg/l 1.5 Taste Score 2.0 Odor Score 2.0 Colour Degree 20 Inorganic Quality Molybdenum (Mo) mg/l 0.07 - Barium (Ba) mg/l 0.7 1.3 Boron (B) mg/l 2.4 2.4 Copper (Cu) mg/l 2.0 2 Calcium (Ca2+) mg/l 100.0 - Magnesium (Mg2+) mg/l 30.0 - Manganese (Mn) mg/l 0.1 - 13

Parameter Unit MON Standard WHO/EHS Standard Sodium (Na) mg/l 200.0 50 Phosphate (PO43-) mg/l 3.5 - Fluoride (F) mg/l 0.7-1.5 1.5 Selenium (Se) mg/l 0.04 0.04 Strontium (Sr) mg/l 2.0 - Sulfate (SO42-) mg/l 500.0 - Chloride (Cl) mg/l 350.0 - Arsenic (As) mg/l 0.01 0.01 Hydrogen sulfide (H2S) mg/l 0.1 - Chromium (Cr) mg/l 0.05 0.05 Dry residue mg/l 1000.0 Uranium (U) mg/l 0.03 0.03 Beryllium (Be) mg/l 0.0002 - Cadmium (Cd) mg/l 0.003 0.003 Total mercury (Hg) mg/l 0.001 0.006 Total cyanide (CN-) mg/l 0.01 - Ammonium ion, (NH4+) mg/l 1.5 - Nitrate ion, (NO3-) mg/l 50.0 50 Nitrite ions (NO2-) mg/l 1.0 3 Phosphate ions, (PO43-) mg/l 3.5 - Silver (Ag) mg/l 0.1 - Iodine (I2) mg/l 1.0 - Vinyl chloride mg/l 0.0003 0.0003 Nickel (Ni) mg/l 0.02 0.07 Lead (Pb) mg/l 0.01 0.01 Aluminium mg/l 0.5 - Antimony (Sb) mg/l 0.02 0.02 Total iron (Fe) mg/l 0.3 - Zinc (Zn) mg/l 5.0 - Organic Quality Benzene mg/l 0.01 0.01 Xylenes mg/l 0.5 0.5 Nitrile 3 acetic acid mg/l 0.2 2 chlorinated methane mg/l 0.02 2 chlorinated ethane mg/l 0.03 3 chlorinated ethylene mg/l 0.02 4 chlorinated ethylene mg/l 0.04 Phenolic compounds mg/l 0.002 Styrene mg/l 0.02 0.02 Toluene mg/l 0.7 0.7 Ethyl benzene mg/l 0.3 0.3 Pesticides Atrazine mg/l 0.002 0.1 Carbofuran mg/l 0.007 0.007 Lindane mg/l 0.002 0.002 Molinat mg/l 0.006 0.006 Endrin mg/l 0.0006 0.0006 Microbial Quality Total Coliform Coli / ml 100 (at source) 20 (at supply) E. Coli E. Coli / 100ml 0 / 100ml 0 / 100ml Radiological Quality Total α radioactivity Bq/l 0.1 0.5 14

Parameter Unit MON Standard WHO/EHS Standard Total β radioactivity Bq/l 1.0 1

43. Ambient Water Quality. The next table shows the Mongolian standard for ambient water quality MNS 4586:1998. No comparable standard is given the World Bank Group’s EHS Guidelines, and the national standard is followed for this project. The project will also involve the reuse of treated wastewater from two onsite wastewater treatment plants at the two planned tourism complexes, for toilet flushing and landscaping (greening). This wastewater will be treated to the standard in MNS 6734:2018 Treated water for reuse. General technical requirements.

Table 5: Ambient Surface Water Quality Standard (MNS 4586:1998) Parameter MNS 4586-98 pH 6.5-8.6 DO mgO/l Not less than 6&4* BOD mgO/l 3 NH4-N mgN/l 0.5 NO2-N mgN/l 0.002 NO3-N mgN/l 9 PO4-P mgP/l 0.1 CI mg/l 300 F mg/l 1.5 SO4 mg/l 100 Mn mg/l 0.1 Ni mg/l 0.01 Cu mg/l 0.01 Mo mg/l 0.25 Cd mg/l 0.005 Co mg/l 0.01 Pb mg/l 0.01 As mg/l 0.01 Cr mg/l 0.05 Cr6+ mg/l 0.01 Zn mg/l 0.01 Hg mg/l 0.1 Oil mg/l 0.05 Phenol mg/l 0.001 Active and washing substances mg/l 0.1 Benzapyren Mkg/l 0.005 *DO>6mgO/l for summer time and DO>4mgO/l for winter time

44. Groundwater. The Mongolian Standard outlining the requirements for protection of groundwater (MNS 3342:1982) states that contamination of groundwater from industrial raw materials, products and municipal wastes during transportation and storage is prohibited. No comparable standard is given in the EHS Guidelines. The national standard includes: (i) Raw materials and products for industrial and municipal waste storage tanks with potential to contaminate groundwater resources should comply with following:  Geological - hydrogeological investigations of the storage tank construction, potential soil infiltration estimates of geological materials, groundwater protection measures to be developed based on the amount and characteristics of the chemicals stored.  Storage tanks to be tested for leakage prior to use. 15

 For areas at the base of mountains, loops of rivers, river beds and highly fractured parts of geological sediments which are used for drinking water, storage tanks cannot be established in these regions. (ii) In case of groundwater contamination due to accidents, the damaged area should be protected, spill gathered without further distribution, the prohibition of drinking water collection from this area, and quick organization and removal of traces of contamination. (iii) In the event of groundwater pollution or when the contamination reaches dangerous levels, the method of observation and control will depend on the groundwater quality, its intended use and the potential consequences of the pollution.

Table 6: Groundwater Quality Standard (MNS 900:2005) Parameter Measuring Maximum WHO Guidelines for Drinking Water unit allowed level Quality, Fourth Edition, 2011 Na* mg/l 200 None established K* mg/l 200 None established Ca2- mg/l 100 - Mg2- mg/l 30 - SO4 mg/l 500 None established HCO3 mg/l - CO32 mg/l - Cl mg/l 350 mg/l 5 P mg/l 0.7-1.5 - Br mg/l None established Test by mark mg/l 2 - Color degree 20* None established Odor mark 2 - pH 6.5-8.5 None established Electric conductivity (Y S/st) - General Minerals 1000 - Hardness mg-eqv/l 7 None established Acidity potential mB - Solid Remains g/l 1 - NH4 mg/l 1.5 None established NO3 mg/l 50 50 NO2 mg/l 1 3 PO4 mg/l 3.5 - As mg/l 0.01 0.01 Fe mg/l 0.3 None established Pb mg/l 0.03 0.01 Ni mg/l 0.02 0.07 Cr mg/l 0.05 0.05 Cu mg/l 0.1 2 Zn mg/l 5 None established Mn mg/l 0.1 None established Cd mg/l 0.003 0.003 Hg mg/l 0.0005 0.006 Br mg/l 0.5 2.1 Ba mg/l 0.7 0.7 Mo mg/l 0.07 None established Se mg/l 0.01 0.04 E.coli or thermotolerant - Must not be detectable in coliform bacteria any 100 ml sample.

45. Air quality. Mongolia has a network of air quality monitoring stations which analyze air quality data for comparison with national and international standards. The standards for Mongolia (MNS 4585: 2016) and the WHO (and which are identical to EHS standards) are noted below. Table 7: Mongolian Air Quality Standard (MNS 4585: 2016) 13 EHS/WHO11F Pollutant Averaging Period Mongolian Standard (µg/m3) (µg/m3) Nitrogen Dioxide (NO2) 20 Minutes 200 24 hours 50 40 (annual mean) Sulphur Dioxide (SO2) 20 Minutes 450 24 hours 50 20 Particulate Matter (PM10) 24 hours 100 50 Annual 50 Particulate Matter (PM2.5) 24 hours 50 Annual 25

46. Noise. The Mongolian National Standard for Ambient Noise MNS 4858:2016 sets an allowable limit for noise in daytime at 60 dB, and night at 45 dB, with night being 10 pm-6 am according to the Act on Labor. In comparison, EHS guidelines recommend that indoor noise levels should not exceed 30 dB (average equivalent over 8 hours LAeq) and 45 dB (maximum for an individual noise event), and outdoor sound levels should not exceed 50 dB LAeq and are more stringent than the national standard. The EHS standards are applied for this project.

Table 8: Mongolian Noise Standard Maximum allowable noise limit, Standard 1hr LAeq in dBA Day (7:00-22:00) Night (22:00-7:00) WB/IFC Guideline – Industrial/commercial 70 70 WB/IFC Guideline – Residential/Institutional/Educational 55 45 Mongolian National Standard 60 45 WB = World Bank, IFC = International Finance Corporation

E. Mongolia’s Occupational Health and Safety Standards

47. Article 16 of the National Constitution of Mongolia states that every employee has the right to “suitable conditions of work”. The government adopted a National Program for Occupational Safety and Health Improvement in 2001 and national standards have also been adopted, such as the National Standard on Occupational Health and Safety MNS 5002:2000.

F. ADB Safeguard Policy Statement

48. ADB’s SPS (2009) provides the joint basis for this IEE. All projects funded by ADB must comply with the SPS. The purpose of the SPS is to ensure that projects are environmentally sound, designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, biology, health, or safety hazards. The SPS sets out the policy objectives, scope and triggers, and principles for three key safeguard areas: (i) environmental safeguards; (ii) involuntary resettlement safeguards; and (iii) Indigenous Peoples safeguards. The policies seek to avoid, minimize, or mitigate adverse environmental and social impacts, including protecting the rights of those likely to be affected or marginalized by the development process. The objectives of ADB’s safeguards are to: (i) avoid adverse impacts of projects on the environment and affected people, where possible; (ii) minimize, mitigate, and/or compensate for

13 See: http://www.who.int/mediacentre/factsheets/fs313/en/index.html (all parameters except carbon monoxide); and,http://whqlibdoc.who.int/ehc/WHO_EHC_213.pdf (carbon monoxide). 17 adverse project impacts on the environment and affected people when avoidance is not possible; and (iii) help borrowers/clients to strengthen their safeguard systems and develop the capacity to manage environmental and social risks. The SPS is underpinned by the ADB Operations Manual for the SPS (OM Section F1, 2010), and guidance is provided by the ADB Environmental Safeguards - A Good Practice Sourcebook (2012).

49. The SPS also promotes the use of international standards, including the World Bank Group’s EHS Guidelines. 14 EHS guidelines relevant to the project include environment protection, water conservation, hazardous materials, waste management, noise control, sanitation, and community and occupational health and safety. Where EHS standards are higher than national standards, efforts are made for ADB-funded projects to target the EHS standards. The standards applied to this project (see above) are based on comparison of national and EHS thresholds: in cases where no EHS thresholds are available, or the Mongolian standards are the same or higher than the EHS standards, the national standards have been applied. In general, several Mongolian standards are the same as, or higher than, the EHS standards (see details noted previously).

50. Compared with the Mongolian EIA requirements, the SPS emphasizes additional requirements, including: (i) a project grievance redress mechanism; (ii) definition of the project area of influence; (iii) assessment of indirect, induced and cumulative impacts; (iv) due diligence of associated facilities; (v) protection of physical cultural resources; (vi) climate change mitigation and adaptation; (vii) impacts on livelihoods through environmental media; (viii) biodiversity conservation; and (ix) a project-specific EMP.

51. At an early stage in the project cycle, typically the project identification stage, ADB screens and categorizes proposed projects based on the significance of potential project impacts and risks. A project’s environment category is determined by the category of its most environmentally sensitive component, including direct, indirect, induced, and cumulative impacts. Project screening and categorization are undertaken to: (i) reflect the significance of the project’s potential environmental impacts; (ii) identify the type and level of environmental assessment and institutional resources required for the safeguard measures proportionate to the nature, scale, magnitude and sensitivity of the proposed project’s potential impacts; and (iii) determine consultation and disclosure requirements.

52. SPS and protected areas. The SPS requires that project activities will not be implemented in areas of critical habitat, which includes areas with high biodiversity value, including habitat required for the survival of critically endangered or endangered species; areas having special significance for endemic or restricted-range species; sites that are critical for the survival of migratory species; areas supporting globally significant concentrations or numbers of individuals of congregatory species; areas with unique assemblages of species or that are associated with key evolutionary processes or provide key ecosystem services; and areas having biodiversity of significant social, economic, or cultural importance to local communities.

53. ADB assigns a risk category to each project based on potential environmental impacts: (i). Category A. Proposed project likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented; impacts may affect an area larger than the sites or facilities subject to physical works. A full-scale environmental impact assessment (EIA) including EMP required.

14 World Bank Group. 2007. Environmental, Health, and Safety Guidelines. Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines 18

(ii). Category B. Proposed project’s potential environmental impacts are less adverse and fewer in number than those of category A projects; impacts are site-specific, few if any of them are irreversible, and impacts can be readily addressed through mitigation measures. An initial environmental examination (IEE), including an EMP, is required. (iii). Category C. Proposed project likely to have minimal or no adverse environmental impacts. No EIA or IEE required but environmental implications need to be reviewed.

54. This IEE was prepared by the TA consultant on behalf of the MET, the executing agency. The assessment procedure undertaken for the project is summarized in the figure below.

Figure 3: Environmental Assessment Procedure for the Project

55. The domestic environment baseline assessment for the project and this draft IEE and EMP were provided for review to MET’s Department of Environment and Natural Resources, the authority responsible for issuance of a domestic General EIA Letter and evaluation of the need for domestic Detailed EIAs. The General EIA Letter is pending from MET. For the purposes of project safeguard preparation, it has been assumed that Detailed EIAs will be required for (i) the two tourism streets and tourism complexes, and (ii) the small project facilities in the protected areas. The scope, budget, and terms of references for Detailed EIAs for these works have already been included in the consulting services packages and costs for the detailed engineering design and construction supervision services for each package. These are in the project administration manual. 19

III. DESCRIPTION OF THE PROJECT

A. Rationale and Environmental Benefits

56. The project will support the development of sustainable tourism within the three aimags of western Mongolia: Bayan-Ulgii, Khovd, and Uvs, with a focus on access to areas with high biodiversity and cultural values, as well as recreational opportunities. The expected outcome is that sustainability and inclusiveness of ecotourism in western Mongolia is increased. The proposed project will have four outputs: inclusive planning and capacity for local tourism businesses enhanced; enabling infrastructure constructed; sanitation and waste management improved; and management of cultural heritage sites and protected areas strengthened. The planned components are consistent with improved environmental management. The project will be funded through an ADB loan of $30.0 million and a $2.0 million grant.

57. The loan will largely focus on the major civil works for the project (tourism complexes and tourist streets). The grant will focus on the project non-structural measures (institutional strengthening and capacity building) and, small site facilities for five selected protected areas and cultural heritage sites, to benefit the livelihoods and income opportunities for poor and vulnerable communities within and around the project sites. The project Feasibility Study Report provides full details on the needs, approaches, and technical aspects of each of the project components. A summary of the project components, quantities, and benefits is in Table ES–1. Additional details for the project civil works (the focus of the IEE) are in Table 9.

B. Project Outputs

58. Output 1: Inclusive planning and capacity for community-based tourism enhanced. This output will strengthen the institutional framework for tourism and increase the number of local beneficiaries from tourism. The project will (i) prepare the first tourism master plan for western Mongolia. This will define limits for tourism development, based on stakeholder consensus and growth projections, travel routes which maximize benefits for communities, and actions to support post COVID-19 sector recovery; (ii) strengthen the three aimag tourism plans, to establish targets for livelihoods, conservation and sanitation aligned with parallel ADB projects on health and border procedures; (iii) establish the first tour camp concession manual and certification program for western Mongolia to embed social and gender targets and environmental standards in commercial operations, strengthen links with local goods and services, and provide a stable business framework for about 45 tour camps with 117 employees; (iv) construct two tourist streets in the Khovd and Uvs aimag centers and nine women-led markets, to showcase and sell local products; and (v) implement a pilot tourism development program for communities and MSME, comprising vocational training, a community revolving fund (CRF), youth incubator, and the establishment of about 13 community-based organizations (CBO).15 About 8,162 residents (50% women and 30% youth) will benefit from tourism-related businesses and value chains. The IEE focuses on impact assessment for construction and operation and maintenance (O&M) of the two tourist streets.

15 The pilot tourism development program will focus initially on rural communities at five protected areas and cultural heritage sites (para. 5) and be developed in partnership with aimag youth employment centers, regional universities, and tour camp operators. The revolving fund will apply a successful design piloted with previous JFPR support and will be the first such fund for community-based tourism in western Mongolia. The youth incubator will comprise (i) training venues for youth in two tourism complexes (outputs 2 and 4), as safe learning spaces to foster innovation and entrepreneurship; and (ii) tourism-related training and links with local enterprises to develop tourism goods and services. The CBOs will help implement the program and coordinate community participation.

59. Output 2: Enabling infrastructure constructed. This output will (i) construct the first tourism center in western Mongolia, the Uvs tourism complex (UVTC) in Uvs Aimag; (ii) establish supporting infrastructure for the UVTC, including car parking and extension of the aimag power line to the site; (iii) establish traffic management plans, safety signs and barrier gates, and upgrade 12 small carparks for a total capacity of 240 vehicles at five protected areas and cultural heritage sites to control public access and halt off-road vehicle damage; and (iv) develop institutional arrangements for operation and maintenance (O&M) of the project facilities. The UVTC will help catalyze tourism development for the western region and will have an operational mandate focused on education, cultural heritage, and nature. It will prioritize local employment and community goods and services and work closely with the community beneficiaries and MSME under output 1 for tourism planning. The designs apply a best practice green standard for water and energy efficiency, low-carbon emissions, and the use of cost-effective local materials.16 The IEE focuses on impact assessment for construction and O&M of the UVTC and supporting infrastructure, and small traffic management facilities in the five project field sites.

60. Output 3: Sanitation and waste management improved. This output will (i) facilitate the installation of about 60 low-cost and gender-sensitive toilet systems at tour camps, campsites and project-funded car parks at five protected areas and cultural heritage sites. The project will replicate successful JFPR-funded toilet designs and O&M procedures from phase 1, including CBO-led management of the campsites and toilets, and sustainable financing from campsite fees; (ii) establish waste disposal procedures for the project facilities, including safe transport and treatment at rural and urban wastewater treatment plants and landfills to be upgraded under ADB’s Aimag and Soum Investment Development Program (ASDIP); and (iii) implement a water, sanitation and hygiene (WASH) program. This will establish sanitation, health and safety standards and procedures for the project communities and facilities as well as for tour camps. The WASH program will be planned with aimag health and border agencies, integrated in the aimag tourism plans (output 1), and aligned with guidelines of the World Health Organization for infection prevention and control.17 These measures will strengthen post COVID-19 resilience for over 16,296 residents and 36,000 visitors per year to these protected areas. The IEE focuses on impact assessment for construction and O&M of the toilet systems at the five project field sites, and sanitation and solid waste management for all of the project facilities.

61. Output 4: Management of cultural heritage sites and protected areas strengthened. This output will (i) construct the first rock art and nomadic culture center in Mongolia, including a ‘digital museum,’ and will be located in Khovd Aimag. It will include high-quality two- and three- dimensional virtual displays of the rock art of the TSC and other sites, establish a digital inventory for rock art, and develop an online platform to promote digital tourism for cultural heritage. The center, museum and access to the TSC will be managed in an integrated approach including O&M, entry fees, and guided visits to and protection of the TSC; (ii) establish at least 35 small management facilities at five protected areas and cultural heritage sites, comprising public campsites, information centers, public cooking cabins, bird watching towers, ranger stations, and fee collection stations, to protect habitats and improve facilities in locations subject to high visitor use; (iii) strengthen site management plans to integrate O&M procedures for the project facilities; and (iv) train about 120 residents and 12 local agencies to implement the revised site plans. The project facilities will be operated and maintained by about 13 CBOs in coordination with the park administrations, generating about 176 jobs (40% women). Overall, these measures will help strengthen the management of five globally important protected areas. The IEE focuses on

16 The infrastructure designs apply the Excellence in Design for Greater Efficiencies standard. 17 World Health Organization. 2020. Infection prevention and control guidance (COVID-19). 21 impact assessment for construction and O&M of the RANCC, facilities at the TSC, and small facilities at the five field sites.

62. For this assessment, the project physical works are clustered per aimag and per site (Figure 4). The focus will be on enhancing the visitor experience in areas that visitors already go to, but there will be no upgrading of existing facilities. Several sites were selected after consideration of alternatives, including consideration of environmental issues, logistics, and proximity to required services (notably the tourist streets, the UVTC, and RANCC). The project elements and actions are all tabulated below. For the Rock Art and Nomadic Cultural Center (Khovd Aimag) and Uvs tourism complex (Uvs Aimag), the project will fund the detailed design and construction supervision of the access roads (about 3 km long for the former, and 0.3 km long for the latter) and the government will fund the civil works for each road. These road works remain within the project scope and are subject to ADB’s safeguard policy requirements and the project EMP.

Figure 4: Project site locations. ATBNP = Altai Tavan Bogd National Park, KKNP = Khan Khukhii National Park, KNNP = Khyargas Nuur National Park, KUNNP = Khar Us Nuur National Park, RANCC = Rock Art and Nomadic Culture Center, UVSPA = Uvs Nuur Strictly Protected Area, UVTC = Uvs Tourism Complex.

Table 9: Project facilities per aimag and per location and key design components. A: Tourist Streets and Tourism Complexes. B: Small Works in Protected Areas. A. Project Component (Tourist Streets and Tourism Complexes) Location: Uvs Aimag Uvs Tourist Street  100-day season. 539 visitors/day (peak).  Waste collection and disposal systems.  To include women-led market stalls, seating, sidewalks, information services, Wi-Fi stands, shops.  Ground floor area of 2,540 m2 (main building, ancillary building, open seating area); green area and pedestrian area: 1,489 m2.  Installation of power and water supply (heat, water, power from adjacent plant), sanitation (to existing system) and solid waste management.  Will use existing parking lot next to stadium.  Use of solar lighting.  Water demand (staff, visitors, park) less than 50 m3/day; rainwater harvesting from roof.  Will use existing paved road (adjacent to site). Location: Uvs Aimag Uvs Tourism Complex  To be situated on a 143 ha land parcel allocated by Uvs Aimag Government; footprint of 6,560 m2 (main and ancillary buildings); access road and parking (inside area): 10,000 m2; green area and pedestrian area: 14,000 m2.  To be constructed for a 100-day season. 436 visitors/day (peak).  Car and bus parking and extension of the aimag power line to the site, installing barrier gates, to control public access and halt off-road vehicle damage. Designs will apply green infrastructure approaches, including water and energy efficiency, recycling (sorting, etc.), and the use of cost- effective local materials.  (i) 28 toilets within the complex, (ii) 22 portable toilets (to meet extra demand for large events and festivals.  Groundwater well (2); 55.4 m3/day. Also rainwater harvesting.  Waste collection and disposal systems (bins, containers, sorting, transport to urban landfill).  Power supply extended from the soum (1.2 km transmission line with 10 kV capacity and 800 kW substation), and solar panels.  Parking lot for buses and cars.  Heating source: geothermal (ground source heat pump). The hot water needs of the UVTC can be supplied by solar vacuum heaters. See Appendix 2 for details of construction and O&M.  Wastewater treatment. Onsite wastewater treatment plant: Biofilm wastewater treatment system- WSB® clean; 60 m3 capacity tank. The wastewater will be treated per MNS 6734-2018. The treated wastewater will be reused for: (i) toilet flushing (20% of total required water) and (ii) watering of site plantings (13% of total required water), achieving significant water savings. The reused wastewater will be monitored for water quality compliance to meet the standard required for reuse (parameters and compliance stantards are given in Tables EMP-4 and EMP-5). Sludge from the onsite plant will be removed periodically and transported by licensed service provider in approved vehicles with sealed containers to Ulaangom WWTP for final treatment and disposal.  0.3 km access road to be upgraded by aimag – east from Ulaangom. Location: Khovd Aimag Khovd Tourist Street  100 day season. 740 visitors/day (peak)  Waste collection and disposal systems (recycling).  To include women-led market stalls, seating, sidewalks, information services, Wi-Fi stands, shops (total ground floor area, main and ancillary buildings: 1,860 m2). 4,000 m2 for green and pedestrian areas.  Installation of power and water supply, sanitation, solid waste management.  Use of renewable energy (solar for lighting). Local power supply 500 meters away (aerial cable with capacity of 10 kV AC). 24

A. Project Component (Tourist Streets and Tourism Complexes)  Market pavilions will operate in winter. It is also estimated that 30.0 kW or 0.03 Gcal/h heat needed for hot water. This demand will be supplied by renewable energy, particularly by solar hot water generator.  Will connect the tourist street to the Khovd District Heating System.  Water supply and sanitation facilities will be connected to the Khovd centralized water supply and sewerage system.  Total projected water demand: 47.5 m3/day (94 staff and about 500 visitors/day); plus water for green landscaping. Will harvest rainwater from 1,300 m2 area of the main building. Water saving with taps and toilets.  Road upgrading not required (adjacent to town roads). Location: Khovd Aimag Rock Art and Nomadic Culture Center (RANCC)  To be located on 30 ha land parcel allocated by Khovd Aimag Government; the footprint of the ADB- funded facility is 6,520 m2 (for main and ancillary buildings); 12,500 m2 for green and pedestrian areas; 10,000 m2 for parking. 100 day season. 599 visitors/day (peak)  20 toilets within the complex.  Water supply: 2 groundwater wells (44 m3/day). Also rainwater harvesting.  Wastewater treatment: onsite wastewater treatment plant: Biofilm wastewater treatment system- WSB® clean; 45 m3 capacity tank. The wastewater will be treated per MNS 6734-2018. The treated wastewater will be reused for: (i) toilet flushing (29% of total required water) and (ii) watering of site plantings (18% of total required water), achieving significant water savings. The reused wastewater will be monitored for water quality compliance to meet the standard required for reuse (parameters and compliance stantards are given in Tables EMP-4 and EMP-5). Sludge from the onsite plant will be removed periodically and transported by licensed service provider in approved vehicles with sealed containers to Khovd WWTP for final treatment and disposal.  Waste collection and disposal systems (bins, containers, sorting, transport to Khovd landfill).  Upgrade 1 existing access road of 3 km (2-lane cement paved); and construct 1 car park for buses and cars.  Onsite (independent) heating source: geothermal (ground source heat pump) and solar for hot water. See Appendix 2 for details of construction and O&M of the ground source heat pump.  Power: extension of existing aimag power line; 5.4 km, with 10 kV capacity and 800 kW sub-station. Also solar panels. B. Small Works in Protected Areas.

LOCATION AND COORDINATES FACILITY NAME and COMPONENTS

Bayan-Ulgii Aimag ATBNP & PCMA SHIVEET KHAIRKHAN Fee collection station: 49°5’30.54”N, 88°6’9.38”E 1. Fee collection and women-led market 2. Info point 3. Dry toilets /4 4. Parking /20cars 5. Waste bins 6. Fire extinguisher area 7. Lighting 8. Solar panel 9. Electric heater

OIGOR 49°11’1.15”N, 88°5’42.32”E 25

B. Small Works in Protected Areas.

LOCATION AND COORDINATES FACILITY NAME and COMPONENTS

ATB MOUNTAIN Tourist BASECAMP – 1: 49°8’38.31”N, 87°59’20.25”E 1. Public cooking cabin 2. Info point 3. Dry toilets /6 4. Parking /40cars 5. Trail 6. Waste bins 7. Fire extinguisher area 8. Lighting 9. Solar panel 10. Electric heater ATB MOUNTAIN Tourist BASECAMP – 2 (mountaineers): 49°8’51.08”N, 87°56’52.00”E 1. Public cooking cabin 2. Dry toilets /4 3. Waste bins 4. Fire extinguisher area 5. Lighting 6. Solar panel 7. Electric heater

TSAGAAN SALAA, BAGA OIGOR Petroglyph Information Center : 49°19'12.49"N, 88°22'22.43"E BUILDING: 1. Tourist information area 2. Digital wall 3. Technical room 4. Terrace 5. Ranger station OUTDOOR ELEMENTS: 1. Trail 2. Parking /20cars 3. Dry toilets /4 4. Waste bins 5. Fire extinguisher area 6. Lighting 7. Solar panel 8. Electric heater Khovd Aimag TSC 26

B. Small Works in Protected Areas.

LOCATION AND COORDINATES FACILITY NAME and COMPONENTS

TSENKHER CAVE Visitor Center: 47°21'15.11"N, 91°57'39.74"E BUILDING: 1. Tourist information area 2. Digital wall 3. Technical room 4. Terrace 5. Women-led market OUTDOOR ELEMENTS: 1. Parking /20cars 2. Dry toilets /4 3. Waste bins 4. Fire extinguisher area 5. Lighting 6. Solar panel 7. Electric heater 1. Close to the entrance of the cave Information points 1. Informative sign 2. Directional signage 2. Intersection between the main trail and 3. Benches /x6 the cave ascent trail 4. Improved trail to the cave 5. Lighting in the cave KUNNP YUMIIN KHOOLOI Campsite HUB + Bird watching tower: 48˚19'20.4'N, 92˚33'38.29'E CAMPSITE HUB SERVICE BUILDING: 1. Info point 2. 6 dry toilets 3. Waste bins 4. Fire extinguisher area 5. Lighting 6. Solar panel 7. Electric heater 8. Gravel parking /20 cars 9. Ranger station 10. Women-led market CAMPING AREA BIRD-WATCHING TOWER 1. Bird-watching tower/hide 2. Directional and informative signs 3. Lighting 4. Benches ARGALANT, KHAR LAKE Toilets and Bird watching tower: 48˚9'46.52''N, 93˚6'49.65''E 1. 4 dry toilets 2. Bird-watching tower/hide

B. Small Works in Protected Areas.

LOCATION AND COORDINATES FACILITY NAME and COMPONENTS

At the entrance of KUNNP Fee collection station: 47°49'39.40N, 91°54'10.2E 1. Fee collection 2. Info point 3. Dry toilets /4 4. Parking /10 cars 5. Waste bins 6. Fire extinguisher area 7. Lighting 8. Solar panel 9. Electric heater

Uvs Aimag

KKNP KHYARGAS LAKE 49°19'24.09" N, 93° 9'49.32"E Fee collection station: 1. Fee collection and women-led market 2. Info point 3. Dry toilets /4 4. Parking /10cars 5. Waste bins 6. Fire extinguisher area 7. Lighting 8. Solar panel 9. Electric heater

SOGOO LAKE Campsite: 49˚22'53.511''N, 95˚8'38.481''E SERVICE BUILDING: 1. Info point 2. 4 dry toilets 3. Waste bins 4.Fire extinguisher area 5.Lighting 6. Solar panel 7. Electric heater 8. Gravel parking /20 cars CAMPING AREA:

UVSSPA UUREG LAKE Campsite: 50˚12'8.91''N, 91˚8'1.00''E SERVICE BUILDING: 1. Info point 2. 4 dry toilets 3. Waste bins 4.Fire extinguisher area 5.Lighting 6. Solar panel 7. Electric heater 8. Gravel parking /20 cars CAMPING AREA: UVS LAKE Renovations to existing entrance point: 50°6'32.28N, 92°21'41.2E 1. Fee collection and women-led market 2. Ranger station 3. Information center 4. Parking area for 30 cars 5. 4 dry toilets 28

B. Small Works in Protected Areas.

LOCATION AND COORDINATES FACILITY NAME and COMPONENTS

TES, SALT LAKE Campsite HUB: 50°23'1.23"N 93°18'57.69"E SERVICE BUILDING: 1. Fee collection 2. Info point 3. 4 dry toilets 4. Women-led market 5. Waste bins 6. Fire extinguisher area 7. Lighting 8. Solar panel 9. Electric heater 10. Gravel parking /10 cars CAMPING AREA: Summary: For the small works in the five protected areas (at 14 sites), most of these will be incremental to facilities that are already in place in or near these areas, as follows: fee collection stations (6 existing, 6 new); 24 m2 x 6 = 144 m2 campsites (17 existing, 6 new); 8,000 m2 x 6 = 48,000 m2 ranger stations (6 existing, 3 new); 24 m2 x 3 = 72 m2 information centers: (0 existing, 3 new); 50 m2 x 3 = 150 m2 information points (5 existing, 11 new); 12 m2 x 11 = 132 m2 parking areas (24 existing, 12 new, with 240 vehicle capacity in new parking areas); total area of 5,760 m2 toilets (30 existing, 60 new); 6 m2 x 60 = 360 m2 birdwatching towers (2 existing, 2 new); 60 m2 x 2 = 100 m2 women-led markets (0 existing, 7 new); 60 m2 x 7 = 420 m2 cooking cabins (0 existing, 2 new); 20 m2 x 2 = 40 m2 lighting (1 new); and, trail upgrades (2 new). Total area in PAs: 51,178 m2 = approximately 5 ha KKNP = Khan Khukhii National Park, KUNNP = Khar Us Nuur National Park, RANCC = Rock Art and Nomadic Culture Center, UVSPA = Uvs Nuur Strictly Protected Area, UVTC = Uvs Tourism Complex.

C. Design Schemes and Construction Methods

63. The table above shows the specific project elements and actions at each project site. These follow basic design concepts, which include green building design (energy efficiency and use of renewable energy, where applicable), water conservation (for example, use of rainwater capture and storage, to boost water supply where water is constrained, such as in the protected areas – for handwashing at least), effective waste sorting, solid waste management, and proper storage and disposal of sanitation wastewater. The basic concepts that were incorporated into the environmental impact assessment are noted below, first of all showing the features and concepts for proposed campsites, followed by the tourist streets and tourism complexes (including the RANCC). These project designs are expected to accommodate an additional 3,250 visitors/day in the three aimags, compared to the 2019 visitor numbers (assuming an increase of 1-3% per annum, after recovery of tourism to 2019 values, by 2023, in the base case scenario).

Figure 5: Bird watching tower

Figure 6: Typical campsite layout

Figure 7: Path and parking surfaces

Figure 8: Fee collection station

Figure 9: Information point

Figure 10: Information center

Figure 11: Base camp with ranger station

Figure 12: Market stall concepts.

Figure 13: Toilets.

Figure 14: Biofilm wastewater treatment option.

Figure 15: Khovd tourist street layout

Figure 16: Uvs tourist street 33

Figure 17: Uvs Tourism Complex

Figure 18: Rock Art and Nomadic Cultural Center

64. Construction for each site will involve the following steps generic to most construction projects:  Site survey to demarcate the perimeter.  Drone and walk-about survey to determine the presence of physical culture resources and trees and other vegetation that need preservation (with the latter marked accordingly).  Drainage survey, to determine direction of sheet flow and runnels that need to be addressed with perimeter channels and silt fences.  Clarification and preparation of access road (minimal disturbance of local traffic).  Fencing and signage to denote a construction site, as needed.  Demolition and recycling/disposal of existing structures, if needed.  Site preparation, including leveling and stockpiling soil as needed.  Staging of building materials and fuel (in a bermed area), as needed.  Foundation works, where needed.  Facility and building installation and construction.  Fittings and fixtures installed.  Operational testing of systems.  Site clean-up, to remove all construction debris and waste; and, site rehabilitation and handover. The contractors monitored by the detailed engineering design/construction supervision companies are responsible for all site rehabilitation and safe and timely disposal of construction waste.  Maintenance of all systems: solid waste separation, recycling, and disposal; sanitation waste clean-out; rainwater harvesting and storage; renewable energy systems maintained.

D. Associated, Existing, and Linked Facilities

65. The project due diligence considered two types of facilities per ADB’s SPS: (i) associated facilities – those which are not funded by the project but whose viability and existence depend 35 exclusively on the project and whose operation and services are essential for the successful operation of the project; and (ii) existing facilities – those which are already established and operating and which the project will help upgrade or rehabilitate. Due diligence was also conducted for “linked” facilities, which will be necessary for the project operations (e.g., existing landfills), but which are not part of the project scope and will not be subject to any ADB-funded construction, operation, upgrade, rehabilitation, or other activities. The due diligence process also contributed to the analysis of alternatives (Section VI) to clarify the feasibility of project infrastructure in specific locations.

66. There are no associated facilities for the project. There are no major existing facilities for the project. The main facilities relevant to the project operation are “linked” facilities, including power stations, wastewater treatment plants, and landfill sites. The capacity and operational status of these facilities is summarized in Tables 10 and 11. Key issues relevant to the project operations are inadequate capacity or rehabilitation needed for wastewater treatment plants. The modest protected area works in Bayan-Ulgii (handling up to 200 visitors/day) will require regular toilet pump-out and taking solid waste to the nearest landfill sites in the soums (see Table 12). There is also an option with Ulgii (which is about 50 km east of the project sites); it has a solid waste dumpsite on a hillside north of the Khovd River, covering 160 hectares (an unregulated operation).

Table 10: Linked facilities in Uvs Aimag center Operational Date of EIA Design Compliance Name Period Functions Link with Project Construction Approved capacity Issues (years) Heating connection 2014 7 Yes 35 MW Within None Heating supply of and supply service Ulaangom project infrastructure "Thermal station II" soum State owned company (aimag center) Water connection and 1986 35 Yes 8,880 Within None Water supply of service "Chandmani m3/day Ulaangom project infrastructure Uvs" LLC soum (aimag center) Electricity connection 1976 45 Yes 10 Mvt Within None Electricity supply of and supply "Electricity Ulaangom project infrastructure distribution network" soum LLC (aimag center) Waste water 1989 32 No 3,840 Within Treatment Waste water service connection and m3/day Ulaangom rate is 40%. provider of project treatment service soum A new infrastructure "Chandmani Uvs LLC (aimag WWTP is center) planned Solid waste service 2006 15 N/a (nor 35 Within None Solid waste "Urban utility" local required personnel Ulaangom collection, transport government owned by EIA soum and disposal service company law) (aimag provider for project center) facilities "Mongolian 2007 14 No 1,186 км In all None Stationary telecommunication" llc telecom soums of telecommunication cable Uvs Aimag service provider 36

Operational Date of EIA Design Compliance Name Period Functions Link with Project Construction Approved capacity Issues (years) Landfill site Established in 1931; rehabilitated in 2019. Located approximately 2.5 km to the southeast of the city and due to largely unregulated operations has expanded to an area of 74 hectares (3 ha for hazardous waste storage). The city has constructed some fencing and an access control gate and guardhouse (with waste registration), but these are fairly recent. A large portion of the impacted area is windblown trash and there is no provision or equipment available to cover or consolidate the waste. EIA = Environmental Impact Assessment, WWTP = wastewater treatment plant.

Table 11: Linked facilities for the RANCC and tourist street in and near Khovd Aimag center Operational Date of EIA Design Compliance Name Period Functions Link with Project Construction approved? capacity Issues (year) Khovd Thermal 2014 6 Yes 42 MW heating supply sometimes heating supply of Power plant II to 27 public overloaded project organizations, infrastructure 52 business entities, 1,680 households Shim-Us local water 1986 34 Yes 4800 water supply a new water water supply of supply and waste m3/day services to 68 source is project water service public required infrastructure company organizations, 109 business entities, 3,557 households "Khovd Electricity 1948 72 n/a (no EIA 25,8 Mvt electricity None electricity supply distribution station" required) supply to all of project electricity supply 17 soums of infrastructure Khovd Aimag Shim-Us local water 1986 34 Yes 7,000 waste water upgrading waste water supply and waste m3/day not services to 68 needed service provider of water service capable to public project company work organizations, infrastructure within its 109 business capacity entities, 3,557 households City utility 1996 24 n/a (no EIA personnel operational insufficient Solid waste department required) 22. cleans within personnel collection, transports Jargalant and transport and and soum technical disposal service dispose capacities provider for project annually facilities 60,000 tn SW "Mongolian 1924 96 Yes personnel- operational None stationary telecommunicatiion" 14, aimag- within telecommunication llc wide Jargalant service provider soum Landfill site Established in 1931; rehabilitation in 2019. Located in close proximity to developed areas to the (Jargalant) southeast of the city and due to largely unregulated operations has expanded to an area of over 280ha. The city has constructed 600m of fencing that partially encloses the dumpsite and an access control gate and guardhouse (with waste registration) but dumping outside the fenced area has been observed. EIA = Environmental Impact Assessment

Table 12: Information on the landfills/ dumpsites in the project soums. Linked facilities information: landfills/ dumpsites in the soums Dimension of facility Aimag and (ha; approximation Status of facility EIA requirement Soum provided by local authorities) Date of Fencing Status Establishment Khovd Aimag Mankhan 1911 no fence 15 no Durgun 1956 no fence 15 no Khovd 1946 no fence 20 no Buyant 1990 mesh fence 10 no Bayan-Ulgii Aimag Ulaankhus 1937 fenced with earth 80 no Tsengel 1963 no fence; storage person 12 no oversees the dumping process to reduce dump site expansion Uvs Aimag Davst 1928 no fence 10 no Sagil 1990 no fence 12 no Tarialan 1925 no fence 18 no Malchin 1925 no fence 20 no Zuunkhangai 1986 plan to be fenced in 2021 3 no

67. The project tourism complexes and streets and information centers, campsites, fee collection stations, public toilets, and ranger stations, will be new facilities. All works within the project protected areas will be established at existing sites zoned and already used for the same purposes i.e., the project campsite facilities will be developed on existing campsite land; and the project carparks will be established on existing areas demarcated for vehicle parking, but which otherwise comprises bare land (Section IV).

IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE)

68. The baseline environment in the project area was assessed and described on the basis of field visits, consultations, analysis of Google Earth© imagery, sampling/analysis in November 2020 by a certified domestic EIA firm, Environ LLC, and review of secondary data. Key data are summarized below. All project interventions will be occurring at sites with existing facilities or infrastructure, with one exception: the RANCC west of Khovd town. Thus, the biophysical context of each project site (with the one exception) already incorporates human activities, which define these sites to a large extent. The domestic environment baseline assessment (EBA) has been disclosed on the ADB project website together with this IEE.

A. Bayan-Ulgii Aimag Subproject

1. Climate

69. Mongolia has a harsh continental climate due, being landlocked, and is surrounded by high mountains in the center of the Eurasian continent, with an average elevation of one and a half kilometres above sea level. This physical context defines Mongolia’s climatic conditions. The westernmost aimags in Mongolia have arid, highland, and steppe zones. The climate has harsh continental characteristics including hot and dry summers, harsh, cold, and dry winters, cold springs, and sunny and cooler autumns. The climate patterns described below were assessed using 20-year data from the Information and Research Institute of Meteorology, Hydrology and Environment (IRIMHE).

70. The coldest months are December, January, and February, with average temperatures ranging from -13.2 to -22.6 degrees (the absolute minimum air temperature is -44.5 degrees). The highest average temperature is observed in July (14.8 -17.3 degrees). Maximum air temperature ranges between 33.2 and 35.8 degrees. In winter, cold Arctic air enters Mongolia and there is less snow due to the formation of anti-cyclonic conditions; but snow cover is formed some of the time. The period of stable snow cover is from November 20 to December 1. Bayan-Ulgii Aimag has relatively low rainfall; 70-80% of the total precipitation falls during the warm season (between April and September). The average amount of precipitation in Bayan-Ulgii Aimag is 86 -126.2 mm per year. The highest humidity is 54% in January; the lowest is 37% in April and May. Wind speed decreases sharply in winter, due to the stable anti-cyclone cantered in Mongolia during the cold season. The weather becomes very unstable in spring and autumn as the atmospheric front zone passes through the country from north to south. In terms of wind direction, winds from the south are most frequent; more than 40% in winter, 22-28% in spring, and autumn, and about 15% of the time in summer. Average wind speeds are less than 6 m/s. Maximum wind speed can exceed 23 m/s (in March).

2. Physical Geography, Geology, and Permafrost

71. Bayan-Ulgii Aimag covers an area of 45,800 km2. The westernmost point of Mongolia is 1,301-4,374 m above sea level, in the Mongol Altai Mountains (95.3% of the total area is above 1,600 m asl) and is surrounded by glacier mountains. Bayan-Ulgii Aimag is located 1,760 km from the capital Ulaanbaatar. Bayan-Ulgii Aimag includes High mountain belt, Steppe, Desert natural zones and High mountain belt, Mountain steppe, Dry steppe, and Patchy desert natural sub zones. Most of the aimag is located in the high mountainous region of Mongol Altai. The Altai Mountains are composed mainly of granite-granodiorite and intrusive granite Palaeozoic rocks. The topographic and structural maps of Mongolia indicate that the area consists primarily of high- altitude ridges, moderately elevated mountains, and slightly elevated hills and also consists of

39 gorges, steep mountain slopes, permafrost valleys, high peaks, sedimentary lake valleys, ravines, depressions (deluvia, proluvia) and mountain river valleys. Permafrost is part of the upper layer of the soil layer and is a phenomenon of soil and rock freezing, or soil icing. The permafrost has two layers: the active phase, which is seasonal with thawing and freezing, and the cryolite zone, which is always frozen. The permafrost of Bayan-Ulgii Aimag located in the Altai mountainous region is divided into 4 classes: continuous; discontinuous; sporadic; and isolated patches.

Figure 19: Geographical location of Bayan-Ulgii Aimag

Figure 20: Natural zones of Bayan-Ulgii Aimag

Figure 21: Natural zones of Bayan-Ulgii

Figure 22: Permafrost distribution in Bayan-Ulgii

3. Overview of Soil Types

72. Mountain dark brown soil: This type of soil is one of the main soils that make up the mountain forest-steppe zone and it is stabilized on the front slopes of the mountains along the forest border, on the back slopes of the mountains along the dry steppe border, and under the meadow-steppe and variegated forbs-grass moist steppe vegetation. The vegetation cover on the soil is 50-90% dense, depending on the particle size and thickness of the gravelly rocky. Due to the short summer shower rains, on the other hand, gravelly bedrock has a high permeability, so mountain dark brown soils have a periodic permeable moisture regime that is periodically washed away, and in some cases, even a predominance of washed-out mode.

73. Coarse humus soil of high mountains: This type of soil is mainly distributed in the Mongol Altai mountain range at an absolute altitude of 2,400 – 2,500 m to 3,000 – 3,200 m asl, above the brown soil zone in specific cold dry (cryo-arid) steppe conditions and covers approximately 1.9% of the country's territory. Vegetation is dominated by grasses, but these grasses are not evenly distributed, forming densely dried smaller clusters with 20–40 cm in diameter on the soil surface. The area between these dense insect-infested grassy spots appears bare with no vegetation and is covered with small crumbly stones. The vegetation cover of this unique type of high mountain spotted steppe is 60-80% and in some places 30-50%.

74. Light brown soil: In the northern part of the desert steppe zone, the grass-Mongolian grassland community is mainly distributed in a well-mixed area of Artemisia frigid (an aster), Allium (onion family), and Khargana (forb grass): the vegetation cover does not exceed 20-30%. Most of the soil surface is bare with no vegetation, so it is easily exposed to wind and is covered with coarse sand and small stones. Occasionally there is a thin, very brittle film layer with a layered structure on the bare surface. The humus accumulation layer is light brown in color; the average thickness is 10 cm.

75. Brown soil of desert steppe: It is distributed in the desert steppe vegetation with 15-25% cover with combinations of community of asters, forbs, stipa grasses, and allium. This soils type 42 covers 7% of the country's territory. In the upper layer of this soil, the brownish, harder topsoil and its lower layer are morphologically obscure. The harder top layer is brittle, without pores or small pores are observed only in some parts of the surface. The average thickness is 0.8 cm (the thinnest is 0.5 cm and the thickest is 1.5 cm).

76. Mountain meadow soil: Mountain meadow soils are slightly more heat-supplied than in the highlands and tundra. In humid and cold conditions, it stabilizes under dense vegetation of Kobresia (sedge), carex-bush, and dense meadow forbs-grass. This soil occurs at an altitude of 2,400-2,600 meters in the northern part of the Mongol Altai mountain range, in the Turgen and Kharkhiraa mountains. Mountain meadow soils are usually distributed at the flat top of the vertical ridges of the mountains but are also located at the base of the Mongol Altai mountain ranges. Mountain meadow soils cover 2.3 percent of the country's total area.

77. Saline soils: These usually occur in the middle of hidden glazed (meadow) brown soils along the edge of a depression with small lakes and ponds. Such soils are located at a depth of 1-2.5 m or sometimes above the groundwater level and are stabilized under specific conditions where strong evaporation is possible. The moisture regime is considered to be “sweating” because water is constantly rising and leaking out. During the warm season, large amounts of water rise from the depths of the soil, evaporate through all the layers and along with water, the salt compounds dissolved in it also rise to the topsoil, where they accumulate and form saline marz. This formation is called moist saline soil.

