Initial Environmental Examination

Project Number: 50393-002 April 2019

Proposed Loan for People’s Republic of China: Gansu Internet-Plus Agriculture Development Project

Prepared by Supply and Marketing Cooperative Gansu Province for the Asian Development Bank

CURRENCY EQUIVALENTS (as of 28 March 2019) Currency Unit – Chinese Yuan (CNY) CNY1.00 = €0.13 €1.00 = CNY7.57

ABBREVIATIONS ADB - Asian Development Bank LIEC - Loan implementation environment consultant CNY - Chinese Yuan MEE - Ministry of Environmental Protection CSC - Construction supervision company MEP - Ministry of Environmental Protection EA - Executing Agency Mu - Chinese land unit (1 ha = 15 mu) EHS - Environmental, health and safety PIU - Project Implementation Unit EIA - Environment Impact Assessment PMO - Project Management Office EMA - Environmental monitoring agency PPE - Private participating enterprise EMP - Environmental management plan PRC - People’s Republic of China EEB - Ecology and Environment Bureau REA - Rapid environment assessment FSR - Feasibility Study Report SMC - Supply and marketing cooperative GHG - Greenhouse Gas SMCGP - Supply and Marketing Cooperative Gansu Province GRM - Grievance redress mechanism SPS - Safeguard Policy Statement IA - Implementing Agency TOR - Terms of Reference ICT - Information communication and technology TRTA - Transaction Technical Assistance IEE - Initial environmental examination WHO - World Health Organization LAR - Land Acquisition and Resettlement WSP - Water Supply Plant LIC - Loan implementation consultant WWTP - Wastewater treatment plant

WEIGHTS AND MEASURES Biochemical Oxygen mg/l Milligrams per liter BOD5 Demand, five days mg/m3 Milligrams per cubic meter CaCO3 Calcium carbonate Unit of land (equals 1/15 mu cm Centimeter ha) 3 3 CO2 Carbon Dioxide µg/m Micrograms per m NOx Nitrogen oxide COD Chemical Oxygen Demand oC Degrees Celsius A-weighted sound O3 Ozone dB(A) pressure level in decibels The acidity/alkalinity of a pH DO Dissolved oxygen solution kg Kilogram PM Particulate matter km Kilometer PM10 PM <10 micrometers kWh Kilowatt Hour PM2.5 PM <2.5 micrometers Equivalent Continuous RT Refrigerating ton Leq Noise Level SO2 Sulfur Dioxide m Meter t/a Tons per annum m/s Meters per Second t/h Tons per hour m2 Square meters Total suspended TSP m³ Cubic meters particulates

NOTE In this report, "€" refers to Euros.

This initial environmental examination 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 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 Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. iii

TABLE OF CONTENTS EXECUTIVE SUMMARY ...... I A. INTRODUCTION ...... I B. INSTITUTIONAL FRAMEWORK FOR ENVIRONMENTAL IMPACT ASSESSMENT ...... I C. ENVIRONMENT BASELINE ...... II D. POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES ...... II E. PUBLIC CONSULTATION AND GRIEVANCE REDRESS MECHANISM ...... IV F. ENVIRONMENTAL MANAGEMENT PLAN ...... IV G. RISKS AND KEY ASSURANCES ...... IV H. CONCLUSION ...... V I. INTRODUCTION ...... 1 A. PROJECT RATIONALE ...... 1 B. THE PROPOSED PROJECT ...... 2 C. ENVIRONMENTAL SAFEGUARDS ...... 3 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 4 A. ADB SAFEGUARD POLICY STATEMENT ...... 4 B. PRC ENVIRONMENTAL LEGAL FRAMEWORK ...... 4 C. PRC ENVIRONMENTAL IMPACT ASSESSMENT FRAMEWORK AND PROCEDURES .. 6 D. PROJECT DOMESTIC EIA REPORT ...... 8 E. RELEVANT INTERNATIONAL AGREEMENTS ...... 8 F. APPLICABLE PRC ENVIRONMENTAL QUALITY STANDARDS ...... 9 III. PROJECT DESCRIPTION ...... 16 A. PROJECT OVERVIEW ...... 16 B. SUBPROJECTS ...... 17 C. DUE DILIGENCE FOR ASSOCIATED AND EXISTING FACILITIES ...... 46 IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE) ...... 50 A. LOCATION ...... 50 B. GANSU PROVINCE ...... 50 C. ENVIRONMENTAL SETTING OF THE SUBPROJECT SITES ...... 53 D. BASELINE ENVIRONMENT MONITORING ...... 57 V. ANTICIPATED IMPACTS AND MITIGATION MEASURES ...... 63 A. PROJECT AREA OF INFLUENCE AND SENSITIVE RECEPTORS ...... 63 B. ANTICIPATED PROJECT BENEFITS AND POSITIVE IMPACTS ...... 63 C. PRE-CONSTRUCTION PHASE ...... 64 D. CONSTRUCTION PHASE ...... 65 E. OPERATION PHASE ...... 73 F. CLIMATE CHANGE ...... 88 G. INDIRECT, INDUCED, AND CUMULATIVE IMPACTS ...... 92 VI. ALTERNATIVE ANALYSIS ...... 94 A. NO PROJECT ALTERNATIVE ...... 94 B. INTERNET BASED SOCIALIZED AGRICULTURAL SERVICE SYSTEM ...... 94 C. AGRICULTURAL TECHNOLOGIES ADOPTED ...... 95

iii iv

VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATION ...... 96 A. PROJECT INFORMATION DISCLOSURE ...... 96 B. PUBLIC CONSULTATION ...... 97 C. FEEDBACK FROM PUBLIC CONSULTATIONS ...... 100 D. FUTURE CONSULTATIONS AND DISCLOSURE ...... 100 VIII. GRIEVANCE REDRESS MECHANISM ...... 106 IX. ENVIRONMENT MANAGEMENT PLAN ...... 107 X. ASSURANCES ...... 108 XI. CONCLUSIONS ...... 110 APPENDIX I: ENVIRONMENTAL MANAGEMENT PLAN ...... 111 A. OBJECTIVES ...... 111 B. IMPLEMENTATION ARRANGEMENTS ...... 111 C. POTENTIAL IMPACTS AND MITIGATION MEASURES...... 114 D. ENVIRONMENT MONITORING PLAN ...... 114 E. INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING ...... 115 F. GRIEVANCE REDRESS MECHANISM ...... 139 G. REPORTING REQUIREMENTS ...... 142 H. PERFORMANCE INDICATORS ...... 143 I. ESTIMATED BUDGET FOR EMP IMPLEMENTATION ...... 143 J. MECHANISMS FOR FEEDBACK AND ADJUSTMENT ...... 143 APPENDIX 2: DRAFT TERMS OF REFERENCE FOR ENVIRONMENTAL POSITIONS ...... 145 APPENDIX 3: RESTRICTED-USE PESTICIDES IN THE PEOPLE’S REPUBLIC OF CHINA 149

i

EXECUTIVE SUMMARY

A. Introduction

1. This initial environmental examination (IEE) has been prepared for the proposed Gansu Internet-Plus Agriculture Development Project (the project). The project supports the development of internet-plus agriculture in a range of feature crops such as potatoes, liquorice, forage mulberry and some summer vegetables in Gansu Province. The internet-plus agriculture is an application of network-connected information technology along the entire agricultural value chain from production to marketing which enhances market access through a two-way automated information exchange system between producers and consumers. The Supply and Marketing Cooperative Gansu Province (SMCGP) is the executing agency of the project.

2. Details of subprojects to be implemented under the project are summarized in Table ES-1 (see Table III-1 for further details). The project outputs are: (i) comprehensive information service and management platform developed; (ii) agricultural production, processing, storage, and marketing modernized; and (iii) capacity of SMCGP improved.

Table ES-1: Summary of Subprojects under the Gansu Internet-Plus Based Socialized Agricultural Service System Development Project Subproject Facilities to be built Subproject 1: Gansu Internet Plus Based Socialized • Data center for agricultural and social Agricultural Service System Platform services • Organic fertilizer substrate plant • Cold chain storage facility Subproject 2: Zhangye County-Level Internet Plus Based • IT-based service centers to provide Socialized Agricultural Service System in Linze County agricultural information and logistic support to farmers Subproject 3: Zhangye Whole Industrial Chain Service • Greenhouses for summer vegetables, System for Gobi Agriculture in Linze County. fruits; and storage facilities Subproject 4: Wuwei Integrated Industry for Potatoes in • Potato seedling, cultivation and processing Gulang County center Subproject 5: Baiyin Whole Industrial Chain Service • Liquorice seedling, plantation and System for Liquorice in Jingtai County processing center Subproject 6: Application Base of the Internet of Things for • 3 large scale sunlit greenhouses Featured Agricultural Products in Lanzhou New District • Cold chain logistics system Subproject 7: Tianshui Whole Industrial Chain Service • Mulberry seedling facility System for Forage Mulberry • Agricultural, social and technology demonstration park

3. The project will be implemented by 7 existing agricultural enterprises in 8 cities or counties. These enterprises comprise state-owned enterprises and private participating enterprises (PPEs). The implementing agencies for the 3 of the subprojects are state-owned enterprises and for the remaining 4 are PPEs.

B. Institutional Framework for Environmental Impact Assessment

4. The IEE has been prepared in accordance with ADB’s Safeguard Policy Statement (SPS, 2009) and environmental impact assessment (EIA) procedures of the People’s Republic of China (PRC). Domestic EIA studies are required to be undertaken in compliance with relevant PRC environmental laws and regulations. National, as well as local legal and institutional frameworks for EIA review and approval, ensure that proposed projects are environmentally sound, designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, social, or safety hazards.

ii

C. Environment Baseline

5. The subproject sites are located in Lintao County of Dingxi City, Ganzhou District of Jiuquan City, Chengguan District and New Area of Lanzhou City, Linze County of Zhangye City, Gulang County of Wuwei City, Jingtai County of Baiyin City and Maiji District of Tianshui City.

6. The planned sites for establishing the data and service centers are located in existing buildings. The planned sites for seedling and cultivation of crops are located within existing agricultural lands. The locations for developing processing plants and fertilizer plant are located within existing industrial areas. All subproject sites are under active ownership by state-owned enterprises or PPEs. All sites are adjacent to existing roads and highways. There are no known rare or endangered flora or fauna, species with international, national or provincial protection status, areas of natural or critical habitat, nature reserves, or areas with special national, regional or local ecological significance are located within or adjacent to any of the project sites. There are no known physical cultural resources near the subproject sites.

7. Environmental baselines have been established at all project sites by sampling and analysis of surface and groundwater quality, air quality, and noise quality. Surface water and groundwater quality at all project sites are suitable for industrial and agricultural uses. The air quality complies with the national standard for residential, commercial, industrial and rural areas. Ambient noise levels comply with the national standard for residential, commercial and mixed industrial areas.

8. Gansu’s gross domestic product per capita of CNY29,326 (equivalent to about €3,855) is the second lowest of all provinces in the PRC, and 40 of the province’s 87 counties are designated as national poverty counties. Agriculture is still a necessary means of rural livelihoods in Gansu Province, yet low productivity and low-value addition of the agriculture sector limit the opportunities for income generation.

D. Potential Environmental Impacts and Mitigation Measures

9. Project benefits and added value for environmental management. The project will have significant environmental benefits, as follows: (i) conservation of water resources, through the avoided future use of about 5.5 million m3 water per year for agricultural production compared with existing use by the project enterprises in existing operations (for similar crops and conditions at nearby sites), due to establishment of “Internet of Things (IoT)1-based agriculture management systems”; (ii) reduced pollution of water and soil resources, through the avoided future use of chemical fertilizer by about 13,135 tons per year, and reduced use of pesticides by about 36 tons per year, compared to baseline conditions.2 Overall, reductions in the rate of application of agricultural chemicals per unit area, especially fertilizers, will decrease the non-point source pollution load entering waterways and contribute to improved water quality; (iii) improved product quality and food safety information for consumers (to be distributed through the existing public information websites of the executing agency); (iv) enhanced market access and technical support for farmers; (v) through these benefits, contribution to national and provincial policies for water conservation and protection; and (vi) positive socio-economic impacts due to improved crop productivity and information technology-based marketing system. It is expected that about 0.45 million people will benefit directly or indirectly from the project.

10. The project will achieve these benefits through the application of network-connected

1 Internet of things refers to physical devices which are embedded with sensors and network connection capability that enable these devices to collect and exchange data. It allows to remotely sense and control devices through existing internet infrastructure. 2 See Sections V.E.1 and V.E.2 for explanations of water and chemical calculations. iii sensors and tracking technologies to improve farming efficiency and real-time monitoring of soil water status and nutrient content; improved growing techniques; conversion from field- based farming to greenhouse systems; conversion from “water hungry” crops (wheat, corn) to “water efficient” crops (e.g. liquorice); and, drip irrigation. Lack of regular and reliable information on water and chemical usage, and of the origin, quality, and food safety of agricultural products, are key constraints which affect farming efficiency and the ability of farmers to access high-value markets. Internet-connected sensors and tracking technologies enable the monitoring and quantification of inputs such as soil, air, water, fertilizer, pesticides and also tracing the location of products along the value chain. A socialized agricultural service system3 will be established and will utilize the network-generated data to provide farmers with agricultural support services and consumers with product characteristics through mobile internet platforms. The system will be managed and operated by specialists within the PMO.

11. In addition to the overall social and environmental benefits of the project designs, the technical support for environment safeguards provided to the government during project preparation gave additional value: (i) two pesticides (omethoate and methamidophos) classified as hazardous and/or for restricted use under World Health Organization and national regulations respectively were found to be in use in subproject areas under operation. A halt in the use of these substances in the subproject areas, as well as prohibiting the use of these chemicals for the ADB-funded project, was agreed with government and is included in the project EMP; and (ii) an industrial coolant with greenhouse gas impacts, “R134a”, is currently used by at least one project enterprise. It was agreed that the use of this coolant will be prohibited in the project, and that only coolants with lower greenhouse gas impacts (e.g. “R32” or “R290”) will be used in the project. This is included in the project EMP.

12. Construction stage Impacts. Potential adverse environmental impacts during the construction phase of the project are short-term and localized and are associated with construction noise, fugitive dust, disruption of traffic and community services, and risks to workers and community health and safety. Mitigation measures to address these impacts and risks are included in the environmental management plan (EMP), and the contractors will be made responsible for the implementation of these measures. Construction stage impacts include the generation of about 60,000 m3 of spoil (excess soil from site preparation activities) and 205 tons of solid waste from construction workers, over the five-year construction period. Municipal landfill sites near the subproject sites have been identified for disposal of these wastes. Due diligence has been conducted and the operational status and capacity to receive the project waste has been confirmed.

13. Operational stage impacts. During the operation and maintenance (O&M) stages of the subprojects, the potential impacts are associated with water usage, wastewater discharge, solid waste management, and odor emissions from the processing plants. The overall water requirement for the project during O&M is about 18 million m3 per annum: this is less than the current water use in the existing enterprise operations by about 5.5 million m3, due to the significant increases in water use efficiency to be achieved by the project. Water supply for the seven subprojects will be sourced from the existing municipal water supply system (which in turn sources water from four existing reservoirs and one irrigation canal). Due diligence has been conducted for all existing facilities. Water demands represent about 0.7% of the total water supply capacity of these water sources: their capacity to meet the project needs, in addition to existing allocations, is confirmed.

14. About 10% of the water used in subprojects, particularly in the processing industries, will be discharged as wastewater. The wastewater produced from the processing plants will be recycled to the extent feasible and will be treated (using digestion tanks) before being

3 Socialized agriculture service systems refer to technical and management support service provision via internet applications based on data generated through network connected sensors and devices.

iv discharged into the municipal sewers. The project will generate about 315 tons of solid waste annually, which will be transported to municipal landfill sites or incinerators. Due diligence was conducted for all existing facilities (existing subproject operations, landfills, wastewater treatment plants, industrial and agricultural parks) and confirmed that these facilities (i) are operating in accordance with domestic approvals and management plans and have no documented compliance issues, and (ii) have the capacity to meet the project requirements. Air emissions from the use of fine particulate organic matter during preparation of dried manure and vegetable waste as fertilizer pose a potential risk to air quality. About 99% of such emissions will be collected through air filtration dust collectors and reused as fertilizer and/or silage; the remaining 1% of dust will be discharged as non-toxic emissions.

E. Public Consultation and Grievance Redress Mechanism

15. About 501 people (264 men and 237 women) were consulted for preparation of the domestic EIAs and this IEE. Virtually all participants responded that the project will have an overall positive impact on the local economy and community and will personally benefit them. Issues of concern expressed by residents included construction noise and dust, and protection of water resources. These concerns are addressed through the project design features for water conservation and improved agricultural management; and safeguard mitigation measures in the project environmental management plan. The domestic EIA reports have been disclosed on the government websites.

16. A project-level grievance redress mechanism (GRM) has been designed and will be established to receive and facilitate resolution of complaints during the construction and operation phases. The GRM includes procedures for receiving grievances, recording/documenting essential 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.

F. Environmental Management Plan

17. An environment management plan (EMP) has been developed to ensure: (i) implementation of identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts; (ii) implementation of monitoring and reporting against the performance indicators; and (iii) compliance with the PRC’s relevant environmental laws, standards and regulations and ADB’s SPS 2009. The EMP includes an environmental monitoring plan to monitor the environmental impacts of the component and assess the effectiveness of mitigation measures, and a capacity building and training program focused on health, safety and environment.

G. Risks and Key Assurances

18. The Gansu Provincial Government has extensive experience in the implementation of ADB-funded loan projects and is experienced in ADB safeguard procedures and requirements. The seven state-owned enterprises and PPEs that will be the implementing agencies have limited experience in ADB projects. This may result in limited implementation of the project EMP and inadequate operation of the project facilities. These risks have been minimized as follows: (i) appointment of a full-time environment officer in the project management office (PMO); (ii) a PIU social and environmental focal staff (one per subproject) will be appointed by each subproject enterprise; (ii) the inclusion of a loan implementation environmental consultant in the loan consulting services; (iii) clear roles and responsibilities of all relevant agencies for EMP implementation, including contractors and construction supervision companies; (iv) capacity building for EMP implementation; and (v) the recruitment of an environmental monitoring agency to implement the external environmental monitoring described in the EMP. Environmental assurances (Section X) have been agreed upon and are v included in the project agreement.

H. Conclusion

19. It is concluded that full and effective implementation of the project EMP, together with the training and project assurances, will minimize the environmental risks of the project and achieve compliance with the policy and regulatory standards applied in this project EIA

1

I. INTRODUCTION

A. Project Rationale

20. Gansu Province, located in the northwest of the PRC, is the seventh largest province with a population of 26.2 million, of which 55.1% is rural population. In 2016, Gansu’s total gross domestic product (GDP) was CNY 720 billion, of which agriculture accounted for 13.7%. Gansu’s GDP per capita of CNY29,326 (equivalent to about €3,855) is the second lowest of all provinces in the PRC, and 40 of the province’s 87 counties are designated as national poverty counties. In the proposed project cities,4 6.5%–10.5% of the rural population is living below the national income poverty line of CNY2,300 per capita. Agriculture is still an important means of rural livelihoods in Gansu Province, yet low productivity and low-value addition of the agriculture sector limit the opportunities for income generation.

21. Uncoordinated business relationships between the primary and processing segment predominate the agriculture sector in Gansu. Information asymmetry about product quality and food safety characteristics (e.g., the origin of inputs, farming system, food safety, nutrition values) has led to adverse selection for low-value products which are not competitive in growing high value online and offline markets in Gansu and other provinces. Automated and credible traceability systems covering the entire value chain from farmer to consumer stage are rare. Farmers’ decisions on the quality and quantity of applied water, fertilizers, and pesticides for crop growth is not documented while real-time information services tailored to agro-ecological conditions, such as soil fertility, moisture, and temperature, are missing for decision support. Limited information communication technology (ICT) capacity of farmers, processors, and other service providers is constraining the adoption of integrated and automated information exchange systems which could facilitate the coordination and cooperation between business entities in the production and marketing segments. If coordinated participation and services were available, it would provide an opportunity for market-led innovation through the network of relevant business entities (e.g., farmers, traders, logistic services, wholesalers, retailers) and thereby enhance the agriculture sector competitiveness.

22. The low productivity of Gansu’s agriculture sector originates from constraints at different segments of agricultural production. Operations in the agriculture processing segment are too small and fragmented to have adequate quality assurance systems for sourced raw materials. Business upscaling of processing operations to realize economies of scale is constrained by high sourcing costs for inputs due to high transaction costs with small scale scattered production and distribution entities. Many operations in the processing segment lack adequate storage, transportation, and marketing capacity to produce the required volume and quality to access premium online and offline markets with high-quality food products.

23. The primary production segment is characterized by low-value crop production. Excessive application of water, fertilizers, and pesticides is one common cause for inefficient input use in crop production and resulting in high production costs, negative externalities on the environment and food safety and inefficient water usage. Adoption of modern agricultural technologies is constrained by deficiencies in technical knowledge of smallholders. Besides, smallholders’ access to extension services is hampered by the absence of adequate agricultural technology and management support services. Although Gansu Provincial Government is employing agricultural specialists to provide agro-technology advice to farmers, meeting the high demand for product-specific support in scattered rural areas with regular

4 Project interventions are planned in Baiyin, Lanzhou, Tianshui, Wuwei, and Zhangye cities with some project activities also in Jiuquan and Dingxi cities.

2 technical meetings is not feasible.

24. E-commerce and internet-based support services are accelerating growth in rural areas which is contributing to structural reforms towards increased quality and market orientation of the agricultural supply chain. The SMCGP represents the backbone of agricultural services and has therefore been identified as the primary organization to deliver internet-plus services to accelerate agriculture sector modernization and integration.5 Support to rural development, through agricultural modernization and value chain promotion approaches, is one of the strategic priorities of ADB’s Country Partnership Strategy for the PRC, 2016–20206 and is also aligned with ADB’s Operational Plan for Agriculture and Natural Resources.7

B. The Proposed Project

25. The project supports seven subprojects in central and southern Gansu (Figure I-1).

Subproject 3

Subproject 2 Subproject 4

Subproject 5

Subproject 6

Subproject 1

Subproject 7

Figure I-1: Location of Subprojects

Subproject 1 Gansu Internet+ Based Socialized Agricultural Service System Platform Subproject 2 Zhangye County-Level Internet Plus Based Socialized Agricultural Service System in Linze County Subproject 3 Zhangye Whole Industrial Chain Service System for Gobi Agriculture in Linze County Subproject 4 Wuwei Integrated Industry for Potatoes in Gulang County Subproject 5 Baiyin Whole Industrial Chain Service System for Liquorice in Jingtai County Subproject 6 Application Base of the Internet of Things for Featured Agricultural Products in Lanzhou New District

5 Government of the People’s Republic of China. 2015. Decision of the Communist Party of China Central Committee and the State Council on Deepening the Comprehensive Reform of Supply and Marketing Cooperatives. Beijing. 6 ADB. 2016. Country Partnership Strategy: Transforming Partnership: People’s Republic of China and Asian Development Bank, 2016–2020. Manila. 7 ADB. 2015. Operational Plan for Agriculture and Natural Resources: Promoting Sustainable Food Security in Asia and the Pacific, 2015–2020. Manila. 3

Subproject 7 Tianshui Whole Industrial Chain Service System for Forage Mulberry

26. The Supply and Marketing Cooperative Gansu Province (SMCGP) will be the project executing agency (EA) and responsible for overall guidance during project preparation and implementation. Five city governments (Baiyin, Lanzhou Tianshui, Weiwu, Zhangye), acting through their Supply and Marketing Cooperatives (SMCs), will be the implementing agencies (IAs). Seven state-owned enterprises and PPEs will be the project implementation units (PIUs). The PIUs will be responsible for implementing the subcomponents and administering and monitoring the contractors and suppliers.

27. The impact of the proposed project will be aligned with (i) inclusive economic opportunities in the rural areas of Gansu Province increased, and (ii) poverty in rural areas of Gansu Province reduced.8 The outcome of the proposed project will be: income generating opportunities from agricultural production and marketing increased. The project outputs are described in Section III.

C. Environmental Safeguards

28. The project is classified ‘Category B’ for the environmental assessment under the Asian Development Bank (ADB) Safeguard Policy (SPS, 2009), requiring preparation of an IEE. The project aims to improve the expansion and operational, environmental, and social management of key agricultural industries in Gansu Province. The scope and magnitude of potential environmental impacts have been categorized under the PRC’s EIA regulations as requiring preparation of an “EIA Table” (projects with lower potential impacts). This IEE has been prepared based on information in the individual feasibility study reports (FSRs) and domestic environmental impact assessment (EIA) documents that have been prepared for each subproject, as well as rapid site visits to the subprojects by the transaction technical assistance (TRTA) environment team.

29. An environmental 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 environment impacts; (ii) implementation of monitoring and reporting against the performance indicators; and (iii) compliance with the PRC’s relevant environmental laws, standards and regulations and the ADB’s SPS. This will be the key guiding document for environmental-related issues in the construction and operational phases of the project. The EMP also define the roles and responsibilities of relevant institutions, procedures and the EMP budget.

8 Government of the People’s Republic of China, State Council. 2011. Outline for Development-Oriented Poverty Reduction Program for Rural China. Beijing.

4

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

30. This IEE has been prepared following both the PRC’s national and local environmental legal and institutional framework and environmental assessment requirements, and in compliance with environmental safeguards of ADB.

A. ADB Safeguard Policy Statement

31. The ADB Safeguard Policy Statement (SPS, 2009) establishes an environmental review process to ensure that projects undertaken as part of programs funded through ADB loans are environmentally sound are designed to operate in line with applicable regulatory requirements and are not likely to cause significant environment, health, social, or safety hazards. Based on the SPS, the project is classified as category “B” and an IEE is required. The categorization of “B” is defined by the SPS as: “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.”

32. During the design, construction, and operation phases of a project, the SPS also requires the borrower to follow environmental standards consistent with “good international industry practice” as reflected in internationally recognized standards such as the World Bank Group’s Environment, Health and Safety (EHS) Guidelines.9 The guidelines provide guidance and standards for ambient air quality, air emissions, wastewater, and other variables, and performance indicators and prevention approaches. When host country regulations differ from these levels and measures, the borrower is to achieve whichever is more stringent. If less stringent levels or measures are appropriate given specific project circumstances, the borrower is required to justify any proposed alternatives.

B. PRC Environmental Legal Framework

33. The environmental protection and management system in the PRC consists of a well- defined hierarchy of regulatory, administrative and technical institutions. At the top level the People’s Congress of the PRC has the authority to pass and revise national environmental laws; the Ministry of Ecology and Environment (MEE, former Ministry of Environmental Protection) under the State Council promulgates national environmental regulations; and the MEE either separately or jointly with the Administration of Quality Supervision, Inspection and Quarantine issues national environmental standards. Provincial and local governments can also issue provincial and local environmental regulations and guidelines in accordance with the national ones. In addition, national and local five-year environmental protection plans form an important part of the legal framework.

34. Key applicable PRC environmental laws are listed in Table II-1 including associated regulations and decrees that support their implementation. Guidelines for EIA implementation are listed in Table II-2.

35. The most far-reaching law on pollution prevention and control is the Environmental Protection Law (1989, amended 2014, effective 2015 and item 2 in Table II-1), which sets out key principles for the country’s pollution control system, including the policy known as the

Government of the People’s Republic of China, State Council. 2011. Outline for Development-Oriented Poverty Reduction Program for Rural China. Beijing. ermal Power Plants, Environmental, Health, and Safety Guidelines for Geothermal Power Generation, Environmental, Health, and Safety Guidelines for Electric Power Transmission and Distribution. These guidelines can be found at http://www.ifc.org/ehsguidelines

5

“Three Simultaneities Policy”,10 the application of pollution levies, and requirements for EIA. The implementation of the “Three Simultaneities Policy” was further strengthened by decrees on its implementation (Table II-1 items 28 and 30) and the Construction Project Environmental Protection Management Regulation (Table II-1 item 19). The amended law further defines enforcement and supervision responsibilities for all levels of environmental protection authorities, imposes stricter obligations and more severe penalties on enterprises and construction units regarding pollution prevention and control, and allows for environmental public interest litigation including through nongovernment organizations. The procedures and requirements for the technical review of EIA reports by authorities have been specified (Table II-1 item 4), and environmental inspection and enforcement on design, installation, and operation of project-specific environmental protection and control measures are regulated under the “Three Simultaneities Policy” (Table II-1 items 5, 15, 25, 26, and 28).

36. Public participation and environmental information disclosure provisions are among the most significant changes introduced in the amended law, further supported by the decrees on the preparation of EIA summaries for public disclosure (item 26), information disclosure on construction project EIAs by government (item 24), method for public participation in environmental protection (item 22), and technical guidelines for public participation in EIAs.

37. For grievance redress, a hotline number (12369) was established in March 2011 at each level of environmental protection authority throughout the country for receiving and resolving environmental complaints, in accordance with the Management Measures for Operation of the Environmental Complaint Hotline (MEP Decree 2010 No. 15 [item 29]).

38. The PRC also provides protection for community health and occupational health and safety through the Labor Law (1994) (item 13), the Occupational Disease Prevention and Control Law (2001) (item 5), PRC Safety Production Law (item 4), State Administrative Regulations of Safety Production (item 18) and environmental and hygiene standards for construction sites.

Table II-1: Applicable PRC Environmental Laws, Regulations, and Decrees Year No. Laws/Regulations/Decrees Issued/Updated Laws 1 National Environmental Impact Assessment Law 2016 2 Environmental Protection Law 2015 3 Atmospheric Pollution Prevention and Control Law 2015 4 Safety Production Law 2014 5 Occupational Disease Prevention and Control Law 2011 6 Water and Soil Conservation Law 2011 7 Water Pollution Prevention and Control Law 2010 8 Urban and Rural Planning Law 2008 9 Solid Waste Pollution Prevention and Control Law 2005 10 Water Law 2002 11 Cultural Relics Protection Law 2002 12 Noise Pollution Prevention and Control Law 1999 13 Labor Law 1995 Regulations Atmospheric Pollution Prevention and Control Action Plan (State Council 14 2013 Announcement No. 37) Policy on Integrated Techniques for Air Pollution Prevention and Control 15 2013 of Small Particulates (MEP Announcement No. 59) 16 Planning Environmental Impact Assessment Regulation 2009 17 Cultural Relics Protection Law Implementation Regulation 2003

10 The “Three Simultaneities Policy” requires the design, construction, and operation of pollution control and treatment facilities to occur simultaneously with the project design, construction, and operation.

6

Year No. Laws/Regulations/Decrees Issued/Updated 18 State Administrative Regulations of Safety Production 2003 19 Construction Project Environmental Protection Management Regulation 1998 20 Wild Plant Protection Regulation 1996 Decrees and Announcements Directory for the Management of Construction Project EIA 21 2017 Categorization (MEP Decree 2017-44) Measures for Public Participation in Environmental Protection (MEP 22 2015 Decree 2015-35) Management Measures for Environmental Impact Post Assessment of 23 2015 Construction Projects (on trial) (MEP Decree 2015-37) Government Information Disclosure of Construction Project EIA (on trial) 24 2013 (MEP Announcement No. 103) 25 Measures for Environmental Supervision (MEP Decree 2012-21) 2012 Requirement for Preparation of EIA Report Summary (MEP 26 2012 Announcement 2012-51) Strengthening of EIA Management for Prevention of Environmental Risk 27 2012 (MEP Announcement 2012-77) Opinion from the State Council on Important Tasks for Strengthening 28 2011 Environmental Protection (State Council Announcement 2011-35) Management Measures for Operation of the Environmental Complaint 29 2010 Hotline (MEP Decree 2010-15) Management Procedures for the Supervision, Inspection and 30 Environmental Acceptance of Construction Projects under the “Three 2009 Simultaneities” (on trial) (MEP Announcement 2009-150) Specifications on the Management of Urban Construction and 31 2005 Demolition Waste (Ministry of Construction Decree 2005-139) Management Measures for Inspection and Acceptance of Environmental 32 2001 Protection at Construction Project Completion (MEP Decree 2001-13) Source: ADB TRTA consultants.

C. PRC Environmental Impact Assessment Framework and Procedures

39. EIA administrative framework. The administrative framework for EIA in the PRC consists of national, provincial, and local (city and county) environmental protection authorities. The national authority is the MEE, which promulgates laws, regulations, administrative decrees, technical guidelines, and environmental quality and emission standards on EIA and pollution prevention and control. At the provincial level, there are environmental protection departments, which act as gatekeepers for EIA and pollution prevention and control in the provinces. They are often delegated authority by the MEE to review and approve EIA reports for development planning and construction projects, except for those projects with national interest and those that cross provincial boundaries. The local (city or county level) ecology and environmental bureaus (EEB) enforce environmental laws and conduct environmental monitoring within city or county limits. Local EEBs can also be delegated the authority to approve EIA reports by the provincial environmental protection departments. Environmental protection departments and EEBs are supported by environmental monitoring stations, which are subsidiaries of these agencies and are qualified entities to carry out environmental monitoring.

40. The former MEP’s “Guideline on Jurisdictional Division of Review and Approval of EIAs for Construction Projects” (2009) defines which construction project EIAs require former MEP review and approval, and which EIAs are delegated to the provincial environmental protection departments.

41. The PRC has a qualification and registration system for EIA, and only qualified and registered institutes and individuals are allowed to prepare EIAs. Under MEP Decree 2015- 7

36, as of 1 November, 2015 qualified institutes for conducting EIAs for construction projects in the PRC can no longer be a subsidiary of an environmental authority responsible for approving EIAs.

42. EIA legal framework. EIA is governed by the Environmental Impact Assessment Law (2016) (Table II-1 item 1), covering EIAs for (i) plans (such as new development areas and new industrial parks) and strategic environmental assessments (SEA), and (ii) construction projects. This law was followed by the promulgation of two regulations: the Construction Project Environmental Protection Management Regulation (1998) (item 19) and the Planning Environmental Impact Assessment Regulation (2009) (item 16), both of which require early screening and environmental categorization.

43. EIA procedures. EIA procedures have been established in the PRC for over 20 years. In 2008, former MEP issued “Management Guideline on EIA Categories of Construction Projects” (revised 2017). Under MEE decree, Directory for the Management of Construction Project Environmental Impact Assessment Categorization (MEP Decree 2017-44) (item 21) provides detailed EIA requirements for 50 sectors and 192 subsectors and classifies EIAs for construction projects into three categories with different reporting requirements based on the “significance” of potential environmental impact due to the project and the environmental sensitivity3F11 of the project site as described in the directory. The directory provides detailed EIA requirements for 50 sectors and 192 subsectors:

(i) Category A: projects with significant adverse environmental impacts, for which a full EIA report is required; (ii) Category B: projects with adverse environmental impacts which are of a lesser degree and/or significance than those of Category A, for which a simplified tabular EIA report is required; and (iii) Category C: projects unlikely to have adverse environmental impacts, for which an EIA registration form is required.

44. A full EIA report for category A and a simplified tabular EIA report for category B are similar to ADB’s EIA and IEE reports, respectively. The registration form of an EIA is similar to an ADB Category C project.

45. EIA follow-up actions. In 2015, the MEP issued decree Management Measures for Environmental Impact Post Assessment of Construction Projects (MEP Decree 2015-37, item 23 of Table II-1). Under this decree, a trial program was implemented on 1 January 2016 requiring follow-up actions 3 to 5 years after commencement of project operation for large infrastructure and industrial projects or projects located in environmentally-sensitive areas. These actions include environmental monitoring and impact assessment to verify the effectiveness of environmental protection measures and to undertake any corrective actions that might be needed. The decree also specifies that the institute that did the original impact assessment for the project cannot undertake environmental impact post-assessment for the same project.

46. EIA guidelines. The MEE has issued a series of technical guidelines for preparing

11 Environmentally-sensitive areas are defined in the Decree, and include (i) nature reserves and protected areas, scenic areas, world cultural and natural heritage sites, drinking water source protection zones; (ii) basic farmland and grassland, forest parks, geological parks, important wetland, natural woodland, critical habitats for endangered plant and animal species, important aquatic spawning/nursery/wintering/migration grounds, regions suffering from water resource shortage, serious soil erosion areas, desertification protection areas, eutrophic water bodies; and (iii) inhabited areas with major residential, health care, scientific research, and administration functions, cultural heritage protection sites, and protection areas with historical, cultural, scientific, and ethnic values.

8

EIAs (Table II-2). These include impact assessment guidelines on general EIA implementation and principles, atmospheric environment and ambient air quality, noise, surface water, groundwater, ecology and regional biodiversity, biodiversity monitoring, quality management on environmental monitoring, and public participation.

Table II-2: Applicable PRC EIA guidelines No. Guideline Date 1 HJ 192-2015 Technical Criterion for Ecosystem Status Evaluation 2015 2 HJ 130-2014 Technical Guidelines for Planning EIA - General Principles 2014 3 HJ 663-2013 Technical Regulation for Ambient Air Quality Assessment (on trial) 2013 4 HJ 2.1-2011 Technical Guidelines for EIA – General Program 2011 5 HJ 19-2011 Technical Guidelines for EIA – Ecological Impact 2011 6 HJ 616-2011 Guidelines for Technical Review of EIA on Construction Projects 2011 7 HJ 623-2011 Standard for the Assessment of Regional Biodiversity 2011 HJ 630-2011 Technical Guideline on Environmental Monitoring Quality 8 2011 Management 9 Technical Guidelines for EIA - Public Participation (public comment version) 2011 10 HJ 610-2011 Technical Guidelines for EIA – Groundwater Environment 2011 11 HJ 2.4-2009 Technical Guidelines for EIA – Acoustic Environment 2009 12 HJ 2.2-2008 Technical Guidelines for EIA – Atmospheric Environment 2008 13 HJ/T 393-2007 Technical Specifications for Urban Fugitive Dust Pollution 2007 14 JG/J 146-2004 Environmental and Hygiene Standards for Construction Sites 2004 15 HJ/T 2.3-1993 Technical Guidelines for EIA – Surface Water Environment 1993 Source: ADB TRTA consultants.

D. Project Domestic EIA Report

47. Under MEE Decree on Management Guideline on EIA Categories of Construction Projects (MEP Decree 2017-44), the project requires a Tabular EIA report. This was prepared by Gansu Chuangxin Environmental Technology Co., Ltd. The company is certified by the MEE to undertake category A, B, and C assessments. The Tabular EIA will be submitted to the Gansu Provincial Department of Ecology and Environment for review and approval in March 2019; approval (usually 30 working days) is anticipated to be in May 2019.

E. Relevant International Agreements

48. The PRC has signed a number of international conventions and treaties environmental and biological protection: those relevant to the project are listed in Table II-3.

Table II-3: Applicable international agreements No. Agreement Year Purpose Ramsar Convention on Wetlands of Preventing the progressive encroachment on and 1 International Importance Especially as 1975 loss of wetlands for now and the future Waterfowl Habitat Convention Concerning the Protection of 2 1986 Conserving cultural and natural heritage sites the World Cultural and Natural Heritage 3 Convention on Biological Diversity 1993 Conservation and sustainable use of biodiversity Stabilizing greenhouse gas (GHG) concentrations UN Framework Convention on Climate 4 1994 in the atmosphere at a level that will prevent Change anthropogenic induced climate change United Nations Convention to Combat Desertification in Those Countries Fighting against desertification and mitigating the 5 1996 Experiencing Serious Drought and/or effects of drought Desertification Controlling emissions of anthropogenic GHGs in ways that reflect underlying national differences in 6 Kyoto Protocol 2002 GHG emissions, wealth, and capacity to make the reductions 9

No. Agreement Year Purpose Safeguarding human health and the environment from persistent organic pollutants (POPs), Stockholm Convention on Persistent ascertaining sound management of stockpiles and 7 2004 Organic Pollutants wastes that contain POPs, and taking measures to reduce or eradicate releases from intentional production and use of POPs Dealing with greenhouse gas emissions 8 Paris climate agreement 2015 mitigation, adaptation and finance starting in 2020 A global treaty to protect human health and the 9 Minamata Convention on Mercury 2017 environment from the adverse effects of mercury Montreal Protocol on Substances Global treaty to regulate the use of ozone 10 1990 that Deplete the Ozone Layer depleting substances Source: ADB TRTA consultants.

