INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

I. Basic Information Date prepared/updated: 01/11/2008 Report No.: AC3330 Public Disclosure Authorized 1. Basic Project Data Country: Project ID: P096812 Project Name: Urban Environmental Project II Task Team Leader: Takuya Kamata Estimated Appraisal Date: December 3, Estimated Board Date: May 27, 2008 2007 Managing Unit: EASUR Lending Instrument: Specific Investment Loan Sector: General water, sanitation and flood protection sector (100%) Theme: Pollution management and environmental health (P);Water resource management (S);Environmental policies and institutions (S) IBRD Amount (US$m.): 150.00 Public Disclosure Authorized IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 150.00 Financing Gap 0.00 150.00 Environmental Category: A - Full Assessment Simplified Processing Simple [] Repeater [X] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) Public Disclosure Authorized 2. Project Objectives The Project will assist Yunnan Province improving effectiveness of lake basin management in Er’Hai and Dianchi, and to improve effectiveness and coverage of critical urban environmental infrastructure for the development of county towns, through expansion and establishment of wastewater services and solid waste management systems, as well as improvement of river environment management systems in Dali, , and Wenshan municipalities and prefectures.

3. Project Description The Project consists of two pillars: i) integrated lake basin management (ILBM) systems and infrastructure for and Er’hai basin in Dali Prefecture and ILBM forDianchi basin in Kunming Municipality through TA; and ii) urban environmental infrastructure

Public Disclosure Authorized development in 16 counties in Kunming and Lijiang Municipalities, and Wenshan Prefecture. The total project cost is US$ 326 million, of which IBRD loan is US$150 million. Component I: Integrated Lake Basin Management System and Infrastructure (US$ 58.96 million, of which IBRD loan is US$ 28.36 million): 1. Er’hai Lake sub-component: Dali Prefecture has developed well-functioning integrated lake basin management system for Er’hai over the last decade, with assistance from UN and other bilateral donor agencies. Its effectiveness is demonstrated in the recent adoption of a long-term Integrated Er’hai Lake Basin Management Master plan (2003-2020), which well articulates policy directions and action measures, as well as in the enforcement of regulations, including closure of fish ponds and restoration of shorelines. This sub-component will therefore focus on physical investments laid-out in the Master plan, which provide: (i) rehabilitation and construction of about 80 km of sewer and 40 km of storm water drainage, and a WWTP with a capacity of 4,000 m3/day, in four major districts of ; (ii) solid waste management system with capacity of 70 tons/day and landfill storage capacity of 1.13 million m3 in Eryuan County; (iii) a wastewater treatment plant with a capacity of 4,000 m3/day and sewer network in Dengchuan Town; (iv) rural non-point pollution control targeting sanitation interventions in 100 key villages, and small-scale wastewater collection and treatment facilities; (v) environment management of major watercourses flowing into the lake (four major rivers and 18 minor water streams from Cangshan Mountain), including rehabilitation of river banks; and (vi) technical assistance and equipment provision for enhanced pollution monitoring and control. 2. Technical Assistance sub-component for Dianchi Lake would assist key bureaus represented in the Dianchi Management Committee of Kumning Municipality to develop an “Integrated Lake Basin Management System” for Dianchi, aiming at enhancing policy formulation and implementation, and improving institutional coordination and enforcement of regulations. It would comprise assistance for: i) development of a long- term Integrated Dianchi Management Masterplan; ii) revision of the Dianchi environmental regulations; iii) development of an action plan for rural non-point pollution control, for reduction of agricultural run-offs from farmland around the lake; and iv) improvement of monitoring capacity of relevant bureaus, including development of water quality model.

Component II: Urban Environment Infrastructures Development for County Towns: This component will assist selected county towns in Kunming, Lijiang, and Wenshan developing urban infrastructure critical for economic growth (US$ 205.21 million, of which IBRD loan is US$ 97.85 million), as detailed below:

1. Kunming Municipality sub-component (Songming, Xundian, and Luquan Counties): Construction of three sanitary landfills of total storage capacity of 1.5 million m3, total designed capacity of 365 tons/day, with designed lifetime for 10-15 years; associated collection and transportation facilities; and closure of existing dumpsites, for three county towns.

2. Lijiang Municipality sub-component (Lijiang Ancient Town District, Yulong and Huaping Counties): (i) Construction of a sanitary landfill of total storage capacity of 2.29 million m3, designed capacity of 350 tons/day, with designed lifetime for 18 years; associated collection and transportation facilities; and closure of an existing dumpsite, jointly for Lijiang Ancient Town District and adjacent Yulong County. (ii) Establishment or expansion of two wastewater treatment plants with a total treatment capacity of 80,000 m3 / day and construction of sewage collection and drainage networks of over 90 km in Yulong and Huaping Counties.