78. Alluvial meadow soil: This type of soil can be formed in the humid conditions of the central floodplain, which is periodically fed by groundwater and river floods, and its moisture is affected to a certain extent by the water from the permafrost thawing. Alluvial meadow soils are much better than swamp soils in terms of heat supply and heat well enough during the summer, which affects its water-moisture regime. In terms of vegetation, dominate meadow communities comprise forbs, grasses, and red heads, forming 90-100% cover. Due to the equal supply of moisture and heat in this soil, the process of decomposition of plant residues is intensifying and the accumulation of fine humus is expected to dominate (Dorjgotov, 2003).

79. Bayan-Ulgii Aimag. In the river valleys, floodplain alluvial soils are dominant (especially the Tsagaan River). Higher up in the mountains, there is coarse humus soil (typical of the Mongol Altai mountain range). Elsewhere are mountain meadow soils (vegetation cover is 30-40%).

4. Surface Water Resources

80. Bayan-Ulgii Aimag. The entire project area in the aimag is located in the Khar Nuur- Khovd river basin. The rivers and sources of recharge are unique in that they are fed by glacial meltwater and rainwater from the high mountains of Altai Tavan Bogd, Tsambagarav, Sair, and Siilkhiim Nuruu. Rivers in this basin originate from the Mongol Altai Mountains, Siilkhem, Tsambagarav, and Munkh Khairkhan Mountains, and flow into Achit Lake, Tal Lake, Tolbo Lake, and Bulgan River. The Tsagaan River flows into the Khovd River, which originates from the Potanin Glacier in Tavan Bogd Mountain. Total length is 100 km, the width of the river is 30-35 m, and the average water drop is 9 m per 1 km. The maximum runoff in the last 10 years was 51.2 m3/sec (in 2017); the minimum runoff was 0.04 m3/sec (in 2010), and the long-term average runoff is 6.75 m3/sec. Khoton Lake is a freshwater lake of glacial origin and located in the western part of the Altai Mountains at an altitude of 2,084 m, in a depression between the mountains west of Khurgan Lake. The area of the lake is 51 km2, the maximum length is 21 km, width is 6 km, the length of the shoreline is 48.8 km and the depth is 50 m. About 10 rivers such as Khar Nuur, 43

Khovd, Tsagaan Gol and Chuluut flow from the lake. Khoton and Khurgan lakes are connected by the Syrgalyn canal, which is about 3 km long, 100-150 m wide and 0.7-0.8 m deep.

Figure 23: River basin map of Bayan-Ulgii Aimag

5. Groundwater Resources and Water Demand

81. Bayan-Ulgii Aimag. The forest nursery of Altai Tavan Bogd National Park (ATBNP), Tsengel soum, Bayan-Ulgii Aimag, is located 2 km from the Tsagaan River; water supply is provided by irrigation canals. The main irrigation canal is 3.2 m wide, and 0.6 m deep. A small pond will be constructed at the bottom of the site to provide water to the local hayfields. The forest nursery of the ATBNP in Tsengel soum, Bayan-Ulgii Aimag is part of the Khovd River Basin and the groundwater resources of the Khovd River are 0.46 km3/year. There is no information on groundwater exploration boreholes and well usage around the Tsagaan Gol, so it is not possible to identify groundwater resources there.

6. Air Quality

82. Meteorological stations in Khovd, Uvs and Bayan-Ulgii Aimags analyze air quality, including the percentage of SO2 and NO2 in the air. According to the 2016-2019 air monitoring statistical data, and the field sampling in November 2020, the region's air quality (in all areas) met the national standards for nitrogen dioxide, sulphur dioxide, carbon monoxide, and total suspended particulates (well below the standards).

7. Water Quality

83. River water samples were taken and analyzed at various locations in November 2020 (see table below). The Tsagaan River has very clean water. Analysis also indicated no organic pollution in the water, and was free of nitrogen and organic matter according to the “River Water 44

Quality Classification”. In this river, the content of the main elements associated with water pollution does not exceed the maximum allowable level of the standard.

84. Khoton Lake: The lake has a pH of 6.19 and a general water hardness of 0.63 (very soft); the data indicate very clean water. There is no organic pollution in the water. According to the “River Water Quality Classification”, Khoton Lake water is free of nitrogen and organic matter, has low mineralization and soft carbonate water.

85. E-coli and pathogens: Bacteriological analysis was undertaken at two locations in September 2020 (Tsagaan river water of Bayan-Ulgii; Khoton-Khurgan lake pipe water). E-coli and pathogens were all undetectable.

Table 13: Mineralization of river water in the area General hardness mg/l ∑и Sampling points + + 2+ 2+ - - 2- (mg-eqv/l) Na +K Ca Mg HCO3 CI SO4 (mg/l) Tsagaan river 0.63 10.6 30.0 8.7 111.0 5.7 24.2 190.2

Table 14: Water quality in Khoton Lake General hardness mg/l ∑и Sampling points + + 2+ 2+ - - 2- (mg-eqv/l) Na +K Ca Mg HCO3 CI SO4 (mg/l) Khoton lake 0.63 4.1 23.8 2.9 36 4.3 4.2 75.3

8. Soil Quality

86. Soil samples were analyzed in November 2020 for heavy metals (lead, chromium, copper, zinc, and arsenic). In Bayan-Ulgii, soil heavy metal levels were also low. Most levels were below permissible levels, with the following exceptions: one sample near Khoton-Khurgan Lake and one near the forest nursery with slightly elevated chromium levels; one sample near Khoton-Khurgan Lake and two near the forest nursery with slightly elevated levels of Arsenic.

Table 15: Heavy metal soil concentrations in Bayan-Ulgii Aimag № XRF # Date Latitude Longitude Site name Pb Cr Cu Zn As MNS 5850:2019, permissible value mg/kg 100 150 100 300 20 30 2974 2020-11-13 48.60259 88.42319 35 121 21 5 7 31 2975 2020-11-13 48.601317 88.423407 16 24 17 11 4 Khoton- 32 2976 2020-11-13 48.60358 88.421224 33 151 0 42 17 Khurgan Lake, 33 2977 2020-11-13 48.604826 88.422514 21 44 11 36 7 Otog (Camping 34 2978 2020-11-13 48.60246 88.42263 27 73 23 28 15 site) 35 2979 2020-11-13 48.60245 88.42199 16 148 0 31 21 36 2980 2020-11-13 48.60253 88.42319 48 131 23 29 15 37 2981 2020-11-14 49.00986 88.76707 55 162 17 76 10 38 2982 2020-11-14 49.01083 88.76798 55 111 10 50 10 39 2983 2020-11-14 49.01136 88.76852 44 123 30 23 26 Forest nursery, 40 2984 2020-11-14 49.01198 88.76894 33 124 23 27 23 Otog (Camping 41 2985 2020-11-14 49.01271 88.76926 52 121 35 21 7 site) 42 2986 2020-11-14 49.01224 88.76857 34 105 17 22 6 43 2987 2020-11-14 49.01156 88.76762 55 142 6 46 4 44 2988 2020-11-14 49.01083 88.76718 17 73 0 16 5

87. No soil samples had detectable pathogen levels.

9. Noise Levels

88. Noise levels were measured at potential project sites in November 2020. All noise measurements at all sites and all times of day were below the permissible level of 60 decibels (usually between 35 and 56 decibels, although November is quieter than in the summer, when there are more vehicles and visitors).

10. Ecological Values

Overview

89. Bayan-Ulgii Aimag is located in the western-most part of Mongolia and comprises mostly mountainous areas and forest and desert steppes. These define the habitat types and the biodiversity values in the aimag. Compared to the other two aimags in the project, there is a lower diversity of birds and mammals; the total area of Important Bird and Biodiversity Areas (IBBAs) is less than 20% of the area of IBBAs in the other two aimags, and these are located south of the project sites, in any case. The Altai Tavan Bogd National Park (ATBNP) is the largest protected area in the aimag; the project sites are located in this protected area. Details are provided below.

Vegetative Cover in ATBNP

90. The Bayan-Ulgii study area belongs to the Eurasian steppe region, the Mongol Altai steppe province (khoshuu), and the Mongol Altai high mountain range (Unatov, 1950). High mountain vegetation is widespread. Rocky meadows with rocky slopes have a vegetation cover, with bushilz and ululj are common, and some grasses and alpine grasses are common.

91. A survey in September 2020 (at several project sites: Khoton-Khurgan Lake camp; camp near the Tsagaan Gol Arboretum; Altai Tavan Bogd tourist camp; Shiveet Khairkh camp) noted a total of 43 species of plants. There were 10 species of grasses, 9 species of compound flowers, 6 species of ulala, and 4 species of basher, as well as shrubs; 93% are classified as hay and pasture plants. There are no very rare plants in this area, but Gentiana decumbens was found, which is a rare plant.

92. The sub-belt of the Yang Orgil is located in the Mongol Altai mountain range, mostly in the foothills of the snow-capped mountains and bare peaks with ridges. It is located at an altitude of 3,400 m without vegetation (Tavan Bogd, Shiveet Khairkhan). Only moss communities predominate here. The Saridag sub-belt includes Cerastium lithospermifolium, Rhodiola quadrifida, Valeriana pettrophila, Lagopsis marrubiastrum, Draba hirta, D. altaica, D. pygmaea, and Pyretrum lanuginosum, which are found in mountain belts such as Tavan Bogd. There is a grassy-bushilzat steppe meadow (Khoton Khurgan Lake) and a high mountain red-bushilzat meadow (Tsagaan river) in the “cold meadow” area.

Figure 24: Plant communities in Bayan-Ulgii Aimag

1 2

1. Khoton-Khurgan Lake. 2. near the Tsagaan Gol Arboretum in Tsengel soum. Figure 25: Examples of vegetation cover at some of the project sites.

Biodiversity Values and Faunal Species in ATBNP

93. The aimag has several Important Bird and Biodiversity Areas, as shown in the figure below, but these are much further south than the proposed project sites (there are also no RAMSAR sites near the proposed project sites).

Figure 26: RAMSAR sites and Important Bird and Biodiversity Areas

94. There are 45 mammal species (seven flagged as species ranging from near-threatened to endangered (Global Red List) and 120 bird species in ATBNP.

Table 16: Threatened mammal species in the ATBNP.

Regional Red Global Red Species list ATBNP

List (2006) List (2014) CMS 2013 2012 Mongolia Mongolia CITES I, II I,II CITES Red Book Book Red 7 Animals law law Animals Grey Wolf Canis lupus NT LC * + Eurasian Otter Lutra lutra DD NT * * * + Manul Otocolobus manul NT NT * + Snow Leopard Uncia EN EN * * * * + Red Deer Cervis elaphus CR LC * * + Ibex Capra sibirica NT LC * * + Argali Ovis ammon NT Vu * * * + ATBNP = Altai Tavan Bogd National Park, CITES = Convention on International Trade in Endangered Species of Fauna and Flora, CMS = Convention on Migratory Species, CR = Critically Endangered, EN = Endangered, V = Vulnerable, NT = Near Threatened, LC = Least concern, DD – data deficient.

95. A mammal of concern in the ATBNP area is the red deer (Cervus elephus). These animals live in forests, ridges, mountain steppes, groves, small mountains, and lowlands (Dulamtseren et al., 1989). However, the proposed project sites are quite far north of the red deer range in this area. 48

Figure 27: Red deer range in western Mongolia

1. Amphibians and Reptiles

96. Mongolia is harsh climate for amphibians; there are none in the ATBNP. The project area is habitat for five reptile species (Terbish et al., 2006), as noted below. None of these have associated conservation concerns.

Table 17: Reptiles in western Mongolia Sub-family Order Species Mongolia Internationally 1. Tuva toad-headed agama Least Concern Not evaluated Agamidae (Phrynocephalus versicolor) LC NE 2. Multi-cellated racerunner (Eremias Lacertilia LC NE multiocellata) Lacertidae 3. Gobi racerunner (Eremias LC NE przewalskii) Colubridae 4. Steppes rat snake (Elaphe dione) LC NE Serpentes 5. Halys pit viper Crotalidae LC NE (Gloydius halys)

2. Fishes

97. With many waterbodies in the project area, fish are prevalent. Some are native and some have been introduced (for example, the common pike). Eighty percent of the fish species in western Mongolia are endemic to Central Asia. Fish presence in the ATBNP area are noted below.

Table 18: Fish species occurring in ATBNP International Regional Latin name English name evaluation evaluation Oreoleuciscus potanini Potanin's osman ND LC Oreoleuciscus angusticephalus Lake osman V V LC-Least concern, V-Vulnerable, ND-Not data

11. Protected Area Management Status and Issues

98. The Altai Tavan Bogd National Park (ATBNP) covers an area of 6,362 km2 and is home to high mountains, lakes, glaciers, and historic monuments. The highest mountain peaks are of interest to professional climbers. There is a stunning landscape of high glaciated snowcapped mountains, alpine and sub-alpine forests, large lakes, rivers and streams, mountain grasslands, barren rocky mountain ranges and semi-arid desert type valleys. The protected area is inhabited by species such as the argali sheep, ibex, red deer, beech marten, moose, snow cock, and golden eagle. There are approximately 80 lakes with clear water, 100 streams and rivers and 200 ponds and wells in Dayan, Hoton, and Horgon Region. Tolbo and Achit Lakes are very famous for fishing as they have rich fish resources. Also, there are big rivers, such as Khovd, Tsagaan, Sogoog, Yolt, Sagsai and Bulgan. Around 30,000 people (mostly herders) settle in the limited use zone of the ATBNP on seasonal basis. Tourism development is the highest priority of its policy, where local communities are promoted to be part of community-based tourism. On the other hand, a high number of domestic livestock results in some extent of degradation to natural resources. There has been a constant increase in the number of visitors to the ATBNP recorded in the recent years, although sufficient management and human resource capacity for sustainable tourism is still lacking. ATBNP has the following existing facilities: 1 fee collection station; 1 campsite; 1 ranger station; 1 information point; 2 car parks; 8 toilets; 4 solid waste points (in poor condition). The ATBNP has travel and tourism and limited use zones that accommodate project-supported activities.

12. Socioeconomic Features

99. Bayan-Ulgii Aimag. According to the livestock census, at the end of 2018, there were 2,166,917 head of livestock in the aimag, a decrease of 59,232 head from the previous year. According to the final harvest data for 2018, 44 tons of grain, 3,005 tons of potatoes and 1,524 tons of other vegetables were harvested from 838 hectares. Bayan-Ulgii Aimag has a total area of 4,570,489 ha, of which agriculture covers 3,509,2577 ha. In Bayan-Ulgii, agricultural land accounts for 79% of the area, state special needs land for 19%, and 2% for water reservoirs, forest lands, cities, villages, other settlements, and roads and networks.

13. Physical Cultural Resources

100. Physical cultural resources (PCR) in western Mongolia were determined on the basis of secondary data, the literature, and field observations and consultations.

101. Bayan-Ulgii is rich in archeaological finds, especially those from the Old Stone Age. In addition to the petroglyphs near the proposed campsite in northern ATBNP, there are the Bayan- Enger petroglyphs on the eastern shore of Lake Tolbo (Bronze Age); however, these are quite far south of the proposed campsites and not at risk from the project.

14. Site-specific Biophysical and Socioeconomic Features at Each Project Site

102. The environmental and socioeconomic baseline data were applied to the specific project sites and verified through examination of recent Google Earth images. These are noted below.

Table 19: Specific biophysical and socioeconomic features at the project sites Project Site Biophysical and Socioeconomic Features SHIVEET River 200 meters to the south; east/west dirt track in this area; rocky steppe area KHAIRKHAN with drainage channels running north-south. No trees or shrubs. Snow meltwater 49°5’30.54”N, likely in this area. Old stone structure 700 meters to the east. Gers on the south 88°6’9.38”E side of the river. Fee collection Not an Important Bird and Biodiversity Area; the distribution area of the Red Deer station (parking, (Cervis elaphus) is 200 km to the south. market, Moderate mammal species diversity in this area. Seven mammal species of information concern include: Grey Wolf Canis lupus (LC); Eurasian Otter Lutra lutra (NT); Manul point, and Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Red Deer Cervis toilets). elaphus (LC); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). OIGOR Small river 200 meters to the south; dry steppe area with no trees or shrubs. Snow 49°11’1.15”N, meltwater likely in this area. Gers on the south side of the river. Confluence with 88°5’42.32”E N/S river 500 meters to the east. Fee collection Not an Important Bird and Biodiversity Area; the distribution area of the Red Deer station (parking, (Cervis elaphus) is 200 km to the south. market, Moderate mammal species diversity in this area. Seven mammal species of information concern include: Grey Wolf Canis lupus (LC); Eurasian Otter Lutra lutra (NT); Manul point, and Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Red Deer Cervis toilets). elaphus (LC); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). ATB The current basecamp area (visitors come for the scenic views). It is sensitive to MOUNTAIN walking traffic. 49°8’38.31”N, Located in mountainous terrain, with no significant vegetation (snow cover a lot of 87°59’20.25”E the year). Meltwater runoff likely in this area. Tourist No specific habitat or vegetation concerns here, given the altitude (3,000 – 4,000 m basecamp asl). (cooking toilets, Not an Important Bird and Biodiversity Area; the distribution area of the Red Deer parking). (Cervis elaphus) is 200 km to the south. Moderate mammal species diversity in this area. Seven mammal species of concern include: Grey Wolf Canis lupus (LC); Eurasian Otter Lutra lutra (NT); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Red Deer Cervis elaphus (LC); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). ATB Further west of the current basecamp area. It is sensitive to walking traffic. MOUNTAIN Located in mountainous terrain, with no significant vegetation (snow cover a lot of 49°8’51.08”N, the year). Meltwater runoff likely in this area. 87°56’52.00”E No specific habitat or vegetation concerns here, given the altitude (3,000 – 4,000 m Mountaineer site asl). (cooking, Not an Important Bird and Biodiversity Area; the distribution area of the Red Deer toilets). (Cervis elaphus) is 200 km to the south. Moderate mammal species diversity in this area. Seven mammal species of concern include: Grey Wolf Canis lupus (LC); Eurasian Otter Lutra lutra (NT); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Red Deer Cervis elaphus (LC); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). TSAGAAN Existing petroglyph heritage site (15 x 0.6 km). Lots of visitors and ongoing damage SALAA, BAGA to petroglyphs. OIGOR Not an Important Bird and Biodiversity Area. Moderate mammal species diversity in 49°19'12.49"N, this area. The distribution area of the Red Deer (Cervis elaphus) is 250 km to the 88°22'22.43"E south. Seven mammal species of concern include: Grey Wolf Canis lupus (LC); Petroglyph information center Eurasian Otter Lutra lutra (NT); Manul Otocolobus manul (NT); Snow Leopard 51

Project Site Biophysical and Socioeconomic Features (toilets, parking, Uncia uncial (EN); Red Deer Cervis elaphus (LC); Ibex Capra sibirica (LC); and, trail). Argali Ovis ammon (Vu). No vegetation or habitat concerns in this specific area (about 2,400 meters asl; dry steppe area); the proposed site is 200 meters north of a river (fed by lakes to the northwest). An east-west track 300 meters to the north. Meltwater runoff likely in this area. LC= least concern, ND = no data, NE = not evaluated, NT = near threatened, V = vulnerable.

B. Khovd Aimag Subproject

1. Climate

103. The coldest months are December, January, and February, with the average temperature ranging from -15.3 to -23.4 degrees; the absolute minimum air temperature ranges between -38 and -45.6 degrees. The highest average temperature is observed in July (reaching 19.1 - 20.9 degrees); the absolute maximum air temperature ranges between 35.2 and 38.6 degrees. Khovd Aimag has relatively low rainfall; 70-80% of the total precipitation falls during the warm season (April to September). The average amount of precipitation in Khovd Aimag is 52.9 in Durgun ranging up to 135.6 mm per year in Khovd. The highest humidity is in January (75%) and the lowest is in June/July (about 10%). The wind direction frequency is the same as that in Bayan- Ulgii (prevailing southerly). Maximum wind speeds occur in April-May (19.5 m/s). However, average wind speeds are less than 2.6 m/s.

2. Physical Geography, Geology, and Permafrost

104. Khovd Aimag is located between the Altai Mountains and the Great Altai Mountains of Mongolia. There are large mountains, such as Munkhkhairkhan, Khukh Serkhiin Nuruu, Baatar Khairkhan and Myangan Ugalzat Nuruu, and the Gobi and steppe covers about 20% of the territory (Khovd Aimag has a total area of 7.6 million hectares). It is 1,336 km west from Ulaanbaatar.

Geographical location of Khovd Aimag

Legend Aimag center Aimag boundary Soum center Soum boundary

Figure 28: Geographical location of Khovd Aimag

105. Khovd Aimag is located in the high mountainous region of the Mongol Altai. The Altai Mountains are composed mainly of granite-granodiorite and intrusive granite Palaeozoic rocks. In Khovd Aimag, in addition to metamorphic rocks at the foot of the mountains, gabbro, granite, diorite and granodiorite rocks have been found in the Bodonch gorge. In terms of natural zones and subzones, Khovd Aimag includes High mountain belt, Steppe, Desert natural zones and High mountain belt, Mountain steppe, Dry steppe, Desert steppe, Patchy desert, and Dry desert sub zones. Landforms comprise high-altitude ridges, moderately elevated mountains, and slightly elevated hills and also consists of gorges, steep mountain slopes, permafrost valleys, high peaks, sedimentary lake valleys, ravines, depressions (deluvia, proluvia) and mountain river valleys. The permafrost of Khovd Aimag, located in the Altai mountainous region, is divided into 5 classes: continuous; discontinuous; checkered; isolated patches; and sparse patches. 53

Figure 29: Natural zones of Khovd Aimag

Figure 30: Permafrost distribution in Khovd Aimag 54

3. Overview of Soil Types

106. Mountain dark brown soil: This type of soil is one of the main soils that make up the mountain forest-steppe zone and it is stabilized on the front slopes of the mountains along the forest border, on the back slopes of the mountains along the dry steppe border, and under the meadow-steppe and variegated forbs-grass moist steppe vegetation. The vegetation cover on the soil is 50-90% dense, depending on the particle size and thickness of the gravelly rocky. Due to the short summer shower rains, on the other hand, gravelly bedrock has a high permeability, so mountain dark brown soils have a periodic permeable moisture regime that is periodically washed away, and in some cases, even a predominance of washed-out mode.

107. Coarse humus soil of high mountains: This type of soil is mainly distributed in the Mongol Altai mountain range at an absolute altitude of 2,400 – 2,500 m to 3,000 – 3,200 m asl, above the brown soil zone in specific cold dry (cryo-arid) steppe conditions and covers approximately 1.9% of the country's territory. Vegetation is dominated by grasses, but these grasses are not evenly distributed, forming densely dried smaller clusters with 20–40 cm in diameter on the soil surface. The area between these dense insect-infested grassy spots appears bare with no vegetation and is covered with small crumbly stones. The vegetation cover of this unique type of high mountain spotted steppe is 60-80% and in some places 30-50%.

108. Light brown soil: In the northern part of the desert steppe zone, the grass-Mongolian grassland community is mainly distributed in a well-mixed area of Artemisia frigid (an aster), Allium (onion family), and Khargana (forb grass): the vegetation cover does not exceed 20-30%. Most of the soil surface is bare with no vegetation, so it is easily exposed to wind and is covered with coarse sand and small stones. Occasionally there is a thin, very brittle film layer with a layered structure on the bare surface. The humus accumulation layer is light brown in color; the average thickness is 10 cm.

109. Brown soil of desert steppe: It is distributed in the desert steppe vegetation with 15-25% cover with combinations of community of asters, forbs, stipa grasses, and allium. This soils type covers 7% of the country's territory. In the upper layer of this soil, the brownish, harder topsoil and its lower layer are morphologically obscure. The harder top layer is brittle, without pores or small pores are observed only in some parts of the surface. The average thickness is 0.8 cm (the thinnest is 0.5 cm and the thickest is 1.5 cm).

110. Mountain meadow soil: Mountain meadow soils are slightly more heat-supplied than in the highlands and tundra. In humid and cold conditions, it stabilizes under dense vegetation of Kobresia (sedge), carex-bush, and dense meadow forbs-grass. This soil occurs at an altitude of 2,400-2,600 meters in the northern part of the Mongol Altai mountain range, in the Turgen and Kharkhiraa mountains. Mountain meadow soils are usually distributed at the flat top of the vertical ridges of the mountains, but are also located at the base of the Mongol Altai mountain ranges. Mountain meadow soils cover 2.3 percent of the country's total area.

111. Saline soils: These usually occur in the middle of hidden glazed (meadow) brown soils along the edge of a depression with small lakes and ponds. Such soils are located at a depth of 1-2.5 m or sometimes above the groundwater level and are stabilized under specific conditions where strong evaporation is possible. The moisture regime is considered to be “sweating” because water is constantly rising and leaking out. During the warm season, large amounts of water rise from the depths of the soil, evaporate through all the layers and along with water, the salt compounds dissolved in it also rise to the topsoil, where they accumulate and form saline marz. This formation is called moist saline soil. 55

112. Alluvial meadow soil: This type of soil can be formed in the humid conditions of the central floodplain, which is periodically fed by groundwater and river floods, and its moisture is affected to a certain extent by the water from the permafrost thawing. Alluvial meadow soils are much better than swamp soils in terms of heat supply and heat well enough during the summer, which affects its water-moisture regime. In terms of vegetation, dominate meadow communities comprise forbs, grasses, and red heads, forming 90-100% cover. Due to the equal supply of moisture and heat in this soil, the process of decomposition of plant residues is intensifying and the accumulation of fine humus is expected to dominate (Dorjgotov, 2003).

113. Khovd Aimag. Specific locations were observed and sampled during the November 2020 field investigations. In the TSC area and the adjacent valley in the Mankhan Nature Reserve, the surface has alluvial sediments covered with gravel; the river floodplain is surrounded by steep rocks on both sides (some evidence of erosion; vegetation cover is <10%). In the Takhilt bagh area (the valley), the soil surfaces have signs of overgrazing by animals, as well as weathering from wind and water (vegetation cover is 20-30%). In the RANCC area (at the face of a mountain outcrop), light brown soil with carbonate dominates (vegetation cover is 20-30%).

4. Surface Water Resources

114. Khovd Aimag. All project sites in Khovd Aimag are located in the Khar Nuur-Khovd river basin. The Khar Nuur-Khovd river basin is part of the Central Asian Internal basin and in terms of hydrogeological water resources, most of them belong to the part of the Mongol Altai region (characterized by abundant nutrients). The area around Khar Lake and Durgun Lake is characterized with seasonally scarce-nutrient lakes. In the Khar Nuur-Khovd river basin, 83.3% of the total glacier area of Mongolia is evident (347.4 km2), with 38 glacier mountains. Due to the predominant influence of big rivers feeding this basin, river water levels increase from spring onwards, and summer floods coincide with high water levels during spring and summer. According to the hydrogeological section of the well near Khovd city, the water-bearing porous composition has a yield of 1.0-2.0 l/sec in the quaternary alluvial and alluvial-proluvial sediments.

115. The Buyant River originates from Tahilt Mountain, a tributary of the Khukh Serkhiin Nuruu, at an altitude of about 3,400 m above sea level and irrigates a total area of 8,366.9 km2. Its total length is 172 km. More than 20 large and small tributaries, such as Gants Modnii River, Chigertei, Rashaant and Deluun replenish the Buyant River. Annual runoff consists of 63% melting snow and ice, 33% groundwater, and 4% rainwater. The Buyant River does not have a constant flow, as there are spring-summer floods; the average annual water flow is 6.4 m3/sec near the Khovd town. The surface water resources of the river are estimated at an average of 0.56 km3/year (Khar Nuur-Khovd River Basin IWRM Baseline Study Report). In 2019, the average annual flow of the river was 9.55 m3/sec, the maximum flow was 44.7 m3/sec in June 2016, and the minimum flow was 0.32 m3/sec in January 2019.

Figure 31: Flow dynamics of the Buyant River, 2014-2019

River basin map of Khovd Aimag

Legend Aimag center Soum center Aimag boundary Soum boundary Spring water River Lake River basins Bulgan Khuisiin Gobi – Tsetseg Lake Khar Lake – Khovd Khyargas Lake – Zavkhan Uyench - Bodonch

Figure 32: River basin map for Khovd Aimag

5. Groundwater Resources and Water Demand

116. Khovd Aimag. The distribution of groundwater is very uneven and limited; it accumulates in river valleys, the delta, downstream, in lakes and intermountain depressions. The eastern part of Khovd town (the area around the Sangiin Kherem) is located 50 m from the shore of the Buyant River; this facility has sufficient groundwater resources and the local water supply is groundwater. The Buyant River is located in the Tuulai Uul watershed. According to the observed geological 57 formations, the groundwater distribution in the area is uneven; the water resource has estimated as 0.06 km3/year (Khar Nuur-Khovd River Basin IWRM Baseline Study Report).

6. Air Quality

117. Meteorological stations in Khovd, Uvs and Bayan-Ulgii Aimags analyze air quality, including the percentage of SO2 and NO2 in the air. According to the 2016-2019 air monitoring statistical data, and the field sampling in November 2020, the region's air quality (in all areas) met the national standards for nitrogen dioxide, sulphur dioxide, carbon monoxide, and total suspended particulates (well below the standards).

7. Water Quality

118. River water samples were taken and analyzed at various locations in November 2020 (see table below). The Buyant River was characterized as belonging to the hydrocarbonate class of calcium (low-mineralization water). The North Tsenkher River had water quality classified as neutral hydrocarbonate-calcium freshwater. It meets the requirements of the Mongolian drinking water standard MNS 0900:2018. In all, the content of the main elements associated with water pollution does not exceed the maximum allowable level of the standard.

Table 20: Mineralization of river water in the area General hardness mg/l + + 2+ 2+ - - 2- Sampling points (mg-eqv/l): MON Na +K Ca Mg HCO3 CI SO4 standard is 7 Buyant river 2.42 13.9 33.3 9.1 128.1 5.0 35.2 North Tsenkher river 2.38 20.7 30.7 10.1 120.8 3.5 53.9

8. Soil Quality

119. Soil samples in the aimag (project areas) were analyzed in November 2020 for heavy metals (lead, chromium, copper, zinc, and arsenic). Most soil samples were within permissible heavy metal levels, with the following exceptions (see table below): one sample near TSC, one in the MNR, and one in the RANCC area with slightly higher lead levels; two samples in the TSC area, and one near Khovd Town with slightly higher chromium levels; two samples near TSC, two samples in the MNR, one in the Khar Us lake area, two in the RANCC area, and three in the Khovd Town area with slightly higher arsenic levels. These all likely reflect local mineralogy, especially in the TSC area, which had higher soil heavy metal levels compared to other sites.

Table 21: Heavy metal soil concentrations in Khovd Aimag № XRF # Date Latitude Longitude Site name Pb Cr Cu Zn As MNS 5850:2019, permissible value mg/kg 100 150 100 300 20 1 2945 2020-11-10 47.35343 91.96133 89 128 15 56 17 2 2946 2020-11-10 47.3545 91.9615 318 130 56 60 77 Tsenkher 3 2947 2020-11-10 47.35481 91.96146 68 219 16 53 31 Cave 4 2948 2020-11-10 47.35478 91.96118 64 174 29 68 26 5 2949 2020-11-10 47.35472 91.96097 62 102 27 59 19 6 2950 2020-11-10 47.42703 92.06682 77 77 12 27 12 7 2951 2020-11-10 47.42668 92.06539 63 90 12 44 37 Takhilt- 8 2952 2020-11-10 47.4269 92.06538 71 81 9 31 26 Camping 9 2953 2020-11-10 47.42727 92.06536 58 38 22 15 13 10 2954 2020-11-10 47.42736 92.06611 105 106 4 28 1 11 2955 2020-11-10 47.84223 92.0259 57 94 14 19 8 58

№ XRF # Date Latitude Longitude Site name Pb Cr Cu Zn As MNS 5850:2019, permissible value mg/kg 100 150 100 300 20 12 2956 2020-11-10 47.84232 92.02574 Khar Us 57 74 21 43 19 13 2957 2020-11-10 47.842037 92.026215 lake, 53 14 10 30 14 Birdwatch 14 2958 2020-11-10 47.84222 92.02615 51 82 5 21 20 tower 15 2959 2020-11-11 48.04949 91.62469 42 71 7 26 21 16 2960 2020-11-11 48.0505 91.62482 115 116 17 69 33 17 2961 2020-11-11 48.05134 91.62361 Rock art, 63 125 11 30 15 18 2962 2020-11-11 48.0537 91.61919 Nomadic 46 106 29 61 6 19 2963 2020-11-11 48.05366 91.61698 culture 86 103 35 47 13 20 2964 2020-11-11 48.05131 91.61578 center 32 100 8 30 13 21 2965 2020-11-11 48.04968 91.61508 45 67 12 16 6 22 2966 2020-11-11 48.04875 91.61924 49 117 16 44 7 23 2967 2020-11-11 48.01228 91.64062 45 103 19 83 18 24 2968 2020-11-11 48.01267 91.63992 70 99 37 85 23 Tourist 25 2969 2020-11-11 48.01318 91.63917 47 156 18 93 31 street- 26 2970 2020-11-11 48.01369 91.64007 65 122 25 73 27 Sangiin 27 2971 2020-11-11 48.01337 91.6422 92 124 38 85 0 kherem 28 2972 2020-11-11 48.01245 91.64258 47 88 43 64 15 29 2973 2020-11-11 48.0116 91.6422 57 106 28 33 18

120. No soil samples in the aimag had detectable pathogen levels.

9. Noise Levels

121. Noise levels were measured at potential project sites in November 2020. All noise measurements at all sites and all times of day were below the permissible level of 60 decibels (usually between 35 and 56 decibels, although November is quieter than in the summer, when there are more vehicles and visitors).

10. Ecological Values

Overview

122. Khovd Aimag is located east of Bayan-Ulgii and south of Uvs. It comprises mostly desert in the southwest, and mountain forest and desert steppes; there are also large lakes to the east of the mountains. These define the habitat types and the biodiversity values in the aimag. There is a relatively high diversity of birds and mammals; Important Bird and Biodiversity Areas (IBBAs) and RAMSAR sites (mostly encompassing the lakes) cover about 20% of the area of Khovd, mostly in the north-central part. Project sites in this aimag are located in the Khar Us Nuur National Park (KUNNP), near the Mankhan Nature Reserve, and in and near Khovd Town. Details are provided below.

Vegetative Cover in Khar Us Nuur National Park (KUNNP) and Khovd Town

123. This area belongs to the Eurasian steppe region, the Mongol Altai mountainous steppe province, and the Eastern Mongol Altai mountainous steppe region (Unatov, 1950). The territory of Khovd Aimag is in the botanical-geographical region on the border of the Central Asian sub- regions of the Eurasian steppe region (National Atlas of the People's Republic of Mongolia). The high mountains of the central and northwestern part of the Khovd Aimag are covered with bushilz and ulaljit cold meadows, cold-dry variegated grasses, small steppe grasses and lichen tundra 59 vegetation. These vegetative habitats were sampled in September 2020. A total of 40 species of plants were observed in and around potential project sites (Tsenkher Cave; Takhilt Bagh camp; Khar Us bird observatory; Khovd Aimag center), comprising mostly grasses, lilies, compound flowers, shrubs, and legumes. Most of the species (92.5%) are considered hay or pasture plants. No plants with very rare status were observed, two somewhat rare plants were observed: rare Taana and Urgost Ortuuz. The common plant communities that were observed include: steppe leek-grass; steppe-meadow wormwood-grass; rocky mountain-steppe bridle grass; and, mountain-steppe bridle-grass.

Figure 33: Plant communities in Khovd Aimag

2 3

1. Tsenkher Cave. 2. Khar Us Lake. 3. Near Khovd Town. Figure 34: Examples of vegetation cover at some of the project sites.

Biodiversity Values and Faunal Species at the Project Sites

124. The project sites are located in or near several national ecological protected areas:  Khar Us Nuur National Park (KUNNP);  Mankhan Nature Reserve.

125. The aimag has one RAMSAR site and two Important Bird and Biodiversity Areas, as shown in the figure below, where several of the proposed campsites are proposed.

Figure 35: RAMSAR sites and Important Bird and Biodiversity Areas

126. The details on the importance of the project areas to birds are summarized below.

Table 22: Important Bird Areas and RAMSAR site, in which Khovd project sites are located IBA: MN013 Khongil 6,027 ha (1,220-1,527 meters asl; 47°51’ N, 91°49’E) The site supports a breeding colony of Lesser Kestrel (VU). The Mongolian Ground Jay Podoces hendersoni, a species listed in the Red Data Book of Mongolia, occurs here as well IBA: MN014 Khar Us Lake 297,265 ha (1,157-1,452 meters asl; 47°45’ N, 92°10’E); also a RAMSAR site - 321,360 ha Globally Threatened species include Dalmatian Pelican Pelecanus crispus (VU), White-headed Duck Oxyura leucocephala (EN), Swan Goose Anser cygnoides (EN), Pallas’s Fish-eagle Haliaeetus leucoryphus (VU), Lesser Kestrel Falco naumanni (VU), White-naped Crane Grus vipio (VU) and Relict Gull Larus relictus (VU). The site also supports species typical of the Eurasian steppe and desert biome. The site regularly supports at least 1% of the flyway populations of Great Crested Grebe Podiceps cristatus, Dalmatian Pelican Pelecanus crispus, Great Cormorant Phalacrocorax carbo, Great Egret Egretta alba, White Spoonbill Platalea leucorodia, White-headed Duck Oxyura leucocephala, Whooper Swan Cygnus cygnus and Caspian Tern Sterna caspia.

127. For mammals, there are 40 species in Mankhan Nature Reserve, and 54 species in KUNNP. The Mankhan Nature Reserve supports 100 bird species and the KUNNP has 280 bird species.

Table 23: Threatened mammal species in the project protected areas.

Regional Global Species list Red List Red List NR KUNNP CMS CMS 2013 2012 Mankhan Mankhan

(2006) (2014) Mongolia Mongolia CITES I, II II I, CITES Red Book Book Red 7 10 Animals law law Animals Eurasian Beaver Castor fiber EN LC * * + Grey Wolf Canis lupus NT LC * + + Manul Otocolobus manul NT NT * + + Snow Leopard Uncia uncia EN EN * * * * + + Wild Boar Sus scrofa NT LC * * + Mongolian Gazella Procapra + Vu Vu * * * gutturosa Goitered Gazelle Gazella + + EN LC * * subgutturosa Saiga Saiga mongolica CR CR * * * + + Ibex Capra sibirica NT LC * * + + Argali Ovis ammon NT Vu * * * + + CITES = Convention on International Trade in Endangered Species of Fauna and Flora, CMS = Convention on Migratory Species, CR = Critically Endangered, EN = Endangered, V = Vulnerable, NT = Near Threatened, LC = Least concern, KUNNP = Khar Us Nuur National Park.

128. A key concern for this site is potential disturbance of the saiga antelope (Mongolian saiga). The proposed location of the toilets at Takhilt bagh in Mankhan soum, Khovd Aimag are within the distribution area of the Mongolian Saiga (Saiga mongolica), and the access road for the TSC goes through the saiga home range (although the TSC itself is outside it; 10 km west). The range of the species is geographically limited and there is a fragmented and sparse population in the Mankhan area. These animals live in herds; in the summer they eat in the morning and the evening, and in the winter, they eat in the day. The saiga eats plants such as leeks, sagebrush, and Gobi sagebrush. It migrates seasonally depending on water and pasture availability. The population of this species is very unstable and is directly affected by factors such as climate and animal diseases. The table below shows that in the early 2000s, droughts and dzuds reduced the number to 750, and since then, some successful conservation projects have increased the saiga population to about 15,000. However, in 2018, 80 percent of the population was affected by an 62 infectious animal disease, and the population declined. However, the population has doubled since then, reflecting some resilience in the saiga population.

129. The Mankhan’s saiga population is distinct from the original population. Analyzing the population growth and population data from 1982 to 2020, it has been growing steadily in recent years. In 2017, 223 individuals were counted. However, according to the 2019 census, because of animal diseases, unfavourable climate conditions and competition over limited pasture (with ever increased domestic animals), the number of saiga has decreased to about 100 animals, with 20 animals in the Mankhan Nature Reserve, in the valley east of TSC.

Figure 36: Home range of saiga in the Mankhan Nature Reserve

3. Amphibians and Reptiles

130. Mongolia is harsh climate for amphibians; there are no amphibians in Khovd. The project area is habitat for five reptile species (Kh. Terbish et al., 2006), as noted below. None of these have associated conservation concerns.

Table 24a: Reptiles in the project area Sub-family Order Species Mongolia Internationally 6. Tuva toad-headed agama Least Concern Not evaluated Agamidae (Phrynocephalus versicolor) LC NE 7. Multi-cellated racerunner (Eremias Lacertilia LC NE multiocellata) Lacertidae 8. Gobi racerunner (Eremias LC NE przewalskii) 63

Sub-family Order Species Mongolia Internationally Colubridae 9. Steppes rat snake (Elaphe dione) LC NE Serpentes 10. Halys pit viper Crotalidae LC NE (Gloydius halys)

4. Fishes

131. With many waterbodies in the project area, fish are prevalent. Some are native and some have been introduced (for example, the common pike). Eighty percent of the fish species in western Mongolia are endemic to Central Asia.

Table 24b: Fish species occurring in the project area International Regional Latin name English name evaluation evaluation Oreoleuciscus humilis Small osman ND V Oreoleuciscus potanini Potanin's osman ND LC Siberian stone ND Orthrias barbatulus LC loach Thymallus brevirostris Mongolian grayling V V Thymallus arcticus Arctic grayling ND NT Oreoleuciscus angusticephalus Lake osman V V LC-Least concern, NE-Not evaluated, NT-Near threatened, V-Vulnerable, ND-Not data

132. Of the fish observed in Khovd, the Mongolian grayling and lake osman are classified as “vulnerable”.

11. Protected Area Management Status and Issues

133. Khar Us Nuur National Park (KUNNP) was established in June 1997. It covers an area of 850,000 ha in the Great Lakes Basin in western Mongolia, forming part of the Altay-Sayan ecoregion identified by the World Wildlife Fund. The area consists of 638,357 ha of agricultural land, 211,267 ha of lakes and ponds, and 526 ha of rivers and streams. The KUNNP’s territory is divided into three internal zones: special (4.4% of total area), tourism (17.6%), and limited use (78%) zones. This unique landscape hosts many rare and endangered species, such as Altai mountain sheep or argali, Siberian ibex, snow leopard, and black stork. KUNNP is also one of the most internationally important wetland areas of Mongolia. In 1999, it was registered as a Ramsar site, providing an important breeding ground and migration stopover for about 200 bird species, of which 10 are globally endangered and 21 nationally threatened.

134. Around 1,300 families (approximately 6,000 people) settle in KUNNP on a seasonal basis, while the average population density is less than 1.2 persons/km2, the main period of residence being from October to April. A problem facing the region arises from the loss of former traditional grazing practices based on sustainable use of the natural resource and the emergence of poisonous plants as a consequence of overgrazing. Key tourism attractions in KUNNP include (1) Bird watching. The lake is a marshy delta and the third biggest lake in Mongolia covering 15,800 km2. It is home to many water birds such as wild ducks, wood grouse, geese, and pelicans. (2) Climbing and hiking. A snowcapped mountain “Jargalant khairkhan” with an altitude of 3,796 m above sea level on the southern edge of the Park attracts climbers and wildlife watchers. (3) Wildlife. The surrounding mountains of the Park are home to iconic wildlife species such as Snow Leopard, Ibex and Argali sheep. Open steppe along the southern part of KUNNP is inhabited by the endangered Saiga antelope and Mongolian gazelle. (4) Przewalski’s horse reintroduction site 64 in neighbouring National Park of Khomyn Tal. This site is located 80 km to the east of the KUNNP where the wild horses have been reintroduced since 2004. (5) Nomadic culture. As elsewhere in the country, nomadic culture of life is an attraction, especially for foreign tourists where numerous ethnic groups exist in the region. It is home to 13 ethnic minorities, each has its own distinct traditional dwelling and settlement pattern, dress and other cultural distinctions, literary, artistic, and musical traditions. KUNNP has the following existing facilities: 1 fee collection station; 4 campsites; 2 ranger stations; 1 information point; 7 car parks; 6 toilets; 1 bird watching tower; 3 solid waste points (in moderate condition) (Tsenkher Cave has the following existing facilities: 1 fee collection station; 2 campsites; 2 car parks; 2 toilets; 2 solid waste points (in poor and moderate condition). The KUNNP has travel and tourism and limited use zones that accommodate project-supported activities.

12. Socioeconomic Features

135. Khovd Aimag. In 2018, the total number of households was 11,876 and the number of herder households was 7,863, an increase of 250 households with livestock and 456 herder households from the previous year. According to the year-end livestock census, at the end of 2018, the number of livestock reached 3,146,400 thousand heads, decreased by 8.7 %, with 5 types: horses by 3,500, cows by 6,800, camels by 300, sheep by 149,300 and goats by 140,200. Livestock decreased in 13 out of 17 soums. Bulgan soum has 288,000 head of livestock, Mankhan soum has 247,200 thousand head of livestock and Myangad soum has 235,500 head of livestock. Khovd Aimag has a total area of 7,606,038 hectares. According to the Unified Land Fund classification, as of 2018, there were 5,097,648 hectares of agricultural land, 35,399 hectares of urban and other settlements, 27,431 hectares of roads and networks, 467,495 hectares of forest land, 43,167 hectares of water reservoir land and state special needs. 1,934,896 hectares of land are being used. According to the Unified Land Fund, 67% is agricultural land, 25% is special needs land, and the remaining 8% is urban land, other settlements, roads, networks, forests, and water reservoirs.

Table 25: Land sub-classifications in Khovd Classification Area, ha Agricultural 5,097,648.24 Pastureland 5,064,435.04 Hay field 17,981.98 Farmland 9,293.65 Атаршсан газар 2,779.10 Land for agricultural construction 3,150.87 Land not suitable for agricultural use 9.60 Towns, villages and other settlements 35,399.85 Land for all of buildings and structures 2.213.97 Public land 29.029.21 Industrial land 1,220.40 Mining land 260.00 Ger land 2676.27 Road and network land 27,431.32 Roads 24,691.16 Railroads 0.0 Air transportation land 355.00 Pipe network land 2385.16 Water transportation land 0.000 Forest resource land 467,495.55 Forested land 310,483.50 65

Classification Area, ha Land where the forest was cut down 502.15 Forestry 13,432.10 Forest expansion reserve 95.00 Other forest reserve land 142,982.80 Water reservoir land 43,167.00 River lands 7,503.00 Lakes and ponds 32,441.10 Streams and springs 2,373.90 Glacier and glacier rivers 849.00 State reserve 1,934,896.05 Specially protected area (State) 1,663,969.00 State border strip land 155,000.00 Land allocated for national defense and security 8,467.05 Embassies 0.00 Land allocated for scientific and technological testing and experimentation and constant 60.00 observation of the environment and weather conditions Inter-aimag otor pasture 105,200.00 Hay area of the state fodder fund 2,200.00 Petroleum contract area to be explored for production under a production sharing 0.00 agreement Free zone area 0.00 7,606,038 ha

13. Physical Cultural Resources

136. Physical cultural resources (PCR) in western Mongolia were determined on the basis of secondary data, the literature, and field observations and consultations. An overview of PCR in Khovd is provided here.

137. Khovd Aimag is rich in archeological finds, especially those from the Bronze and Iron Ages. The most prominent physical cultural resources are the Tsambagarav Mountain petroglyphs (4-6th centuries AD), Khushuut petroglyphs near the Khongio River (Iron Age), petroglyphs in the mountains near Khovd (Bronze and Iron Age), the “San” wall, in Khovd town (remnants of a protective wall dating back to the Manchu period, more than 300 years ago), and Deer Stones (Bronze Age stone statues carved with symbols) and Khirigsuur (tomb sites) – quite common throughout Khovd. Despite the prevalence of PCR in Khovd, the only project site that is close to PCR is the RANCC, west of Khovd Town, where there are deer stones and Khirigsuur.

Figure 37: Khirigsuur near the RANCC site in Khovd

Figure 38: Tomb sites on the perimeter of the RANCC site

Figure 39: Khirigsuur near the RANCC site

14. Site-specific Biophysical and Socioeconomic Features at Each Project Site

138. The environmental and socioeconomic baseline data were applied to the specific project sites and verified through examination of recent Google Earth images. These are noted below.