F. Applicable PRC Environmental Quality Standards

49. PRC environmental standards. Standards issued by the MEE generally consist of environmental quality (ambient) standards applicable to the receiving environment and emission standards applicable to the pollution source. The former includes standards for ambient air quality, noise and vibration, surface water, groundwater, and soil. The latter includes standards for integrated wastewater discharge, construction and community noise, odor and air pollutants (Table II-4).

Table II-4: Applicable PRC environmental standards No. Standard Code/Date 1 Ambient Air Quality Standards GB 3095-2012 2 Quality Standards for Groundwater GB/T 14848-2017 3 Environmental Quality Standards for Surface Water GB 3838-2002 4 Environmental Quality Standards for Noise GB 3096-2008 Soil Environmental Quality Risk Control standard for soil contamination of 5 GB 15618-2018 agricultural land 6 Noise Standards for Construction Site Boundary GB 12523-2011 7 Noise Standards for Industrial Enterprises at Site Boundary GB 12348-2008 8 Emission standards for Odor Pollutants GB 14554-93 9 Air Pollutant Integrated Emission Standards GB 16297-1996 10 Integrated Wastewater Discharge Standards GB 8978-1996 11 Technical Specifications for Regionalizing Environmental Noise Function GB/T 15190-2014 12 Standard for Flood Control GB 50210-94 Limits and Measurement Methods for Crankcase Pollutants from Heavy- 13 GB 11340-2005 duty Vehicles Equipped with Pressure Ignition Engines Emission Limits and Measurement Methods for Exhaust Pollutants from 14 GB 17691-2005 Vehicle Compression-Ignition and Gas Fueled Ignition Engines Limits and Measurement Methods for Exhaust Pollutants from Vehicles 15 GB 18285 -2005 Equipped with Ignition Engines 16 Limits and Measurement Methods for Emissions from Light Duty Vehicles GB 18352-2005 17 Organic Fertilizer Standards NY525-2012 Source: ADB TRTA Consultant and domestic EIA report.

50. As noted above, ADB’s SPS requires borrowers to follow environmental standards consistent with good international industry practice as reflected in internationally recognized standards such as the World Bank Group’s EHS Guidelines. When host country regulations differ from these levels and measures, the borrower is to achieve whichever is more stringent. If less stringent levels or measures are appropriate in view of specific project circumstances, the borrower/client is required to justify any proposed alternatives. Both PRC standards and EHS guidelines are used in this assessment as described below.

10

1. Ambient Air Quality Standards

51. Ambient air quality limits are intended to indicate safe exposure levels for the majority of the population, including the very young and the elderly, throughout an individual’s lifetime. Limits are given for one or more specific averaging periods, typically one-hour average, 24- hour average, and/or annual average. The PRC’s recently updated Ambient Air Quality Standards (GB3095-2012) has two classes of limit values; Class 1 standards apply to special areas such as nature reserves and environmentally sensitive areas, and Class 2 standards apply to all other areas, including urban and industrial areas. The PRC standards for Class 2 areas are applicable to the Project.12

52. The World Health Organization (WHO) Air Quality Guidelines are recognized as international standards and are adopted by the World Bank Group’s EHS Guidelines. In addition to guideline values, interim targets are given for each pollutant by the WHO as incremental targets in a progressive reduction of air pollution. The WHO guidelines and corresponding PRC standards are presented in Table II-5.

53. From a review of Table II-5, it can be observed that:

• For TSP, there are PRC standards but no corresponding WHO guidelines. • For PM10, PRC Class 2 annual average and 24-hour average standards meet WHO interim target-1 guidelines (there are no 1-hour average standards or guidelines for either PRC or WHO). • For PM2.5, PRC Class 2 annual and 24-hour standards meet WHO interim target-1 guidelines (there are no 1-hour standards or guidelines for either PRC or WHO). 3 • For SO2, WHO only has a 24-hour average guideline (0.125 mg/m ), which is slightly 3 lower than the PRC standard (0.150 mg/m ). However, SO2 levels are low in the project area, and the project will only contribute to low levels of SO2, so the minor difference is inconsequential. • For NO2, the PRC standard is equivalent to the WHO annual average guidelines, there is no WHO 24-hour average guideline; the 1-hour average PRC standard is equivalent to the WHO guideline. • For O3, the PRC class I 1-hour average standard is equivalent to the WHO 1-hour average guideline, and PRC 1-hour average class II standard is equivalent to the WHO interim target-1 1-hour average guideline. • For CO, there are PRC standards but no corresponding WHO guidelines.

Table II-5: PRC Ambient Air Quality Standards and WHO ambient air quality guidelines, μg/m3 PRC Ambient Air Quality WHO/EHS Guidelines Air Quality Averaging Standard parameter period Interim Air quality Class I Class II Targets guideline annual 80 200 NA NA TSP 24-hour 120 300 NA NA annual 40 70 30-70 20 PM10 24-hour 50 150 75-150 50 annual 15 35 15-35 10 PM2.5 24-hour 35 75 37.5-75 25 annual 20 60 NA NA SO2 24-hour 50 150 50-125 20 1-hour 150 500 NA NA

12 On 29 February 2012, the China State Council passed the roadmap for ambient air quality standards with the aim of improving the living environment and protecting human health. The Ambient Air Quality Standards (GB 3095-2012) prescribes the first-ever limits for PM2.5. It also modified the previous area classifications by combining Class III (special industrial areas) with Class II (residential, mixed use areas). 11

annual 40 40 NA 40 NO2 24-hour 80 80 NA NA 1-hour 200 200 NA 200 8-hour 100 160 160 100 O3 1-hour 160 200 NA NA 24-hour 4,000 4,000 NA NA CO 8-hour NA NA NA NA 1-hour 10,000 10,000 NA NA NA= not applicable. Source: WHO Air Quality Guidelines (2006) in IFC EHS Guidelines (2007), and PRC GB 3095-2012.

54. Overall the PRC standards show a high degree of equivalency to the WHO guidelines or IT-1 values and are adopted for use in the Project.

2. Soil Standard

55. Table II-6 presents the PRC Soil Environmental Quality Risk Control standard for soil contamination of agricultural land (GB15618-2018). The standard applies to the agricultural land of the project.

Table II-6: PRC Soil Environmental Quality Risk Control standard for soil contamination of agricultural land (GB15618-2018) unit: mg/kg Soil pH No. Pollutants Type pH≤5.5 5.5

3. Odor pollutants

56. Odor pollutants will be generated from the operation of agricultural processing plants of the subprojects. Odor pollutants are regulated under PRC’s Emission standards for Odor Pollutants (GB 14554-93). There is no equivalent standard recommended in the EHS Guidelines, and the PRC standard is adopted for use in the Project.

12

Table II-7: Applicable odor pollutant standard Category II Standard at the site boundary No. Parameter (mg/m3, Odor concentration excluded) 1 Ammonia 2.0 2 Trimethylamine 0.15 3 H2S 0.10 4 Methyl mercaptan 0.01 5 Dimethyl sulfide 0.15 6 Dimethyl disulfide 0.13 7 Carbon disulfide 5.0 8 Styrene 7.0 9 Odor concentration 30 Source: PRC GB 14554-93.

4. Boiler Emissions

57. Table II-8 presents the relevant PRC national boilers emission standard compared with relevant international standards (EHS Guidelines for small boiler). The PRC national standards are more stringent than the EHS Guidelines, and the PRC national standards are applicable to the project.

Table II-8: PRC Emission Standards and Relevant International Guidelines for gas fired boilers Emission standard of air EHS Guidelines for Small pollutants for coal-burning Combustion Facilities Parameter oil-burning gas-fired boiler Emissions Guidelines Comparison (Table 2 of GB13271-2014) (3MWth-50MWth) (Boiler) Stack height is determined Design stack height according to the requirements in according to good PRC standard Stack the approved EIA, and must be international meets good Height ˃ 8 m. practice to avoid excessive international ground level concentrations practice and minimize impacts. PM 30 mg/Nm3 NA No EHS guideline 3 SO2 200 mg/Nm NA No EHS guideline

3 3 PRC standard more NOx 200 mg/Nm 320 mg/Nm stringent than EHS Source: World Bank EHS General Guidelines - Table 1.12 and PRC GB13271-2014.

5. Fugitive Particulate Matter Emission

58. Fugitive emission of particulate matter (PM) such as dust from construction sites is regulated under PRC ‘s Air Pollutant Integrated Emission Standard (GB 16297-1996), which sets 120 mg/m3 as the maximum allowable emission concentration and ≤ 1.0 mg/m3 as the concentration limit at the boundary of construction sites, with no specification on the PM’s particle diameter. There is no equivalent standard recommended in the EHS Guidelines, and the PRC standard is adopted for use in this IEE report.

6. Surface Water

59. PRC’s Surface Water Ambient Quality Standard (GB3838-2002) defines five water quality categories for different environmental functions. For example, Category I is the best, such as water at sources of rivers and National Nature Reserves. Category V is the worst quality, suitable only for agricultural and scenic water uses. Based on information collection and site visit, Category III and IV water quality standard (for subproject 6) (see Table II-9) is 13

applicable for the surface water near the subproject sites. There are no applicable EHS guidelines or target for water quality in this context, and the PRC standard is adopted for use in this IEE report.

Table II-9: Applicable surface water standard. Unit: mg/l, pH excluded Water Quality Category No. Parameter I II III IV V 1 pH 6-9 6-9 6-9 6-9 6-9 90% saturation 2 Dissolved Oxygen ≥6 ≥5 ≥3 ≥2 or ≥7.5 3 CODMn ≤2 ≤4 ≤6 ≤10 ≤15 4 CODCr ≤15 ≤15 ≤20 ≤30 ≤40 5 BOD5 ≤3 ≤3 ≤4 ≤6 ≤10 6 NH3-N ≤0.15 ≤0.5 ≤1.0 ≤1.5 ≤2.0 TP ≤0.02 ≤0.1 ≤0.2 ≤0.3 ≤0.4 7 For lakes and ≤0.01 ≤0.025 ≤0.05 ≤0.1 ≤0.2 reservoirs TN (N for lakes and 8 ≤0.2 ≤0.5 ≤1.0 ≤1.5 ≤2.0 reservoirs) 9 Copper ≤0.01 ≤1.0 ≤1.0 ≤1.0 ≤1.0 10 Zinc ≤0.05 ≤1.0 ≤1.0 ≤2.0 ≤2.0 11 Fluoride ≤1.0 ≤1.0 ≤1.0 ≤1.5 ≤1.5 12 Selenium ≤0.01 ≤0.01 ≤0.01 ≤0.02 ≤0.02 13 Arsenic ≤0.05 ≤0.05 ≤0.05 ≤0.1 ≤0.1 14 Total Mercury ≤0.00005 ≤0.00005 ≤0.0001 ≤0.001 ≤0.001 15 Cadmium ≤0.001 ≤0.005 ≤0.005 ≤0.005 ≤0.01 Hexavalent 16 ≤0.01 ≤0.05 ≤0.05 ≤0.05 ≤0.1 Chromium 17 Lead ≤0.01 ≤0.01 ≤0.05 ≤0.05 ≤0.1 18 Cyanide ≤0.005 ≤0.05 ≤0.2 ≤0.2 ≤0.2 19 Volatile Phenol ≤0.002 ≤0.002 ≤0.005 ≤0.01 ≤0.1 20 Sulfide ≤0.05 ≤0.1 ≤0.2 ≤0.5 ≤1.0 21 Petroleum ≤0.05 ≤0.05 ≤0.05 ≤0.5 ≤1.0 22 Anionic surfactant ≤0.2 ≤0.2 ≤0.2 ≤0.3 ≤0.3 23 Coliforms ≤200 ≤2000 ≤10000 ≤40000 ≤40000 CODMn = permanganate index; CODcr = chemical oxygen demand; BOD5 = 5 days biochemical oxygen demand; NH3-N= ammonia nitrogen; TP = Total Phosphorus; TN = Total Nitrogen. Source: PRC GB3838-2002.

7. Groundwater

60. PRC’s Groundwater Water Ambient Quality Standard (GB/T14848-2017) also defines a number of water quality categories for different environmental functions. The Category III standard (Table II-10) is applicable for all subprojects’ sites. There is no equivalent standard recommended in the EHS Guidelines, and the PRC standard is adopted for use in the Project.

Table II-10: Applicable groundwater standard No. Parameter Unit Category III Standard 1 pH - 6.5-8.5 2 CODMn mg/l 3.0 3 Sulfate mg/l 250 4 Chloride mg/l 250 5 Volatile Phenols mg/l 0.002 6 Total hardness (CaCO3) mg/l 450 7 Nitrate NO3- mg/l 20 8 Nitrite NO2- mg/l 1.0 9 NH3-N mg/l 0.5 10 Molybdenum mg/l 0.2

14

No. Parameter Unit Category III Standard 11 Cyanide mg/l 0.05 12 Cadmium mg/l 0.005 13 Chromium VI mg/l 0.05 14 Arsenic mg/l 0.01 15 Zinc mg/l 1.0 16 Fluoride mg/l 1.0 17 Lead mg/l 0.01 18 Iron mg/l 0.3 19 Manganese mg/l 0.1 20 Copper mg/l 1.0 21 Selenium mg/l 0.01 22 Benzene mg/l 0.01 23 Methylbenzene mg/l 0.7 24 Total coliforms /L 3.0 25 Colony forming unit /L 100 26 Mercury mg/l 0.001 27 Total dissolved solid mg/l 1000 CODMn = permanganate index; CODcr = chemical oxygen demand; BOD5 = 5 days biochemical oxygen demand; NO3- = Nitrate; NO2- = Nitrite; NH3-N= ammonia nitrogen; TP = Total Phosphorus; TN = total nitrogen. Source: PRC GB/T14848-2017.

8. Wastewater Discharges

61. Table II-11 presents the relevant PRC wastewater discharge standards. The EHS Guidelines indicate that wastewater discharged to public or private wastewater treatment systems should: meet the pretreatment and monitoring requirements of the sewer treatment system into which it discharges; not interfere, directly or indirectly, with the operation and maintenance of the collection and treatment systems, or pose a risk to worker health and safety, or adversely impact characteristics of residuals from wastewater treatment operations; and be discharged into municipal or centralized wastewater treatment systems that have adequate capacity to meet local regulatory requirements for treatment of wastewater generated from the project.

62. The wastewater discharges from the Project will be required to meet Class B maximum acceptable concentrations in Wastewater Quality Standards for Discharge to Municipal Sewers (GB/T 31962-2015), and the WWTP discharges are required to meet Class 1A of Discharge Standard of Pollutants for Municipal Wastewater Treatment Plants (GB 18918- 2002).

Table II-11: PRC Wastewater Quality Standards for Discharge to Municipal Sewers Maximum acceptable concentration (mg / L, except pH No. Pollutant and chromacity) Class B 1 pH 6.5-9.5 2 SS 400 3 COD 500 4 Ammonia nitrogen 45 5 TDS 2000 6 Chromacity 70 7 BOD 350 8 Total phosphorus 8 Source: PRC GB/T 31962-2015.

15

9. Noise

63. Table II-12 presents the relevant PRC Urban Noise Standards compared with relevant international guidelines from the WHO (as presented in the EHS Guidelines). The classes within the standards are not directly comparable, but the PRC Category I standards are equivalent to WHO Class I standards, Category II standards are less stringent than WHO Class I standards and Category III standards are more stringent than WHO Class II standards. For this project, the following categories will be applied: Categories II and III standard for the subproject sites (Category III for the industrial parks in which subprojects 4, 5, 6 and 7 are located); and Category I standard for sensitive receptors.

Table II-12: PRC Environmental Quality Standards for Noise (GB3096-2008) and relevant international guidelines PRC Standards International Standards Comparison Leq dB(A) One Hour Leq dB(A) Category Day Night Day Night 06-22h 22-06h 07-22h 22-07h 0: Areas needing extreme quiet, such as special 50 40 health zones WHO Class I: WHO Class I: Classes are not I: Mainly residential; and residential, Residential, directly comparable, cultural and educational 55 45 institutional, institutional, but PRC Class II institutions educational: 55 educational: 45 standards exceed II: Mixed residential, WHO Class II commercial and 60 50 WHO Class II: WHO Class II: standards. PRC industrial areas industrial, Industrial, standards are III: Industrial areas 65 55 commercial: 70 Commercial: 70 utilized in this report. IV: Area on both sides of 70 55 urban trunk roads Source: WHO Noise Quality Guidelines (1999) in IFC EHS Guidelines (2007), and PRC GB3096-2008.

64. Table II-13 presents the relevant PRC and international standards (US EPA, IFC EHS Guideline: Occupational health and safety standards) for on-site construction noise. The PRC’s Emission Standard of Environmental Noise for Boundary of Construction Site (GB12523–2011) regulates construction noise, limiting construction noise levels at the construction site boundary to 70 dB(A) in the day time (06:00–22:00 hours) and 55 dB(A) at night (22:00–06:00 hours).

Table II-13: PRC Noise Emission Standard for Construction Site Boundary (GB12523-2011) and relevant international guidelines Day Leq Night Leq International Standards IFC EHS Guideline dB(A) dB(A) Leq dB(A) US EPA: 85 (day, 8-hour Occupational Health and Safety: 85 (Equivalent 70 55 exposure) level; LAeq,8h) / 110 (Maximum LAmax, fast) Source: US EPA, IFC Occupational Health and Safety standard and PRC GB 12523-2011.

65. During operation, noise at the boundaries of the sites should comply with Class II of the PRC Industrial Enterprise Boundary Noise Emission Standard (GB12348-2008) (Table II-14). At sensitive receptors, the project should comply with the World Bank EHS Guidelines (Table II-11).

Table II-14: PRC Noise Emission Standard for Construction Site Boundary (GB12348-2008) Standard Value Leq dB(A) Standard Type Daytime Nighttime Class 2 60 50 Source: PRC GB 12348-2008.

16

III. PROJECT DESCRIPTION

A. Project Overview

66. The expected outputs of the project are: (i) comprehensive information service and management platform developed; (ii) agricultural production, processing, storage, and marketing modernized and agricultural production modernized, and (iii) capacity of SMCGP improved.

67. Output 1: Comprehensive information service and management platform developed. This output will develop data centers with information platforms to process data generated from project facilities for increased production and processing efficiency and for e- commerce marketing purposes. This will include (i) construction of data and training centers; (ii) procurement of ICT equipment and technical advisory; and (ii) training of farmers and enterprise staff to build capacity in ICT application in the agriculture production and processing segment. The platform will provide product origin, quality, safety monitoring and tracing services as well as management advice for the coordination and optimization of agricultural production, processing, and marketing activities. The integrated network will also reduce transaction costs between service providers and establish access to high value markets via linking to e-commerce platforms. The platform is intended to be scalable and inclusive to provide project generated market information, and agricultural support services to a wide range of beneficiaries, especially farmers who lack access to markets and high-quality technical support services.

68. Output 2: Agricultural production, processing, storage, and marketing modernized. This output will (i) establish demonstration agricultural production enterprises for high value crop production including summer vegetables, potatoes, fruits, and licorice; and forage crop production, in particular mulberry; (ii) equip the demonstration enterprises with internet of things13 applications for product quality and safety monitoring, increased production efficiency and coordination with other segments of the agriculture sector; (iii) construct warehouses, cold storage facilities, and market facilities to increase value addition; and (iv) finance ICT, and transport equipment to promote an integrated and automated information exchange network for enhanced coordination and quality assurance at distribution, storage, processing, and marketing facilities. Global positioning systems together with network connected sensors for soil moisture, temperature, and optical spectrum will be utilized to monitor and optimize the quantity and timing of irrigation, fertilizer application, and harvesting depending on the intra-field variability of crops and soil conditions. Project financed improvements to processing and storage services will benefit small farmers including women and vulnerable groups through enhanced market access. The production enterprises will be used for demonstration and training purposes to increase access and quality of agriculture technology and management support services for small farmers, including women and vulnerable groups in rural areas who will benefit as suppliers or members of the cooperatives.

69. Output 3: Capacity of SMCGP improved. This output will (i) provide on-the-job training to SMCGP staff in the implementation of projects relating to use of the internet of things; (ii) support national study tours in particular with respect to precision agriculture, modern internet-based marketing, quality control and traceability; and (iii) promote participation in national and regional conferences. The output will improve the capacity of SMCGP staff to implement projects and to work within the internet-based environment.

70. Project features and value addition. The project design contains innovative

13 Internet of things refers to physical devices which are embedded with sensors and network connection capability that enable these devices to collect and exchange data. It allows to remotely sense and control devices through existing internet infrastructure. 17 agriculture internet plus features. A provincial- and a county-level project supported platform will be providing tailored agriculture production and value chain services though Internet of Things applications. Greenhouses and agriculture production bases for high value crops will be equipped with network connected moisture and temperature sensors to optimize water resource use. IoT sensors will also be equipped along production and processing lines for the identification of product batches to provide credible product origin and food safety certification data on branded products of fresh and processed agriculture products. Production batch identification technology will also be installed in warehouses and logistics fleets to achieve higher cost-effectiveness of the distribution system and online delivery linkages to e- commerce platforms.

B. Subprojects

71. Activities to be carried out under the 7 subprojects is summarized in Table III-1. The implementing agencies for 3 subprojects are state-owned enterprises, and for the remaining 4 are PPEs.

18

Table III-1: List of Subprojects and Activities Subproject Implementing SOE/ No. City Activities and construction content Title Company PPE 1. Lanzhou Gansu 1) Establish a data center of 200 TB cloud technology-based data storage and maintenance capacity in a 60 m2 room Gansu Agricultural SOE Prefecture, Internet+ using an existing SMCGP facility; and use the facility to host data system solutions for bigdata analytics and Materials and Jiuquan Based processing capabilities. Fertilizer Limited Prefecture, Socialized 2) Establish an Internet plus based agriculture input service system comprising (i) implementation of an Information Company. Dingxi Prefecture Agricultural system for dissemination of agriculture marketing details, brand development, product advertisement, and pricing; (ii) Service an on-demand telephonic advisory services function through recruitment of 50 agriculture experts for providing System remote digital advisory functions to farmers on agriculture techniques and related issues to improve productivity; (iii) Platform implementation of information system enabling farmers to hire agricultural equipment, planning and reserving cold storage logistic vehicles, and storage places; (iv) implementation of predictive analytic software solutions that provide information to farmers on national agricultural product demand; (v) procurement, and configuration of internet-of- things (IoT) sensors to 100 fertilizer distributors and 10 agriculture material storehouses for collecting real-time statistics on consumption and demand planning of agriculture input resources, enabling farmers to place online orders for agricultural inputs and plan for their delivery; (vi) deployment of one stop online portal for accessing SMCGP services; and (vii) undertake capacity development and knowledge sharing through seminars, development of training contents for farmers, online training and multimedia based promotional activities; 3) Construct an organic fertilizer substrate plant (annual output 30,000 tons) in Jiuquan 4) Construct a fertilizer production station (annual output 5,000 tons) in Jiuquan and procure equipment for soil testing and fertilizer recommendation. 5) Construct an agricultural products integrated logistics park including 2,088 m2 of constant temperature library and sorting area, 2,290 m2 of agricultural material warehouse, 8,926 m2 of agricultural products trading market, 610 m2 of agricultural materials sales area, 9,810 m2 of shops, and 14,318 m2 of service center and life service building. 6) Open online flagship stores on the main E-commerce platform in the PRC. 2. Zhangye Zhangye 1) Agricultural socialization service village terminal site construction: rent 1,000 m2 of the county-level agricultural Linze Zhongyun PPE Prefecture Linze County-Level socialization service center (1 county-level center) and 77 village-level centers of 100–200 m2 each; refurbish each Data Company County Internet Plus office and procure office electronic equipment. Each village-level center to be operated by 1-2 staff. Based 2) Purchase farm machinery for hire to farmers for land preparation and sowing, pesticide spraying using drones and Socialized crop harvesting. Agricultural 3) Agricultural products cold-chain warehousing logistics services: rent 4,000 m2 of cold storage warehouse and 4,800 Service m2 of warehouse; purchase cold chain equipment and 18 vehicles for product distribution. System in 4) Rural logistics service construction: rent 1,000 m2 county-level sorting center, 200 m2 town-level sorting center, and Linze County rent 100 m2 village-level sorting station (“sorting center” refers to items purchased by farmers from the internet and sorted into different categories to speed delivery); purchase 8 electric medium-sized trucks for distribution and 73 electric minibuses for village-level logistic stations. 5) Enter agreements with major e-commerce platform providers and facilitate farmers to trade their produce. 6) Agricultural products off-line show shop: rent a 1,000 m2 shop and purchase relevant exhibition equipment. 7) Agricultural socialized financial services system construction: rent a 200 m2 office building, 1,000 mu forage storage site, 1,000 mu open area (storage capacity 1,000 tons) for temporary storage and sorting of waste organic matter (vegetable mulch, tree cuttings etc; the waste then to be sent to subproject 3 for fertilizer and greenhouse substrate use), and 500 mu seed storage site. Purchase 3 sets of modular sheds (designed for quick installation and taking 19

Subproject Implementing SOE/ No. City Activities and construction content Title Company PPE down) for storage and storage tarpaulins, and 100 x 1-ton seed safety storage tanks. Construct a county financial clearing system. 3. Zhangye Zhangye 1) Gobi Desert agricultural construction site: (i) construct greenhouses (499 mu area) on new (undeveloped) desert Linze New PPEa Prefecture Linze Whole lands leased by the company from the government for agriculture development including 30 intelligent solar Cooperation Baihui County Industrial greenhouses (using manual maintenance and cleaning), 20 intelligent connected steel arch greenhouses, 100 Business and Trade Chain intelligent small arch greenhouses, 4 water storage tanks (each 5,000 m3 capacity), access roads between Limited Company Service greenhouses and limited on-site landscaping (“green belt”). System for 2) Construct facilities on the existing company land including: (i) central production line for drying summer vegetables, Gobi with annual output of 200 tons of freeze-dried and 2,000 tons of heat-dried vegetables (heat from biogas); (ii) Agriculture in production line for cultivation substrates with 50,000 tons annual output; (iv) insulated storehouse of 50,000 m3, Linze County covering a land area of 10,000 m2; and (c) Gobi agricultural IoT control demonstration center with three floors and a floor area of 2,840 m2, comprising the first floor for the IoT information control area, the second floor for IoT quality control area, and the third floor for IoT service area. 3) Capacity development and knowledge management: (i) seminars and training sessions for farmers with whom contract farming agreements have been made; (ii) engagement with e-commerce platforms for marketing and trading of Gobi smart greenhouse produce involving the company; and (iii) establishing arrangements with Gansu Agriculture University for provision of specialist resource persons for developing and implementing training programs. 4. Wuwei Wuwei 1) Construct (i) a center building with a floor area of 8,808 m2; (ii) 3,000 m2 of multi-span greenhouses with IoT network Gansu Zhengyang PPE Prefecture Integrated and data systems using the cloud technology platform established through output 1 for controlled potato plantation Service for Modern Gulang County Industry for and seedling development; and (iii) a 1,620 m2 staff dormitory. Purchase equipment and software to develop an Agriculture Limited Potatoes in electronic information management platform linked to the provincial e-commerce platform. Purchase planting and Company Gulang harvesting machinery for renting to farmers. County 2) Potato food research and processing center including (i) construction of 500 m2 thermostatic storage, 1,800 m2 bio- fertilizer production workshop, 2,000 m3 liquid fertilizer storage tank; (ii) expansion of the original processing center by increasing the floor area of 15,728 m2, purchasing a potato paste production line with an annual output of 5,000 tons, a potato biscuit production line with an annual output of 5,000 tons, and a potato chip production line with an annual output of 5,000 tons; (iii) purchase biological fertilizer production line with an annual output of 4,000 tons solid biological fertilizer and 16,000 tons liquid biological fertilizer; and (iv) purchase 493 sets of other equipment. 3) Potato virus-free seedling and cultivation center: construct (i) a 100 mu potato meta-variety seedling base with an annual output of 5.1 million seed potatoes; (ii) a 1,000 mu potato area with an annual output of 2,800 tons; and (iii) a 2,160 m2 potato virus-free seedling center, with an annual output of 3 million seed potatoes, including 40 greenhouses, 1 office building, 3 management rooms, 3 pump rooms, and 1 power transformer for connection to the national electricity grid. 4) Potato standardized production area: transfer 3,000 mu land in Gaolingxin Village Gulang County for potato planting with 8,400 tons annual output of potatoes for processing. 5. Baiyin Prefecture Baiyin Whole 1) Licorice internet + system deployment: (i) procure software and equipment to develop the data acquisition, video Jingmao Ecological PPEa Jingtai County Industrial surveillance, transmission network, and water and fertilizer integration systems (ii) develop integration of data Agricultural Chain platforms between the Gansu Platform (subproject 1) and the licorice data platform (iii) implement traceability system Technical Company Service for licorice; and (iv) develop decision processing system to regulate automated inputs replenishment (water and Limited System for fertilizer) based on data collected through the liquorice internet plus platform. Licorice in 2) Establish standard operating processes, and procurement of machinery for licorice seedling nursery base and

20

Subproject Implementing SOE/ No. City Activities and construction content Title Company PPE Jingtai liquorice planting activities. County 3) Licorice seedling base: build 4,000 mu liquorice seed planting and a seedling base including the purchase of a licorice planting machine 4) Licorice planting area: develop 60,000 mu (through LURT) of licorice plantation and purchase agricultural machinery. 5) Liquorice processing facility covering a land area of 43 mu, and a floor area of 17,727 m2 including 2,473 m2 liquorice processing workshop, 1,690 m2 liquorice drying and cleaning workshop, 2,462 m2 warehouse, 2,864 m2 sunshine shed, 3,490 m2 office building, 3,896 m2 dormitory building, and 27,969 m2 liquorice drying square. Purchase software, hardware, and ancillary facilities, and liquorice processing and product inspection equipment, etc. 6. Lanzhou Application 1) Establish IoT based platform for smart greenhouses and implement sampling IoT networks to collect soil chemistry Lanzhou New SOE Prefecture New Base of the data from 8 villages: (i) Implementation of IoT network in the smart green houses and identified village network; (ii) District Land Assets District Internet of Implementation of data system to collect, store, organize, and executing automated decisions; and implement a Investment and Things for traceability system for tracking the fruits from farm to market. Management Featured 2) Agricultural IoT application demonstration base: expand 3 large-scale intelligent sunlit greenhouses with a total floor Limited Company Agricultural area of 148,896 m2, construct 4,968 m2 comprehensive management room for the greenhouses, and purchase drip Products in pipes and integrated water and fertilizer facilities. Lanzhou New 3) Intelligent cold-chain logistic system for agricultural products: upgrade the existing cold-chain warehouse logistics District system, purchase equipment to build cold-chain logistics temperature control management and traceability system; purchase five 10-ton refrigerated trucks for the agricultural logistics command center. 4) Build a comprehensive management room with a total floor area of 4,968 m2, including a 1,728 m2 modern marketing service system for agricultural products and modern agricultural IoT control center, an 864 m2 technical training center, an 864 m2 inspection and testing center, and a 1,728 m2 packaging workshop. 7. Tianshui Tianshui 1) Implementation of IoT platform for controlled growth of seedling and integrating with Gansu platform for product Tianshui Denong PPEa Prefecture Whole advertisement and selling of mulberry forage. Supply and Industrial 2) Construct the following facilities within an existing national agricultural science and technology demonstration park: Marketing Seed Chain 852 m2 training centre, 1,704 m2 dormitory, conversion of a 1,512 m2 building (previously used for tissue culture) for Industry Limited Service office space, pump houses and sewage network. Purchase equipment and software for electronic information Company System for management platform, and reapers for leasing to farmers. Forage 3) Construct forage mulberry seedling tissue culture facility with an area of 39.8 mu, including 5,175 m2 tissue culture Mulberry centre, 3,630 m2 #1 bottle seedling room and 3,840 m2 #2 bottle seedling room (seedlings are kept in sterilized bottles at regulated temperatures, to minimize risk of bacterial invasion and to optimize growth). Purchase about 517 items of small operational equipment (e.g. sensors, sterilized bottles, etc). 4) Construct seedling hardening center covering 78.9 mu including six 17,971 m2 intelligent seedling hardening greenhouses, a 4,838 m2 intelligent seedling greenhouse, a 1,200 m2 seedling production workshop, a 1,620 m2 storage warehouse (for temporary storage of soil materials and culture mediums to produce growing substrate for young mulberry plants), and a 2,430 m2 silage fermentation workshop, distribution room, heat pump room, custody room, etc.. Purchase 80 sets of equipment. a Although shown as PPEs, these enterprises have between 20% and 51% state ownership. m2 = square meters, m3 = cubic meters, IoT = internet of things, LURT = land use rights transfer, PPE = participating private enterprise, SOE = state owned enterprise Sources: Domestic feasibility study reports.

21

72. Selection of crop types for the project. Crop types were selected to maximize production success under local climatic, soil, and topographic conditions, as well as access to transport routes and markets. Subprojects 3 and 4 are located in regions known for summer vegetable and potato production respectively, and the PIUs are leading production enterprises: the selection of these sites and enterprises allows the project to have large outreach and benefits and to scale up from existing expertise and production systems. For subproject 5, liquorice was selected as this is a hardy crop with low water requirements which is suited for the dry, cold, and low-nutrient growing conditions of the Gobi Desert. For subproject 6, which will focus on greenhouse production of high-value perishable fruits (e.g. strawberries), the Lanzhou New Area is an established “high tech zone” and is close to the airport: these features enable production to be quickly established and for rapid delivery to elsewhere in the PRC. For subproject 7, mulberry was selected as this is hardy crop with low water requirements, which is suited for the dry, sloping, and mountainous conditions and shallow soils of the area.

1. Subproject 1

73. Subproject 1 will be divided into the following components and implemented at Lintao County of Dingxi City, Ganzhou District of Jiuquan City and Chengguan District of Lanzhou City (Error! Reference source not found.Figure III-1).

• Chengguan District Lanzhou City: Agricultural Social Service Big Data Center with related software and hardware; Internet + Agricultural Input Service System and Open online flagship stores on the main E-commerce platform in the PRC. These components will be located on the 8th floor of the existing head office (No.30 Zhongshang Road, Chengguan District) of SMCGP. • Ganzhou District of Jiuquan City: construct an organic fertilizer substrate plant fertilizer production station and purchasing equipment for soil testing and fertilizer recommendation. These components will be located at empty land of existing abandoned storage warehouses (Xidong Town, Ganzhou District) owned by PIU. • Lintao County of Dingxi City: Internet + Agricultural Products Cold-chain Storage and Brand Electricity Supplier Services Center with software and hardware for establishing logistics services and product traceability online platform. These components will be located at reserved construction land (Wangjiazhuang, Balipu Town, Lintao County) owned by PIU.

22

Figure III-1: Location of Subproject 1

74. Layouts of the Jiuquan and Lintao components are in Figure III-2 and Figure III-3.

Fertilizer production station Existing boundaries

Product warehouse

Organic fertilizer workshop

Material warehouse

Figure III-2: Layout of the Jiuquan component 23

Gaochang Road

Warehouses Trade center

Xingchen Road

Service center

Figure III-3: Layout of the Lintao component

75. The subproject 1 will utilize municipal water for production water and domestic water and power from the national electricity grid. Annual power and water consumption of subproject 1 are presented in Table III-2.

Table III-2: Annual power and water consumption of subproject 1 Item Power consumption (kWh) Water consumption (m3) Lanzhou component 876,000 0 Jiuquan component 487,153 4,224 Lintao component 1,861,887 9,638 Total 3,225,040 13,862

76. The Lanzhou component will not result in staff increase; therefore, water balance of Jiuquan component and Lintao component are presented in Table III-3 and

77.

78.

79. Table III-4.

Table III-3: Water balance of subproject 1 Jiuquan component

24

Intake, m3/a Output, m3/a Item Municipal water Water Consumed Discharges to sewer Domestic water 1,764 352.8 1,411.2 Floor cleaning 1,260 504 756 Equipment 1,200 240 960 cleaning Total 4,224 1,096.8 3,127.2

Table III-4: Water balance of subproject 1 Lintao component Intake, m3/a Output, m3/a Item Municipal water Water Consumed Discharges sewer Domestic water 3,384 676.8 2,707.2 for staff Domestic water for persons 2,000 4,00 1,600 visiting the center Floor cleaning 3,804 1,521.6 2,282.4 Landscape 450 450 0 Total 9,638 2,948.4 6,589.6

80. The process of organic fertilizer substrate is presented in Figure III-4 Error! Reference source not found..

Materials W

Baterial Mixing G, WW

Residue Fermentation G, WW

Sub package G, SW Additive G: Air Pollutants SW: Solid waste WW: Waste water Final package SW

Figure III-4: Process of organic fertilizer substrate

81. During operation, the Jiuquan component will discharge odor pollutants. The pollutants will be discharged through the fans installed at the top of the workshop. Exhaust gas emission of the Jiuquan component is presented in Table III-5.

Table III-5: Exhaust gas emission of Jiuquan component Annual Annual Generation Treatment Emission Location Pollutant generation emission rate (kg/h) method rate (kg/h) quantity (t/a) quantity (t/a) 25

NH3 0.055 0.396 Deodorizing 0.011 0.0792 Fermentation microorganism; workshop H2S 0.0044 0.0315 0.00088 0.0063 80% efficiency

82. The Jiuquan component and Lintao component will generate wastewater and solid waste during operation. Wastewater will be discharged to the local sewer system. Domestic waste will be collected by the local sanitation departments for final disposal at Jiuquan Suzhou District Landfill and Lintao Guangda municipal solid waste incineration power generation plant. Production waste of Jiuquan component and packing waste from Lintao component will be recycled.

83. Annual pollutants generation and emission of subproject 1 are presented in Table III-6.

Table III-6: Annual waste generation and emission of subproject 1 Jiuquan component, t Lintao component, t Total, t Item Pollutants Generation Emission Generation Emission Generation Emission Wastewater 3,127.2 3,127.2 6,589.6 6,589.6 9,716.8 9,716.8 COD 0.78 0.78 1.65 1.65 2.43 2.43 Wastewater BOD 0.31 0.31 0.66 0.66 0.97 0.97 SS 0.87 0.87 1.86 1.86 2.73 2.73

NH3-N 0.11 0.11 0.23 0.23 0.34 0.34 Domestic 7.35 7.35 64.1 64.1 71.45 71.45 Waste waste Trade waste 0 0 66.0 0.0 66.00 0.00

NH3 0.396 0.0792 0 0 0.396 0.0792 Exhaust gas H2S 0.0315 0.0063 0 0 0.0315 0.0063

2. Subproject 2

84. The subproject 2 will be divided into the following components and implemented at Linze County: (i) Zhangye County-Level Internet Plus Based Socialized Agricultural Service System will be located at the existing No.2 building of E-commerce incubation park, Shahe Town, Linze County. The building is owned by PIU; and (ii) county-level agricultural socialization service centers, rural logistics service centers, agricultural products e-commerce service centers will be located across Linze County. (Figure III-5).

26

No.2 building of E-commerce incubation park

Figure III-5: Subproject 2 site location

85. The subproject 2 will utilize municipal water for domestic water and power from the national electricity grid. Annual power and water consumption is presented in Table III-7.

Table III-7: Annual power and water consumption of subproject 2 Item Power consumption (kWh) Water consumption (m3) No.2 building of E- 606,100 5,004 commerce incubation park Rural service centers 154,000 2,952 Total 860,100 7,956

86. Water balance of subproject 2 is presented in Table III-8.

Table III-8: Water balance of subproject 2 (Unit: m3/a Input Output Item Municipal water Water Consumed Discharge to sewer No.2 building, E-commerce incubation 5,004 1,008 3,996 park Rural service centers 2,952 576 2,376 Total 7,956 1,584 6,372

87. The subproject 2 will generate wastewater and solid waste during operation. Wastewater will be discharged to the local sewer system. Domestic waste will be collected by the local sanitation departments for final disposal at Linze Urban Area Landfill. Annual waste generation from subproject 2 is given in Table III-9.