Additionally, the project will include the cultural heritage works proposed for Lion Mountain Park in Lijiang and small TA to ensure that the proposed rehabilitation works comply with UNESCO protection codes and other national cultural heritage regulations.

3. Wenshan Prefecture sub-component (Wenshan, Qiubei, Funing, Yanshan, Malipo, Guangnan, Xichou and Maguan Counties): (i) Construction of three sanitary landfill of total storage capacity of over 2 million m3, designed capacity of some 350 tons/day, with designed lifetime for 10-20 years; associated collection and transportation facilities; and closure of existing dumpsites, in Funing, Malipo and Maguang Counties. (ii) Establishment or expansion of three wastewater treatment plants with a total treatment capacity of 28,500 m3/day and construction or rehabilitation of sewage collection and drainage networks of over 200 km in Wenshan, Qiubei, Yanshan, Malipo and Funing and Guangnan Counties. (iii) Integrated environment management of 21 km section of Panlong River in Wenshan County and 11 km section of Puting River in Funing County, including enhancement of riverbank and dredging; as well as environment improvement measures for Lake Puzhehei in , including construction of rural wastewater treatment and sanitation facilities, river course management, rehabilitation of wetland. (iv) Technical assistance for enhanced environment monitoring and capacity building for the Prefecture.

4. Project Location and salient physical characteristics relevant to the safeguard analysis Yunnan Province is located in the southwest border of China, which is a mountainous province on plateau. The altitude declines gradually from northwest to southeast in a ladder shape, and elevation differs significantly, with average altitude of about 2,000 meters, maximum altitude of 6,740 meters and minimum altitude of 76 meters. The topography is varied, and climate is complex with significant vertical altitude difference in temperature. The province has more than 600 rivers, including 180 larger rivers, most of which are upstream of rivers flowing into sea and belonging to six major river systems separately. The rivers flow into three seas and three bays (East China Sea, South China Sea, the Andaman Sea, the North Bay, Motama Bay, the Bay of Bengal) before flowing into two oceans (Pacific and the Indian Ocean).

There are many plateau lakes in Yunnan Province. The total area of lakes is 1,066 km2 with catchment area of 9,000 km2, and total water storage of 30 billion m3. The most famous ones include Dianchi Lakes, Erhai, Fuxian Lake, , and Yangzonghai. Dianchi Lake is the largest lake in Yunnan, and ranks sixth in the country.

Yunnan Province has 16 prefectures, 29 minority autonomous counties in 129 counties. By the end of 2005, the province’s total population was 44.2 million, with urban population of 11.6 million. Yunnan is a province with most minorities in China, and there are around 30 groups of minorities with over 5,000 people each. Population of minority accounts for 33.4% of the total population in the province.

The provincial GDP of the year 2005 is RMB 347 billion; the added value of the primary industry was RMB 67 billion, the secondary industry was RMB 145 billion and the tertiary industry RMB 137 billion.

Yunnan has unique geography, climate, and natural & ecological environment. Cultural diversity, natural and cultural landscape created unique tourist resources in Yunnan. , Dali and Xishuangbanna, three rivers flowing in parallel, and Yulong Snow Mountain in Lijiang are famous national scenic areas. In addition, there are 47 provincial-level scenic areas. Summary of Key Characteristics of Project City

1) Kunming: Kunming is the capital of Yunnan Province, serves as the political and cultural center, and transport and communications hub. Kunming is in the central eastern of Yunnan Plateau; multi-years temperature is 14.7 ° C. The city consists of five districts (Wuhua, Panlong, Xishan, Guandu and Dongchuan), one city (Anning) and eight counties (Chenggong, Jinning, Fuming, Shilin, Yiliang, Songming, Xundian and Luquan). By the end of 2005, there are 46 townships, 7 minority townships, 53 towns and 30 sub districts. In 2005, the city had a population of 5.1 million, with total GDP of RMB 106 billion, increasing by 11% from the previous year. Per capita net income of farmers was 3,258 Yuan.

2) Dali Dali Bai is located in the northwest of Yunnan Province, east to Erhai lake, west to Diancang mountain. The Prefecture contains one city and 11 towns. Dali City is located in the watershed area of Jinsha River, Lancang River and Red River. At the same time, most parts of area belong to Lancang River that its runoff area accounts for 98.75% of the city's total area. By the end of 2005, there were 34.3 million permanent residents and its GDP was RMB 23.5 billion in 2005, 15% increase from the previous year.

Er’hai Lake is located at the edge of Dali city with its surface of 2,565km2. There are about 117 rivers in this area including Yongan River, Miyi River, Luoshi River, Boluo River, Xier River, Fengyu River, and Eighteen streams of Cang mountain. Erhai basin includes Dali city and Eryuan County where there are 18 towns. The total population in Erhai basin is 854,800 people. Main economic activity around Er’hai lake consists of agriculture, animal husbandry, fishery, tourism and electric power industry.