Table 26: Biophysical and socioeconomic features at the project sites in Khovd Project Site Biophysical and Socioeconomic Features Tsenkher Cave, The site currently has a low level of visitors, who access via a dirt road across the valley Mankhan Soum, from the soum. There are currently negative impacts from tourism (mostly solid waste). Khovd The immediate area is not an Important Bird and Biodiversity Area. However, it is close to an area of importance for the Saiga Antelope; this antelope is sometimes dispersed along the valley east of Tsenkher Cave, which is part of the Mankhan Nature Reserve. The saiga population in this area is small and variable, subject to climate changes and disease; there is a larger population throughout this area; not just east of Tsenkher cave. Overall, the area has a medium level of mammal species richness; there are seven species of concern in the vicinity, including: Grey Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Goitered Gazelle Gazella subgutturosa (LC); Saiga mongolica (CR); Ibex Capra sibirica (LC); Argali Ovis ammon (Vu). No habitat or vegetation issues at the specific site – sparse grassland, adjacent to a summer stream. There are about 10 gers 500 meters away, near the stream. Dirt tracks evident throughout the area – a small valley edging up into the mountains to the west. YUMIIN Popular tourism site (ferry to Agvash Lake in the summer). KHOOLOI This is an Important Bird and Biodiversity Area, as a well as a RAMSAR site (7 globally 48˚19'20.4'N, important birds, with many seasonal waterbirds, as well). 92˚33'38.29'E There are ten mammal species of concern here: Eurasian Beaver Castor fiber (LC); Grey Campsite hub and Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); birdwatching Wild Boar Sus scrofa (LC); Mongolian Gazella Procapra gutturosa (Vu); Goitered Gazelle 68

Project Site Biophysical and Socioeconomic Features tower (toilets, Gazella subgutturosa (LC); Saiga mongolica (CR); Ibex Capra sibirica (LC); Argali Ovis parking, ammon (Vu). information point, Extensive wetlands in the connection between the two lakes to the south (500 meters markets, ranger away). Otherwise, the proposed campsite is dry sparse grassland (no vegetation or habitat station). issues at the specific site). There are many dirt tracks to the west, north, and east (and the town 5 km to the east). There are several gers to the southwest. ARGALANT, Existing bird watching area; summer local tourists common. KHAR LAKE This is an Important Bird and Biodiversity Area, as a well as a RAMSAR site (7 globally 48˚9'46.52''N, important birds, with many seasonal waterbirds, as well). 93˚6'49.65''E There are ten mammal species of concern here: Eurasian Beaver Castor fiber (LC); Grey Toilets and Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); birdwatching Wild Boar Sus scrofa (LC); Mongolian Gazella Procapra gutturosa (Vu); Goitered Gazelle tower. Gazella subgutturosa (LC); Saiga mongolica (CR); Ibex Capra sibirica (LC); Argali Ovis ammon (Vu). Extensive wetlands to the west and south (800 meters away). Otherwise, the proposed campsite is dry sparse grassland (no vegetation or habitat issues at the specific site). There are many dirt tracks extending down from the north into the peninsula (location of the campsite). There are several bird watching towers along the southern end of the peninsula. At the entrance Dry steppe area (no trees or shrubs); at the junction of the highway and the park access. of KUNNP Many dirt tracks emanating from this point and also parallel to the highway. 47°49'39.40N, Near an Important Bird and Biodiversity Area (9 km to the east), as a well as a RAMSAR 91°54'10.2E site (7 globally important birds, with many seasonal waterbirds, as well). Fee collection There are ten mammal species of concern here: Eurasian Beaver Castor fiber (LC); Grey station (parking, Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); toilets, information Wild Boar Sus scrofa (LC); Mongolian Gazella Procapra gutturosa (Vu); Goitered Gazelle point). Gazella subgutturosa (LC); Saiga Saiga mongolica (CR); Ibex Capra sibirica (LC); Argali Ovis ammon (Vu). Khovd Aimag The site is on the southern edge of town, in a vacant lot at the junction of the north/south (tourist street) road and the southernmost road in town. There is a sparse residential house and ger area immediately to the north (on the other side of the road), and dry grass and bush scrubland and empty lots to the south (some gers about 300 meters to the south, along the N/S road). There are many dirt tracks crisscrossing the site. There are no sensitive or vulnerable natural habitats in or adjacent to the site. Khovd Aimag The site is about 1.3 km northwest of the river (west of Khovd town), in dry (RANCC) grass/scrubland, immediately adjacent to a mountain outcrop (to the northeast). There are no habitat or vegetation concerns at this site. There are multiple tracks running N/S, immediately west of the site. The area is not an Important Bird and Biodiversity Area (but medium mammal species richness in this area). Saiga antelope are located further south (near Tsenkher Cave, in Mankhan Nature Reserve). There is a khirigsuur (tomb) just west of the site, and several tombs on the eastern perimeter of the site near the mountain. *LC-Least concern, NE-Not evaluated, NT-Near threatened, V-Vulnerable, ND-Not data, KUNNP – Khar Us Nuur National Park.

C. Uvs Aimag Subproject

1. Climate

139. The coldest months are December, January, and February, with average temperature ranging from -18.4 to -31.3 degrees; the absolute minimum air temperature ranges between -37.3 and -47.7 degrees. The highest average temperature is observed in July, reaching 15.1 - 21.8 69 degrees (the absolute maximum air temperature ranges between 34.2 and 39.5 degrees). Uvs Aimag has relatively high rainfall compared to the other two aimags; 70-80% of the total precipitation falls during the warm season (between April and September). The average amount of precipitation in this area is 62.6 - 246.2 mm. Humidity ranges from 71 to 76% in the winter to 9-12% in May/June. Due to the depressions in Uvs Aimag, western and eastern winds are observed along the mountain gorges. However, as in the other aimags, the prevailing winds are from the south. Maximum wind speeds exceed 21 m/s (in May), while average wind speeds are less than 3.1 m/s.

2. Physical Geography, Geology, and Permafrost

140. Uvs Aimag covers an area of 69,600 km2 in the northern part of the Great Lakes Depression. It is 1,417 km away from Ulaanbaatar. The aimag center, Ulaangom soum, is located at an altitude of 939 meters above sea level. The aimag has a diverse geomorphological structure, with Uvs and Khyargas Lake, the surrounding Gobi region, the Kharkhiraa, Turgen, and Khankhukh high mountains, and all the features of the vertical belt of the Central Asian Internal basin, from the desert to the high mountain glaciers; 8.2% of the aimag territory is mountain forest steppe, 14.5% is High Mountain, 37.7% is steppe, and 39.6% is the Gobi Desert. Uvs Aimag is located in the high mountainous region of the Mongol Altai. Granite dominates the high mountain peaks. The Altai Mountains are composed mainly of granite-granodiorite and intrusive granite Palaeozoic rocks. The area consists primarily of high-altitude ridges, moderately elevated mountains, and slightly elevated hills and also consists of gorges, steep mountain slopes, permafrost valleys, high peaks, sedimentary lake valleys, ravines, depressions (deluvia, proluvia) and mountain river valleys. The permafrost of Uvs Aimag, located in the Altai mountainous region, is divided into 4 classes: continuous; sporadic; isolated patches; and sparse patches.

Figure 40: Geographical location of Uvs Aimag

Figure 41: Natural zones of Uvs Aimag

Figure 42: Permafrost distribution in Uvs Aimag

3. Overview of Soil Types

141. Mountain dark brown soil: This type of soil is one of the main soils that make up the mountain forest-steppe zone and it is stabilized on the front slopes of the mountains along the forest border, on the back slopes of the mountains along the dry steppe border, and under the meadow-steppe and variegated forbs-grass moist steppe vegetation. The vegetation cover on the soil is 50-90% dense, depending on the particle size and thickness of the gravelly rocky. Due to the short summer shower rains, on the other hand, gravelly bedrock has a high permeability, so mountain dark brown soils have a periodic permeable moisture regime that is periodically washed away, and in some cases, even a predominance of washed-out mode.

142. Coarse humus soil of high mountains: This type of soil is mainly distributed in the Mongol Altai mountain range at an absolute altitude of 2,400 – 2,500 m to 3,000 – 3,200 m asl, above the brown soil zone in specific cold dry (cryo-arid) steppe conditions and covers approximately 1.9% of the country's territory. Vegetation is dominated by grasses, but these grasses are not evenly distributed, forming densely dried smaller clusters with 20–40 cm in diameter on the soil surface. The area between these dense insect-infested grassy spots appears bare with no vegetation and is covered with small crumbly stones. The vegetation cover of this unique type of high mountain spotted steppe is 60-80% and in some places 30-50%.

143. Light brown soil: In the northern part of the desert steppe zone, the grass-Mongolian grassland community is mainly distributed in a well-mixed area of Artemisia frigid (an aster), Allium (onion family), and Khargana (forb grass): the vegetation cover does not exceed 20-30%. Most of the soil surface is bare with no vegetation, so it is easily exposed to wind and is covered with coarse sand and small stones. Occasionally there is a thin, very brittle film layer with a layered structure on the bare surface. The humus accumulation layer is light brown in color; the average thickness is 10 cm.

144. Brown soil of desert steppe: It is distributed in the desert steppe vegetation with 15-25% cover with combinations of community of asters, forbs, stipa grasses, and allium. This soils type covers 7% of the country's territory. In the upper layer of this soil, the brownish, harder topsoil and its lower layer are morphologically obscure. The harder top layer is brittle, without pores or small pores are observed only in some parts of the surface. The average thickness is 0.8 cm (the thinnest is 0.5 cm and the thickest is 1.5 cm).

145. Mountain meadow soil: Mountain meadow soils are slightly more heat-supplied than in the highlands and tundra. In humid and cold conditions, it stabilizes under dense vegetation of Kobresia (sedge), carex-bush, and dense meadow forbs-grass. This soil occurs at an altitude of 2,400-2,600 meters in the northern part of the Mongol Altai mountain range, in the Turgen and Kharkhiraa mountains. Mountain meadow soils are usually distributed at the flat top of the vertical ridges of the mountains, but are also located at the base of the Mongol Altai mountain ranges. Mountain meadow soils cover 2.3 percent of the country's total area.

146. Saline soils: These usually occur in the middle of hidden glazed (meadow) brown soils along the edge of a depression with small lakes and ponds. Such soils are located at a depth of 1-2.5 m or sometimes above the groundwater level and are stabilized under specific conditions where strong evaporation is possible. The moisture regime is considered to be “sweating” because water is constantly rising and leaking out. During the warm season, large amounts of water rise from the depths of the soil, evaporate through all the layers and along with water, the salt compounds dissolved in it also rise to the topsoil, where they accumulate and form saline marz. This formation is called moist saline soil. 72

147. Alluvial meadow soil: This type of soil can be formed in the humid conditions of the central floodplain, which is periodically fed by groundwater and river floods, and its moisture is affected to a certain extent by the water from the permafrost thawing. Alluvial meadow soils are much better than swamp soils in terms of heat supply and heat well enough during the summer, which affects its water-moisture regime. In terms of vegetation, dominate meadow communities comprise forbs, grasses, and red heads, forming 90-100% cover. Due to the equal supply of moisture and heat in this soil, the process of decomposition of plant residues is intensifying and the accumulation of fine humus is expected to dominate (Dorjgotov, 2003).

148. In the UVTC area east of Ulaangom, desert steppe brown soils are predominant. In the Khar Termes resort area on Khyargas Lake, mountain light brown soils with carbonate predominate (vegetation cover is 20-30%). However, the soil is covered with fine sand and gravel. In the Soogoo Lake area, non-carbonated black soils are dominant (vegetation cover is 50-60%). The Altan Burgas campsite area has mountain taiga permafrost soils.

4. Surface Water Resources

149. The project sites in Uvs Aimag belong to the Uvs Lake-Tes River and the Khyargas Lake- Zavkhan river basins. In terms of the hydrological network, it is a classic example of a landscape with all features of the vertical aspects of a basin. The Uvs Lake-Tes River Basin is a narrow valley covering the area between the great region of the Khangai-Khentii Mountain Range and the Khan2Khukhii Mountain Range “B” (the Great Lakes Depression, in terms of physical geography). The Kharkhiraa and Turgen mountains are one of the three sub-regions of the Mongol Altai mountain range. Uvs Lake is the largest mineral lake in Central Asia, located in the Central Asian Internal basin. It is located at 759 m above sea level. It covers an area of 3,350 km2, is 84 km long and 79 km wide, and the coastline is 425 km long. It is located on the northern edge of the Great Lakes Depression; the northern part is located in the Tuva Republic of the Russian Federation. There are 44 rivers in this basin, such as Tes, Nariin, Kharkhiraa, Turgen, Sagil and Borshoo. There are also many small lakes and ponds. 14% of the lake's water source is precipitation, 57.4% is surface runoff and 28.6% is groundwater.

150. The Kharkhiraa and Turgen mountains are rich in snow and glaciers and cover more than 20 percent of Mongolia's glacial area. Due to global warming, the amount of snow has decreased by 55% in the 20 years from 1992 to 2011. The Kharkhiraa River is a 4th range river fed by glaciers and rainwater at an altitude of 3,078 m above sea level. In the upper part of the river, a small river originates at 2,982 m asl at Kharkhiraa Mountain and joins with a small river that originates at 2,922 m asl at the Turgen Deglii Tsagaan glacier, and flows through a narrow gorge with sparse mountain vegetation. As soon as it descends from the mountain near Tarialan soum, it divides into three branches: Kharkhiraa, Teel, and Gashuun. 55% of the total annual runoff is in June-August, spring runoff is 23% (in April-April), autumn runoff is 16% (in September- November), and winter runoff is 6% (in December-March). The long-term average flow is 5.19 m3/sec. The surface water resources of the Kharkhiraa Turgen branches are 1,073.04 million m3/year with an annual average flow rate of 50%. Potential exploitable resources are 42.91 million m3/year; estimated exploitable groundwater resources - 275.4 million m3/year, and operating resources are estimated at 4.17 million m3/year (Kharkhiraa and Turgen river basin IWRM plan).

Figure 43: Discharge of Kharkhiraa River, Uvs: 1979-2018

151. The long-term average flow of the Kharkhiraa River was 9.85 m³/sec, the minimum flow in 2009 was 3.12 m³/sec, and the maximum flow (in 1986) was 51.82 m³/sec.

152. The Khan Khukhii mountain range is a national park that separates the Uvs and Khyargas lake depressions, which are extended into the Great Lakes Depression. Due to the mountain meadows around the Altan Burgas, there are many surface springs with surface soil water, and there are temporary and permanent springs such as Khondlon, Must, Uvurbulag, and Arbulag nearby. The spring flow rate has been recorded as 0.12-0.7 l/sec.

153. Soogoo Lake is located in the Khan Khukhii mountain range at an altitude of 2,030 m above sea level; it is a freshwater lake with an area of 171 hectares. It is likely to have a tectonic origin in the depression between the mountain tops and has an artesian aquifer that rises from the bottom. The Khyargas Lake-Zavkhan river basin in Malchin soum. The eastern shore of Khyargas Lake in Khar Termes in summer is a popular place for tourists and travelers from Uvs Aimag and urban and rural areas. The Khar Termes tourist camp is a national spa resort assumed to have health benefits. There are small rivers, such as the Mogoin Gol, which flow from the eastern side of the Khan Khukhii Mountains; with limited surface water resources, they do not flow into Khyargas Lake. 18 km south of the existing camp, on the shores of Khyargas Lake is a wetland, with Butsaldagiin spring.

154. Mineral water: In recent years, medical and wellness tourism has become one of the most important types of domestic tourism in Mongolia. The Khyargas Lake Khar Termes Sanatorium, Ulaangom Chandmani Mountain Spa, Ulgii Sonduult and Khyargas Modot have therapeutic springs to treat various diseases. The Khar Termes sanatorium near Khyargas Lake is 140 km from Ulaangom (domestic and foreign tourists can swim, sunbathe, relax, and go fishing).

River basin map of Uvs Aimag

Legend Aimag center Soum center Aimag boundary Soum boundary Spring water River Lake River basins Khar Lake – Khovd Khyargas Lake – Zavkhan Uvs Lake - Tes

Figure 44: River basin map of Uvs Aimag

5. Groundwater Resources and Water Demand

155. In Uvs Aimagaimag, according to geological and hydrogeological maps, the area around the center of Uvs Aimag is dominated by Neogene clayey sediments and has very little groundwater resources. Therefore, groundwater is unlikely to enter the area. As an example, in 2012, Energy-Empire LLC drilled a 95m deep well west of the planned UVTC location, but it has not been put into operation, due to the presence of saline wastewater. Groundwater from a number of nearby wells is used to supply water to the population around Lake Uvs, and a drinking water supply will be available from wells near the administrative rangers' building of UVSPA and Uvs Lake tourist camp. Well depth is 30m, yield is 3 l/sec, and the stable water level is at 8m. The estimated exploitation rate of groundwater resources of the Kharkhiraa and Turgen branches is estimated at 275.4 million m3/year (Kharkhiraa and Turgen River Basin IWRM Plan). Due to the lack of groundwater boreholes and wells in the Khan Khukhii mountain range, it is not possible to determine the groundwater resources there; it is possible to consider the Uvs Lake-Tesiin river basin as a resource.

156. Khyargas Lake and Khar Termes have low groundwater resources. Several organizations have drilled holes and no water has come out. They have drilled 65 meters for water for the Khar Termes tourist camp, but the quality of drinking water was poor.

157. The Khar Nuur-Khovd river basin covers a large part of the territory of 29 soums of Bayan- Ulgii, Khovd and Uvs Aimags. It is a source of drinking water for the population of the region, and a source of water for agriculture, energy, urban gardening, construction, and various businesses. Water consumption is more than doubled in the last 12 years (see table below).

Table 27: Total annual water consumption and trends in the Khovd River Basin18 Year Water consumption 2008 153.6 mln m3/year 2015 273.6 mln m3/year 2021 373.2 mln m3/year

158. The water resources of the Khovd River are estimated at 2,365 million m3/year; in a low water year, with probability of 95%, there are 1,561 million m3/year; sufficient compared to the total water demand and trends of 2008-2021. However, the evaporation is expected to increase sharply due to the impact of climate change; therefore, there is a need to assess the impacts to the water resources and water regimes.

159. Groundwater resources in the Khovd river basin are 786.1 million m3; 4.4 million m3 in 2008 for drinking, household, and industrial needs of the population; 4.9 million m3 in 2015 and 5.3 million m3 in 2021 for drinking, household and industrial needs of the population, which accounts for 0.57-0.67 percent of the resource, indicating that water resources are sufficient.

Table 28: Total annual water consumption and trends in the Buyant River Year Water consumption 2008 126.4 mln m3/year 2015 126.9 mln m3/year 2021 144.6 mln m3/year

160. The water resources of the Buyant River are 178.8 million m3/year; in a low water year, with probability of 95%, there are 111.6 million m3/year and the water resources are estimated as insufficient compared to the total water demand and trends. This river is expected to use 96.6- 97.6% of the water demands of 2008 and 2015, or almost all of the water, and does not fully meet the water demands planned for 2021. Measures need to be taken to increase the efficiency of water consumption through the rational use of water from the Buyant River and to keep low runoff in the river to support the ecosystem.

161. The groundwater resources of the Buyant River Basin are estimated at 138.8 million m3, of which 3.4 million m3/year was used for household and industrial needs in 2008, 3.8 million m3/year in 2015, and 4.1 million m3/year in 2021. This accounts for 2.4-2.9 percent of groundwater resources, indicating that these resources are at a reasonable level to meet demand. There is no information on the North Tsenkher River's groundwater resources and boreholes

162. A small spring originates from Sogoo Lake in the Khan Khukhii mountain range of Uvs Aimag and flows down the riverbed into the mountain, which the locals consider to be the source of the Baruunturuun River. Due to the freshness of the water, the locals drink water during the summer. The source of surface water at the Khyargas Lake tourist camp in Uvs Aimag is the Bucaldag spring, which is located 7 km from the camp. The water quality is soft and meets the requirements of Mongolian water standards. It is also possible to transport water from Uzuuriin Bulag, which is about 25 km away.

6. Air Quality

163. Meteorological stations in Khovd, Uvs and Bayan-Ulgii Aimags analyze air quality, including the percentage of SO2 and NO2 in the air. According to the 2016-2019 air monitoring statistical data, and the field sampling in November 2020, the region's air quality (in all areas) met

18 Source: Khar Nuur - Khovd River Basin Integrated Water Resources Management Plan 76 the national standards for nitrogen dioxide, sulphur dioxide, carbon monoxide, and total suspended particulates (well below the standards).

7. Water Quality

164. Water samples were taken and analyzed at various locations in November 2020 (see table below).

165. Uvs Lake: This lake is different from the others, classified as a sodium sulphate type lake. The biochemical oxygen demand (BOD) is 14.7 mg/l, and the ammonium nitrogen content is 0.7 mg/l /HA 0.5, which indicates that the lake is slightly polluted. The chemical composition of the water is dominated by salt.

166. Khyrgas Lake: The water quality indicates high hardness. The lake water is classified as “Slightly polluted”, and in terms of dry matter (mineral) content, magnesium and dissolved substances, it is classified as “Very polluted”.

167. Well in Ulaangom center: The water from 4 wells at the source station #2 is colorless and odorless, and has neutral pH. The data indicate that this water meets the requirements of MNS 0900:2018 standards of “The environment. Health and safety. Drinking water. Hygiene requirements, quality and safety assessment”.

168. Well near Uvs Lake: The water in the lake is soft, with a neutral pH. The water is classified as neutral hydrocarbonate-calcium freshwater. The water did not exceed bacteriological standards. It meets the requirements of the Mongolian drinking water standard MNS 0900: 2018.

169. E-coli and pathogens: Bacteriological analysis was undertaken at two locations in September 2020 (Uvs Aimag's Tourist camp; Uvs, drinking water of 5th and 11th baghs). E-coli and aero-tolerants and pathogens were all undetectable.

Table 29: Water quality in several lakes General hardness mg/l ∑и Sampling points + + 2+ 2+ - - 2- (mg-eqv/l) Na +K Ca Mg HCO3 CI SO4 (mg/l) Uvs lake /mineralization 14,323 4,241.3 1,183.4 4,537.6 3,693 Ulaangom, Well 2.42 29.3 46 1.4 150.7 9.9 40.3 277.6 Uvs lake, Well 3.17 137.8 34.9 17.3 244 85.1 109.6 628.7

8. Soil Quality

170. Soil samples in each of the three aimags (project areas) were analyzed in November 2020 for heavy metals (lead, chromium, copper, zinc, and arsenic). In Uvs Aimag, soil heavy metal levels were generally low, with most samples below the permissible soil levels, with the following exceptions: three samples near Ulaangom with slightly elevated chromium; one sample near Uvs lake, three near Ulaangom, and four near Khyargas Lake with slightly elevated arsenic levels.

Table 30: Heavy metal soil concentrations in Uvs Aimag № XRF # Date Latitude Longitude Site name Pb Cr Cu Zn As MNS 5850:2019, permissible value mg/kg 100 150 100 300 20 45 2989 2020-11-16 50.11805 92.39095 29 132 27 43 18 46 2990 2020-11-16 50.11784 92.39178 Uvs Lake, 24 102 34 49 10 47 2991 2020-11-16 50.11773 92.39101 Camping 42 108 0 50 10 48 2992 2020-11-16 50.11819 92.3902 38 125 30 96 18 77

№ XRF # Date Latitude Longitude Site name Pb Cr Cu Zn As MNS 5850:2019, permissible value mg/kg 100 150 100 300 20 49 2993 2020-11-16 50.11855 92.38934 65 106 20 85 22 50 2994 2020-11-16 50.1188 92.38966 37 117 22 60 11 51 2995 2020-11-16 50.11861 92.39043 30 59 9 65 10 52 2996 2020-11-16 49.99884 92.18857 49 129 22 87 17 53 2997 2020-11-16 49.99985 92.19051 30 135 30 34 6 54 2998 2020-11-16 50.00349 92.20114 39 139 0 63 8 55 2999 2020-11-16 50.00414 92.20109 Uvs, Tourist 46 151 30 55 13 56 3000 2020-11-16 50.00522 92.20108 center 53 129 29 39 20 57 3001 2020-11-16 50.00624 92.20016 51 136 25 32 8 58 3002 2020-11-16 50.004761 92.199148 40 159 43 93 14 59 3003 2020-11-16 50.002588 92.202824 45 131 33 72 0 60 3004 2020-11-16 49.9749 92.05813 40 113 22 86 7 61 3005 2020-11-16 49.97529 92.05878 59 156 22 85 22 62 3006 2020-11-16 49.97482 92.05983 42 135 51 68 20 63 3007 2020-11-16 49.97486 92.0584 43 112 26 84 10 64 3008 2020-11-16 49.97466 92.05826 Uvs, Tourist 75 97 44 129 19 65 3009 2020-11-16 49.97393 92.05784 street 43 76 37 119 7 66 3010 2020-11-16 49.97336 92.05643 43 105 31 51 1 67 3011 2020-11-16 49.97224 92.05634 36 41 2 57 1 68 3012 2020-11-16 49.97247 92.05463 68 110 38 91 6 69 3013 2020-11-16 49.97327 92.05576 43 101 9 69 18 70 3014 2020-11-17 49.3319 93.15259 39 89 8 79 4 Khar Termes, 71 3015 2020-11-17 49.332 93.152 25 118 0 34 20 Оtog 1 72 3016 2020-11-17 49.33257 93.15305 41 99 21 40 9 (Camping 73 3017 2020-11-17 44.33197 93.15405 39 122 0 51 7 site) 74 3018 2020-11-17 49.33126 93.15284 36 104 7 96 11 75 3019 2020-11-17 49.33729 93.12534 24 47 27 24 12 Khar Termes, 76 3020 2020-11-17 49.3372 93.12496 48 118 50 20 26 Оtog 2 77 3021 2020-11-17 49.3365 93.12449 24 68 1 23 11 (Camping 78 3022 2020-11-17 49.338027 93.124569 33 66 8 27 16 site) 79 3023 2020-11-17 49.337918 93.127269 21 73 3 21 19 80 3024 2020-11-18 49.20452 93.62066 30 96 5 31 9 Khyargas 81 3025 2020-11-18 49.20434 93.62099 27 118 0 62 18 Lake, Оtog 82 3026 2020-11-18 49.20388 93.62155 33 129 18 43 17 (Camping 83 3027 2020-11-18 49.20407 93.62261 36 90 15 50 22 site) 84 3028 2020-11-18 49.20451 93.62141 53 119 25 89 23

171. No soil samples had detectable pathogen levels.

9. Noise Levels

172. Noise levels were measured at potential project sites in November 2020. All noise measurements at all sites and all times of day were below the permissible level of 60 decibels (usually between 35 and 56 decibels, although November is quieter than in the summer, when there are more vehicles and visitors).

10. Ecological Values

Overview

173. Uvs Aimag is located east of Bayan-Ulgii and north of Khovd. It comprises mostly mountain forest steppes and desert steppes, with a significant lake area (north central and south central). These define the habitat types and the biodiversity values in the aimag. There is a high diversity of birds and mammals (more than the other two aimags); Important Bird and Biodiversity Areas (IBBAs) and RAMSAR sites (mostly encompassing the lakes) cover about 20% of the area of Khovd; Uvs Lake is the largest of the IBBAs in the three aimags. Project sites in this aimag are located in the Uvs Nuur Strictly Protected Area (UVSPA) and the Khyrgas Lake (in Khan Khuhii National Park; KKNP), and in and near Ulaangom. Details are provided below.

Vegetative Cover in the Protected Areas and in and near Ulaangom

174. The Uvs study area includes the Eurasian steppe region, the North Gobi Desert province, the Ulaangom desert region of the Uvs Lake steppe, and the Khyargas Lake region (Unatov, 1950).

175. Uvs Aimag and its adjacent botanical-geographical regions include the Eurasian steppe region, the Central Asian sub-region, the Tuvang mountain depression of Uvs Lake, the Ulaangom district of the Uvs hidden depression desert steppe, the central part of the Khan-Khukh mountain steppe of the Khan-Khukh mountain steppe, and the North Gobi Desert, and it belongs to the Khyargas Lake sub-district of the Great Lakes Depression, Khyargas Lake District (Buyan- Orshikh, 1994).

176. The Ulaangom geographical region covers the southern part of Uvs Lake, the dry riverbed in the western part, and the sloping steppe cut by the riverbed. The riverbed is rich in pebbles, sparse poplar groves, and in some places meadows with sparse meadow plant communities. The Gobi-steppe is commonly covered with Nanophyton erinaceum and wormwood communities. In the eastern part of the Khan-Khokhii mountain range, taiga and taiga larch forests are widespread.

177. The Khyargas Lake area covers the area around the lake in the northern part of the Great Lakes Depression and is dominated by rugged mountains and hills in the south, southeast, and east of the depression. The lake is surrounded by occasional shrubs, but mostly stagnant steppe deserts, and in the western and southeastern parts of the depression there are communities belonging to the sandy variant of the feathered-wormwood steppe desert.

178. A survey in September 2020 (several project sites: Ulaangom center; Khyargas Lake tourist camp) noted a total of 90 species of plants belonging to 23 families and 61 genera were recorded. Most were grasses, compound flowers, lilies, and legumes. There were also 2 species of trees, and 10 species of shrubs. 92% of the plant species were hay and pasture plants. Six species of rare plants were observed (Cedar, Leek, Thorny Ortuuz, Gobi Memory, Ordinary Beet, and Bamboo).

Figure 45: Plant communities in Uvs Aimag

4 5

4. Ulaangom. 5. Khyargas Lake. Figure 46: Examples of vegetation cover at some of the project sites.

Biodiversity Values and Faunal Species at the Project Sites

179. The project sites are located in and near Ulaangom and in several national ecological protected areas:  Uvs Nuur Strictly Protected Area (UVSPA);  Khyrgas Lake -Khan-khuhii NP (KKNP).

180. The aimag has two RAMSAR sites and two Important Bird and Biodiversity Areas (project sites are located in them), as shown in the figure below.

Figure 47: RAMSAR sites and Important Bird and Biodiversity Areas

181. The details on the importance of the project areas to birds are summarized below.

Table 31: Important Bird Areas and RAMSAR site, in which Uvs project sites are located IBA: MN009 Uvs Lake 502,462 ha (705-908 meters asl; 50°12’ N, 92°17’E); also a RAMSAR site – 585,000 ha There are many Globally Threatened species occurring at Uvs Lake, such as Dalmatian Pelican Pelecanus crispus (VU), White-headed Duck Oxyura leucocephala (EN), Swan Goose Anser cygnoides (EN), Pallas’s Fish-eagle Haliaeetus leucoryphus (VU), Greater Spotted Eagle Aquila clanga (VU), Eastern Imperial Eagle A. heliaca (VU), Lesser Kestrel Falco naumanni (VU), White-naped Crane Grus vipio (VU), Great Bustard Otis tarda (VU) and Relict Gull Larus relictus (VU). The site supports species typical of the Eurasian steppe and desert biome. The site regularly supports at least 1% of the flyway populations of Great Crested Grebe Podiceps cristatus, Dalmatian Pelican Pelecanus crispus, Great Cormorant Phalacrocorax carbo, White Spoonbill Platalea leucorodia, White-headed Duck Oxyura leucocephala, Greylag Goose Anser anser, Ruddy Shelduck Tadorna ferruginea, Red-breasted Pochard Netta rufina, Common Goldeneye Bucephala clangula, Common Crane Grus grus, Common Coot Fulica atra, Little-ringed Plover Charadrius dubius, Northern Lapwing Vanellus vanellus and Great Black-headed Gull Larus ichthyaetus. IBA: MN012 Uureg Lake 73,348 ha (1030-1079 meter asl; 48°54’ N, 93°26’E); also a RAMSAR site – 45,000 ha Several Globally Threatened species occur at the site, including Dalmatian Pelican (VU), White-headed Duck Oxyura leucocephala (EN), Swan Goose Anser cygnoides (EN), Pallas’s Fish-eagle Haliaeetus leucoryphus (VU) and Relict Gull Larus relictus (VU). The site supports species typical of the Eurasian steppe and desert biome. The wetland regularly harbours more than 20,000 waterbirds. Congregatory waterbirds occurring in numbers exceeding 1% of their flyway populations are Great Crested Grebe Podiceps cristatus, Dalmatian Pelican Pelecanus crispus, White Spoonbill Platalea leucorodia, White- headed Duck Oxyura leucocephala, Ruddy Shelduck Tadorna ferruginea, Red-crested Pochard Netta 81 rufina, Common Pochard Aythya ferina, Kentish Plover Charadrius alexandrinus, Greater Sand Plover C. leschenaultii and Northern Lapwing Vanellus vanellus.

182. There are 66 mammal species in Uvs SPA, 25 in Khyargas Lake, and 41 mammal species in Khan-Khuhii NP. There are 335 bird species in the Uvs Lake area, 183 in the Khyargas and Airag Lakes, and 120 in KKNP.

183. The highest number of rare or endangered mammal species occurs in the Uvs Lake area, and the lowest number of such species occurs in the Khyargas and Airag Lakes area.

Table 32: Threatened mammal species in the project protected areas in Uvs

Regional Global Airag Airag

Species list Red List Red List lakes KKNP KKNP UVSPA CMS CMS 2013 2012 Khyargas Khyargas (2006) (2014) and Mongolia Mongolia CITES I, II II I, CITES Red Book Book Red 12 2 8 Animals law law Animals Siberian Mole Talpa DD LC * * + altaica Eurasian Beaver Castor + EN LC * * fiber Grey Wolf Canis lupus NT LC * + + + Eurasian Otter Lutra lutra DD NT * * * + Marbled Polecat Vormela + DD LC * * peregusna Manul Otocolobus manul NT NT * + + + Snow Leopard Uncia + + EN EN * * * * uncia Wild Boar Sus scrofa NT LC * * + + Red Deer Cervis elaphus CR LC * * + + Siberian Musk deer + + CR Vu * * * Moschus moschiferus Ibex Capra sibirica NT LC * * + + Argali Ovis ammon NT Vu * * * + + CITES = Convention on International Trade in Endangered Species of Fauna and Flora, CMS = Convention on Migratory Species, CR = Critically Endangered, EN = Endangered, V = Vulnerable, NT = Near Threatened, LC = Least concern, DD – data deficient, KKNP = Khan Khukhii National Park, UVSPA = Uvs Nuur Special Protected Area.

184. A mammal of concern in western Mongolia is the red deer (Cervus elephus). These animals live in forests, ridges, mountain steppes, groves, small mountains, and lowlands (Dulamtseren et al., 1989). Willows and groves are a major source of food in winter and provide excellent protection against predators such as wolves (Chen et al., 1998).

185. In Uvs, the red deer are distributed west and south of Uvs Lake (and east of Uureg Lake, and north of Khyargas Lake), well away from the project sites near these lakes. Red deer have a large distribution range in the Sogoo Lake area (where one campsite will be located).

Figure 48: Red deer range in western Mongolia

5. Amphibians and Reptiles

186. There is only one amphibian species, in the Tess River basin: the salamander, Salamandrella keyserlingii, a member of the tailed amphibian family (Davaa et al., 1992). This is the only species recorded in the Great Lakes Depression; it is regionally endemic. The project area is habitat for five reptile species (Kh. Terbish et al., 2006), as noted below. None of these have associated conservation concerns.

Table 33: Reptile species in Uvs Aimag Sub-family Order Species Mongolia Internationally 11. Tuva toad-headed agama Least Concern Not evaluated Agamidae (Phrynocephalus versicolor) LC NE 12. Multi-cellated racerunner (Eremias Lacertilia LC NE multiocellata) Lacertidae 13. Gobi racerunner (Eremias LC NE przewalskii) Colubridae 14. Steppes rat snake (Elaphe dione) LC NE Serpentes 15. Halys pit viper Crotalidae LC NE (Gloydius halys)

6. Fishes

187. With many waterbodies in the project area, fish are prevalent. Some are native and some have been introduced (for example, the common pike). Eighty percent of the fish species in western Mongolia are endemic to Central Asia.

Table 34: Fish species occurring in Uvs Aimag Uvs Lake- International Regional Khyrgas - Latin name English name Tes river evaluation evaluation Airag Lakes basin Lucius lucius Pike ND LC* * Oreoleuciscus humilis Small osman ND V * Oreoleuciscus potanini Potanin's osman ND LC * * Siberian stone ND Orthrias barbatulus LC * loach Triplophysa gundriseri Tes loach ND МД * Mongolian Thymallus brevirostris V V * grayling Thymallus arcticus Arctic grayling ND NT * Oreoleuciscus angusticephalus Lake osman V V * LC-Least concern, NE-Not evaluated, NT-Near threatened, V-Vulnerable, ND-Not data

188. Of the fish observed in Uvs, the Mongolian grayling and lake osman are classified as “vulnerable”.

11. Protected Area Management Status and Issues

189. Khan Khukhii National Park (KKNP) was established in 2000, covering 221,598 ha in the Khan Khukhii mountain ranges that are located in Great Lakes basin of western Mongolia. KKNP PAAO manages three SPAs, including: (1) Khyargas Lake National Park; (2) KKNP; and, (3) Altan Eis SPA. In recent years, the Khyargas Lake has become a tourist attraction destination in Uvs Aimag, especially for domestic visitors. However, KKNP has not been well accommodated to tourists.

190. There are several Globally Threatened species in this area, including Dalmatian Pelican (VU), White-headed Duck (Oxyura leucocephala) (EN), Swan Goose (Anser cygnoides) (EN), Pallas’s Fish-eagle (Haliaeetus leucoryphus) (VU) and Relict Gull (Larus relictus) (VU). The area supports species typical of the Eurasian steppe and desert biome. The wetland regularly harbours more than 20,000 waterbirds. Congregatory waterbirds occurring in numbers exceeding 1% of their flyway populations are Great Crested Grebe (Podiceps cristatus), Dalmatian Pelican (Pelecanus crispus), White Spoonbill (Platalea leucorodia), White-headed Duck (Oxyura leucocephala), Ruddy Shelduck (Tadorna ferruginea), Red-crested Pochard (Netta rufina), Common Pochard (Aythya farina), Kentish Plover (Charadrius alexandrines), Greater Sand Plover (C. leschenaultia) and Northern Lapwing (Vanellus vanellus). There is fairly high mammal diversity (8 species, including red deer and snow leopard).

191. KKNP is accessible by three different routes and entry points. According to the KKNP, 70% of visitors enter through Tarialan soum, where the soum authority fee is collected. The recently-paved road Ulaangom-Ulaanbaatar crosses along the northern tip of Khyargas lake where travelers stop over and stay nights. Key tourism attractions in KKNP include: the Khyargas Lake (Khetsuu had): Khetsuu had looks like a small rocky island; a bird nesting site with an 84 astonishing view to the Khyargas Lake especially with a colony of Cormorants nesting; mineral spring at Khar Termes, located on the northern tip of Khyargas lake at altitude of 1,070 m above sea level. It is attracted mainly to locals and domestic travelers who stay for medical purposes (minerals for traditional medical treatment); Altan burgast (Golden willow), a uniquely formed rock cliff rounded by a gold-colored willow that is located near the upper stream of the Shavart river in Undorkhangai soum; Jinst chuluu, a granite rocky cliff that forms a concrete-building like shape where cedar wood grows around; wildlife, 61 species of mammals, more than 200 species of birds and 370 plant species are found in the National Park in numerous types of landscapes including alpine, mountain forest, mountain steppe, dry steppe, mixed zones and riparian zones; among these are Red deer, Wild boar, Roe deer, Musk deer, and Lynx (listed on the Redbook of Mongolia). KKNP has the following existing facilities: 2 fee collection stations; 9 campsites; 2 ranger stations; 9 car parks; 9 toilets; 9 solid waste points (in moderate or poor condition). The KKNP has travel and tourism and limited use zones that accommodate project-supported activities.

192. The Uvs Nuur Strictly Protected Area is located in the Uvs Lake Basin, which is a region with a harsh climate and unique ecological environment that includes many different ecosystems: Gobi, desert steppe, steppe, wetlands, forest steppe, mountain range, snow and glacier. This area is rich in biodiversity, including the world endangered Snow leopard as an umbrella species and other wildlife such as snowcock and mountain argali sheep. 22.938 ha or 5.4% of its territory is designed as a tourism zone, where tourism-related activities are promoted.

193. The UVSPA Cluster covers an area of 424,298 ha and is located at an altitude of 759 m above sea level, the lowest point in the Great Lake Depression. The UVSPA is located in the International Geo-Biosphere Research Zone, and listed in the “Man and Biosphere Reserve” network of UNESCO in December 1997, designated in the Ramsar site (Ramsar Convention on Wetlands of International Importance) in 1999, and UNESCO World Heritage sites in 2003. Therefore, it is a unique area not only in Mongolia but also in the world. Concerning its geographic location across Mongolia and Russian Federation, the UVSPA was declared as a trans-boundary protected area under the name of “Uvs Lake Basin” SPA by the convention between the governments of Russian Federation and Mongolia in 2011.

194. There are many Globally Threatened species occurring at Uvs Lake, such as Dalmatian Pelican (Pelecanus crispus) (VU), White-headed Duck (Oxyura leucocephala) (EN), Swan Goose (Anser cygnoides) (EN), Pallas’s Fish-eagle (Haliaeetus leucoryphus) (VU), Greater Spotted Eagle (Aquila clanga) (VU), Eastern Imperial Eagle (A. heliacal) (VU), Lesser Kestrel (Falco naumanni) (VU), White-naped Crane (Grus vipio) (VU), Great Bustard (Otis tarda) (VU) and Relict Gull (Larus relictus) (VU). The site supports species typical of the Eurasian steppe and desert biome. The site regularly supports at least 1% of the flyway populations of Great Crested Grebe (Podiceps cristatus), Dalmatian Pelican (Pelecanus crispus), Great Cormorant (Phalacrocorax carbo), White Spoonbill (Platalea leucorodia), White-headed Duck (Oxyura leucocephala), Greylag Goose (Anser anser), Ruddy Shelduck (Tadorna ferruginea), Red-breasted Pochard (Netta rufina), Common Goldeneye (Bucephala clangula), Common Crane (Grus grus), Common Coot (Fulica atra), Little-ringed Plover (Charadrius dubius), Northern Lapwing (Vanellus vanellus) and Great Black-headed Gull (Larus ichthyaetus). There are also at least 11 important mammals in this area, including snow leopard and red deer.

195. There are 978 households and 4,199 people living in this protected area, of which 100% are herders and livestock breeders. Currently, UVSPA does not have any tourist camp, and tourists come to the lake to relax and enjoy the nature. UVSPA is accessible by three different 85 routes and entry points: from Tarialan, Davst and Tes soums. In 2019, 90.3% of the visitors entered to the SPA through Tarialan soum, 3.5% from Davst soum and 6.2% from Tes soum.

196. Key tourism attractions in UVSPA include: the Uvs Lake is a well-known destination for tourists, especially of interest to domestic visitors having a short trip, usually for one day. It is located about 36 km to the east of the aimag center. The end point of Tes River is an important bird area where a vast number of waterfowl summer and nest. Many of the regional and global endangered species such as Euro-Asian Spoonbill, Relict Gull, Black stork and Great white heron are the main attraction for bird watchers. Baganuur Lake is a small lake located on the southern shore of Uvs Lake where about 40 pairs of Spoonbill nest and summer. Torhilog River is one of the biggest inland waters going to the Uvs Lake. It is a major bird nesting area located in the north of the lake, approximately 150 km from Ulaangom on the migration pathway of water birds between Siberia and Asia. There are 72 species of mammals, 245 bird species, and 29 species of fish in the Uvs Lake Basin. The nomadic lifestyle of ethnic minorities such as Hoton, Durvod and Bayad could attract international visitors staying in herders’ home, riding horses, and assisting in herders’ daily activities. UVSPA has the following existing facilities: 1 fee collection station; 1 campsite; 1 ranger station; 2 information points; 3 car parks; 4 toilets; 1 bird watching tower; 3 solid waste points (in moderate or poor condition). The UVSPA has limited use zones that accommodate project-supported activities.

12. Socioeconomic Features

197. According to the 2018 livestock census, 17,200 herders from 8,900 herder households are engaged in livestock production in the aimag. The number of herder households increased by 300 from the previous year, but the number of herders decreased by 300. The average number of livestock per herder household was 311, a decrease of 4.2% from the previous year. At the end of 2017, there were 3,129,900 head of livestock, including 23,500 camels, 119,500 horses, 176,800 cattle, 1,552,100 sheep, 1,257,900 goats. The total number of livestock increased by 12.4%, compared to the previous year. Uvs Aimag has a total area of 6,958,539 hectares. As of 2018, there were 4,834,033 hectares of agricultural land, 16,814 hectares of urban and other settlements, 46,175 hectares of road network, 110,229 hectares of forest land, 85,420 hectares of water reservoir land and 1,865,865 hectares of state special needs land. Agricultural land accounts for 69% of the aimag area, special needs land for 27%, and the remaining 4% for urban and other settlements, roads and networks, forests and water reservoirs.

Table 35: Land sub-classifications in Uvs Classification Area, ha Agricultural 4,384,033.65 Pastureland 4,287,389.53 Hay field 22,144.54 Farmland 70,801.55 Атаршсан газар 2,367.86 Land for agricultural construction 4,654.17 Land not suitable for agricultural use 446,686.00 Towns, villages and other settlements 16,814.32 Land for all of buildings and structures 3,703.01 Public land 7,737.61 Industrial land 163.04 Mining land 3,408.99 Ger land 1,801.67 Road and network land 46,175.19 86

Classification Area, ha Roads 41,234.60 Railroads 0.0 Air transportation land 333.17 Pipe network land 4,607.42 Water transportation land 0.00 Forest resource land 110,229.38 Forested land 72,519.90 Land where the forest was cut down 4,512.10 Forestry 106.88 Forest expansion reserve 33,090.50 Other forest reserve land 0.00 Water reservoir land 85,240.54 River lands 29,979.10 Lakes and ponds 54,714.30 Streams and springs 727.14 Glacier and glacier rivers 0,00 State reserve 1,865,865.96 Specially protected area (State) 1,692,770.00 State border strip land 141,294.54 Land allocated for national defense and security 936.42 Embassies 0.00 Land allocated for scientific and technological testing and experimentation and 24.00 constant observation of the environment and weather conditions Inter-aimag otor pasture 20,900.00 Hay area of the state fodder fund 9,941.00 Petroleum contract area to be explored for production under a production sharing 0.00 agreement Free zone area 0.00 6,958,539 ha

13. Physical Cultural Resources

198. Physical cultural resources in western Mongolia were determined on the basis of secondary data, the literature, and field observations and consultations. An overview is provided here.

199. Uvs Aimag has various archeological finds. The most prominent physical cultural resources are as follows: Chandmani Mountain Tomb - This is a cemetery with 40 graves located on Chandmani Mountain, about 1 km southwest of Ulaangom; and, Khirigsuur or stone tomb (Bronze Age monuments) - there are many of these west of Ulaangom. There are no project sites west of Ulaangom (they are either in town or east of Ulaangom).

Figure 49: Khirigsuur near the mountains west of Ulaangom

14. Site-specific Biophysical and Socioeconomic Features at Each Project Site

200. The environmental and socioeconomic baseline data were applied to the specific project sites and verified through examination of recent Google Earth images. These are noted below.