Table III-9: Annual waste generation and emission of subproject 2 No.2 building of E-commerce Rural service Total Item Pollutants incubation park (t) centers (t) (t) Wastewater 3,996 2,376 6,372 COD 0.72 0.43 1.15 Waste-water BOD 0.36 0.21 0.57 SS 0.80 0.48 1.28 NH3-N 0.14 0.08 0.22 Solid waste Domestic waste 20.9 12.2 33.1 27

3. Subproject 3

88. The subproject 3 will be divided into the following components and implemented at Linze County of Zhangye City (Figure III-6):

• (1) Gobi Desert agricultural construction site: (i) construct greenhouses (499 mu area) on new (undeveloped) desert lands leased by the company from the government for agriculture development. Activities will include 30 intelligent solar greenhouses, 20 intelligent connected steel arch greenhouses, 100 intelligent small arch greenhouses, a 20,000 m3 water storage tank,14 and inter-shed roads and green belt; and • (2) construct the following facilities on the existing company land at Xinbaihui agricultural demonstration logistics park (owned by the PIU): (a) production line for dried vegetables with an annual output of 200 tons of freeze-dried vegetables and 2,000 tons of heat-dried vegetables; (b) production line for cultivation substrates with 50,000 tons annual output; (iv) thermal insulation storehouse of 50,000 m3, covering a land area of 10,000 m2; and (c) Gobi agricultural Internet of Things (IoT) control demonstration center with three floors and a floor area of 2,840 m2. The first floor is for the IoT information control area, the second floor for IoT quality control area, and the third floor for IoT service area.

89. The subproject 3 will utilize municipal drinking water for production water and domestic water, power from the national electricity grid and municipal irrigation water from Hongshanwan reservoir. Drip irrigation and integrated water and fertilizer technology will be utilized. Irrigation water, fertilizer and pesticides consumption of subproject 3 is presented in Table III-12 .

Figure III-6: Location of Subproject 3

90. The layout of subproject 3 is presented in Figure III-7Error! Reference source not found..

14 Sediment management for the water storage tank will be minimal as water will be sourced from a reservoir (Section III.C) with high water quality and low sediment content. Periodic maintenance (if needed) will involve emptying and cleaning of the tank.

28

Gobi agricultural IoT control demonstration center

Vegetable workshop and warehouses Substrates plant

Figure III-7: Layout of subproject 3 29

Table III-10: Irrigation water, fertilizer and pesticides consumption of subproject 3.(Unit: kg/mu) Item Solar Greenhouse (70mu) Intelligent Intelligent Type of Chili and Connected Small Arch Fertilizer/ Strawberry Tomato Eggplant color Cucumber Zucchini Vegetable Steel Arch Total (t/a) Average Greenhouses Pesticide (10 mu) (10 mu) (10 mu) pepper (10 mu) (10 mu) (10 mu) Greenhouses (100 mu) (10 mu) (200 mu) Farmyard 400 400 400 400 400 400 400 400 400 400 148 manure Chemical 24 24 44 44 40 40 20 33.7 20 20 8,360 fertilizer nitrogen 16.08 16.08 29.48 29.48 26.8 26.8 13.4 22.59 13.4 13.4 5,601 fertilizer phosphate 3.84 3.84 7.04 7.04 6.4 6.4 3.2 5.39 3.2 3.2 1,338 fertilizer potash 2.4 2.4 4.4 4.4 4 4 2 3.37 2 2 836 fertilizer Special 1.68 1.68 3.08 3.08 2.8 2.8 1.4 2.36 1.4 1.4 585 fertilizer Pesticides 0 0 0 0 0 0 0 0 0 0 0 Insecticide 0 0 0 0 0 0 0 0 0 0 0 Herbicide 0 0 0 0 0 0 0 0 0 0 0 Irrigation water 70 70 140 140 100 100 150 110 150 150 52,700 m3/a (m3/mu.a)

30

91. Water balance of subproject 3 is presented in Table III-11.

Table III-11: Water balance of subproject 3 (Unit: m3/a) Total water Fresh water Recycled Water Item Wastewater To where consumption consumption water Consumed Irrigation 52,700 52,700 0 52,700 0 NA water Vegetable Substrate 1,760 1,760 0 68 1,692 cleaning production Substrate 12,000 1,944.5 10,055.5 12,000 0 NA production Boiler make- 3,000 3,000 0 2,280 720 Sewer up water Domestic Substrate 10,454.4 10,454.4 0 2,090.9 8,363.5 water production Total 79,914.4 69,858.9 10,055.5 69,138.9 10,775.5 NA

92. Subproject 3 will use biogas for the drying process. The biogas will be sourced from dried livestock manure and dried vegetable waste. Power will be supplied from the national electricity grid. Annual power and water consumption are given in Table III-12.

Table III-12: Annual power and water consumption of subproject 3 Item Power consumption (kWh) Water consumption (m3) Biogas (m3) Workshop 10,887,750 17,158.9 1,676,000 Gobi greenhouses 0 52,700 0 and facilities Total 10,887,750 69,858.9 1,676,000

93. Processing of solid and liquid vegetable waste and dried manure (to produce greenhouse soil substrates and fertilizer) is summarized in Tables III-13 and 14.

Table III-13: Processing of Wet Vegetable Waste for Liquid Fertilizer Mitigation No. Process Main pollutants measures Sound insulation; Noise, vegetable 1 Shattering and mashing reuse of vegetable residue mulch 2 Mixing Noise Sound insulation 3 Fermentation CH4, H2S, NH3 To biogas boiler 4 Concentration Noise Sound insulation 5 Mixing with additions Noise Sound insulation 6 Tank storage Not applicable Not applicable

Table III-14: Processing of Vegetable Waste and Manure for Biogas and Greenhouse Soil Substrate Main pollutants and/or No. Process Mitigation measures emissions Storage of vegetable waste and 1 Odor pollutants Ventilation dried manure Noise–sound insulation. Dust– collection with dust collector and bag Mixing, breaking up of Noise and fine organic 2 (hand-held machine) resulting in vegetable waste, dried manure particulate matter (dust) 99% dust removal, and reuse as fertilizer 31

Main pollutants and/or No. Process Mitigation measures emissions 3 Fermentation CH4, H2S, NH3 To ambient air after odor treatment 4 Mixing with additions Noise Sound insulation 5 Product storage Not applicable Not applicable

94. A vegetable workshop has three processes: (i) drying dehydration process; (ii) vacuum freeze dehydration process; and (iii) refrigeration process. The drying and freeze processes are presented in Table III-15 and Table III-16.

Table III-15: Drying dehydration process No. Process Main pollutants Mitigation measures The residue will be reused to produce organic 1 Vegetable screen Vegetable residue fertilizer. Wastewater will be reused in the organic Wastewater and fertilizer production process after sediment. 2 Washing sediment Sediment will be collected by the local sanitary department. Noise, waste bark Waste bark and waste root will be used by 3 Peeling and slicing and waste root local farmers. Sound insulation. Blanching and Wastewater will be reused in the organic 4 Wastewater precooking fertilizer production process. Centrifugal Noise and Sound insulation. Wastewater will be reused in 5 dewatering wastewater the organic fertilizer production process. Sound insulation. Waste will be reused in 6 Sorting Noise and waste organic fertilizer production Sound insulation. Waste package material will 7 Package Noise and waste be collected by the manufacturer.

Table III-16: Vacuum freeze dehydration process No. Process Main pollutants Mitigation measures The residue will be reused to produce organic 1 Vegetable screen Vegetable residue fertilizer. Wastewater will be reused in the organic fertilizer Wastewater and production process after sediment. 2 Washing sediment Sediment will be collected by the local sanitary department. Noise, waste bark and Waste bark and waste root will be used by local 3 Peeling and slicing waste root farmers. Sound insulation. Blanching and Wastewater will be reused in the organic fertilizer 4 Wastewater precooking production process. Quick-freezing and 5 Waste Waste will be reused in organic fertilizer production drying Sound insulation. Waste package material will be 6 Package Noise and waste collected by the manufacturer.

95. Refrigeration process will generate noise, vegetable residue and waste package material. The residue will be reused to produce organic fertilizer. Waste package material will be collected by the manufacturer. Sound insulation measures will be implemented to reduce noise. During operation, the biogas boiler will discharge exhaust gas to ambient air through one 15 m high chimney. The exhaust gas emission of the biogas boiler is presented in Table III-7.

32

Table III-17: Annual exhaust gas emission of biogas boiler Annual Annual Exhaust gas exhaust gas Emission emission Limit emission emission Pollutants concentration quantity (mg/m3) rate (m3/h) quantity (mg/m3) (t/a) (million m3/a) PM 22.9 0.402 30 2,444.17 17.598 SO2 9.5 0.168 200 NOx 60 1.173 200 Note: The Limit standard is from table 2 of Emission standard of air pollutants for the boiler (GB13271—2014)

96. Fine particulate organic matter (dust) generated from the shattering process of solid substrate production will be treated by a bag filter and a dust collector with an efficiency of 99%, and then discharged through one 15 m high chimney (Table III-18).

Table III-18: Annual dust emission of solid substrate production process PM PM concentration Air flow Generation Emission Total Annual Pollutant concentration after treatment (m3/h) rate (kg/h) rate(kg/h) emissions (t/a) (mg/m3) (mg/m3) PM 5,000 23.3 4667 46.67 0.23 0.276

97. Annual pollutants generation and emission of subproject 3 are in Table III-19.

Table III-19: Annual waste generation and emission of subproject 3 Pollutants Item Total Emissions (t/a) Quantity 17.598 million m3/a SO 0.168 The exhaust gas of biogas boiler 2 NOx 1.173 PM 0.402 Quantity 6 million m3/a Dust from shattering process PM 0.276 Quantity 0 CODcr 0 Domestic water BOD5 0 SS 0 NH3-N 0 Waste vegetable 0 Sediment 23 Solid waste Domestic waste 36 Waste bark and root 45 Waste package material 2.2

4. Subproject 4

98. Subproject 4 will be divided into the following components and implemented at Gulang County of Wuwei City (Figure III-8 and Table III-20): (i) potato recreational food research and processing center will be located within the existing potato production plant in District C of Gansu International inland port industrial park, Gulang County. The area will be 200 mu and is owned by PIU; and (ii) potato virus-free seedling and cultivation Center will be located at Gaoling New Village, Peijiaying Town, Gulang County. The total area will be 3,000 mu. The farmland will be rented from local villagers.

33

Figure III-8: Location of Subproject 4

99. Subproject 4 will utilize municipal drinking water for production water and domestic water, power from the national electricity grid and municipal irrigation water from Dajingxia reservoir. Drip irrigation and integrated water and fertilizer technology will be utilized. Irrigation water, fertilizer and pesticides consumption of subproject 4 (half of 3,000 mu potato farmland will not be used in each year for rotation of crops) is presented in Table III-20.

Table III-20: Irrigation water, fertilizer and pesticides consumption of Subproject 4 Type of Usage Rate for Solar Potato Fertilizer/ Solar Greenhouse Usage Rate for Farmland Item Total (t/a) Pesticide Greenhouse for Seedling (9 Potato (kg/mu) (1,500 (kg/mu) mu) (t/a) mu) (t/a) Organic 1000 9 1000 1,500 1,509 fertilizer Chemical 90 0.81 120 180 180.81 fertilizer Nitrogen 58.5 0.5265 78 117 117.53 fertilizer Phosphate 14.4 0.01296 19.2 28.8 28.93 fertilizer Potash 9 0.081 12 18 18.08 fertilizer Special 8.1 0.0729 10.8 16.2 16.27 fertilizer Pesticides 0 0 400 ml 0.6 0.6 Insecticide 0 0 0 0 0 Herbicide 0 0 0 0 0 Irrigation water 14 126 140 21,000 21,0126 (m3/mu) Note: 50% of potato farm land will be planted every year for rotation.

34

Fertilizer workshop

Potato R&D multi- span greenhouse Product warehouse

Material warehouse

Figure III-9: Layout of potato recreational food research and processing center

100. Water balance of subproject 4 is presented in Table III-21.

Table III-21: Water balance of subproject 4 Intake, m3/a Output, m3/a Item Fresh Water in Circulation Circulation Water Water in Wastewater water material water water consumed product Multi-span 126 0 0 0 126 0 0 greenhouse Farmland 210,000 0 0 0 210,000 0 0 Potato chip 19,063 8750 3,063 3,063 14,813 12,800 0 production line Potato paste 2,000 0 0 0 1,667 0 333 production line Potato biscuits 4,000 0 0 0 3,333 0 667 production line Domestic water 13,176 0 0 0 2,635 10,541 0 Total 249,445 8,750 3,063 3,063 232,790 23,341 1,000

101. All the wastewater will be treated in existing wastewater treatment plant (WWTP) then recycled as landscape water.

102. Potato recreational food research and processing center will have three potato 35 production lines: potato paste production line, potato chip production line and potato biscuits production line and two fertilizer production lines: solid fertilizer production line and liquid fertilizer production line. The material of the two fertilizer production lines will be biogas residue and slurry of the existing biogas production line. Annual power and water consumption are presented in Table III-22.

Table III-22: Annual power and water consumption of subproject 4 Item Power consumption (kWh) Water consumption (m3) Potato recreational food research and processing 5,047,440 39,445 center Potato farm land 0 210,000 Total 5,047,440 249,445

103. Fertilizer production process with pollutant generation is in Tables III-23 and Table III-24.

Table III-23: Solid fertilizer production process No. Process Main pollutants Mitigation measures Noise and To produce liquid fertilizer. 1 Biogas residue dehydration wastewater Sound insulation Mixing with phosphate fertilizer, 2 Noise and waste Sound insulation potassic fertilizer etc. Noise–sound insulation. Dust–collection Noise and fine with dust collector and bag (hand-held 3 Granulation organic particulate machine) resulting in 99% dust removal and matter (dust) reuse for fertilizer; and discharge of the remaining 1% through 15 m high chimney 4 Drying Noise Sound insulation 5 Cooling Noise Sound insulation Sound insulation. Waste package material 6 Package and storage Noise and waste will be collected by the manufacturer.

Table III-24: Liquid fertilizer production process No. Process Main pollutants Mitigation measures 1 Biogas slurry storage Odor pollutants Ventilation Sound insulation. Waste package Mixing with liquid phosphate 2 Noise and waste material will be collected by the fertilizer and potassic fertilizer. manufacturer. 3 Filter Noise Sound insulation. 4 Verification NA NA 5 Tank storage NA NA

104. Three potato production lines: potato paste production line, potato chip production line and potato biscuits production line are presented in Table III-25 to Table III-27.

Table III-25: Potato chip production process No. Process Main pollutants Mitigation measures The waste potato will be reused to produce 1 Potato screen Waste potato fertilizer. Wastewater will be treated in existing Wastewater and WWTP after sediment then reused as 2 Washing sediment landscape water. Sediment will be collected by the local sanitary department. Noise, waste bark and Waste bark and waste potato will be used to 3 Peeling and slicing waste potato produce fertilizer. Sound insulation.

36

No. Process Main pollutants Mitigation measures Wastewater will be treated in existing 4 Blanching Wastewater WWTP after sediment then reused as landscape water. 5 Cooling Noise Sound insulation. 6 Dehydration Noise Sound insulation. Sound insulation. Oil smoke will be treated 7 Frying Noise and oil smoke by oil fume purifier then discharged through one 15 m high chimney. 8 Cooling Noise Sound insulation. Sound insulation. Waste package material 9 Package Noise and waste will be collected by the manufacturer. Wastewater will be treated in existing 10 Circulation system Wastewater WWTP after sediment then reused as landscape water.

Table III-26: Potato paste production process No. Process Main pollutants Mitigation measures Mashed potato 1 Noise Sound insulation. production 2 Pressing Noise Sound insulation. Sound insulation. Oil smoke will be treated by oil fume purifier 3 Frying Noise and oil smoke then discharged through one 15 m high chimney. Wastewater will be reused in the organic 4 Seasoning Waste fertilizer production process. Sound insulation. Waste package material 5 Package Noise and waste will be collected by the manufacturer.

Table III-27: Potato biscuits production process No. Process Main pollutants Mitigation measures Sound insulation. 1 Material mixing Noise and waste Waste will be collected by the local sanitary department. Sound insulation. 2 Modulation Noise and waste Waste will be collected by the local sanitary department. 3 Molding Noise Sound insulation. Wastewater will be reused in the organic 4 Bake Waste fertilizer production process. Sound insulation. Waste package material 5 Cooling Noise and waste will be collected by the manufacturer. Package and Sound insulation. Waste package material 6 Noise and waste storage will be collected by the manufacturer.

105. Fine particulate organic matter (dust) generated from the granulation process of solid fertilizer production will be treated by a bag filter and a dust collector with an efficiency of 99% and to be reused as fertilizer. The remaining 1% of collected dust will be discharged through one 15 m high chimney. Dust emission is presented in Table III-28.

Table III-28: Annual dust emission of solid fertilizer production process PM PM concentration Air flow Generation Emission Annual emission Pollutants concentration after removal (m3/h) rate (kg/h) rate (kg/h) quantity (t/a) (mg/m3) (mg/m3) PM 3,000 9.35 433 5 0.039 0.0935

106. Subproject 4 will use 100 tons of cooking oil for the frying process annually. About 3% 37 of the cooking oil will be transformed to oil smoke, then annual oil smoke generation will be 3 tons (1.25 kg/h). The efficiency of oil smoke purifier will be 95%, then annual oil smoke emission will be 0.15 tons. Treated oil smoke will be discharged through one 15 m high chimney. During the potato planting process, waste plastic film and waste package material of fertilizer for potato planting will be generated. Annual waste generations from subproject 4 are presented in Table III-29.

Table III-29: Annual waste generation and emission of subproject 4 Generation Released from the Pollutants Item quantity (t/a) site (t/a) The exhaust gas of solid fertilizer workshop Dust 9.35 0.0935 (converting solid fertilizer to fine particle fertilizer) Oil smoke from potato chip Oil smoke 1.5 0.075 production Quantity 8949 0 CODcr 80.8 0 Wastewater BOD5 32.4 0 SS 23 0 NH3-N 0.36 0 Waste potato 0.04 0 Waste package of fertilizer 0.002 0 for potato planting 1.75 for every 5 Waste plastic film 0 years Solid waste Waste bark and root 1040 0 Waste from potato 110 0 processing Waste package for fertilizer 0.8 0.8 production Domestic waste 54.9 54.9

5. Subproject 5

107. The subproject 5 (Figure III-10) will be divided into the following components and implemented at Jingtai County of Baiyin City: (i) Liquorice seedling base will be located within the existing industrial park owned by PIU. The liquorice seedling base will be 4,000 mu (266 ha); (ii) Liquorice processing base will be located at Shitang Village. The site is construction land with an area of 43 mu (2.9 ha); and (iii) Liquorice planting base will be located at Shitang Village, Hongshui Town, Shangshawo Town and Manshuitan Village. The total area will be 60,000 mu (4,000 ha), and the land will be rented from a local farmer.

108. Subproject 5 will utilize municipal water for production water and domestic water, power from the national electricity grid and irrigation water from Dajingxia reservoir. Drip irrigation and integrated water and fertilizer technology will be utilized. Irrigation water, fertilizer and pesticides consumption of subproject 5 (40,000 mu liquorice and 20,000 mu corn will be planted in each year for rotation of crops) is presented in Table III-30.

38

Figure III-10: Location of Subproject 5

109. The layout of subproject 5 is presented in Figure III-11Error! Reference source not found..

Process workshop

Dormitory Cleaning workshop Warehouse

Office building Sunshine shed

Pump station

Figure III-11: Layout of the liquorice processing base

Table III-30: Irrigation water, fertilizer and pesticides consumption of subproject 5 Type of Consumption 40,000 mu 4,000 mu of Consumption 20,000 mu of Total Item Fertilizer/ Rate for Liquorice of Liquorice Liquorice Rate for Corn Corn Planting Use (t/a) Pesticide (kg/mu) Planting (t/a) Seedling (t/a) (kg/mu) (t/a) Organic 1,500 60,000 6,000 2,000 40,000 106,000 fertilizer Chemical 38.5 1,540 154 49 980 2,674 fertilizer Nitrogen 23.48 939.4 597.8 29.89 29.89 1,672 fertilizer 39

Phosphate 7.7 308 196 9.8 9.8 514 fertilizer Potash 4.62 184.8 117.6 5.88 5.88 308 fertilizer Special 2.7 107.8 68.6 3.43 3.43 180 fertilizer Pesticides 0.7 28 2.8 1.05 21 52 Insecticide 0.3 12 1.2 0.25 5 18 Herbicide 0.4 16 1.6 0.8 16 34 17.36 Irrigation 9.80 million 0.98 million 6.58 million 245 m3/a. 329 m3/a million water m3/a m3/a m3/a m3/a

110. Water balance of subproject 5 is presented in Table III-31.

Table III-31: Water balance of subproject 5 (Unit: m3/a) Water Recycling Waste- Item Fresh water Water loss Note consumption water water Planting base 16,380,000 16,060,680 319,320 16,380,000 0 NA Seedling base 980,000 980,000 0 980,000 0 NA Liquorice cleaning 360,000 360,000 0 72,000 288,000 Reuse-planting base Liquorice 30,000 30,000 0 3,000 27,000 Reuse-planting base infiltration Domestic water 5,400 5,400 0 1,080 4,320 Reuse-planting base Total 17,755,400 17,436,080 319,320 17,436,080 319,320 NA

111. Wastewater will be reused in liquorice planting base in Shitang Village.

112. Annual power and water consumption of subproject 5 are presented in Table III-32.

Table III-32: Annual power and water consumption of subproject 5 Item Power consumption (kWh) Water consumption (m3) Total 753,500 17,436,080

113. Liquorice production process with pollutant generation is presented in Table III-33. Table III-33: Liquorice production process No. Process Main pollutants Mitigation measures Soil, waste liquorice will be collected by the local sanitary 1 Liquorice screen Soil; waste liquorice department 2 Washing Wastewater Wastewater will be reused in planting base after sediment. 3 Infiltration Wastewater Wastewater will be reused in planting base after sediment. Sound insulation. Waste liquorice will be collected by the 4 Slicing Noise and waste local sanitary department. 5 Drying Noise Sound insulation Noise–sound insulation. Dust–collection with dust collector Screen, and bag (hand-held machine) resulting in 99% dust Noise, dust and 6 package and removal and reuse for fertilizer; and discharge of the waste storage remaining 1% through 15 m high chimney. Waste package material–storage and collection by manufacturers for reuse

114. Organic dust generated from the liquorice process will be treated by a bag filter and a dust collector with an efficiency of 99%, to be reused as fertilizer. The remaining 1% of dust collected will be discharged through one 15m high chimney after treatment. Dust emission is presented in Table III-34.

40

Table III-34: Annual dust emission of liquorice process PM PM concentration Emission Annual Air flow Generation Pollutant concentration after treatment rate emission (m3/h) rate (kg/h) (mg/m3) (mg/m3) (kg/h) quantity (t/a) PM 20,833.3 62.5 104200 104.2 0.625 1.875

115. During operation, the liquorice process base will use chemicals. The waste chemicals are classified as hazardous waste in PRC which is required to be stored, transported and treated by a certified company based on relevant PRC regulations and requirements.

116. Annual pollutants generation and emission of subproject 5 are presented in Table III-35.

Table III-35: Annual waste generation and emission of subproject 5 Quantity, generated Quantity, Pollutants Item (t/a) discharged (t/a) Exhaust gas 18 million m3 18 million m3 Dust from liquorice process Dust 187.5 1.875 Quantity 315,000 0 CODcr 56.7 56.7 Production wastewater SS 141.75 28.35 BOD5 22.05 22.05 Quantity 2,592 0 CODcr 1.08 0.37 Domestic wastewater BOD5 0.43 0.03 SS 1.21 0.41 NH3-N 0.15 0.14 Waste liquorice 300 300 Solid waste Waste package material 60 0 Domestic waste 22.5 22.5 Hazardous waste Waste chemical 0.06 0

6. Subproject 6

117. The subproject 6 is located at Lanzhou New District of Lanzhou City (Figure III-12) and it includes development of 3 large scale sunlit greenhouses for cultivation of fruits. The layout of subproject 6 is shown in Figure III-13.

Figure III-12: Location of Subproject 6 41

Existing greenhouses

New greenhouses

Figure III-13: Layout of subproject 6

118. Subproject 6 will utilize municipal drinking water for production water and domestic water, power from the national electricity grid and municipal irrigation water from Datong River Section. Drip irrigation and integrated water and fertilizer technology will be utilized. Irrigation water, fertilizer and pesticides consumption of subproject 6 is presented in Table III-36.

42

Table III-36: Irrigation water, fertilizer and pesticides consumption of subproject 6 (Unit: kg/mu) Item Existing greenhouses (968.57 mu) New greenhouses (290 mu) Type of Cherry Cherry Fertilizer/ Cherry (150 Prune Strawberry Strawberry Rose (150 Total (t/a) tomato (50 tomato (30 Lily (60 mu) Pesticide mu) (668.57 mu) (100 mu) (50 mu) mu) mu) mu) Organic 600-750 2,200 400-500 700-750 400-500 700-750 450-600 400-550 755.14 fertilizer Chemical 51 48.1 47 100 fertilizer 45 100 49 51.40 65.19 Nitrogen 26.77 24.11 22.78 67 22.78 67 26.8 27.19 fertilizer 34.56 Phosphate 13.96 13.38 13.44 16 11.44 16 10.4 13.08 fertilizer 16.58 Potash 6.1 6.3 6.4 10 6.4 10 7 6.60 fertilizer 8.33 Special 4.17 4.31 4.38 7 4.38 7 4.8 4.53 fertilizer 5.72 Pesticides 0.12-0.2 0.15-0.25 0.14-0.3 0.17-0.3 0.14-0.3 0.17-0.3 0.16-0.3 0.14-0.25 0.36 Insecticide 0.16 0.16 0.14 0.16 0.14 0.16 0.15 0.13 0.182 Herbicide 0.055 0.045 0.055 0.045 0.055 0.045 0.043 0.052 0.062 Bio pesticide 0.15 0.14 0.16 0.15 0.16 0.15 0.17 0.16 0.2 Irrigation water 36.975 36.975 36.975 36.975 36.975 36.975 36.975 36.975 46,535.63 (m3/mu)

43

119. Water balance of subproject 6 is presented in Table III-37.

Table III-37: Water balance of subproject 6 Intake, m3/a Output, m3/a Note Item Fresh water Water Consumed Wastewater Irrigation water for greenhouses 47,000 47,000 0 NA Domestic water 11,520 2,304 9,216 To sewer Total 58,520 49,304 9,216 To sewer

120. Annual power and water consumption of subproject 6 are presented in Table III-38.

Table III-38: Annual power and water consumption of subproject 6 Item Power consumption (kWh) Water consumption (m3) Total 27,525,100 58,520

121. During operation, subproject 6 will generate wastewater and solid waste. Wastewater will be discharged to the local sewer system. Solid waste will include waste samples and substrate, waste products, waste plastic film, waste branches and plants, waste package material and domestic waste. Waste samples and substrate generated from the culture process will be mixed with organic fertilizer after high temperature sterilization then reused as base fertilizer. Waste products and waste branches and plants will be recycled to produce organic fertilizer, waste plastic film and waste package material will be collected by manufactures, and domestic waste will be collected and treated by the local sanitary department. Annual pollutants generation and emission of subproject 6 are in Table III-39.

Table III-39: Annual waste generation and emission of subproject 6 Quantity, Quantity, Pollutants Item generated (t/a) discharged (t/a) Quantity 9,216 9,216 CODcr 3.45 2.95 Domestic BOD 1.75 1.6 wastewater 5 SS 1.9 1.33 NH3-N 0.175 0.17 Waste products 0.006 0 Waste plastic film 1.04 every 5 years 0 Solid waste Waste branches and plants 1.7 0 Waste package material 0.078 0 Domestic waste 48 48

7. Subproject 7

122. Subproject 7 will be located at Tianshui National agricultural science and technology demonstration Park, Maiji District, Tianshui City (Figure III-14Error! Reference source not found.), within the existing forage mulberry plant owned by PIU.

44

Figure III-14: Location of Subproject 7

The layout of subproject 7 is presented in Figure III-15 and Figure III-16.

Tissue culture center Supporting facilities

Office building No. 1 seedling domestication center No. 2 seedling domestication center

Figure III-15: Layout of agricultural science and technology demonstration park

45

Substrate production workshop

Silage production workshop

Geedling hardening greenhouses

Figure III-16: Layout of the seedling base and seedling hardening Center

123. Subproject 7 will utilize municipal water for production water and domestic water, power from the national electricity grid and irrigation water from Jiudianxia reservoir. Drip irrigation and integrated water and fertilizer technology will be utilized. Irrigation water, fertilizer and pesticide consumption of subproject 7 (rotation of crops is not necessary) are in Table III-40.

Table III-40: Irrigation water, fertilizer and pesticides consumption of subproject 7 Total 7 greenhouses for Item Requirement (kg/mu) planting (35 mu) (t/a) Organic fertilizer 0 0 Chemical fertilizer 0 0 nitrogen fertilizer 0 0 phosphate fertilizer 0 0 potash fertilizer 0 0 Pesticides 0 0 Insecticide 0 0 Herbicide 0 0 Others 0 0 Irrigation water (m3/mu) 0.5 23.1

124. Water balance of subproject 7 are in Table III-41 Table III-39.

Table III-41: Water balance of subproject 7 Input, m3/a Output, m3/a Circulation Water loss Item Fresh Pure Circulation Pure Discharged water by Notes water water water water (wastewater) evaporation Preparation Reused as of pure 1,500 0 0 0 1,176 24 300 landscape water water

46

Input, m3/a Output, m3/a Circulation Water loss Item Fresh Pure Circulation Pure Discharged water by Notes water water water water (wastewater) evaporation Tissue Reused as culture 0 216 0 0 0 42 174 landscape water center after sediment Seedling hardening 17.5 0 0 0 0 17.5 0 NA Center Substrate production 0 240 0 0 0 240 0 NA workshop Silage Reused as production 1,080 0 0 0 0 216 864 landscape water workshop after sediment Air source 0 720 72,000 72,000 0 720 0 NA heat pump Domestic 11,700 0 0 0 0 2,340 9,360 To sewer water Total 14,297.5 1176 72,000 72,000 1,176 3,599.5 10,698 NA

125. Annual power and water consumption of subproject 5 are presented in Table III-42.

Table III-42: Annual power and water consumption of subproject 7 Item Power consumption (kWh) Water consumption (m3) Total 2,636,900 14,297.5

126. Solid waste generated during operation period include domestic waste, waste spire and leaf primordium, waste tissue culture, waste plastic film, waste bud seedling, waste forage mulberry and dust from silage production. Domestic waste will be collected and treated by the local sanitary department, waste spire and leaf primordium will be reused for substrate production, waste tissue culture and substrate will be reused for substrate production after heat sterilization, waste plastic film will be collected by manufactures, waste bud seedling will be reused as fertilizer after heat sterilization, waste forage mulberry and dust from silage production will be reused as fodder by nearby farmers. Annual pollutants generation and emission of subproject 7 are in Table III-43.

Table III-43: Annual waste generation and emission of subproject 7 Generation quantity Discharged from Pollutant Item (t/a) the site (t/a) Dust from silage Dust 19.8 0.198 production Quantity 2,972 0 CODcr 0.72 0.612 Wastewater SS 0.36 0.33 BOD5 0.396 0.277 NH3-N 0.036 0.035 Waste spire and leaf 0.5 0 primordium Waste tissue culture 0.12 0 Waste plastic film 0.4 every 5 years 0 Solid waste Waste bud seedling 0.06 0 waste forage mulberry 1.1 0 Dust collected from silage 19.602 0 production Domestic waste 48.75 48.75 47

C. Due Diligence for Associated and Existing Facilities

127. Due diligence was conducted to determine the presence and extent of associated and/or existing facilities at the project sites. Associated facilities are those which are not funded by the project and whose viability and existence depend exclusively on the project and whose goods or services are essential for successful operation of the project (SPS 2009: 31). The project does not include any associated facilities.

128. For six of the seven subprojects, the project-funded facilities will be located and constructed within existing company compounds and lands, and/or lands leased from the government. Most of these existing company lands and facilities are under active agricultural production (Table III-44). Many of the project-funded facilities will be physically linked with, or operate in conjunction with, these existing facilities. The project facilities will also depend on existing municipal services for water sources for drinking and irrigation, and for disposal of wastewater and solid waste.

129. Existing facilities. All existing facilities are operating under approved domestic EIAs (Table III-44). No documented compliance issues were identified for these facilities. In addition, all existing subproject lands are zoned specifically for agriculture production: the project does not involve the conversion of lands from one land use type to another.

Table III-44: Due Diligence for Existing Processing Facilities Item EIA approval? Approval date Agency Remarks Subproject 1 (Jiuquan) Yes 19-Mar-2009 Gansu EED Existing facilities Subproject 1 (Lanzhou) n/a n/a n/a No existing facilities Subproject 1 (Lintao) n/a n/a n/a No existing facilities Subproject 2 Yes 8-Jan-2016 Linze EEB Existing facilities Subproject 3 Yes 13-Mar-2017 Linze EEB Existing facilities Subproject 4 Yes 15-Apr-2016 Gulang EEB Existing facilities Subproject 5 Yes 27-Nov-2013 Baiyin EEB Existing facilities Subproject 6 n/a n/a n/a No existing facilities Subproject 7 Not availablea n/a n/a Existing facilities a Domestic EIA approval could not be obtained. However, the Maiji District EEB issued a certification that no fines have been imposed on any of the subproject operations since establishment (19 March 2018). EEB = environmental protection bureau, EED = environmental protection department, n/a = not applicable.

130. Four of the seven subprojects will be located within existing industrial or agricultural parks, of which two are national-level parks and two are county-level. Subprojects 6 and 7 are within the national-level parks: a “high tech zone” for agriculture (subproject 6) and an agricultural park (subproject 7). Subprojects 4 and 5 (industrial parks) are in county-level parks. These parks are operated in accordance with national and provincial regulations for industrial and agricultural parks and which embody the principals of “circular economy”: (i) they are self- contained complexes with their own wastewater treatment plants (WWTPs) and sewage pipeline networks, water supply, and power supply; and (ii) they must achieve defined minimum environmental standards, including for wastewater treatment and air emissions. Due diligence for environmental approvals and WWTPs for these parks is summarized in Table III-45.

Table III-45: Due Diligence for Industrial and/or Agricultural Parks and On-Site Wastewater Treatment Plants EIA Approval On-site wastewater treatment Subproject Name of Park date plant Notes Gansu February PIU for subproject 4 also 4 (Wuwei) Land 2017 EIA Approval: November 2017 has its own operating

48

EIA Approval On-site wastewater treatment Subproject Name of Park date plant Notes Port Industrial Capacity Phase I: 20,000 m3/d WWTP: the EIA and Park (2020); Phase II: 80,000 m3/d environmental acceptance (2030). Current wastewater flow: reports approved in April Not available (WWTP to be 2016 and December 2018 completed in 2019) respectively. Capacity: 400 m3/d; current wastewater flow: 191 m3/d.a This WWTP will treat wastewater for subproject 4. Treated wastewater will be recycled as landscape water Jingtai County Shitan Wastewater will be recycled Liquorice October EIA for the WWTP under as irrigation water after 5 Industrial Park 2018 preparation treatment. 4 WWTPs with total capacity of 190,000 m3/d. EIA approval for Projected wastewater from WWTP No. 2: Capacity: 15,000 the subproject is 30 m3/d Lanzhou New November, m3/d; current wastewater flow: and will be discharged to 6 District 2015 10,000 m3/d WWTP No. 2. Tianshui EIA under National review by EIA approval for WWTP included Agricultural Tianshui in overall EIA for park. Capacity: All subproject treated Science and EEB; 45,000 m3/d; current wastewater wastewater will be recycled Technology approval flow based on static data of 2017: as irrigation water and Demonstration anticipated 8,000 m3/d landscape water after 7 Park July 2019 treatment aTechnology adopted: hydrolytic acidification + internal circulation anaerobic reactor + Anaerobic- Anoxic-Oxic-Oxic + biological aeration tank.

131. Wastewater treatment. Arrangements for wastewater treatment for subprojects 4–7 are summarized in Table III-45 and comprise treatment at existing, certified WWTPs. For subproject 1 (Lintao component) wastewater will comprise domestic sewage (staff), which will be discharged to the Lintao WWTP (EIA approved February 2015; capacity 17,500 m3/day). For subproject 1 (Jiuquan component), wastewater will comprise domestic sewage (staff) and discharge from fertilizer production. Most will be recycled on-site; excess will be discharged to the municipal sewage system for treatment at Suzhou District No.2 WWTP (EIA approved March 2012; capacity 60,000 m3/day). For subproject 2, wastewater will only comprise domestic sewage, which will be discharged to the municipal sewage system for treatment at Linze Urban Area WWTP (EIA approved June 2013; capacity 16,000 m3/day). For subproject 3, wastewater will comprise domestic sewage and production wastewater. This will be pre- treated and then recycled for use in the solid substrate and fertilizer production. For all subprojects, water balances and wastewater volumes are given in Section III.B.

132. Water supply for subprojects. The project will source irrigation water from municipal water supply system which in turn source water from five reservoirs (for four of seven subprojects, one river (Yellow River; for two subprojects), and one irrigation channel (for one subproject) (Table III-46). All reservoirs (except one, Dajingxia, which is 60 years old and precedes legislation) have approved domestic EIAs; are operating under approved operational plans; and no compliance issues have been documented.

49

Table III-46: Due Diligence for Municipal Water Supply System Sub- Date of Operational Management complies Water Source Date of EIA project Construction Plan with domestic EIA Hongshuihe 30 August 1 March 2019 n/a n/a Reservoira 2018 Hongshanwan 2,3 December 2014 April 2014 Yes Yes Reservoirb Not available Dajingxia 4 January 1959 (precedes Yes n/a Reservoirb legislation) Yellow River Not available 5 (Jingtai channel) 1961 (as above) Yes n/a Not available 6 Shandunzi canalc 1976 (as above) Yes n/a Jiudianxia 7 November 2006 May 2006 Yes Yes Reservoird Source rivers: aHei River, bLiyuan, cDajing River, cDatong River, dTao River. EIA = environmental impact assessment, n/a = not applicable.