3) Lijiang Lijiang city is located in northwestern Yunnan Province, 502 km from the provincial capital city Kunming. The rivers in Lijiang City belong to Lancang River and Jinsha River. Lijiang city is in low latitude monsoon climate, with a unique mountain climate characteristic. The administrative jurisdiction of Lijiang municipality include the ancient city zone, Yulong Naxi Autonomous County, , , and Ninglang Yi Nationality Autonomous County. At the end of 2005, its total population was 1.1 million, including minority population of 0.7 million. Naxi, Yi, Lishi, Bai and Pumi minorities represent relatively large population. Total GDP of the city was RMB 6 billion in 2005, 10.8% increase from the previous year.

4) Wenshan Wenshan Prefecture is located in the south eastern part of Yunnan Province, bordering Vietnam on the south. The total area of the prefecture is 31,456 km2 and 95% of the total area is mountainous and semi-mountainous area. Low-latitude plateau, monsoon climate prevails over Wenshan Prefecture, with no severe cold winter. Main grain crops of the prefecture include rice, maize, wheat and potato. Products such as peanut, flue-cured tobacco, hot pepper, pseudo-ginseng, fibrous crop, and cotton are specialized and exported. Wenshan Prefecture consists of eight counties, i.e., Wenshan, Yanshan, Xichou, Malipi, Maguan, Qiubei, Guangnan and Funing. By the end of 2005, there were 114 towns (townships), including 17 minority towns (townships) with total population of 3.3 million. Total GDP of the prefecture was RMB 15 billion in 2005, 13.1% increase from the previous year.

5. Environmental and Social Safeguards Specialists Mr Andres Liebenthal (MIGIE) Mr Bekir A. Onursal (EASRE) Mr Juan D. Quintero (EASRE) Mr Chaogang Wang (EASCS) Mr Yiren Feng (EASCS)

6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts:

OP4.01 Environmental Assessment (EA). The EA reports have been prepared for all project components, which satisfy the Bank’s requirements for OP.4.01. The project would have overall positive environmental and social impacts by mitigating pollution caused by untreated wastewater and uncontrolled dumpsites. In addition to pollution abatement, the project will bring positive impact on aquatic ecology and water quality for the rivers in the project area. The investment has no adverse impacts on water resources and on residential areas. Other key environmental impacts include: disposal of sludge from the WWTP, leachate collection and disposal, selection and construction of resettlement sites.

OP4.04 Natural Habitats. The subprojects will not bring any negative impact on sensitive sites, critical natural habitats or protected areas. Under the project, integrated control and the treatment of rivers and municipal environments, wetland conservation, lakeshore ecological restoration, integrated treatment and control of micro-watersheds will be implemented. This will enhance pollution control and ecological environmental protection, which is important for natural habitats. The project will also help to consolidate the objectives of the 11th Five Years Plan i.e. improving the ecological environment of key watersheds and natural habitats, and enhancing the living standards of local people.

OP4.11 Physical Cultural Resources. Cultural property exists in the city but no impact has been identified in the project area. The EA report includes construction clauses with explicit procedures in case of finding cultural property during the construction period. Lion Mountain Park which was designed by the UNESCO as world cultural heritage list is located outside of the Ancient Lijang Town.

OP4.12 Involuntary Resettlement. Borrower prepared the Resettlement Action Plan (RAP) for project activities that are acceptable to IBRD. The proposed investment would affect 1,554 households while 6,587 persons will be affected by involuntary resettlement. Project activities will require land acquisition for a total of 2,292 mu of collective land and 2,326 mu of state-owned land, moreover, 80,721 square meters of housing areas will be demolished. RAP has included land development program, land sale, the use of revenues from land sales and compensation.

OP4.10 Indigenous People. Yunnan is renowned for its diverse ethnic minority groups. In the four project municipalities and prefectures, 13 ethnic minority groups will be affected. Social Assessment (SA) Report has been prepared in accordance of OP 4.10, based on extensive surveys, public forums and interviews with the affected indigenous populations. In addition, a separate analysis has been finalized and included in the SA report by the China Cross-Cultural Consulting Center, Sun Yat-Sen University (CCCC) which conducted a field survey to identify the features of project areas, social impacts, benefit mechanism on the indigenous peoples (IPs) involving 34 subprojects.