Table 36: Biophysical and socioeconomic features at the project sites Project Site Biophysical and Socioeconomic Features KHYARGAS Immediately adjacent to KNNP. LAKE Site now heavily used by local tourists in the summer, but lack of facilities. Not an 49°19'24.09" N, Important Bird or Biodiversity Area, but 2 species of concern in this area (Grey Wolf 93° 9'49.32"E Canis lupus - LC and Manul Otocolobus manul - NT). Seasonal waterbirds in the lake. Fee collection Lake 200 meters to the south. station (markets, Potential issues with meltwater runoff. information point, Gers nearby, and campsite facilities on the other side of the road. 100-meter dirt track off toilets, parking). the main road. No vegetation or habitat issues at the specific site (thin, dry grassland). SOGOO LAKE Not an Important Bird or Biodiversity Area, but within a large distribution range of Red 49˚22'53.511''N, Deer. Seasonal waterbirds in the lake. Lake 200 meters to the west. 95˚8'38.481''E Forest patches 1.5 km to the north. Various drainage channels running through this site. Campsite No habitat issues; dry scrub and grassland. (information point, toilets, parking). UUREG LAKE This is an Important Bird and Biodiversity Area, but with only 2 species of concern in this 50˚12'8.91''N, area (Grey Wolf Canis lupus - LC and Manul Otocolobus manul - NT). Seasonal 91˚8'1.00''E waterbirds in the lake. Lake is 425 meters to the west. Campsite No habitat issues here; no trees or bushes – dry steppe grassland. East-west runnels (information point, obvious throughout this area (possible snowmelt drainage issues). toilets, parking) Several dirt tracks running north-south in this area. UVS LAKE On the edge of the Uvs Strictly Protected Area. Site heavily visited by local and domestic 50°6'32.28N, tourists (swimming and bathing). 92°21'41.2E The site is an Important Bird and Biodiversity Area, with eextensive forest and wetlands Existing entrance along the northern edge of the lake (fed by mountain stream drainage systems). point: (market, 88

Project Site Biophysical and Socioeconomic Features ranger station, Mammal species richness is generally higher than in other parts of western Mongolia. parking, There are 12 mammal species of concern in the area: Siberian Mole Talpa altaica (LC); information center, Eurasian Beaver Castor fiber (LC); Eurasian Otter Lutra lutra (NT); Marbled Polecat parking). Vormela peregusna (LC); Grey Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Wild Boar Sus scrofa (LC); Red Deer Cervis elaphus (LC); Siberian Musk deer Moschus moschiferus (Vu); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). Lake is 2 km to the northeast. TES, SALT LAKE On the edge of the Uvs Strictly Protected Area. 50°23'1.23"N Site heavily visited by local and domestic tourists (medical tourism is prevalent). 93°18'57.69"E The site is an Important Bird and Biodiversity Area, with extensive wetlands and river campsite mouths north and south of the site – but several kilometers away. (information point, Mammal species richness is generally higher than in other parts of western Mongolia. fee collection, There are 12 mammal species of concern in the area: Siberian Mole Talpa altaica (LC); market, toilets, Eurasian Beaver Castor fiber (LC); Eurasian Otter Lutra lutra (NT); Marbled Polecat parking) Vormela peregusna (LC); Grey Wolf Canis lupus (LC); Manul Otocolobus manul (NT); Snow Leopard Uncia uncial (EN); Wild Boar Sus scrofa (LC); Red Deer Cervis elaphus (LC); Siberian Musk deer Moschus moschiferus (Vu); Ibex Capra sibirica (LC); and, Argali Ovis ammon (Vu). No habitat or vegetation issues at the specific site (dry grassland evident). Lake is 300 meters to the west; no noticeable shoreline habitats for birds. Dirt tracks evident to the east; no habitations nearby. Uvs Aimag The site is on the southern edge of Ulaangom, in a vacant lot next to the stadium (tourist street) parking, and a heat/ water/ electricity source (building). There are several drainage channels running north/south through the site. There is a residential area immediately to the north (on the other side of the road), and dry grass scrubland and empty lots to the south. There are no sensitive or vulnerable natural habitats in or adjacent to the site. Uvs Aimag The site is east of Ulaangom, just north of a dirt road that connects the town to the lake (tourism (considerable traffic in the summer). It is essentially a dry dirt patch surrounded by grass complex) and scrub vegetation that merges into stream channels draining to the lake (with vegetation evident). The site itself is completely surrounded by dirt tracks on the perimeter, and there are a few buildings and gers at the eastern edge of the site. It appears to be a common ground pasture or recreational area. There are no sensitive environmental features here. *LC-Least concern, NE-Not evaluated, NT-Near threatened, V-Vulnerable, ND-Not data.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Approach

201. There are three basic concepts that frame the physical works in this project:  construction and operation of tourism complexes (the UVTC and RANCC) – these being the major project works in terms of construction activities and potential operational impacts;  the construction and operation of the tourist streets (Khovd and Uvs) – a slightly smaller scale of physical works and operational impacts in peri urban areas;  construction and operation of campsites and related ecotourist amenities (such as bird watching towers) in the selected protected areas, with minimal or no upgrading of associated facilities, such as access roads – these are the least obtrusive project activities, in the construction phase, but have the closest proximity to the habitat and biodiversity features that define the protected areas; and,  almost all project locations are sites which are near existing structures and/or are on cleared and modified land.

202. Risk avoidance. Prior to the development of safeguard mitigation measures, the selection of project locations and design of the facilities was first based on the need to avoid environmental risks, especially to ecological values, physical cultural resources, and/or water resources within and near the project protected areas. All site locations and designs were required to comply with the criteria in Table 37. Sites and/or designs not meeting these criteria were excluded. The criteria encompass risks and benefits related to the following.  Compliance with protected area zoning and management (see Appendix 6 for details on land use zoning and uses for protected areas). All project components and activities comply with, are aligned with, and support, the site’s protected area management plan.  For the small project facilities in protected areas, the specific site locations with geographic coordinates are given in Table 9 (Section III.B) and Appendix 8 (and also in Appendix 1 of the project administration manual). The need for strict adherence to the identified project designs and specific site locations is included in (i) the project EMP, (ii) the loan agreement, and (iii) the terms of reference for consulting services package CS7 Detailed Engineering Design and Construction Supervision for Small Works at Five Protected Areas (Appendix 3 of the project administration manual).  Use of green building concepts and maximization of renewable energy use.  Adapting site and building designs to handle the future risks associated with climate change (resilience embedded within the designs).  Use of global best practices and work sequences in constructing and assembling facilities and infrastructure (described in this chapter).  Compliance with national building and safety codes.  Designs based on pre and post COVID-19 visitor numbers.

Table 37: Design criteria and restrictions used to minimize environmental and social safeguards risks in the design phase Facility Type Locations, Design Criteria, and Restrictions Tourism Complexes  Location and Siting: Locations with <20% incline; at least 500 meters from and Tourist Streets waterbodies; not encroaching on Local or Special Protected Areas; not in or near any Critical Habitat, Important Bird Area, or an area otherwise important to biodiversity.  Not on non-government land.

Facility Type Locations, Design Criteria, and Restrictions  Footprint does not encompass any physical culture resources or locations that are considered sacred sites. Such features within one kilometer of the complexes will all be marked and protected.  Operational Aspects: rainwater harvesting and storage is a component of building design; water-efficient dual flush toilet design and water-efficient taps; solar panels for lighting; solar hot water heaters; use of geothermal (where feasible) for heating; orientation and shape to maximize passive heating and cooling; universal access (ramps, lifts, and doorways) to accommodate wheelchairs; two toilets for disabled access; street access and parking located and designed to reduce traffic congestion. Solid waste disposal at the ASDIP-supported soum and aimag landfills Protected Area  Location and Siting: All works located only in Limited Use Zone, Tourism Zone, or Campsites and outside the protected area (i.e., within buffer zone). Even within these zones, all Associated Facilities works excluded from any Critical Habitat.  All works > 200 meters from nearest waterbodies.  Operational Aspects: All toilets are dry, non-flush designs to avoid water use and wastewater management; no running taps or shower facilities within the campsites; litter bins and waste storage containers at campsites, with collection and disposal at ASDIP-supported soum and aimag landfills; power for ranger stations, fee collection stations, campsite pathway lights provided by solar panels, to avoid connection to mains power; parking areas with gravel surface and perimeter drainage channels to avoid sheet runoff; off-road and off-trail activity discouraged or prohibited.  Further, all future projects designed and developed by CBOs, supported within this project, will be subject to screening criteria, to ensure that they comply with Mongolia and ADB safeguards requirements (see Appendix 4: Community Revolving Fund). ASDIP = Aimag and Soum Development Investment Program.

203. With these concepts and approaches categorized in this manner, each project site has a unique environmental impact risk that reflects a combination of the project intervention (as defined above and described in Section IV) and the specific environmental and socioeconomic features at each site (as described in Section V). Each site has been assessed to ensure that risks are addressed with site-specific mitigation measures, which are included in the project EMP. The environmental impact assessment process for each project site involved:  definition of the specific project actions;  delineation of the zone of influence of those project actions (pre-construction, construction, and operation phases);  itemization of the environmental and socioeconomic features and sensitive receptors at the project site;  examination of the interactions and possible immediate environmental impacts (both negative and positive), with consideration of significance and reversibility;  determination of cumulative and induced impacts (mostly emanating from the operational phase);  definition of the required mitigation measures to reduce residual negative impacts to acceptable levels;  definition of a rehabilitation plan for sites which will have structures removed; and  specification of the required monitoring program, to support compliance with required mitigation measures, and to observe unintended environmental effects, allowing corrective actions.

204. Before finalization of the project sites, the various alternative sites (that were in consideration due to aimag and MET preferences and concerns about service proximity and access, for the tourist streets and the tourism complexes) were filtered through an environmental safeguards review. This process ranked sites that had the highest level of environmental vulnerabilities, so that they could be eliminated from further consideration (the process to examine alternatives is discussed later). Only those sites that are “workable” from an environmental safeguards perspective remained in consideration and were then assessed for environmental impacts and mitigation measures. These are described below (the associated monitoring program is noted in the EMP).

205. Zone of Influence and Sensitive Receptors: Zone of influence refers to the area within which a project action or facility may cause some change in the physical, environmental, and socioeconomic features in the area. For actions which affect soil and geology, the zone of influence is just 5-10 meters: the area within which soil/rocks are moved and stored. For noise, the usual area within which noise generating devices create an increment on background noise is less than 100 meters. The same zone of influence applies to air quality (coming from individual machines or vehicles, not fires or stacks). For water quality concerns, the standard in Mongolia for location of toilets, which is a proxy for a source of contaminants to waterbodies, is 200 meters. For impacts based on visuals (sighting of people by animals, or people seeing crowds of people), the distance used in this analysis is 500 meters (a conservative zone of influence, assuming no obstructing vegetation or structures). For site drainage from slope areas, a zone of influence was not assumed; instead, the distance to the nearest waterbody was clarified, if within two kilometres. For traffic congestion in urban areas, based on experience with traffic patterns in areas that have a road system and alternative routes, the zone of influence for potential traffic congestion (access to and from parking areas at the tourist streets and the RANCC and Uvs Tourism Complex) was assumed to be one kilometre.

206. Each project site was examined carefully in Google Earth images (these are in a separate analytical file; thumbnails were provided in Section III) and all features that could be seen (vegetation type, forest patches, facilities/infrastructure/roads/gers, and waterbodies) were identified and enumerated. The results of this visual analysis (zones of influence and sensitive receptors) were documented on a site-by-site basis in Section IV (Baseline Environment); those details are not repeated here, but have been fully incorporated into the site-specific impact assessment and description of mitigation measures.

207. Positive Impacts: As noted previously, the project design incorporates green building features and environment-friendly approaches, such that the operation of these buildings and facilities is expected to have virtually no negative environmental effects. In fact, as these facilities are used in lieu of existing facilities (such as poor solid waste disposal, poorly maintained toilets, and poorly maintained parking areas), they can be considered net positive environmental impacts (especially improving water quality or at least reducing current risks to water quality, and reducing litter), during the operational phase. There will also be net benefits in local employment (during construction and operation). Since these features are common to all sites, they are not included on a per-site basis in the impact matrix.

Overview:

208. All sites are expected to have common issues of temporary generation of noise and dust during construction, to varying extents, depending on the scale of works. The tourist streets and tourism complexes will be larger scale works, to be extended over at least two construction seasons (reflecting the limited construction season in Mongolia due to harsh winters), so noise, 92 dust, and potential traffic congestion (in urban areas) will be larger issues, compared to all the small works in the protected areas. Dust generation and sedimentation will be addressed with covers over exposed sediment piles and use of drainage channels on the site perimeter, and silt curtains. Noise disturbance is a low risk as most sites are remote; the Uvs and Khovd tourist streets are the only project sites within an aimag urban center, and works will be prohibited at night and planned in consultation with residents and business owners.

209. A key concern is the risk of induced impacts resulting from increased visitor numbers and cumulative pressures on sites as a result of the new and/or improved facilities. The design approach to address this is: (i) the establishment of maximum daily capacities for the project facilities, and (ii) the improved site management, facilities, and capacity of park administrations and community-based organizations resulting from the project, which will improve visitor flows and waste management, and restrict off-road access and disturbance. The risk of induced impacts to Khyargas, Khar Us, and Uvs lakes (within the project locations of KKNP, KUNNP, and UVSPA) due to increasing visitor numbers, has been minimized by the restriction of project facilities to at least 200 m from lake shorelines, in compliance with national regulations.

210. For the project locations in protected areas, works will not involve the clearance or disturbance of any natural habitats or critical habitats and will only be conducted in the cleared lands of existing sites zoned for tourism. Potential risks of construction and/or operational impacts to the Khyargas, Khar Us, and Uvs lakes (within the project locations of KKNP, KUNNP, and UVSPA) are limited as the project facilities will be located at least 200 m from the lake shorelines, in compliance with national regulations. For the TSC, a potential concern is noise and/or visual disturbance to the Saiga antelope population at Mankhan Nature Reserve, during construction and/or O&M of the planned small information center and carpark for this site. These facilities are intended to improve existing visitation to the site, which is currently unregulated: this will include strictly-controlled vehicle access to and from the main highway to TSC, along an existing unsealed road, and will result in improved protection of the hills and plain either side of the access road, reducing the risk of collisions and other disturbance.

211. The very small scale of project works in the protected areas (with a cumulative footprint at 14 sites of just 5 hectares, versus 310,400 hectares of Important Bird and Biodiversity Areas that six of the sites are adjacent to, in Uvs and Khovd) is a key factor in a minimal concern for negative impacts on biodiversity and associated habitats (0.0016% of the cumulative area of the IBBAs). Further, all the project sites in the protected areas are located in the Limited Use Zone of the PAs, in which tourism activities are allowed (and these have been occurring over the last 5 years, in any case; these will now be better managed with the project-supported facilities and actions).

212. Risk of illegal collection of wildlife or flora. During the public consultations, several residents expressed a concern regarding potential poaching of wildlife and plant collection (residents of Ulaankhus and Tsengel soums of Bayan-Ulgii Aimag and Khovd soum of Khovd Aimag; Section VII.B), given the expected proximity of construction workers and tourists to protected areas. These residents expressed that workers for other construction activities had been involved in poaching. Such events were not confirmed during IEE preparation; however to be cautious, the possibility of this risk occurring, and corresponding mitigation measures, have been applied to all project sites excluding the two tourist streets (which will be located in the Khovd and Uvs aimag centers).

B. Site-specific Environmental Risks and Mitigation Measures

213. Site-specific environmental risks and mitigation measures are summarized in the table below. These inform the EMP (Appendix 1). The approach in setting up the assessment of environmental risks and associated mitigation measures was to define these for each project site and show the assessment for the construction and operation phases accordingly (per site), as the site context and conditions define the issues, and there is an apparent continuity of mitigation measures between the construction and operation phases.

Table 38: Site-specific environmental risks and mitigation measures POTENTIAL DIRECT IMPACTS PROJECT MITIGATION MEASURES BAYAN-ULGII AIMAG Altai Tavan Bogd National Park (ATBNP) and Petroglyphic Complexes of the Mongolia Altai (PCMA) OIGOR Entrance Fee collection station (parking, market, information point, and toilets). (Small river 200 meters to the south) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry Need diversion channels and silt fences (downstream going to the river. edge, south side) at the site, to prevent water/sediment slurry in the area and drainage to the river.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with site drainage, water Maintain diversion channels and silt fences (downstream quality risks, and site aesthetics. edge) at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will be at least 200 meters from the river and pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 80 visitors/day (planned parking lot of wildlife. capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. SHIVEET KHAIRKHAN Entrance Fee collection station (parking, market, information point, and toilets). (River 200 meters to the south) 94

POTENTIAL DIRECT IMPACTS PROJECT MITIGATION MEASURES Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. TSAGAAN SALAA, BAGA OIGOR (Petroglyph information center (toilets, parking, trail). (River 200 meters to the south) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

POTENTIAL DIRECT IMPACTS PROJECT MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences (downstream quality risks, and site aesthetics. edge) at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will be at least 200 meters from the river and pumped clean regularly. Regular clearing of solid waste

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade ; collection of PCR. and wildlife and rare plant trade, as well as illegal collection of PCRs. ATB MOUNTAIN Mountaineer site (cooking cabin, toilets). Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with water quality risks and Dry toilets are not near any streams or rivers and will be site aesthetics. pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (registered on of wildlife. arrival; turn people away when capacity reached). No informal businesses in the vicinity. No off-trail trekking in the area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. ATB MOUNTAIN Tourist basecamp (cooking cabin, toilets, parking). 96

POTENTIAL DIRECT IMPACTS PROJECT MITIGATION MEASURES Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site, to prevent water/sediment slurry in the area.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site, to quality risks, and site aesthetics. prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will not be near any streams or rivers and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 80 campers/day (planned parking of wildlife. lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES KHOVD AIMAG Khovd Tourist Street: Buildings, parking, (power, water, heating from aimag center). Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site, to prevent water/sediment slurry in the area.

Traffic congestion, over 1-2 summer Create construction vehicle access from the N/S side construction seasons. street, rather than the main W/E road. Operation Phase 97

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site, to aesthetics. prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Regular clearing of solid waste

Higher noise levels and increased frequency Maintain the 740 visitors/day capacity limit (planned of traffic congestion, at times. parking lot capacity; turn people away when filled). Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity. Rock Art and Nomadic Culture Center (RANCC): Buildings, parking (power from grid and solar; water, heating at site; access road). Construction Phase Over possibly 2 construction seasons: Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry (site Need diversion channels and silt fences at the site and access road). (southern and western edges), to prevent water/sediment slurry in the area. Silt fences along new access road. Cross-road culverts for road drainage to be installed.

Risk of disturbance of wildlife. No construction at night.

Establishment of ground source heat pump  Restrict work footprint to <50 m2. (see Appendix 2 for description of design,  Restrict borehole diameter to <50 cm. construction, and O&M).  Drilling will be conducted with a minimum of water use; and application of high-quality grout, to minimize the risk of injection and diffusion of pollutants into subsurface soil and groundwater.  Drilling waste from the borehole (cuttings and mud) will be screened and dried, then disposed onsite as part of soil reuse.  Only a closed-loop system will be employed for the GSHP, to avoid the release of water into the subsurface and minimize the risk of pollution of groundwater Operation Phase 98

Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site, to aesthetics. prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required, going west and south). Maintain roadside ditches and cross-road culverts. Regular clearing of solid waste

Higher noise levels and increased traffic Maintain the 740 visitors/day capacity limit (planned congestion along the N/S road, at times. parking lot capacity; turn people away when filled). Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity.

Risk of disturbance of wildlife. Allow for animal crossing (new road near RANCC); supported with adequate signage. Maintain the 599 visitors/day capacity limit (planned parking lot capacity; turn people away when filled).

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade; collection of PCR (in hills near and wildlife and rare plant trade, as well as illegal RANCC). collection of PCRs.

Unsustainable water extraction from the (i) Assess sustainability of groundwater use based on best onsite well. available data, including assessment of aquifer size and recharge rate, existing extraction demand, and cumulative demand including the site requirements; (ii) install cost- effective water meter at each water well pump; (iii) monitor groundwater extraction volumes and water table depth on a quarterly basis; (iv) include the monitoring results in the environment monitoring reports to ADB (see EMP Section D); (v) in the event that groundwater availability appears to be decreasing, inform and discuss with MET and ADB; (v) prepare and submit corrective time-based actions.

Inadequate O&M of onsite WWTP, leading to (i) Ensure selection of the wastewater treatment model soil and/or water pollution, odor, and/or complies with the project-approved design, which is hazards to worker health and safety selected for operational reliability, (ii) conduct intermittent monitoring of treated wastewater quality to ensure the target treatment standard is complied with, (iii) daily vigilance by staff on odor emissions, (iv) ensure only trained operators have access to the WWTP and are responsible for O&M, (v) locate the WWTP in a sealed facility behind the center, off-limits to the public, (vi) monitoring of the treated wastewater for specific parameters (Tables EMP-4 and EMP-5).

Malfunctions with grid electricity, solar power, Closure of systems and facility if there are service and/or heating problems (to avoid cascading issues). Sun incidence and solar power output to be monitored for effectiveness (panels cleaned).

O&M of ground source heat pump (see  Regular checking of machinery condition, valve Appendix 2 for description of O&M). pressure, and flow speed to ensure that the closed loops containing water and antifreeze are intact.  Antifreeze will be changed only occasionally, pending regular performance checking. 99

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES  Antifreeze is a hazardous waste. It will be registered with the Aimag Environmental Department (AED). Prior agreement will be made for safe disposal as required by the Law of Mongolia on Waste (2017). Disposal (if and when needed) will be at the Khovd Aimag central landfill, at the designated hazardous waste site.  In parallel, ADB’s ASDIP will support the upgrade of the aimag landfill, which will improve the safe treatment and disposal of hazardous waste.  Emergency preparedness and response. In the event that O&M detects loss of pressure (i.e., which may indicate leakage): (i) the system will be stopped automatically, (ii) water will be evacuated to a bypass tank via the loop valve in the service room, (iii) estimate and report to the aimag authority the volume of fluid (if any) that may have leaked to the soil, (iii) dispose the drained fluid (see above), (iv) do not re-use the pump until the piping has been fixed, refilled, and tested by qualified experts and is confirmed not to leak Khar Us Nuur National Park (KUNNP) At the entrance of KUNNP Fee collection station (parking, toilets, information point). Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences (eastern side) at the site, to prevent water/sediment slurry in the area.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase 100

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage and site Maintain diversion channels and silt fences (eastern side) aesthetics. at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets are well-removed from the lake; will be pumped clean regularly. Regular clearing of solid waste.

Risk of habitat degradation and disturbance Set a capacity limit of 60 visitors/day (planned parking lot of wildlife. capacity; turn people away when filled). No informal businesses in the vicinity. No off-road travel in the area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. Signage on conservation of birds in the area. Information point to define lake shoreline access area (to the east) to prevent trampling in reeds. YUMIIN KHOOLOI Campsite hub and birdwatching tower (toilets, parking, information point, markets, ranger station). (Extensive wetlands in the connection between the two lakes to the south; 500 meters away) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with campsite drainage and mud Need diversion channels and silt fences at the site (south slurry, drainage to lakes (negative affect on side), to prevent water/sediment slurry in the area and water quality, but 500 meters away; drainage to lakes. birdwatching tower will be closer).

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase 101

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (south side), to prevent water/sediment slurry in the area and drainage to lakes. Prevent runoff from parking area (gravel and drainage channels required; south side). Dry toilets will be 500 meters from lakes and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking of wildlife. The birdwatching tower will lot capacity; turn people away when filled). increase the number of people on the No informal businesses in the vicinity. shoreline, with possible disturbance of birds. No off-trail trekking in the area. No off-road travel in area. Signage on conservation of birds in the area. Define lake shoreline access area to prevent trampling in reeds (better to prevent it altogether; restrict it to access to tower).

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. ARGALANT, KHAR LAKE Toilets and birdwatching tower. (Extensive wetlands to the west and south; 800 meters away) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry, Need diversion channels and silt fences at the site (south drainage to lake (potential negative affect on side), to prevent water/sediment slurry in the area and water quality, but 800 meters away; drainage to lake. birdwatching tower will be closer).

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase 102

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (south side), to prevent water/sediment slurry in the area and drainage to lake. Dry toilets will be 800 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 60 visitors/day. of wildlife. The birdwatching tower will No informal businesses in the vicinity. increase the number of people on the No off-trail trekking in the area. shoreline, with possible disturbance of birds. No off-road travel in area. Signage on conservation of birds in the area. Define lake shoreline access area to prevent trampling in reeds (better to prevent it altogether; restrict it to access to tower). Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade. and wildlife and rare plant trade. Tsenkher cave (TSC): (1) At cave entrance, (2) Intersection between main trail and cave ascent trail. Information Center; parking; toilets. 2 Information Points (interpretive signs); trail upgrading. (Stream 500 meters to the north) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry, Need diversion channels and silt fences at the site (north drainage to stream (negative affect on water side), to prevent water/sediment slurry in the area and quality, but 500 meters away). drainage to the stream.

Risk of disturbance of wildlife at site. No construction at night.

Workers poaching, collecting plants ; Awareness-raising and supervision of workers to prevent collection of PCR. wildlife poaching and collection of rare plants, as well as collection of PCR.

Increased vehicle traffic (construction trucks) No vehicle traffic at night; speed limited to 20 km/hr. across the Mankhan Nature Reserve valley, with risk to saiga antelope – possible disturbance and dispersal. Operation Phase 103

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (north side), to prevent water/sediment slurry in the area and drainage to the stream. Prevent runoff from parking area (gravel and drainage channels required; north side). Dry toilets will be 500 meters from stream and will be pumped clean regularly. Regular clearing of solid waste

Risk of disturbance of wildlife at site. Set a capacity limit of 80 visitors/day (planned parking lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. No off-road travel in area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching illegal trade ; collection of PCR. and wildlife and rare plant trade; as well as illegal collection of PCR.

Increased visitor vehicle traffic across the Vehicle access from the highway turnoff to the cave to be Mankhan Nature Reserve valley, with risk to regulated; e.g., all vehicles at the junction of highway/track saiga – possible disturbance and dispersal. to the cave to be registered. In lieu of registering vehicles, use of a dedicated electric vehicle (bus) running at regular intervals from the main road to the cave. No driving at night ; speed limit of 20 km/hr. Gravel-top the road to prevent dust. No off-road driving between the main road junction and TSC, to minimize disturbance (year-round). RANCC to include information about threatened species around TSC. Guided tours to TSC to include information about the saiga antelope and other species – so that visitors understand the restrictions on off-road access and gain greater awareness of the cultural and natural values around the site.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES UVS AIMAG Uvs Tourist Street: Buildings, parking (power, water, heating from aimag center). Construction Phase Generation of dust. Worker PPEs ; covers for exposed sediments.

Construction noise. Worker PPEs ; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels, catchment drain, and silt fences at the site (southern side), to prevent water/sediment slurry in the area.

Traffic congestion, over 1-2 summer Create construction vehicle access from the side street construction seasons. (western side), rather than the main W/E road. Operation Phase 104

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site (south aesthetics. side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Regular clearing of solid waste

Higher noise levels and increased frequency Maintain a visitor capacity limit of 539/day (planned parking of traffic congestion, at times. lot capacity; turn people away when filled). Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity. Uvs Tourism Complex: Buildings, parking (power from grid and solar; water, heating at site; access road). Construction Phase Over possibly 2 construction seasons: Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry (site Need diversion channels, drains, and silt fences at the site and access road). (eastern edges), to prevent water/sediment slurry in the area. Silt fences along new access road. Cross-road culverts for road drainage to be installed.

Risk of traffic congestion on road to lake. Create construction vehicle access from the north side dirt track, rather than the main road.

Ongoing issues with site drainage and site Maintain diversion channels, catchment drain, and silt fences aesthetics. at the site (eastern side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required, going to the east). Maintain roadside ditches and cross-road culverts. Regular clearing of solid waste

Higher noise levels and increased frequency Maintain the 436 visitors/day capacity limit (planned parking of traffic congestion, at times, disrupting lot capacity; turn people away when filled). traffic to the lake area. Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity.

Unsustainable water extraction from the (i) Assess sustainability of groundwater use based on best onsite well available data, including assessment of aquifer size and recharge rate, existing extraction demand, and cumulative demand including the site requirements; (ii) install cost- effective water meter at each water well pump; (iii) monitor groundwater extraction volumes and water table depth on a quarterly basis; (iv) include the monitoring results in the environment monitoring reports to ADB (see EMP Section D); (v) in the event that groundwater availability appears to be decreasing, inform and discuss with MET and ADB; (v) prepare and submit corrective time-based actions.

Inadequate O&M of onsite WWTP, leading to (i) Ensure selection of the wastewater treatment model soil and/or water pollution, odor, and/or complies with the project-approved design, which is selected hazards to worker health and safety. for operational reliability, (ii) conduct intermittent monitoring of treated wastewater quality to ensure the target treatment standard is complied with, (iii) daily vigilance by staff on odor emissions, (iv) ensure only trained operators have access to the WWTP and are responsible for O&M, (v) locate the WWTP in a sealed facility behind the center, off-limits to the public, (vi) monitoring of the treated wastewater for specific parameters (Tables EMP-4 and EMP-5).

Malfunctions with grid electricity, solar power, Closure of systems and facility if there are service problems and/or heating. (to avoid cascading issues). Sun incidence and solar power output to be monitored for effectiveness (panels cleaned).

O&M of ground source heat pump (see  Regular checking of machinery condition, valve pressure, Appendix 2 for description of O&M). and flow speed to ensure that the closed loops containing water and antifreeze are intact.  Antifreeze will be changed only occasionally, pending regular performance checking.  Antifreeze is a hazardous waste. It will be registered with the Aimag Environmental Department (AED). Prior agreement will be made for safe disposal as required by the Law of Mongolia on Waste (2017). Disposal (if and when needed) will be at the Uvs Aimag central landfill, at the designated hazardous waste site.  In parallel, ADB’s ASDIP will support the upgrade of the aimag landfill, which will improve the safe treatment and disposal of hazardous waste. 106

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES  Emergency preparedness and response. In the event that O&M detects loss of pressure (i.e., which may indicate leakage): (i) the system will be stopped automatically, (ii) water will be evacuated to a bypass tank via the loop valve in the service room, (iii) estimate and report to the aimag authority the volume of fluid (if any) that may have leaked to the soil, (iii) dispose the drained fluid (see above), (iv) do not re-use the pump until the piping has been fixed, refilled, and tested by qualified experts and is confirmed not to leak. Khan Khukhii National Park (KKNP) KHYARGAS LAKE Fee collection station (markets, information point, toilets, parking). (Lake 200 meters to the south) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry, Need diversion channels and silt fences at the site (south drainage to lake (negative affect on water side), to prevent water/sediment slurry in the area and quality, 200 meters away). drainage to lake.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site (south quality risks, and site aesthetics. side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; south side). Dry toilets will be 200 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of disturbance of wildlife. Set a capacity limit of 60 visitors/day (planned parking lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-road travel in area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching and illegal trade. wildlife and rare plant trade. SOGOO LAKE Campsite (information point, toilets, parking). (Lake 200 meters to the west) Construction Phase 107

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with campsite drainage and mud Need diversion channels and silt fences at the site (west slurry, drainage to lake (negative affect on side), to prevent water/sediment slurry in the area and water quality, lake 200 meters away). drainage to lake.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site (west quality risks, and site aesthetics. side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 200 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking lot of wildlife. Some risk of disturbance of capacity; turn people away when filled). mammals in the area, especially forest No informal businesses in the vicinity. patches to the east. No off-trail trekking in the area. No off-road travel in area. Noise reduction (barriers) around parking area; wildlife signage.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching and illegal trade. wildlife and rare plant trade. Uvs Nuur Strictly Protected Area (UVSPA) UUREG LAKE Campsite (information point, toilets, parking) (Lake is 425 meters to the west) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with campsite drainage and mud Need diversion channels and silt fences at the site (west slurry, drainage to lake (possible negative side), to prevent water/sediment slurry in the area and affect on water quality, although lake is 425 drainage to lake. meters away). No construction at night. Risk of disturbance of wildlife. Awareness-raising and supervision of workers to prevent Workers poaching, collecting plants. wildlife poaching and collection of rare plants.

Operation Phase 108

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site (west quality risks, and site aesthetics. side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 425 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking lot of wildlife. capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. No off-road travel in area. Noise reduction (barriers) around parking area; wildlife signage. Define lake shoreline access area to prevent trampling in the reeds. Ongoing risk of poaching, plant collection, illegal trade. Regular inspections/ patrols to reduce risk of poaching and wildlife and rare plant trade. TES, SALT LAKE Campsite (information point, fee collection, market, toilets, parking) (Lake is 300 meters to the west) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with campsite drainage and mud Need diversion channels and silt fences at the site (west slurry, drainage to lake (possible negative side), to prevent water/sediment slurry in the area and affect on water quality, lake is 300 meters drainage to lake. away). No construction at night. Risk of disturbance of wildlife. Awareness-raising and supervision of workers to prevent Workers poaching, collecting plants. wildlife poaching and collection of rare plants.

Operation Phase 109

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site (west quality risks, and site aesthetics. side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 300 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of disturbance of wildlife. Set a capacity limit of 20 campers/day (planned parking lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. No off-road travel in area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching and illegal trade. wildlife and rare plant trade. UVS LAKE Existing entrance point: (market, ranger station, parking, information center). (Lake is 2 km to the northeast) Construction Phase Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site (east side), to prevent water/sediment slurry in the area.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site (east aesthetics. side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required; east side). Dry toilets will be 2 kms from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of disturbance of wildlife. Set a capacity limit of 180 visitors/day (planned parking lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. No off-road travel in area.

Ongoing risk of poaching, plant collection, Regular inspections/ patrols to reduce risk of poaching and illegal trade. wildlife and rare plant trade.

C. Mitigation Measures to be Applied to All Construction Works

214. The following measures will be applied to all project civil works and are included in the project EMP.

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215. Management of permafrost layers. While there are interpolated maps of permafrost distribution in western Mongolia (see Section IV), these cannot be applied with any certainty to individual project sites. Sites in Bayan-Ulgii and Khovd may be characterized by either continuous or sporadic patches of permafrost, whereas sites in Uvs may have less incidence of permafrost, with isolated or sparse patches. Prior to finalized design and construction works, test pits or cores will be required at each site to determine the incidence of permafrost, and then the facility design and construction can proceed accordingly. Where permafrost is an issue, the following approaches have been proposed in other projects in Mongolia. Shallow or slab foundations and heat-resistant materials can be used in areas where there may be a concern. The objective is to avoid mechanical damage to the permafrost layer. This includes the use of specialized heat- resistant polystyrene materials on slopes where cuts are required to accommodate steep angles, an elevated road base, and the use of geocell mats with aggregates (although this is a new technology in Mongolia and not yet widely used). There will be few road works, but some parking areas may encounter permafrost issues. These measures will avoid physical damage to the permafrost and will reduce heat convection into the soil during operation. Protection of the permafrost will reduce road corrugation resulting from thawing of the permafrost. Note that most small works in the protected areas will require minimal grading and excavation, all of which can be above the permafrost layer. The construction works associated with the Tourist Streets and Uvs Tourism Complex and RANCC will require deeper foundations; permafrost mitigation as described above may be required, subject to site-specific surveys.

216. Management of exposed sediments and soils. Risks associated with sediment mobilization will be managed through strict on-site measures including: stabilization of exposed surfaces and spoil piles with ditches and/or sheeting; minimizing the duration that surfaces are exposed; and, timing works for early spring and autumn, when rains are minimal and the ground is firm. For the two ground source heat pumps to be established at the two tourism complexes, the drilling operations will: (i) be restricted to a footprint of <50 m2, (ii) the drilling borehole will be <50 cm diameter, (iii) mud extracted by the drilling will be stored in a small settling pond and then reused or buried onsite, and (iv) the drilling will only be undertaken by certified operators.

217. Prevention of soil contamination. To reduce the risk of soil contamination from construction machinery, contractors must do the following: (i) store petroleum products, hazardous materials and wastes on impermeable surfaces in secured, bermed, and covered areas; (ii) remove all construction wastes from the work sites to approved waste disposal sites; (iii) establish emergency preparedness and response actions; (iv) provide spill clean-up measures and equipment at each construction site; and, (v) train contractors and crews in emergency spill response procedures.

218. Soil erosion control. Before construction, contractors will include site-specific drainage and soil erosion control plans as part of their site-specific EMPs. These will include the following actions, where relevant: (i). Plan and implement construction in staged sections, with one section completed and stabilized before beginning the next. (ii). Minimize open excavation areas. (iii). Construct intercepting channels and drains to prevent runoff entering construction sites and to divert runoff from sites to existing drainage or open ground. (iv). Stabilize all cut slopes, embankments, and other erosion-prone working areas. (v). Stabilize all earthwork disturbance areas within 15 days after earthworks are completed. (vi). Provide temporary detention ponds or containment to control silt runoff. (vii). Strip and stockpile topsoil, and cover (by geotechnical cloth) or seed temporary soil 111

stockpiles. (viii). Limit construction and material handling during periods of rains and high winds. (ix). Properly slope or re-vegetate disturbed surfaces, e.g., cut banks. (x). Landscaping will only use native plant species. (xi). Construction camps and storage areas will be located to minimize the land area required.

219. Prevention of water pollution. The following measures will be implemented: (i) Timing of site-specific construction to assess risk of snowmelt discharges (May-June) and peak rainfall (August) and schedule works around these times as far as possible. Construction in other months imparts much lower construction risk, as the ground is hard, infiltration is limited, and there will be limited runoff from work sites. (ii) Plan and implement construction in staged sections, with one section completed and stabilized before beginning the next; and minimize open excavation areas (as noted previously). (iii) Construct intercepting channels and drains to prevent runoff entering construction sites and to divert runoff from sites to existing drainage or open ground (as noted previously). (iv) Contractors must develop actions for control of oil and other dangerous substances as part of their site EMPs. (v) Wastewater will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil. (vi) All sites for washing of construction equipment will be equipped with water collection basins and sediment traps. (vii) Fuel storage, machinery maintenance workshop and vehicle cleaning areas will be stationed at least 200 m from waterbodies. (viii) Storage facilities for fuels, oil, and other hazardous materials will be within secured areas on impermeable surfaces and provided with bunds/berms and cleanup installations. (ix) Contractors’ fuel suppliers must be properly licensed and will follow established protocol for transferring fuel. (x) Labor camps (if needed) will be located at least 200 m from waterbodies. (xi) Portable toilets and on-site wastewater pre-treatment systems will be installed at construction camps (if needed) along with proper maintenance protocols.

220. Management of air quality. Standard mitigation measures to reduce impacts on air quality are as follows: (i) Spraying water on exposed construction sites where fugitive dust is being generated. (ii) Locating cement mixers >500 m downwind from the nearest residential areas and other sensitive receptors. (iii) Dust suppression (covers and barriers) near sensitive receptors. (iv) Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emissions. (v) Covering materials during truck transportation, in particular, fine material, to avoid spillage or dust generation. (vi) Maintenance of project vehicles (engines) to minimize greenhouse gas emissions. (vii) Turn off equipment/ vehicle when not in use; limit engine idling to a maximum of 5 minutes. (viii) For odor: disinfection/deodorization/sanitizing affected latrines prior to clearing; provision of adequate sanitation facilities; and, strict enforcement of sanitation practices; prompt disposal of organic and hazardous wastes. 112

(ix) Prohibit burning of wastes. (x) Timely monitoring of air quality and inspections during construction.

221. Noise management. The following measures will be implemented to comply with noise standards: (i) Properly maintain construction vehicles and machinery, to minimize noise. (ii) Apply noise reduction devices and methods for high noise equipment operating within 150 m of sensitive sites (i.e., tour camps and residential gers). (iii) Locate high-noise activities (e.g., concrete-mixing) >0.5 km from sensitive areas, if possible. (iv) Prohibit operation of high-noise machinery, and movement of heavy vehicles along urban and village roads, between 18:00 and 08:00. (v) Place temporary noise barriers around noise sources during construction, if needed. (vi) Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation. (vii) Conduct regular interviews with residents/villagers adjacent to construction sites to identify noise disturbance. Community feedback will be used to adjust work hours if there are noisy conditions.

222. Waste management. Covered garbage bins will be installed at worker camps and construction areas. Waste separation and recycling should be implemented to the extent possible. The construction contractors will be responsible to transport solid domestic and construction waste and dispose of these at approved sites. Waste collection and disposal methods will follow strict procedures to ensure that only non-hazardous waste is disposed. Hazardous wastes (discarded fuel, oil, spills) will be stored in sealed drums and transported to the official aimag landfill site in accordance with national regulations.

223. Prevention of disturbance of local traffic and pedestrian flows. The contractors/builders will be required to undertake the following. (i) Preparation and implementation of a traffic management plan, and coordination with local authorities and communities (for the tourism complexes and the tourist streets, mostly). (ii) Information disclosure: villagers, residents and businesses will be informed in advance through media and information boards at construction sites of the construction activities, and give the dates and duration of expected disruption. (iii) Public consultations on work phasing and schedules, anticipated access blocking, provisions for safe access for blocked properties and temporary parking for blocked garages/driveways. (iv) Posting of billboards on road/lane closure, traffic rerouting plan at strategic places, at least 1 week prior to works (this probably only applies to the tourist streets). (v) Posting of traffic (flag) persons during entire working hours, if necessary. (vi) Spreading out the schedule for materials delivery in non-peak hours. (vii) Efficient management of truck arrival/ departure. (viii) For power utilities, coordinate with the respective power company and substation and set contact arrangements in case of accidental damage of the power lines; establish advance notice in case of any planned service interruption. (ix) Timing of works; to be conducted in September to June as far as possible, the off- peak season in which visitor numbers are low.

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224. Management of Environment, Health, and Safety (EHS) aspects. Contractors/builders will prepare an environmental, health and safety management plan, which will include the following. (i) Construction site protection: clear signs will be placed at construction sites in view of the public, informing people about the project GRM, and warning people against potential dangers such as moving vehicles, hazardous materials, and excavations, and raising awareness on safety issues. Heavy machinery will not be used at night. All sites will be secured, disabling access by the public through appropriate fencing, whenever appropriate. (ii) Provide a clean and sufficient supply of fresh water for construction sites and camps. (iii) Provide adequate number of latrines at construction sites and work camps and ensure that they are cleaned and maintained in a hygienic state. (iv) Garbage receptacles at construction sites and camps will be set up, which will be periodically cleared to prevent outbreak of diseases. (v) Provide personal protection equipment (PPE), e.g., safety boots, helmets, gloves, protective clothing, goggles, ear plugs, will be provided to all workers. (vi) Emergency preparedness and response plan for accidents and emergencies, including environmental and public health emergencies associated with hazardous material spills and similar events. These plans will be submitted to the local soum authorities for review and approval. Emergency phone link with local clinics will be established. Each worker camp will have basic first aid kits. (vii) A records management system that will store and maintain easily retrievable records regarding loss or damage will be established. It will include documenting and reporting of occupational accidents, diseases, and incidents. The records will be reviewed during compliance monitoring and audits. (viii) Occupational health and safety matters will be given a high degree of publicity to all work personnel, and posters will be displayed prominently at construction sites. (ix) All workers will be given basic training in sanitation, general health and safety matters, and work hazards. An awareness program for HIV/AIDS and other communicable diseases will be implemented for workers and the local communities. (x) Core labor standards will be implemented. Civil works contracts will stipulate priorities to: (i) employ local people for works; (ii) ensure equal opportunities for women and men; (iii) pay equal wages for work of equal value and pay women’s wages directly to them; and (iv) not employ child or forced labor.

225. Management of physical culture resources. Each site will be demarcated before any works and access by project workers and vehicles will be prohibited. A drone survey (if needed) and detailed ground survey will be undertaken to document and preserve all physical culture resources. Standard chance-find procedures will be applied, including documentation of finds, work stoppage, and notification of appropriate authorities to determine next steps.

226. Dismantling of structures and rehabilitation of sites. Only two project sites will be located at the locations of existing facilities (two sites in ATBNP). No upgrading of facilities at those two sites is planned. As such, there will be no requirements for dismantling structures and rehabilitating sites.

D. Indirect, Induced, and Cumulative Impacts

227. Indirect impacts are adverse and/or beneficial environmental impacts that cannot be immediately traced to a project activity but can be causally linked. Induced impacts are adverse and/or beneficial impacts on areas and communities from unintended but predictable 114 developments caused by a project which may occur later or at a different location. Cumulative impacts are the combination of multiple impacts from existing projects, the proposed project, and anticipated future projects that may result in significant adverse and/or beneficial impacts that would not be expected in case of a stand-alone project.19

228. The project activities are intended to help catalyze and strengthen management of tourism in the project sites, based on visitor capacity limits and operational waste and sanitation systems, and information to support conservation of local cultural and environmental resources. The scope and design capacity of the project facilities was developed based on (i) analysis of pre COVID-19 visitor numbers compiled at the aimag and site level, and (ii) projections of post COVID-19 visitor numbers, applying recovery scenarios issued by the United Nations World Tourism Organization.20 With the expected upward momentum in visits to the western region, control of both the numbers and access will be critically important. The main visitor pressure, due to the project, will be in Khovd Aimag, where the facilities will be expected to handle 1,579 visitors/campers per day (85% of these going to the RANCC and Tourist Street, near the urban area). Uvs facilities will handle up to 1,315 campers/visitors per day, with 74% of these going to the Tourist Street and Tourism Complex in and near Ulaangom. Bayan-Ulgii facilities supported by the project will only accommodate 360 visitors/campers per day.

229. Thus, the project may contribute to indirect, induced, and cumulative impacts, in the following manner:  Indirect impacts: about 3,250 visitors/day to the western region (assuming all project facilities working at full capacity in the summer) will almost certainly use other roads, facilities, and campsites in all three aimags, with Khovd being the most likely in this regard (Bayan-Ulgii the least likely). This will mostly bring positive spin-offs to local communities and businesses, but will also increase the risk of solid waste and habitat disturbance in areas not in the immediate vicinity of project-supported facilities.  Potential induced impacts: depending on future visitor numbers and the success of project-supported facilities, there may be replications of campsites and other visitor facilities in other locations in the western region. While this can have a net positive socioeconomic impact, the risk of waste, sanitation, and habitat disturbance issues increases substantially, unless there is very effective conservation, visitor awareness, and protected area management to support new facilities (the lakes in Uvs and Khovd are particularly susceptible; as well as Tsenkher Cave and the Mankhan Nature Reserve).  Cumulative impacts: similar to the potential induced impacts, there may be projects in the future that replicate the approach in the current project. The vulnerabilities noted for induced impacts would be the same. These may be incremental in the current visitor areas, or occur in new areas. The order of vulnerability reflects current visitor projections, with Khovd having the highest ranking of potential visitors, followed by Uvs, and then

19 ADB. 2011. Sourcebook for Safeguard Requirement 1: Environment. Manila. 20 Between 2015 and 2019, annual tourist numbers to western Mongolia increased from about 21,595 to 101,825 (79%): 3,800 to 12,000 (Bayan-Ulgii), 11,000 to 52,522 (Khovd) and 795 to 37,303 (Uvs). Visitors comprised domestic (81%) and international (19%) tourists, the latter largely from Kazakhstan, the People’s Republic of China, and Russian Federation. Projected visitor numbers were estimated by applying three post COVID-19 recovery scenarios issued by the United Nations World Tourism Organization (“pessimistic”, “base”, and “optimistic” scenarios). The “based” scenario – which assumes a 100% recovery to pre COVID-19 numbers by 2023 – was selected, due to (i) continuing domestic tourism, and (ii) the assumed recovery of regional tourism by 2023. Based on this scenario, visitor numbers to western Mongolia are estimated to have increased to about 710,000 per year by 2027, the year of project completion. Sources: World Travel and Tourism Council. 2020. Travel and Tourism Economic Impact 2020 Mongolia. London; United Nations World Tourism Organization. 2021. UNWTO Tourism Data Dashboard; and, ADB. 2021. Technical Assistance to Mongolia for the Sustainable Tourism Development Project [Phase 2]. Manila (Appendix 23: feasibility study report). 115

Bayan-Ulgii. Note that all three aimags, with their current provincial development plans, intend to boost economic growth significantly by improving infrastructure, especially roads (Appendix 7). These plans, if fully developed, will almost certainly increase visitor numbers in western Mongolia (assuming no pandemic restraints), which will possibly increase pressure on the protected areas. The project-supported facilities have been designed based on projected post COVID-19 recovery in tourism and increases in visitor numbers.

E. Climate Change and Greenhouse Gas Emissions

230. Climate change data and trends for western Mongolia were documented in the Climate Risk and Vulnerability Assessment for this project. This has been submitted as a separate report. That report included key observations with regard to adaptation needs within the project and mitigation opportunities. The main climate trends in Mongolia (and western Mongolia) are summarized here. Opportunities for building design, reflecting the need for resilience and increased use of renewable energy and increased water conservation, have been taken into consideration by the project technical team. Those design details have been documented separately (they were summarized in Section VI).

231. Based on long term records from 48 meteorological stations across Mongolia, the near surface temperature and the annual mean temperature over Mongolia has increased by 2.24ºC between 1940 and 2015. This warming trend is higher in mountainous regions but lower across the steppes and Gobi region. The 10 warmest years in the last 76 years have all been recorded since 2000, despite a short-term return to average in 2012.

232. Annual mean temperatures have been recorded at meteorological stations in the project aimags. The annual mean air temperature has increased by 2.1oC in Bayan-Ulgii, 2.8oC in Khovd, and 2.4oC in Uvs, since the 1960s. The observed temperature increase is higher than the national average (temperature increase) in Uvs and Khovd Aimags. Similarly, the maximum air temperature has increased by 2.4oC, 3.4oC, and 2.4oC, while the minimum air temperature increased by 2.0oC, 5.1oC, and 2.3oC in Bayan-Ulgii, Khovd and Uvs Aimags, respectively. The highest air temperature increases are clearly evident in Khovd Aimag (compared to the other two aimags). The warm spell duration/ heat wave has increased from from 15 to 25 days in Bayan- Ulgii Aimag, from 5 to 15 days in Khovd Aimag, and 20 to 28 days in Uvs Aimag.