133. Solid waste management. The subprojects will generate solid waste during operation, comprising vegetable mulch, old and discarded agricultural equipment, plastic film, plastic packaging, and general litter. Vegetable mulch waste will be re-used for on-farm use and production of organic fertilizer, and plastic film and packaging will be subject to specific mitigation measures (Section V.E). Other solid waste such as domestic waste will be collected by the local sanitary departments and treated at the local landfills and incineration plants. The due diligence of these landfills and waste incineration power plants are presented in Table III-47. Table III-47: Due Diligence for Municipal Solid Waste Treatment Facilities Design Operation Approval Environmental Management Name capacity period August Operated by Lanzhou Fengquan Environmental Protection Since Lanzhou 2013 Company. The plant has installed CEMS for real-time November Zhongpuzi monitoring of exhaust gas (SO2, NOx, PM, air flow) and 2016; no waste wastewater (COD, ammonia nitrogen, pH). Data are sent 2,000 t/d defined incineration electronically to the Lanzhou Ecology and Environment limit to power Bureau (EEB) Data Center. The plant is operating in operation plant accordance with EIA requirements period (http://hbj.lanzhou.gov.cn/col/col5620/index.html). Lintao Under To be operated by Guangda Green and Environmental From waste approval Protection Renewable Energy Company. The plant will install February incineration 500 t/d process CEMS. 2020; as power above plant Suzhou December Operated by Suzhou District Sanitary Department. Operating District 2013 in accordance with EIA requirements; no documented Municipal 1.95 compliance issues (Jiuquan EEB website: environmental Solid million 2014-2023 acceptance report Waste m3 http://www.jqhjbh.gov.cn/Item/Show.asp?m=1&d=354; and Landfill latest environmental monitoring report, April 2018: (phase II) http://www.jqhjbh.gov.cn/Item/Show.asp?m=1&d=3568) Linze January Operated by Linze County Sanitary Department. Operating in 0.35 Urban Area 2016 accordance with EIA requirements; no documented million 2018-2027 Landfill compliance issues (Linze EEB m3 (phase II) http://www.gslz.gov.cn/dzdt/gksx/hbj/hjjch/index.html) November Operated by Gulang Sanitary Department. Operating in 0.32 Gulang 2015 accordance with EIA requirements; no documented million 2017-2031 Landfill compliance issues (Gulang EEB website: environmental m3 acceptance report April 2018

50

Design Operation Approval Environmental Management Name capacity period (http://www.gulang.gov.cn/Html/gsgs/171530C04166BGG9G 7A5C0KCE.html; http://61.178.185.70:8888/pub/glxzfxxgk/gkml/zdlyxxgk/hjbh/i ndex.htm ) August Operated by Jingtai County Sanitary Department. Operating Jingtai 0.86 2017 in accordance with EIA requirements; no documented Urban Area million 2018-2027 compliance issues (Jingtai EEB website: Landfill m3 http://www.jingtai.gov.cn/public/column/4305579?type=4&acti (phase II) on=list) August Operated by Lanzhou New District Sanitary Company. Lanzhou 3.9 2013 Operating in accordance with EIA requirements; no New million 2014-2027 documented compliance issues (Lanzhou New District EEB District m3 website: environmental acceptance report Landfill http://lzxq.gszwfw.gov.cn/col/col36376/index.html) June, Operated by Tianshui Sanitary Department. Operating in 2007 accordance with EIA requirements; no documented Tianshui 3.17 compliance issues (Tianshui EEB website: environmental Urban Area million 2011-2032 acceptance report September 2018 Landfill m3 (http://www.tsrb.com.cn/ts/2018-11/09/content_1734163.htm ; http://www.tianshui.gov.cn/col/col402/index.html) CEMS = continuous emissions monitoring systems.

134. The due diligence confirms that all existing industrial and municipal facilities are: (i) operating in accordance with approved domestic EIAs and management plans; and (ii) for the reservoirs, landfills, WWTPs, and agricultural and industrial parks, have the capacity to meet the project requirements; provide the required water resources for the project (see also Section V.E for further details of water supply and capacity). No past or present concerns related to impacts on the environment were identified; and furthermore, the ADB-funded project does not involve the rehabilitation, modernization, or expansion of any existing facilities. Based on this information, the due diligence described here is concluded to be adequate per ADB’s SPS requirements to constitute an environmental audit (SPS Appendix 1 para. 10).

51

IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE)

A. Location

135. The project will be implemented at Lintao County of Dingxi City, Ganzhou District of Jiuquan City, Chengguan District and New Area of Lanzhou City, Linze County of Zhangye City, Gulang County of Wuwei City, Jingtai County of Baiyin City and Maiji District of Tianshui City of Gansu Province (Figure IV-1Error! Reference source not found.).

Source: Google Earth. Figure IV-1: Location of the Project Sites

B. Gansu Province 136. Overview. Gansu Province is located in the northwest of the PRC, between the Tibetan and Loess plateaus. It has an area of 454,000 square km and borders the provinces of Inner Mongolia, Ningxia, Xinjiang, and Qinghai, as well Mongolia. Most of its land is more than 1,000 m above sea level (asl). The Yellow River passes through the southern part of the province. Gansu is divided into 14 prefecture-level divisions: 12 prefecture-level cities and two autonomous prefectures. The 14 prefecture-level divisions of Gansu are subdivided into 82 county-level divisions (17 districts, 4 county-level cities, 58 counties, and 3 autonomous counties) (Figure IV-2). The province contains the geographical center of the PRC, marked by the Center of the Country Monument at 35°50′40.9′′N 103°27′7.5′′E.

52

Source: http://d-maps.com Figure IV-2: Map of Gansu Province administrative divisions

137. Topography. Topography and soils are variable in the province, with varied landforms including medium to high-mountains, hills, plateau, river valleys, and deserts. The landscape in Gansu is mountainous in the south and flat in the north. The mountains in the south are part of the Qilian Mountains, while the far western Altyn-Tagh contains the province’s highest point, at 5,830 metres. A natural land passage known as Hexi Corridor, stretching some 1,000 km from Lanzhou to the Jade Gate, is situated within the province. It is bound from the north by the Gobi Desert and Qilian Mountains from the south. Within the subproject areas the landforms can be categorized mainly into two types: the loess plateau with a few outstanding rocky peaks amongst deep loess sediments in the middle to northeast, and with an average elevation of 1200–1800 m above asl; and mountains with alternating steep slopes and deep gullies, from about 1000 m asl up to more than 4000 m asl in the highest peak. 138. Soils. The soil types in the project areas include cultivated loessal soils and sierozem both developed on top of the parental loess deposits in the loess plateau, and light to dark brown soils distributed mainly at the southeast mountainous areas. Part of the Gobi Desert is located in Gansu, as well as small parts of the Badain Jaran Desert and the Tengger Desert. 139. Climate. The climate in the province is mainly continental, covering sub-humid to sub- arid temperate zones, and varying from warm and humid in the southeast to cold and dry in the northwest. In the subproject areas the annual mean temperature ranges from 14 °C in the southeast down to 6 °C in the north, and the frost-free period of the year lasts between 220 days in the southeast and 160 days in the north. Annual mean precipitation varies between 700 mm in the southeast and 400 mm in the north, concentrating more than half of the annual rainfall in the mid-summer season from June through early September. Strong or gentle winds blow from the west or northwest, occasionally in springtime with clouds of dust over the sky. 140. Water resources. The main river basins in the province include the Yellow River basin, the Yangtze (Changjiang) River basin, and some subsidiary inland river basins. Most of the flow of the Yellow River passes through Gansu. The area around Wuwei is part of the Shiyang 53

River Basin. Water resources in Gansu are not abundant, with the surface water at a level of 28.214 billion m3 and the groundwater at a level of 0.730 billion m3 in 2014, reaching a total amount of 28.944 billion m3 in the province (Table IV-1). However, the spatial distribution of the water resources in the province is not even, featuring abundance in the southeast and scarcity in the north to the northwest.

Table IV-1: Water Resources of Gansu Province River Basin Surface Water Groundwater Total Water Percentage Water Yield (million m3) (million m3) Resources of Total Coefficient (MCM) (10,000 m3/km2) Local Inflow Outflow Yellow River 12,516 23,964 34,108 263 12,779 44.1 87.6 Yangtze River 10,037 3,359 13,127 0 10,037 34.7 260.8 Other inland rivers 5.662 1,410 999 468 6,129 21.2 22.7 Province Totals 28,214 28,733 48,235 730 23,944 100 63.7 Source: Water Resources Bureau 141. Ecological resources and land management. Gansu Province has approximately 822 vertebrate fauna species, of which 105 are classified as rare or threatened vertebrate fauna (of which 54 are nationally listed as rare, threatened and/or protected); 59 protected areas (including 13 national-level and 40 provincial-level), which encompass about 9,952,500 ha (amounting to 22.1% of the total provincial territory); and, 39.65 million ha of forest cover (amounting to 9.4% of the total provincial territory).15 142. The loess soils of eastern Gansu are deeply eroded with steep hillsides and gullies, from which soil is lost during rainstorms, increasing siltation of dams and reservoirs, and increasing maintenance costs of drainage and rural roads. Reforestation efforts have been ongoing in Gansu – especially in the southern parts of the province, where five subprojects are located. Planting of native and agro-forestry species of trees and shrubs to reduce erosion on degraded hillsides has been well researched and National standards have been promulgated for this activity.11 The species usually planted, depending on altitude and climatic harshness are (i) Pinus tabulaeformis (Chinese Pine) and Robinia pseudoacacia (Black Locust) on sites lower than 1800m asl.; (ii) Betula spp. (Birch), Pinus armandii (Ba Shan Pine), Larix chinensis (Chinese Larch) and Larix kaempferi (Japanese Larch) on sites higher than 1800m asl.; and (iii) Xanthoceras sorbifolia (Shiny Yellow Horn) in the arid, cold, high elevation, and poor soil sites in Dingxi county. Sea-buckthorn is added to the mix where grazing pressure is high.

143. Socio-economic conditions. General socio-economic conditions for the province are set out in Table IV-2 and Table IV-3.

Table IV-2: Economic Indicators of Gansu Province in 2017 Per GDP Per capita capita disposable Cultivated Per Sown Gross Rural net % of income of area capita area Division population population Total Per income cultivated urban (million cultivated (million (million) (0,000) (billion capita of area residents mu) area (mu) mu) CNY) (CNY) farmers (CNY) (CNY) PRC 1390.08 57,661 82712 59,660 36,396 13,432 2,023 1.46 1,683 83.2 Gansu 26.26 14,076 767.7 29,326 27,763 8,076 80.59 3.07 38.86 48.2 Table IV-3: Poor Population of the Gansu Province in 2017 Division Gross population Rural Poor population Rural

15 Data sources: http://www.gsep.gansu.gov.cn/showpage/news_detail.aspx?arc_id=2227; http://www.cnwildlife.com/Article/Class1/Class2/200603/20060328091432.html http://www.wildlife.gov.cn/index.php; http://www.cnki.com.cn/Article/CJFDTotal-GHDL200101007.htm; http://www.xjtour.net/filebase/xjgl/2008411123549.htm

54

(million) population (million) Poverty (million) incidence PRC 1390.08 57.661 3.046 3.1% Gansu 26.26 14.076 1,890 9.6%

C. Environmental Setting of the Subproject Sites

144. Primary land use and ecological resources in the subproject sites is as follows.

Table IV-4: Site Conditions for Subproject Components Prefecture Subproject Title

1 Lanzhou Gansu Province Internet+ Based Socialzied Agricultural Service System Platform

The platform will be located on the eighth floor of the head office building of EA. 2. Zhangye Zhangye Whole-industrial-chain Service System for Gobi Agriculture

Site within the existing company compound for The site for greenhouse and water storage construction of vegetable drying and packing tank construction. Currently being levelled with plant. Prepared construction site. soil from Zhangye. Building sites (better soil – not gobi). Prepared construction site. 3 Baiyin Baiyin Whole Industrial Chain Service System for Liquorice in Jingtai County

Processing base will be constructed within this The site for liquorice seedling and planting developing land in the Shitang Village. The new base – farmland is already sown to liquorice. base will be equipped with all facilities and services. Prepared construction site. 4 Lanzhou Whole-industrial-chain Service System for Featured Agricultural Products of Lanzhou New District 55

The site for construction of greenhouses, in an Site weeds include Haloxylon and Artemesia existing industrial estate. Prepared construction site. 5 Tianshui Tianshui Whole-industrial-chain Service System for forage mulberry

The site for mulberry seedling raising and Production equipment and machinery will be hardening-off. Farmland already planted to housed in this building, currently under forage mulberry. construction. New workshop equipped with all facilities and services. 6. Zhangye Zhangye County-Level Internet Plus Based Socialized Agricultural Service System in Linze County

The existing building where The neighbourhood of the Basement area with equipment will be installed (Fl.3 building. Existing urban services. existing cool storage areas. operators; Basement Servers). The building has sewerage, Part to be used for servers. Modern building with a/c and connected to mains water, has Existing facilities (cool complies with fire regulations. parking and bus routes. stores) can be easily adapted. 7. Jiuquan Gansu Province Internet+ Based Socialized Agricultural Service System Platform

One organic fertilizer substrate plant and one fertilizer production station will be constructed within this existing plant owned by EA. 8. Dingxi Gansu Province Internet+ Based Socialized Agricultural Service System Platform

56

One agricultural product integrated logistics park will be constructed within this developing land in the urban area of Lintao County. 9. Wuwei Wuwei Integrated Industry for Potatoes in Gulang County

Potato food research and processing centre will be constructed within this existing potato process plant.

145. Ecological values of the subproject sites. All subprojects are located within existing agricultural or industrial zones on modified lands. There are no natural or critical habitats,16 documented rare or endangered flora or fauna, species with international, national or provincial protection status, parks, nature reserves, or areas with special national, regional or local ecological significance within or adjacent to any of the project sites. There are also no known drinking water sources, scenic sites, or sites with physical cultural resources.17

146. Sensitive receptors. The domestic EIA report identifies sensitive receptors for ambient air, water body and noise impacts near the project site during the construction phase and operation phase. Sensitive receptors of all subprojects are presented from Table IV-5 to Table IV-13

16 Natural habitat is land and water areas where the biological communities are formed largely by native plant and animal species, and where human activity has not essentially modified the area’s primary ecological functions. Critical habitat are 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 (Environment Safeguards: A Good Practice Sourcebook, ADB, 2012). 17 Physical cultural resources are broadly defined as covering all types of tangible cultural heritage, including movable or immovable objects, sites, structures, groups of structures, and natural features and landscapes that have archaeological, paleontological, historical, architectural, religious, aesthetic or other cultural significance. These resources are human-made objects, natural features, or a mix of the two. They may be located in urban or rural areas and may be above or below ground or underwater. They may be known and listed on official inventories, but often they are undiscovered (Environment Safeguards: A Good Practice Sourcebook, ADB, 2012). 57

Table IV-5: Sensitive receptors near subproject 1 Jiuquan component Item No. Location Direction Distance (m) Type Ambient 1 Xidong Town N 683 Residential area air and Majiacaowan 2 W 2,432 Residential area noise Village

Table IV-6: Sensitive receptors near the subproject 1 Lintao component Item No. Location Direction Distance (m) Type Wangjiaxiaozhuang 1 WS 147 Residential area Village Wangjiadazhuang 2 ES 431 Residential area Village Yongjiazhuang Ambient 3 NE 967 Residential area Village air and Hejiazhuang noise 4 SSW 1519 Residential area Village Luojiazhuang 5 NNW 1787 Residential area Village 6 Lintao urban area SSW 1745 Residential area 7 Balipu Town NNE 1408 Residential area Surface Grade III surface 1 Tao River W 2308 water water body

Table IV-7: Sensitive receptors near subproject 1 Lanzhou Part Item No. Location Direction Distance (m) Type Gansu Minzu 1 NNW 772 School Middle School No.2 Hospital of 2 NW 765 Hospital Lanzhou University 3 Yitong suburb E 150 Residential area Ambient 4 Fujiaxiang suburb W 180 Residential area air and Shanggou Primary noise 5 W 344 School School Baidaolu Primary 6 SE 238 School School 7 Xiuhe Kindergarten NE 151 Kindergarten 8 Xiyuan suburb NE 309 Residential area Surface Grade III surface 1 Yellow River N 980 water water body

Table IV-8: Sensitive receptors near subproject 2 Item No. Location Direction Distance (m) Type Wuhujiayuan 1 suburb W 163 Residential area Qingshuiwan 2 suburb N 151 Residential area 3 Binhe Kindergarten W 188 Kindergarten Ambient 4 No. 1 Linze Middle N 394 School air and school noise 5 Dadi suburb W 276 Residential area Jinxiujiayuan 6 suburb NE 59 Residential area 7 Dongquya suburb SW 1,290 Residential area 8 Majiawan suburb NE 1,331 Residential area Zhengjiazhuang 9 Village NE 1,783 Residential area Surface Grade III surface water 1 Dasha River W 80 water body

Table IV-9: Sensitive receptors near subproject 3 Item No. Location Direction Distance (m) Type 1 Xiajiadi Village N 1,500 Residential area

58

2 Huayin Village N 2,500 Residential area Zhujiazhuang 3 NE 2,350 Residential area Village Ambient Songjiazhuang air and 4 NE 2,300 Residential area Village noise Dongsongjiazhuang 5 E 1,980 Residential area Village 6 Lanjiapu Village NE 2,450 Residential area Surface Grade III surface 1 Dasha River E 5,500 water water body

Table IV-10: Sensitive receptors near subproject 4 Item No. Location Direction Distance (m) Type Ambient 1 Xitan Village SE 2,511 Residential area air and 2 Yuandunzi Village SW 1,620 Residential area noise

Table IV-11: Sensitive receptors near subproject 5 Item No. Location Direction Distance (m) Type Ambient Tongzhuang air and 1 W 100 Residential area Village noise Surface Grade III surface 1 Yellow River E 40,000 water water body Note: There are no sensitive receptors in a 3km radius of the liquorice seedling base.

Table IV-12: Sensitive receptors near subproject 6 Item No. Location Direction Distance (m) Type Ambient 1 Zhongchuang Village W 163 Residential area air and 2 Shangzidun Village E 151 Residential area noise 3 Chenjialiang Village W 188 Residential area Surface Grade IV surface 1 Shanzidun Canal W 80 water water body

Table IV-13: Sensitive receptors near subproject 7 Item No. Location Direction Distance (m) Type 1 Zhanggou Village N 1208 Residential area 2 Quliu Village N 510 Residential area 3 Beiwan Village NNE 1536 Residential area Jiangjiazhuang 4 NE 2059 Residential area Village 5 Niujia Village E 1650 Residential area 6 Maojia Village E 2342 Residential area Ambient 7 Huolu Village SSW 1560 Residential area air and Zuojiazhuang noise 8 SSW 1466 Residential area Village 9 Weixi Village SSE 1491 Residential area 10 Weidong Village SE 2255 Residential area 11 Qingning Village S 2264 Residential area 12 Wangli Village N 2202 Residential area 13 Zhongtan Town NE 1509 Residential area 14 Weinan Town SE 1750 Residential area Surface Grade III surface 1 Wei River S 141 water water body

D. Baseline Environment Monitoring

147. Baseline environmental monitoring was conducted at the subproject sites, as follows. 59

1. Ambient air quality

148. Ambient air quality monitoring was undertaken continuously over 7 days for SO2 and NO2 (1-hour average concentrations), NH3 and H2S (1-hour average concentrations), and TSP, PM10, PM2.5, SO2 and NO2 (24-hour average concentration). Monitoring locations are presented in Table IV-14 and methods are shown in

149. Table IV-15. Meteorological parameters such as wind direction, wind speed, air temperature, barometric pressure and cloud cover were also monitored. Ambient air quality results are presented in Table IV-16. The data show that all 24-hour average SO2, NO2, TSP, PM2.5 and PM10 concentrations and 1-hour average SO2, NO2, H2S and NH3 concentrations complied with the relevant PRC ambient air quality standard, Class II of Ambient Air Quality Standards (GB3095-2012). The results show that air quality in the project area is relatively good.

Table IV-14: Air quality and noise monitoring locations Subproject Locations Subproject 1- Lanzhou Part EA’s head office building Subproject 1- Lintao component Construction site of Lintao component Subproject 1- Jiuquan component Existing warehouses owned by PIU Subproject 2 No. 2 Building E-commerce incubation park Subproject 3 Xinbaihui agricultural demonstration logistics park owned by PIU Subproject 4 Existing potato process plant owned by PIU Subproject 5-seedling base Existing industrial park owned by PIU Subproject 5- process base Construction site of liquorice process base at Shitan Village Subproject 6 Construction site of the greenhouses Subproject 7 Existing forage mulberry plant owned by PIU

Table IV-15: Air quality monitoring methods Pollutant Standard Method Detection limit Formaldehyde absorbing- 1-hour mean: 0.007 mg/m3 SO2 HJ/T482-2009 pararosaniline 24-hour mean: 0.004 mg/m3 spectrophotometric method 1-hour mean:0.005 mg/m3 NO2 HJ/T479-2009 Saltzman method 24-hour mean:0.003 mg/m3 TSP GB/T15432-1995 Gravimetric method 0.001mg/m3 3 PM10 HJ 618-2011 Gravimetric method 0.010 mg/m 3 PM2.5 HJ 618-2011 Gravimetric method 0.010 mg/m Non-dispersive infrared CO GB/T9801-1988 0.3mg/m3 spectrometry Nessler's reagent colorimetric NH3 HJ 533-2009 0.05mg/m3 method Odor GB/T 14675-1993 Triangle odor bag method 10 Source: Domestic EIA (2018).

60

Table IV-16: Air quality monitoring results (Unit: μg/m3) Exceedance of national 24-hour mean Limit Monitoring 1-hour mean concentration standards % No. Item concentration period rage 1-hour 24-hour rage 1-hour mean 24-hour mean mean mean SO2 60-130 5-7 500 150 0 0 NO2 7-26 11-18 200 80 0 0 Subproject 1 October 14, PM2.5 — 33-49 — 75 0 — Jiuquan 2018- October PM10 — 57-89 — 150 — 0 component 20, 2018 TSP — 124-184 — 300 — 0 H2S 3-9 — 10 — 0 — NH3 100-170 — 200 — 0 — SO2 34-92 45-58 500 150 0 0 November 7, Subproject 1 NO2 22-59 29-40 200 80 0 0 2018- Lintao PM2.5 — 23-68 — 75 — 0 November 13, component PM10 — 87-119 — 150 — 0 2018 TSP — 106-225 — 300 — 0 SO2 66-165 6-14 500 150 0 0 September 4, Subproject NO2 22-55 29-40 200 80 0 0 2018- 1- Lanzhou PM2.5 — 50-73 — 75 — 0 September 10, component PM10 — 48-73 — 150 — 0 2018 TSP — 94-235 — 300 — 0 SO2 45-78 2-4 500 150 0 0 August 8, 2018- NO2 13-39 5-22 200 80 0 0 Subproject 2 August 14, PM2.5 — 5-20 — 75 — 0 2018 PM10 — 23-34 — 150 — 0 TSP — 56-85 — 300 — 0 SO2 17-22 6-18 500 150 0 0 NO2 21-26 19-46 200 80 0 0 April 13, 2018- PM2.5 — 35-68 — 75 — 0 Subproject 3 August 19, PM10 — 73-132 — 150 — 0 2018 TSP — 131-265 — 300 — 0 H2S 1-2 — 10 — 0 — NH3 68-103 — 200 — 0 — October 15, SO2 6-13 5-9 500 150 0 0 Subproject 4 2018- October NO2 7-26 11-18 200 80 0 0 21, 2018 PM2.5 — 34-55 — 75 — 0 61

Exceedance of national 24-hour mean Limit Monitoring 1-hour mean concentration standards % No. Item concentration period rage 1-hour 24-hour rage 1-hour mean 24-hour mean mean mean PM10 — 63-96 — 150 — 0 TSP — 119-186 — 300 — 0 H2S 3-9 — 10 — 0 — NH3 100-170 — 200 — 0 — SO2 9-22 4-14 500 150 0 0 Subproject 5 NO2 19-41 9-15 200 80 0 0 May 15, 2018- seedling PM2.5 — 21-48 — 75 — 0 May 21, 2018 base PM10 — 56-114 — 150 — 0 TSP — 97-176 — 300 — 0 SO2 19-35 8-29 500 150 0 0 Subproject 5 NO2 34-77 13-30 200 80 0 0 May 22, 2018- process PM2.5 — 31-68 — 75 — 0 May 28, 2018 base PM10 — 78-132 — 150 — 0 TSP — 103-231 — 300 — 0 SO2 3-47 1-24 500 150 0 0 NO2 14-68 7-36 200 80 0 0 June 10, 2018- Subproject 6 PM2.5 — 8-59 — 75 — 0 June 16, 2018 PM10 — 18-137 — 150 — 0 TSP — 88-171 — 300 — 0 SO2 13-19 8-11 500 150 0 0 NO2 12-21 14-19 200 80 0 0 November 24, PM2.5 — 40-65 — 75 — 0 2018- Subproject 7 PM10 — 74-104 — 150 — 0 November 30, TSP — 146-189 — 300 — 0 2018 H2S 2-5 — 10 — 0 — NH3 10-60 — 200 — 0 —

62

2. Noise

150. Noise monitoring results are presented in Table IV-17. The results indicate that daytime and nighttime noise levels at the project sites meet the applicable Class II standards (60 dB(A) daytime, 50 dB(A) nighttime) in PRC Environmental Quality Standards for Noise (GB3096-2008). Table IV-17: Noise monitoring results (Unit: dB(A)) Exceedance of Daytime Nighttime national standards % Item Monitoring period noise noise Daytime Nighttime range range noise noise Subproject 1–Jiuquan October 14–20, 2018 49.3-57.6 43.3-49.6 0 0 Subproject 1–Lintao November 7–13, 2018 51.1-58.9 43.9-48.5 0 0 Subproject 1–Lanzhou September 4–10, 2018 52.3-59.1 44.2-49.0 0 0 Subproject 2 August 8–14, 2018 46.0-55.2 40.9-47.7 0 0 Subproject 3 April 13–August 19, 2018 53.6-58.4 43.5-48.4 0 0 Subproject 4 October 15–21, 2018 41.0-49.6 38.9-40.2 0 0 Subproject 5 seedling May 15–21, 2018 41.2-48.6 38.7-43.2 0 0 base Subproject 5 process May 22–28, 2018 40.1-47.7 37.2-45.2 0 0 base Subproject 6 June 10–16, 2018 42.4-50.7 38.8-48.4 0 0 Subproject 7 November 24–30, 2018 43.3-49.6 36.1-49.3 0 0 Note: The limit for daytime noise is 60 dB(A), and nighttime is 50 dB(A).

3. Water quality

151. Surface water. Surface water resources near the subproject sites are: the Yellow River (Lanzhou section), Yellow River (Jingtai section), Tao River Jiuquan section, Dasha River Lintao section, Datong River Datong River Diversion Canal, Wei River Tianshui Section and Dajing River Gulang section. Table IV-18 presents a summary of the water quality of these rivers in 2017.

Table IV-18: Water Quality in 2017 of Rivers Near Subproject Sites7 Applicable Compliance Actual Water Exceedance Water Body Section Standard Status Quality Category parameter Jingtai section Class III Yes Class II NA Yellow River Lanzhou section Class III Yes Class II NA Tao River Jiuquan section Class II Yes Class II NA Dasha River Lintao section Class II Yes Class II NA Datong River Datong River Class II Yes Class II NA Diversion Canal Wei River Tianshui Section Class III Yes Class II NA Dajing River Gulang section Class III Yes Class III NA Source: Gansu Environmental Quality Bulletin (2017).

152. The results show that the water quality of surface water bodies of the project complies with relevant PRC standards. 153. Groundwater. During domestic EIA preparation process, the EIA institute implemented groundwater quality monitoring at the subprojects with agricultural activities (subproject 3, 4, 5, 6 and 7). The results are presented in Table IV-19. Groundwater samples were taken in 2018. The results indicate that groundwater quality complies with the relevant PRC standard, Class III of GB/T14848-2017 Quality Standards for Ground Water.

63

Table IV-19: Groundwater monitoring results (Unit: mg/L, excluding pH) Subproject Item 3 4 5 6 7 Limit pH 7.57 7.3 7.26 7.58 7.56 6.5-8.5 Total hardness 413 357 256 406 312 450 Chloride 82.3 164 240 198 231 250 Cyanide ND ND ND ND ND 0.05 Fluoride 0.72 0.48 0.73 0.42 0.57 1.0 Arsenic 0.0004 0.0022 ND 0.0003 ND 0.01 Mercury ND ND ND 0.00063 ND 0.001 Cadmium ND ND ND ND ND 0.005 Chromium VI ND ND ND ND ND 0.05 Lead ND ND ND 0.0009 ND 0.01 Total dissolved solid 625 748 801 993 578 1000 CODMn 1.61 1.15 1.54 0.9 1.3 3.0 Sulfate 241 142 150 87 136 250 Total coliforms ND ND ND ND ND 3 NH3-N 0.02 0.1 0.03 0.04 0.03 0.5 Nitrate NO3- 0.03 0.09 0.08 12.2 7.3 20 Nitrite NO2- ND ND ND ND ND 0.1 Volatile Phenols ND ND ND ND ND 0.002

64

V. ANTICIPATED IMPACTS AND MITIGATION MEASURES

A. Project Area of Influence and Sensitive Receptors

154. To define the geographic scope of the impact assessment, the “project area of influence” and “sensitive receptors” were identified. The project area of influence was defined as the total area which might be subject to adverse impacts of the project. This was based on the locations of sensitive receptors, defined as settlements and/or environmental values that might be affected by the project construction and/or operation. The receptors are described in Section IV.C of this IEE and comprise: (i) villages, communities and/or public buildings (e.g. schools, offices) potentially subject to construction- or operational- noise and/or vibration, air pollution, altered water quality or supply, and/or environment-related social impacts; (ii) public service facilities vulnerable to disturbance or pollution e.g. water source protection areas and reservoirs; and (iii) surface and/or groundwater resources.

B. Anticipated Project Benefits and Positive Impacts

155. Anticipated project environmental benefits during operation comprise: (i) conservation of water resources, through a reduction in annual water consumption; (ii) reduced pollution of water and soil resources, through reduced use of chemical fertilizer and pesticides, compared to baseline conditions; (iii) improved product quality and food safety information for consumers (such as whether organic or not, pesticides used); and (iv) enhanced market access and technical support for farmers. The project will achieve these benefits through the application of network-connected sensors and tracking technologies to improve farming efficiency. Lack of regular and reliable information on water and chemical usage, and of the origin, quality, and safety of agricultural products, are key constraints which affect farming efficiency and the ability of farmers to access high-value markets. Internet-connected sensors and tracking technologies enable the monitoring and quantification of inputs such as soil, air, water, fertilizer, pesticides and also tracing the location of products along the value chain. A socialized agricultural service system 18 utilizes the network generated data to provide farmers with agricultural support services and consumers with product characteristics through mobile internet platforms. 156. Water management and water savings. The project design is based on available science on water requirements for plant health and soil moisture. Project-designed water conservation measures will replace flood and spray irrigation of broadacre crops and will ensure water savings when compared with the without-project operations. The project will result in a water savings of about 5,491,096 m3 per year (Section V.E.1).

157. Reduced rates of chemical fertilizer and pesticide application. The project will result in a significant reduction of the use of agricultural chemicals: a reduction of chemical fertilizer by about 13,115 tons per year, and reduced use of pesticides by about 36 tons per year, compared to baseline conditions (Section V.E.2). The project’s support for increased use of organic fertilizers (and the government’s willingness to undertake an international loan for this) reflects the increasing national trend toward improved food safety and “green production systems”, as stated in the range of national plans for agriculture and water resources management and international treaties that the PRC is a signatory to (Section II). For subproject 3, the trend toward organic fertilizers is also financially supported by the Zhangye City Government, which offers farmers a subsidy of CNY300 per ton of organic fertilizer used, for lands >15 mu. 158. Improved management of agricultural and/or industrial parks. Five subprojects will be located within existing agricultural or industrial parks, of which two are national-level

18 Socialized agriculture service systems refer to technical and management support service provision via internet applications based on data generated through network connected sensors and devices. 65 parks and three are county-level. Subprojects 6 and 7 are within the national-level parks: a “high tech zone” for agriculture (subproject 6) and an agricultural park (subproject 7). Subprojects 3 (agricultural-industrial park) and 4 and 5 (industrial parks) are in county-level parks. These parks are operated in accordance with national and provincial regulations for industrial and agricultural parks and which embody the principals of “circular economy”: (i) they are self-contained complexes with their own wastewater treatment plants and sewage pipeline networks, water supply, and power supply; and (ii) they must achieve defined minimum environmental standards, including for wastewater treatment and air emissions. The project will add value to these existing systems as follows: (i) for subproject 3, excess vegetable mulch waste will be utilized by the other agricultural companies or farmers within the agricultural park; (ii) for subproject 4, steam generated from the existing park activities will be recycled for use in the new potato production; and (iii) other companies and farmers within the parks will be invited to participate in the project trainings for improved agricultural production and EMP implementation. 159. Project beneficiaries. The project will directly or indirectly benefit about 0.45 million people in the subproject areas due to improved crop productivity (Table V-1). This in turn will result in increased farmer revenue from the sale of products or increased employment opportunities.

Table V-1: Project Beneficiaries County Household Population Men Women Suzhou 11,240 45,972 23,446 22,526 Lintao 18,740 76,647 39,090 37,557 Linze 20,000 81,800 41,718 40,082 Gulang 18,360 75,092 38,297 36,795 Jingtai 9,200 37,628 19,190 18,438 Lanzhou New District 9,000 36,810 18,773 18,037 Maiji District 23,600 96,524 49,227 47,297 Total 110,140 450,473 229,741 220,732

C. Pre-Construction Phase

160. Prior to construction, the following measures will be implemented.

i) Institutional strengthening. (a) The project management office (PMO) will assign at least one full-time, qualified environment officer to the PMO team. This officer will lead the coordination of the EMP; (b) the seven implementing agencies will each assign one environmental and social focal point as part of the PIU teams; and (c) under the loan consulting services, the PMO will hire a loan implementation environment specialist (LIEC) to provide external support.

ii) Updating the EMP. The EMP will be updated as needed, including mitigation measures and monitoring. This will be the responsibility of the PMO, PIUs and LIEC.

iii) Training in environmental management. The LIEC and personnel from the Gansu Environmental Protection Department and district/county EEBs will give training in implementation and supervision of environmental mitigation measures to contractors and the construction supervision companies (CSCs).

iv) Grievance Redress Mechanism (GRM). The PMO and PIUs will implement the project GRM at least two months before the start of construction, to ensure that the project communities and public services (e.g. schools and nursing homes) are well informed and provided the opportunity to discuss any concerns. This is further to the public consultations already conducted during project preparation (Section VII).

66

v) Bidding document and contract documents. The project environment management plan (EMP; Appendix 1) will be included in the bidding documents and contracts for procurement of civil works, goods and services. All contractors and subcontractors will be required to comply with the EMP.

vi) Contractor obligations. Contractors, in their bids, will respond to the environmental clauses in the bidding documents for EMP requirements. Prior to construction, each contractor will develop a site EMP, based on the attached project EMP, and assign at least one person responsible for environment, health, and safety (EHS). The site EMP shall include the following: (a) surface water protection; (b) spill control and management; (c) site drainage and soil erosion protection; (d) health and safety; and (e) temporary traffic management. The site EMPs will be submitted to the environmental officer of each PMO for approval, with support of the local EEBs.

D. Construction Phase

1. Impacts on Ecological Environment

161. All subproject sites are located either in existing farmland (for the production bases) or existing buildings and/or construction sites (for the processing and information technology centers). The risk of direct impacts on natural lands or ecological values by the project is low. The project will not impact any nature reserves, scenic, cultural or other types of protected areas; is located within modified habitats and does not involve critical habitat; and will not impact any rare, threatened, or protected flora or fauna species. The existing farmland areas comprise irrigated areas usually centered upon existing irrigation canal networks. One subproject, Subproject 3, will construct vegetable greenhouses in the Gobi Desert (outside Zhangye City). The site is modified and already under use by the PIU. The following measures will be ensured during the construction phase:

(i) Construction machinery and construction workers shall be strictly assigned to work areas and access corridors as part of site planning and without occupying land randomly. Construction machinery and construction materials will not be placed in naturally vegetated areas.

(ii) Imported construction materials such as brick, stone, sand and cement, shall be transported to the construction site in batches to meet demand so that stockpiles do not overflow onto naturally vegetated areas. After the completion of the project, cleaning and greening work shall be carried out to restore any damage.

(iii) All planting activities under the project, including re-vegetation for rehabilitation of construction sites, will only use plant species which are (i) native (i.e. naturally occurring) to Gansu Province, and (ii) are sourced from local stock within Gansu Province. In the event that non-native seedlings are required for rapid stabilization of exposed soils and sites, only sterile seedlings (i.e. which cannot propagate) will be used, to prevent the spread of weeds.

(iv) To reduce the risk of spreading weeds, pest animals, and/or soil-based organisms, the project will: (a) prohibit the use of any plant species classified in the PRC as weeds – including native species – as defined by the China National Invasive Plant Database (http://www.agripests.cn) and by the Ministry of Ecology and Environment and Chinese Academy of Sciences.

(v) All re-vegetation activities under the project, including for the rehabilitation of construction sites, and for landscaping, will be subject to operation and maintenance 67

procedures after planting, to ensure the planted vegetation is adequately protected and maintained.

(vi) To avoid soil and water pollution, no pesticides and no top-dressing fertilizers will be used for any of the re-vegetation, planting, or landscaping activities under the project.

2. Soil Erosion

162. Erosion may occur during the earthworks, site preparation for crops, and construction of unsealed farm tracks, and improper management of excess spoils. Details of spoils generated from each subproject are given in Table V-2.

Table V-2: Magnitude of Earthworks for each Subproject Earth excavation Earth backfill Spoil Subproject Spoil Disposal Spoil (x1,000 m3) Spoil (x1,000 m3) (x1,000 m3) 1 (Lintao) 19 5 14 Lintao Urban Area Landfill 1 (Jiuquan) 3.6 1.3 2.3 Suzhou District Landfill 1 (Lanzhou) 0 0 0 NA 2 0 0 0 NA 3 10.2 3.06 7.14 Linze Urban Area Landfill 4 0 0 0 NA 5 18.3 5.5 12.8 Jingtai Urban Area Landfill 6 52 31 21 Lanzhou New District Landfill 7 5.3 2 3.3 Tianshui Landfill 163. The data shows that excavation and backfill volumes for all subprojects are closely matched and there will be minimal excess spoil or stockpiles. However, the amount of earth excavation during construction is the main indicator of the magnitude of potential erosion during this phase, since the exposed, mostly sloping surfaces will be open to the effects of rain and wind until stabilized. 164. The following mitigation measures are set to limit soil erosion and spoil management during construction. These measures will apply to all subprojects. (i) At the construction site, the potential for the stormwater runoff will be assessed, and appropriate stormwater drainage systems to minimize soil erosion will be implemented, including perimeter bunds and the establishment of temporary detention and settling ponds to control topsoil runoff. (i) Land excavation and filling will be balanced so as minimize the requirement for fill material transportation. (ii) During earthworks, the area of soil exposed to potential erosion at any time will be minimized through good project and construction management practices. (iii) Temporary spoil storage sites will be identified, designed, and operated to minimize impacts. Spoil sites will be restored after storage activities. (iv) Spoil will be reused on-site to the maximum extent feasible as fill. (v) Excess spoil that cannot be used on-site will be transported to an approved spoil disposal site. Certified landfill sites, and with capacity to receive excess spoil, have been confirmed. (vi) Spoil and aggregate piles will be covered with landscape material and/or regularly watered. (vii) Waste construction material such as residual concrete, asphalt, etc., will be handled appropriately for reuse or disposal. (viii) Construction and material handling activities will be limited or halted during periods of rains and high winds.

68

(ix) Any planned paving or vegetating of areas will be done as soon as practicable after the materials are removed to protect and stabilize the soil. (x) Once construction is complete disturbed surfaces will be adequately sloped and revegetated with native trees and grass.

3. Air Quality

165. Fugitive emission of dust (measured as total suspended particulates; TSP)19 from construction activities and equipment is assessed to be the main air pollutant during the construction stage. Fugitive dust will be generated on construction sites during earthworks from construction activities (excavation, loading, hauling and unloading), uncovered earth material stockpiles on construction sites and temporary spoil storage and disposal areas (and containers), and from vehicles hauling loads, especially if loads are uncovered. Impacts will be short-term and localized and in line with typical construction works. Additional pollutants will originate from the gaseous emissions of construction vehicles (CO and NO2) and heavy diesel machinery and equipment. 166. Without appropriate mitigation, construction phase activities may generate significant localized TSP levels, with worst-case conditions occurring in clear weather without watering. 167. To reduce air quality impacts during the construction period, the following air quality management measure and construction good practice as set out in the World Bank EHS Guidelines will be implemented: (i) Water will be sprayed on active construction sites including where fugitive dust is being generated daily, and more frequently during windy days. (ii) Transport vehicles will be limited to low speeds in construction sites. (iii) Loads will be covered during truck transportation to avoid spillage or fugitive dust generation. Fine materials will be transported in fully contained trucks. (iv) Construction site roads will be well maintained and watered and swept on an as-needed basis. Construction site road entry points will be equipped with the truck drive through wash ponds. (v) Transport routes and delivery schedules will be planned to avoid densely populated and sensitive areas and high traffic times. (vi) Store petroleum or other harmful materials in appropriate places and cover to minimize fugitive dust and emission. (vii) Provide regular maintenance to vehicles to limit gaseous emissions (to be done off-site). (viii) Construction spoil and other construction materials will be temporarily stored using containers, but they may the potential to generate dust. Thus, containers will be covered and/or watered if necessary. (ix) Muddy or dusty materials on public roads outside the exits of works areas will be cleaned immediately. (x) The disturbed sites will be revegetated as soon as possible. (xi) Locating asphalt plants and mixers >500 m downwind from the nearest residential areas and other sensitive receptors.

19 Airborne particles or aerosols that are less than 100 micrometers are collectively referred to as total suspended particulate matter (TSP). 69

(xii) Dust suppression near sensitive receptors e.g. schools, hospitals, residential areas. (xiii) Ensure vehicle and machinery emissions comply with PRC standards of GB18352-2005, GB17691-2005, GB11340-2005, and GB18285-2005. (xiv) Timely monitoring of air quality and inspections during construction, as defined in the project EMP (Appendix 1). 168. Overall, air quality impacts from construction activities will be short-term (because of the phased construction approach), localized and low in magnitude.

4. Water Quality, Wastewater Management, and Hydrology

169. Water quality and wastewater management. Construction wastewater will be produced from the maintenance and cleaning of mechanical equipment and vehicles as well as on-site works e.g. cement mixing. Inappropriate disposal of construction wastewater – e.g. from construction site runoff; washing construction equipment and vehicles; oil-containing wastewater from machinery repairs; workers camps – could contaminate soil, surface water, and/or groundwater, and/or clog local drains and irrigation channels. 170. Locations of the nearby streams that could be affected by the wastewater discharges from the subproject sites are: • Tao River, located about 2.3 km away from the Subproject 1 (Lintao Component) • Dasha River, located about 80 m away from the Subproject 2 • Shanziduan Canal, located about 617 m away from the Subproject 6 • Wei River, located about 141 m away from the Subproject 7 171. For the Tao River and Shanziduan Canal, no impacts are expected due to the distance from the subproject sites. For the Dasha River, no impacts are expected as the subproject scope does not involve any construction works. For the Wei River, potential impacts without mitigation might include temporary pollution from nearby construction dust, vehicle movements, and runoff. To prevent pollution of water resources, the following mitigation measures and construction good practice will be implemented: (i) On-site toilets will be installed for all site personnel in all work sites. (ii) Construction wastewater generated during the construction phase will be discharged to the existing municipal sewer systems. All discharged construction wastewater will meet the appropriate PRC standard GB/T 31962- 2015 before discharge. Discharged water will then be treated in the nearby wastewater treatment plants. (iii) All necessary measures will be undertaken to prevent construction materials and waste from entering the drainage system, to ensure that site runoff does not reach distant water bodies or irrigation canals or farmlands (iv) Maintenance of construction equipment and vehicles will not be allowed on sites to reduce wastewater generation. (v) Oil traps will be installed at service areas and parking areas. Oil-water separators will be installed for oil-containing wastewater. (vi) All construction machinery will be repaired and washed at special repairing shops. No on-site machine repair, maintenance and washing shall be allowed, to reduce wastewater generation. (vii) Storage facilities for fuels, oil, and other hazardous materials are within secured areas on impermeable surfaces. Storage sites will be contained within bunds and cleanup kits will be installed at each site in the event of leakage.

70

(viii) Contractors’ fuel suppliers will be properly licensed, follow proper protocol for transferring fuel, and are in compliance with Transportation, Loading and Unloading of Dangerous or Harmful Goods (JT 3145-88). 172. Hydrology and water availability. There are no water source protection areas within or near the subprojects. Water requirements for construction will be sourced from municipal water supplies.

5. Noise Impacts

173. An increase in localized noise will occur during construction. Major sources of noise are the operation of equipment, vehicles and heavy machinery, as well as noise from goods and material transportation (Table V-3). Though noise levels may be high, the impacts will be temporary and localized and can be further mitigated.

Table V-3: Noise Values of Construction Machineries at Different Distances dB (A) Distance to Machinery Machinery Name 15m 20m 40m 60m 80m 100m 130m 150m 200m Excavator 71 69 63 59 57 55 53 51 49 Bulldozer 72 70 64 60 57 56 54 52 50 Loader 61 59 53 49 47 45 43 41 39 Heavy truck 69 67 61 57 55 53 51 49 47 Drilling machine 72 70 64 60 57 56 54 52 50 Concrete-mixer 71 69 63 59 57 55 53 51 49 Applicable Standard 70 (daytime) (GB12523－2011, revised) 55 (nighttime) Source: Domestic EIA.

174. From the above table, it can be concluded that the noise levels will comply with the national standards at a distance of 100 m from the construction sites, both during day time and noise time. These noise levels were compared with the locations of nearest sensitive receptors given in Tables IV-6 to IV-14. Two residential areas are located within about 100 m of the project sites: (i) Jinxiujiayuan suburb, located about 59 m from existing buildings to be used for Subproject 2; and (ii) Tongzhuang Village, located about 100 m from planned construction sites for Subproject 5. For Jinxiujiayuan suburb, there will be no impacts as the subproject does not involve construction works. For Tongzhuang Village, residents may experience day-time noise levels up to 70 dB(A) due to construction works. Tongzhuang Village is within a “Class II” area for noise (maximum day-time noise limit of 60 dBA; Table II-12). For this village, construction noise levels may meet or exceed these levels. Extended exposure to such noise levels without mitigation measures could cause physical hearing injury to residents and workers, in addition to general stress and disturbance. 175. To ensure construction activities meet PRC noise standards and to protect workers and nearby communities, the following mitigation measures and construction good practice as set out in EHS Guidelines will be implemented: (i) Construction activities will be planned in consultation with local authorities and communities so that activities with the greatest potential to generate noise and vibration are planned during periods of the day that will result in the least disturbance. (ii) Construction works will be limited to day time and will be strictly prohibited during the nighttime (22:00 h to 07:00 h). Exceptions will only be allowed in exceptional cases, and only after getting the approval of the surrounding residents, local Environmental and Ecological Board (EEB) and other relevant departments. Nearby residents will be notified of such nighttime activities well in advance. 71

(iii) When undertaking construction planning, simultaneous high-noise activities will be avoided. High noise activities will be scheduled during the day rather than evening hours. Similarly, the construction sites will be planned to avoid multiple high noise activities or equipment from operating at the same location. (iv) Low-noise equipment will be selected as much as possible. Equipment and machinery will be equipped with mufflers and will be properly maintained to minimize noise. (v) Noise protective equipment will be provided to workers to meet the requirements in occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007) and EHS Guidelines. (vi) Transportation routes and delivery schedules will be planned during detailed design to avoid densely populated and sensitive areas and high traffic times. (vii) Vehicles transporting construction materials or waste will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. (viii) Special attention will be paid to protect sensitive sites near the subproject sites: high noise construction activities will be positioned as far away from sensitive sites as possible. (ix) For Tongzhuang Village, the following additional measures will be implemented: (i) installation of sound barriers around the construction site which are design-certified of sufficient thickness, height, and suitable material to mitigate noise levels of 70 dB(A) to 60 dB(A) (the Class II standard for daytime noise); (ii) during peak construction period, daily noise measurements by the contracted environment monitoring agency to ensure noise levels at the sound barriers meet the Class II daytime noise standard. In the event that noise levels exceed the Class II standard, the construction works emitting the noise will be immediately halted and discussions held on how to resolve the issue, including the installation of additional noise barriers; (iii) during peak construction, daily consultations with residents, led by the PIU safeguard officer, and attended by the construction supervision companies and contractors.

6. Solid Waste

176. Solid waste generated in the construction phase will include both construction and domestic waste. Construction wastes include various waste packing materials and waste generated during equipment installation and cleaning. An estimated domestic waste of 0.5 kg/day per worker will be generated from construction workers. The domestic waste generated during the construction period is presented in Table V-. Inappropriate waste storage and disposal could affect soil, groundwater and surface water resources, and hence, public health and sanitation. Table V-4: Estimated Volumes of Domestic Waste – Construction Phase Estimated domestic Subproject Waste Management waste generated (tons) Collected by the local sanitary department and 1 12 transported to Lintao Urban Area Landfill and Suzhou District Landfill for treatment Collected by the local sanitary department and 2 0.9 transported to Linze Urban Area Landfill for treatment Collected by the local sanitary department and 3 51 transported to Linze Urban Area Landfill for treatment Collected by the local sanitary department and 4 24 transported to Gulang Landfill for treatment

72

Collected by the local sanitary department and 5 108 transported to Jingtai Urban Area Landfill for treatment Collected by the local sanitary department and 6 7.2 transported to Lanzhou New District Landfill for treatment Collected by the local sanitary department and 7 2.48 transported to a local landfill for treatment Collected by the local sanitary department and Total 205.58 transported to Tianshui Landfill for treatment 177. The following solid waste management measure and construction good practice as set out in the World Bank EHS Guidelines will be implemented: (i) Wastes will be reused or recycled to the extent possible. (ii) Littering by workers will be prohibited. (iii) Excavated soil will be backfilled onsite to the extent possible. Excess spoil that cannot be used on-site will be transported to an approved spoil disposal site. (iv) Existing domestic waste containers will be used for domestic waste collection at work sites. Domestic waste will be collected regularly by the local sanitation departments and transported for disposal at local licensed landfills and waste incineration plants. (v) Construction waste dumpsters will be provided at all construction sites. Construction waste will be collected regularly by a licensed waste collection company and transported for disposal at local licensed landfills. (vi) There should be no final waste disposal on site. Waste incineration at or near the site is strictly prohibited. (vii) Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, spoil, that remain on the site after construction.

7. Hazardous and Polluting Materials

178. Inappropriate transportation, storage, use and spills of petroleum products and hazardous materials such as oily waste can cause soil, surface and groundwater contamination. To prevent this, the following mitigation measures and construction good practice as set out in the World Bank EHS Guidelines will be implemented: (i) A hazardous material handling and disposal protocol that includes spill emergency response will be prepared and implemented by contractors. (ii) Storage facilities for fuels, oil, chemicals and other hazardous materials will be within secured areas on impermeable surfaces provided with dikes with a 110% volume, and at least 300 m from drainage structures and important water bodies. A standalone site within the storage facility will be designated for hazardous wastes. (iii) Signs will be placed at chemicals and hazardous materials storage sites to provide information on the type and name of chemicals and hazardous materials. (iv) Suppliers of chemicals and hazardous materials must hold proper licenses and follow all relevant protocols and PRC regulations and requirements. (v) A licensed company will be hired to collect, transport, and dispose of hazardous materials following relevant PRC regulations and requirements. 73

8. Impacts on Community Health and Safety

179. Construction activities have the potential to cause community disturbance such as traffic congestion or delays, and public safety risks from heavy vehicles and machinery traffic and risk to kids trying to get onto the construction sites. Mitigations and construction good practice as set out in EHS Guidelines will be implemented to address traffic and other community disturbance issues. (i) Each contractor will undertake a health and safety risk assessment of construction works and implement relevant construction phase EHS plan in line with construction good practice as set out in EHS Guidelines (ii) Transportation routes and delivery schedules will be planned during detailed design to avoid densely populated and sensitive areas and high traffic times. (iii) Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. (iv) Signs will be placed at construction sites in clear view of the public, warning people of potential dangers such as moving. All sites will be made secure, discouraging access by members of the public through appropriate fencing with security guards whenever appropriate.

9. Workers Occupational Health and Safety

180. Construction may cause physical hazards to workers from noise and vibration, dust, handling heavy materials and equipment, falling objects, work on slippery surfaces, fire hazards, chemical hazards such as toxic fumes and vapors, and others. 181. Contractors will implement adequate precautions to protect the health and safety of their workers: (i) Each contractor will undertake a ‘job hazard analysis at each new construction site to identify potential hazards that may arise from the proposed works or working conditions to the project workers, particularly those that may be life- threatening. (ii) Identify and minimize the causes of potential hazards to workers. Implement appropriate safety measures. (iii) Provide training to workers on occupational health and safety, emergency response, especially concerning using potentially dangerous equipment and storage, handling and disposal of hazardous waste. The induction will be conducted before construction, and no worker is allowed on site without induction. (iv) Ensure that all equipment is maintained in a safe operating condition. (v) Provide appropriate protective equipment to workers. (vi) Provide procedures for limiting exposure to high noise or high temperature working environments in compliance with PRC occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007 and EHS Occupational Health and Safety Guidelines). (vii) Ensure regular safety meetings with staff.

10. Physical Culture Resources

182. Based on site visits, there are no known cultural heritage or archaeological sites at or

74

near the project sites. However, construction activities have the potential to disturb unknown underground cultural relics. The EMP mitigation measures include immediate suspension of construction activities if any archaeological or other cultural relics are encountered. The local Cultural Heritage Bureaus and PMO will be promptly notified. Construction will resume only after investigation and with the permission of the appropriate authority. The clause for protection of unknown underground cultural relics will be included in construction contracts.

E. Operation Phase

1. Sustainable use of water resources

183. Water quantity. The project has been designed to maximize water use efficiency, through the following designs: (i) selection of “water efficient” (e.g. liquorice) rather than “water hungry” (e.g. wheat, corn) crops; (ii) adoption (for two subprojects) of greenhouse farming rather than field-based farming; (iii) installation of real-time sensors to monitor soil moisture and nutrient contents; (iv) linking of sensors with central computer systems to establish an “internet of things” (IoT) system for the project. This will allow PIUs and farmers to assess, in real time, crop water requirements. Water supply will be released based on real-time measurements of soil moisture content to avoid over-watering; (v) water release and fertilizer supply will be integrated within the same IoT system, further maximizing water and nutrient intake and minimizing waste. 184. Projected water requirements for the subprojects and the capacity of water sources to meet these needs was assessed based on: (i) water and soil nutrient needs for individual crop types; (ii) comparison of projected water use for each subproject with measurements of water use for the same crop types within existing subproject sites or nearby in Gansu Province i.e. similar topographic, soil, and climatic conditions; (iii) preparation of water balances for different components within each subproject (Section III.B); and (iv) comparison against existing river runoff of source rivers and water storage capacity of the supply sources. Data and information sources for these calculations comprised records of water and agricultural chemical use for existing subproject activities, published information on crop water and soil requirements in Gansu Province, and government regulations. Water balances (Section III.B; and this subsection) were prepared by the domestic EIA institute and reviewed by the TRTA team. 185. The project will source irrigation water from five reservoirs (for four of seven subprojects, one river (Yellow River; for two subprojects), and one irrigation channel (for one subproject) (Table V-5; due diligence on these sources is given in Section III.C).

Table V-5: Summary of Project Water Use Annual Storage Projected “Without Flow of Capacity Annual Water Subproject Projected Project” % of % of Source of Water Consumption Water Subproject Water Estimated Storage Annual River Source (Existing Use) Consumption Consumption– Water Capacity Flow of (million Water Source (million (million – All Usesb Agricultural Use Consumption of Water Source SP m3)a for Subproject m3) m3/year) (m3/year) Only (m3/year) (m3/year) Source River Hongshuihe Reservoir 1 267 (Jiuquan) 49.1 89 4,224 0 0 0.009% 0.002% Jiudianxia Reservoir e 3,670 (Lintao) 943 252 9,638 0 0 0.001% 0.0003% Municipal water supply 1 n/a (Lanzhou) n/a 532 0 0 0 n/a n/a Hongshanwan 2 230 Reservoir 17 161 7,956 0 0 0.047% 0.003% Hongshanwan 3 230 Reservoir 17 161 79,914 52,700 125,800 0.470% 0.035% Dajingxia 4 113 Reservoir 10.15 10.2 249,445 210,126 468,022.5 2.45% 0.221% 75

Yellow River 5 26,680 (Jingtai) 596 416.6 17,755,400 17,360,000 22,960,260 2.98% 0.067% Shandunzi 6 3,050 Canal 443 131 58,520 47,000 116,228.4 0.013% 0.002% Jiudianxia 7 3,670 Reservoir 943 124 14,298 23.1 180.2 0.002% 0.004% Total 18,179,395 17,669,849 23,670,491 Savings 5,491,096 aSee Table III-46 for details of source rivers. bAgricultural production, drinking, sanitation. n/a = not applicable, SP = subproject.

Table V-6: “Without Project” Estimated Water Consumption Annual water consumption of localized Total annual water Subproject No. Area (mu) traditional planting a m3/mu consumption m3/a 3 Solar greenhouse 340 370 125,800 Corn 160 1,287 205,920 Wheat 160 1,633.5 261,360 4 Medlar 150 4.95 742.5 Subtotal n/a 2,925.45 468,022.5 Corn 420 19,781 8,308,020 Wheat 380 8,544 3,246,720 Potato 280 11,242 3,147,760 5 Oil plants 320 5,317 1,701,440 Vegetable 410 4,880 2,000,800 Bean 320 14,236 4,555,520 Subtotal n/a 64,000 22,960,260 Greenhouse 120 968.57 116,228.4 6 Barren land 0 290 0 Subtotal 968.57 116,228.4 Solar greenhouse 2 78.9 157.8 Seedling hardening- 7 2 11.2 22.4 greenhouse Subtotal 90.1 180.2 Total 23,670,491 a From Agricultural water quota in Gansu province (2017).

186. These data indicate the following.

(i) For two subprojects, 1 (partially) and 2 (entirely), the project activities will comprise service and logistics centers and will be connected to municipal drinking water supply sources. Water consumption for these subprojects will be low.

(ii) For subprojects 3 to 7, projected water requirements represent less than 0.6% of annual river flow of source rivers and less than 3% of the water storage sources (Table V-5).

(iii) None of the projects involve groundwater use and will not affect groundwater supplies.

187. These data confirm that the project water supply requirements are sustainable; and, that the selected water sources have the capacity to meet the project requirements as well as continuing to meet existing use. Overall, compared with baseline conditions, the project will achieve significant water use efficiency. The project will save about 5,491,096 m3 water per year compared to conventional farming techniques (Table V-5). 188. Water quality. The risk of impacts to water quality from the project is assessed to be low, based on the following: (i) the project does not involve works in any water resource

76 protection areas; (ii) the nearest surface water bodies (streams, rivers, wetlands) are 0.08– 2.3 km away; (iii) the project does not involve groundwater extraction; (iv) the project is designed to maximize water use, therefore the risk of runoff due to unregulated water application is low; (v) two of the seven subprojects are focused on greenhouse farming, which will be entirely enclosed and will not involve any discharge of runoff or chemicals to the soil; and (vi) two of the seven subprojects are focused on field-based farming (liquorice, potatoes) and for these, design features are included in the project to minimize water use (including real- time monitoring sensors to measure soil water content; Section V.E.2). 189. Monitoring of water quantity and water quality. To ensure that subprojects 1 and 3–7 do not exceed local annual water allocations, and, that water quality is not impacted by operations, the following monitoring measures will be implemented: Water quantity (i) Water usage measured by the project-funded sensors will be stored at the PIU and PMO centralized computer systems. The PMO and each PIU will summarize this information in semi-annual reports to the implementing agencies. The information will also be included in the semi-annual environment monitoring reports to ADB. (ii) The PMO, PIUs and county water bureaus will review the data to (a) ensure that water use is maintained within the levels of the county water allocations, and (b) maximize water use efficiency in the subproject farming operations. Water quality (iii) The types and volumes of fertilizers and pesticides used by the subprojects will be documented by each PIU and stored at the PIU and PMO centralized computer systems, in order to monitor overall use and efficiency over time. (iv) The PMO and each PIU will summarize this information in semi-annual reports to the implementing agencies. The information will also be included in the semi-annual environment monitoring reports to ADB.

2. Use of Agricultural Chemicals

190. Increases in agricultural production are usually accompanied by increases in agricultural chemical use (both fertilizer and pesticides). For this project, the design is based upon: (i) information on crop growing requirements for soil moisture and nutrient levels; (ii) the installation of sensors in greenhouses and crop fields for real-time measurement of soil moisture, temperature, and other parameters to measure crop health and growing requirements; (iii) a switch (where required) from the use of non-organic to organic fertilizers using vegetable waste materials produced during project operation, in accordance with the principals of circular economy and agricultural practice; (iv) the integration of fertilizer and pesticide management; and (v) the need to meet requirements under the PRC Action Plan for Reaching Zero Growth of Fertilizer and Pesticide Application until 202020 which emphasizes that in Gansu Province, fertilization principles should reduce the use of chemical fertilizer and increase the use of organic fertilizer. The project designs anticipate significant reductions in the rates of fertilizer and pesticide application, as follows. 191. Fertilizer. Chemical fertilizers include inorganic ions such as sulfate and chloride (which weaken soil structure) and cadmium and fluoride (which accumulate in soil and can ultimately affect plant growth). Organic fertilizers based on nitrogen and phosphorus are slow release compared with chemical fertilizer and tend not to be leached away by rainstorms after application. High organic matter levels in organic fertilizers also aerate soils and maintain soil structure and wetting capacity. Crop production at existing facilities at five of the seven subprojects currently involves the use of about 24,417 tons per year of chemical fertilizer. Fertilizer is applied through the use of solid and liquid fertilizer (applied at the base of plants in soil and/or through spraying or mixing with irrigation or rain water).

20 Released by MOA on 17 February 2015. 77

192. The project reductions in fertilizer use were estimated based on: (i) comparison with existing rates of fertilizer use for similar crop types within the existing facilities (Table V-6); and (ii) the installation of new measures to be introduced by the project. These include: (i) sensors installed in greenhouses and fields for monitoring of soil nutrient and water levels; (ii) application of combined water and fertilizer application through drip irrigation systems; and (iii) the purchase and use of soil sampling equipment, allowing farmers to quickly assess soil nutrient levels while on-site, to make informed decisions about fertilizer application. 193. Overall the project will result in: (i) a large increase in the efficiency of applying fertilizer use – from 30% to 100% compared to existing baseline application rates; and (ii) a reduction in the use of chemical fertilizers in existing and project-funded subproject sites (Table V-7). These measures will result in a savings (or avoided use) of about 13,135 tons per year of chemical fertilizers compared to baseline conditions. Table V-7: Fertilizer Use of Project and Baseline Land Area (mu) Planned/future fertilizer Baseline fertilizer Subproject application in the subproject application in the (t/year) subproject (t/year) 1 Not applicable 0 0 2 Not applicable 0 0 70 mu solar 2,360 3,325 greenhouse 3 200 mu smart tunnel 4,000 9,500 100 mu smart low 2,000 4,750 tunnel 9 mu solar greenhouse 0.81 0 4 1,500 mu farmlands 180 300 4,000 mu liquorice 154 396 seedling farmlands 5 40,000 mu liquorice and 20,000 mu corn 2,520 5,940 farmlands 968.57 mu and 290 6 65.19 204.1 mu greenhouses 35 mu forage mulberry 7 0 0 farmlands Total 11,280 24,415 Difference in baseline and projected chemical fertilizer use (t/year) 13,135

194. The project will implement the following procedures for the application and safe handling and management of fertilizers: (i) application through drip irrigation, irrigation water, rainfall, and in soil during planting. For subprojects 3, 5, and 6, fertilizer will be mixed with water and provided via drip irrigation, ensuring that only small quantities are required and in small doses. This ensures that fertilizers will be retained around the root bases of plants rather than percolate deeply into the soil. For subprojects 3 and 6 (greenhouses), vegetables will be grown in substrate and there will be no percolation of fertilizer into the soil. For subproject 4 (potato farming in open fields), fertilizer use will be reduced through real-time monitoring and the other measures described above; (ii) mixing of fertilizers with water (especially phosphates) and handling will be conducted by trained workers and using protective clothing (gloves, goggles); (iii) safe storage of fertilizers by the PIUs in a specific room, with limited access; (iv) training of PIUs and farmers in fertilizer use; (v) installation of first-aid equipment and fire extinguishers on-site; and (vi) storage of fertilizers in cool, shaded rooms to avoid over-heating. 195. Pesticides. Crop production at existing facilities at five of the seven subprojects currently involves the use of about 89 tons per year of pesticides. These pesticides include omethoate, thimet and methamidophos. At these subprojects, pesticides are applied manually: the companies and farmers purchase pesticides on an annual basis, mix the pesticides with water by hand, and then use machine- or hand-pumped sprays. At least two of the pesticides

78

(omethoate and methamidophos) currently used in some of the existing subproject sites are classified as “highly hazardous” (class Ib) by the World Health Organization; 21 one (methamidophos) is prohibited in the PRC, and one (omethoate) is for strictly-controlled use in the PRC, under national pesticide management regulations (Appendix 3). 196. The project will reduce the use of pesticides through: (i) conversion of field-based farming to greenhouse farming (resulting in less exposure to pests) (subprojects 3, 6); (ii) germination of potato seedlings and growth of young plant within controlled conditions in farm buildings, to maximize growing success prior to provision of young plants to farmers for growing outdoors (subproject 4); (iii) conversion of corn and wheat farming to liquorice farming, a crop that is much more pest-resistant compared with other crops (subproject 5); (iv) physical control methods (lamps with sticky pads); (v) the use of organic-based pesticides (e.g. matrine, sophocarbidine, abamectine) which break down in soil and water (these pesticides are already available in Gansu Province for commercial use); and (vi) the halt of using at least two hazardous pesticides (omethoate, methamidophos) in the existing subproject sites, and by farmers under contract to the subproject companies, and, the avoidance of such chemicals in the project-funded sites. 197. These measures, and the pesticides and application rates to be used, comply with the PRC’s Action Plan for Reaching Zero Growth of Fertilizer and Pesticide Application until 2020. Overall the project will result in significant benefits: (i) an increase in efficiency of pesticide application by about 59% compared with existing usage (projected pesticide use by the project will be about 52.76 tons/year; Table V-8); (ii) the introduction of the integrated pest management techniques described above, at both the existing and new subproject sites, including through training for PIUs and farmers; and (iii) a halt to the use of at least two highly hazardous pesticides, reducing the risk of impact to the environment or human health. Table V-8: Pesticide Use of Project and Baseline Subproject Baseline application (tons/year) Planned application (tons/year) 3 3.1 0 4 8.34 0.6 5 76.8 51.8 6 0.95 0.36 7 0 0 (mulberry trees will not require pesticides) Total 89.19 52.76 Difference 36.43

198. The application and management of pesticides under the project will comprise the following: (i) machine-spray of pesticide for subprojects 4 and 5 (due to the large area of land to be covered, and to reduce direct handling by farmers); (ii) safe storage of pesticides by the PIUs in a specific room, with limited access; and (iii) training of PIUs and farmers in integrated pest management.

3. Solid Waste

199. Solid waste generated during operation periods will include domestic waste, agricultural waste (plastic film and the packaging of fertilizers and pesticides) for subprojects 3–7 and production waste from subprojects 1, 3, 4, 5 and 7. For plastic film, the main supply is for subprojects 4–6, which will use an estimated total of 2.83 tons during the 5 years of project implementation (Tables III-29, 39, 43). For greenhouses (subproject 3), the main management issue will be the responsible collection and disposal of plastic packaging for fertilizers and pesticides. Plastic residue left in the soil may affect the decomposition of soil humus and air and water permeability of the soil, resulting in soil structure damage and lower water retention and fertilizer conservation. Film residue also hinders seed germination, root

21 WHO. 2009. The WHO Recommended Classification of Pesticides by Hazard and Guidelines to Classification. Geneva. 79 growth and crop development, as well as affecting normal nutrient absorption of crops resulting in poor fertilizer use efficiency. For fertilizers, based on observations during the TrTA period, most of the packaging for fertilizers can be recycled by farmer households or subproject enterprises. Detailed estimates on solid waste generated from the subproject sites are in Section III. The following measures will be implemented: 200. For domestic waste, mitigation measures are: (i) Domestic waste bins will be provided; and (ii) Domestic waste will be routinely collected by the local sanitation departments for final disposal at approved waste disposal sites. 201. For plastic film in subprojects 3, 4, 5, 6 and 7, mitigation measures are: (i) In accordance with PRC Regulation GB 13735-2017 for Polythethylene Blown Mulch Film for Agricultural Uses, the use of non-recyclable plastic film <0.1 mm thickness will be prohibited. Only non-recyclable plastic film of thickness >0.1 mm and/or recyclable film (regardless of thickness) will be used; (ii) During crop harvesting, the film waste will be collected by farmers. The waste will be stockpiled and transported to “plastic film waste recycling centers” under the management of the Gansu Agricultural Department for the production of recycled fine-particle plastic materials, for sale to manufacturers for various uses. These centers are established and operating throughout farming areas of Gansu Province; and, (iii) Film mulching practices which optimize the timing of mulching and timely removal of film to shorten the mulching period. (iv) Overall, the impact of plastic film use is considered low, as the total amount to be generated (about 2.83 tons in five years) is relatively small. 202. For waste packaging such as chemical fertilizer and pesticide, including for greenhouses (subproject 3), mitigation measures are: (i) The project will result in significant reduction in the use of chemical fertilizers and pesticides, which will reduce the amount of plastic packaging; (ii) Training will be conducted for farmers on reducing the use of fertilizers and pesticides, and, responsible disposal of packaging; and (iii) Plastic packaging will be stored by the PIUs and/or farmers for re-use, and/or collection by manufacturers for subsequent recycling. 203. For production waste of subproject 1, mitigation measures are: (i) Production waste of the subproject 1 Jiuquan component will be recycled to produce substrate; and (ii) Waste generated by the subproject 1 Lintao component will be collected by the local sanitation departments for final disposal at Lintao Urban Area Landfill. 204. For production waste of subproject 3, mitigation measures are: (i) Waste vegetable of the subproject will be recycled to produce organic fertilizer; (ii) Sediment generated from the cleaning process will be collected by the local sanitation department and treated at Linze Urban Area Landfill; and (iii) Waste bark and root will be reused by local cattle and sheep breeders. 205. For production waste of subproject 4, mitigation measures are: (i) Waste potato and waste bark will be reused to produce organic fertilizer;

80

(ii) Sediment generated from the cleaning process will be collected by the local sanitation department for final disposal at Gulang Landfill; (iii) Residue generated from the potato processing process will be recycled to the biomass production process; (iv) Dust generated from the granulation process of organic matter for solid fertilizer production will be treated by bag filters and a dust collector with an efficiency of 99%, and then reused for fertilizer and/or silage. The remaining 1% of dust collected will be discharged through a 15 m high chimney after treatment. 206. For production waste of subproject 5, mitigation measures are: (i) Sediment generated from the cleaning process will be collected by the local sanitation department and treated in Jingtai Urban Area Landfill; (ii) Waste liquorice will be collected by the local sanitation department and treated in Jingtai Urban Area Landfill; (iii) Hazardous waste generated from the test process will be collected, transported and treated by a certified 3rd party hazardous waste treatment company. 207. For production waste of subproject 6, mitigation measures are: (i) Waste samples and substrate generated from the culture process will be mixed with organic fertilizer after high-temperature sterilization then reused as base fertilizer; and (ii) Waste leaf, barks, fruits and plants will be collected to produce organic fertilizer. 208. For production waste of subproject 7, mitigation measures are: (i) Waste spire and leaf primordium will be reused to produce substrate; (ii) Waste tissue culture and substrate will be reused for substrate production after heat sterilization; (iii) Waste bud seedling will be reused as organic fertilizer after heat sterilization; (iv) Waste forage mulberry and dust from silage production will be reused as fodder by nearby farmers. 209. Overall, risks associated with the production and disposal of solid waste are small. In all townships, established litter collection processes and transport systems to nearby landfills are already in place. Volumes of waste produced during construction and operation will be small and manageable because: (ii) the nature of the project does not generate large or diverse volumes of waste; and (ii) the main waste products to be generated, plastic mulch and/or packaging for agricultural chemicals, will be minimized through the use of biodegradable plastics, improved mulching (to reduce the need for plastic film), reduced chemical application, recycling of the fertilizer bags, and, inventorying and control of the pesticide packaging, as described above.

4. Air pollution

210. Subprojects 1, 3, 4, 5 and 7 will generate air pollutants during operation. Estimates on air pollution for each subproject is given in Section III. 211. For subproject 1, mitigation measures are: (i) Deodorizing microorganism will be used to reduce odor pollutants; (ii) Odor pollutants generated during substrate production will be collected and discharged by fans; and 81

(iii) Modelling of odor diffusion was carried out by the EIA Institute, and the results are compliance with relevant PRC standard: Emission standards for odor pollutants (GB14554-93). 212. For subproject 3, mitigation measures are: (i) Modelling of biogases boiler emission diffusion was carried out by the EIA Institute and the results are compliance with relevant PRC standard: Emission standard of air pollutants for boilers (GB13271-2014); (ii) Emission of biogas boilers will be discharged through the 15m high chimney; (iii) Odor inhibitor will be used at material storage sheds and ventilation of material storage sheds will be enhanced; (iv) Dust generated from the straw shattering process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 15m high chimney; and (v) Odor pollutants generated from the fermentation process will be collected by fans then discharged through the 15m high chimney. 213. For subproject 4, mitigation measures are: (i) Dust generated from the fertilizer production process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 15m high chimney; and (ii) Oil fume purifier generated from potato processing will be collected and treated by oil fume purifier, then discharged through the 15m high chimney. 214. For subproject 5, mitigation measures are: ` (i) Dust generated from the shattering process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 15m high chimney; 215. For subproject 7, mitigation measures are: (i) Dust generated from shattering and mixing process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 20 m high chimney.

5. Wastewater

216. The project will generate domestic wastewater and production wastewater and estimates of waste generated from the subproject are given in Chapter III. Because all the subprojects with agricultural activities will utilize drip irrigation and combined water and fertilizer technology, no wastewater will be generated during agricultural activities. 217. For the domestic wastewater, mitigation measures are: (i) Domestic wastewater will be treated in a digestion tank and will be discharged to the local municipal sewerage systems. 218. For production waste water of subproject 1, mitigation measures are: (i) For the Jiuquan component, the wastewater generated will be discharged to the local municipal sewerage system. (ii) For the Lintao component, wastewater generated from the floor cleaning process and will be discharged to the local municipal sewerage system.

82

219. For production waste water of subproject 3, mitigation measures are: (i) Wastewater generated from the cleaning process will be recycled to produce substrate after sediment removal; and (ii) Boiler blowdown will be discharged to the local municipal sewerage system. 220. For production waste water of subproject 4, mitigation measures are: (i) Wastewater generated from the cleaning process will be reused in the cleaning process after sediment; and (ii) Wastewater generated from the scalding process will be discharged to the local municipal sewerage system. 221. For production waste water of subproject 5, mitigation measures are: (i) Wastewater generated from the cleaning process and infiltration process will be reused as liquorice irrigation water after sediment removal; and 222. For production waste water of subproject 6, mitigation measures are: (i) Wastewater generated from culture bottle cleaning process and purified water production process will be discharged to the local municipal sewerage system; and 223. For production waste water of subproject 7, mitigation measures are: (i) Wastewater generated from the purified water production process will be reused as landscape water; and (ii) Wastewater generated from the silage production process, and the tissue culture process will be reused as landscape water after sediment removal.

6. Chemicals and Hazardous Materials

224. In addition to agricultural chemicals, other chemicals to be used for project operations comprise fuel and oil (for machinery and vehicles; all subprojects); and, analytical chemicals to be used for on-site laboratory sampling of the quality of liquorice for subproject 5. Under PRC liquorice product standards, a range of heavy metals (including lead, copper, cadmium, arsenic) and other substances are required to be within specified safety parameters for public consumption. Sampling for these substances requires the use of laboratory chemicals including: (i) liquiritin and glycyrrhizinic acids (200 µg per sample), phosphoric acid (5 ml per sample), acetonitrile (400 ml per sample), and absolute ethyl alcohol (200 ml per sample); and (iii) hydrochloric acid (for acid-insoluble ash content detection). Analyses include spectrophotometric assay (for heavy metal detection) and gas chromatography (for detection of benzene hexachloride, DDT and PCNB). In total, each test requires about 995 mL of chemicals. About 300 samples per year will be assessed i.e. projected volume of chemicals to be used is about 287 L. After each test, about 805 mL of waste chemicals will be produced i.e. about 257 L per year (the chromatography does not produce liquid waste). These substances are defined as hazardous waste, as per the PRC National Hazardous Waste Directory. 225. Toxic chemicals and their hazardous waste can have negative impacts on human health and the environment if not appropriately managed. These risks will be mitigated as follows. (i) A registry of all activities that involve the handling of potentially hazardous substances will be developed, including protocols for the storage, handling and spill response. (ii) All chemicals, toxic, hazardous, and harmful materials will be transported in spill-proof tanks with filling hoses and nozzles in working order. 83

(iii) All chemicals, toxic, hazardous, and harmful materials will be stored in secure areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained from affecting soil, surface water or groundwater systems. The area should be a 110% volume of storage capacity. Their usage will be strictly monitored and recorded. (iv) Good housekeeping procedures will be established to avoid the risk of spills. (v) Spills will be dealt with immediately, and personnel will be trained and tasked with this responsibility. (vi) Workers will be properly trained before handling hazardous wastes and have the requisite protective equipment. (vii) Hazardous waste will be temporarily stored in closed containers away from direct sunlight, wind, water and rain in secure designated areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained. (viii) Hazardous wastes including oily waste, waste chemicals and waste ion exchange resin will be collected and disposed of by licensed contractors. (ix) For subproject 5, the following additional measures will be implemented, and which comply with the PRC Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2001: (i) laboratory chemicals will be stored in a specified and locked room, with limited access; (ii) handling of the chemicals will be by qualified staff only; (iii) waste chemicals will not be discharged into drains but will be collected in closed containers and stored in the locked chemicals room; and (iv) the full containers will be periodically collected by a certified agency for hazardous waste collection, which will also treat and dispose the liquid waste in accordance with national procedures.

7. Noise

226. Noise sources during operation will be mainly from subprojects 1 and 3–7 (as subproject 2 does not involve farming activities) and will include farm machinery, vehicles, processing, and the public market areas. For subprojects 1 and 3–7, the nearest settlements are located 59 m to about 1 km from the subproject sites, with a maximum distance of up to 2.5 km. Maximum noise levels at the boundary of the subproject sites are estimated to be 42.6 to 58.9 dB(A) in the day time and 37.1 to 49.8 dB(A) in the night time (Table V-9 to Table V- 14. Activities of subproject 6 will be mainly located within greenhouses, therefore the noise impacts of subproject 6 will be limited). At these distances, the projected noise levels already meet the Class I and II standards required for the project for sensitive receptors (Section II.F.9). Nonetheless, to further mitigate noise impacts, the project will do the following. (i) Low-noise equipment will be used as far as possible, and noise reduction measures such as noise elimination, shock absorption, insulated enclosures and sound dampening materials on exterior walls will be implemented. (ii) All equipment will be properly maintained to minimize noise. (iii) Appropriate noise protective equipment will be provided to the workers who are likely to be exposed to high noise level environments to meet the requirements in occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007) and EHS Guidelines on occupational health and safety (OHS). (iv) Layout for subproject sites will be planned to reduce noise levels on nearby communities.