233. In Mongolia, 85% of all precipitation falls during the warm spring-summer-autumn season, while 3% or less falls in winter as snow. Annual precipitation dynamics are characterized by the dominance of summer rainfall. Precipitation over all of Mongolia has decreased by about 7% over the last 76 years. Excluding some extremes, annual rainfall can vary between -25 mm to +25 mm around the average annual rainfall.

234. In terms of spatial pattern, warm season or summer precipitation has increased slightly in the Altai mountains, western Gobi in the Altai region and the southeastern part of the country since 1961. In other parts of Mongolia, it decreased by 0.1 mm to 2.0 mm/year. There is a statistically significant decreasing trend in the central part of the country and a slightly increasing trend in the western Gobi in the Altai region.

235. The observed annual precipitation at meteorological stations in the project aimags indicates that precipitation has decreased by about 10 mm in both Bayan-Ulgii and Khovd Aimags, while there has been only a slight decrease in Uvs Aimag.

116

236. The precipitation pattern across Mongolia during the warm season has been changing, especially in terms of the frequency of more intense rainfall. This means that the quantum of intense rain or maximum daily rainfall within the total annual precipitation is increasing, leading to a net decline in the effective rainfall for pasture plants. The frequency of hydrometeorological disasters and magnitudes of climate extreme events have increased more since the 1950s. The weather-related disasterous and extreme events in Mongolia include snow and dust storms, and heavy rain and flash floods. The occurrences of these events have increased about 6-7 times over the last two decades.

237. There are no systematic extreme whether event records at the aimag level. The information on extreme weather related events shows that wind storms with speeds exceeding 20 m/s can cause building damage. For example, on November 25, 2018, sstorms occurred in the western aimags, especially in Bayan-Ulgii, Khovd, Uvs and Gobi-Altai aimags. Wind speeds exceeded 40 m/s in some places. More than 210 gers collapsed and power outages occurred in 52 soums of these aimags. The roofs of schools, kindergartens, hospitals, cultural centers and apartment buildings were also blown off.

238. Forest and pasture/wildfires, which may spread and activate due to natural dryness and droughts, but mostly caused by anthropogenic activities, are common enough in Mongolia. In practice, the increasing intensity of pasture degradation (caused by the combined impacts of human activity and climate change), is a serious concern. An average of 200 forest pasture/wildfires occur in Mongolia every year; increasing slightly in frequency for the last two decades.

239. According to the statistics, forest and pasture/wildfires have been recorded every year since 2015; Uvs Aimag tends to be more ssusceptible, among the project three aimags. In Uvs Aimag the highest number of fires occurred in 2015, with 34 reported fires.

240. Mongolia has an extremely variable climate. Throughout its long history, the flood-drought cycle has been an unavoidable and natural part of life, with periods of severe drought followed by extensive flooding. There are two kinds of flooding; ‘regular’ high discharge floods and flash floods. The high discharge floods are due to snowmelt, in combination with rainfall; in most cases the slow increase of river water levels and flooding over the riparian zone and floodplains can in most cases be accommodated by the river system and does not cause serious damage. These kinds of floods can even be beneficial to the ecosystems and wetlands. Inundation of the ﬂoodplains supports high levels of soil moisture and supply of nutrients, which is very beneﬁcial in repairing ecosystems, as well as for replenishing groundwater aquifers; this is especially important as many rivers are covered by ice for almost 6-8 months per year. Flash floods are short duration extreme flood events that are more destructive and can cause substantial damage.

241. The most recent heavy rains and floods in the area were recorded on 13 July 2020. This resulted in damage to a road and three bridges (from Ulaangom to the border with the Russian Federation). The damaged accounted for more than billion MNT; thousands of people were unable to travel.

242. Mongolia is an arid country that remains sensitive to summer precipitation fluctuations and shortages. The drought index for Mongolia has increased, starting from the mid 1990s, with direct implications for agriculture and the livestock sector. As most of the precipitation falls in summer, there are now issues surrounding the low water content in the soil during the warm season, which in turn results in a lowering of the groundwater table, increased surface runoff, and decreased river flows. 117

243. The observations noted above clearly indicate recent trends in climate change, with increasing temperatures, decreasing rainfall, but increased frequency of heavy rainfall events, all apparent in western Mongolia to varying degrees. These manifest as stressed pasture lands, increased melt water volumes, increased frequency and volume of floods, and increased incidence of forest and pasture wildfires. Climate modelling indicates that these current trends will continue. These are all threats to normal livelihoods and new buildings and infrastructure.

244. Building design life for this project is assumed to be 50 years (as per BNbD 20-02-11). The vulnerability and climate risk index will increase from 0.5 to 0.6 in Bayan-Ulgii, from 0.7 to 0.8 in Uvs, and from 0.5 to 0.7 in Khovd Aimag by 2046-2065, compared to the 2018 level (Khovd shows the largest expected rise in the vulnerability and climate risk index). The climate projections by RegCM4-ECHAM5 under RCP8.5 (RCP8.5 extreme case scenario which represents the highest levels of emissions with the most significant climate change impact, was adopted to avoid the potential risk of lower emission scenarios) indicate that: winter air temperature will increase by 1.2 oC by 2035, 2.2 oC by 2046-2065, 4.2 oC by 2081-2100, while summer temperature will increase by 1.0 oC by 2035, 2.1 oC by 2046-2065, and 4.2 oC by 2081-2100. The winter precipitation will increase by 10% by 2035, 40% by 2046-2065, and 75% by 2081-2100, while summer precipitation will increase by 8% by 2035, 10% by 2046-2065, and 20% by 2081-2100. For winds, the project facilities are located in areas where annual mean wind speed are 1.3-2.2 m/s and maximum speeds may reach 34 m/s. According to Mongolia’s wind storm map, wind storms may occur 10-20 days/year. Wind speeds are anticipated to increase with more intense and/or frequent storm events.

245. The project has included climate change adaptation measures in the designs of the two tourism complexes, tourist streets, campsites, carparks, and toilet systems, to address the risk of harsh winters, flash floods, fire, stronger winds, and subsurface slumping due to seasonal freeze/thaw cycles. These include: (i) siting to avoid locations zoned as moderate or high risk for flooding or fire; (ii) drainage systems and roof designs to avoid snow accumulation and for rapid drainage of melting snow and ice; (iii) non-flush dry toilets situated on shallow concrete bases, to minimize soil disturbance; and, (iv) rainwater collection to contribute to annual water needs and offset reliance on groundwater wells (at field sites) or mains water supply (for the two tourist streets). For the two tourism complexes, additional designs to provide resilience to stronger winds and storms include (i) reinforced concrete in the structural framework and roof, (ii) inclined roof forms, reduce wind shear (and also improve shedding of snow), (iii) triple glazing on windows, for added strength and durability, including against wind-blown sand, and (iv) laminated finishes for the external aspects of wood and plastic surfaces. In the absence of energy-saving measures, total annual project greenhouse gas (GHG) emissions are estimated to be about 7,324 tons CO2e. The project energy efficiency measures (design and orientation that maximize passive heating and cooling; use of solar panels; and, for the RANCC, access to geothermal energy) will reduce GHG emissions annually by 3,931 tons CO2e, resulting in net GHG annual emissions of 3,393 tons CO2e per year. These levels are below ADB’s threshold of concern for GHG emissions (100,000 tons CO2e per year). 118

VI. ANALYSIS OF ALTERNATIVES

246. Analysis of alternatives comprised (i) consideration of the “no project or do nothing alternative”, (ii) site locations for the project facilities, and (iii) alternative designs for various project components, especially power and water supply and O&M procedures for the safe collection, transport, treatment, and disposal of sewage and solid waste.

A. No Project Alternative

247. Given the rising tourist numbers in western Mongolia (except 2020 with the COVID-19 pandemic), the “no project” or “do nothing” alternative is not an option. Visitor statistics compiled during project preparation confirm a 79% increase in visitor numbers to western Mongolia from 2013 to 2019 (from 21,595 to 101,825), of which about 86% were domestic. Western Mongolia is also prioritized by the government for economic development, and transboundary, regional tourism is promoted. In this context, there is a clear requisite to improve facilities at existing sites and ensure their operation with proper visitor controls, waste management systems, sanitation management, water conservation, and use of renewable energy, to the extent possible. These are all facilitators for conservation enhancement.

B. Site Locations

248. Tourism complexes. The key considerations were: (i) proximity to services for power, water, and heating, and logistics for tourist access and existing visitor flows, (ii) relatively close to aimag urban centers, (iii) safeguard risks, and (iv) costs for construction and O&M. For the UVTC, seven sites were considered, west and east of Ulaangom (see table below). Sites west of Ulaangom (Uvs Aimag center) were too far from services, had higher risks of flash floods, and supported physical culture resources, especially khirgisuurs. There were no habitat or biodiversity concerns at any of the seven sites. The selected location – east of Ulaangom – has the optimal proximity to services, easy road access, groundwater availability, and no safeguard issues. For the RANCC, only 1 site was initially selected by the Khovd Aimag Government, and which met the project selection criteria including lack of safeguard risks: for this reason, no other site locations were considered.

249. Tourist streets. (i) For Khovd tourist street, two site locations were assessed, one within an existing cultural heritage site, an old Manchu fortress, with only 1 external wall remaining but with a small cemetery, two residential houses, and likelihood of subsurface artefacts; and one on open, cleared land between the urban center and airport. Both sites achieved design criteria for proximity to visitors and access to public utilities. The location near the airport was selected to avoid safeguard risks. (ii) For Uvs tourist street, the location selected by the Uvs Aimag Government (on the southern edge of Ulaangom) met the project selection criteria including lack of safeguard risks, and no other site locations were considered.

250. Small works in protected areas. No alternative site locations were considered, as the project will build new facilities near existing sites that are currently visited by tourists, to avoid disturbance to other locations or habitats.

C. Design Considerations

251. Alternative designs for building heating. Various alternatives for heating the buildings in the RANCC and the Uvs Tourism Complex were assessed for practicality, cost, and safeguards issues. A ground source heat pump was deemed to be the most effective way of heating the

119 buildings, as this produces a net gain with a renewable energy source (using the gradient between warm below-grade geology and buildings above grade. Only electricity to power the heat pump (circulating water) is required. The alternatives assessment is shown in the table below.

Table 39: Alternatives for heating of buildings. Type of Environmental heating impact (low, medium, Advantage Disadvantage TA Team Preference system high) Electric boiler no impact Easy to manage, high operation The operation cost can reliable source, cost be reduced by the easy to adjust the management. heating Gas Boiler no impact Japan high dependent on technology source availability Ground source Low (utilizes passive low operation cost Requires Install at two tourist heat pump temperature differential operator training complexes because of between soil and air) low operation cost Electric heater no impact can be used when Install at all small at small needed. facilities, number facilities at PA depend on the size of the buildings

252. Alternative designs for sewage and wastewater storage and treatment. The assessment of alternatives for handling sewage and wastewater at the facilities in the protected areas and at the RANCC and Uvs Tourism Complex is shown in the table below. For all toilet facilities in the protected areas, dry toilets, with periodic pumping out, were selected (this has the least environmental impact and uses no water). For the RANCC and the Uvs Tourism Complex, flush toilets with on-site storage and biofilm treatment, allowing re-use of water, were selected.

Table 40: Alternatives assessment for sewage and wastewater storage and treatment. Operation TA Team Type of toilets Advantage Disadvantage and Preference Maintenance Composting dry toilet easy seasonal use in high Compost (Ecosan by MNS 5924:2015) management, mountainous needs to be low cost of areas (in sites emptied. operation at ATBNP and Khankhukhii- Sogoo lake site) 120

Operation TA Team Type of toilets Advantage Disadvantage and Preference Maintenance Dry Sealed Vault Toilet no seasonal use, In sites near to Need to be environmental Previous the aimag emptied by pollution experience is centers, where signing O&M not favoring to WWTP exist. agreement replicate. High with licensed cost service provider

Flush toilet with septic tank hygienically High cost, Priority 2: in Need to safe, and need to sites near to empty sludge comfortable establish Lake where at the end of groundwater available water tourist well to provide resources season (by water (UNSPA, signing O&M Khyargas NNP agreement and KUNNP). with licensed service provider)

Ventilated Improved unsealed high soil Prohibited Mostly not Pit Latrine, by MNS 5924:2015 contamination emptied

Ventilated Improved Sealed Pit Hygienically Need to be Priority 1: in need to Latrine, by MNS 5924:2015 safe, useable emptied at the sites near to emptied at year round end of tourist Lake (UNSPA, the end of season Khyargas NNP tourist and KUNNP). season 121

Operation TA Team Type of toilets Advantage Disadvantage and Preference Maintenance This model is In private tour Need to be Pour flush toilet/latrine, by MNS not piloted in camps. emptied at 5924:2015 Mongolia. the end of tourist season (by signing O&M agreement with licensed service provider)

Dried waste Dehydrating toilet/latrine, by needs to be MNS5924:2015 emptied.

Portable toilet Hygienically seasonal use, During annual Need to be safe, and most need to events emptied after suitable for transport with organized in the event (by users special truck PAs. (e.g., signing O&M Takhilt Bagh in agreement KUNNP) with licensed service provider)

Type of waste water Operation and TA Team Advantage Disadvantage treatment systems Maintenance Preference

Septic tank with capacity Need to empty Less O&M high 60 m3 (using GRAF sludge at the cost disturbance of model): https://www.graf- end of tourist soil water.com/ season (by signing O&M agreement with licensed service provider) 122

Type of waste water Operation and TA Team Advantage Disadvantage treatment systems Maintenance Preference

Wastewater holding tank, Need to empty Safe to the High O&M with capacity 120 m3 sludge environment. cost for frequently (by Less initial regular signing O&M investment emptying agreement with cost services licensed service provider)

Biofilm waste water O&M Safe to the Need regular Install at two tourist treatment system-WSB® agreement with environment. water quality complexes because clean licensed Possible to monitoring to of high treatment service provide use the treated re-use the efficiency and water water for water for saving (re-use of flushing the toilets treated water for toilet as per flushing the toilet) MNS 6734- and possible further 2018, extension. Wastewater flows by gravity. Small-scale wastewater O&M More suitable Has to be treatment system, with agreement with for settlement installed at capacity 60 m3, with open licensed like soum least 500m water reservoir service provide center from the project site as well as the ger district near to the project site, high distance of protection zone

253. Source of power (electricity): The source of electricity in the western region is renewable (hydroelectric power). The Western Energy System has only one generating source: the 12 MW Durgun Hydro Power Plant, which was put into operation in 2008. The majority of electricity, on average 70%, is imported from the Russian Krasnoyarsk energy system through the 110 kV8 transmission line. This power is sourced from the Krasnoyarsk hydroelectric power station (HEPS 6,000 MW) in the Russian Federation. This electricity and the use of solar makes the power supply for all building and systems renewable. Wind power was examined as an option for some facilities, but the wind potential map for western Mongolia indicates only a marginal or sporadic wind speed/frequency. Use of small wind turbines was therefore not further considered. The use of solar will involve small (25kW) solar panels which will cover a 130 m2 area. Also, small scale solar panels can be installed almost anywhere - on rooftops of existing buildings, reducing their land footprint. 123

254. The Uvs Tourism Complex was the only project-supported facility that required several iterations of alternative site assessment. The process is shown in the table below.

Table 41: Analysis of different location options for the Uvs Tourism Complex Option 4 (near Option 1 Option 5 Option 6 (3 Option 3 Kharkhiraa Option 7 (on the (between Option 2 (near km north- PARAMETER (closer to Mountain; way to Uureg Ulaangom (Ulaangom) Kharkhiraa east from Uvs Lake) close to a Lake) and UVSPA) Mountain) option 1) resort) Soum Tarialan Ulaangom Tarialan Ulaangom Ulaangom Ulaangom Turgen Proposed land 30 area (ha) Latitude 50.0005 49.972329 50.072958 49.949471 49.988931 50.018917 50°09'57.6"N Longitude 92.1935 92.051995 92.320051 91.868725 91.926884 92.229705 91°37'33.9"E Construction phase Available Yes Yes Yes Yes Yes Yes Yes power supply? Available No Yes Yes Likely Likely Likely Likely water supply? Cost of $130,000 $40,000 $148,000 $260,000 $203,000 $165,000 $350,000 establishing power supply Cost of $66,000 $38,000 $66,000 $66,000 $66,000 $66,000 $66,000 establishing water supply Cost of $100,000 $35,000 $100,000 $100,000 $100,000 $100,000 $100,000 sewage line Total Cost ( $296,000 $113,000 $314,000 $426,000 $369,000 $331,000 $516,000 Power, Water and Sewage) Flood risks? Yes. There is No No Medium to high Medium No Medium (needs a rain water run- (needs a site (needs a site site specific flood off place. specific flood specific flood risk assessment for risk assessment risk mitigation for mitigation assessment infrastructure) infrastructure) for mitigation infrastructure) Environmental No No Environment No No Environment No No No Environment safeguard Environment sensitive zones in Environment sensitive zones Environment Environment sensitive zones in issues? sensitive the vicinity; sensitive in the vicinity; sensitive sensitive the vicinity; No zones in the nearest physical zones in the some burial sites zones in the zones in specific habitat vicinity; cultural resources vicinity; UVs in vicinity vicinity; some vicinity; issues. Need nearest (temple) is about Nuur (SPA) burial sites in nearest survey of physical physical 1.2 km; there is a is about 3.2 vicinity physical cultural resources cultural holy mountain km E cultural before construction. resources is (worship place) direction; No resources is Address possible about 0.5 km about 0.9 km ; protected about 3 km spring drainage (Horse racing nearest industry monument (Horse issues, as this site is place); No (power plant) is /cultural racing); No near the protected about 1.36 km heritage site protected convergence of two monument in vicinity monument highways, which /cultural /cultural may affect drainage heritage site in heritage site in area. vicinity in vicinity Social Public land Potential LAR Public land Public land Public land Some herder Public land owned safeguard owned by the impacts according owned by the owned by the owned by the households by the Turgen soum issues? Tarialan soum to the footprint of Tarialan Ulaangom soum Ulaangom are nearby government government the UVTC. soum government soum but in (confirmed by Mrs (Letter of Ownership and government (confirmation by government considerably Zolzaya, land officer 124

Option 4 (near Option 1 Option 5 Option 6 (3 Option 3 Kharkhiraa Option 7 (on the (between Option 2 (near km north- PARAMETER (closer to Mountain; way to Uureg Ulaangom (Ulaangom) Kharkhiraa east from Uvs Lake) close to a Lake) and UVSPA) Mountain) option 1) resort) confirmation possession rights (Letter of Mr. Bold-Erdene (confirmation distant of Turgen soum). from have been issued confirmation land officer, by Mr. Bold- locations She confirmed that S.Badamseree in the area for from Ulaangom Erdene land there are no jid, Tarialan residential and S.Badamser soum). No officer, herder's winter and soum agriculture eejid, ownership/posse Ulaangom spring camps and it governor). No purposes Tarialan ssion rights. No soum). No is an open pasture ownership soum structures. No ownership/pos in winter and spring. rights. No governor). herders' camp. session rights. No LAR impacts. structures. No Only No structures. Only pasture ownership pasture/unused No herders' land. No LAR rights. No land. No LAR camp. Only impacts. No structures. impacts. No past pasture/unuse past land Only pasture land acquisition d land. No acquisition land. No LAR LAR impacts. impacts. No No past land past land acquisition acquisition Operation and maintenance phase Strategic No high Being at the No high Pros: lies on the This is closer No high Location about 40 benefit of strategic location of strategic main road to the strategic km from Ulaangom. location for benefit to be Ulaangom city will benefit to be inbound from Ulaangom city benefit to be Pros: en route of the Uvs tourism – closer to the an advantage of closer to the Ulgii to and in the closer to the main road between potential to lake. Might be ensuring easy lake. Might Ulaangom or future, there lake. Might Ulaangom and generate preferable for accessibility to the be preferable Ulaangom to might be a be preferable Ulguu and to Uureg maximum visitor flows local residents for visitor Ulgii i.e. along chance this for visitor lake, a scenic spot. revenue but the year around and flows but the the main tourist becomes a flows but Cons: too far to potential therefore, maybe potential route. On an satellite city of potential reach from footprint could a better chance to footprint elevated site Ulaangom. footprint Ulaangom on daily affect the lake operate all-year could affect with good could affect basis. About 40 km ecosystem in a around. the lake surrounding the lake one way daily negative way. ecosystem in view - more ecosystem in commute - too much a negative attractive than a negative of a strain for staff way. just being in the way. members and town. Ulaangom residents to commute. Daily transport They will have It will not require They will The staff will The staff will They will The daily commute of staff, goods, to commute extensive have to most likely need most likely have to time is relatively to and from to/from the site commuting and commute to commute need to commute shorter so public site on daily basis. since the location to/from the to/from commute to/from the transportation could It might require is in the town site on daily Ulaangom on to/from site on daily be easily arranged. a special area. basis. May daily basis. Ulaangom on basis. May transportation require daily basis. require arrangement. transport transport arrangement arrangement Solid waste $1,100 $1,100 $1,100 $1,100 $1,1000 $1,100 $1,100 collection Environmental No major No major Impact No Major No Major Impact No Major No Major No Major Impact safeguard Impact Impact Impact Impact issues? Social Relatively Easy access for Staff Relatively close Close to Staff Close to Turgen safeguard close to employees employed in to Ulaangom Ulaangom employed in soum center issues? Ulaangom the Center town; relatively town; easy the Center (around 7 km) town; relatively may not be easy access for access for may not be able to go employees. employees. able to go 125

Option 4 (near Option 1 Option 5 Option 6 (3 Option 3 Kharkhiraa Option 7 (on the (between Option 2 (near km north- PARAMETER (closer to Mountain; way to Uureg Ulaangom (Ulaangom) Kharkhiraa east from Uvs Lake) close to a Lake) and UVSPA) Mountain) option 1) resort) easy access back home back home for employees. after work after work due to the due to the distance distance from from Ulaangom. Ulaangom. Marketing and operational perspective Ease of 2.8 km by pave In town 2.8 km by about 10 km by about 10 km 2.8 km by about 40 km from travel/access road and 8.2 pave road pave road and by pave road pave road Ulaangom by paved to the site? km by earth and about 20 about 12 km by and about 7 and 12 km road about 2 km road km by earth earth road km by earth by earth road from paved road to road road the site proximity to 2.8 km by pave In town 2.8 km by about 10 km by about 10 km 2.8 km by about 40 km from the nearest road and 8.2 pave road pave road and by pave road pave road Ulaangom by paved urban center? km by earth and about 20 about 12 km by and about 7 and 12 km road about 2 km (distance, road km by earth earth road km by earth by earth road from paved road to time, etc.) road road the site Proximity to It will be closer It will be closer It will be The site is along The site is Located It will be closer to other tourism to Uvs lake and within a closer to Uvs the main road along the main close to Uureg Lake but sites? and there are walking distance lake and bound to Bayan- road bound to Kharkhiraa much further from (numbers, some bird of all major there are Ulgii westward. Bayan-Ulgii mountain Ulaangom. distance) habitat areas attractions in some bird From this westward. and nearby. Uvs Ulaangom, habitat areas location, Uureg From this Ulaangom lake is the including the nearby. lake is about location, Uureg city. Both are single most museum, Buddhist 40kms, a lake is about an attraction in monastery and picturesque and 40kms, a advantage. It the area. town open market. less visited lake. picturesque will be closer Uvs lake is and less to Uvs lake about 30 kms. It visited lake. and there are is on the foothills Uvs lake is some bird of the Altai about 30 kms. habitat areas Mountains so It is on the nearby. Uvs hiking and other foothills of the lake is the activities will be Altai single most available. Mountains so attraction in hiking and the area. other activities will be available. Availability of Nearest Nearest hotels are The nearest Could not say No The nearest The most closes accommodatio accommodatio available within 1- accommodati how far is the accommodatio accommodati one is on the other ns nearby? n available in 2 kms. ons are nearest resort. ns nearby ons are side of a nearby (distance, Ulaangom. available in But all other except in available in Pass, a ger camp numbers, etc.) Ulaangom. accommodation Ulaangom city. Ulaangom. called Ontsiin is available in Tasarkhai. Ulaangom city. alternative alternative CONCLUSION alternative 3 1 2

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VII. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

255. This section describes the public consultations for the environmental assessment. Meaningful participation and consultation during project planning, design, and implementation are important safeguard requirements. Mongolia’s Law on Environmental Impact Assessment requires that during project preparation, consultations are held with local agencies and residents within and near the project sites. ADB’s SPS (2009) also requires meaningful public participation, consultation, and information disclosure. The consultation process for this project followed both the Mongolian law and the SPS. The consultations were undertaken by the executing agency, aimag and soum governments, and the TA Consultant.

256. Two rounds of consultation were conducted, in November 2020 and March 2021, and comprised : (i) information disclosure; (ii) questionnaire surveys; (iii) informal visits to villages and households in the project areas; and, (iv) public meetings attended by representatives of the affected public and other concerned stakeholders. For the first round, the team gave a 20-minute presentation on the project scope and then circulated questionnaires to participants. The presentations were prepared and made in Mongolian and Kazakh languages (the presentation was made in the Mongolian language in most of the soums; in two soums of Bayan-Ulgii Aimag, where Kazakh minority dominates, it was made in the Kazakh language).

257. The first round focused on informing residences of the proposed project and next steps, and gathering initial feedback. For the second round, more detailed information was presented on the anticipated environmental and social benefits and risks, updated site locations, and the proposed design and mitigation measures to address these risks. Community feedback was sought, including concerns about potential impacts and measures to address these. The consultations were conducted in parallel with a social and poverty analysis (led by the TA social experts, during the first round of public consultations), achieving a holistic approach for environmental and social safeguards.

258. Overall, consultations (2 rounds) were held with a total of 475 residents and Government officials from 12 soums in three aimags, comprising 189 women (40% of participants) and 286 men (60%), aimag and soum departments for Environment and Tourism, representatives of Aimag Public Utility and Service Entities, including power, water, heating supply, waste water and solid waste services (existing and associated facilities), and Protected Area Administration staff; and, Potential tourist service providers (local businesses) and potentially affected populations, including herders and soum center inhabitants.

259. COVID-19. The COVID-19 pandemic, which began in late 2019 to early 2020, challenged the planning and implementation of the consultations. During the first round of consultations, a national lockdown was imposed. In discussion with local governments, permission was given to the study team to proceed with the consultation meetings, but with the restrictions of a limited number of participants in one place within a shortened time, to reduce the risk of disease spread. Essentially the same conditions prevailed during the second round of consultations (March 2021), except that meetings with stakeholders in two soums of Bayan-Ulgii could only be done remotely.

A. First Round of Public Consultation and Information Disclosure

260. The first public consultation took place in 10 project soum centers during the period 8-29 November 2020. The consultation approach was prepared by the government and study team and consultations in the field led by the national environmental safeguard consultant. The consultation process was organized to provide a project introduction in 20 minutes and then

127 questionnaires were given to all participants; these were filled in by participants and handed back to the consultant. In this way, there was minimal personal contact, to manage the COVID-19 situation. The details of the November public consultation meetings are described in the table below. The first round focused on information dissemination about the proposed project and its objectives, proposed activities, and outputs; and, to gather views of herders and soum center populations on existing environmental issues.

Table 42: First round of public consultation meetings. Gender Aimag Soum Participants Date Relationship with Project Male Female Tsengel 17 22-Nov-20 8 9 ATBNP camping sites Bayan-Ulgii Ulaankhus 16 20-Nov-20 6 10 Petroglyph locations Durgun 11 15-Nov-20 5 6 KUNNP area Khovd Aimag center, where Jargalant 21 11-Nov-20 6 15 tourist street and tourist Khovd complex will be established Mankhan 18 9-Nov-20 9 9 Tsenkher cave location Location of Tourist Complex Khovd 13 13-Nov-20 9 4 is in this soum territory Naranbulag 17 27-Nov-20 10 7 Khyargas Lake NP Tarialan 21 24-Nov-20 8 13 UVTC Uvs Ulaangom 19 25-Nov-20 11 8 Tourism street Undurkhangai 25 29-Nov-20 18 7 Khyargas Lake NP Total 178 90 88 ATBNP = Altai Tavan Bogd National Park, KKNP = Khan Khukhii National Park, KUNNP = Khar Us Nuur National Park, NP = national park, TSC = Tsenkher cave, UVSPA = Uvs Nuur Basin Strictly Protected Area, UVTC = Uvs Tourism Complex.

Key Findings from the First Round

261. The first public consultation took place in 10 project soum centers during the period 11-29 November 2020. The questionnaire covered the following issues: a) existing environmental situation, including air, water, and soil pollution, waste and environmental problems and availability of surface and ground water resources; b) the potential impacts of proposed project activities, including positive project impacts and potential negative impacts of construction-related activities, water and land resource depletion; and, c) potential impact prevention actions, and feedback on project actions and additional comments. In general discussions during the consultations, the national environmental safeguards consultant provided a general response to public concerns, and these were further logged and tabulated (see below). The main results of the first round of public consultations are provided in the table below. The graphed survey results (first and second round) are in Appendix 5.

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Figure 50: First public consultations in the project soums, November 2020

Table 43: Main results of the first round of public consultations (November 2020). Issues Raised Summary of Responses and Discussions Response of Project Existing environmental issues in project areas Existence of Bayan-Ulgii Aimag (BU): two project soums have The Project will make sure, through environmental pollution issues, mostly soil and water pollution the IEE/EMP, to reduce as much as pollution (air, water that is of concern (60-80%). Also, air pollution (20- possible construction and households and soil) and 35%) in soum center makes them worry. waste at construction and operation waste problems in stages and provide strict controls, to their settled areas. In Uvs Aimag, no air pollution issues in soums, not contribute to existing air, water except Ulaangom -aimag center. Public has same and soil pollution. concerns for water and soil pollution issues in Uvs Aimag as in Bayan-Ulgii soums.

Similar patterns expressed in all soums of Khovd Aimag. An exception is Durgun soum, where only water pollution is of concern.

For the solid waste issue, respondents of all soums pinpointed that the waste problem is a concern. Availability of Both soums of BU and all 4 soums of Uvs Aimags According to responses, there is no surface and have sufficient surface and underground water big water problem in project soums. ground water resources and do not have a water shortage However, the situation in Durgun resources, issue. In Khovd Aimag, all 4 soums have surface soum is different and the entire shortage of water water available. However, Durgun soum has been Durgun soum population lacks 129

Issues Raised Summary of Responses and Discussions Response of Project supply and water experiencing a lack of drinking water resources drinking water supply. The Project quality. despite it being located next to Khar Us Lake, team needs to address this issue which has saline water. properly so that it does not contribute to the problem with its planned In terms of water quality, more than 60% of actions for small facilities. Use of dry respondents of both BU soums, some toilets in a small facility is proposed. respondents of Naranbulag and Ulaangom soums of Uvs Aimag and Khovd, Mankhan soums of Especially, it needs to cooperate with Khovd Aimag have concerns about their water river basin administrations existing in quality. In particular, majority of Durgun soum of all project soums for its activity on Khovd Aimag is very concerned about their water supply. Currently, there are two drinking water quality. RBAs (Uvs Lake -TEs river basin and Khyargas Lake-Zavkhan river basin) in Uvs Aimag and one basin administration (Khar Lake-Khovd river basin) in BU and Khovd Aimag combined. Availability of rare The majority of respondents in all soums of these Majority of local population- and endangered three aimags responded that rare and respondents are satisfied with current species of flora endangered species of flora and fauna exist in conservation efforts by protected area and fauna and their territories. Only a few responded that either administrations. their current they do not have or do not know about the conservation existence of rare and endangered flora and fauna In some responses (Mankhan soum of status from species in their territories. Khovd, and Ulaankhus soum of BU respondents’ aimag), where Protected areas exist, viewpoints. With regard to conservation status of these they are concerned about the illegal species: Khovd: Mankhan-good, majority in other hunting. Project team needs to pay soums- good to adequate, A few said there attention to this case, adding needs to be improved conservation. monitoring action in the EMP to stop this illegal hunting in project areas. BU: Ulaankhus – majority adequate, Tsengel- 40% of respondents- good ; 40%- bad and 20% adequate

Uvs: 60% of respondents of Undurkhangai expressed good and other sufficient. Majority in other soums- sufficient and a few good and bad.

Generally, the current conservation status of flora and fauna is sufficient, according to local people’s views. Existence of In BU: water quality, soil erosion and degradation, The environmental concerns are the environmental reduction of trees and shrubs, destruction of same throughout the aimags soums issues or historical and cultural heritage are of local on water resource depletion, water problems. peoples’ concern quality, reduction of trees and shrubs and soil degradation. In Uvs: surface and ground water depletion and reduction of trees and shrubs are main The Project team needs to address environmental problems in all soums. this common concern to be reflected in activities, to avoid possible impacts. In Khovd: soil erosion and degradation, wildlife reduction, trees and shrubs depletion in all soums Damage to cultural and historical sites and damage to cultural and historical sites is expressed as a concern in BU and (Jargalant) are of concern. Khovd Aimags. This concern is being addressed in areas, where the project is planned to be implemented. It also needs to be properly addressed in local Tourism development plans and cultural and historical site conservation plans, to stop negative actions. 130

Issues Raised Summary of Responses and Discussions Response of Project Project potential impacts The project plans BU: 60% in Ulaankhus and 80% in Tsengel Project design and environmental to build some responded yes. Remaining said water resources teams need to review the negative water application for new facilities are not sufficient. responses to meet their concern on facilities. Do you water scarcity. think the In 3 soums of Uvs aiimag, they responded that groundwater and there is no problem of water supply in case of The negative responses need to be surface water project new facility is established (>80%). In reviewed in terms of water application resources are Narnabulag, 38% of respondents were worried premises. The required water balance sufficient to build that water resources may not sufficient. for total water consumption needs to new wells? be calculated for implementing a In Khovd Aimag, 1 respondent out of 57 (total of 4 rationale water use and water saving soums) respondents worried that water resources policy. may not be sufficient in Mankhan soum if there is a new facility that uses water. Will negative Majority of respondents in all soums of three Project team needs to review effects occur in the aimag have concern that project may bring proposed actions in view of concerns protected area in negative impacts to protected areas located in raised by the majority of respondents: your soum due to their respective territories. project activity? To ensure all concerns are rightly The reasons to worry are: increased solid waste; addressed especially on the territory multiple vehicles’ traces in the bare land, if not of protected areas. regulated; disturbance to wildlife habitats; increased number of tourists may lead to soil and If internal zoning regulations are vegetation cover degradation; undisciplined and adequately addressed. noisy tourists that do not care about protected areas; inadequate toilets and garbage issue; to Whether proposed mitigation actions learn the location of new facilities with regard to and follow up monitoring will be wildlife habitat areas; to follow all internal zoning properly implemented and what will regulations and restrictions while selecting the be the residual impact. Whether it is facility location. acceptable.

No need to plan and build large building, which How project designs will address may impact protected area. Instead, eco-house or respondents’ concern on planned ger- traditional dwellings are appropriate, to not facilities. impact protected areas During the Majority of respondents in all soums of three Project environmental team needs to construction of the aimag responded that they agree that the review the concerns expressed in project facility, described temporary impacts will be during the questionnaires and if necessary people and construction period incorporate the actions that address vehicles will gather the reduction/elimination of impacts in and dust will Some say these are temporal and eventually will the proposed EMP. increase. There will fade away. also be a lot of noise. This can Other suggest to strongly monitor for lead to temporary reduction/elimination of these potential impacts. adverse effects such as wildlife To use “ready- to- compile - panels (pre- displacement and constructed panels- walls) for facilities in soil and vegetation protected areas to restrict/reduce impacts during cover degradation. construction. Do you agree that adverse impacts To monitor rehabilitation activities on soil and will occur? vegetation cover after construction completed. Will there be any Majority of respondents were quite optimistic that Project environmental team pays adverse effects on there will be no impact at the operational phase of attention to negative responses and the environment, project. Optimistic respondents were about 60- concerns to reflect justified concerns, rare and 80%. in IEE, especially in EMP, to endangered reduce/eliminate possible negative wildlife, human In Tsengel of BU 60% of respondents say that impacts. health and safety adverse impacts will be to surrounding 131

Issues Raised Summary of Responses and Discussions Response of Project during the environment, wildlife and human health: increased operation of the noise and dust due to tourist influx, reduced project facility? environmental quality, reduction of and disturbance to rare and endangered species of flora and fauna due to increased tourists, unless strict regulation enforcement and monitoring.

Negative impact may raise, if project facility is not built in accordance with building standards and landscaping requirements.

Strict enforcement on illegal hunting may reduce negative impacts (Ulaankhus soum of BU aimag). Impact Prevention Do you have any To use traditional horse -carts as transport means Project team needs to review the suggestions for in the protected areas to reduce tourist footprints. recommendations listed here, to changing the reflect them in project detailed design purpose of the To create pathways either for vehicles or tourists and IEE/EMP, to reduce concerned project or the to reduce negative impacts to soil and vegetation impacts. planned activities if cover. the project activities will have To plan measures to stop illegal hunting of wildlife any negative (Mankhan soum of Khovd Aimag). impact on the beautiful Comprehensive approach is required that environment, rare addresses all social economic and conservation and endangered challenges that face project rural areas in order to species of flora promote sustainable tourism business in western and fauna or local aimags. people in your area? To increase conservation effectiveness through involving local herder groups and forest user groups for monitoring of environmental legislation enforcement.

Public awareness raising/training of tourists and local population on correct behavior in protected areas and environmental protection.

To establish an Entrance Gate at the junctions of three paved roads from Ulaanbaatar, from Khovd Aimag Center and from southern border with the PRC where all travelers and drivers obtain information on western aimags’ tourist destinations and on local conservation areas and efforts to improve conservation. Project benefits and whether to support the project Will this project All respondents expect that the project will bring Local people have a high expectation bring benefits to benefits to local soums: creation of job places, on project benefits and this creates a you and/or to local which in turn reduces poverty; increased local demand for review of actions that development? economy. address the link with the local economy, involvement of locals for Two respondents in Durgun (Khovd), tourism business and support local Undurkhangai (Uvs) are pessimistic about the SME business. project benefits with no explanation why. Do you support the All respondents support project implementation in Need to assess, based on the implementation of their respective soum territories. responses that project activities are such projects in very much meeting local demands on your area? Two respondents that do not support sustainable tourism development. implementation of the project: (Tsengel, BU) - wilderness area will be impacted and one Durgun 132

Issues Raised Summary of Responses and Discussions Response of Project (Khovd)-although respondent selected the answer not to support, in next question he responded that he wanted to cooperate with project on greening/ tree plantation activity. Are you interested Several respondents offered their services to the The Project team needs to review the in working with the project, which are outlined below. list of activities that local people project? If so, in Tourism service areas. expressed to cooperate with project what field do you Rare and endangered plant and wildlife species and incorporate into project design want to work? conservation. and action plan those activities, which To provide services of sewing, cooking and tourist add value for the project. premises. To offer on position of local project manager to cooperate with the project on organization of training for local young people. To cooperate with the project on developing a mechanism that invites financial service with low interest rate to support local SMEs that work on tourism services. PRC = People’s Republic of China.

Table 44: Additional comments of respondents during the first round Public Consultations. Aimag name Comments Khovd Aimag Jargalant soum  Need to avoid creation of tourist camps nearby habitat areas of rare and endangered bird species, which negatively impact and eventually lead to destruction of habitat and species.  Before project operational stage, it needs to plan and train those who will be working in project facilities.  Manchu fortress needs to be partly restored to show to tourists.  Permafrost melting and inadequate solid waste disposal issues need to be addressed within project.  Cultural and historical sites need to be restored for tourism development.  Would like to get project info online.  Project should be far from politicians and any parties and be implemented in close cooperation with local communities.  Project needs to address job creation within tourism sector, support tourist camping with adequate toilets.  Manchu fortress should be in the project plan to restore and use for tourists.  Would like to cooperate with project on painting and handcrafts.  To support and cooperate with Local SME and family business.  If project supports restoration of Manchu fort for tourist attraction, it will be a great contribution to Khovd Aimag center. Khovd soum  Public awareness raising on project activity is important to promote local peoples’ involvement.  Tri-partite cooperation agreement (project, soum government and local people) with project can be useful for local people to work effectively.  RANCC location needs to be changed and size needs to be reduced (to avoid pasture size reduction) and it needs to consult with local herders before allocation of land for construction.  100 ha land allocation for RANCC is too much. There are many herders and pasture is limited. Also, wild goats habitat in the mountain “Yamaat Ulaan” next to RANCC. It needs to be addressed.  Kazakh minority lives in this soum. Therefore its traditional culture (handicraft, eagle hunting) need to be promoted within the project.  Project planned facility needs to be relocated closer to soum center.  Too big land is allocated for RANCC and it needs to be addressed.  Livelihood support project needs to be implemented in this area. Mankhan soum  Would like to support project with organizing a handicraft training for local people. 133

Aimag name Comments  Would like to cooperate with project on local souvenir trading.  Project needs to organize more activities on project information disclosure to local communities for public awareness raising and more participation.  Young people participation in project activities will be desirable.  In planning and constructing project facilities, it needs to look at heating, water supply and waste water treatment solutions to not impact and degrade local environment.  Construction will increase noise and soil and water pollution; it needs to be properly addressed.  Local tourism council needs to be trained and strengthened to effectively support project implementation.  Project detailed EIA need to be done well to avoid any negative impacts. Uvs Aimag Undurkhangai soum  In soum development, the primary focus should be environmental quality and livestock.  Baby-sitting with 2 small children and want to have job with project provided opportunity.  Would like to cooperate in tourism business through provision of cooking service.  Project needs to pay proper attention to surrounding environment and specifically focus on solid waste management.  Job creation for local people is desirable.  With increased tourists, local medicinal plants will be in danger and tourist’s destination needs to be set so as to not disturb wildlife.  Tourism business need to change its ill-practice and needs to be environmentally friendly.  Expect the project to contribute to poverty reduction and employment.  Project and Government need to pay attention on awareness raising and educate youth and prepare young generation with good behavior.  Management of Protected Areas needs to be strengthened with project implementation. Tarialan soum  With Covid19, project needs to consider virtual meeting, if necessary.  Project facilities need to apply water saving and grey water technology, as the area experiences water resources issues.  While constructing project facilities, reducing environmental impacts is very important.  A detailed environmental and social study needs to be carried out to understand well local needs and environmental specifics.  Tarialan soum lacks a paved road that connects aimag center Ulaangom with our soum center, which is very necessary for local people.  Hope project implementation will be helpful for environmental sustainability of our soum.  SME financial support is very important for local business. Hope this issue is well addressed within project.  Soum is famous with Sea-buckthorn and barley plantation. Need project support in processing of these types of fruit and barley to make final products.  Project ownership by locals is very important. Ulaangom soum  During project implementation, well organized monitoring is very necessary to complete project successfully. Local government tends to implement activities that are ineffective and less productive. Therefore, to pay attention on spending project money on very necessary actions.  Expect that project really involve local business and communities. In previous project, high level government officials usually implemented and with less effectiveness and less productivity.  Project needs to pay attention on more productive delivery.  In case project produces unavoidable negative impacts, it needs to consider offset measures for wildlife.  A pond that harvests water is very important in this area for effective water application.  A poor tourism development is linked to poverty and poor local development.  Extreme sport needs to be developed with implementation of this tourism project in this area. 134

Aimag name Comments Durgun soum  Project team needs to coordinate their activities with protected area conservation management priorities.  Greening and tree planting to restore construction site is desirable.  Public awareness raising is important for the project, for more involvement of local communities.  Job creation in local area should be promoted within project. Bayan-Ulgii Aimag Tsengel soum  Restoration quality after project construction activities; need to pay attention.  Local disabled and vulnerable community interests need to be represented in the project. It needs to reduce involvement of local government and increase involvement of local communities to ensure project successful implementation.  In most cases, construction is not completed with less quality due to weak monitoring after the construction, which leads to various impacts to surrounding environment. This needs to be well considered.  Need to pay attention on contractor’s performance and comply with construction standards, which is usually a fault of contractor.  Solid waste needs to be handled well and it needs local approach and involvement of local businesses.  In last decade, domestic tourism is increasing annually and this needs to be studied and included in the project design and activities.  Handcraft and souvenirs made from local materials are valuable and hope project will consider this issues  Would like to cooperate with project with supply of transport and camping for tourist stay. Ulaankhus  Prior to implementation of activities, project needs to carry out risk assessment and reduction activities to avoid any consequences to environment.  Increased tourists will bring a lot of problems like solid and wastewater issues. This needs to be addressed as a high priority of project to handle.  Local people are unable to get a loan from a bank due to lack of mortgage. If project facilitates on this, local business may become active and productive and local economy may rise quickly. BU = Bayan-Ulgii Aimag, COVID-19 = coronavirus disease, RANCC = rock art and nomadic cultural center.

B. Second Round of Public Consultation and Information Disclosure

262. After the first public consultation took place in November 2020, the COVID-19 situation was heightened due to increased numbers of incidents in Ulaanbaatar (UB). To control the spread of the virus, the Government of Mongolia implemented two total lockdowns, each with a duration of 15 days. With a released lockdown in UB by the end of February, it was possible to plan for consultations and to start informing the local governments, and potentially affected populations and project beneficiaries in the project planned territories. This was done 12 days before the public consultation, to allow local peoples to be informed and to plan to attend meetings.

263. For the second round of public consultations, the project team decided that two separate teams (a team leader and assistant in each team) would be dispatched to reduce field trip time and to be able to cover all project soums within the shortest possible time, to avoid any risk of being stopped in case of discovery of COVID-19 incidents in rural areas of Mongolia.

264. As the project team came from a potential virus affected area, the consultants were tested for COVID-19 before going to western Mongolia, and test results were shown to officials there. Masks were also prepared, along with protective face shields, and disinfection sprays used before consultation meetings started. Social distancing was also practiced.

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265. The second public consultation took place in 13 project soum centers during the period 10-24 March 2021. The consultations were led by Mr. Erdenesaikhan, NES in the first field team, and Mr. Gantulga, an experienced public consultation expert, hired to lead the second field team.

266. The purpose of the second public consultation was to inform stakeholders at project soums about: a) the project objective, activities and outputs; b) to gather local peoples’ views on quality of the environment they live in and status of natural resources they use; c) potential impacts of project proposed activities, potential ways for impact reduction/elimination (EMP); and, d) the Grievance Redress Mechanism (GRM) to address possible complaints associated with project implementation and ways of cooperation between the project team and the local population. The consultation process was organized so as to provide all topics mentioned above in 30 minutes; then questionnaires were given to all participants for filling in; these were then collected. In this way, there was minimal personal contact. The details of the second-round public consultation meetings are described in the table below.

267. The presentations were prepared and made in Mongolian and Kazakh languages. The presentation was made in Mongolian language in most of soums. In two soums of Bayan-Ulgii Aimag where Kazakh minority dominates, it was made in the Kazakh language.

268. ADB’s requirement for meaningful consultation requires that the draft IEE and EMP are provided to communities at least two weeks ahead of consultations. The project did not meet this requirement, for the following reasons: (i) the atypical and unique situation of COVID-19 related lockdowns and travel restrictions, (ii) the remoteness of some communities precluded efficient provision of information due to limited electronic means and/or distance from soum centers which precluded easy travel by local government or the consultant team to deliver hard copies, (iii) the document was not yet fully drafted at these stages of the project preparation, and (iv) the additional time needed for translation to Kazakh as well as Mongolian languages. Based on these conditions, the most realistic approach was assessed to be delivery of the safeguard information through the actual consultations. All key project designs, environmental safeguard risks, and proposed mitigation measures were presented, in Mongolian and Kazakh languages, during the consultations.

Table 45: Second public consultation meeting information. Name of soums, where Gender Total Relationship Name Public Consultation Meeting Date of Participants with Project was conducted Male Female aimag Bayan- Tsengel 31 19-Mar-21 27 4 ATBNP Ulgii camping sites Ulaankhus 19 18-Mar-21 12 7 Petroglyph’s locations Khovd Mankhan 19 12-Mar-21 14 5 Tsenkher cave location Durgun 24 18-Mar-21 10 14 KHUNNP area

Jargalant & Buyant Tourist street, RANCC and Bird watching 22 16-Mar-21 14 8 tower (Tumurt) Khovd Aimag center and Buyant soum 136

Name of soums, where Gender Total Relationship Name Public Consultation Meeting Date of Participants with Project was conducted Male Female aimag Khovd* 30 14-Mar-21 22 8 Location of RANCC in this soum territory

Tarialan 11 15-Mar-21 8 3 UVTC Zuunkhangai 34 12-Mar-21 24 10 Khan Khukhii NP Davst 24 19-Mar-21 15 9 Uvs Lake NP

Uvs Sagil 23 17-Mar-21 13 10 Uureg Lake Malchin 27 14-Mar-21 15 12 Khyargas Lake NP Ulaangom** 33 22 11 Tourism street 22-Mar-21 and Tourism complex Total 297 196 101 Remarks: *- Khovd soum administration requested that the project team not carry out a public gathering, to avoid risk of spreading virus, as the project team arrived from potentially virus affected UB. There were two individual meetings with the soum government, to hand in questionnaires, filled in by soum potential-affected population living in the territory of RANCC. ** GoM declared travel restriction and prohibition of any public activity, including meeting before the meeting day. So, the project team consulted with the Uvs Aimag government and organized a virtual meeting with aimag government officers and made a presentation. Then they were handed questionnaire survey materials to be filled in by project potential-affected populations nearby the project site (and SME business representatives and local governor officials).