84

Table V-9: Estimates of Noise from the Operation Activities of Subproject 1 Jiuquan component

Superimposed baseline Superimposed Baseline noise noise and subproject Limit Location Noise contributed from the noise source subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime North Fermentation workshop 25.1 38.8 52.3 45.1 52.5 46.0 boundary Substrate production workshop 38.6 East Fermentation workshop 23.5 36.3 53.9 47.3 54.0 47.6 boundary Substrate production workshop 36.1 60 50 South Fermentation workshop 19.7 32.8 57.6 49.6 57.6 49.7 boundary Substrate production workshop 32.6 West Fermentation workshop 29.4 42.5 47.3 43.3 48.5 45.9 boundary Substrate production workshop 42.3

Table V-10: Estimates of Noise from the Operation Activities of Subproject 2 Lintao component

Superimposed baseline Superimposed Baseline noise noise and subproject Limit Location Noise contributed from the noise source subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime North Social activities 32.5 58.9 48.5 58.9 48.6 boundary East Social activities 35.0 56.7 47.6 56.7 47.8 boundary 60 50 South Social activities 28.6 51.1 43.9 51.1 44.0 boundary West Social activities 30.1 50.6 42.1 50.6 42.4 boundary

Table V-11: Estimates of Noise from the Operation Activities of Subproject 3 Superimposed Superimposed baseline Baseline noise Limit Location Noise contributed from the noise source subproject noise and subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime North Vegetable production 19.1 39.5 57.2 49.4 57.3 49.8 60 50 boundary workshop 85

Vegetable powder production 7.4 workshop Warehouse 3.5 Substrate material workshop 27 Fermentation workshop 26.7 Substrate production 39.4 workshop Vegetable production 17.2 workshop Vegetable powder production 7.3 workshop East Warehouse 16.3 24.9 56.4 45.5 56.4 45.5 boundary Substrate material workshop 22 Fermentation workshop 14 Substrate production 13.8 workshop Vegetable production 23.2 workshop Vegetable powder production 9.5 workshop South Warehouse 45.5 45.5 55.1 47.8 55.6 49.8 boundary Substrate material workshop 19.5 Fermentation workshop 13.5 Substrate production 13.9 workshop Vegetable production 12.2 workshop Vegetable powder production 1.8 workshop West Warehouse 1.1 17.4 58.4 48.5 58.4 48.5 boundary Substrate material workshop 14.2 Fermentation workshop 7.7 Substrate production 5.5 workshop

86

Table V-12: Estimates of Noise from the Operation Activities of Subproject 4 Superimposed Superimposed Baseline noise baseline noise and Limit Location Noise contributed from the noise source subproject subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime Potato production workshop 45.7 North Fertilizer production workshop 35.8 46.1 41.0 38.9 47.3 46.9 boundary Warehouse 17.6

Potato production workshop 44.2 South Fertilizer production workshop 30.7 44.4 49.6 40.2 50.7 45.8 boundary Warehouse 15.0 60 50 Potato production workshop 48.1 East Fertilizer production workshop 38.9 49.5 45.2 39.5 50.2 49.1 boundary Warehouse 20.4

Potato production workshop 47.6 West Fertilizer production workshop 38.5 48.1 48.9 39.8 51.5 48.7 boundary Warehouse 19.0

87

Table V-13: Estimates of Noise from the Operation Activities of Subproject 5 Superimposed Superimposed Baseline noise baseline noise and Limit Location Noise contributed from the noise source subproject subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime Liquorice production workshop 36.7 North Pump station 45.5 46.0 41.2 38.7 47.2 46.7 boundary Warehouse 20.0

Liquorice production workshop 33.9 South Pump station 42.2 42.8 48.6 43.2 49.6 46.0 boundary Warehouse 14.8 60 50 Liquorice production workshop 32.0 East Pump station 40.7 41.3 45.9 41.7 47.2 44.5 boundary Warehouse 11.9

Liquorice production workshop 35.5 West Pump station 42.7 43.5 43.8 40.6 46.7 45.3 boundary Warehouse 17.5

88

Table V-14: Estimates of Noise from the Operation Activities of Subproject 7 Superimposed Superimposed Baseline noise baseline noise and Limit Location Noise contributed from the noise source subproject subproject noise noise Daytime Nighttime Daytime Nighttime Daytime Nighttime Tissue culture center 15.2 North Seedling hardening Center 18.7 35.1 43.3 36.1 43.9 38.6 boundary Silage production workshop 35.0

Tissue culture center 13.2 South Seedling hardening Center 11.7 32.6 49.6 49.3 49.7 49.4 boundary Silage production workshop 32.5 60 50 Tissue culture center 18.1 East Seedling hardening Center 16.7 35.0 45.5 40.7 45.9 41.7 boundary Silage production workshop 34.8

Tissue culture center 16.2 West Seedling hardening Center 13.9 33.2 42.1 34.8 42.6 37.1 boundary Silage production workshop 33.1

89

8. Community and Occupational Health and Safety

227. Operation of the subprojects poses potential risks to workers and the community, including fire and noise pollution. To mitigate potential health and safety risks to workers, the following measures and good practice measures per the World Bank EHS Guidelines on occupational health and safety will be taken: (i) Operation phase EHS plan and traffic management plan will be developed and implemented, and workers will be trained regularly on their implementation. (ii) Protective equipment including goggles, gloves, safety shoes will be provided to workers. Noise protection equipment will be provided to workers in the high-noise area. Noise areas with more than 85 dB(A) shall be marked, and hearing protection shall be provided to workers. (iii) PIU personnel and farmers will be responsible for operating and maintaining the project-funded machinery, and will be trained as needed in the safe handling and management, including farming equipment, hand-held dust extraction collectors, liquorice seedling planting machines, and other specialized machinery. (iv) Provide training to workers on occupational health and safety, and emergency response. Training for PIU personnel and farmers is included in the EMP training program (EMP Table 4). (v) Vehicles transporting materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. (vi) Adequate ventilation in work areas to reduce heat and humidity will be installed. Surfaces, where workers come in close contact with hot equipment, will be shielded. The warning sign will be placed in high-temperature areas.

9. Emergency Response Plan

228. An emergency risk and response plan will be established following the “National Environmental Emergency Plan” (24 January 2006), and other relevant PRC laws, regulations and standards and will include measures in the World Bank EHS guidelines concerning occupational and community health and safety. The main risks include fire hazard. Major elements of the emergency response plan are presented in the EMP (Table 2 of Appendix 1).

F. Climate Change

229. Potential impacts of climate change are assessed of: (i) the effects of project greenhouse gas emissions (GHGs) on the climate; and (ii) the effects of climate change on the project.

Greenhouse Gas Emissions

230. GHG emissions from the project will occur from three sources: (i) emissions from construction activities, (ii) emissions from agricultural activities; and (iii) emissions from energy use (electricity) in the operation of facilities, including agricultural processing.

231. Construction phase. GHG emissions from the construction activities will mainly result from the use of construction vehicles. The approximate number of vehicles to be used in each

90 subproject is given in Table V-16. Total GHG emissions 22 for construction activities are estimated about 2,400 tons CO2e for the construction period.

Table V-16: Estimates of GHG Emissions from the Construction Activities of the Project Subproject Construction Number of Heavy Number of Number of Period (years) Vehicles to be Light Vehicles construction used to be used machinery to be used 1 2 0 5 7 2 0.5 0 0 0 3 1.5 2 4 4 4 4 3 6 6 5 4 2 5 5 6 3 3 6 6 7 2.5 1 2 2

232. Agricultural activities. GHG emissions for the agricultural subprojects, comprising vegetables, fruits, liquorice and mulberry, were calculated using the models provided in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Table V-17). Total GHG emissions for the proposed agricultural activities of the project are about 57,999 tons CO2e/year.

Table V-17: Estimates of GHG Emissions for Agricultural Subprojects Crops Nitrogen Phosphate Potash Other GHS Subproject proposed Fertilizer, Fertilizer, Fertilizer, Fertilizer, Emission, tons tons tons tons tons 3 Vegetables 5,601 1,338 836 585 39,152 4 Potato 117.53 28.93 18.08 16.27 1167 5 liquorice 1672 514 308 180 17,260 6 Fruits 34.56 16.58 8.33 5.72 421 7 Mulberry 0 0 0 0 Total 7425.09 1897.51 1170.41 786.99 57,999 Estimates made using the IPCC National Greenhouse Gas Inventories Calculator.

233. Power consumption. The annual power consumption requirements for each subproject are given Table V-18. GHG emissions from the power consumption are estimated using a conversion factor for power generation in the “Northwest China Grid” to greenhouse 23 gas emissions of 0.63915 kg CO2e/kWh. Total GHG emissions from the power consumption of the project are about 32,573 tons CO2e/year.

Table V-18: Estimates of GHG Emissions for Agricultural Subprojects Subproject Power Consumption, GHG emission, tons kWh per annum 1 3,225,040 2,062 2 860,100 550 3 10,887,750 6,963 4 5,047440 3,228 5 753,500 482 6 27,525,100 17,602 7 2,636,900 1,686 Total 50,935,830 32,573

22 The tool used to estimate greenhouse gas emissions is the GHG Protocol for mobile combustion Version 2.6 (World Resources Institute, 2015). For this assessment it was assumed that mean distance travelled by heavy vehicles is 50 km and 100 km for light vehicles. 23 National Development and Reform Commission issues CO2 emission per kWh every year for CDM project development. The carbon emission factor of Northwest China Grid was 0.63915 kg CO2/kWh in 2016. 91

234. The total CO2e emissions generated by the project, from the five years construction duration and first year of operation (i.e. six years total), will be about 92,973 tons/annum. This is below the 100,000 tons CO2e/year threshold in ADB’s SPS for significant emissions.

Net greenhouse gas emissions

235. GHG emissions from the baseline agricultural activities. Four of the seven subprojects currently support the cultivation of wheat, corn and some vegetables. Baseline GHG emissions for the agricultural subprojects were calculated using the models provided in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Table V-19). Total GHG emissions from the baseline agricultural activities are about 126,458 tons CO2e/year.

Table V-19: Estimates of Baseline GHG Emissions for Agricultural Subprojects Subproject Crops, currently grown Chemical Fertilizer, tons GHG emission, tons 3 Vegetables 17.575 82,307 4 Corn and wheat 300 1,936 5 Corn, wheat sweet potato, potato 6,336 40,897 6 Corn, Fruits (apples, pears) 204.1 1,317 7 Mulberry 0 0 Total 24,415 126,458 GHG = greenhouse gas emissions. Estimates made using the IPCC National Greenhouse Gas Inventories Calculator.

236. Avoided GHG emissions as a result of the project. Compared with the estimated GHG emissions of the existing agricultural production by the subproject enterprises, over 6 years (5 years construction + 1 year operation) the project will avoid an estimated 68,549 tons CO2e/year GHG emissions (126,458 t – 57,999 t; Tables V-17 and V-19).

Project Vulnerability to Climate Change and Adaptation Measures

237. The potential impacts of climate change and variability in agriculture and water-related activities cover the impacts on the proposed project outputs and the upstream value chains in agricultural production. The project is rated by ADB to have a “medium” risk of vulnerability to climate change. A climate risk and vulnerability assessment was undertaken as follows.

238. Current trends in the climate. The Gansu Provincial Meteorology Bureau, from the observation of the last 50 years of climate data, has identified the following climate trends:

• The annual average temperature has increased by 1.1°C in the last 50 years, which is higher than the national average; • Average yearly precipitation has decreased by 5.7 mm per decade, higher than the national average of 2.9 mm per decade; • Increase in the frequency and intensity of extreme weather events, with weather- related disasters accounted for 88.5% of natural disasters, higher than the national average of 18.5%.

239. Projected climate change. Based on the above trends, the Gansu Provincial Meteorology Bureau predicted the following trends:

• Temperature. Historical data for the years 1961-1990 found an annual mean temperature of 10.1 °C, with temperature forecast to “highly likely increase” and “with high variability” by 2.3 °C (range 0.73 °C to 3.99 °C) by 2031–2040 and by 3.21 °C (range 1.75 °C to 4.73°C) by 2051-2060.

92

• Precipitation and evaporation. The historical mean total precipitation is 316.1 mm and is projected to “highly likely increase” and with “high variability,” by 36.17 mm (range -87.1 to 195.02 mm) in 2031–2040 and by 65.27 mm (range -28.1 to 321.65 mm) in 2051–2060. Historical mean potential evapotranspiration was 323.3 mm and is projected to” unlikely to change” averages but will have “high variability” of 0.07 mm for 2031-2040 and 0.11 mm for 2051-2060. Historical mean soil moisture is 32.14 mm/m and is forecast to be at 32.13mm/m by 2031-2040 and 32.13 mm/m by 2051- 2060; it will “unlikely change averages” but will have “have variability” in both periods. • The historical mean annual run-off was at 32.94 mm and is projected to be at 32.98 by 2031-2040 and at 32.76 by 2051-2060; it is “unlikely to change averages” but will have “high variability” for both periods. Historical droughts (average of events in 10 years) was at 6 and unlikely to change at 5.93 by 2031-2040 and 5.91 by 2051-2060. Historical severe storms (average of events in 10 years) is at 0.33 events and is projected to be at 0.34 events for 2031-2040 and 0.38 events by 2051-2060; it is “unlikely to change averages” but will have “high variability.” • Historical flood frequency (average of events in 10 years) is at 2.67 and is projected to be at the same at 2.67 for both periods of 2031-2040 and 2051-2060; however, floods will have “greater variability” and “may be more intense.

240. Climate risks to the project. The key climate risks to this project are: increased temperature; increased or more variable precipitation; increased or more variable evapotranspiration; decreased soil moisture; increased or decreased run-off; increased likelihood of severe storms; increased likelihood of higher frequency or magnitude of floods. These climate risks will affect agriculture production before, during and after production of potatoes, summer vegetables, and fruits. Weather or climate conditions will also affect the construction, maintenance, and operations of the physical infrastructure of the storage buildings for agriculture produce and materials, logistic chain infrastructure, greenhouses and service centres.

241. Adaptations to future climate change. In the early stages of the project it was expected that the sustainability of agricultural water resources, continued combatting of land degradation and crop management to reduce water loss would be critical to long term project success – and that these factors will be vulnerable to climate change. While this remains a valid supposition, detailed inspection of subproject component sites, their environmental conditions, and more detailed specifications of the proposed investments show that no subproject location is vulnerable to flash floods or advancing desertification or would contribute to the destabilization of landforms. Nevertheless, the project designs include the following adaptation measures for climate resilience (Table V-20).

Table V-20: Adaptation Features incorporated in the Project Subproject Components Structural adaptation measures Non-structural adaptation measures Construction of storage Design storm, flash floods, and heat Avoid flood-prone and potential building for agriculture produce protection and/or prevention ground subsidence areas; and materials and market measures for building infrastructure spaces (i.e., Cold chain Develop improved warehouses, Training centers, Design with sufficient drainage management plans to minimise construction of greenhouses. capacity for the storage and other the cold storage time for food related facilities to avoid damages and ingredients Construction of Data and from flash floods Information Centers/ Implement Multi-hazard Early Socialized comprehensive Ensure power and backup systems Warning System (MHEWS) service centers in case of power failure from the grid awareness and training for are protected from floods and risk of users (farmers, buyers, ground subsidence traders, and operators of the facilities) 93

Subproject Components Structural adaptation measures Non-structural adaptation measures Construction of greenhouses / - introduce relevant potato/summer Capacity building or provision Demonstration of improved vegetables/ fruits species that are of climate advisory services to production systems within better adapting to the gradually rising help implement agricultural three existing production bases temperature practices and technologies that (i.e., potato, summer - Design and build the are more resilient to climate vegetables, and fruits) orchard/plantation areas with change. effective water-saving measures including rainwater harvest facilities - Implement appropriate water conservation techniques, including water recycling, drip agriculture -Implement soil and land conservation measures, including mulching, nitrogen-fixing plants, composting

G. Indirect, Induced, and Cumulative Impacts 242. Indirect impacts are adverse and/or beneficial environmental impacts which 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 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.24 243. Indirect impacts. A potential indirect risk is that the hydrology of streams downstream of the subproject sites is negatively affected, due to water extraction and interception of runoff for the project. This risk is considered minimal because water demand and supply analysis have confirmed that water extraction represents only small amounts of the total capacity of the watercourses. 244. Induced impacts. A likely induced impact is that the establishment of infrastructure and capacity achieved by the project will result in scaling up of commercial activities after the project by the project enterprises, including increases in workers, further land intensification, and/or subsequent pressures on public utilities (e.g. roads and water and electricity easements) and natural resources, especially water use. Increased water use is especially significant for Gansu Province, which is largely arid and has relatively limited fresh water resources. 245. These risks are limited by the following: (i) annual water allocation quotas for all transboundary rivers in Gansu Province are controlled and issued by the National Yellow River Management Committee. This includes the Yellow River (which drains across the eastern PRC) and Hei River (which drains to Inner Mongolia Province) and is to ensure that downstream provinces receive sufficient water for development and conservation; (ii) the National Action Plan to Promote Water Saving and Efficiency in 0.1 billion mu of Farmland (2016–2020) requires that from 2020 onward, there will be zero increase in raw water extraction in Gansu Province. For Gansu, this means achieving water savings across 5.5 million mu of agricultural land. Stated measures include conversion to high-efficiency irrigation methods, conversion from “water hungry” to “water efficient” crops (e.g. conversion from wheat and corn to liquorice), and conversion from open farmland to greenhouses. The current project is directly supporting these measures; (iii) application of the national Basic Farmland Redline and Ecological System Production Redline Policy. Newly defined national “redlines” demarcated in the past five years restrict the expansion of economic development; (iv) physical limits imposed by the boundaries of each PIU’s land ownership, and/or, topography;

24 ADB. 2011. Sourcebook for Safeguard Requirement 1: Environment. Manila.

94 and (v) provincial and county restrictions imposed for existing land planning and zoning. A beneficial induced impact may be the increase in demand for organic fertilizer, strengthening the viability of the industry and reducing demand for chemical-based fertilizers.

246. Cumulative impacts. The cumulative impacts of the subprojects in combination with existing and future agricultural projects will include increased use in water resources and agricultural chemicals. At national and provincial planning levels, these risks are already well recognized through key policies (e.g. see above), which provide targets to reduce water use, improve farming efficiency, and convert to green production systems. The project has been designed to minimize its contribution to cumulative impacts, through a range of design features, including the installation of soil moisture and nutrient sensors, highly controlled irrigation supply, centralized data collection and exchange to maximize crop growing conditions, conversion from “water hungry” to “water efficient” crops, increased use of greenhouse farming, and use of drip irrigation in controlled circumstances (acknowledging the limitation of drip irrigation such as risk of clogging).

95

VI. ALTERNATIVE ANALYSIS

247. An analysis of alternatives was considered for (i) agricultural service system with or without the project scenario, and (ii) selection of agriculture technology.

A. No Project Alternative

248. Gansu’s agriculture sector is characterized by low-value crop production. Excessive application of water, fertilizers, and pesticides is one common cause for inefficient input use in crop production, resulting in high production costs, negative externalities on the environment and food safety and inefficient water usage. Adoption of modern agricultural technologies is constrained by deficiencies in technical knowledge of smallholders. In addition, smallholders’ access to extension services is hampered by the absence of adequate agricultural technology and management support services. 249. The low productivity of Gansu’s agriculture sector originates from constraints to different segments of agricultural production. Operations in the agriculture processing segment are too small and fragmented to have adequate quality assurance systems for sourced raw materials. Business upscaling of processing operations to realize economies of scale is constrained by high sourcing costs for inputs due to high transaction costs with small scale scattered production and distribution entities. Many operations in the processing segment lack adequate storage, transportation, and marketing capacity to produce the required volume and quality to access premium online and offline markets with high quality food products. 250. Without the Project alternative, the agriculture system would continue to suffer, thus affecting the socioeconomic conditions of the farmers and environmental degradation due to increased use of water resources, fertilizers and pesticides.

B. Internet Based Socialized Agricultural Service System

251. The PRC has initiated internet-plus policies with the objective to integrate the agricultural sector into the wider economy through linking rural economic development approaches with ICT solutions to service delivery in rural areas. E-commerce and internet- based support services are accelerating growth in rural areas which is contributing to structural reforms towards increased quality and market orientation of the agricultural supply chain. 252. Internet connected sensors and tracking technologies enable the monitoring and quantification of inputs such as soil, air, water, fertilizer, pesticides and also tracing the location of products along the value chain. The socialized agricultural service system will utilize the network generated data to provide farmers with agricultural support services and consumers with product characteristics through mobile internet platforms. 253. Adoption of Internet Based Socialized Agricultural Service System which could facilitate the coordination and cooperation between business entities in the production and marketing segments. It will provide an opportunity for market-led innovation through the network of relevant business entities (e.g., farmers, traders, logistic services, wholesalers, retailers) and thereby enhance the agriculture sector competitiveness. 254. The system will enable tracing the location of products along the value chain and will l utilize the network generated data to provide consumers with product characteristics through mobile internet platforms. 255. The system will enable the monitoring and quantification of inputs such as soil, air, water, fertilizer, pesticides. The socialized agricultural service system will utilize the network generated data to provide farmers with real time information services tailored to agro- ecological conditions, such as soil fertility, moisture, and temperature, to farmers for decision support which will result in suitable consumption of water, fertilizers and pesticides and

96 increase the value of crop plant. 256. Besides, this system will also promote modern agricultural technologies in Gansu Province by providing adequate agricultural technology and management support services to farmers based on real-time agro-ecological information.

C. Agricultural technologies adopted

257. Based on site visit and communication with farmers located at the proposed project sites, the common irrigation methods in the proposed project sites are flood irrigation. Flood irrigation is a waste of water and could result in non-point source pollution from loss of fertilizer and pesticides. Besides, excess use of water, fertilizer and pesticides high production costs, negative externalities on the environment and food safety and inefficient water usage. 258. The project will adopt drip irrigation methods and integrated water and fertilizer technology in subproject 3, 4, 5 and 6 (subproject 7 will not utilize these technologies because forage mulberry will not require water, fertilizer and pesticides during growing phase). 259. Through project-wide design initiatives centered upon the IoT based close monitoring and response of crops, the project will provide water savings and reductions in fertilizer and pesticide use. 260. The advantages of drip irrigation and integrated water and fertilizer technology are: (i) Fertilizer and nutrient loss are minimized due to a localized application and reduced leaching. (ii) Water application efficiency is high if managed correctly. (iii) Recycled non-potable water can be safely used. (iv) Moisture within the root zone can be maintained at field capacity. (v) Soil type plays a less important role in the frequency of irrigation. (vi) Soil erosion is lessened. (vii) Weed growth is lessened. (viii) Labor cost is less than other irrigation methods. (ix) Foliage remains dry, reducing the risk of disease.

97

VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATION

261. Meaningful public participation and consultation during project feasibility study, design and implementation are important safeguard requirements. The PRC Environmental Protection Law and Regulations on the Administration of Construction Project Environmental Protection (Order No. 253 of the State Council) require that domestic EIAs solicit the opinions of organizations concerned and villagers and residents within and near the project sites. In August 2012, the PRC National Development and Reform Commission (NDRC) issued a requirement for “Social Risk Assessment of Large Investment Projects”, which emphasizes the importance of public consultation in an effective manner and requires that the results of public consultation are clearly summarized in the domestic EIA report, including the dates of consultations, number of stakeholders, who the affected people are, and the comments received. 262. ADB’s SPS (2009) also requires meaningful public participation, consultation and information disclosure. The consultation process for this project followed PRC law and the SPS. 263. This section describes the public consultations for the environmental assessment, undertaken by the domestic EIA institutes, implementing agencies, and TRTA team. Consultation included: (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, including a questionnaire survey after the meeting. A social and poverty analysis was also conducted by the TRTA social and resettlement experts based on group discussions with key agencies, beneficiaries, and adversely affected communities, with emphasis on poverty villages and potential gender issues. For the preparation of resettlement plans, information disclosure and public consultations were conducted, by questionnaire surveys, community meetings, and focus group discussions.

A. Project Information Disclosure

264. Two rounds of information disclosure were undertaken during project preparation. At the first information disclosure, the project information of 13 candidate subprojects was posted on the PMO website on 23 March 2018.25 The information in this first public notification was: (i) Project name and summary of the 13 subprojects. (ii) Name and contact information of the subproject proponents. (iii) Name and contact information of the institute responsible for preparing the domestic EIA. (iv) Name and contact information of the PMO and subprojects companies. (v) Potential project environmental impacts on the air, water, and acoustic environment; and, impacts by solid waste generated from the subprojects and water consumption. (vi) Proposed mitigation measures. (vii) Request for questions, suggestions and feedback from the public. 265. After the seven final subprojects were determined, the second information disclosure was implemented. Information on the 7 subprojects was posted on the PMO website on 29 October 2018.26 The information in this first public notification was notification was:

25 http://www.gscoop.gov.cn/gsgxs/info/5eb72b67b6f9e370c541bda7cded74ce/d26e57b8781fce7c8acf63a4c9ae39e2.html 26 http://www.gscoop.gov.cn/gsgxs/info/5eb72b67b6f9e370c541bda7cded74ce/dfdb3f0f3e7b4ab73409e090f57fec17.html

98

(i) Project name and summary of the 7 subprojects. (ii) Name and contact information of the subproject proponents. (iii) Name and contact information of the institute responsible for preparing the domestic EIA. (iv) Name and contact information of the PMO and subprojects companies. (v) EIA procedures and content including important parts of EIA: 1) water balance; 2) potential project environmental impacts; 3) feasibility research of proposed mitigation measures; 4) public consultation; 5) project benefits including sustainable use of water, chemical fertilizer and pesticide application reduction, infrastructure improvement and management. (vi) Potential project environmental impacts on the atmospheric environment, water environment, acoustic environment and impacts by solid waste generated from the subprojects and water consumption (vii) Proposed mitigation measures. (viii) Request for questions, suggestions and feedback from the public. 266. The EIA Institute also undertook information disclosure in accordance with the Interim Guidelines on Public Consultation for EIA (2006) during domestic EIA process. 27 The information includes: (i) Name and summary of all the subprojects. (ii) Name and contact information of the institute responsible for preparing the EIA report. (iii) Name and contact information of the institute responsible for approval of the EIA report. (iv) Name and contact information of the construction company. (v) Potential project environmental impacts and mitigation measures during the construction phase and operation phase. (vi) Key conclusions of the EIA report. (vii) Contact information to get abridged versions of the EIA report. 267. No public feedback was received during the public information disclosure.

B. Public Consultation

268. Public consultations were held with residents and authorities near all of the subproject sites. The responses received, including farmer’s approaches to adopt the project technologies, environmentally sensitive sites to be addressed, and suggestions from local government authorities, were reviewed with the domestic EIA institute to revise the project design and address environmental issues. In the consultation meetings, questionnaires were distributed to the respondents. The questionnaires targeted beneficiaries and potentially affected persons by the subprojects. A total of 501 questionnaires (Table VII-1) were distributed and 100% (501) completed questionnaires were received. The main contents of the questionnaire are potential impacts and mitigation measures. A total of 264 men and 237 women participated in these surveys, providing a gender-balanced consultation process. Demographic data of the participants are summarized in Table VII-2. About 45% of the participants in these surveys are farmers. Photos of the consultation meeting and survey are shown in Figure VII-1 Error! Reference source not found..

27 http://www.dxbei.com/gshx/zhangye/2018/0410/291069.html?from=singlemessage#10006-weixin-1-52626- 6b3bffd01fdde4900130bc5a2751b6d1 99

Table VII-1: Project public consultation questionnaire Name Sex Age Nationality Education level Occupation Contact Company Title number Q1. Are you satisfied with the local environmental quality? A. Very satisfied B. Satisfied C. Not satisfied Q2. What is the main local environmental issue? A. Bad air quality B. Bad water quality C. Noise pollution D. Solid waste E. Bad ecological environment Q3. What impact do you think the project will bring? A. Good impact B. Adverse impact C. No idea Q4. What the largest good impact that you think the project will bring? A. Air environmental protection B. Water resource protection C. Water and soil erosion reduction and ecological, environmental protection D. Noise pollution reduction E. Water resource saving F. Solid waste reduction G. Soil environment protection Q5. What the adverse impact that you think the project will bring? A. Air environmental pollution B. Water resource pollution C. Ecological damage D. Noise pollution E. Water resource waste F. Solid waste produce G. Soil environmental damage Q6. What is your main concern during the project construction period? A. Noise B. Dust C. Water resource pollution D. Ecological damage E. Not convenient for farming F. Not convenient for getting around Q7. Are you going to make a complaint if the project has an impact on your daily life? A. Yes B. No C. It depends on the level of impact Q8. Who you will refer to if you are going to make a complaint? A. Contractor B. project enterprise C. Environmental protection bureau D. Village committee E. Complaints Office in the Township government Q9. Do you agree with the project location? A. Yes B. No C. Do not care Q10. What impact do you think the project will bring to your daily life? A. Good impact B. Adverse impact C. No idea Q11. What impact do you think the project will bring to local economy development and society? A. Good impact B. Adverse impact C. No idea Q12. Do you think the project is viable after considering the good and adverse impacts that will be caused? A. The project is viable, the good impact is greater than the adverse impact B. Project is not viable, adverse impact is greater than the good impact C. No idea Suggestions or requirements of the project: Suggestions or requirements for environment protection of the project: Project information (a project summary was provided here), anticipated pollution control measures and environmental benefits.

100

(i) Consultant Meeting of subproject 1 (Jiuquan). (ii) Consultant Meeting of subproject 1 (Lintao).

(iii) Consultant Meeting of subproject 2 (iv) Consultant Meeting of subproject 3

(v) Consultant Meeting of subproject 4 (vi) Consultant Meeting of subproject 5 101

(vii) Consultant Meeting of subproject 6 (viii) Consultant Meeting of subproject 7

Figure VII-1: Public consultation activities

C. Feedback from Public Consultations

269. Feedback from public consultations carried out through questionnaire surveys is presented in Table VIII-3. There is strong support for the project. About 70% of the participants responded that the project will have an overall positive impact on the local economy and community and will personally benefit them. About 21% of participants responded that they were unsure how the project would affect them. 270. According to the public, the significant positive environmental impacts of the project are savings and protection of water resources (for 40% of respondents) and reduction in solid waste (for 19% of respondents). The major adverse environmental impacts of the project are air pollution (25%), noise pollution (18%), solid waste (17%) and water pollution (15%). During the construction stage, the major adverse impacts will be dust (30%) and noise (27%).

D. Future Consultations and Disclosure

271. This IEE will be disclosed on the ADB website. Environmental monitoring reports will also be disclosed on the ADB website on a semi-annual basis. 272. The implementing agencies, through the PIUs, will continue to conduct regular community liaison activities during the construction and operations phases, including the implementation of the GRM (Section VIII). Ongoing consultation will ensure that public concerns are understood and dealt with in a timely manner.

102

Table VII-2: Summary data on questionnaire respondents (subproject 1-4) Subproject 1 Subproject 2 Subproject 3 Subproject 4 Items No. of No. of No. of persons % No. of persons % % % persons persons Male 72 49.7% 21 44.7% 27 54.0% 40 52.6% Gender Female 73 50.2% 26 55.3% 23 46.0% 36 47.4% Below middle school 67 46.2% 17 36.2% 30 60.0% 32 42.1% Education High school or equivalent 55 37.9% 14 29.8% 13 26.0% 22 28.9% College and above 23 15.9% 16 34.0% 7 14.0% 22 28.9% Han 145 100.0% 46 97.9% 50 100.0% 76 100.0% Nationality Other 0 0.0% 1 2.1% 0 0.0% 0 0.0% Below 30 32 22.1% 15 31.9% 2 4.0% 18 23.7% Age 30 -45 65 44.8% 19 40.4% 19 38.0% 36 47.4% Above 45 48 33.1% 13 27.7% 29 58.0% 22 28.9% Farmer 66 45.5% 16 34.0% 36 72.0% 32 42.1% Worker 35 24.1% 9 19.1% 7 14.0% 25 32.9% Job Government official 16 11.0% 7 14.9% 1 2.0% 13 17.1% Other private business 28 19.3% 15 31.9% 6 12.0% 6 7.9%

Table VII-2 continued: Summary data on questionnaire respondents (subproject 5-7)

Subproject 5 Subproject 6 Subproject 7 Total Items No. of No. of No. of persons % No. of persons % % % persons persons Male 41 56.9% 36 52.9% 27 62.8% 264 52.7% Gender Female 31 43.1% 32 47.1% 16 37.2% 237 47.3% Below middle school 38 52.8% 31 45.6% 27 62.8% 242 48.3% Education High school or equivalent 18 25.0% 24 35.3% 13 30.2% 159 31.7% College and above 16 22.2% 13 19.1% 3 7.0% 100 20.0% Han 70 97.2% 68 100.0% 43 100.0% 498 99.4% Nationality Other 2 2.8% 0 0.0% 0 0.0% 3 0.6% Below 30 26 36.1% 15 22.1% 12 27.9% 120 24.0% Age 30 -45 32 44.4% 30 44.1% 19 44.2% 220 43.9% Above 45 14 19.4% 23 33.8% 12 27.9% 161 32.1% Farmer 26 36.1% 26 38.2% 26 60.5% 228 45.5% Job Worker 31 43.1% 24 35.3% 7 16.3% 138 27.5% 103

Subproject 5 Subproject 6 Subproject 7 Total Items No. of No. of No. of persons % No. of persons % % % persons persons Government official 10 13.9% 8 11.8% 4 9.3% 59 11.8% Other private business 5 6.9% 10 14.7% 6 14.0% 76 15.2%

Table VIII-3: Public consultation questionnaire results (subproject 1-4) Subproject 1 Subproject 2 Subproject 3 Subproject 4 Question Answer No. % No. % No. % No. % Q1. Are you Very satisfied 46 31.7% 17 36.2% 30 60.0% 29 38.2% satisfied with local Satisfied 85 58.6% 27 57.4% 18 36.0% 40 52.6% environmental quality? Not satisfied 14 9.7% 3 6.4% 2 4.0% 7 9.2% Bad air quality 31 21.4% 3 6.4% 10 20.0% 13 17.1% Q2. What is the Bad water quality 55 37.9% 19 40.4% 25 50.0% 30 39.5% main local Noise pollution 27 18.6% 3 6.4% 9 18.0% 12 15.8% environmental Solid waste 17 11.7% 18 38.3% 2 4.0% 11 14.5% issue? Bad ecological 15 10.3% 4 8.5% 4 8.0% 10 13.2% environment Q3. What impact do Good impact 108 74.5% 35 74.5% 42 84.0% 54 71.1% you think the Adverse impact 9 6.2% 2 4.3% 1 2.0% 6 7.9% project will bring? No idea 28 19.3% 10 21.3% 7 14.0% 16 21.1% Air environmental 10 6.9% 4 8.5% 7 14.0% 8 10.5% protection Water resource 33 22.8% 12 25.5% 3 6.0% 15 19.7% protection Q4. What the Water and soil erosion largest good impact reduction and ecological 5 3.4% 18 38.3% 20 40.0% 6 7.9% that you think the environmental protection project will bring? Noise pollution reduction 6 4.1% 3 6.4% 0 0.0% 4 5.3% Water resource saving 39 26.9% 0 0.0% 2 4.0% 20 26.3% Solid waste reduction 28 19.3% 6 12.8% 12 24.0% 12 15.8% Soil environment protection 24 16.6% 4 8.5% 6 12.0% 11 14.5% Air environmental pollution 47 32.4% 8 17.0% 8 16.0% 21 27.6% Q5. What the Water resource pollution 12 8.3% 11 23.4% 3 6.0% 6 7.9% adverse impact that Ecological damage 7 4.8% 8 17.0% 5 10.0% 4 5.3% you think the project will bring? Noise pollution 31 21.4% 2 4.3% 18 36.0% 18 23.7% Water resource waste 9 6.2% 3 6.4% 1 2.0% 5 6.6% Solid waste produce 23 15.9% 9 19.1% 13 26.0% 13 17.1%

104

Subproject 1 Subproject 2 Subproject 3 Subproject 4 Question Answer No. % No. % No. % No. % Soil environmental 16 11.0% 6 12.8% 2 4.0% 9 11.8% damage Noise 45 31.0% 15 31.9% 4 8.0% 20 26.3% Dust 37 25.5% 20 42.6% 30 60.0% 19 25.0% Q6. What is your Water resource pollution 21 14.5% 5 10.6% 5 10.0% 12 15.8% main concern during the project Ecological damage 13 9.0% 7 14.9% 5 10.0% 9 11.8% Not convenient for construction 18 12.4% 0 0.0% 3 6.0% 9 11.8% period? farming Not convenient for getting around 11 7.6% 0 0.0% 3 6.0% 7 9.2% Q7. Are you going Yes 35 24.1% 13 27.7% 25 50.0% 18 23.7% to make a No 12 8.3% 6 12.8% 4 8.0% 6 7.9% complaint if the project has an It depends on the level impact on your of impact 98 67.6% 28 59.6% 21 42.0% 52 68.4% daily life? Contractor 28 19.3% 12 25.5% 4 8.0% 12 15.8% Project enterprise 18 12.4% 8 17.0% 5 10.0% 11 14.5% Q8. Who will you Environmental 22 refer to if you are protection bureau 36 24.8% 46.8% 9 18.0% 15 19.7% going to make a complaint? Village committee 32 22.1% 2 4.3% 24 48.0% 21 27.6% Complaints Office in the 31 21.4% 3 6.4% 8 16.0% 17 22.4% Township government Q9. Do you agree Yes 95 65.5% 39 83.0% 42 84.0% 51 67.1% the project No 12 8.3% 1 2.1% 0 0.0% 7 9.2% location? Do not care 38 26.2% 7 14.9% 8 16.0% 18 23.7% Q10. What impact Good impact 89 61.4% 35 74.5% 39 78.0% 40 52.6% do you think the Adverse impact 19 13.1% 2 4.3% 2 4.0% 8 10.5% project will bring to your daily life? No idea 37 25.5% 10 21.3% 9 18.0% 28 36.8% Q11. What impact Good impact 107 73.8% 39 83.0% 41 82.0% 48 63.2% do you think the Adverse impact 8 5.5% 1 2.1% 2 4.0% 6 7.9% project will bring to local economic development and No idea 30 20.7% 7 14.9% 7 14.0% 22 28.9% society? Q12. Do you think Project is viable 111 76.6% 38 80.9% 47 94.0% 51 67.1% the project is viable Project is not viable 8* 5.5% 1* 2.1% 0 0.0% 6* 7.9% after considering the good and adverse impacts No idea 26 17.9% 8 17.0% 3 6.0% 19 25.0% that will be caused? 105

Table VII-3 continued: Public consultation questionnaire results (subproject 5-7) Subproject 5 Subproject 6 Subproject 7 Total Question Answer No. % No. % No. % No. % Q1. Are you Very satisfied 30 41.7% 27 39.7% 17 39.5% 196 39.1% satisfied with local Satisfied 33 45.8% 26 38.2% 26 60.5% 255 50.9% environmental quality? Not satisfied 9 12.5% 15 22.1% 0 0.0% 50 10.0% Bad air quality 15 20.8% 12 17.6% 21 48.8% 84 16.8% Q2. What is the Bad water quality 22 30.6% 15 22.1% 13 30.2% 166 33.1% main local Noise pollution 9 12.5% 19 27.9% 5 11.6% 79 15.8% environmental Solid waste 23 31.9% 5 7.4% 2 4.7% 76 15.2% issue? Bad ecological 53 environment 3 4.2% 17 25.0% 2 4.7% 10.6% Q3. What impact Good impact 55 76.4% 48 70.6% 39 90.7% 381 76.6% do you think the Adverse impact 8 11.1% 5 7.4% 1 2.3% 32 6.4% project will bring? No idea 9 12.5% 15 22.1% 3 7.0% 88 17.6% Air environmental 58 protection 12 16.7% 15 22.1% 2 4.7% 11.6% Water resource 116 protection 13 18.1% 19 27.9% 21 48.8% 23.2% Water and soil erosion Q4. What the reduction and largest good ecological 5 6.9% 8 11.8% 3 7.0% 65 13.0% impact that you environmental think the project protection will bring? Noise pollution 27 reduction 8 11.1% 3 4.4% 3 7.0% 5.4% Water resource saving 15 20.8% 7 10.3% 2 4.7% 85 17.0% Solid waste reduction 16 22.2% 10 14.7% 12 27.9% 96 19.2% Soil environment 54 protection 3 4.2% 6 8.8% 0 0.0% 10.8% Air environmental 125 pollution 11 15.3% 19 27.9% 11 25.6% 25.0% Water resource 13 18.1% 12 17.6% 18 41.9% 75 15.0% Q5. What the pollution adverse impact Ecological damage 6 8.3% 1 1.5% 5 11.6% 36 7.2% that you think the Noise pollution 9 12.5% 11 16.2% 3 7.0% 92 18.4% project will bring? Water resource waste 12 16.7% 6 8.8% 1 2.3% 37 7.4% Solid waste produce 12 16.7% 10 14.7% 3 7.0% 83 16.6% Soil environmental 53 damage 9 12.5% 9 13.2% 2 4.7% 10.6% Q6. What is your Noise 20 27.8% 15 22.1% 18 41.9% 137 27.38% main concern Dust 10 13.9% 22 32.4% 13 30.2% 151 30.1%

106

during the project Water resource 63 construction pollution 12 16.7% 5 7.4% 3 7.0% 12.6% period? Ecological damage 6 8.3% 6 8.8% 2 4.7% 48 9.6% Not convenient for 63 farming 15 20.8% 15 22.1% 3 7.0% 12.6% Not convenient for 39 getting around 9 12.5% 5 7.4% 4 9.3% 7.8% Q7. Are you going Yes 29 40.3% 37 54.4% 13 30.2% 170 33.9% to make a No 10 13.9% 10 14.7% 5 11.6% 53 10.6% complaint if the project has an It depends on the level 278 impact on your of impact 33 45.8% 21 30.9% 25 58.1% 55.5% daily life? Contractor 9 12.5% 11 16.2% 3 7.0% 79 15.8% Project enterprise 10 13.9% 18 26.5% 8 18.6% 78 15.6% Q8. Who will you Environmental 113 refer to if you are protection bureau 12 16.7% 9 13.2% 10 23.3% 22.6% going to make a Village committee 23 31.9% 14 20.6% 15 34.9% 131 26.1% complaint? Complaints Office in the Township 18 25.0% 16 23.5% 7 16.3% 100 20.0% government Q9. Do you agree Yes 44 61.1% 38 55.9% 36 83.7% 345 68.9% the project No 8 11.1% 8 11.8% 3 7.0% 39 7.8% location? Do not care 20 27.8% 22 32.4% 4 9.3% 117 23.4% Q10. What impact Good impact 42 58.3% 40 58.8% 40 93.0% 325 64.9% do you think the Adverse impact 6 8.3% 11 16.2% 0 0.0% 48 9.6% project will bring to your daily life? No idea 24 33.3% 17 25.0% 3 7.0% 128 25.5% Q11. What impact Good impact 41 56.9% 45 66.2% 42 97.7% 363 72.5% do you think the Adverse impact 10 13.9% 5 7.4% 0 0.0% 32 6.4% project will bring to local economic development and No idea 21 29.2% 18 26.5% 1 2.3% 106 21.2% society? Q12. Do you think Project is viable 41 56.9% 52 76.5% 41 95.3% 381 76.6% the project is Project is not viable 8* 11.1% 6* 8.8% 0 0.0% 29* 5.8% viable after considering the good and adverse No idea 23 31.9% 10 14.7% 2 4.7% 91 18.2% impacts that will be caused? *Respondents answering that the project is not viable ranged from 0% to 11% of the total number of people consulted. Specific reasons for this answer are unclear but may reflect lack of clarity over the project and/or lack of sufficient information provided at the time of consultations. Public consultations with all communities close to subproject sites will be continued before and during construction to ensure awareness of project activities and to provide further opportunities for any concerns to be identified. 107

VIII. GRIEVANCE REDRESS MECHANISM

273. A project-specific grievance redress mechanism (GRM) was prepared during preparation of the domestic EIA and this IEE, in compliance with PRC and ADB’s SPS (2009) requirements. The GRM is designed to achieve the following objectives: (i) provide channels of communication for local villages and communities to raise concerns about environmental and social-related grievances which might result from the project; (ii) prevent and mitigate adverse environmental and social impacts to villages and communities caused by project construction and operation, including those associated with resettlement; (iii) improve mutual trust and respect and promote productive relationships between the project agencies and local villages and communities; and (iv) build village and community acceptance of the project. The GRM is accessible to all members of the villages and communities, including women, youth, minorities and poverty-stricken villagers and residents. Multiple points of entry are available, including face-to-face meetings, written complaints, telephone conversations, e-mail, and social media.