Consultation in Mankhan soum, Khovd Aimag on 12 March 2021 137

Consultation in Durgun soum of Khovd Aimag on 18 March 2021

Consultation in Jargalant and Buaynt soums of Khovd Aimag on 16 March 2021

Meeting with Khovd soum government officials on 14 March 2021 138

Consultation in Tsengel soum of Bayan-Ulgii Aimag on 19 March 2021

Consultation in Ulaankhus soum of Bayan-Ulgii Aimag on 18 March 2021

Consultation in Zuunkhangai soum of Uvs Aimag on 12 March 2021

Consultation in Sagil soum of Uvs Aimag on 17 March 2021 139

Consultation in Davst soum of Uvs Aimag on 19 March 2021

Consultation in Tarialan soum of Uvs Aimag on 15 March 2021

Consultation in Malchin soum of Uvs Aimag on 14 March 2021

Virtual Consultation with local government officials in Ulaangom soum of Uvs Aimag on 22 March 2021 Figure 511: Second public consultations in the project soums, March 2021

Key Findings from the Second Round

269. The main results of the second round of public consultations are noted in the table below.

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Table 46: Main results of the second round of public consultations (March 2021). Issues Raised Summary of Responses and Discussions Response of Project Project potential impacts Based on project Majority of respondents think there would be only objective, and benefits from the project. description of A few respondents (4 in Uvs, 4 in Khovd) think activities, there would be negative impacts because of introduced to you, project implementation: do you think there - Shy wildlife and bird species will disappear. will be a positive - Water scarcity may rise. impact upon - Economic benefits are visible, but it will implementing this negatively impact surrounding environment. project? - Vegetation and soil deterioration and dust increase due to camping of tourists. During the project Majority of respondents in all soums of three The project environmental team construction aimag responded that they agree that the needs to review the concerns activities, foot described temporary impacts will be during the expressed in questionnaires and if traffic, noise and construction period. necessary incorporate actions that air pollution will Number of recommendations came from address the reduction/ elimination of increase. Do you respondents: impacts needs to be identified in impacts in EMP. think this will detail and clear measures for impact mitigations be negatively impact proposed in project plans. the community, flora and fauna in proposed areas? Are there any 35% of respondents of 4 soums of Khovd Aimag, Project team needs to review potential adverse 24% of respondents of Uvs Aimag and 37% of proposed actions in view of concerns effects of project respondents of Bayan-Ulgii Aimag agree that there raised by majority of respondents: activities on the will be adverse effects of project activities on the To ensure all concerns are rightly state of protected state of protected areas. addressed especially on the territory area in your of protected areas. vicinity? Their concerns are: increased solid waste; multiple If internal zoning regulations are vehicles’ traces in the bare land, if not regulated; adequately addressed. disturbance to wildlife habitats; increased number Whether proposed mitigation actions of tourists may lead to soil and vegetation cover and follow up monitoring will properly degradation; undisciplined and noisy tourists that be implemented and what will be the do not care about protected areas; inadequate residual impact. Whether it is toilets and garbage issues which contribute acceptable. degradation of environmental quality in Pas. How project designs address respondents’ concern on planned The remaining 63-76% respondents are not facilities. worried about project activities planned in protected areas. Some 86-89% of total respondents in three aimags Project design and environmental constructions to be responded no problem in water resources in their teams need to review the negative built by the project soums’ territories. responses to meet their concern on require water use. water scarcity. Do you think the Other 11-24% of people were concerned about the The negative responses need to be groundwater and availability of water to be used for project facilities. reviewed in terms of water surface water In particular, 3 respondents out of 12 in Sagil of application premises. If required, resources are Uvs, 4 of 19 and 21 respectively in Durgun and water balance for total water sufficient in your Jargalant of Khovd had expressed water resource consumption needs to be calculated area? concerns. for implementing rational water use and water saving policy.

Do you think 89% in Khovd, 93% in Uvs and 90% of Bayan-Ulgii Project team needs to revise a location building tourists were very positive of planned constructions of tourist of RANCC, if there is a resettlement streets in and streets and centers in those aimags. issue associated with current location Tourism A small portion of respondents (Sagil, Davst and with aimag and soum land complexes nearby Ulaangom of Uvs, all 4 soums of Khovd) think it will management office. Uvs and Khovd bring negative impacts more than positive impacts, if RANCC location is in eastern most Aimag center will create TSs and TCs in these 2 aimags territory of Khovd soum that is much 141

Issues Raised Summary of Responses and Discussions Response of Project result in positive or Negative responses were relatively high among closer to aimag center rather than negative impact? Khovd soum respondents in Khovd Aimag, where soum center. Therefore, respondents RANCC is planned to be built (6 out of 21 responses of this soum do not feel benefits of in this question). project. Project team needs to provide more information to this soum. A Public consultation meeting was not organized only in this soum because of request of soum governor to avoid Covid19 risk. Will there be Responses of all surveyed were of different Current tourism practices in Mongolia adverse effects on opinions: have a bad image of the environment, - In Khovd Aimag, about 60% of respondents of garbage/disturbance makers to local flora and fauna, 3 soums said no negative impacts of project people because of weakness or human health and facilities at operational stage. Exception is in absence of services and facilities for safety during the Khovd soum, where 23 out of total 29 tourists, like no tourist camps or operation of respondents (Kazakh ethnic) said tourist toilets and solid waste services, facilities? complex operation in their soum territory will which became a big burden for local bring negative impacts. governments and inhabitants, - However majority of people (23 out of total 28) especially protected area responded positively on building of tourist administrations with increased tourist complex in Khovd. Reason of such answer is numbers and associated that project public consultation team was not consequences. able to organize meeting, where proposed to This is a specific message to project describe project activities in detail, because of team from local inhabitants to pay Khovd soum government request not to do proper attention not only to address any meeting during that time. Then issues during construction, but on questionnaires were sent to households for operational stage to properly address filing in. and plan for impacts reduction, - In Uvs, majority of respondents in Ulaangom, including consideration of residual Malchin and Tarilan soums said no problem. impacts. Whereas, half of respondents in other three soums responded there will be negative effects of project facilities in operation to surrounding environment. Impact Prevention Do you have any In Khovd, 26 respondents, in Uvs- 11, and in suggestions for Bayan-Ulgii- 20 responded yes to this question. changing the Their combined responses are listed in separate purpose and Table #2 below. planned activities Majority of respondents in tree aimag are satisfied of the project if the with the current information and do not have any project activities suggestions to change the project activities. will have any Project needs to pay attention on conservation of negative impact on pastures of local herders, while implementing the the beautiful project. environment, rare and endangered plant and wildlife species or local people in your area?

Do you support the All respondents support project implementation in Project team needs to revise the implementation of their respective soum territories. location of RANCC, if there is a such projects in 6 respondents of Ulaangom soums proposed to resettlement issue associated with the your area? If not, create camping site in Altanburgas area in KKNP. current location, with aimag and soum please explain why Some pinpointed that a camping in Sogoo lake is not land management office. you do not support popular tourist destination (difficult to access the project. and only few local people go there). 142

Issues Raised Summary of Responses and Discussions Response of Project A respondent of Durgun soum of Khovd Aimag felt it was difficult to answer this question. Two respondents in Khovd soum of Khovd Aimag do not want to support project, if project plans to resettle households related with project location. A respondent of Tsengel, BU aimag is against planned activities, as it will negatively impact environmental quality of PAs.

Table 47: Additional comments of respondents during the second round Public Consultations. Aimag name Comments Khovd  To improve the solid waste management in project areas.  To stop the current tourists with poor behavior.  To plan tourist bases not nearby beautiful areas or wildlife habitat areas.  To combine locations of TC and TS and plan to build those in area of Manchu fort ruins.  To conduct EIA before project activity and create fish reproduction pond nearby TSC.  To plant more trees around project facilities, which will balance negative impacts such as soil erosion and sand movement occurred due to construction activities.  To involve local communities in environmental protection and restoration activities.  Road signs and signages need to be well designed for tourists.  Project needs to invoke a principle “Community based tourism development”.  To create camping site in south part of Durgun Lake, which is suitable for tourist visits.  A new approach for waste management is required.  To incorporate local specifics into the building architectural designs.  DEIA is required to plan and implement for mitigation of all potential impacts.  Khovd/Khovd- to involve more local people in project activities, project activities need to be environmentally friendly.  More benefits to local economy.  To propose bio-toilets in project areas.  To respect local culture and traditions and habitats while planning project activities. Uvs  Promote ecological tourism principles in project activity.  To develop tourism itinerary not only for Sogoo lake, where camping site is planned, but tourism development plan should include entire Zuunkhagai soum.  Sogoo lake in KKNP is not popular tourist destination (difficult to access and only few local people go there). Popular tourist destination is Altanburgas in KKNP. Therefore, a camping site needs to be planned in Altanburgas but not in Sogoo Lake.  Project provides opportunity to promote soum.  Project needs to plan where to keep wildlife in case if they escape from the areas due to project negative impacts.  Project will promote local economic and social development. Besides these positive impacts, its undesirable by-products will be increased waste issues and reduction of environmental quality. Project needs to address those issues well to eliminate/reduce negative impacts.  There are many unemployed women in project soums and they want to use project opportunity to get improved livelihoods through engaging to this project.  Project need to address needs of local SME businesses.  Project needs to be implemented in environmentally friendly ways. Bayan-Ulgii  To develop catch and release fishing tourism is suitable in Tsengel soum.  To provide opportunity for local people to participate and implement project activities.  Involvement of local communities in reducing project negative impacts and risks is effective.  Wants to cooperate with project through establishing and operating tourist camps. 143

Aimag name Comments  Pay attention on proper waste management and adequate toilets.  Organize different capacity building training for local people and support in improving the tourism infrastructure in local areas.  Road issue needs to be addressed.  Provision of information to local community and involve them in project implementation is a key.  Very much waiting for project implementation because domestic tourist numbers are increasing annually.  Tourists that visit ATB always visit Khoton-Khurgan lakes and mineral water in Tsagaan-Us. There is need to create camping sites and some services, including car tire and waste management.  Improvement of livelihoods of local people is needed.  Conservation of rare and endangered species, while implementing project is important and relevant measures need to be taken.  Water pollution may rise and need to prevent this at water sources.  If not implementing the project, negative impacts from current tourism practice will be increased/ escalated.  Solid waste recycling activity need to be organized within project to reduce volume of solid waste.

270. Overall Conclusions on the Public Consultation Results  The majority of respondents support project implementation.  10 respondents in three aimags say that negative impacts will prevail over the positive impacts.  24%, 35% and 37% of respondents respectively in Khovd, Uvs and Bayan-Ulgii said there will be negative impacts of project activities on state protected areas. Their concerns are: increased solid waste; multiple vehicles’ traces in the bare land, if not regulated; disturbance to wildlife habitats; increased number of tourists may lead to soil and vegetation cover degradation; undisciplined and noisy tourists that do not care about protected areas; inadequate toilets and garbage issues which contribute to degradation of environmental quality in PAs.  Local people welcome the tourism development project. But they are also concerned about associated risks of a tourist influx, as current tourist practices have brought negatives (increased volume of solid waste, inadequate and small numbers of toilets, soil and vegetation cover deterioration and depletion) to local environment and quality of livelihoods.  They request and expect that the project addresses all these negative issues and takes care properly to mitigate impacts.  They expect that the project will cooperate with local communities for implementation through various mechanisms.  There are no distinct responses specific to individual aimags.

271. The stakeholder concerns documented have been addressed in the following ways through the project designs and safeguards: (i) role of community-based organizations (CBOs) to be directly involved in the project has been expanded, to ensure a greater voice for community. About 13 CBOs will be established, which will help coordinate and mobilize community participation in the project trainings, community revolving fund, WASH program, and O&M of the small public facilities in the project protected areas, (ii) mitigation measures to address the risks of construction and operational impacts to residents and ecology have been identified on a site- specific basis and incorporated in the project EMP, (iii) the project GRM provides a basis with time-based corrective actions for the effective resolution of stakeholder concerns during implementation, (iv) stakeholder consultations to develop the project activities during 144 implementation are a fundamental part of the implementation process and embedded in the designs, especially for the pilot tourism development program, (v) civil society representation is included in the composition of the project steering committee, and (vi) the task of facilitating and ensuring stakeholder consultation during implementation is included in the terms of reference for the project implementation unit (see below).

C. Future Information Disclosure and Public Consultation Program

272. Disclosure of the IEE and EMP. The IEE and EMP has been disclosed on ADB’s website (www.adb.org). The IEE and EMP is being translated to Mongolian language and will also be disclosed on ADB’s website. After project implementation begins: (i) both language versions will also be disclosed on the project website to be established by the project implementation unit, and (ii) hard copies will be provided to the executing agency, the environment departments of Bayan- Ulgii, Khovd, and Uvs aimags, the soum and bagh governments of each participating soum, and the key community groups in each soum that will be involved in the project, including the 13 community-based organizations to be established for the project.

273. Public consultations. Public consultations will be maintained with project communities throughout project implementation, including: (i) before and after key works, to ensure residents are informed of and have the opportunity to respond to, pending works and procedures, (ii) during period broader consultations about project progress. Future consultation will be planned and coordinated by the project implementation unit (PIU) Environment Safeguard Specialist and Social, Gender, and Civil Society Specialist, in coordination with the PIU aimag project coordinators and MET, aimag, and soum focal points, via questionnaire surveys, household visits, workshops, and public hearings (see EMP; Appendix 1). 145

VIII. GRIEVANCE REDRESS MECHANISM

274. A project GRM was prepared and complies with ADB’s SPS (2009) and domestic requirements. The GRM will be accessible to diverse members of the project soums and community, especially including vulnerable groups such as women, minority and poor. Multiple points of entry, including face-to-face meetings, written complaints, telephone conversations, or e-mail, will be available. The GRM is described in the project EMP (Appendix 1).

IX. ENVIRONMENTAL MANAGEMENT PLAN

275. A project EMP has been prepared (Appendix 1), based on the findings of the IEE, domestic assessments, fieldwork, and stakeholder consultations. The EMP defines: (i) responsibilities and authorities for the EMP implementation, (ii) summary of impacts and mitigation measures, (iii) environmental monitoring and inspection, (iv) institutional strengthening and training, (v) reporting requirements, (vi) public consultation, (vii) cost estimates, and (viii) mechanism for feedback and adjustment. The EMP will be included as an annex in bidding and contract documents. Contractors will be required to develop site-EMPs that comply with the EMP.

X. ASSURANCES

276. All ADB-funded projects are required to comply with a standard set of loan assurances for environmental safeguards, which focus on compliance with national laws and the project EMP. In addition, there are assurances defined for overall project implementation; these are noted below. Refer to the final draft loan and grant agreements for the specific wording for each assurance:

(i) GOM will and will cause the MET to ensure that Governments of Bayan-Ulgii, Khovd, and Uvs (i) will not unreasonably discontinue any existing power, water and wastewater services to communities due to the civil works under the project by the project completion date and (ii) send notifications to all affected communities and other stakeholders as relevant at least three days prior to any planned interruptions of such public utilities that are caused by the civil works under the project.

(ii) GOM will and will cause the MET and Governments of Bayan-Ulgii, Khovd, and Uvs, to ensure that (i) no project works are located in the Strict Protection Zone of any protected areas, (ii) no project works are located in any critical habitats, (iii) all project facilities are located at least 200 m from the nearest lake, river, or wetland, in compliance with national laws, and (iv) all civil works, especially the small facilities within protected areas, will be implemented within the specific site locations and for the specific scope of works defined in the feasibility study report. Any proposed changes in the locations of sites or scope will be subject to review and endorsement of MET and ADB, pending additional impact assessment as needed.

(iii) The Project Executing Agency will, and will cause the Project Implementing Agency to, ensure that for all water wells constructed or upgraded under the Project: (a) the sustainability of groundwater use will be assessed based on the best available data, including assessment of aquifer size and recharge rate, existing extraction demand, and cumulative demand including the project requirements, (b) cost-effective water meters will be installed at each water well pump; (c) groundwater extraction volumes and water table depths will be monitored, at least on a quarterly basis, by the local (soum) governments and/or authorities; and (c) monitoring results will be included in the Safeguards Monitoring Reports. In the event that groundwater availability appears to be decreasing, the Project

146

Executing Agency will, and will cause the Project Implementing Agency to inform and discuss this situation with ADB, in a timely manner. Subsequently, the Project Executing Agency will, and will cause the Project Implementing Agency to, prepare and submit for ADB’s approval the necessary corrective or preventative time-based actions.

(iv) For the rock art and nomadic cultural center (Khovd Aimag) and Uvs tourism complex (Uvs Aimag), the project will fund the detailed design and construction supervision of the access roads (about 3 km long for the former, and 0.3 km long for the latter) and the government will fund the civil works for each road. These road works remain within the project scope and are subject to ADB’s safeguard policy requirements and the project EMP.

Assurances related to project implementation

(i) MET and the aimag and soum governments will not issue any further tourism concessions in the ATBNP, KKNP, KUNNP, TSC, or UVSPA until the tourism concession manual, certification program, revisions to the three aimag tourism plans, and revisions to the protected area management plans (Outputs 1 and 4), have been completed and put into operation.

(ii) GOM will and will cause the Governments of Bayan-Ulgii, Khovd, and Uvs to ensure that project beneficiaries of the pilot tourism development scheme (Output 1), especially poor and vulnerable households, female-headed households, and youth, are (i) prioritized for allocation of vendors stalls in the tourist streets and women-led markets, and (ii) are subject to low or no rental costs for the use of these stalls.

(iii) Any interest or other fee charges applied by the Government to the community revolving fund (Output 1) will remain within the fund and be used solely for the fund purposes, to help support replenishment and increase in the fund capital, therefore strengthening the financial sustainability of the fund.

(iv) Operational arrangements and financing of the community-based organizations (CBOs) (Output 1) will be (i) established within tripartite contracts between the CBO, protected area administration, and soum government, and (ii) funded by the project for the first four years of CBO operation. Thereafter, the CBO salaries and operational costs will be financed by domestic sources e.g. entry fees to the protected areas and other tourism revenue.

(v) GOM will ensure that the Khovd Aimag power station and Uvs Aimag power station are adequately maintained and managed in order to: (i) provide the required power for the Khovd Tourist Street and Rock Art and Nomadic Cultural Center (Khovd Aimag) (Outputs 1 and 4) and Uvs Tourist Street and Uvs Tourism Complex (Uvs Aimag) (Outputs 1 and 2); (ii) ensure there is no disruption to the existing power supply for communities and services, including during winter and times of peak demand.

(vi) GOM will and will cause the Uvs Aimag Government to ensure timely completion of road upgrades between Ulaangom and the Uvs Nuur Special Protected Area before completion of the project-funded Uvs Tourism Complex (Output 2).

(vii) GOM will and will cause the MET and Governments of Bayan-Ulgii, Khovd, and Uvs to ensure that O&M costs of the tourism complexes and tourist streets (Outputs 1, 2, 4) and small facilities in the protected areas (Outputs 3 and 4), shall be subsidized by the government until full cost recovery (including through entry fees, rental of vendor spaces, 147

and other revenue sources) is being achieved.

(viii) The project-funded facilities within the project protected areas (Outputs 3 and 4) will be operated and maintained by the following agencies: (a) the protected area administrations – for the project-funded fee collection stations and ranger stations, and (b) community- based organizations established with the project support – for all other project-funded facilities, i.e. the public campsites, car parks, toilets, information centers, information points, and public cooking cabins.

(ix) GOM will and will cause the MET to review park and facility entry fees in order to improve project cost recovery.

XI. CONCLUSIONS

277. The project designs and safeguards provide an integrated approach for the management of tourism and natural resources in globally significant protected areas, by strengthening inclusive tourism benefits for local communities and improving traffic, waste, and park management, through structural and non-structural measures. The key project facilities for environmental impact assessment are two tourism complexes and two tourist streets (in Khovd and Uvs Aimags); and small works in 14 locations within four protected areas and one unprotected cave system, in Bayan-Ulgii, Khovd, and Uvs Aimags.

278. Environmental risks during construction are dust and noise generation and inadequate site drainage. For the tourist streets in Khovd and Uvs, additional risks are of traffic congestion and unintended damage to existing (subsurface) utilities. Environmental risks during operations are that the enhanced facilities and infrastructure will facilitate indirect, induced, and/or cumulative impacts through higher visitor numbers, especially to protected areas. These risks have been addressed through an integrated design and safeguard process. Mitigation measures are included in the project EMP. For the risks of indirect, induced, and/or cumulative impacts, these issues are addressed through the designs, which include daily limits for visitor numbers to sites within the protected areas; green building standards to maximize the sustainability of water and power resources and for the safe collection, treatment, and disposal of sewage and solid waste; and, the widely dispersed nature of the project facilities, which reduce resource demand within individual locations.

279. Meaningful public consultations have been conducted in accordance with Mongolia’s regulations and ADB requirements. There is public support for the project, given the expected opportunities for local employment, small businesses, and improved quality of life. Public consultation will continue throughout project implementation. A project GRM has been developed and will be implemented at the aimag and soum levels. Environmental and social concerns were carefully considered during the analysis of alternative sites, so that the best combination of engineering practicality, logistics, access, and minimal environmental and social issues could be clarified. The proposed project activities are aligned with Mongolia’s laws for protected areas and buffer zones, the respective protected area management plans, and the requirements of ADB’s SPS for works near protected areas.

280. Based on the information presented in this IEE, and assuming full and effective implementation of the EMP, loan assurances, and training, potential adverse environmental impacts are expected to be minimized and/or mitigated to acceptable levels.

148 Appendix 1

APPENDIX 1: ENVIRONMENTAL MANAGEMEN PLAN

ENVIRONMENTAL MANAGEMENT PLAN FOR THE SUSTAINABLE TOURISM DEVELOPMENT PROJECT (PHASE 2)

MONGOLIA

Prepared by the Ministry of Environment and Tourism of Mongolia for the Asian Development Bank

This environmental management plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of the ADB website in which the full Initial Environmental Examination is given.

A. Objectives

1. This environmental management plan (EMP) is for the Sustainable Tourism Development Project (Phase 2) (the project). The EMP is to be implemented in all phases of each subproject – design, pre-construction, construction, and operation. The EMP is intended to ensure project compliance with Mongolia’s environmental laws and the Safeguard Policy Statement (SPS, 2009) of the Asian Development Bank (ADB). This EMP describes: the roles and responsibilities of relevant institutions for EMP implementation; potential impacts and the measures to mitigate them; environmental monitoring and inspection requirements; institutional strengthening and training; inspection, monitoring, and reporting arrangements; the grievance redress mechanism (GRM); and future public consultation. Terms of reference for the environmental management positions are included. Health and safety guidelines to address COVID-19 disease risk for communities and workers during the project construction phase are in Appendix 3. Health and safety procedures for the operational phase are not presented in the EMP, as they already form part of the overall project designs.

2. During preparation of the detailed engineering designs (after loan effectiveness), the project implementation unit (PIU), acting on behalf of the executing and implementing agencies, will pass this EMP to the engineering design entity for incorporation of the mitigation measures into the detailed designs. If necessary, the EMP will be updated at the end of the detailed design, to reflect any significant changes as compared with the designs agreed in the project documents between the Government of Mongolia and ADB. To ensure that bidders will respond to the EMP’s provisions, the PIU will prepare and provide the following specification clauses for incorporation into the bidding documents: (i) a list of environmental management requirements to be budgeted by the bidders in their proposals, (ii) environmental clauses for contractual terms and conditions, and, (iii) the domestic General EIA (GEIA) and Detailed EIA (DEIA), and the project initial environmental examination (IEE), including the updated EMP, for compliance.

B. Organizations and their Responsibilities for EMP Implementation

3. MET is the executing agency responsible for overall project implementation. The implementing agencies are MET’s Department of Tourism Policy Coordination (DTPC) (for the loan) and Department of Protected Area Management (DPAM) (for the grant). DTPC and DPAM will be supported by the aimag and soum governments, and protected area administrations of the three western aimags where project activities will be implemented.

4. Guidance and sector coordination will be through the project steering committee (PSC) and technical working group (TWG) to be established during loan effectiveness. The PSC and TWG will build upon the existing PSC and TWG for the previous (and still ongoing) Sustainable Tourism Development Project. The committee will include representatives from the Ministry of Finance (MOF), Ministry of Roads and Transport, Ministry of Construction and Urban Development, Ministry of Power, Bayan-Ulgii, Khovd, and Uvs Aimag governments, and other relevant agencies. The committee will meet at least twice a year. The TWG will represent the committee at the daily level for coordination between line agencies.

5. A PIU will be established, with a central office at MET (Ulaanbaatar) and a field office in each of the three aimags. The PIU staff will comprise consultants, who will be responsible for project implementation, including accounting, procurement, training, preparation and dissemination of knowledge products, monitoring, and reporting. The PIU will be chaired by the Director General of DTPC, supported by the Director General of DPAM. The PIU will be

150 Appendix 1

responsible for the planning and coordination of the project activities, with close coordination and oversight from DTPC and DPAM.

6. The EMP implementation arrangements and responsibilities of governmental organizations are summarized in the table below. The detailed terms of reference for the environmental positions are in the project administration manual.

Table EMP-1: Institutional responsibilities for EMP implementation Organization Roles and Responsibilities Project Steering  Comprises MET State Secretary, DTPC, DPAM, MOF, Ministry of Construction and Committee (PSC) Urban Development, Ministry of Road and Transport Development, Ministry of Energy, Bayan-Ulgii, Khovd, and Uvs Aimag governments, and CSOs.  Provides advice on project implementation.  Reviews project progress.  Ensures timely inter-ministerial coordination and support for the project, including information exchange and facilitation of meetings and approvals, as needed.  Meets at least semi-annually. Technical  Comprises MET, DTPC and DPAM Director Generals, technical representatives Working Group from each ministry within the PSC and CSOs.  Represents the PSC to assist the executing and implementing agencies with regular technical support, as needed (e.g., for information exchange and/or to facilitate meetings).  Meets regularly. Ministry of  Project executing agency. Environment and  Assumes overall accountability and responsibility for project planning, Tourism (MET) management, and implementation.  Ensures timely and effective execution of the loan agreements.  Co-signs (with MOF) withdrawal applications to ADB.  Co-signs (with PIU coordinator) withdrawals from the advance accounts to the local currency accounts; and for expenditures from the local currency accounts.  Overall coordination and guidance of PIU.  Ensures all PIU tasks are completed in a timely and efficient manner.  Reviews PIU progress reports.  Submits progress reports to ADB and MOF.  Facilitates auditing of project accounts.  Chairs the PSC (chair: MET State Secretary).  Provides timely policy and coordination support. MET Department  Project implementing agency for the overall project and loan-funded activities of Tourism especially for the two tourism complexes and two tourist streets. Policy  On behalf of MET, responsible for: (i) co-signing (with MOF) of withdrawal Coordination applications to ADB; (ii) co-signing (with PIU coordinator) of withdrawals from the (DTPC) advance accounts to the local currency accounts, and, for expenditures from the local currency accounts; (iii) overall project planning and implementation; (iv) consolidation of the technical and financial project progress reports from both implementing agencies and timely submission to the MET Minister’s Office, MOF, and ADB; and (v) facilitation of project auditing.  Responsible for implementation of the loan-funded project activities, including review and authorization of works and goods – for the tourist streets, tourism complexes, and overall project coordination.  Responsible for recruitment and authorization of salary payments for the PIU.  Responsibility for coordination of PIU.  Project tasks, including review of technical and financial progress reports prepared by PIU; implementation of project EMP, SGAP, CPP, and SCS. Appendix 1 151

Organization Roles and Responsibilities  Provide guidance to the aimag and soum government agencies, to work with the PIU, facilitate project stakeholder activities e.g., meetings and trainings with soum governments, communities, and tour operators.  Conduct all tasks in close consultation, and joint agreement, with associated agencies in the western aimags. MET Department  Project implementing agency for the grant i.e., all small works in protected areas. of Protected Area  On behalf of MET, responsible for: (i) grant project planning and implementation; Management (iv) review of the grant technical and financial project progress reports and (DPAM) endorsement for inclusion in the overall project progress reports for submission to the MET Minister’s Office, MOF, and ADB.  Responsible for implementation of the grant project activities, including review and authorization of works and goods.  Responsibility for coordination of two grant funded PIU technical positions (sanitation and waste specialist, and livelihoods specialist).  Provide guidance to the protected area administrations, to work with the PIU, facilitate project stakeholder activities e.g., meetings and trainings with soum governments, communities, and tour operators. Support DTPC Director General to:  Co-review and endorse PIU candidates and salary payments for the PIU.  Co-review of technical and financial progress reports prepared by PIU; implementation of project EMP, SGAP, CPP, and SCS.  Conduct all tasks in close consultation, and joint agreement, with associated agencies in the western aimags. Bayan-Ulgii,  Facilitates aimag- and soum-level project support, including arrangement of project Khovd, and Uvs workshops. Aimag  Assigns at least one soum officer per soum in each park (i.e., a minimum of five governments officers per park) to attend meetings and trainings.  Soum officers to ensure soum and aimag governments are updated on project progress.  The aimag governors are co-chairs of the technical working group that will guide project implementation.  Undertakes regular coordination with the PIU.  Participates in central- and aimag-level meetings to define operation and maintenance arrangements and financing for the project facilities, including the allocation of government funds for operation and maintenance.  Provides timely information and clarification on any local land issues and permits, as needed.  Participates as members of the PSC.  Reviews PIU progress reports. Project Overall project management and environment safeguards (full time) Implementation  Comprising a project coordinator, field coordinators, accountant, procurement Unit (PIU) specialist, technical, and safeguard specialists.  Based at MET in Ulaanbaatar, except for the three field coordinators, to be based at the administrations in the three aimags.  On behalf of, and with coordination from, the implementing agencies, coordinates and implements the project activities, including recruitment, procurement, financial management, disbursement, safeguards, supervision of contractors, monitoring, and reporting.  Ensures compliance with the EMP, SGAP, CPP, SCS, and other project documents. For the EMP, this includes screening procedures and the GRM.

Role of the PIU Environment Safeguard Specialist (intermittent support throughout implementation) 152 Appendix 1

Organization Roles and Responsibilities  Update IEE and/or EMP as needed, especially during detailed engineering designs.  Ensure that the EMP, especially all relevant mitigation measures, are included in the detailed engineering designs.  Establish and coordinate implementation of the GRM  Supervise the implementation of mitigation measures during project design, construction, and operation  Ensure that environmental management, monitoring, and mitigation measures are incorporated into bidding documents, construction contracts and operation management manuals  Respond to any unforeseen adverse environmental impacts and take corrective actions as needed  Ensure compliance with domestic labour laws and the Core Labour Standards of the International Labour Organization  Ensure project compliance with the environmental safeguard assurances in the loan and project agreements  Prepare semi-annual environment monitoring reports to ADB

Role of the 3 PIU aimag deputy coordinators (full time)  One each per project aimag. To be based at the aimag government offices  Maintain daily coordination with aimag and soum project agencies and focal points  Lead aimag-level focal point for project GRM  Work closely with PIU environment safeguard specialist to ensure timely EMP implementation: conduct EMP-specific site visits if needed; monitor EMP implementation in the course of site visits for another project coordination External  A qualified independent environmental monitoring agency will be recruited to environment implement the ambient monitoring portion of the environmental monitoring plan, monitoring throughout construction phase – focusing effort on key construction stages of agency individual packages – and first year of operation. (intermittent) Contractors  Ensure sufficient funding and human resources for proper and timely (intermittent) implementation of required mitigation and monitoring measures in the EMP throughout the construction phase.  Responsible for GRM operation during the construction phase. Construction  Ensure sufficient funding and human resources for supervising and instructing supervision contractors for proper and timely implementation of required mitigation and company monitoring measures in the EMP (intermittent)  Supervise construction progress and quality  Appoint qualified EHS officer for regular onsite supervision of contractors  Supervise the contractor’s EMP implementation performance  Undertake simple and cost-effective on-site quantitative measurements to regularly check that construction complies with the project environmental monitoring standards and targets, especially for noise and air quality (especially during works in urban areas and villages), using a basic hand-held meter  Submit monthly EMP monitoring reports to PIU Other Domestic Agencies GASI –  Soum environment, health, and safety inspectors will inspect project facilities and environment, issue completion certificates. health, and safety inspectors CSOs and other  Project will coordinate with existing donor efforts, including GIZ, KfW, UNDP, The donors Nature Conservancy, and World Wildlife Fund, and Kreditanstalt für Wiederaufbau programs. Appendix 1 153

Organization Roles and Responsibilities Asian  Oversees project administration and timely execution of the loan agreements by Development the executing and implementing agencies. Bank (ADB)  Disburses loan proceeds.  Review procurement, consultant recruitment, progress reports, and audit reports.  Reviews project compliance and targets against the design and monitoring framework, EMP, SGAP, and project administration manual.  Monitors project progress and conducts review missions.  Discloses monitoring reports on ADB public website.  Serves as observer to the project steering committee ADB = Asian Development Bank, CPP = consultation and participation plan, CSO = civil society organization, DPAM = Department of Protected Area Management, GASI = General Agency for Specialized Inspection, EIA = Environmental Impact Assessment, EMP = Environmental Management Plan, IEE = Initial Environmental Examination, KfW = Kreditanstalt für Wiederaufbau, MET = Ministry of Environment and Tourism, SGAP = Social and Gender Action Plan, PIU = Project Implementation Unit, PSC = project steering committee

C. Potential Impacts and Mitigation Measures

7. Tables EMP-2 and EMP-3 summarize the potential impacts of the project components during all project phases, including preparatory actions common to all sites (before construction), and site-specific actions in the construction and operation phases. The required mitigation measures will be incorporated into the detailed design, bidding documents, construction contracts and operational management manuals, to be prepared by the PIU and MET. The effectiveness of the measures will be evaluated based on regular environmental inspections and monitoring, to determine if they should be continued, improved, or adjusted. For operational phase impacts, it is assumed that all elements of the proposed operational systems, such as waste management, sanitation systems, use of renewable energy, etc. are in place and fully functional (as designed); they are not, therefore, repeated as mitigation measures in the table below.

Table EMP-2: Preparatory actions (before construction) common to all sites Preparatory Actions Common to All Sites Detailed Design Stage Institutional  At least 2 months before site preparation: (i) reconfirm the full-time status of the MET Strengthening for Environmental Officer for the project; (ii) appoint PIU Environment Safeguard Officer. EMP  Organize and conduct training on the EMP for relevant agencies. Implementation  Responsibility of PIU and MET. Detailed  The detailed engineering designs should be prepared in close coordination with MET Engineering and the aimags and protected area authorities, to ensure a correct reconciliation of Designs the designs to site-specific conditions, as identified in the IEE.  Continue consultations with local stakeholders, as designs are firmed-up and sites are confirmed and surveyed.  Responsibility of PIU and MET. Updating EMP  Update mitigation measures defined in this EMP based on final detailed designs.  Submit the updated EMP to ADB for review.  In case of major changes of project locations and/or additional physical components, determine whether the change is minor or major and consult with ADB.  Responsibility of PIU, MET, ADB. Disclosure of the  Hard copies of the EMP in English and Mongolian languages will be provided to the project EMP executing agency, the environment departments of Bayan-Ulgii, Khovd, and Uvs aimags, the soum and bagh governments of each participating soum, and the key community groups in each soum that will be involved in the project, including the 13 community-based organizations to be established for the project. Construction Preparation 154 Appendix 1

Preparatory Actions Common to All Sites Environmental  Prior to site preparation and works, ensure that the contractor initiates environment Monitoring Plan monitoring in accordance with the EMP monitoring plan.  Initiate monitoring to set the pre-construction baseline for each site.  Responsibility of PIU and MET. Bidding and  Mitigation measures in the EMP are incorporated into all bidding documents on a site- Contract by-site basis. Documents  Bidding documents are sent to ADB for review.  Prepare environmental contract clauses for contractors.  Ensure that the contractors recruited conform with, and implement, the domestic Environmental Safeguard Clauses for Civil Works Contracts; including that each contractor shall have a qualified environment specialist on the team, as needed (depending on the site and scale of works).  Ensure that the contractors fulfill all additional domestic safeguard requirements that are not otherwise covered in this EMP.  Responsibility of PIU and MET. EMP Training  Provide training on construction environnemental management, implementation, and supervision, to contractors, in accordance with the training plan in this EMP.  Emphasize the strict prohibition on catching, consuming, and trading protected species.  Responsibility of PIU and MET. Establish GRM  Responsibility for GRM implementation is assigned to MET and PIU environmental and social specialists and soum government focal points.  All agencies aware of, and trained in, the GRM, and will help support the environmental and social officers when necessary.  Key contact details for the GRM (phone number, fax, address, email) provided on the MET, PIU and/or soum government public websites, and information boards at construction sites.  Responsibility of PIU and MET. Pre-Construction  Confirm that all site locations comply with the approved project locations. Especially Site Planning for the project sites in protected areas, confirm that the site locations are exactly consistent with the geographic coordinates provided in Appendix 7 (and also in Appendix 1 of the Project Administration Manual).  Site demarcation and survey for physical cultural resources, trees (for retention), slope conditions and drainage, and optimal access (for site construction planning).  To be implemented by contractors and PA/ aimag staff.  To be supervised by PIU, PA authorities, and aimag regulators. Location of Work  Prior to works, identify specific locations for camps (if they are needed) and assess Camps these for adequacy of construction requirements and to minimize ecological and social impacts, especially to avoid existing facilities at or near these sites.  Confirm the appropriate access routes for vehicles and equipment (least-impact existing routes to the extent possible).  Obtain approval from soum government and protected area authorities for the locations.s  Responsibility of Contractor, PA Authorities, and PIU. Community  Will provide small loans for community-led tourism activities in the project soums. All revolving funds activities will comply with the safeguard screening criteria specified in Appendix 3.  PIU environment safeguard specialist and PIU social, gender, and civil society specialist will (i) train the community revolving fund committees and community- based organizations to screen all proposed loan applications against the criteria in Appendix 3, (ii) undertaking the screening of all loan applications for at least the first year of implementation of the community revolving funds, (iii) assess the capacity of these entities to undertake the screening, and pending the assessment, continue to conduct periodic (random) screening throughout project implementation. Appendix 1 155

Preparatory Actions Common to All Sites Public  All project works will be preceded by consultations with local communities to explain consultations and discuss the scheduled works. The consultations will be held in Mongolian or Kazakh languages, reflecting local community requirements, at times and locations suitable to the communities including poor and vulnerable residents.  Any concerns received will be documented and measures developed if needed to address these, in the designs and/or the EMP. ADB = Asian Development Bank, EIA = environmental impact assessment, EMP = environmental management plan, IEE = initial environmental examination, MET = Ministry of Environment and Tourism, PIU = project implementation unit.

Table EMP-3: Direct Impacts and Required Mitigation Measures During the Construction and Operation Phases POTENTIAL DIRECT IMPACTS REQUIRED MITIGATION MEASURES BAYAN-ULGII AIMAG Altai Tavan Bogd National Park (ATBNP) and Petroglyphic Complexes of the Mongolia Altai (PCMA) OIGOR Entrance Fee collection station (parking, market, information point, and toilets). (Small river 200 meters to the south) Construction Phase: Implement: contractors. Supervise: PIU, ATBNP authority, Aimag regulators. Generation of dust Worker PPEs; covers for exposed sediments Construction noise Worker PPEs; no construction at night Issues with site drainage and mud slurry Need diversion channels and silt fences (downstream going to the river edge, south side) at the site, to prevent water/sediment slurry in the area and drainage to the river Risk of disturbance of wildlife No construction at night Workers poaching, collecting plants Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plant Operation Phase: Implement: ATBNP staff. Supervise: ATBNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences (downstream quality risks, and site aesthetics. edge) at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will be at least 200 meters from the river and pumped clean regularly. Regular clearing of solid waste Risk of habitat degradation and disturbance Set a capacity limit of 80 visitors/day (planned parking lot of wildlife. capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. Ongoing risk of poaching, plant collection, Regular inspections / patrols to reduce risk of collection illegal trade. and/or trade of flora, fauna, and/or PCR; link reporting with existing aimag and MET monitoring systems. All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. SHIVEET KHAIRKHAN Entrance Fee collection station (parking, market, information point, and toilets). (River 200 meters to the south) 156 Appendix 1

POTENTIAL DIRECT IMPACTS REQUIRED MITIGATION MEASURES Construction Phase: Implement: contractors. Supervise: PIU, ATBNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: ATBNP staff. Supervise: ATBNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences (downstream quality risks, and site aesthetics. edge) at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will be at least 200 meters from the river and pumped clean regularly. Regular clearing of solid waste

Ongoing risk of poaching, plant collection, Regular inspections / patrols to reduce risk of collection illegal trade. and/or trade of flora, fauna, and/or PCR; link reporting with existing aimag and MET monitoring systems.

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. TSAGAAN SALAA, BAGA OIGOR (Petroglyph information center (toilets, parking, trail). (River 200 meters to the south) Appendix 1 157

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent Disturbance/ collection of PCR. wildlife poaching and collection of rare plants, as well as collection of PCR. Operation Phase: Implement: ATBNP staff. Supervise: ATBNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences (downstream quality risks, and site aesthetics. edge) at the site, to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will be at least 200 meters from the river and pumped clean regularly. Regular clearing of solid waste

Ongoing risk of poaching, plant collection, Regular inspections / patrols to reduce risk of collection illegal trade; collection of PCR. and/or trade of flora, fauna, and/or PCR; link reporting with existing aimag and MET monitoring systems.

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. ATB MOUNTAIN Mountaineer site (cooking cabin, toilets). Construction Phase: Implement: contractors. Supervise: PIU, ATBNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: ATBNP staff. Supervise: ATBNP authority and Aimag regulators. 158 Appendix 1

POTENTIAL DIRECT IMPACTS REQUIRED MITIGATION MEASURES Ongoing issues with water quality risks and Dry toilets are not near any streams or rivers and will be site aesthetics. pumped clean regularly. Regular clearing of solid waste

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. ATB MOUNTAIN Tourist basecamp (cooking cabin, toilets, parking). Construction Phase: Implement: contractors. Supervise: PIU, ATBNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site, to prevent water/sediment slurry in the area.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: ATBNP staff. Supervise: ATBNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site, to quality risks, and site aesthetics. prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Dry toilets will not be near any streams or rivers and will be pumped clean regularly. Regular clearing of solid waste

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES KHOVD AIMAG Khovd Tourist Street: Buildings, parking, (power, water, heating from aimag center). Construction Phase: Implement: contractors. Supervise: PIU, Khovd authority, Aimag regulators. Appendix 1 159

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site, to prevent water/sediment slurry in the area.

Inappropriate sourcing of rock aggregate for Aggregates will only be sourced from borrow or quarry access road leads to site damage and/or sites which are (i) legally approved, (ii) subject to existing soil and water pollution. O&M arrangements, and (iii) have clear procedures in place for site closure and restoration.

Traffic congestion, over 1-2 summer Create construction vehicle access from the N/S side construction seasons. street, rather than the main W/E road. Operation Phase: Implement: Khovd staff. Supervise: Khovd authority and Aimag regulators. Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site, to aesthetics. prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Regular clearing of solid waste

Higher noise levels and increased Maintain the 740 visitors/day capacity limit (planned frequency of traffic congestion, at times. parking lot capacity; turn people away when filled). Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity. Rock Art and Nomadic Culture Center (RANCC): Buildings; parking; power from grid and solar; water supply (on-site well); heating; access road; on-site wastewater treatment plant (WWTP). Construction Phase: Implement: contractors. Supervise: PIU, Khovd authority, Aimag regulators. 160 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Over possibly 2 construction seasons: Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry Need diversion channels and silt fences at the site (site and access road). (southern and western edges), to prevent water/sediment slurry in the area. Silt fences along new access road. Cross-road culverts for road drainage to be installed.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Regular inspections / patrols to reduce risk of collection Disturbance/ collection of PCR. and/or trade of flora, fauna, and/or PCR; link reporting with existing aimag and MET monitoring systems.

Establishment of ground source heat pump  Restrict work footprint to <50 m2. – soil or water pollution due to poorly  Restrict borehole diameter to <50 cm. implemented drilling.  Drilling will be conducted with a minimum of water use; and application of high-quality grout, to minimize the risk of injection and diffusion of pollutants into subsurface soil and groundwater.  Drilling waste from the borehole (cuttings and mud) will be screened and dried, then disposed onsite as part of soil reuse.  Only a closed-loop system will be employed for the GSHP, to avoid the release of water into the subsurface and minimize the risk of pollution of groundwater. Operation Phase: Implement: Khovd staff. Supervise: Khovd town authority and Aimag regulators. Appendix 1 161

Higher noise levels and increased traffic Maintain the 740 visitors/day capacity limit (planned congestion along the access road at times. parking lot capacity; turn people away when filled). Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity.

Risk of disturbance of wildlife. Along the new RANCC access road: add speed-limit sign and wildlife sign (indicating caution in case of wildlife crossing the road). Maintain the 599 visitors/day capacity limit (planned parking lot capacity; turn people away when filled).

Unsustainable water extraction from the (i) Assess sustainability of groundwater use based on onsite well. best available data, including assessment of aquifer size and recharge rate, existing extraction demand, and cumulative demand including the site requirements; (ii) install cost-effective water meter at each water well pump; (iii) monitor groundwater extraction volumes and water table depth on a quarterly basis; (iv) include the monitoring results in the environment monitoring reports to ADB (see EMP Section D); (v) in the event that groundwater availability appears to be decreasing, inform and discuss with MET and ADB; (v) prepare and submit corrective time-based actions.

Inadequate O&M of onsite WWTP, leading (i) Ensure selection of the wastewater treatment model to soil and/or water pollution, odor, and/or complies with the project-approved design, which is hazards to worker health and safety. selected for operational reliability, (ii) conduct intermittent monitoring of treated wastewater quality to ensure the target treatment standard is complied with, (iii) daily vigilance by staff on odor emissions, (iv) ensure only trained operators have access to the WWTP and are responsible for O&M, (v) locate the WWTP in a sealed facility behind the center, off-limits to the public, (vi) monitoring of the treated wastewater for specific parameters (Tables EMP-4 and EMP-5).

Ongoing risk of poaching, plant collection, Regular inspections / patrols to reduce risk of collection illegal trade; collection of PCR (in hills near and/or trade of flora, fauna, and/or PCR; link reporting RANCC). with existing aimag and MET monitoring systems.

Malfunctions with grid electricity, solar Closure of systems and facility if there are service power, and/or heating problems (to avoid cascading issues). Sun incidence and solar power output to be monitored for effectiveness (panels cleaned).

O&M of ground source heat pump –  Regular checking of machinery condition, valve inadequate O&M leads to reduced heating pressure, and flow speed to ensure that the closed loops containing water and antifreeze are intact. 162 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES capacity and reduced GHG emission  Antifreeze will be changed only occasionally, pending savings. regular performance checking.  Antifreeze is a hazardous waste. It will be registered with the Aimag Environmental Department. Prior agreement will be made for safe disposal as required by the Law of Mongolia on Waste (2017). Disposal (if and when needed) will be at the Khovd Aimag central landfill, at the designated hazardous waste site.  In parallel, ADB’s ASDIP will support the upgrade of the aimag landfill, which will improve the safe treatment and disposal of hazardous waste.  Emergency preparedness and response. In the event that O&M detects loss of pressure (i.e., which may indicate leakage): (i) the system will be stopped automatically, (ii) water will be evacuated to a bypass tank via the loop valve in the service room, (iii) estimate and report to the aimag authority the volume of fluid (if any) that may have leaked to the soil, (iii) dispose the drained fluid (see above), (iv) do not re-use the pump until the piping has been fixed, refilled, and tested by qualified experts and is confirmed not to leak. Khar Us Nuur National Park (KUNNP) At the entrance of KUNNP Fee collection station (parking, toilets, information point). Construction Phase: Implement: contractors. Supervise: PIU, KUNNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences (eastern side) at the site, to prevent water/sediment slurry in the area.

Risk of disturbance of wildlife. No construction at night.

Ongoing risk of poaching, plant collection, Regular inspections / patrols to reduce risk of collection illegal trade. and/or trade of flora, fauna, and/or PCR. Signs on conservation of birds. Information point to define lake shoreline access area (to the east) to prevent trampling in reeds. Link reporting with existing aimag and MET monitoring systems.

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. YUMIIN KHOOLOI Campsite hub and birdwatching tower (toilets, parking, information point, markets, ranger station). (Extensive wetlands in the connection between the two lakes to the south; 500 meters away) Construction Phase: Implement: contractors. Supervise: PIU, KUNNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking of wildlife. The birdwatching tower will lot capacity; turn people away when filled). increase the number of people on the No informal businesses in the vicinity. shoreline, with possible disturbance of No off-trail trekking in the area. birds. No off-road travel in area. Signage on conservation of birds in the area. Define lake shoreline access area to prevent trampling in reeds (better to prevent it altogether; restrict it to access to tower).

All of the above issues. Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. ARGALANT, KHAR LAKE Toilets and birdwatching tower. (Extensive wetlands to the west and south; 800 meters away) Construction Phase: Implement: contractors. Supervise: PIU, KUNNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry, Need diversion channels and silt fences at the site (south drainage to lake (potential negative affect side), to prevent water/sediment slurry in the area and on water quality, but 800 meters away; drainage to lake. birdwatching tower will be closer).

Risk of disturbance of wildlife. No construction at night.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (south side), to prevent water/sediment slurry in the area and drainage to lake. Dry toilets will be 800 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

All of the above issues. Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. Tsenkher cave (TSC): (1) At cave entrance, (2) Intersection between main trail and cave ascent trail. Information Center; parking; toilets. 2 Information Points (interpretive signs); trail upgrading. (Stream 500 meters to the north) Construction Phase: Implement: contractors. Supervise: PIU, TSC authority, and Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry, Need diversion channels and silt fences at the site (north drainage to stream (negative affect on side), to prevent water/sediment slurry in the area and water quality, but 500 meters away). drainage to the stream.

Risk of disturbance of wildlife at site. No construction at night.

Workers poaching, collecting plants; Awareness-raising and supervision of workers to prevent collection of PCR. wildlife poaching and collection of rare plants, as well as collection of PCR.

Increased vehicle traffic (construction Control vehicle registration for site entry; prohibit vehicle trucks) across the Mankhan Nature traffic at night; set speed limits (20 km/hour); turn off Reserve valley, with risk to saiga antelope – equipment and vehicles when not in use; limit engine possible disturbance and dispersal. idling to a maximum of 5 minutes. Operation Phase: Implement: TSC staff. Supervise: TSC authority and Aimag regulators. 166 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (north side), to prevent water/sediment slurry in the area and drainage to the stream. Prevent runoff from parking area (gravel and drainage channels required; north side). Dry toilets will be 500 meters from stream and will be pumped clean regularly. Regular clearing of solid waste

Increased visitor vehicle traffic across the Vehicle access from the highway turnoff to the cave to be Mankhan Nature Reserve valley, with risk to regulated; e.g., all vehicles at the junction of Saiga – possible disturbance and dispersal. highway/track to the cave to be registered. In lieu of registering vehicles, use of a dedicated electric vehicle (bus) running at regular intervals from the main road to the cave. No driving at night ; speed limit of 20 km/hr. Gravel-top the road to prevent dust. No off-road driving between the main road junction and TSC, to minimize disturbance (year-round). RANCC to include information about threatened species around TSC. Turn off equipment and vehicles when not in use; limit engine idling to a maximum of 5 minutes. Guided tours to TSC to include information about the Saiga antelope and other species – so that visitors understand the restrictions on off-road access and gain greater awareness of the cultural and natural values around the site.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES UVS AIMAG Uvs Tourist Street: Buildings, parking (power, water, heating from aimag center). Construction Phase: Implement: contractors. Supervise: PIU, Soum authority, Aimag regulators. Appendix 1 167

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Generation of dust. Worker PPEs ; covers for exposed sediments.

Construction noise. Worker PPEs ; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels, catchment drain, and silt fences at the site (southern side), to prevent water/sediment slurry in the area.

Traffic congestion, over 1-2 summer Create construction vehicle access from the side street construction seasons. (western side), rather than the main W/E road. Operation Phase: Implement: Ulaangom staff. Supervise: Soum authority and Aimag regulators. Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site aesthetics. (south side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required). Regular clearing of solid waste

Maintain a visitor capacity limit of 539/day (planned Higher noise levels and increased parking lot capacity; turn people away when filled). frequency of traffic congestion, at times. Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity. Uvs Tourism Complex: Buildings; parking; power from grid and solar; water supply (onsite well); heating at site; access road; on-site wastewater treatment plant Construction Phase: Implement: contractors. Supervise: PIU, Soum authority, Aimag regulators. 168 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Over possibly 2 construction seasons: Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry Need diversion channels, drain, and silt fences at the site (site and access road). (eastern edges), to prevent water/sediment slurry in the area. Silt fences along new access road. Cross-road culverts for road drainage to be installed.

Risk of traffic congestion on road to lake. Create construction vehicle access from the north side dirt track, rather than the main road.

Establishment of ground source heat pump  Restrict work footprint to <50 m2. – soil or water pollution due to poorly  Restrict borehole diameter to <50 cm. implemented drilling.  Drilling will be conducted with a minimum of water use; and application of high-quality grout, to minimize the risk of injection and diffusion of pollutants into subsurface soil and groundwater.  Drilling waste from the borehole (cuttings and mud) will be screened and dried, then disposed onsite as part of soil reuse.  Only a closed-loop system will be employed for the GSHP, to avoid the release of water into the subsurface and minimize the risk of pollution of groundwater. Operation Phase: Implement: Ulaangom staff. Supervise: Soum authority and Aimag regulators. Appendix 1 169

Ongoing issues with site drainage and site Maintain diversion channels, catchment drain, and silt aesthetics. fences at the site (eastern side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required, going to the east). Maintain roadside ditches and cross-road culverts. Regular clearing of solid waste

Higher noise levels and increased Maintain the 436 visitors/day capacity limit (planned frequency of traffic congestion, at times, parking lot capacity; turn people away when filled). disrupting traffic to the lake area. Logical management of parking spaces to prevent congestion. No informal businesses in the vicinity.

Malfunctions with grid electricity, solar Closure of systems and facility if there are service power, and/or heating. problems (to avoid cascading issues). Sun incidence and solar power output to be monitored for effectiveness (panels cleaned).

O&M of ground source heat pump –  Regular checking of machinery condition, valve inadequate O&M leads to reduced heating pressure, and flow speed to ensure that the closed capacity and reduced GHG emission loops containing water and antifreeze are intact. savings.  Antifreeze will be changed only occasionally, pending regular performance checking.  Antifreeze is a hazardous waste. It will be registered with the Aimag Environmental Department (AED). Prior agreement will be made for safe disposal as required by the Law of Mongolia on Waste (2017). Disposal (if and when needed) will be at the Uvs Aimag central landfill, at the designated hazardous waste site. 170 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES  In parallel, ADB’s ASDIP will support the upgrade of the aimag landfill, which will improve the safe treatment and disposal of hazardous waste.  Emergency preparedness and response. In the event that O&M detects leakage in the ground source heat pump: (i) immediately halt operation of the pump, (ii) extract and drain all fluid in the closed loop into a sealed container, to prevent any further leakage into the soil. Maintain a container of sufficient volume onsite, (iii) estimate and report to the aimag authority the volume of fluid that may have leaked to the soil, (iii) dispose the drained fluid (see above), (iv) do not re-use the pump until the piping has been fixed and tested by qualified experts and is confirmed not to leak. Khan Khukhii National Park (KKNP) KHYARGAS LAKE Fee collection station (markets, information point, toilets, parking). (Lake 200 meters to the south) Construction Phase: Implement: contractors. Supervise: PIU, KKNP authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: KKNP staff. Supervise: KKNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (south side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; south side). Dry toilets will be 200 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. SOGOO LAKE Campsite (information point, toilets, parking). (Lake 200 meters to the west) Construction Phase: Implement: contractors. Supervise: PIU, KKNP authority, Aimag regulators. Appendix 1 171

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: KKNP staff. Supervise: KKNP authority and Aimag regulators. Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (west side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 200 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking of wildlife. Some risk of disturbance of lot capacity; turn people away when filled). mammals in the area, especially forest No informal businesses in the vicinity. patches to the east. No off-trail trekking in the area. No off-road travel in area. Noise reduction (barriers) around parking area; wildlife signage.

All of the above issues Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. Uvs Nuur Strictly Protected Area (UVSPA) UUREG LAKE Campsite (information point, toilets, parking) (Lake is 425 meters to the west) Construction Phase: Implement: contractors. Supervise: PIU, UVSPA authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Risk of disturbance of wildlife. No construction at night.

Workers poaching, collecting plants. Awareness-raising and supervision of workers to prevent wildlife poaching and collection of rare plants. Operation Phase: Implement: UVSPA staff. Supervise: UVSPA authority and Aimag regulators. 172 Appendix 1

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (west side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 425 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

Risk of habitat degradation and disturbance Set a capacity limit of 40 campers/day (planned parking of wildlife. lot capacity; turn people away when filled). No informal businesses in the vicinity. No off-trail trekking in the area. No off-road travel in area. Noise reduction (barriers) around parking area; wildlife signage. Define lake shoreline access area to prevent trampling in the reeds.

All of the above issues. Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. TES, SALT LAKE Campsite (information point, fee collection, market, toilets, parking) (Lake is 300 meters to the west) Construction Phase: Implement: contractors. Supervise: PIU, UVSPA authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Campsite drainage and mud slurry, Need diversion channels and silt fences at the site (west drainage to lake (possible negative affect side), to prevent water/sediment slurry in the area and on water quality, lake is 300 meters away). drainage to lake.

Risk of disturbance of wildlife. No construction at night.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage, water Maintain diversion channels and silt fences at the site quality risks, and site aesthetics. (west side), to prevent water/sediment slurry in the area and drainage to lake. Prevent runoff from parking area (gravel and drainage channels required; west side). Dry toilets will be 300 meters from lake and will be pumped clean regularly. Regular clearing of solid waste

All of the above issues. Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. UVS LAKE Existing entrance point: (market, ranger station, parking, information center). (Lake is 2 km to the northeast) Construction Phase: Implement: contractors. Supervise: PIU, UVSPA authority, Aimag regulators. Generation of dust. Worker PPEs; covers for exposed sediments.

Construction noise. Worker PPEs; no construction at night.

Issues with site drainage and mud slurry. Need diversion channels and silt fences at the site (east side), to prevent water/sediment slurry in the area.

POTENTIAL DIRECT IMPACTS PROPOSED MITIGATION MEASURES Ongoing issues with site drainage and site Maintain diversion channels and silt fences at the site aesthetics. (east side), to prevent water/sediment slurry in the area. Prevent runoff from parking area (gravel and drainage channels required; east side). Dry toilets will be 2 kms from lake and will be pumped clean regularly. Regular clearing of solid waste

All of the above issues. Awareness raising and signs for tourists and residents on (i) protected area regulations, (ii) correct use of dry toilets. KKNP = Khan Khukhii National Park, MET = Ministry of Environment and Tourism, PCR = physical cultural resources, PIU = project implementation unit, RANCC = Rock Art and Nomadic Culture Center, UVSPA = Uvs Nuur Strictly Protected Area.

Mitigation measures to be applied to all project sites

8. The previous table clarified the potential environmental impacts associated with project activities at each site, and the required mitigation measures and approaches. Regardless of the site-specific circumstances, the experience with construction in Mongolia has allowed development of a “toolbox” of measures and approaches that have been proven to reduce environmental and social risks during construction and facility installation, and to permit operation of infrastructure without undue environmental consequences. These are itemized here, and will be included as an annex to any construction contracts or agreements for infrastructure and facilities being constructed with project support (these have been adapted from the Phase 1 Sustainable Tourism Project).

9. Protection of permafrost. While there are interpolated maps of permafrost distribution in western Mongolia (see Section IV), these cannot be applied with any certainty to individual project sites. Sites in Bayan-Ulgii and Khovd may be characterized by either continuous or sporadic patches of permafrost, whereas sites in Uvs may have less incidence of permafrost, with isolated or sparse patches. Prior to finalized design and construction works, test pits or cores will be required at each site to determine the incidence of permafrost, and then the facility design and construction can proceed accordingly. Where permafrost is an issue, the following approaches have been proposed in other projects in Mongolia. Shallow or slab foundations and heat-resistant materials can be used in areas where there may be a concern. The objective is to avoid mechanical damage to the permafrost layer. This includes the use of specialized heat-resistant polystyrene materials on slopes where cuts are required to accommodate steep angles, an elevated road base, and the use of geocell mats with aggregates (although this is a new technology in Mongolia and not yet widely used). There will be few roadworks, but some parking areas may encounter permafrost issues. These measures will avoid physical damage to the permafrost and will reduce heat convection into the soil during operation. Protection of the permafrost will reduce road corrugation resulting from thawing of the permafrost. Note that most Appendix 1 175 small works in the protected areas will require minimal grading and excavation, all of which can be above the permafrost layer. The construction works associated with the Tourist Streets and Uvs Tourism Complex and RANCC will require deeper foundations; permafrost mitigation as described above may be required, subject to site-specific surveys.

10. Responsible sourcing of rock and soil materials for construction. For the Khovd and Uvs tourist streets, rock art and nomadic cultural center, and Uvs tourism complex, construction of the access roads and/or buildings will require rock aggregate, to be sourced from quarries. Smaller volumes of rock and soil might also be needed for construction of some of the small public facilities in the protected areas. Inappropriate sourcing from unlicensed sites could lead to habitat damage, soil erosion and/or soil and water pollution. To avoid these risks all project works will comply with the following measures: (i) Aggregates will only be sourced from borrow or quarry sites which are (i) legally approved, (ii) subject to existing O&M arrangements, and (iii) have clear procedures in place for site closure and restoration. (ii) No rock or soil extraction or quarrying will occur within any protected area or other type of protected site, natural habitat, or critical habitat.

11. Management of exposed sediments and soils. Risks associated with sediment mobilization will be managed through strict on-site measures including: stabilization of exposed surfaces and spoil piles with ditches and/or sheeting; minimizing the duration that surfaces are exposed; and, timing works for early spring and autumn, when rains are minimal and the ground is firm.

12. Prevention of soil contamination. To reduce the risk of soil contamination from construction machinery, contractors must do the following: (i) store petroleum products, hazardous materials and wastes on impermeable surfaces in secured, bermed, and covered areas; (ii) remove all construction wastes from the work sites to approved waste disposal sites; (iii) establish emergency preparedness and response actions; (iv) provide spill cleanup measures and equipment at each construction site; and, (v) train contractors and crews in emergency spill response procedures.

13. Soil erosion control. Before construction, contractors will include site-specific drainage and soil erosion control plans as part of their site-specific EMPs. These will include the following actions, where relevant: (i) Plan and implement construction in staged sections, with one section completed and stabilized before beginning the next. (ii) Minimize open excavation areas. (iii) Construct intercepting channels and drains to prevent runoff entering construction sites and to divert runoff from sites to existing drainage or open ground. (iv) Stabilize all cut slopes, embankments, and other erosion-prone working areas. (v) Stabilize all earthwork disturbance areas within 15 days after earthworks are completed. (vi) Provide temporary detention ponds or containment to control silt runoff. (vii) Strip and stockpile topsoil, and cover (by geotechnical cloth) or seed temporary soil stockpiles. (viii) Limit construction and material handling during periods of rains and high winds. (ix) Properly slope or re-vegetate disturbed surfaces, e.g., cut banks. (x) Landscaping will only use native plant species. (xi) Construction camps and storage areas will be located to minimize the land area required.

14. Prevention of water pollution. The following measures will be implemented: 176 Appendix 1

(i) Timing of site-specific construction to assess risk of snowmelt discharges (May-June) and peak rainfall (August) and schedule works around these times as far as possible. Construction in other months imparts much lower construction risk, as the ground is hard, infiltration is limited, and there will be limited runoff from work sites. (ii) Plan and implement construction in staged sections, with one section completed and stabilized before beginning the next; and minimize open excavation areas (as noted previously). (iii) Construct intercepting channels and drains to prevent runoff entering construction sites and to divert runoff from sites to existing drainage or open ground (as noted previously). (iv) Contractors must develop actions for control of oil and other dangerous substances as part of their site EMPs. (v) Wastewater will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil. (vi) All sites for washing of construction equipment will be equipped with water collection basins and sediment traps. (vii) Fuel storage, machinery maintenance workshop and vehicle cleaning areas will be stationed at least 200 m from waterbodies. (viii) Storage facilities for fuels, oil, and other hazardous materials will be within secured areas on impermeable surfaces and provided with bunds/berms and cleanup installations. (ix) Contractors’ fuel suppliers must be properly licensed and will follow established protocol for transferring fuel. (x) Labor camps (if needed) will be located at least 200 m from waterbodies. (xi) Portable toilets and on-site wastewater pre-treatment systems will be installed at construction camps (if needed) along with proper maintenance protocols.

15. Management of air quality. Standard mitigation measures to reduce impacts on air quality are as follows: (i) Spraying water on exposed construction sites where fugitive dust is being generated. (ii) Locating cement mixers >500 m downwind from the nearest residential areas and other sensitive receptors. (iii) Dust suppression (covers and barriers) near sensitive receptors. (iv) Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emissions. (v) Covering materials during truck transportation, in particular, fine material, to avoid spillage or dust generation. (vi) Maintenance of project vehicles (engines) to minimize greenhouse gas emissions. (vii) Turn off equipment/ vehicle when not in use; limit engine idling to a maximum of 5 minutes. (viii) For odor: disinfection / deodorization / sanitizing affected latrines prior to cleaning; provision of adequate sanitation facilities; and, strict enforcement of sanitation practices; prompt disposal of organic and hazardous wastes. (ix) Prohibit burning of wastes. (x) Timely monitoring of air quality and inspections during construction.

16. Noise management. The following measures will be implemented to comply with noise standards: (i) Properly maintain construction vehicles and machinery, to minimize noise. (ii) Apply noise reduction devices and methods for high noise equipment operating within 150 m of sensitive sites (i.e., tour camps and residential gers). (iii) Locate high-noise activities (e.g., concrete-mixing) >0.5 km from sensitive areas, if possible. (iv) Prohibit operation of high-noise machinery, and movement of heavy vehicles along urban Appendix 1 177

and village roads, between 18:00 and 08:00. (v) Place temporary noise barriers around noise sources during construction, if needed. (vi) Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation. (vii) Conduct regular interviews with residents/villagers adjacent to construction sites to identify noise disturbance. Community feedback will be used to adjust work hours if there are noisy conditions.

17. Waste management. Covered garbage bins will be installed at worker camps and construction areas. Waste separation and recycling should be implemented to the extent possible. The construction contractors will be responsible to transport solid domestic and construction waste and dispose of these at approved sites. Waste collection and disposal methods will follow strict procedures to ensure that only non-hazardous waste is disposed. Hazardous wastes (discarded fuel, oil, spills) will be stored in sealed drums and transported to the official aimag landfill site in accordance with national regulations.

18. Prevention of disturbance to traffic and pedestrian flows. The contractors/builders will be required to undertake the following. (i) Preparation and implementation of a traffic management plan, and coordination with local authorities and communities (for the tourism complexes and the tourist streets, mostly). (ii) Information disclosure: villagers, residents and businesses will be informed in advance through media and information boards at construction sites of the construction activities, and give the dates and duration of expected disruption. (iii) Public consultations on work phasing and schedules, anticipated access blocking, provisions for safe access for blocked properties and temporary parking for blocked garages/driveways. (iv) Posting of billboards on road/lane closure, traffic rerouting plan at strategic places, at least 1 week prior to works (this probably only applies to the tourist streets). (v) Posting of traffic (flag) persons during entire working hours, if necessary. (vi) Spreading out the schedule for materials delivery in non-peak hours. (vii) Efficient management of truck arrival/ departure. (viii) For power utilities, coordinate with the respective power company and substation and set contact arrangements in case of accidental damage of the power lines; establish advance notice in case of any planned service interruption. (ix) Timing of works; to be conducted in September to June as far as possible, the off-peak season in which visitor numbers are low.

19. Management of Environment, Health, and Safety (EHS) aspects. Contractors/builders will prepare an environmental, health and safety management plan, which will include the following. (i) Construction site protection: clear signs will be placed at construction sites in view of the public, informing people about the project GRM, and warning people against potential dangers such as moving vehicles, hazardous materials, and excavations, and raising awareness on safety issues. Heavy machinery will not be used at night. All sites will be secured, disabling access by the public through appropriate fencing, whenever appropriate. (ii) Provide a clean and sufficient supply of fresh water for construction sites and camps. (iii) Provide adequate number of latrines at construction sites and work camps and ensure that they are cleaned and maintained in a hygienic state. (iv) Garbage receptacles at construction sites and camps will be set up, which will be 178 Appendix 1

periodically cleared to prevent outbreak of diseases. (v) Provide personal protection equipment (PPE), e.g., safety boots, helmets, gloves, protective clothing, goggles, ear plugs, will be provided to all workers. (vi) Emergency preparedness and response plan for accidents and emergencies, including environmental and public health emergencies associated with hazardous material spills and similar events. These plans will be submitted to the local soum authorities for review and approval. Emergency phone link with local clinics will be established. Each worker camp will have basic first aid kits. (vii) A records management system that will store and maintain easily retrievable records regarding loss or damage will be established. It will include documenting and reporting of occupational accidents, diseases, and incidents. The records will be reviewed during compliance monitoring and audits. (viii) Occupational health and safety matters will be given a high degree of publicity to all work personnel, and posters will be displayed prominently at construction sites. (ix) All workers will be given basic training in sanitation, general health and safety matters, and work hazards. An awareness program for HIV/AIDS and other communicable diseases will be implemented for workers and the local communities. (x) Measures to avoid or immediately halt sexual exploitation, abuse and harassment. Strict requirements will be included in all personnel contracts and on-site workplace requirements for zero-tolerance of abuse or harassment. This will include immediate investigation of any report or complaint, and immediate dismissal when abuse or harassment is confirmed. (xi) Measures for safety and resilience to COVID-19 described in Appendix 3 will integrated in the contractor health and safety plans and be strictly implemented. (xii) Core labor standards will be implemented. Civil works contracts will stipulate priorities to: (i) employ local people for works; (ii) ensure equal opportunities for women and men; (iii) pay equal wages for work of equal value and pay women’s wages directly to them; and (iv) not employ child or forced labor.

20. Management of physical culture resources. For all civil works the following procedures shall be conducted: (i) Prior to any works, full site inspections are conducted by the MET, relevant national and/or aimag agencies and/or other experts as needed, to assess the presence of physical cultural resources, including buried artefacts. (ii) For these site inspections, each site will be demarcated before any works. At this stage, access by project workers and vehicles will be prohibited. (iii) A drone survey (if needed) and detailed ground survey will be undertaken to document and preserve all physical culture resources. (iv) Standard chance-find procedures will be applied, including documentation of finds, work stoppage, and notification of appropriate authorities to determine next steps. (v) No civil works will proceed at the site until clear next steps and endorsement to proceed have been issued by the relevant national and/or aimag agencies.

21. Minimizing disruption of existing public services to communities. The works contractors and construction supervision companies will make best efforts to minimize any disruption to any existing power, water and wastewater services to communities caused by the civil works under the project. The contractors and construction supervision companies will do the following to minimize such risks: (i) Prior to any works, identify whether there are existing public services to communities in the vicinity of the works site, including: power supply, water supply, wastewater pipelines, drainage canals, and/or solid waste collection services. Appendix 1 179

(ii) Assess the risks that the project works may cause to disruption of these services e.g., due to damage to buried power or water supply lines; and, prevention of solid waste vehicles accessing residential areas due to road closure for the project works. (iii) Send notifications to the relevant aimag and soum agencies to obtain endorsement for the planned disruptions in services. (iv) Send notifications to all affected communities and other stakeholders as relevant at least three days prior to any planned interruptions of such public utilities that are caused by the civil works under the project. (v) During the planned disruptions, provide regular updates to the aimag and soum agencies and communities, to ensure they are well informed of progress and when the services will resume. (vi) In the event of accidental damage or disruption of services, immediately inform the relevant aimag and/or soum agencies, PIU, and communities. Identify immediate solutions and time-based actions to resolve the issue.

22. Post-construction site rehabilitation. The following actions will be implemented by the contractors, with monitoring and support by the detailed engineering design and construction supervision companies (DED/CSC).

(i) Waste removal. Contractors will be responsible to ensure all waste materials generated during works, including construction waste and sewage, is removed regularly during construction and at the completion of works. (ii) Contractors will identify the nearest official landfill sites for disposal of the waste. The DED/CSC will inspect the waste and, in discussion with the contractor and PIU environment safeguard specialist, confirm the adequacy of the proposed landfill site. (iii) Transport of the waste will be conducted in covered trucks and – for any liquids – in sealed containers to avoid spillage and soil or water contamination. (iv) For any hazardous waste, including fuel, oil, batteries, or any other discarded chemicals, the contractor and DED/CSC will document the type and volume of the waste and identify the nearest hazardous landfill facility. (v) Site rehabilitation. (vi) All stockpiled surface soil will be re-established on the site. (vii) Any permafrost that has been accidentally exposed will be immediately covered. (viii) Revegetation of the works site will: (a) only use plant species that are native to the specific site location, and (b) only use only locally-sourced stock. (ix) If non-native plant species must be utilized, for example the use of fast-growing species for soil stabilization, then only sterilized seedlings will be used. This is to prevent the spread of weeds, especially in the project protected areas. (x) The revegetation activities will not use any pesticides or top-dressing fertilizers.

D. Environmental Monitoring, Inspection, and Reporting

23. Three types of environmental monitoring and inspection will be undertaken to ensure project compliance with the EMP, as follows.

 Environmental impact monitoring. Duration: throughout construction and first year of operation. Agency: all contractors responsible for civil works packages. Each contractor will appoint an environment, health, and safety on-site official, who will monitor the parameters in Table EMP-4 for impacts and risks in relation to noise, dust, waste, drainage, health, safety, and damage to existing vegetation and waterbodies. The following approach has been undertaken for the monitoring: (i) for the two tourist streets 180 Appendix 1

and tourism complexes, which are large facilities and/or near residential centers, the monitoring includes quantitative assessment of air and water quality and noise, as well as other parameters, (ii) for the for the small project facilities within the protected areas, quantitative monitoring of air quality and noise is not required given the small scope of works and temporary nature, and water quality monitoring is included only for sites <1 km m from streams and lakes. All of the project sites are located >200 m from waterbodies, but some sites are sloped and there is a potential risk of sediment mobilization. Time- series photographic plots are intended to determine changes over time in specific habitats (quality and coverage), before, during, and after construction, and the first year of operation. This overall monitoring design reflects site-specific conditions and risks, and improves efficiency and avoids unnecessary costs.

 Supervision of construction works and frequent oversight of the contractor’s environmental impact monitoring. Duration: throughout construction and first year of operation. Agency: detailed engineering design and construction supervision firms (to be recruited for each works package). Each firm will (i) monitor the functionality of the constructed facilities, especially for compliance with the designed green standards for water and energy efficiency, sanitation, and solid waste management; and (ii) appoint an environment, health, and safety inspector who will intermittently visit the project sites to assess progress by the contractor(s) in works progress, compliance with the EMP, and environmental impact monitoring tasks.

 EMP performance verification (compliance monitoring). Duration: throughout construction (intermittent). Agency: PIU environment safeguard specialist. The specialist will conduct inspection visits to works sites to assess compliance with the EMP and consult with the contactors, supervision companies, and soum agencies. The specialist will be supported by (i) the three PIU aimag deputy coordinators, who will travel to work sites on occasions the PIU environment safeguard specialist is unable to, and (ii) the PIU building engineer, who will be ensure the constructed works comply with the designs.

Table EMP-4: Project Monitoring Requirements (Environmental and Social Impacts). The following standards will apply to monitoring data: surface water quality standard (MNS 4586:1998); ambient air quality standard (MNS4585:2016); ambient noise standard (MNS 4585:2007); reuse of treated wastewater (MNS 6734:2018). Monitoring Requirements Construction and Operation Phases BAYAN-ULGII AIMAG: OIGOR Entrance Fee collection station (parking, market, information point, and toilets). (Small river 200 meters to the south) Construction Phase: Visual inspection of site drainage, especially during and after rainfall events. Visual inspection of compliance with EMP construction requirements (daily). Water quality in small river (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality in small river (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. SHIVEET KHAIRKHAN Entrance Fee collection station (parking, market, information point, and toilets). (River 200 meters to the south) Appendix 1 181

Monitoring Requirements Construction and Operation Phases Construction Phase: Visual inspection of site drainage, especially during and after rainfall events. Visual inspection of compliance with EMP construction requirements (daily). Water quality in river (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality in river (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. ATB MOUNTAIN Mountaineer site (cooking cabin, toilets). Construction Phase: Visual inspection of site drainage, especially during and after rainfall events. Visual inspection of compliance with EMP construction requirements (daily). Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. ATB MOUNTAIN Tourist basecamp (cooking cabin, toilets, parking). Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage, especially during and after rainfall events. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. TSAGAAN SALAA, BAGA OIGOR (Petroglyph information center (toilets, parking, trail). (River 200 meters to the south) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage, especially during and after rainfall events. Water quality in the river to the south (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality in the river to the south (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. KHOVD AIMAG: Tsenkher cave (TSC): (1) At cave entrance, (2) Intersection between main trail and cave ascent trail. Information Center; parking; toilets. 2 Information Points (interpretive signs); trail upgrading. (Stream 500 meters to the north) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to the stream (daily). 182 Appendix 1

Monitoring Requirements Construction and Operation Phases Water quality in the stream (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year):  Water quality in the stream (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly.  Record visitor numbers (daily).  Compile any incidental sightings of wildlife observed around the center and along the access road from the highway to the center, especially of Saiga antelope: (i) all staff to participate, (ii) encourage visitors to provide any sightings, (iii) compile sighting in an onsite logbook, including date, time, location, number of animals, presumed species, (iv) submit to the aimag environment department.  Photographic plots (same frame time-series; monthly) at 2 locations on the site. At the entrance of KUNNP Fee collection station (parking, toilets, information point). Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. YUMIIN KHOOLOI Campsite hub and birdwatching tower (toilets, parking, information point, markets, ranger station). (Extensive wetlands in the connection between the two lakes to the south; 500 meters away) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to the lakes (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. ARGALANT, KHAR LAKE Toilets and birdwatching tower. (Extensive wetlands to the west and south; 800 meters away) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to the wetlands (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. Khovd Tourist Street: Buildings, parking, (power, water, heating from aimag center). Construction Phase: Noise – weekly during peak construction at mid-day (noisiest time of day). Air quality (particulates) during peak construction period – weekly at mid-day. Visual inspection of site drainage on a daily basis (after rainfall events). Photographic plots (same frame time-series; monthly) at 2 locations on the site. Appendix 1 183

Monitoring Requirements Construction and Operation Phases Rock Art and Nomadic Culture Center (RANCC): Buildings, parking (power from grid and solar; water, heating at site; access road). Construction Phase: Noise – weekly during peak construction at mid-day (noisiest time of day). Air quality (particulates) during peak construction period – weekly at mid-day. Visual inspection of site drainage on a daily basis (during and after rainfall events). Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year):  Compile any incidental sightings of wildlife observed around the RANCC: (i) all staff to participate, (ii) encourage visitors to provide any sightings, (iii) compile sighting in an onsite logbook, including date, time, number of animals, and presumed species, (iv) submit to the aimag environment department.  Photographic plots (same frame time-series; monthly) at 2 locations on the site.  Monitoring of the treated wastewater at the onsite wastewater treatment plant to ensure water quality meets the required standard. Parameters: number of E.coli/1ml; BOD <20 mg/L; suspended solids <10 mg/L; dissolved salts <1500mg.  Groundwater extraction from the onsite well: (i) monitor groundwater extraction volumes and water table depth on a quarterly basis, using a flow gauge and depth sensor in the well, (ii) monitoring to be conducted by the O&M staff, in coordination with the relevant soum government department and PIU, (iii) include the monitoring results in the environment monitoring reports to ADB, (iv) in the event that groundwater availability appears to be decreasing, inform and discuss with MET and ADB and prepare and submit corrective time-based actions. UVS AIMAG: TES, SALT LAKE Campsite (information point, fee collection, market, toilets, parking) (Lake is 300 meters to the west) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to lake (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. SOGOO LAKE Campsite (information point, toilets, parking). (Lake 200 meters to the west) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to lake (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. KHYARGAS LAKE Fee collection station (markets, information point, toilets, parking). (Lake 200 meters to the south) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). 184 Appendix 1

Monitoring Requirements Construction and Operation Phases Visual inspection of site drainage to lake (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. UVS LAKE Existing entrance point: (market, ranger station, parking, information center). (Lake is 2 km to the northeast) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Photographic plots (same frame time-series; monthly) at 2 locations on the site. (Water quality monitoring not required as lake is 2 km from the works site)

Operation Phase (for one year): Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. UUREG LAKE Campsite (information point, toilets, parking) (Lake is 425 meters to the west) Construction Phase: Visual inspection of compliance with EMP construction requirements (daily). Visual inspection of site drainage to the lake (daily). Water quality at lake (suspended sediments, ammonia, dissolved oxygen, e-coli) 2x monthly. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase (for one year): Water quality in lake (suspended sediments, ammonia, dissolved oxygen, e-coli) monthly. Record visitor numbers (daily). Casual observations of birds and wildlife recorded, as needed. Photographic plots (same frame time-series; monthly) at 2 locations on the site. Uvs Tourist Street: Buildings, parking (power, water, heating from aimag center). Construction Phase: Noise – weekly at mid-day (noisiest time of day). Air quality (particulates) during peak construction period – weekly at mid-day. Visual inspection of site drainage on a daily basis. Photographic plots (same frame time-series; monthly) at 2 locations on the site. Uvs Tourism Complex: Buildings, parking (power from grid and solar; water, heating at site; access road). Construction Phase: Noise – weekly at mid-day (noisiest time of day). Air quality (particulates) during peak construction period – weekly at mid-day. Visual inspection of site drainage on a daily basis. Photographic plots (same frame time-series; monthly) at 2 locations on the site.

Operation Phase:  Compile any incidental sightings of wildlife observed around the UVTC: (i) all staff to participate, (ii) encourage visitors to provide any sightings, (iii) compile sighting in an onsite logbook, including date, time, number of animals, and presumed species, (iv) submit to the aimag environment department. Appendix 1 185

Monitoring Requirements Construction and Operation Phases  Monitoring of the treated wastewater at the onsite wastewater treatment plant to ensure water quality meets the required standard. Parameters: number of E.coli/1ml; BOD <20 mg/L; suspended solids <10 mg/L; dissolved salts <1500mg. Monitoring frequency: four times per year.  Groundwater extraction from the onsite well: (i) monitor groundwater extraction volumes and water table depth on a quarterly basis, using a flow gauge and depth sensor in the well, (ii) monitoring to be conducted by the O&M staff, in coordination with the relevant soum government department and PIU, (iii) include the monitoring results in the environment monitoring reports to ADB, (iv) in the event that groundwater availability appears to be decreasing, inform and discuss with MET and ADB and prepare and submit corrective time-based actions.

Table EMP-5: EMP Performance Monitoring (Verification and Compliance) Parameter Location Method Frequency A. CONSTRUCTION PHASE Mitigation measures All sites. Visual inspection, public Daily by on-site implemented as per EMP. consultations, review of lodged contractors and CSCs grievances, review of worker accident and sick leave data. Grievances addressed promptly All works. Review of lodged grievances. Regular (bi-weekly), as per GRM. Consult with local authorities. and in response to serious issues as they are raised. Engineering investigation after All works. Review of investigation and At the latest one week any storms, seismic, or extreme remediation works report. Field after each event. weather event; remediation observations. works as needed. B. OPERATION PHASE Mitigation measures All sites. Visual inspection, public Monthly for all sites. implemented as per EMP. consultations, review of lodged grievances. Grievances addressed promptly All works Review of lodged grievances. Monthly. as per GRM Consult with local authorities. Engineering investigation after All works. Review of investigation and At the latest one week any storms, seismic, or extreme remediation works report. Field after each event. weather event; remediation observations. works as needed. Onsite wastewater treatment RANCC, Testing of treated wastewater. Quarterly plants for the RANCC and UVTC Performance indicators that must performance testing UVTC be complied with to enable reuse of treated wastewater for toilet flushing and landscaping:  no E.coli/1ml  BOD <20 mg/L  Suspended solids <10 mg/L  Dissolved salts <1500mg/l Workplace measures for health, All sites. Reports from staff. Performance Ongoing. safety, and respect are indicators: implemented.  Immediate reporting and investigation of any harassment or abuse. 186 Appendix 1

Parameter Location Method Frequency  Immediate dismissal of staff confirmed to be responsible for harassment or abuse.  Target is zero cases of harassment or abuse.  Any staff at risk (or thought to be at risk) of COVID-19 receive immediate testing and self-isolate until testing confirmed to be negative. CSC = construction supervision company, EMP = Environmental Management Plan, GRM = Grievance Redress Mechanism.

Table EMP-6: Environmental monitoring reporting requirements Frequency of Report From To Reporting A. Construction Phase Contractor/ Internal progress reports PIU Monthly CSC (if used) Intermittent (inception report, at least 3 External reports External Monitoring Agency PIU progress reports, draft and final report)a General Agency for Specialized MET, soum Within three months Environmental acceptance Inspection; government, after monitoring and audit reports Local Agency for Specialized PIU component completion Inspection Compliance monitoring with PIU ADB Semi-annual EMP – progress reports B. Operation Phase (1st year) EMP progress reports. PIU ADB Annual ADB = Asian Development Bank, CSC = , EMP = Environmental Management Plan, PIU = Project Implementation Unit a The external environment monitoring agency will submit inception, progress, and final reports to the PIU, MET and ADB, at a frequency and schedule that will be tailored to fit the project construction progress and maximize the effectiveness of the site visits by the agency. The reporting frequency will be agreed with the PIU and described in the agency’s inception report (see terms of reference, Appendix 2). The PIU will also include updates on the progress of the external environment monitoring agency within the PIU semiannual environment monitoring reports to ADB.

E. Training, Awareness Raising, and Capacity Building

24. To ensure effective implementation of the EMP, a capacity building program will be implemented. Training will focus on the mitigation measures, monitoring, and reporting requirements in this EMP, and will be conducted by the PIU environment and social safeguard specialists, with facilitation and support from the MET project environment and social officers, aimag and soum environmental inspectors, and the General Agency for Specialized Inspection and its local (aimag and soum) inspectors. Trainees will include MET, DTPC, DPAM, contractors, CSCs (if engaged), and soum environment, water, and forestry officials.

25. The PIU will organize the training. The training shall include, but not be limited to: (i) coordination with the PIU procurement specialist for inclusion of the EMP and other relevant environmental clauses in the bidding documents for the project works; (ii) minimizing waste at source; (iii) respecting and protecting wildlife at specific sites; (iv) proper handling of waste; (v) occupational health and safety measures during work, and emergency preparedness in case of Appendix 1 187 incidents; (vi) establishment and implementation of the GRM; (vii) workplace respect, and measures to avoid or immediately halt sexual exploitation, abuse and/or harassment. Strict requirements will be included in all personnel contracts and on-site workplace requirements for zero-tolerance of abuse or harassment. This will include immediate investigation of any report or complaint, and immediate dismissal when abuse or harassment is confirmed; (viii) relevant measures for safety and resilience to COVID-19 described in Appendix 3; (ix) implementation of the mitigation and monitoring measures; and, (x) reporting requirements. The proposed project environment training program is shown below.

26. The trainings shall be designed and implemented to maximize trainee participation and on-the-job applied examples, to improve effectiveness. A pre- and post-questionnaire assessment shall be conducted of all participants to gauge skill or awareness levels before the training; and, to receive feedback after the training. The results of the training, feedback, lessons learned, and measures to improve subsequent trainings, will be included in the semiannual environment monitoring reports to ADB.

Table EMP-7: Project Environment Training Program Fre- Days/ Total Topic Scope of Training Trainer Trainee quency course Persons Procurement  ADB procurement guidelines PIU contract PIU, MET 2 2 20 and contract  Bidding document and contract specialist. management preparation, including EMP clauses (emphasis on  Risk of improper procurement and EMP mitigation measures, and handling implementation) variation orders and contract management Implementation  Roles, responsibilities, monitoring, PIU PIU, PAA, 2 2 100 of EMP inspection, reporting in EMP environment LASI, soum  Environment monitoring program. and social and aimag  Mitigation measures specialists government  Public consultation, participation. officers  GRM implementation, coordination, reporting, working with the public  Environment, health and safety for construction and operation for workers and community  Prevention, control of transmissible diseases and HIV/AIDS  COVID-19 risk management protocols for the project  Workplace respect, and measures to avoid or immediately halt sexual exploitation, abuse and/or harassment Ecological  Management and conservation of PIU PIU, PAA, 2 2 80 management natural habitats (forests, wetlands) environment LASI and biodiversity specialist  Maintenance of planted vegetation and habitats  Point and non-point pollution control  Prevention of the capture, collection, consumption, and sale of protected plants and animals 188 Appendix 1

Fre- Days/ Total Topic Scope of Training Trainer Trainee quency course Persons Solid waste  Organizational arrangements and PIU PIU, soum 2 2 30 management responsibilities environment and aimag  SWM principles and hierarchy specialist. government  Waste streams, types and sources officers,  Solid waste management facilities operators  Management procedures and truck (collection, recovery, recycling and drivers disposal) and support documents  Hazardous waste management procedures  Monitoring, surveillance and reporting  Setting objectives and targets  Communication and public awareness plan Protected area  Awareness building (national policy PIU Local 2 1 80 management and regulation, park values, natural environment stakeholders and livelihoods resource protection) specialist. (tour camp  Field training (best practices) operators) Sanitation  Wastewater collection management PIU PIU, soum 2 2 40 management  WWTP management (wastewater environment and aimag disposal registering procedure, specialist. government triangulation with tourist ger camp officers, registers, interrelations with truck operators drivers, treatment process and and truck maintenance, output sludge drivers transportation towards landfill) Climate change  Energy saving and GHG emission PIU PIU, PAA 2 1 40 resilience reduction environment  Carbon sink by revegetation specialist. Total 14 - 390 ADB = Asian Development Bank, EMP = Environmental Management Plan, GHG = greenhouse gas, GRM = Grievance Redress Mechanism, PAA = protected area administration, PIU = Project Implementation Unit, WWTP = wastewater treatment plant.

F. Public Consultation and Grievance Redress Mechanism

27. Public consultations were conducted during project preparation and will continue throughout project implementation. The public consultations will raise awareness of project activities, especially those which may impact the public such as noise or dust. A public consultation plan focused on environment-related safeguard risks is in the table below; and contributes to the overall project consultation and participation plan (within the project administration manual). This includes public participation in evaluating environmental benefits and impacts. The PIU environment officer and social officer are responsible for facilitating the public consultations, with support from all project agencies. The plan complements the consultation and participation plan (CPP) and stakeholder communication strategy (SCS) for the overall project (see project administration manual).

Table EMP-8: Public Consultation and Participation Plan for Environmental Safeguards Appendix 1 189

Organizer Approach Times/Frequency Subjects Participants Construction PIU Questionnaire At least once per Construction impacts; Workers, survey, site visits, year during peak adjusting mitigation residents in and/or informal construction measures if necessary; construction areas interviews feedback Public workshops At least once per EMP implementation Residents, year during peak progress; construction affected persons, construction impacts; adjusting mitigation social sectors measures if necessary; feedback Operation PIU, Public consultation At least once in first Effects of mitigation Residents, operators of and site visits year of operation measures, impacts of affected persons project operation, feedback adjacent to project facilities facilities Public workshop As needed based on Effects of mitigation Residents, public consultation measures, impacts of affected persons, operation, feedback social sectors Public satisfaction At least once after Comments and suggestions Project survey one year of operation beneficiaries

G. Grievance Redress Mechanism

28. A project grievance is defined as an actual or perceived project-related problem that results in a complaint by an affected person. The PIU will work proactively toward preventing grievances through the implementation of mitigation measures and community consultations. To address any complaints that do arise, this project grievance redress mechanism (GRM) will be established. The GRM is a simple and time-based process for receiving, recording, and addressing project-related grievances transparently and quickly. The GRM will be accessible to diverse members of the local communities, including more vulnerable groups such as women, youth and elderly. Multiple points of entry, including face-to-face meetings, written complaints, telephone calls, or e-mail, will be available. Opportunities for confidentiality and privacy for complainants will be honored where requested. The GRM does not impede or replace legal procedures and Mongolia’s judicial system

29. In Mongolia, residents' complaints or concerns are generally communicated to the bagh (village) or soum representatives, and this system has been integrated into the GRM.

30. The PIU environment safeguard specialist and PIU social, gender, and civil society specialist will be the lead coordinators for GRM implementation. They will establish a GRM tracking and documentation system, instruct all project agencies in the GRM procedures, conduct daily coordination with project agencies, arrange meetings and conduct site visits as necessary, maintain the overall project GRM database, and prepare the reporting inputs for progress reports to ADB. For day to day GRM implementation, they will be supported by the three PIU aimag deputy coordinators.

31. All project agencies and staff will be trained in the GRM and will take an active role in supporting these staff as and when necessary. In each project soum and bagh, the government will nominate a focal person for the GRM.21 The names and contact details of the PIU, soum and

21 This focal person could be the citizen representative at both the soum and bagh levels. 190 Appendix 1 bagh focal points will be disseminated to the project agencies and communities. Upon receiving any complaints, the bagh and soum focal points will immediately inform the PIU.

32. Once a complaint is received and filed, MET, the aimag and soum project focal points, and PIU, will identify if the complaint is eligible for management under the GRM. GRM-eligible complaints include those where: (i) the complaint pertains to the project; and, (ii) the issues arising in the complaint are concerned with the project safeguards. Ineligible complaints include those where: (i) the complaint is clearly not project-related; (ii) the nature of the issue is outside the mandate of the safeguard GRM, such as allegations of fraud or corruption; and, (iii) other procedures are more appropriate to address the issue. Ineligible complaints will be recorded and passed to the relevant authorities and the complainant will be informed of the decision and reasons for rejection. The procedure and timeframe for the GRM are described below.

 Stage 1 (5 calendar days): If a concern arises during construction or operation, the affected person may submit a written or oral complaint to the contractor (construction phase) or operator of the project facility (operation phase). The contractor will: (i) respectfully acknowledge the issue and immediately stop the causal activity (e.g. on-site construction causing high noise levels to a nearby household); (ii) not resume the activity until the complaint has been resolved; (iii) inform the PIU of the incident on the same day of the incident occurring and how the contractor has responded or will respond; (iv) give a clear reply to the affected person within two calendar days; and (v) as far as possible, resolve the problem within five calendar days from receiving the complaint. The PIU will: inform MET and the aimag and soum focal points within one working day of being informed by the contractor; and subsequently keep these parties informed at all stages.

 Stage 2 (5 calendar days): If the issue cannot be resolved in Stage 1, after five calendar days, the PIU will take over responsibility. Eligibility of the complaint will be assessed and a recommended solution given to the complainant and contractors within two calendar days. If the solution is agreed by the complainant, the contractors and/or facility operators (in operation) will implement the solution within five calendar days from the PIU taking over responsibility of the complaint. Written records will be made of all stages and outcomes. At the expiration of Stage 2, MET (through the PIU) will inform ADB of the outcome.

 Stage 3 (15 calendar days): If no solution can be identified by the PIU, and/or the complainant is not satisfied with the proposed solution, the PUI will organize, within seven (7) calendar days, a stakeholder meeting (including the complainant, contractor and/or operator of the facility, soum focal point). A solution acceptable to all shall be identified including clear steps. The contractors (during construction) and facility operators (during operation) will immediately implement the agreed solution. All attempts will be made to fully resolve the issue within 15 calendar days. Written records will be made of all stages and outcomes. At the expiration of Stage 3, MET (through the PIU) will inform ADB of the outcome.

Appendix 1 191

Affected Person(s) Stage 1 Solution Complaint Complaint 5 days Implemented

Contractor, CSC IAs, bagh or soum committee Reporting

Unresolved Complaint Forwarded Stage 2 PIU Environment Safeguard 5 days and/or Social Specialists (recording and coordination)

Unresolved Complaint Forwarded Stakeholder Meeting PIU

Action Plan Reporting by PIU to ADB Stage 3 Solution Implemented 15 days ADB

Figure EMP-1: Operation Chart of the Grievance Redress Mechanism ADB = Asian Development Bank, CSC = construction supervision company, GRM = grievance redress mechanism, IA = implementing agency, MET = Ministry of Environment and Tourism, PIU = project implementation unit.