274. Public grievances to be addressed by the GRM might include disturbance of agricultural activities, traffic, dust emissions, construction noise, inappropriate disposal of construction wastes, damage to private houses, safety measures for the protection of the public and construction workers, and/or water quality deterioration.

275. Currently in Gansu Province (and generally in the PRC), when residents or organizations are negatively affected by a construction or development, they may complain, by themselves or through their village or community committee, to the contractors, developers, the local EEB, or by direct appeal to the local courts. The weaknesses of this system are: (i) the lack of dedicated personnel to address grievances; and (ii) the lack of a specific timeframe for the redress of grievances. The project GRM addresses these weaknesses.

276. The GRM meets the regulatory standards of the PRC that protect the rights of citizens from construction-related environmental and/or social impacts. Decree No. 431 Regulation on Letters and Visits, issued by the State Council of PRC in 2005, codifies a complaint acceptance mechanism at all levels of government and protects the complainants from retaliation. Based on the regulation, the Ministry of Environmental Protection (MEP) published updated Measures on Environmental Letters and Visits (Decree No. 15) in December 2010.

277. The GRM will be accessible to diverse members of the villages and community, including more 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. 278. The details of the GRM, including a time-bound flow chart of procedures, are included in the project EMP (Appendix 1).

108

IX. ENVIRONMENT MANAGEMENT PLAN

279. A project environmental management plan (EMP) has been prepared (Appendix 1). Development of the EMP drew on the domestic EIA, discussions with the PMO, IAs, EEBs, other government agencies, and local communities. The EMP defines mitigation measures for the anticipated environmental impacts, institutional responsibilities, and mechanisms to monitor and ensure compliance with PRC’s environmental laws, standards and regulations and ADB’s SPS. The EMP specifies major environmental impacts and mitigation measures, roles and responsibilities, inspection, monitoring, and reporting arrangements, training, and the grievance redress mechanism. The EMP will be updated after detailed design, as needed.

109

X. ASSURANCES

280. 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, the following project-specific assurances are included in the project agreement between ADB and the Gansu Provincial Government. Refer to the project agreement for the final specific wording of the assurances.

(i) One full-time PMO environment officer and seven PIU social and environment focal staff (one per subproject) will be appointed. These personnel will be responsible for coordination and implementation of the EMP.

(ii) PMO will engage a loan implementation environmental consultant, as part of the loan consultancy implementation services. The consultant will support the PMO to provide capacity building for, and coordination of, the EMP.

(iii) Each PIU will engage a qualified environmental monitoring agency with appropriate national certification, to conduct the external environment monitoring specified in the EMP.

(iv) The government will ensure that (i) existing water and wastewater services will continue to be provided to communities during the civil works for the project; (ii) any interruptions to such services as a result of the project construction and/or operation are as limited as possible; and (iii) prior to any such interruptions, consultations are held with all affected communities.

(v) For all existing facilities that the ADB-funded facilities will be linked with (e.g. through physical connections for water or power supply; and/or allocation of existing workers between existing and new facilities), the existing facilities will continue to be maintained in accordance with domestic requirements for environmental management, including (but not limited to) environmental safety measures, water allocation approvals, and worker and community health and safety. In case any changes are made to such existing facilities which would significantly impact their capacity or function and as a result the viability of the project, ADB is immediately advised of such changes. In such case the government will assess the project impact and prepare a corrective action plan, if necessary, to be agreed with ADB.

281. Additional safeguard requirements are included in the implementation agreements between the executing agency and project implementation units, including the following.

(vi) The PIU will not use agricultural chemicals listed as hazardous under Classes I or II by the World Health Organization (www.who.int/ipcs/publications/pesticides_hazard_2009.pdf?ua=1) or listed as prohibited or strictly controlled use under PRC national regulations for pesticide management (listed in Appendix 3 of the EMP). This specifically includes two pesticides, omethoate and methamidophos (currently used by at least one PIU in its existing operations). Furthermore, the PMO and PIUs shall assess the use of these pesticides in the current PIU operations and cease their use before the start of the ADB- funded subproject.

110

(vii) The PIU will not use “R134a” as a coolant for any ADB-funded facilities or activities, including the operation of cold storage warehouses and refrigerators. Instead, coolants with a lower climate impact shall be used, such as “R32” or “R290”. Furthermore: (i) the PIU shall include this specific requirement in the relevant construction tenders and shall explicitly assess whether this has been complied with in the bids received; (ii) the PIU shall assess whether their existing (non ADB-funded) operations use R134a, and if so, to assess the feasibility (including cost) of converting to coolants with lower climate impact such as R32 or R290.

111

XI. CONCLUSIONS

282. This IEE has been prepared for the proposed Loan for Gansu Internet-Plus Agriculture Development Project in Gansu Province of the PRC. The project will be implemented by 7 agricultural enterprises distributed among 8 cities or counties engaged in a range of agricultural pursuits. These enterprises will comprise both state-owned and private participating enterprises (PPE).

283. The project will bring significant positive environmental benefits. When compared to baselines, once operational the project will: (i) result in annual water savings by 5,491,096 m3; and (ii) estimated annual reduction in the use of chemical fertilizer by 13,135 tons and pesticides by 36.43 tons and reduce the agricultural pollution accordingly.

284. Potential adverse environmental impacts during the construction phase are short-term and localized and are associated with construction noise, fugitive dust, disruption of traffic and community services, and risks to workers and community health and safety. Potential negative operation phase impacts are associated with waste and wastewater, noise, and health and safety risks to workers and the community.

285. The project has: (i) selected appropriate technologies to reduce the emission of pollutants; (ii) identified potential negative environmental impacts and appropriately established mitigation measures; (iii) received public support from the project beneficiaries and affected people; (iv) established effective project GRM procedures; and (v) prepared a EMP including environmental management and supervision structure, environmental mitigation and monitoring plans, and capacity building and training.

286. It is concluded that the project will not result in adverse environmental impacts that are irreversible, diverse, or unprecedented. Any minimal adverse environmental impacts associated with the project will be prevented, reduced, or minimized through the implementation of the project EMP.

112

APPENDIX I: ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives

1. This Environmental Management Plan (EMP) is for the Gansu Internet-Plus Agriculture Development Project (the Project). The EMP is to be implemented in all phases of the project – design, pre-construction, construction, and operation. The EMP is to ensure project compliance with PRC environmental laws and ADB’s Safeguard Policy Statement (SPS 2009). The EMP describes: the roles and responsibilities of all project agencies to implement this EMP; anticipated impacts and mitigation measures; inspection, monitoring, and reporting arrangements; training and institutional strengthening; grievance redress mechanism (GRM); and future public consultation.

2. In the engineering design stage, the Project Management Office (PMO) will pass this EMP to the design institutes for incorporating mitigation measures into the detailed engineering designs. The EMP will be updated at the end of the detailed design, as needed. To ensure that bidders will respond to the EMP’s provisions, the PMO and the project implementation units (PIUs) of the project counties and districts will prepare and provide the specification clauses for incorporation into the bidding documents: (i) a list of environmental management requirements to be budgeted by the bidders in their bids; (ii) environmental clauses for contractual terms and conditions; and (iii) the project EIA and updated EMP.

B. Implementation Arrangements

3. Supply and Marketing Cooperative Gansu Province (SMCGP) will be the project executing agency (EA) and responsible for overall guidance during project preparation and implementation. The SMCGP will establish the PMO, which will be responsible for the day-to-day management of the project. Five project city governments (Baiyin, Lanzhou Tianshui, Weiwu and Zhangye) which are represented by their Supply and Marketing Cooperatives (SMCs) will be Implementing Agencies (IAs) and seven benefiting state-owned enterprises and participating private enterprise (PPEs) will be the PIUs. The PIUs will be responsible for implementing the project and administering and monitoring contractors and suppliers.

4. The PMO will designate a qualified environment and safety officer, who will take overall responsibility for supervising the implementation of the EMP, including mitigation measures, coordinating the project level GRM and preparing monitoring reports for submission by the PMO to ADB. The PMO will engage a loan implementation environmental consultant (LIEC) prior to the engagement of construction contractors, who will support the PMO in mitigation implementation, environmental monitoring, reporting, and addressing any environment-related issues that arise including grievances. The LIEC will also support contractors in developing construction site- specific environmental management plans (CEMPs) prior to construction and operation.

5. The PIUs will implement project components, administer and monitor contractors and suppliers, and be responsible for construction supervision and quality control. The PIUs will ensure that the EMP is implemented proactively and responds to any adverse impact beyond those foreseen in the IEE. The PIUs will also attend to requests from relevant agencies and ADB regarding the mitigation measures and monitoring program. Each PIU will include one qualified social and environmental focal staff, to (i) supervise contractors and ensure compliance with the EMP; (ii) conduct regular site inspections; (iii) coordinate periodic environmental quality monitoring in compliance with the approved monitoring plan; (iv) act as local entry point for the project GRM; and (v) submit semi-annual monitoring results to the PMO and ADB. The PIUs will

113 also engage an environmental monitoring agency (EMA) to undertake construction and operation phase ambient environmental monitoring, as per the requirements of the environmental monitoring plan presented in this EMP.

6. The PMO and PIU environment officers with support of the LIEC will (i) provide overall coordination and support on environmental aspects; (ii) supervise contractors and construction supervision companies (CSCs) and their compliance with the EMP; (iii) conduct regular site compliance inspections; (iv) act as PMO entry point for the project GRM; (v) collect and submit environmental monitoring data provided by (a) contractors and/or CSCs to the PMO, and (b) the EMA to the PMO; and (vi) support PMO with preparation of EMP progress section as a part of semiannual project progress reports and semiannual environmental monitoring reports (EMRs). The PIUs will be responsible for EMP implementation during operation.

7. The PMO environmental officer and PIU social and environmental focal staff will be in place prior to starting of any construction works in the project.

8. Construction contractors will be responsible for implementing the mitigation measures during construction under the supervision of the PIUs and the PMO. In their bids, the contractors will prepare CEMPs which detail how the contractors will comply with the EMP. Each contractor will engage Environment, Health and Safety Officer, who will oversee CEMP implementation, take all reasonable measures to minimize the impact of construction activities on the environment, develop and prepare monthly reports for submission to the IA. Contractors are also required to report any spills, accidents, and grievances received, and take appropriate action. The Environment, Health and Safety Officer will also be responsible for developing CEMPs and an Occupational Health and Safety Plan.

9. CSCs will be responsible for supervising and guiding construction contractors during the project construction phase. CSCs will have a qualified Environment, Health and Safety Officer who will be responsible for supervising construction contractors to ensure proper the implementation of EMP and CEMPs; and preparing and submitting consolidated monthly EMRs to the PMO based on the CEMPs implementation.

10. ADB will conduct due diligence of environment issues during project review missions. ADB will also review the semiannual EMRs submitted by the PMO and will disclose the reports on its website. If the PMO fails to meet safeguards requirements described in the EMP, ADB will seek corrective measures and advise the PMO on items in need of follow-up actions.

11. Roles and responsibilities for the EMP implementation are presented in Table 1.

Table 1: Roles and Responsibilities for Implementation of the Environment Management Plan Organization Role and Responsibility EA - Coordinating and overseeing project preparation and implementation. - Coordination of strategic issues at the regional or national level. - Providing policy guidance and facilitation during implementation. - Facilitating interagency coordination with other involved parties at the regional level (and facilitate issues and decision making at the national level, if required). PIUs - Contracting and administering contractors and suppliers. - Supervising construction and monitoring quality control. - Appointing a PIU social and environmental focal staff - Internal environmental monitoring for the tasks specified in EMP Table 4, to ensure contractors comply with EMP - Engaging a EMA for environmental monitoring.

114

- Ensuring compliance with EMP and RP. - Responding to any adverse impact beyond those foreseen in the IEE and ensuring that if there are any changes in scope, the IEE/EMP will be updated as needed. - Responding to requests from relevant agencies and ADB regarding the mitigation measures and environmental monitoring program. - Identifying and implementing O&M arrangements. - Take corrective actions if needed. - Prepare environmental monitoring reports semi-annually during construction and annually during operation. PMO - On behalf of the EA, the PMO will be responsible for all project organization and implementation activities, including the following: - Updating IEE/EMP if needed, including the environmental monitoring plan. - Ensuring that mitigation measures are included in engineering detailed design. - Ensuring the project’s compliance with loan and project agreements and safeguards requirements. - Managing the activities of the design institutes, procurement agents, and consultants in accordance with government and ADB regulations. - Coordination with concerned offices, including SPG, and with external contacts. - Taking part in capacity development and training. - Establishing and operating the project complaint center with a hotline. - Overseeing the project program and activities of the IA in the implementation of the project outputs. - Monitoring the project’s physical and financial progress and compliance with the project’s reporting requirements, ensuring project progress reports are prepared and submitted to ADB on time. - Preparing progress reports for submission to the IA and/or PMO. - Coordinating the activities of and meeting the requirements of ADB’s review missions. Loan - Review the updated IEE and EMP. Implementation - Confirm that mitigation measures have been included in detailed engineering design. Environmental - Review bidding documents to ensure that the EMP clauses are incorporated. Consultant - Review CEMPs to ensure compliance with the EMP. (LIEC) - Provide technical assistance and support to the PMO and contractors on mitigation measures and EMP implementation. - Deliver the construction and operation phase capacity building programs to the staff of the IA, PMO, and contractors. - Conduct site inspections in compliance with the environmental monitoring plan. - Review reports prepared by contractors and assist the PMO in preparing semiannual environmental monitoring reports. Environment - A qualified independent environmental monitoring agency will be recruited to monitoring implement the ambient monitoring portion of the environmental monitoring plan. agency (EMA) Contractors - Ensure sufficient funding and human resources for proper and timely implementation of required mitigation and monitoring measures in the EMP and CEMPs 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 and CEMPs throughout the construction phase. (CSCs) - Appoint an EHS officer to supervise and instruct contractors and their EHS officers for EMP and CEMPs implementation related to the environment, occupational health and safety on construction site. - Prepare and submit monthly EMP and CEMP monitoring reports to the PMO. Asian - Review and clear the IEE and EMP and disclose on ADB website. Development - Approve updated IEE/EMP if appropriate and disclose on ADB website Bank (ADB) - Provide guidance for executing and implementing agencies.

115

- Conducting review missions. - Monitoring status of compliance with loan and project covenants, including safeguards. - Regularly updating the project information documents for public disclosure at the ADB website, including the safeguards documents. ADB = Asian Development Bank, EMP = environmental management plan, O&M = operation and maintenance, PMO = project management office.

C. Potential Impacts and Mitigation Measures

12. Table 2 lists the potential impacts of the project components during project preparation, design, construction and operation, and, proposed mitigation measures. The mitigation measures will be incorporated into detailed design, bidding documents, construction contracts and operational management manuals, by the design institutes (during detailed design) and contractors (during construction), under the supervision of the PMO, PIUs, and CSCs, with technical support from the LIEC. The effectiveness of these measures will be evaluated based on environmental inspections and monitoring to determine whether they should be continued, improved or adjusted.

D. Environment Monitoring Plan

13. Three types of project monitoring will be conducted under the EMP: (i) internal monitoring – to be conducted by the PIUs and CSCs; (ii) external monitoring – of air, water, noise and soil standards – to be conducted by a certified EMA(s); and (iii) compliance monitoring – to be conducted by both the EMA and LIEC, to ensure the EMP is being implemented.

14. The project monitoring program (Table 3) covers the scope of monitoring, monitoring parameters, time and frequency, and implementing and supervising agencies. Monitoring shall comply with the methodologies provided in the relevant national environmental monitoring standards. Other associated standards to be followed are the national environmental quality standards of ambient air, surface water, sediment and noise, and the pollutant discharge standards.

15. Internal monitoring. During construction, the PIUs and CSCs will be responsible for conducting internal environmental monitoring in accordance with the monitoring plan. Results will be reported through the CSC monthly reports to the PIUs and PMO.

16. External monitoring. The PIUs will contract at least one EMA to conduct environmental monitoring in accordance with the monitoring program. A detailed cost breakdown will be provided by the EMA when the environmental monitoring program is updated at the start of each component implementation. Monitoring will be conducted during construction and operation periods, until a project completion report (PCR) is issued. Quarterly monitoring reports will be prepared by the EMAs and submitted to the PIUs and PMO.

17. Compliance monitoring for EMP and progress reporting. The LIEC will review project progress and compliance with the EMP based on field visits, and the review of the environmental monitoring reports provided by the EMAs. The findings of the LIEC will be reported to ADB through the semi-annual EMP monitoring and progress reports. The reports will include (i) progress made in EMP implementation, (ii) overall effectiveness of the EMP implementation (including public and occupational health and safety), (iii) environmental monitoring and compliance, (iv) institutional strengthening and training, (v) public consultation (including GRM), and (vi) any problems encountered during construction and operation, and the relevant corrective actions undertaken.

116

The LIECs will help the PMO prepare the reports and submit the English report to ADB for disclosure.

18. Project completion environmental audits. Within three months after each subproject completion, or no later than a half year with permission of the local EEBs, environmental acceptance monitoring and audit reports of each subproject completion shall be (i) prepared by a licensed environmental monitoring institute (usually the county EMA under the EEB) in accordance with the PRC Guideline on Project Completion Environmental Audit (2001), (ii) reviewed for approval of the official commencement of individual subproject operation by environmental authorities, and (iii) finally reported to ADB through the semiannual EMP monitoring and progress reporting process.

19. Quality assurance (QA) /quality control (QC) for compliance monitoring. To ensure accuracy of the monitoring, QA/QC procedures will be conducted in accordance with the following regulations: i) Regulations of QA/AC Management for Environmental Monitoring issued by the State Environmental Protection Administration in July 2006; ii) QA/QC Manual for Environmental Water Monitoring (Second edition), published by the State Environmental Monitoring Centre in 2001; and iii) QA/QC Manual for Environmental Air Monitoring published by the State Environmental Monitoring Centre in 2001.

E. Institutional Strengthening and Capacity Building

20. The PIUs have limited previous experience with ADB-funded projects or safeguard requirements. The experience and qualifications of staff within the district and county EEBs for environmental management varies. Domestic EIAs and project approvals generally include limited mitigation measures, but there is not yet a regulatory requirement in the PRC for EMPs of the scope required by ADB. Implementation of the current EMP represents a significant new task for the local agencies. During the project design phase, trainings on EMP implementation were conducted, including roles and responsibilities of contractors and CSCs for EMP implementation, the project impacts and mitigation measures.

21. During implementation, a capacity building program (Table 4) will be implemented on: (i) the EMP, including the mitigation measures, monitoring, and reporting; and (ii) PRC environmental laws and regulations. Training will be provided by the Gansu Provincial EED, county and district EEBs, and LIEC. Trainees will be the PMO, IAs, PIUs, contractors, CSCs, and local water resources bureaus, agriculture bureaus, and forestry bureaus. The PMO environmental officer will arrange the training programs, supported by the LIEC.

117

Table 2: Environment Impacts and Mitigation Measures Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise A. Detailed Design Phase • Environmental mitigation and pollution control measures identified in the PMO EA Detailed IEE, the EMP and the domestic EIAs will be incorporated into the detailed supported by Design design. These include installation of electrostatic precipitators for the dust LIEC Budget Include mitigation control, exhaust chimneys, exhaust fans, and oil flume purifiers. measures and Sedimentation tanks and septic tanks will be built for collection and monitoring program treatment of wastewater discharges from the subprojects. in detailed design • For subprojects requiring the use of industrial coolants (for the operation of cold-storage warehouses), the cooling systems will be designed for the use of “R32”, “R290” or other coolants with low-impacts to greenhouse gases. The designs will not use the coolant “R134a”. Include mitigation Environmental mitigation measures identified in this EMP and domestic EIA PMO EA Detailed measures and will be incorporated in the bidding documents for the project and will be supported by Design Incorporate monitoring program included in contract documents for civil constructions and equipment LIEC Budget Mitigation in bidding installations. All contractors shall be required to strictly comply with the EMP. Measures documents and Monitoring in Confirm with all subproject PIUs that the use of at least two pesticides, PMO EA N/a Detailed omethoate and methamidophos, which are classified as “hazardous” or for supported by Existing use of Design and restricted-use by WHO and/or the government, are halted in all existing LIEC hazardous Bidding and subproject farming operations where they are currently being used. pesticides Contracting Remind PMO and PIUs this is an official requirement under the loan agreement Inclusion of a The Contractor/bidder shall propose an Environmental, Health and Safety PMO EA Detailed Environmental, Officer (EHS Officer) as the Contractor’s Key Personnel at the Site. The Bidder supported by Design Health and Safety shall provide detailed the proposed EHS Officer including academic LIEC Budget Officer (EHS Officer) qualifications and experience. The responsibilities of the EHS Officer are given as the Contractor’s in Table 1 of the EMP. Key Personnel at the Site Environmental The environmental monitoring program will be incorporated into the design to PMO EA Detailed monitoring ensure that environmental impacts are closely monitored and activities of the supported by Design incorporated into project construction and operating are closely supervised against the PRC LIEC Budget

118

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise design. environmental laws, regulations and standards, ADB SPS, and the project EMP and approved domestic EIA. Grievance Impacts on project PMO environment officer and PMO social and environmental focal staff will be PMO EA, ADB PMO Redress Affected Persons responsible for coordination of the GRM. GRM training will be provided for PIU supported by Mechanism members and GRM access points; and the GRM access point phone numbers, LIEC fax numbers, addresses and emails will be disclosed to the public. B. Construction Phase Construction Environmental, The Contractor shall be required to submit for approval, and subsequently Contractors PIU Contract EMP Health and Safety implement a Construction Environmental Management Plan (CEMP) and supported or risks and impacts Occupational Health and Safety Plan with the following site-specific by LIEC from the management plans: construction • Occupational health and safety management plan activities • Community health and safety management plan • Waste management plan • Wastewater discharges management plan • Air and noise emissions management plan • Hazardous material management and spill control plan • Water supply and sanitation management at the worksites and labour camps • Management of labour camps • Traffic management plan • Training plan for environmental, health and safety risks • Emergency Response Plan • Demobilization plan after completion of works Ecological Flora and fauna • To reduce the risk of spreading weeds, pest animals, and/or soil-based Contractors PIU Contract environment protection organisms, the project will: (a) prohibit the use of any plant species classified supported or in the PRC as weeds – including native species – as defined by the China by LIEC National Invasive Plant Database (http://www.agripests.cn) and by the Ministry of Ecology and Environment and Chinese Academy of Sciences. • All re-vegetation activities under the project, including for the rehabilitation of construction sites, and for landscaping, will be subject to operation and maintenance procedures after planting, to ensure the planted vegetation is adequately protected and maintained. • To avoid soil and water pollution, no pesticides and no top-dressing

119

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise fertilizers will be used for any of the re-vegetation, planting, or landscaping activities under the project. For Subproject 3, the site does not support unique natural desert landforms and is already modified by use. However, to adopt a precautionary approach, the following good practice will be followed: • The layout of construction sites shall minimize the areal extent of construction activities being undertaken at any time. Construction machinery and construction workers shall be strictly assigned to work areas and access corridors as part of site planning and without occupying land randomly. Construction machinery and construction materials will not be placed in naturally vegetated areas. • Imported construction materials such as brick, stone, sand and cement, shall be transported to the construction site in batches to meet demand so that stockpiles do not overflow onto naturally vegetated areas. After the completion of the project, cleaning and greening work shall be carried out to restore any damage Erosion and Soil erosion, spoil • At the construction site, the potential for the stormwater runoff will be Contractors PIU Contract Spoil disposal assessed, and appropriate stormwater drainage systems to minimize soil supported or erosion will be implemented, including perimeter bunds and the by LIEC establishment of temporary detention and settling ponds to control topsoil runoff. • Land excavation and filling will be balanced so as minimize the requirement for fill material transportation. • During earthworks, the area of soil exposed to potential erosion at any time will be minimized through good project and construction management practices. • Temporary spoil storage sites will be identified, designed, and operated to minimize impacts. Spoil sites will be restored after storage activities. • Spoil will be reused on-site to the maximum extent feasible as fill. Excess spoil that cannot be used on-site will be transported to an approved spoil disposal site. • Spoil and aggregate piles will be covered with landscape material and/or regularly watered. • Waste construction material such as residual concrete, asphalt, etc., will be

120

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise properly handled for reuse or disposal. • Construction and material handling activities will be limited or halted during periods of rains and high winds. • Any planned paving or vegetating of areas will be done as soon as practicable after the materials are removed to protect and stabilize the soil. • Once construction is complete disturbed surfaces will be properly sloped and revegetated with native trees and grass. Air Pollution Dust, vehicle • Water will be sprayed on active construction sites including where fugitive Contractors PIU Contract emissions dust is being generated daily, and more frequently during windy days. supported or • Transport vehicles will be limited to low speeds in construction sites. by LIEC • Loads will be covered during truck transportation to avoid spillage or fugitive dust generation. Fine materials will be transported in fully contained trucks. • Construction site roads will be well maintained and watered and swept on an as-needed basis. Construction site road entry points will be equipped with the truck drive through wash ponds. • Transport routes and delivery schedules will be planned to avoid densely populated and sensitive areas and high traffic times. • Store petroleum or other harmful materials in appropriate places and cover to minimize fugitive dust and emission. • Provide regular maintenance to vehicles to limit gaseous emissions (to be done off-site). • Construction spoil and other construction materials will be temporarily stored using containers, but they may the potential to generate dust. Thus, containers will be covered and/or watered if necessary. • Muddy or dusty materials on public roads outside the exits of works areas will be cleaned immediately. • On-site asphalting and concrete batching are prohibited. • The disturbed sites will be revegetated as soon as possible. Wastewater Surface and • Existing toilets at the component site will be provided for the workers. groundwater • Construction wastewater generated during the construction phase will be contamination from discharged to the existing municipal sewer system. All discharged construction construction wastewater will meet the appropriate PRC standard GB/T wastewater, and 31962-2015 before discharge. Discharged water will then be treated in the domestic water nearby WWTP.

121

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • All necessary measures will be undertaken to prevent construction materials and waste from entering the drainage system. • Maintenance of construction equipment and vehicles will not be allowed on sites to reduce wastewater generation. • Oil traps are provided for service areas and parking areas, and oil-water separators are installed for oil-containing wastewater; • All construction machinery is repaired and washed at special repairing shops. No on-site machine repair, maintenance and washing shall be allowed to reduce wastewater generation; • Storage facilities for fuels, oil, and other hazardous materials are within secured areas on impermeable surfaces with 110% volume of the materials stored, and provided with bunds and cleanup kits; • The contractors’ fuel suppliers are properly licensed, follow proper protocol for transferring fuel, and are in compliance with Transportation, Loading and Unloading of Dangerous or Harmful Goods (JT 3145-88). Noise Impacts from To ensure construction activities meet PRC noise standards (Noise Standards Contractors PIU Contract construction noise for Construction Site Boundary, GB 12523-2011) and to protect workers, the supported or on sensitive following measures will be implemented: by LIEC resources • Construction activities will be planned in consultation with local authorities and communities so that activities with the greatest potential to generate noise and vibration are planned during periods of the day that will result in the least disturbance. • Construction activities and particularly noisy ones are to be limited to reasonable hours during the day and early evening. Construction activities will be strictly prohibited during the nighttime (22:00 h to 07:00 h). Exceptions will only be allowed in special cases, and only after getting the approval of the surrounding residents, local EEB and other relevant departments. And nearby residents should be notified of such nighttime activities well in advance. • When undertaking construction planning, simultaneous high-noise activities will be avoided, and high noise activities will be scheduled during the day rather than evening hours. Similarly, the construction sites will be planned to avoid multiple high noise activities or equipment from operating at the same location.

122

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Low-noise equipment will be selected as much as possible. Equipment and machinery will be equipped with mufflers and will be properly maintained to minimize noise. • Noise protective equipment will be provided to workers to meet the requirements in occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007) and EHS Guidelines. • Transportation routes and delivery schedules will be planned during detailed design to avoid densely populated and sensitive areas and high traffic times. • Vehicles transporting construction materials or waste will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. • For Tongzhuang Village (subproject 4), the following additional measures will be implemented: (i) installation of sound barriers around the construction site which are design-certified of sufficient thickness, height, and suitable material to mitigate noise levels of 70 dB(A) to 60 dB(A) (the Class II standard for daytime noise); (ii) during peak construction period, daily noise measurements by the contracted environment monitoring agency to ensure noise levels at the sound barriers meet the Class II daytime noise standard. In the event that noise levels exceed the Class II standard, the construction works emitting the noise will be immediately halted and discussions held on how to resolve the issue, including the installation of additional noise barriers; (iii) during peak construction, daily consultations with residents, led by the PIU safeguard officer, and attended by the construction supervision companies and contractors

123

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise Solid Waste Inappropriate Waste • Wastes will be reused or recycled to the extent possible. Contractors, PIU Contract Disposal • Littering by workers will be prohibited. local supported or • Excavated soil will be backfilled onsite to the extent possible. Excess spoil sanitation by LIEC that cannot be used on-site will be transported to an approved spoil disposal departments site. (domestic • Existing domestic waste containers will be used for domestic waste waste), collection at work sites. Domestic waste will be collected regularly by the licensed local sanitation departments and transported for disposal at local licensed waste landfills and incineration plants. collection • Construction waste dumpsters will be provided at all construction sites. companies Construction waste will be collected regularly by a licensed waste collection (construction company and transported for disposal at local licensed landfills. waste) • There should be no final waste disposal on site. Waste incineration at or near the site is strictly prohibited. • Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, spoil, that remain on the site after construction. Hazardous Inappropriate • A hazardous material handling and disposal protocol that includes spill Contractors, PIU Contract and Polluting transportation, emergency response will be prepared and implemented by contractors. waste supported or Materials storage, use and • Storage facilities for fuels, oil, chemicals and other hazardous materials will management by LIEC spills be within secured areas on impermeable surfaces provided with dikes with companies a 110% volume, and at least 300 m from drainage structures and important water bodies. A standalone site within the storage facility will be designated for hazardous wastes. • Signs will be placed at chemicals and hazardous materials storage sites to provide information on the type and name of chemicals and hazardous materials. • Suppliers of chemicals and hazardous materials must hold proper licenses and follow all relevant protocols and PRC regulations and requirements. • A licensed company will be hired to collect, transport, and dispose of hazardous materials following relevant PRC regulations and requirements. • No asbestos will be used for any project materials, works, or actives. (Note: ADB’s prohibited investment activities list forbids the use of asbestos, with the exception of cement bonded materials containing no more than 20% of

124

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise asbestos. Due to the difficulty in identifying such percentage, a complete ban of the use of asbestos will be implemented). • For subproject 5, the following additional measures will be implemented, and which comply with the PRC Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2001: (i) laboratory chemicals will be stored in a specified and locked room, with limited access; (ii) handling of the chemicals will be by qualified staff only; (iii) waste chemicals will not be discharged into drains but will be collected in closed containers and stored in the locked chemicals room; and (iv) the full containers will be periodically collected by a certified agency for hazardous waste collection, which will also treat and dispose the liquid waste in accordance with national procedures. Socio- Community • Each contractor will undertake an OHS risk assessment of construction PMO (plan PIU Contract economic Disturbance and works and implement relevant construction phase EHS plan in line with design), supported or Resources Safety construction good practice as set out in EHS Guidelines Contractors by LIEC • Transportation routes and delivery schedules will be planned during detailed (plan design to avoid densely populated and sensitive areas and high traffic times. implementatio • Vehicles transporting construction materials or wastes will slow down and n) not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. • Signs will be placed at construction sites in clear view of the public, warning people of potential dangers such as moving. All sites will be made secure, discouraging access by members of the public through appropriate fencing with security guards whenever appropriate. Worker Contractors will implement adequate precautions to protect the health and EHS Plan PIU LIEC Occupational safety of their workers: Developed by supported Health and Safety • Each contractor will undertake a ‘job hazard analysis’ at each new LIEC by LIEC construction site to identify potential hazards that may arise from the proposed works or working conditions to the project workers, particularly those that may be life-threatening. • Identify and minimize the causes of potential hazards to workers. Implement appropriate safety measures. • Provide training to workers on occupational health and safety, emergency EHS Plan PIU Contract response, especially concerning using potentially dangerous equipment and implemented supported or storage, handling and disposal of hazardous waste. The induction will be by contractors by LIEC

125

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise conducted before construction, and no worker is allowed on site without induction. • Ensure that all equipment is maintained in a safe operating condition. • Provide appropriate protective equipment to workers. • Provide procedures for limiting exposure to high noise or high temperature working environments in compliance with PRC occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007 and EHS Occupational Health and Safety Guidelines). • Ensure regular safety meetings with staff. Physical As yet unknown A construction phase chance find procedure will be established and activated Contractors PIU PMO Cultural physical cultural if any chance finds of physical cultural resources are encountered: supported Resources resources may be • construction activities will be immediately suspended if any physical cultural by LIEC damaged if proper resources are encountered; and local precautions are not • destroying, damaging, defacing, or concealing physical cultural resources Cultural taken. will be strictly prohibited in accordance with PRC regulations; Heritage • local Cultural Heritage Bureau will be promptly informed and consulted; and, Bureau • construction activities will resume only after thorough investigation and with the permission of the local Cultural Heritage Bureau. • In case of any physical cultural resource is found, ADB SPS 2009 requirements, as well as PRC laws and regulations, will be followed. C. Operation Phase EHS Plan Environmental An Occupational Health and Safety Plan for the Construction Phase will be PIU supported EA IA Health and Safety developed and implemented for each Project facility. The Plan will be by Consultant supported hazards at the prepared by carrying out a job-safety hazard assessment at each facility to by LIEC facilities, particularly address the following risks and will include facility-specific management at the processing plans: facilities may have • Hazards at work sites such as running machinery, rotating and moving an impact on the equipment, work at heights, electricity, and so on. Safety precautions will workers health and be developed specifically to each facility with necessary provisions of safety and PPEs. environment • Health and Hygiene at the Work Sites • Fire safety and fire fighting and first aid facilities • Waste including hazardous waste

126

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Storage and handling of hazardous material • Wastewater • Air and noise emissions Water quality Impact on surface • Minimize the use of chemical fertilizer and maximize the use of organic PIU EA IA water quality from fertilizers by project design supported agricultural • For subprojects 3, 5, and 6, fertilizer will be mixed with water and provided by LIEC chemicals via drip irrigation, ensuring that only small quantities are required, in small doses, and that fertilizers is retained at root bases • For subprojects 3 and 6 (greenhouses), vegetables will be grown in substrate and there will be no percolation of fertilizer into the soil • For subproject 4 (potato farming in open fields), fertilizer use will be reduced through real-time monitoring soil nutrient levels • For all subprojects, the design measures (improved monitoring and growing techniques) will achieve large reductions in fertilizer use compared to existing application rates (IEE Section V.E.2) • Monitoring. The types and volumes of fertilizers and pesticides used by the subprojects will be documented by each PIU and stored at the PIU and PMO centralized computer systems, in order to monitor overall use and efficiency over time. Water Monitoring of water • Water usage measured by the project-funded sensors will be stored at the PIU and PIU EA IA quantity use; ensure that PMO centralized computer systems. The PMO and each PIU will summarize this supported subprojects 1 and information in semi-annual reports to the implementing agencies. The information by LIEC 3–7 do not exceed will also be included in the semi-annual environment monitoring reports to ADB. annual water • The PMO, PIUs and county water bureaus will review the data to (a) ensure that water use is maintained within the levels of the county water allocations, and (b) allocations maximize water use efficiency in the subproject farming operations. • The PMO and each PIU will summarize this information on water use and water quality in semi-annual reports to the implementing agencies. The information will also be included in the semi-annual environment monitoring reports to ADB Air pollution Discharge of air For subproject 1, mitigation measures are: PIU EA IA pollutants • Deodorizing microorganism will be used to reduce odor pollutants; supported • Odor pollutants generated during substrate production will be collected and by LIEC discharged by fans; and • Modelling of odor diffusion was carried out by the EIA Institute and the

127

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise results are compliance with relevant PRC standard: Emission standards for odor pollutants (GB14554-93). For subproject 3, mitigation measures are: • Modelling of biogases boiler emission diffusion was carried out by the EIA Institute, and the results are compliance with relevant PRC standard: Emission standard of air pollutants for boilers (GB13271-2014); • Emission of biogas boilers will be discharged through the 15m high chimney; • Odor inhibitor will be used at material storage sheds and ventilation of material storage sheds will be enhanced; • Dust generated from the straw shattering process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 15m high chimney; and • Odor pollutants generated from the fermentation process will be collected by fans then discharged through the 15m high chimney. For subproject 4, mitigation measures are: • Dust – as for subproject 3; • Oil fume purifier generated from potato processing will be collected and treated by oil fume purifier, then discharged through the 15m high chimney. For subproject 5, mitigation measures are: • Dust – as for subproject 3; For subproject 7, mitigation measures are: • Dust generated from shattering and mixing process will be collected and treated by bag filters (99%) and reused as fertilizer and/or silage. The remaining 1% of dust collected will be discharged through the 20 m high chimney For all subprojects requiring the use of industrial coolants (for the operation of cold-storage warehouses): • Only coolants with low greenhouse gas impacts will be used e.g. “R32” or “R290” • The use of coolant “R134a” is prohibited in all subprojects. Wastewater Discharge of For the domestic wastewater, mitigation measures are: PIU EA IA Production and • Domestic wastewater will be treated in a digestion tank and will be supported discharged to the local municipal sewerage systems. by LIEC,

128

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise Domestic For production waste water of subproject 1, mitigation measures are: EEB Wastewater • For the Jiuquan component, production wastewater generated from the ground clean and equipment clean and will be discharged to the local municipal sewerage system. • For the Lintao component, wastewater generated from the ground cleaning process and will be discharged to the local municipal sewerage system. For production waste water of subproject 3, mitigation measures are: • Wastewater generated from the cleaning process will be recycled to produce substrate after sediment removal; and • Boiler blowdown will be discharged to the local municipal sewerage system. For production waste water of subproject 4, mitigation measures are: • Wastewater generated from the cleaning process will be reused in the cleaning process after sediment; and • Wastewater generated from the scalding process will be discharged to the local municipal sewerage system. For production waste water of subproject 5, mitigation measures are: • Wastewater generated from the cleaning process and infiltration process will be reused as liquorice irrigation water after sediment removal; and For production waste water of subproject 6, mitigation measures are: • Wastewater generated from culture bottle cleaning process and purified water production process will be discharged to the local municipal sewerage system; and For production waste water of subproject 7, mitigation measures are: • Wastewater generated from the purified water production process will be reused as landscape water; and • Wastewater generated from the silage production process, and the tissue culture process will be reused as landscape water after sediment removal. Solid Waste Collection and For domestic waste, mitigation measures are: PIU, District EA IA Disposal • Domestic waste bins will be provided; and Sanitation supported • Domestic waste will be routinely collected by the local sanitation Departments by LIEC, departments for final disposal at approved waste disposal sites. EEB For the plastic film, mitigation measures are: • Film mulching practices which optimize the timing of mulching and timely removal of film to shorten the mulching period;

129

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Use of biodegradable polymers for the agricultural plastic films such as aliphatic polyesters and aliphatic co-polyesters; and • Manufactures will be responsible for waste plastic film recovery and recycling. For waste packagings such as chemical fertilizer and pesticide, mitigation measures are: • Training will be conducted for farmers on packaging handling and recycling; and • Manufactures will be responsible for waste packaging recovery and recycling. For production waste of subproject 1, mitigation measures are: • Production waste of the subproject 1 Jiuquan component will be recycled to produce substrate; and • Waste generated by the subproject 1 Lintao component will be collected by the local sanitation departments for final disposal at Lintao Urban Area Landfill. For production waste of subproject 3, mitigation measures are: • Waste vegetable of the subproject will be recycled to produce organic fertilizer; • Sediment generated from the cleaning process will be collected by the local sanitation department and treated at Linze Urban Area Landfill; and • Waste bark and root will be reused by local cattle and sheep breeders. For production waste of subproject 4, mitigation measures are: • Waste potato and waste bark will be reused to produce organic fertilizer; • Sediment generated from the cleaning process will be collected by the local sanitation department for final disposal at Gulang Landfill; • Residue generated from the potato processing process will be recycled to the biomass production process; • Dust generated from the granulation process of solid fertilizer production will be collected by bag filters with a collection rate of 99% and reused for fertilizer and/or silage. The remaining 1% of dust collected will be discharged through one 15 m high chimney after treatment. For production waste of subproject 5, mitigation measures are: • Sediment generated from the cleaning process will be collected by the local sanitation department and treated in Jingtai Urban Area Landfill;

130

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Waste liquorice will be collected by the local sanitation department and treated in Jingtai Urban Area Landfill; • Hazardous waste generated from the test process will be collected, transported and treated by a certified 3rd party hazardous waste treatment company. For production waste of subproject 6, mitigation measures are: • Waste samples and substrate generated from the culture process will be mixed with organic fertilizer after high-temperature sterilization then reused as base fertilizer; and • Waste leaf, barks, fruits and plants will be collected to produce organic fertilizer. For production waste of subproject 7, mitigation measures are: • Waste spire and leaf primordium will be reused to produce substrate; • Waste tissue culture and substrate will be reused for substrate production after heat sterilization; • Waste bud seedling will be reused as organic fertilizer after heat sterilization; and • Waste forage mulberry and dust from silage production will be reused as fodder by nearby farmers. Chemical Inappropriate • No pesticides classified as “hazardous” or for restricted-use by WHO or the PIU, Licensed EA IA and Management government, including omethoate and methamidophos, shall be used in Contractors supported Hazardous the project; and, the use of these chemicals in the existing subproject by LIEC, Materials farming operations shall be halted by the start of construction of the new EEB project • A registry of all activities that involve the handling of potentially hazardous substances will be developed, including protocols for the storage, handling and spill response. • All chemicals, toxic, hazardous, and harmful materials will be transported in spill-proof tanks with filling hoses and nozzles in working order. • All chemicals, toxic, hazardous, and harmful materials will be stored in secure areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained from affecting soil, surface water or groundwater systems. The area should be a 110% volume of storage capacity. Their usage will be strictly monitored and recorded.