33. MET and/or the aimag and/or soum governments shall bear any and all costs of implementing the GRM, including meeting, travel, and/or accommodation costs of the project staff or affected person. The GRM will be implemented throughout project construction and at least the first year of operation for each project facility. The PIU will document any grievances, steps taken, and results, within the semi-annual reports to ADB. An overall approach of sensitivity, listening, understanding, and responsiveness will be maintained in receiving and responding to all complaints, to ensure that complainants are not intimidated by the process.

34. Accountability mechanism. ADB implements an accountability mechanism as a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance with ADB's operational policies and procedures. 22

22 Available at: http://www.adb.org/documents/accountabilitymechanism-policy-2012. 192 Appendix 1

The mechanism is designed to: (i) enhance ADB's development effectiveness and project quality; (ii) be responsive to the concerns of project-affected people and fair to all stakeholders; (iii) reflect the highest professional and technical standards in its staffing and operations; (iv) be as independent and transparent as possible; and (v) be cost-effective, efficient, and complementary to the other supervision, audit, quality control, and evaluation systems at ADB. The mechanism provides two approaches to which affected persons may apply: (i) review of perceived grievances and complaints, which is undertaken by ADB’s Office of Special Project Facilitator; and (ii) review of whether or not non-compliance with ADB’s policies has occurred, which is undertaken by ADB’s Compliance Review Panel.

35. The PIU, in its training and consultations, shall inform project stakeholders about the Accountability Mechanism. As far as possible, attempts will first be made to resolve any grievances through the project GRM, before applying to the Accountability Mechanism.

H. Cost Estimates

36. This section provides an estimate of the cost of environmental impact and compliance monitoring, required as part of EMP implementation, and the cost of associated training (see tables below). Costs associated with design and implementation of mitigation measures are assumed to be included in the executing and implementing agency budgets for this project, as well as being included within the contractors’ budgets for project construction. As such, these kinds of costs are not included here (already embedded within the project cost estimates). Costs are assumed to be spread over three years of construction (most sites requiring just one summer season; four sites probably requiring two seasons) and one year of operation.

37. The total estimated cost for monitoring is $68,800 (including air quality, noise, and water quality at sites where these are required) (see table below). Unit costs are assumed to include associated transportation, pro-rated over all samples/analysis. Salary costs are assumed to cover the effort to collect samples and to do simple site observations, incidental and time-series plot photographs, and logs of visitors, and therefore are not included in the table below.

Table EMP-9: EMP Monitoring Budget. See text for details Parameter Level of Effort and Unit Cost Total Cost Noise (construction phase) 14 sites x 1/week x 20 weeks @ $60 $16,800

4 sites x 1/week x 40 weeks @ $60 $9,600 Air quality, just particulates (construction 14 sites x 1/week x 20 weeks @ $60 $16,800 phase) 4 sites x 1/week x 40 weeks @ $60 $9,600 Water quality Construction phase: suspended sediments, 10 sites x 2/month x 5 months @ $100 $10,000 ammonia, dissolved oxygen, e-coli (construction phase) 10 sites x 1/month x 6 months @ $100 $6,000 Operation phase: as above Total Cost $68,800

38. The total estimated cost of training related to the EMP is based on a unit cost of $20/trainee, which includes just the materials and consumables for each trainee. The trainer costs are assumed to be covered by the PIU staff (on salary) and training venues will be provided by Government agencies (in-kind). With about 390 trainees expected, the total cost of training delivery is estimated at $7,800.

Appendix 1 193

I. Mechanisms for Feedback and Adjustment

39. Based on the established project environmental monitoring and reporting systems, the EA, IAs, and PIU shall assess whether further mitigation measures are required as corrective actions, and/or whether improvement in environmental management practices are required. The effectiveness of mitigation measures and monitoring plans will be evaluated by a feedback reporting system. The PIU will play a critical role in the feedback and adjustment mechanism. If the PIU identifies a substantial deviation from the EMP, or if any changes are made to the scope of the site activities that may cause significant adverse environmental impacts or increase the number of affected people, then the PIU shall immediately consult MET and ADB for feedback and/or approval to update the EMP. If necessary, further public consultations will be undertaken. The revised domestic EIAs and project IEE, including this EMP, will be submitted to ADB for review, appraisal, and public disclosure. The revised EMP will be passed to the contractors, CSCs (if engaged) and operators of the project facilities for implementation.

194 Appendix 2

APPENDIX 2: GROUND SOURCE HEAT PUMPS FOR THE TOURISM COMPLEXES

1. Ground source heat pump (GSHP) technology is the selected method to provide heating supply for the two tourism complexes, the rock art and nomadic culture center (Khovd Aimag) and Uvs tourism complex (Uvs Aimag). GSHP technology utilizes the natural difference in ambient temperature between surface air and deep soil and bedrock (at about 150 meters depth). The system involves the circulation of ground-heated water (with antifreeze) in a closed system running through subsurface pipes to a circulator pump and heat exchanger in the main building, and then to a water-based radiator system throughout the building. Once installed, the system is low maintenance. Apart from the electricity required to run the circulator pump (which will be sourced from the aimag electricity grid, most of which is supplied by hydropower-sourced power from the Russian Federation), the system has almost no environmental footprint. Use of GSHP technology in Mongolia began in 2008 and has since been applied for buildings in several aimags i.e., there is already established experience in the construction and O&M for this approach. An alternative design approach applying shallow horizontal heat exchange (1–2.5 m depth) also exists, but is not suitable for the project sites as these shallow depths are seasonally frozen i.e. would not provide the temperature differences needed to warm the piped water.

2. GSHP technology is rated by the U.S. Environmental Protection Agency as the most energy-efficient, environmentally clean, and cost-effective systems for the heating and cooling of buildings; and is suitable for all types of buildings (including homes, office buildings, schools, and hospitals.23

3. One GSHP will be installed at each tourism complex. A closed “vertical loop” (a polyethylene pipe filled with water and antifreeze) will transfer the cold water from the building vertically to a depth of about 150 meters, where it will be passively heated by the warmer subsurface temperature, then back to the building, where it will be connected to a circulator pump and heat exchanger and then circulated through a water-based radiator system in the building (Figure 1). The system runs continuously, with the heat taken up in the building and the relatively cold water (exiting the building) heated in the pipe loop in the ground. The footprint of the borehole which will accommodate the downward and upward flowing pipes, will be only about 20-30 cm diameter. The water-filled pipes are contained within a bore hole liner or casing. The borehole will be located as close to the main building as possible, to reduce the distance of piping needed. The radiator system will extend to wherever heat transfer is required in the main and other buildings. The circulator pump and heat exchanger will be held in a small service room in the main building; this room will also include a circulator pump, to pump the heated water throughout the buildings, and an access valve to enable intermittent testing of the additive levels in the water (as part of O&M). The piping will extend from the borehole, underground, to the circulator pump and heat exchanger.

4. Construction. A site close to the proposed main building of each complex, large enough to accommodate a drilling rig, will be selected. The drilling process is the same as that required for drilling water wells. A small drilling operation will be established, comprising a drilling rig and small retention pond for sorting and drying cuttings and drilling mud. The rig will drill to about 150 m depth (a borehole of about 20-30 cm diameter). A water-based drilling mud will be used, so there will be no specific issues related to borehole contamination or cuttings and mud issues at the surface. The cuttings and waste drilling mud will be screened and stored in a small retention pond, for subsequent drying and removal off-site, or burial on site. The drilling operation will be

23 https://www.eia.gov/energyexplained/geothermal/geothermal-heat-pumps.php

Appendix 2 195 contained to a small area of about 50 m2 and is expected to be completed in less than a month. The borehole will be lined (with borehole casing); the circulator pipes will be installed and tested; and then the borehole sealed, with bentonite grout filling. The vertical pipes will be connected to the service room (housing the circulator pump and heat exchanger) and the building radiator system, when these are completed, and filled with water and antifreeze, and pressure-tested again. There will be no habitat disturbance issues. Drilling mud will be handled according to the Mongolia drilling permit requirements; and properly contained and disposed, as described above. No chemicals will be used for drilling. The borehole will be sealed with a casing or liner, therefore no cross-contamination of water tables is expected from the drilling.

Figure 1: Design Plan for the Ground Source Heat Pump

5. Operation and maintenance (O&M). The GSHP during the operation phase will be a closed loop system, sealed off from the aquifer, the surrounding bedrock and soil, and only visible as a pipe system exiting the ground near the service room of the main building. It is a low maintenance system, which requires that the system is filled with water and antifreeze, and circulating constantly throughout the closed loop (in the ground, service room, and the radiator system in the buildings). A trained operator is required to occasionally check the circulator pump settings (flow speed and pressure) and the quality of the water/antifreeze mixture in the system (via the access valve). There will be no environmental impacts associated with the GSHP operation. The electricity requirement to run the circulator pump and heat exchanger in the service room will come from the grid, and this in turn will come from the hydropower supply for this part of western Mongolia. As a result, the GSHP system will have virtually no carbon footprint, unlike the coal-fired heating systems common throughout Mongolia.

6. Existing experience for O&M of GSHP in Mongolia. Recent usage includes an established GSHP at Asem Village on the southern edge of Ulaanbaatar. This village comprises 53 houses that are heated with a closed-loop GSHP system (1.58 MW), with a mixture of water and antifreeze circulating. The GSHP has been operating since 2016. According to the building engineers, there has been no need to change the antifreeze in the closed loop system, indicating low operational risks related to handling and/or leakage. Procedures for handling, storage, and disposal of antifreeze is described in the IEE and EMP.

196 Appendix 3

APPENDIX 3: COVID-19 – PROJECT HEALTH & SAFETY PLAN (DRAFT GUIDELINES)

Item Good Practices Who Who Implements Supervises Awareness  Preparation of awareness materials on COVID-19, e.g., signs, Contractor CSC, PIU, Materials posters. MET  Installation of awareness signs at work sites, for visibility to workers and the general public. Detection  Control and document the entry/exit to the work site for both Contractor CSC, PIU, Measures workers and other parties. MET  Prevent sick workers from entering the site through checking temperatures of workers and other people entering the site. Require self-reporting prior to entering the site.  All workers to self-monitor their health, possibly with the use of questionnaires, and take their body temperature regularly.  Thermal screening at the workplace to be considered only in the context of a combination of measures for prevention and control of COVID-19 at the workplace and along with risk communication.  Workers to report their previous locations (previous two weeks) on first entry. Physical  Keep a distance of at least 1.5 meters between workers and Contractor CSC, PIU, Distancing minimize physical contact, ensure strict control over external MET Measures access, and queue management (marking on the floor, barriers).  If inside: reduce density of people in the building (no more than 1 person per every 10 square meters), physical spacing at least 1.5 meters apart for work stations and common spaces, such as entrances/exits, lifts, pantries/canteens, stairs, where congregation or queuing of workers might occur.  Avoid crowding by staggering working hours (for different trades) to reduce the congregation of workers at common spaces such as entrances or exits.  Implement or enhance shift or split-team arrangements.  Minimize the movement of local workers in and out of the site (e.g., avoid workers returning home to affected areas, or returning to site form affected areas).  Minimize the workers’ contact with the local community. Respiratory  All workers should wear a face mask (multi-layer and N95 best) Contractor CSC, PIU, Measures at all times. MET  If a worker is sick, they should not come to work; if a worker feels unwell while at work, provide a medical mask so that they may get home safely.  Where masks are used, whether in line with government policy or by personal choice, it is very important to ensure safe and proper use, care and disposal. Hand Hygiene  Regular and thorough hand-washing with soap and water or Contractor CSC, PIU, Measures hand hygiene with alcohol-based hand-rub (a) before starting MET work, before eating, frequently during the work shift, especially after contact with co-workers; (b) after going to the bathroom, after contact with secretions, excretions and body fluids, after contact with potentially contaminated objects (gloves, clothing, masks, used tissues, waste), and immediately after removing gloves and other protective equipment but before touching eyes, nose, or mouth.  Hand hygiene stations, such as hand washing and hand rub dispensers, should be put in prominent places around the workplace and be made accessible to all staff, contractors, and workers, along with communication materials to promote hand hygiene.

Appendix 3 197

Item Good Practices Who Who Implements Supervises Cleaning and  Cleaning and disinfection of all site facilities, including offices, Contractor CSC, PIU, Disinfection accommodation, canteens, and common spaces: MET  Cleaning (soap, water, and mechanical action) to remove dirt, debris, and other materials from surfaces. Disinfection of dirty surfaces and objects only after cleaning.  Most common disinfectants – sodium hypochlorite (bleach) of surface at concentration 0.1% or alcohol at least 70% concentration for surfaces which can be damaged by sodium hypochlorite.  Priority disinfection of high-touch surfaces - commonly used areas, door and window handles, light switches, kitchen and food preparation areas, bathroom surfaces, toilets and taps, touchscreen personal devices, personal computer keyboards, and work surfaces.  Disinfectant solutions must always be prepared and used according to the manufacturer’s instructions, including instructions to protect the safety and health of disinfection workers, use of personal protective equipment, and avoiding mixing different chemical disinfectants.  Provide appropriate PPEs to the cleaners.  Manage the waste as medical waste, and dispose of it in accordance with local regulations. Response  Workers who are unwell or who develop symptoms consistent Contractor CSC, PIU, Measures if with COVID-19 to stay at home, self-isolate, and contact a MET Workers Found medical professional or the local COVID-19 information line for with COVID-19 advice on testing and referral. Symptoms  Standard operating procedures to be prepared to manage a person who becomes sick at the workplace and is suspected of having COVID-19, including isolation, contact tracing and disinfection.  People who were in close contact at the workplace with persons with laboratory-confirmed COVID-19 should be quarantined for 14 days from the last time of the contact in accordance with WHO recommendations.  Set out differentiated procedures for the treatment of sick persons, based on the case severity. Pay workers throughout periods of illness, isolation or quarantine.  Set aside a part of worker accommodation for precautionary self-quarantine.  Establish communications with local medical services and refer sick workers there. Adjusting Work  Consider changes to work processes and timing to minimize Contractor CSC, PIU, Practices and contact between workers e.g., decreasing the size of work MET Managing Work team, changing to a 24-hour work rotation (except respecting Related Travel requirements for no work at night), and preference that workers eat outdoors.  Ensure adequate ventilation is provided in indoor work and meeting areas.  Cancel or postpone non-essential travel to areas with community transmission of COVID-19.  Provide hand sanitizer to workers who must travel, advise workers to comply with instructions from local authorities where they are travelling, as well as information on whom to contact if they feel ill while travelling.  Workers returning from an area where COVID-19 transmission is occurring should monitor themselves for symptoms for 14 days and take their temperature twice a day; if they are feeling unwell, they should stay at home, self-isolate, and contact a medical professional. 198 Appendix 3

Item Good Practices Who Who Implements Supervises Communication  Carefully manage the relations with the community with clear Contractor CSC, PIU, and Contact and regular communication. MET With the  Ensure they are made aware of the procedures put in place at Community the site to address issues related to COVID-19.  Practice social distancing with the local community. Risk  Provide posters, videos, and electronic message boards to Contractor CSC, PIU, Communication, increase awareness of COVID-19 among workers and promote MET Training, and safe individual practices at the workplace, engage workers in Education providing feedback on the preventative measures and their effectiveness.  Provide regular information about the risk of COVID-19 using official sources, such as government agencies and WHO, and emphasize the effectiveness of adopting protective measures and counteracting rumors and misinformation.  Special attention should be given to reaching out to and engaging vulnerable and marginalized groups of workers, such as those in the informal economy and migrant workers, domestic workers, subcontracted and self-employed workers, and those working under digital labor platforms (if appropriate in the western aimags).  Train the workers on procedures in place by the project, and their own responsibilities in implementing them.

Appendix 4 199

APPENDIX 4: SAFEGUARD SCREENING CRITERIA FOR THE COMMUNITY REVOLVING FUND

A. The revolving fund WILL ONLY SUPPORT sub-projects which:

1. Have minimal or no environmental impacts. All activities must be equivalent to “Category C” for the environment of the ADB Safeguard Policy Statement (2009). Any activities that may be classified as “Category A” or “Category B” will not be supported. These categories are defined as follows: A — “likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented. These impacts may affect an area larger than the sites or facilities subject to physical works.” B — potential adverse environmental impacts are less adverse than those of category A. projects. These impacts are site-specific, few if any of them are irreversible, and in most cases mitigation measures can be designed more readily than for category A projects. C — likely to have minimal or no adverse environmental impacts.

2. Have all relevant domestic environmental approvals and/or land permits, as well as for any associated facilities or operations.

3. Have a clearly defined geographic location.

4. Are clearly based on participatory consultation and agreement with other stakeholders, especially affected persons [for sub-projects involving multiple parties and lands].

5. Do not result in changes to land ownership (e.g. from village land to other categories) or official land use category (e.g. from agricultural to other land use).

6. Demonstrate compliance with the following project documents: (i) the Environment Management Plan, (ii) Social Development Action Plan, (iii) Gender Action Plan.

7. Comply with all domestic laws and regulations, including the Law on Special Protected Areas, Law on Buffer Zones, and Law on Water.

8. Comply with the management objectives of the site’s protected area management plan, including objectives for livelihoods, tourism, and biodiversity conservation.

9. Examples of activities that will be supported and encouraged through loans include:

 Relocation of existing pit toilets away from lakes.  Replacement of existing pit toilets with improved varieties which prevent any pollution to lakes and rivers.  Training of community staff in a local cooperative about environmental and safety practices, to improve the management of existing facilities and to reduce health and safety risks to staff.  Milk and dairy processing except for goats.  Meat processing except of goats.  Wool processing except of goats.  Sheep and livestock skins processing without chemicals.  Vegetable growing, including potatoes.  Vegetables planting in greenhouses.

200 Appendix 4

 Local dress sewing.  Handicrafts except which are sourced from threatened species or illegal collection in the strict protection zones of protected areas.  Small product manufacturing activities such as bakery, shoes.  Farming such as bees and chickens except pigs (due to high pollution risks).  Rehabilitation of small structures in tour camps which are entirely owned and managed by local residents AND which have all relevant licenses or permits required for operation in the protected area or its buffer zone. Such applications will be subject to more detailed review.

B. Activities which demonstrate the sustainable use of natural resources WILL BE ENCOURAGED AND FAVORED, including:

 Contribute directly to the protected area management plan, especially for the protection of lakes, rivers, habitats, wildlife, and cultural heritage.  Water use efficiency.  Sustainable water supply.  Soil conservation practices.  Energy efficiency.  Recycling of plastic waste.  No use of agricultural chemicals.  Improved pest control methods e.g. integrated pest management.  Sourcing livestock from local farmers.  Sourcing feed for livestock from local farmers.  Biogas generation as part of waste treatment.  Manure processed as organic fertilizer.  Production, processing and marketing of local special products.  Involvement and/or support to women, the poor, and/or ethnic minorities. – Directly contributing to the project Social Development Plan and Gender Action Plan.

C. The revolving fund WILL NOT FUND any activities which:

 Are prohibited under national and aimag laws and regulations. Including laws for protected areas, buffer zones, water resources protection, biodiversity conservation, tourism management, and waste management.  Are prohibited under the protected area management plans.  Are listed in the ADB Prohibited Investment Activity List (see below).  May cause significant and irreversible impacts to the environment i.e. meet the definitions of ADB “Category A” or “Category B” for Environment.  Involve land acquisition.  Involve demolition of residential or private commercial buildings.  Involve involuntary resettlement, and which meet the definition of ADB “Category A” or “Category B” for resettlement.  Have direct or indirect negative impacts on vulnerable ethnic minorities.  Involve activities within the strict protection zone of protected areas.

D. ADB LIST OF PROHIBITED INVESTMENT ACTIVITIES

40. The use of ADB funds is strictly prohibited for the following activities (ADB Safeguard Policy Statement, 2009). Appendix 4 201

i. Production or activities involving harmful or exploitative forms of forced labor24 or child labor.25 ii. Production of or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements or subject to international phase-outs or bans, such as (a) pharmaceuticals, 26 pesticides, and herbicides, 27 (b) ozone-depleting substances, 28 (c) polychlorinated biphenyls 29 and other hazardous chemicals, 30 (d) wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, 31 and (e) transboundary trade in waste or waste products.32 iii. Production of or trade in weapons and munitions, including paramilitary materials. iv. Production of or trade in alcoholic beverages, excluding beer and wine.33 v. Production of or trade in tobacco. vi. Gambling, casinos, and equivalent enterprises. vii. Production of or trade in radioactive materials, 34 including nuclear reactors and components thereof. viii. Production of, trade in, or use of unbonded asbestos fibers.35 ix. Commercial logging operations or the purchase of logging equipment for use in primary tropical moist forests or old-growth forests. x. Marine and coastal fishing practices, such as large-scale pelagic drift net fishing and fine mesh net fishing, harmful to vulnerable and protected species in large numbers and damaging to marine biodiversity and habitats.

24 All work or services not voluntarily performed i.e. extracted from individuals under threat of force or penalty. 25 Employment of children whose age is below the host country’s statutory minimum age of employment, or, in contravention of International Labor Organization Convention No. 138 “Minimum Age Convention” (www.ilo.org). 26 A list of pharmaceutical products subject to phaseouts or bans is available at http://www.who.int. 27 A list of pesticides and herbicides subject to phaseouts or bans is available at http://www.pic.int. 28A list of the chemical compounds that react with and deplete stratospheric ozone resulting in the widely publicized ozone holes is listed in the Montreal Protocol, together with target reduction and phaseout dates. Information is available at http://www.unep.org/ozone/montreal.shtml. 29 A group of highly toxic chemicals. Likely to be found in oil-filled electrical transformers, capacitors, and switchgear dating from 1950 to 1985. 30 A list of hazardous chemicals is available at http://www.pic.int. 31 A list is available at http://www.cites.org. 32 As defined by the Basel Convention; see http://www.basel.int. 33 Does not apply to project sponsors who are not “ substantially involved” in these activities i.e. the activity concerned is ancillary to a project sponsor's primary operations. 34 Does not apply to the purchase of medical equipment, quality control (measurement) equipment, and any equipment for which ADB considers the radioactive source to be trivial and adequately shielded. 35 Does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is <20%.

202 Appendix 5

APPENDIX 5: SURVEY RESULTS FROM THE TWO PUBLIC CONSULTATIONS

First Round: November 2020

Bayan-Ulgii

1. Is there air, water, or soil pollution in your Bagh? If yes, 2. Is there a waste problem in your bagh/soum? please describe the type, location, and cause of the pollution. 12 10 10 8 8 6 6 4 4 2 2 0 0 Ulaankhus Tsengel Ulaankhus Tsengel air pollution water pollution soil pollution no do not know yes no do not know

3. Does your Bagh experience regular shortages of 4. What is the surface and groundwater resources of groundwater or surface water supply? your Bagh, soum? 10 10 8 8

6 6

4 4

2 2 0 Ulaankhus Tsengel 0 Ulaankhus Tsengel frequent occasional not often frequent occasional rare

Appendix 5 203

5. What is the drinking water quality? 6. Are there rare and endangered plants (medicinal, useful, food) and wildlife? 8 7 12 6 10 5 8 4 6 3 2 4 1 2 0 0 Ulaankhus Tsengel Ulaankhus Tsengel

good adequate bad yes no do not know

8. Describe environmental issues or problems in your 7. How do you assess the protection of rare and endangered Bagh, soum plants, wildlife and natural landscapes in your area? 10 8

7 5

6 0 5 Ulaankhus Tsengel 4 drinking water availability or water quality surface water shrinking or quality 3 soil erosion and degradation dust and sand storm 2 reduction of trees and shrubs 1 wildlife population reduction vegetation degradation cover and extinction of rare plants 0 local people's safety Ulaankhus Tsengel damage to cultural and historical sites good adequate bad Suggestions for improving protection: other concern not listed here

204 Appendix 5

9. Will this project bring the benefits to you? 10. The project plans to build some water application facilities. Do you think the groundwater and surface water resources are sufficient to build new wells? 14 12 10 10 8 8 6 6 4 4

2 2 0 0 Ulaankhus Tsengel Ulaankhus Tsengel

yes no Benefits: yes no

11. Will negative effects occur in the protected area in 12. During the construction of the project facility, people and your soum? vehicles will gather and dust will increase. There will also be a lot of noise. This can lead to temporary adverse effects such as 12 wildlife displacement and soil and vegetation cover degradat 10 10

8 8

6 6

4 4

2 2

0 0 Ulaankhus Tsengel Ulaankhus Tsengel

yes no Effects: yes no Effects:

Appendix 5 205

13. Will there be any adverse effects on the environment, 14. Do you have any suggestions for changing the rare animals, human health and safety during the operation purpose of the project or the planned activities if the of the project facility? project activities will have any negative impact on the beautiful environment, rare and endangered plants, 8 animals or local people in your area? 10 7 8 6 6 5 4 4 3 2 2 0 1 Ulaankhus Tsengel 0 yes no Effects: Ulaankhus Tsengel yes no Suggestions:

16. Are you interested in working with the project? If so, 15. Do you support the implementation of such projects in your in what field do you want to work? area? 12 14 10 12 10 8 8 6 6 4 4 2 2 0 Ulaankhus Tsengel 0 Ulaankhus Tsengel yes no Suggestions: yes no Suggestions:

206 Appendix 5

Uvs Aimag: Undurkhangai, Naranbulag, Ulaangom and Tarialan soums. 2. Is there a waste problem in your Bagh? 1. Is there air, water, or soil pollution in your Bagh? 8 16 7 14 6 12 5 10 8 4 6 3 4 2 2 1 0 0 Undurkhangaiair pollution water Naranbulag pollution soil pollution Ulaangomno do Tarialannot know Undurkhangai Naranbulag Ulaangom Tarialan

yes no do not know

3. What is the surface water of your Bagh, soum? 4. What is the surface and groundwater resources of your Bagh, soum? 14 14 12 12 10 10

8 8

6 6

4 4

2 2

0 0 Undurkhangai Naranbulag Ulaangom Tarialan Undurkhangai Naranbulag Ulaangom Tarialan

rich occasional not often rich occasional not often

Appendix 5 207

5. What is the drinking water quality? 6. Are there rare and endangered plants (medicinal, useful, 14 food) and wildlife species?

12 20 10 15 8

6 10

4 5 2 0 0 Undurkhangai Naranbulag Ulaangom Tarialan Undurkhangai Naranbulag Ulaangom Tarialan

good adequate bad yes no do not know

7. How do you assess the conservation status of rare and 8. Please describe any other environmental issues or endangered plants, animals and natural landscapes in your problems in your Bagh, soum. area? 15 14

12 10

10 5 8

6 0 Undurkhangai Naranbulag Ulaangom Tarialan 4 drinking water availability or water quality surface water shrinking or quality 2 soil erosion and degradation dust and sand storm 0 reduction of trees and shrubs Undurkhangai Naranbulag Ulaangom Tarialan wildlife population reduction vegetation degradation cover and extinction of rare plants good adequate bad Suggestions for improving protection: local people's safety damage to cultural and historical sites 208 Appendix 5

10. The project plans to build some water facilities. Do you 9. Will this project bring the benefits to you? think the groundwater and surface water resources are 25 sufficient to build new wells? 25 20 20 15 15 10 10

5 5

0 0 Undurkhangai Naranbulag Ulaangom Tarialan Undurkhangai Naranbulag Ulaangom Tarialan

yes no Benefits: yes no

11. Will negative impacts occur in the protected area due to 12. During the construction of the project facility, people and project activity? vehicles will gather and dust will increase. There will also be a lot of 25 noise. This can lead to temporary adverse effects such as wildlife displacement and soil and vegetation cover degradat 20 18 15 16 14 10 12 10 5 8 0 6 Undurkhangai Naranbulag Ulaangom Tarialan 4 2 0 yes no Effects: Undurkhangai Naranbulag Ulaangom Tarialan

yes no Effects: Appendix 5 209

13. Will there be any adverse effects on the environment, 14. Do you have any suggestions for changing the purpose of wildlife, human health and safety during the operation of the project or the planned activities if the project activities project facility? will have any negative impact on the beautiful environment, rare and endangered plants, animals or local people in your 20 area?

15 12 10 yes yes 8 10 no 6 4 no Effects: 2 5 0 Undurkhangai Naranbulag Ulaangom Tarialan

0 Undurkhangai Naranbulag Ulaangom Tarialan

16. Are you interested in working with the project? If so, in 15. Do you support the implementation of such projects what field do you want to work? in your area? Additional comments or questions to address by the project? 25

25 20

20 15

15 yes 10 no 10 5 Suggestions: 5 0 Undurkhangai Naranbulag Ulaangom Tarialan

0 Undurkhangai Naranbulag Ulaangom Tarialan yes no Suggestions:

210 Appendix 5

Khovd Aimag: Jargalant, Khovd, Mankhan and Durgun soums

1. Is there air, water, or soil pollution in your Bagh? If yes, 2. Is there a waste problem in your Bagh? please describe the type, location, and cause of the pollution. 20 20 18 16 14 15 12 10 8 10 6 4 2 5 0 Khovd Jargalant Mankhan Durgun 0 Khovd Jargalant Mankhan Durgun air pollution water pollution soil pollution no do not know yes no do not know

3. What is the surface water of your Bagh, soum? 4. What is the surface and groundwater resources of your Bagh, soum? 18 16 12 14 10 12 10 8 8 frequent 6 6 occasional 4 4 not often 2 0 2 Khovd Jargalant Mankhan Durgun 0 frequent occasional not often Khovd Jargalant Mankhan Durgun

Appendix 5 211

5. What is the drinking water quality? 6. Are there rare and endangered plants (medicinal, useful, food) and animals? 18 20 16 18 14 16 12 14 10 12 10 8 8 6 6 4 4 2 2

0 0 Khovd Jargalant Mankhan Durgun Khovd Jargalant Mankhan Durgun

good adequate bad yes no do not know

7. How do you assess the protection of rare and endangered 8. Please describe environmental problems in your Bagh, plants, animals and natural landscapes in your area? 20 soum.

12 10 10

6 0 Khovd Jargalant Mankhan Durgun 4 drinking water availability or water quality surface water shrinking or quality 2 soil erosion and degradation dust and sand storm 0 reduction of trees and shrubs Khovd Jargalant Mankhan Durgun wildlife population reduction vegetation degradation cover and extinction of rare plants local people's safety damage to cultural and historical sites good adequate bad Suggestions for improving protection: other concern not listed here

212 Appendix 5

9. Will this project bring the benefits to you? 10. The project plans to build some water facilities. Do you think the groundwater and surface water resources are 20 sufficient to build new wells? 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 Khovd Jargalant Mankhan Durgun 0 Khovd Jargalant Mankhan Durgun yes no yes no

11. What negative effects do you think will occur in the 12. During the construction of the project facility, people protected area, if temporal camps established? and vehicles will gather and dust will increase. There will also be a lot of noise. This can lead to temporary adverse 16 effects such as wildlife displacement and degrade soil and 14 vegetation cover. 12 14 10 12 8 10 6 8 4 6 2 4 0 2 Khovd Jargalant Mankhan Durgun 0 Khovd Jargalant Mankhan Durgun

yes no yes no

Appendix 5 213

13. Will there be any adverse effects on the environment, rare 14. Do you have any suggestions for changing the purpose animals, human health and safety during the facility operation? of the project or the planned activities if the project activities will have any negative impact on the beautiful 14 environment, rare and endangered plants, animals or local people in your area? 12 12 10 10

8 8

6 6

4 4

2 2

0 0 Khovd Jargalant Mankhan Durgun Khovd Jargalant Mankhan Durgun yes no yes no

15. Do you support the implementation of such projects in your 16. Are you interested in working with the project? If so, in area? what feild do you want to work? 20 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 Khovd Jargalant Mankhan Durgun Khovd Jargalant Mankhan Durgun

yes no Suggestions: yes no Suggestions:

214 Appendix 5

Second Round: March 2021

Public consultation results of Mankhan, Durgun, Jargalant, Buayn and Khovd soums of Khovd Aimag

Do you think there will be a positive impact upon During the project construction activities, traffic, implementing this project? noise and air pollution will increase. Do you think 30 this will negatively impact to commnuty and flora and fauna in proposed areas? 25 30 20 25

15 20 15 10 10 5 5 0 0 Mankhan Durgun Jargalant Khovd Mankhan Durgun Jargalant Khovd

Yes No Yes No

Are there any potential adverse effects of project Some constructions to be built by the project activities on state protected areas? require water use. Do you think there's enough surface and ground water resources? 20 30 15 25 20 10 15

5 10 5 0 0 Mankhan Durgun Jargalant Khovd Mankhan Durgun Jargalant Khovd

Yes No Yes No

Appendix 5 215

Do you think building a Tourism complex nearby Khovd Do you think establishing a tourism street in Khovd Aimag Aimag center will result in positive or negative impact? center will result in positive or negative impact? 25 30

25 20

20 15 15 10 10

5 5

0 0 Mankhan Durgun Jargalant Khovd Mankhan Durgun Jargalant Khovd

Positive impact Negative impact Positive impact Negative impact

Will there be adverse effects on the environment, flora Do you have any suggestions for changing the purpose and fauna, human health and safety during the and planned activities of the project if the project operation of facilities? activities will have any negative impact on the beautiful 25 environment, rare and endangered plants, animals or local people in your area? 20 20

15 15

10 10

5 5

0 0 Mankhan Durgun Jargalant Khovd Mankhan Durgun Jargalant Khovd

Yes No Yes No

216 Appendix 5

Do you support the implementation of such projects in your area? 30

0 Mankhan Durgun Jargalant Khovd

Yes No

Public consultation results of Zuunkhangai, Malchin, Davst, Sagil and Tarialan soums of Uvs Aimag During the project construction activities, traffic, Do you think there will be a positive impact upon noise pollution and air pollution will increase. Do implementing this project? you think this will negatively impact to flora and 35 fauna in proposed areas? 30 25 25 20 20 15 15 10 10 5 5 0 0

Yes No Yes No

Appendix 5 217

Are there any potential adverse effects of project Some constructions built by the project require water activities on state protected areas? use. Do you think there's enough surface and ground water resources in your area? 30 35 25 30 20 25 15 20 10 15 10 5 5 0 0

Yes No Yes No

Do you think building a Tourism complex in Uvs Aimag Do you think establishing a tourism street in Uvs Aimag center will result in positive or negative impact? center will result in positive or negative impact? 30 30 25 25 20 20 15 15 10 10 5 5 0 0

Positive impact Negative impact Positive impact Negative impact

218 Appendix 5

Will there be adverse effects on the environment, rare Do you have any suggestions for changing the purpose and animals, human health and safety during the operation of planned activities of the project if the project activities will project facility? have any negative impact on the beautiful environment, rare and endangered plants, animals or local people in 30 your area? 25 30 20 25 15 20 15 10 10 5 5 0 0

Yes No Yes No

Do you support the implementation of such projects in your area? 35 30 25 20 15 10 5 0

Yes No

Appendix 5 219

Public consultation results of Tsengel and Ulaankhus soums of Bayan-Ulgii Aimag

During the project construction activities, traffic, noise Do you think there will be a positive impact upon pollution and air pollution will increase. Do you think this implementing this project? will negatively impact to flora and fauna in proposed areas? 35 25 30 25 20

20 15 15 10 10 5 5 0 0 Tsengel Ulaankhus Tsengel Ulaankhus

Yes No Yes No

Are there any potential adverse effects of project Some constructions built by the project require water use. activities on protected areas? Do you think there's enough surface and ground water resources in your area? 16 14 30 12 25 10 20 8 15 6 10 4 2 5 0 0 Tsengel Ulaankhus Tsengel Ulaankhus

Yes No Yes No

220 Appendix 5

Do you think building a Tourism complex in Uvs and Khovd Do you think establishing tourist streets in Uvs and Aimags will result in positive or negative impact? Khovd Aimags will result in positive or negative impact? 20 25

15 20

15 10 10 5 5

0 0 Tsengel Ulaankhus Tsengel Ulaankhus

Positive impact Negative impact Positive impact Negative impact

Do you have any suggestions for changing the Do you support the implementation of Will there be any adverse effects on purpose and planned activities of the project if such projects in your area? human health and safety during the the project activities will have any negative operation of project facility? impact on the beautiful environment, rare and 35 endangered plants, animals or local people in 30 25 your area? 25 20 20 20 15 15 10 10 10 5 5 0 0 0 Tsengel Ulaankhus Tsengel Ulaankhus Tsengel Ulaankhus

Yes No Yes No Yes No

Appendix 6 221

APPENDIX 6: PROTECTED AREA LEGISLATION IN MONGOLIA

This appendix summarizes information on legal requirements for the protection and management of protected areas in Mongolia.

Law on Special Protected Areas 1. Strictly Protected Areas (SPA) may be divided into the following zones, based on their natural features, and unique soil, water, flora, or fauna characteristics: (1) Pristine zones ("ongon büs"); (2) Conservation zones ("xamgaalaltyn büs"); and (3) Limited use zones ("xyazgaarlaltyn büs").

2. Article 9. Pristine Zone Regime: (1) Only protection activities conformant with the need to preserve original natural features may be conducted within pristine zones. (2) Research and investigation activities may be conducted within a pristine zone only by way of observation methods, and without causing any damage to the natural features. All other activities are prohibited within this zone.

3. Article 10. Conservation (sometimes named as Protection) Zone Regime: In addition to the activities described in article 9 of this Law, biotechnological measures making use of environmentally safe technologies may be implemented in conservation zones to enhance flora and fauna reproduction and to mitigate damages caused by natural disasters.

4. Article 11. Limited Use Zone Regime: The following activities may be conducted in limited use zones using environmentally safe technologies and with appropriate licenses or permits: 1) Activities described in articles 9 and 10 of this Law; 2) Soil and plant cover restoration; 3) Forest maintenance and cleaning; 4) Animal inventories and activities to regulate animal population numbers, age, sex and structure, following an approved program and methods; 5) Use of mineral water and other treatment and sanitation resources; 6) Ecotourism organized following designated routes and areas, according to appropriate procedures; 7) Use of accommodations constructed according to appropriate procedures and designated for temporary residence, camping, observation, research or investigation by travelers or other people with permission; 8) Taking photographs, making audio or video recordings and using these for commercial purposes; 9) Worshipping natural sacred sites and conducting other traditional ceremonies; 10) In the case of local residents, the collection and use of associated natural resources and medicinal and food plants, according to established regulations, for household needs.

5. Article 12. Prohibited Activities in Strictly Protected Areas: 1) It is prohibited to conduct the following activities in Strictly Protected Areas for purposes other than those described in articles 10 and 11 of this Law: (i) Changing natural features by ploughing, digging, using explosives, exploring natural resources, mining, quarrying sand or stone, harvesting wood and reeds, or constructing roads in areas other than in limited use zones; (ii) Harvesting and processing secondary natural resources or plants of medicinal, nutritional or technical value for commercial purposes; (iii) Hunting, trapping or disturbing animals or destroying their nests, hibernation dens or burrows for purposes other than those described in the paragraph 4 of article 11 of this Law; (iv) Using methods, techniques or substances that produce negative environmental impacts to combat or prevent damaging insects, rodents, or fire; (v) Constructing buildings other than those described in paragraph 7 of article 11 of this Law; (vi) Conducting any activities that pollute the soil, water or air.

National Conservation Parks and their protection regimes

222 Appendix 6

6. Article 13. National Conservation Parks:

7. National conservation parks consist of those areas taken under state special protection whose natural original conditions are relatively well preserved and that are of historical, cultural, scientific, educational and ecological significance.

8. Article 14. National Conservation Park Zones:

9. National conservation parks may be divided into the following zones in consideration of their natural features, the location of flora and fauna, the conservation requirements of their historical and cultural monuments, and the conditions for developing travel and tourism: (1) Special zones ("oncgoi büs"); (2) Travel and tourism zones ("ayalal zhuulchlalyn büs"); (3) Limited use zones ("xyazgaarlaltyn büs").

10. Article 15. Special Zone Regime:

11. In addition to protection measures aimed at preserving natural features, measures using environmentally safe technologies for the conducting of research and investigation, enhancement of flora and fauna reproduction, restoration of soil and elimination of damages caused by natural disasters may also be undertaken in special zones.

12. Article 16. Travel and Tourism Zone Regime:

13. The following activities may be conducted in travel and tourism zones using valid permits and environmentally safe technologies: (1) Activities described in articles 11 and 15 of this Law; and (2) Fishing in designated areas.

14. Article 17. Limited Use Zones Regime:

15. The following activities may be conducted in limited use zones: 1) Activities described in articles 11, 15, and 16 of this Law; 2) Traditional animal husbandry; 3) Authorized construction of buildings for travelers and others, using approved proposals 4) and plans; 5) Construction of roads and road stations following the appropriate procedures and 6) using approved proposals and plans; 7) Support and maintenance of fields required for sport facilities and public activities; 8) Conducting ecological assessments for and developing the settled areas in the territory 9) according to approved general plans.

16. Article 18. Prohibited Activities within National Conservation Parks:

17. It is prohibited to conduct the following activities in National Conservation Parks for purposes other than those described in articles 15, 16, and 17 of this Law: 1) Activities described in paragraph 1-8 and 11 of article 12 of this Law; 2) Activities in special zones as described in paragraphs 9 and 10 of article 12 of this Law; 3) Extending settled areas or constructing buildings in violation of the approved 4) development and building plans.

Appendix 7 223

APPENDIX 7: KEY POINTS FROM CURRENT AIMAG DEVELOPMENT PLANS

Industrial target of the aimag within the framework of the Development Plan of Bayan-Ulgii Aimag: 2010-2021 (A new plan is under development) 1. Achieve an average annual growth rate of 18 percent in the aimag’ s industrial sector and further improve the structure of the economic sector.

2. Areas of implementation: • Deepen economic restructuring and dramatically increase the aimag’ s economic capacity based on the mining, processing industry and tourism sectors. • Increase exports of tungsten, meat, processed wool, cashmere and leather. • Expand the wholesale network. • Expand the range and variety of insurance services, especially for livestock and agricultural production with high climatic risks. • Increase production of construction materials and supply to neighboring aimags. • To set priorities for mineral exploration and mapping, to use mineral resources that can be used in the first place, and to have 70.0 percent of the aimag’ s territory with a 1: 50,000 exploration map. • Dramatically increase exports by supporting the tungsten exploration and mining industry in all aspects. • Expand gold mining. • Cashmere and sheep wool are deeply processed to produce the final product. • Establish small and medium-sized textile factories. • The policy will support the development of small and medium enterprises in the light and food sectors. • Establish a tannery in Ulgii, Deluun, Nogoonnuur and Ulaankhus. • Establish small and medium milk and dairy processing plants in Ulgii city. • Develop and implement a program to further develop the mining industry. • Construction of a gas fuel plant in Ulgii city. • Actively develop the Asgat silver deposit and start exploiting it. • Work closely with license holders of mineral and mineral deposits in the aimag and improve control over their activities. • Start construction of a cement plant in Ulgii. • Support meat processing plants in Ulgii to produce final products.

Uvs Aimag Development Strategic Plan (2008-2021) (A new plan is under development) 3. Strategic Objective (2016-2021): To coordinate the development of the aimag's internal and external resources, support the development of import substitution, production of some value- added products, and establish an industrial and technology park.

4. Activities to be implemented: • To develop the production of some food and consumer goods that can be produced in our aimags and soums, to reduce over-dependence on imports • To increase the production of value-added ecologically clean products that meet international and quality standards. • Establish an industrial technology park in Ulaangom.

224 Appendix 7

• Establish and operate a goat cashmere and camel wool processing and leather production and wood production complex with new environmentally friendly techniques and technologies. • An industrial technology park will be established in the aimag and the production of some import-substituting products will increase.

Khovd Aimag Development Program 2007-2021 (A new plan is under development)

5. Priority 1. Restructure the aimag's economic sector and increase the average annual GDP growth to at least 18 percent.

6. Areas of activities to be implemented: • Intensify exploration of mineral resources and further develop the mining industry. • Improving the competitiveness of products in foreign markets through the introduction of new techniques and technologies, and increasing the production of export products. • Establish an industrial and technology park. • Intensive development of small and medium enterprises to fully process livestock and agricultural products, first of all, within the framework of the Government program to support small and medium enterprises in the aimag. • Full inclusion of informal sector production in the aimag’ s GDP estimate. • Ensuring sustainable growth of agricultural production. • Continue to implement energy, road, communication and information network development programs • Intensively develop the tourism sector and make it a sector that has a significant impact on economic growth. • Establish a Technology Transfer Center in the aimag center, train professional staff, and provide information. • Improve the operation of border crossings and ports and create favorable conditions for foreign relations. • Expand the wholesale network of food, consumer goods and raw materials. • Take measures to create a more favorable economic and legal environment for domestic and foreign investors in order to further develop the mining industry and tourism sector. • Develop and implement a “Coal” program to increase and export the aimag’ s coal resources. • Full transition to budgeting and implementation procedures in close coordination with this development program. • Establish a development support fund in Khovd Aimag and create an efficient banking and financial system.

7. Outcome: The foundation will be laid for industry and services to play a leading role in the aimag's economy.

Appendix 8 225

APPENDIX 8: CONFIRMED LIST OF SMALL FACILITIES IN PROJECT FIELD SITES

NOTE: ANY PROPOSED CHANGE IN THE SCOPE OR LOCATIONS OF THESE FACILITIES WILL BE SUBJECT TO NEW ENVIRONMENTAL IMPACT ASSESSMENT AND REQUIRE PRIOR ENDORSEMENT OF THE GOVERNMENT AND ASIAN DEVELOPMENT BANK.

PROPOSED PROJECT FACILITY (number) Car park Women- LOCATION Fee Bird led market NAME Camp Ranger Info. Info. Toilets (Coordinates, Soum) collection watching place Other site Station Center Point No. Capacity (seats) station tower (each with 4-6 stalls) Oigor Entrance point (8809’54,477” E, 4908’58,093”N), 1 1 1 20 4 1 Ulaankhus soum Shiveet Khairkhan Entrance (Tsagaan Altai Tavan Gol Post) 1 1 1 20 4 1 Bogd National (89018’8,642” E,4906’46,604”N) Park (ATBNP) Tsengel soum and Main petroglyph site 1 1 1 20 4 Trail Petroglyphic (49°19'12.49"N, 88°22'22.43"E) Complexes of Basecamp#1 (for tourists) Cooking the Mongolia (49°8'38.31"N, 87°59'20.25"E), 1 1 1 40 6 Cabin, trail Altai (PCMA) Ulaankhus soum Basecamp#2 (for professional mountaineers) Cooking 1 4 (49°8'51.08"N, 87°56'52.00"E), Cabin Ulaankhus soum At the entance gate of the Khar Us Nuur protected area, the entry point to 1 1 1 10 4 the park: 47°49'39.4, 91°54'10.2 (Tsagaanburgas Bagh, Buyant Soum) Khar Us Nuur Durgun Lake, Agvash, Yumiin Hooloi National Park 1 (48°19'20.40"N, 92°33'38.29"E), 1 1 1 20 6 1 1 (KUNNP) (HUB) Durgun soum Durgun Lake, Argalant, Khar Lake Shanaa (48° 9'46.52"N, 93° 4 1 6'49.65"E), Durgun soum

226 Appendix 8

PROPOSED PROJECT FACILITY (number) Car park Women- LOCATION Fee Bird led market NAME Camp Ranger Info. Info. Toilets (Coordinates, Soum) collection watching place Other site Station Center Point No. Capacity (seats) station tower (each with 4-6 stalls) 47°21'15.11"N, 91°57'39.74"E, 1 1 20 4 1 Mankhan soum Tsenkher (1) At cave entrance, (2) Intersection Upgrade cave (TSC) between main trail and cave ascent 2 trail, trail, Mankhan soum lighting Khar Termes (49°19'24.09" N, 93° 9'49.32"E), 1 1 1 10 4 1 Khan Khukhii Malchin soum National Park Sogoo Lake (KKNP) (49˚22'53.511''N, 95˚8'38.481''E), 1 1 1 20 4 Zuunkhangai soum Close to Uureg Lake restroom Uvs Nuur (50°12’8.91N, 91° 8’1.00E), Sagil 1 1 1 20 4 Strictly soum Protected Rennovate existing entrance point and 1 1 1 1 30 4 1 Area Information 50° 6'32.28, 92°21'41.20 (USVSPA) Tes, Salt Lake (50°23'1.23"N 1 1 1 1 10 4 1 93°18'57.69"E) (HUB) 5 (2 cabins, 2 TOTAL 6 4 3 3 11 12 240 60 2 7 trails, 1 lighting)