131

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Good housekeeping procedures will be established to avoid the risk of spills. • Spills will be dealt with immediately, and personnel will be trained and tasked with this responsibility. • Workers will be properly trained before handling hazardous wastes and have the requisite protective equipment. • Fertilizers, chemicals, and laboratory chemicals (subproject 5; for sampling) will be stored in specific rooms with restricted access, and out of direct sunlight • Hazardous waste (used chemicals from subproject 7) will be temporarily stored in closed containers away from direct sunlight, wind, water and rain in secure designated areas with impermeable surfaces and protective dikes such that spillage or leakage will be contained. • Hazardous wastes including oily waste, waste chemicals and waste ion exchange resin will be collected and disposed of by licensed contractors. • First-aid equipment and fire extinguishers will be installed in key locations on-site and well-maintained Noise Impact on Sensitive • Low-noise equipment will be used as far as possible, and noise reduction PIU EA IA Receptors measures such as noise elimination, shock absorption, insulated enclosures supported and sound dampening materials on exterior walls will be implemented. by LIEC, • All equipment will be properly maintained to minimize noise. EEB • Appropriate noise protective equipment will be provided to the workers who are likely to be exposed to high noise level environments to meet the requirements in occupational exposure limits for hazardous agents in workplace Part 2: physical agents (GBZ 2.2-2007) and EHS Guidelines on OHS. • Layout for subproject sites will be planned to reduce noise levels on nearby communities. Community Risks to Workers • Operation phase EHS plan and traffic management plan will be developed Plans EA IA and and Community and implemented, and workers will be trained regularly on their developed by supported Occupational implementation. LIEC by LIEC Health and • Protective equipment including goggles, gloves, safety shoes will be and Safety provided to workers. Noise protection equipment will be provided to workers Plans authorities in the high-noise area. Noise areas with more than 85 dB(A) shall be implemented marked, and hearing protection shall be provided to workers. by PIU

132

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • Provide training to workers on occupational health and safety, and emergency response. • Vehicles transporting materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals. • Adequate ventilation in work areas to reduce heat and humidity will be installed. Surfaces, where workers come in close contact with hot equipment, will be shielded. The warning sign will be placed in high- temperature areas. Emergency A draft emergency risk and response has been established in accordance Plans EA LIEC; IA Response with the “National Environmental Emergency Plan” (24 January 2006), other developed by supported relevant PRC laws, regulations and standards, as well as World Bank EHS PMO with by LIEC Guidelines and ADB’s SPS 2009, and will include measures in the World support from and local Bank EHS guidelines with respect to occupational and community health and LIEC emergency safety. The plan must be established and in place before the component is authorities operational. Plans Indicative plan requirements are as follows: implemented • Procedures for responding to different types of emergency situations will be by PIU identified in the response plan. • Emergency exercises will be conducted, and they should include different emergency scenarios. Training Requirements • Appropriate operating and maintenance employees will be trained to ensure that they are knowledgeable of the requirements of the emergency response plan. Training will be provided as follows: − Initial training to all employees before the facilities are put in operation. − When new equipment, materials, or processes are introduced. − When emergency response procedures have been updated or revised. Annual Emergency Simulation • Simulated emergency exercises will be conducted at least annually. Receiving Notification of a Possible Emergency • When a supervisor receives a report of a possible emergency situation, he/she should obtain at a minimum the following information from the reporting person:

133

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise − Name of the person reporting an emergency; − Nature of emergency - leak, fire, interruption of service if a leak, odor present, etc. − Details of emergency: location, amount, how long has the odor been noticed, what actions have been taken, etc. − Leaks or other emergencies require prompt investigation. Immediate On-site Action • The first responder will assess the nature of the report. This assessment should include the status of the emergency, an estimation of how the incident might progress, and an evaluation of the manpower, equipment, and materials needed to adequately cope with the situation. • If there is a strong odor or any measurable reading of gas detected inside a structure: − Clear the building of all occupants. − Eliminate potential ignition sources. − Localize or isolate the problem and shut off the gas as needed. − Determine the extent of the hazardous area and establish a restricted area. • The responding supervisor shall determine the extent of the emergency and inform the dispatcher of the condition at the site. • If emergency procedures are put into effect, the responding supervisor should select a location and establish an emergency command post. • The responding supervisor will assign one person to remain at the command post to maintain communications until the emergency is over. • When necessary, the command post will be coordinated with the local emergency responders. When local emergency responders are involved, they will be in charge of the incident. • The responding supervisor will make himself known to fire and/or police department officials, or other authority having jurisdiction and will remain with them during the emergency. • All employees reporting to the scene of the emergency will report to the command post for identification and instructions. • Key personnel will be alerted, and it will be their responsibility to keep the emergency personnel under their supervision informed and available for emergency call out.

134

Fund Potential Impacts Responsibility Category Mitigation Measures Source and Issues Implement Supervise • When a system failure cannot be made safely by normal procedures, emergency shutdown procedures should be implemented. • Reduce system pressure or segment a section before repair procedures are implemented. • Well trained and qualified personnel will be dispatched to monitor system pressure and repair work. Communication with Public Officials • When an emergency resulting in a hazard to the public safety occurs, the local fire department, police, the city medical emergency center and other relevant public officials should be notified. An emergency call list will be prepared and make it available at the plant control room. ADB = Asian Development Bank, CSC = construction supervision company, DI = design institute, EA = executing agency, EEB = environment protection bureau, EMA = Environmental Monitoring Agency, EEB = the municipal and district/county environment protection bureau, GRM = grievance redress mechanism, IA = implementing agency, LIEC = loan implementation environment consultant, PMO = project management office. Source: Domestic Project EIA Report (2018) and TRTA consultants.

135

EEB EEB EEB EEB EEB EEB EEB EEB EA, EA, EA, EA, EA, EA, EA, EA, EA, EA, Supervise

A A

PIU PIU PIU PIU PIU PIU EM EM Implement

during during during during during

Frequency Daily Daily during construction construction construction construction construction construction Once before Weekly Weekly during Monthly Monthly Monthly Monthly Quarterly construction season construction season

point

and

Location

discharge meters onstruction site e collection and e collection disposal sites onstruction site onstruction siteonstruction construction sites c Construction site C Boundaries of the Boundaries of the onstruction siteonstruction maintenance areas. At At c Wast hazardous materials. Monitoring of c the Vehicle Vehicle and equipment oil, chemicalsoil, and other sensitive receptors in 100 Storage facilities for fuels, Wastewater Table 3: Environmental Monitoring Plan Monitoring 3: Environmental Table

aste w COD,

t ir ir - a azardous olid olid following nspection

i

s h

) monitoring

2.5 /Methodology

anagemen , PM ontrol measures

m 10 c portable

a Parameter anagement measuresanagement aterials ollution requirement Compliance inspection of implementation of m Compliance inspections of implementation of m measures Compliance inspection of land clearing to ensure mitigation of implementation of p Wastewater sampling TSS, etc. pH following PRC requirements Ambient noise monitoring (day and night Leq dB(A)) using device following the PRC requirements contaminationSoil test following the PRC Ambient dust monitoring (TSP, PM requirementsPRC Visual/compliance Phase

Subject

Flora andFlora Fauna Hazardous and Polluting Materials Soil WasteSolid Wastewater Noise A. ConstructionA. Air Pollution

136 Appenidx 1

EEB EEB EEB EEB EEB EEB A, A, EA, EA, EA, E EA, EA, EA, EA, Supervise

A PIU PIU PIU PIU PIU EM Implement

ly ly

during during

annual annual - - per per year Quarterly Frequency Semi Semi Monthly Monthly heating season and once during heating construction season construction season season for two weeks Quarterly during none

the

of the ite ite

site s

ite ite and Location sewer on siteon roads. i t project meters project uc Sub Sub components Construction site Boundaries of the ischarge outlet to components Monitoring Transportation routes. municipal D Constr sensitive receptors in 100

of

near

aste COD, to of

- w the raffic measures t olid olid

on

s

monitoring

ds measures /Methodology

inspection Safety dB(A))

recor etc. following PRC

an an Emergency Response

Parameter anagement oise monitoringoise (day and ontrol measuresontrol Compliance operation phase m implementation GHG emission componentthe N Leqnight implementation of Occupational and Community andHealth including miss,minor, major,fatal accidents and Plan Wastewater sampling TSS, pH requirements measures are being implemented Compliance inspection of implementation of c Compliance inspection of

Phase

monitoring Subject

2

Solid WasteSolid CO Noise Wastewater B. Operation Impacts Socioeconomic

137

IA =

,

EEB EEB EEB A, A, E EA, EA, EA, Supervise

= environment protection bureau,

PIU PIU PIU EEB Implement GRM GRM = grievance redress mechanism

ureau, ureau,

ly ly

nce annual annual - - EA = executing agency, O Frequency Semi Semi

DI = design institute, ite ite ite s s s

Location

project project project Sub Sub Sub Monitoring

A consultants.

RT = the municipal and district/county environment protection b

EEB ) and T )

8 , tion of ccupational c ealth and o e

h p

and an

/Methodology CSC CSC = construction supervision company, keeping records on miss,minor, major,

management measures ommunity EIA Report EIA (201 accidents

c

near Parameter afety afety s including the fatal Emergency Response Plan implementation Compliance environment acceptance testing for Compliance ins operation phase Hazardous Materials Management Plans (HMMPs)implementation Compliance inspection of operation phase and Project

Subject nvironmental E acceptance Health and Safety and Emergency Response Hazardous and Polluting Materials

EMA EMA = Environmental Monitoring Agency = projectmanagementoffice. PMO environment consultant, loan implementation LIECimplementing = agency, Source: Domestic ADB = Asian Development Bank, 138 Appenidx 1

= = )

€ 3 3

268 268 , , 5 5 € € Training Training per courseper per courseper Budget ( Fixed costs:Fixed Fixed costs:Fixed about €1,756 about €1,756 delivery xdelivery delivery xdelivery Development Development

30 30 # Persons

2 2 Days

,

of of

, and second second ing ing years) years) Times and third and third and start start then once (once prior to

construction during during and thenand once operation 3 3 (once prior to

assessment

tatement tatement S S

olicy olicy Contents P P friendly farming methods -

grievances and eligibility assessment afeguard afeguard applicable environmental,PRC health applicable environmental,PRC health Institutional strengthening and training program training and strengthening Institutional

S S : compliance and corrective actions compliance and corrective actions 4 - -

Non Integrated pest management Safe handling and use of pesticides and other chemicals and safetyand laws, policies, standards and regulations World Guidelines Bank EHS and international industry best practices GRM structure, responsibilities, and timeframe ofTypes grievances and eligibility Impacts mitigation and measures Monitoring reportingand requirements Non ADB’s Project safetyand laws, policies, standards and regulations World Guidelines Bank EHS and international industry best practices GRM structure, responsibilities, and timeframe ofTypes Impacts mitigation and measures Monitoring reportingand requirements ADB’s Project

GRM Table Table − − Implementation of Operation Phase EMP − − − Environmentally − − − Implementation of Construction Phase EMP − − − ADB and laws, PRC regulations and policies − − − ADB and laws,PRC regulations policies and − − − GRM −

, ,

PIU

, , EA

ontractors Attendees PMO, PMO, EA C PMO PIU

IEC Trainers L LIEC

Training Topic Training Environment, Health and Safety Plan Operation Phase Health and TrainingSafety Construction Phase Environment, 139

536 , €10

60

6

Total

planting machines and

Use of protective clothing for handling of chemicals O&M and/or of plantingand harvesting machines Safe handlingof mobile phones to minimize riskshealth use of (e.g. speakerfunction) Safe disposal ofold mobile phones and batteries Safe O&M of liquorice harvesting machinesmulberry for and potato,and farmingother equipment

− − − −

F. Grievance Redress Mechanism

22. The environmental and social officers of the PMO and seven PIUs will be the lead coordinators for GRM implementation. However, 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.

23. At the PMO level, the PMO environmental officer and social officer will establish a GRM tracking and documentation system, conduct daily coordination with the PIU officers, arrange meetings and conduct site visits as necessary, maintain the overall project GRM database, and prepare the reporting inputs for progress reports to ADB. At the PIU level, the PIU social and environmental focal staff will instruct contractors and CSCs on the GRM procedures, and coordinate with the local EEBs and other government divisions as necessary. PMO and PIU staff will be trained and supported by the LIEC and Loan Implementation Social Consultant (LISC).

24. The contact persons for different GRM entry points, such as the PMO and PIU environmental and social officers, contractors, operators of project facilities (OPFs), and local EEBs, will be identified prior to construction. The contact details for the entry points (phone numbers, addresses, e-mail addresses) will be publicly disclosed on information boards at construction sites and on the websites of the local EEBs.

25. Once a complaint is received and filed, the PMO and PIU officers will identify if complaints are eligible. Eligible complaints include those where (i) the complaint pertains to the project; and (ii) the issues arising in the complaint fall within the scope of environmental issues that the GRM is authorized to address. 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 environmental GRM (such as issues related to resettlement, 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 is as follows and also summarized in Figure EMP-1.

• Stage 1: If a concern arises during construction, the affected person may submit a written or oral complaint to the contractor. Whenever possible, the contractor will resolve the issue directly with the affected person. The contractor shall give a clear reply within five (5) working days. The contractor will keep the PIU and PMO fully informed at all stages.

• Stage 2: If the issue cannot be resolved in Stage 1, after five calendar days, the PMO and/or PIU will take over responsibility. Eligibility of the complaint will be assessed and a recommended solution given to the complainant and contractors within five (5) working days. If the solution is agreed by the complainant, the contractors and/or facility operators (in operation) will implement the solution within seven (7) calendar days. Written records will be made of all stages and outcomes. At Stage 2, PMO will also inform the ADB project team of the issue, steps taken in Stage 1, and, planned steps for Stage 3.

• Stage 3: If no solution can be identified by the PMO and/or PIU, and/or the complainant is not satisfied with the proposed solution, the PMO will organize, within ten (10) calendar days, a stakeholder meeting (including the complainant, contractor and/or operator of the facility, local EEB, PIU, PMO). 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. Written records will be made of all stages and outcomes.

141

26. The GRM does not affect the right of an affected person to submit their complaints to any agency they wish to, for example the local village committee, community leaders, courts, PMO, PIUs, Gansu Provincial Government, district/county government, and/or ADB.

27. The PMO and PIUs 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.

Grievance/Complaints by APsADB

Oral or written Oral or written complaint complaint Solution found (5 working days) Local EEBs, IAs, Contractors, CSCs, Residental Committees LIEC

Forward Inform if solved, forward if not solved

The PMO and PIU Environment and/or Social Officers

Record complaint, assess eligibility of complaint, inform relevant stakeholders including ADB, Gansu Province EED and District/county EEBs

Solution not found Consult LIEC, IAs, Contractors, and CSCs to identify solution

Conduct stakeholders meeting

Solution (contractor, IA, APs, EEBs and LIEC) found to identify solution and action plan (10 calendar days)

Solution found

Implement Solution

During During Operation construction

Contractors and CSCs IAs and district/county EEBs

Figure 1: Operation Chart of the Project Grievance Redress Mechanism AP = affected person, CSC = construction supervision company, EEB = environment protection bureau, EED = environment protection department, IA = implementing agency, LIEC = loan implementation environment consultant, PIU = project implementation unit, PMO = project management office.

143

G. Reporting Requirements

28. Environmental reporting. The CSCs will submit monthly reports to the PIUs on implementation and compliance with the EMP and CEMPs, including information on all spills, accidents, grievances received, and actions taken.

29. Based on the CSCs’ monthly EMP progress reports and the compliance inspection and ambient monitoring results, the PIU social and environmental focal staff will prepare semi-annual environmental monitoring reports (EMR) including EMP implementation and monitoring results for submission to the PMO. The PMO environment officer, with the support from the LIEC, will compile the findings and prepare semi-annual EMRs for submission to ADB, on behalf of the PMO. The reports will assess the project compliance with the EMP and PRC environmental standards; identify any environment-related implementation issues and necessary corrective actions; and reflect these in a corrective action plan. The performance of the contractors in respect of environmental compliance will also be reported, as will the operation and performance of the project GRM, environmental, institutional strengthening and training, and compliance with safeguard covenants.

30. ADB will review the semi-annual EMRs, provide feedback, and then disclose the EMRs on the ADB public website. ADB missions will inspect the project progress and implementation once to twice a year. For environmental issues, inspections will focus mainly on (i) monitoring data; (ii) the implementation status of project performance indicators specified in the loan covenants on the environment, environmental compliance, implementation of the EMP, and environmental institutional strengthening and training; (iii) the environmental performance of contractors, CSCs and the PMO; and (iv) operation and performance of the project GRM.

31. Within 3 months after completion, or no later than 1 year with permission of the Gansu Environment Protection Department, an environmental acceptance report shall be prepared by a licensed institute in accordance with the PRC Regulation on Project Completion Environmental Audit (MEP, 2001), approved by the relevant environmental authority, and reported to ADB. The environmental acceptance report will indicate the timing, extent, effectiveness of completed mitigation and of maintenance, and the need for additional mitigation measures and monitoring (if any) during operation at least until the project completion report is prepared.

32. The environmental reporting requirements are summarized in Table 5.

Table 5: Reporting Requirements Report Prepared by Submitted to Frequency A. Construction Phase EMP implementation reports CSCs PIUs Monthly Compliance monitoring EMA PIUs, PMO Quarterly reports Environmental monitoring PMO with the support of ADB Semi-annual reports LIEC B. Operation Phase Environmental monitoring PMO with the support of ADB Semi-annual report LIEC ADB = Asian Development Bank, CSC = construction supervision company, EMA = environment monitoring agency, PIU = project implementation unit, PMO = project management office.

H. Performance Indicators

33. Performance indicators (Table 6) have been developed to assess the implementation of the EMP. These indicators will be used to evaluate the effectiveness of environmental management during project implementation.

Table 6: Performance Indicators No. Description Indicators (i) PMO established with appropriately qualified staff including Environmental Officer. (ii) PIU will assign or hire a qualified PIU social and environmental focal 1 Staffing staff. For all subprojects involving crop production, these staff will be full- time. (iii) EMA is engaged. (i) Environment mitigation cost during construction and operation is sufficiently and timely allocated. 2 Budgeting (ii) Environment monitoring cost is sufficiently and timely allocated. (iii) The budget for capacity building is sufficiently and timely allocated. (i) Compliance monitoring is conducted by PIUs as per the environment monitoring plan. 3 Monitoring (ii) Construction phase and operation phase environment monitoring is conducted by environmental monitoring agency. (i) PMO to review the implementation of EMP; 4 Supervision (ii) ADB review missions (i) Semi-annual environmental monitoring reports during the construction 5 Reporting phase and operation phase prepared by the PMO are submitted to ADB. Capacity (i) Training on ADB safeguard policy, EMP implementation, and GRM are 6 Building provided during project implementation. (i) GRM contact persons are designated at all IA and the PMO, and GRM Grievance contact information disclosed to the public before construction. 7 Redress (ii) All complaints are recorded and processed within the set time framework Mechanism in the GRM of this IEE. Compliance with (i) The project complies with the PRC’s environmental laws and regulations 8 PRC standards and meets all required standards. ADB = Asian Development Bank, EA = executing agency, EMA = Environmental Monitoring Agency, GRM = grievance redress mechanism, IA = implementing agency, IEE = initial environmental examination, LIEC = loan implementation environment consultant, PMO = project management office, PRC = People’s Republic of China.

I. Estimated Budget for EMP Implementation

34. The estimated budget for the EMP implementation of the project is presented in Table 7. Costs are presented for mitigation implementation, ambient monitoring, capacity building, implementation support if needed, and GRM implementation.

J. Mechanisms for Feedback and Adjustment

35. The effectiveness of mitigation measures and monitoring plans will be evaluated through a feedback reporting system. If during compliance inspections and monitoring, substantial deviation from the EMP is observed, then the PMO environment officer and LIEC will consult with the EA and local EEBs and propose appropriate changes to the EMP monitoring and mitigation plan.

145

36. Any EMP adjustments will be subject to ADB review and approval, and ADB may pursue additional environmental assessment and, if necessary, further public consultation. The revised EMP with ADB confirmation will be re-disclosed on ADB’s public website. The revised EMP will be passed on to the contractor(s) for incorporation into the CEMPs for implementation.

Table 7: Estimated Budget for Implementing the Project Environment Management Plan Construction Phase Unit Cost Source of Unit (CNY) Quantity Cost (CNY) Funds 1. Staffing PMO environment officer Months 6,000 60 360,000 Counterpart PIU social and environmental focal Financing staff - 7 Months 6,000 420 2,520,000 Subtotal 2,880,000

2. Ambient Monitoring Air - TSP Quarterly 1,500 84 126,000 Counterpart Noise Quarterly 1,100 84 92,400 Financing Subtotal 218,400 3. Capacity Building Construction Phase HSE Plan EHS Plan Development and Training Development 15,000 3 45,000 Counterpart EHS Course Financing Development 15,000 1 15,000 EHS Course Delivery 30,000 1 30,000 Subtotal 90,000

TOTAL Construction Phase 3,188,400 Operation Phase (first 2 years) 1. EHS Plans during Operation Phase Counterpart Consultant Months 6,000 12 72,000 Financing Subtotal 72,000 2. Ambient Monitoring Boiler exhaust gas monitoring Quarterly 1,500 8 12,000 Odor pollutants emission monitoring Quarterly 1,100 8 8,800 Counterpart Noise Quarterly 1,100 56 61,600 Financing Wastewater Quarterly 750 56 42,000 Subtotal 124,400 3. Capacity Building Operation Phase HSE Plan EHS Plan Development and Training Development 15,000 3 45,000 Counterpart EHS Course Financing Development 15,000 1 15,000 EHS Course Delivery 30,000 1 30,000 Subtotal 90,000

TOTAL Operation Phase 286,400 GRAND TOTAL Construction + Operation 3,474,800

LIEC Loan Implementation Environment 600,000(about ADB Loan Consultant Person Months 40,000 15.0 €78,847)

APPENDIX 2: DRAFT TERMS OF REFERENCE FOR ENVIRONMENTAL POSITIONS

1. PROJECT MANAGEMENT OFFICE ENVIRONMENT OFFICER

A. Scope and Duration of Work

1. The officer will work on behalf of the Gansu project management office (PMO) to coordinate the implementation of the project environment management plan (EMP). The EMP is the critical guiding document to manage, monitor, and report upon project environmental impacts. Implementation of the EMP is a full-time task. For this reason, the PMO will assigns at least one full-time officer for this role. These terms of reference describe the requirements for this officer. The officer will report directly to the PMO. The position is for the entire project duration (5 years).

B. Qualifications

2. The officer will have: (i) a undergraduate degree or higher in environmental management or related field; (ii) at least 5 years of experience in environmental management, monitoring, and/or impact assessment; (iii) ability to communicate and work effectively with local communities, contractors, and government agencies; (iv) ability to analyze data and prepare technical reports; (v) willingness and health to regularly visit the project construction sites and in different seasons; and (vi) ideally, proficiency in spoken and written English.

C. Detailed Tasks

3. The PMO environment officer will have a detailed understanding of the project EMP and supporting documents, including the domestic environmental reports, the project initial environmental examination (IEE), and project environmental assurances. The officer will have the following tasks.

(i) Assess whether the EMP requires updating due to any changes in project design, which may have occurred after the EMP was prepared. (ii) Distribute the Chinese language version of the EMP to all relevant agencies, including the implementing agencies, and provincial and municipal agencies for environment protection. This should occur at least 3 months before construction begins. (iii) Conduct meetings with agencies as necessary to ensure they understand their specific responsibilities described in the EMP. (iv) Ensure that relevant mitigation, monitoring, and reporting measures in the EMP are included in the bidding documents, contracts, and relevant construction plans. (v) Confirm that the implementing agencies responsible for the internal environment monitoring described in the EMP understand their tasks and will implement the monitoring in a timely fashion. (vi) At least 2 months before construction begins, establish and implement the project grievance redress mechanism (GRM) described in the EMP. This will include: (a) preparation of a simple table and budget identifying the type, number, and cost of materials needed to inform local communities about the GRM and starting dates and scope of construction; (b) design, prepare, and distribute these materials, and plan and conduct the community meetings; (c) prepare a form to record any public complaints; (d) preparation of a summary table to record all complaints, including dates, issues, and how they were resolved; and (e) ensure that all relevant agencies, including contractors, understand their role in the GRM. (vii) Prior to construction, ensure that the implementation agencies and their contractors have informed their personnel, including all construction workers, of the EMP requirements. This

147

will include all mitigation measures relating to impacts to air, water, noise, soil, sensitive sites, ecological values, cultural values, worker and community health and safety, respectful behavior when communicating with local communities, and responding to and reporting any complaints. (viii) During project construction, make regular site visits with the loan implementation environment consultant (LIEC) to assess progress, meet with contractors and/or local communities, and assess compliance with the EMP. (ix) Ensure that all relevant agencies submit required progress reports and information, including environmental monitoring and reports of any issues or grievances. (x) Compile, review, and store environmental progress reports from the implementation agencies, records of any grievances, and any other relevant issues. Maintain digital copies of all information. When necessary, enter data into summary tables in digital format (e.g., to transfer records of grievances from hard copy forms). Ensure that all information is stored in the PMO filing system, backed up, and can be easily retrieved. (xi) Prepare semiannual environment progress reports. (xii) Work closely with the PMO, implementing agencies, project implementation units, loan implementation consultants, and other agencies as necessary to conduct these tasks.

D. Reporting Requirements

4. Semiannual environment monitoring reports using the template provided by ADB or a domestic format reviewed and approved by ADB.

E. Logistical Support Provided by the PMO to the Environment Officer

(i) Provision of hard and soft copies of the project EMP, domestic and project environmental reports, feasibility study reports, loan and project agreements, maps, and other supporting materials as necessary to ensure the officer can implement the tasks. (ii) Vehicle transport, office materials, and other logistical support, as necessary for the officer to visit the project construction sites and local communities, arrange and conduct meetings, and prepare and distribute consultation materials. (iii) Overall coordination, including review of the draft semiannual monitoring reports, and final responsibility for submission of the monitoring reports to ADB.

2. PROJECT IMPLEMENTATION UNIT SOCIAL AND ENVIRONMENTAL FOCAL STAFF

A. Scope and Duration of Work

1. Overall coordination of the project SDAP, GAP, LURTF and EMP is the responsibility of the PMO social and environment officers. At the field level, daily coordination and implementation of the SDAP, GAP, LURTF and EMP will be undertaken by the project implementation units (PIUs) responsible for each subproject. For this purpose, each PIU requires a PIU social and environmental focal staff. The seven PIU officers will work on behalf of the PIUs to implement the project SDAP, GAP, LURTF and EMP. The officers will report directly to each of their PIU managers and work closely with the county social and environment protection bureaus (SEBs), social and environment monitoring agencies or experts (SEMAs), and PMO social and environment officers. The positions are for the entire project duration (5 years).

B. Qualifications

2. The officers will have: (i) a master’s degree or higher in social and environmental

management or related field; (ii) at least 10 years of experience in social and environmental management, monitoring, and/or impact assessment, including specific experience on the management and monitoring of agriculture projects; (iii) ability to communicate and work effectively with local communities, contractors, and government agencies; (iv) ability to analyze data and prepare technical reports; (v) willingness and health to regularly visit the project construction sites and in different seasons; and (vi) ideally, proficiency in spoken and written English.

C. Detailed Tasks

3. The PIU social and environment focal staff will have a detailed understanding of the project SDAP, GAP, LURTF and EMP and supporting documents, including the domestic social and environmental reports, project IEE, and project social and environmental assurances. The officers will have the following tasks.

(i) Work closely with the PMO social and environment officers, SEB, social and environment monitoring agencies, contractors, construction supervision companies, and all other relevant agencies to implement the SDAP, GAP, LURTF and EMP. (ii) Distribute the Chinese language version of the SDAP, GAP, LURTF and EMP to all relevant agencies, including the implementing agencies, provincial and municipal agencies for social and environment protection. This should occur at least 3 months before construction begins. (iii) Conduct meetings with agencies as necessary to ensure they understand their specific responsibilities described in the SDAP, GAP, LURTF and EMP. (iv) Ensure that contractors implement the relevant measures in the SDAP, GAP, LURTF and EMP. (v) Implement the monitoring and reporting requirements in the SDAP, GAP, LURTF and EMP, including timely submission of progress reports to the PMO social and environment officers. (vi) Implement the project grievance redress mechanism. (vii) Make regular inspections of construction sites to assess progress, meet with contractors and/or local communities, and assess compliance with the SDAP, GAP, LURTF and EMP. (viii) Maintain digital records of all progress and information. (ix) Support the PMO social and environment officers in all of their tasks.

D. Reporting Requirements

4. Monthly reports to the PMO social and environment officers.

3. LOAN IMPLEMENTATION ENVIRONMENTAL CONSULTANT

A. Qualifications

1. The specialist will have: (i) a master’s degree or higher in environmental management or related field; (ii) at least 10 years of experience in environmental management, monitoring, and/or impact assessment; (iii) familiarity with ADB project management requirements and national environmental management procedures; (iv) ability to communicate and work effectively with local communities, contractors, and government agencies; (v) ability to analyze data and prepare technical reports; (vi) willingness and health to regularly visit the subproject sites; and (vii) proficiency in spoken and written English.

B. Tasks

2. Working closely with the PMO environment officer and PIU social and environmental focal

149 staff, and other staff and agencies, the loan implementation environment consultant (LIEC) will do the following.

3. Before construction:

(i) Ensure project environmental readiness, including: (i) all contractor contracts include, and will comply with, the EMP; and (iii) relevant sections of the EMP are incorporated in construction plans and contracts. (ii) Assist the PMO and PIUs to implement the grievance redress mechanism (GRM), including: (i) establish and publicize the GRM; and (ii) collate and evaluate grievances received. (iii) Develop procedures to: (i) monitor EMP implementation progress; (ii) collate and evaluate data collected in the EMP environmental monitoring program; and (iii) prepare and submit the semiannual environmental monitoring reports to ADB (to continue until project completion report). (iv) Undertake training of project agencies as required by the EMP training plan. (v) Provide hands-on support and on-the-job training to the PMO, implementing agencies, and contractors on the specific requirements of the EMP as required.

4. During project implementation:

(i) Undertake site visits to all PIUs during subproject construction and operating phase. (ii) Assist in the ongoing public consultation process as described in the project IEE. (iii) Conduct and monitor project compliance with the EMP and all relevant assurances and covenants in the loan and project agreements for environmental safeguards; identify any environment-related implementation issues; and, propose necessary responses in corrective action plans. (iv) Assist the PMO and PIUs in managing the accredited environmental external monitoring agencies for conducting periodic environmental impact monitoring in compliance with the approved monitoring plan defined in the EMP; (v) Undertake training of project agencies as required by the EMP training plan, and provide hands-on support and on-the-job training to the PMO and/or PIUs and contractors on the specific requirements of the EMP, as required. (vi) Undertake simple and cost-effective on-site quantitative measurements to regularly check that the construction complies with the environmental monitoring standards and targets, especially for noise, and water turbidity (during the dredging and embankments), using a basic hand-held meter. (vii) Design a simple and cost-effective water monitoring program for the subprojects involving crop production. The objective of the program is to assist the PMO and PIUs in measuring and reporting monthly and annual water use for agriculture in each subproject. This will enable: (a) the PMO, PIUs, and county water bureaus to monitor water use in relation to allocation quotas and overall sustainability; (b) the PMO, PIUs, and ADB to assess whether the project is achieving improvements in water use (compared with existing crop production). Prepare and finalize the program methodology in consultation with the PMO and PIUs. The program should include the data collected through the soil moisture sensors to be installed by the project; and, be integrated with the data collection and storage system to be prepared by the PIUs, so that the water monitoring data is incorporated as part of the overall project computer systems and can be easily viewed as needed by the PMO and PIUs. (viii) Assist PMO to prepare semiannual environmental monitoring progress reports for submission to ADB. The reports will focus on progress with implementation of the EMP, compliance with environment-related project assurances, and results of the water monitoring.

APPENDIX 3: RESTRICTED-USE PESTICIDES IN THE PEOPLE’S REPUBLIC OF CHINA

Pesticide use in the PRC is guided by a wide range of regulations. Key regulations and sources are as follows.

Directory for restricted use pesticides (2017) issued by the former Ministry of Agriculture (MoA) now Ministry of Agriculture and Rural Affairs (MARA): Order 2567 of former MoA issued in August 2017: http://www.moa.gov.cn/govpublic/ZZYGLS/201709/t20170911_5810706.htm

Prohibited pesticides in China which are issued in different orders from MARA and former Ministry of Agriculture (MoA): Order 194 of former MoA issued in April 2002 : http://jiuban.moa.gov.cn/zwllm/tzgg/gg/200210/t20021016_14307.htm Order 199 of former MoA issued in June 2002 : http://jiuban.moa.gov.cn/zwllm/tzgg/gg/200210/t20021016_14307.htm Order 274 of former MoA issued in April 2003 : The link is missing in MoA's website. Order 322 of former MoA issued in December 2003: The link is missing in MoA's website. Order 747 of former MoA issued in Nobember 2006: http://jiuban.moa.gov.cn/zwllm/tzgg/gg/200612/t20061213_739003.htm Order 1157 of former MoA issued in Februrary 2009: http://jiuban.moa.gov.cn/zwllm/tzgg/gg/200902/t20090227_1226994.htm Order 1586 of former MoA issued in July 2011: http://jiuban.moa.gov.cn/zwllm/tzgg/gg/201107/t20110705_2045813.htm Order 2032 of former MoA issued in December 2013: http://www.moa.gov.cn/govpublic/ZZYGLS/201312/t20131219_3718683.htm Order 2289 of former MoA issued in August 2015: http://www.moa.gov.cn/govpublic/ZZYGLS/201508/t20150825_4803203.htm Order 2445 of former MoA issued in September 2016: http://jiuban.moa.gov.cn/zwllm/tzgg/gg/201609/t20160913_5273423.htm Order 2552 of former MoA issued in September 2017: http://www.moa.gov.cn/govpublic/ZZYGLS/201707/t20170721_5757240.htm