OP4.37 Safety of Dams. The proposed project does not involve any activities to construct or rehabilitate dams. However, four reservoirs in Wenshan Prefecture and two in Dali Prefecture provide water resources to several project towns, thereby triggering the Bank’s Safety of Dams Policy. An independent expert from Nanjing Institute has conducted a review of the dams in the project area and found that Qinhuadong Reservoir – triggered by the integrated management of Putting River in Funing County subcomponent – is currently the only dam that may need to improve its operational capacity. Further follow-up actions will be discussed with the Funing authorities. In addition, operations manual and emergency plans for all the related dams will be discussed and agreed with the relevant authorities.

OP7.50 Projects on International Waterways. Er’hai Lake in Dali discharges water to Mekong River through its tributary of Yangbi River. Wenshan and Malipo Counties are part of the catchment of the Red River, which flows into Vietnam. The two counties discharge water into the Red River through an upper reach tributary. Pollution reduction achieved through the implementation of the proposed components will benefit the two international rivers. The Bank has been assisting Yunnan Province in notifying riparian countries according to the Bank’s policy procedures. Currently, the Bank is awaiting the decision of the Chinese Government on ways to proceed (i.e., whether the notification will be issued by the Government of China or by the Bank on their half).

BP17.50 Public Disclosure. The Bank's disclosure requirements have been followed. All drafts of the EAs, RAPs, were disclosed in Washington DC by Nov 2, 2007.

All the EA reports in Chinese have been disclosed locally as follows:  Consolidated EA: announcement was made in the Yunnan Daily newspaper informing that the draft CEA has been prepared and where it is available for public; the EA-summary was linked to the YEPB's website on October 24, 2007.  For all the subcomponents in Wenshan Prefecture, announcement was made through the Wenshan Daily Newspaper informing the draft EAs have been prepared and where to locate draft EAs for public on October 12, 2007  For all the subcomponents in Dali, announcement was made through the Dali Daily Newspaper and Dali Government Website informing that the draft EAs has been prepared and where it is available for public around October 11, 2007.  For Yulong stormwater drainage system and Lijiang city wastewater subcomponent, announcement was made through the Lijiang Daily Newspaper on October 14, 2007 informing that the draft EAs has been prepared and where it is available for public.  EA report for Huaping’s wastewater and sewer components through the Lijiang Daily Newspaper on October 17, 2007.  EA report for solid waste managements in Lijiang was disclosed through the Lijiang Daily Newspaper on October 12, 2007 and EA report on Lion Mountain components in Lijiang was disclosed through the same newspaper on November 18, 2007.  FOR all the subcomponents in Kunming Municipality, announcement was made through Kunming Daily Newspaper on October 12m 2007 informing that the draft EAs has been prepared and where it is available for public.

All Chinese RAP documents have also been disclosed locally, the details are shown in the table below.

Cities Media Timing Location Kunming Kunming Daily News Paper 2007-08-31 PMO & government Web Wenshan Wenshan Daily News Paper 2007-08-29 PMO & government Web Dali Dali Daily News Paper 2007-09-03 PMO & government Web Lijiang Lijiang Daily News Paper 2007-09-12 PMO & government Web

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project is expected to bring significant positive benefits for the environment, public health and tourism-based economy due to improved sanitation services and capacity. Wastewater treatments and landfills are new for the city, but appropriate technologies have been chosen to meet the national environmental standards at acceptable costs.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The proposed project is built upon the experience gained from implementing the first Yunnan Environment Project financed by the Bank. During project preparation, alternative facility locations and treatment technologies were explored and considered.

In terms of minimizing the impacts associated with involuntary resettlement, efforts have been made during project planning and design. The resettlement impacts have been significantly reduced through optimizing the project design and implementation arrangements. These are described in details in Section 1.4 of Summary RAP and each sub-RAP.

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Environmental Impact: In order to maximize environmental benefits and to avoid, minimize and mitigate potential short-term negative environmental impact, stand-alone EMP was prepared. The EMP includes detailed information on: environmental management; supervision mechanism and institutional arrangements; mitigation measures; environmental monitoring plans; training plans; estimated budget allocations necessary to implement the mitigation measure; monitoring plans; and ways to strengthen client capacity. Based on the findings of EIA report, the EMP will be incorporated into bidding and contract documents to ensure that obligations are clearly communicated to contractors. Bidding documents will also include environmental management as one criterion for selecting contractors. Contractors will be obliged to follow appropriate environmental, health, and safety standards to reduce associated risks during construction and operation. For each project component, PPMOs, Municipal/Prefecture PMOs and County PMOs will take the responsibility for environmental management and compliance with required environmental standards during construction and operation periods. Yunnan PMO is a repeated borrower and demonstrates rich experiences and capacity to plan and implement the mitigation measures described above. Each project owner will either include environmental specialists as staff or engage environmental specialists for the supervision, inspection, coordination and management of environmental performance, in order to ensure implementation of EMP and compliance with regulatory and project requirements for pollution control and environmental protection.

An environmental monitoring program for the construction and operation phases has been designed and included in the EMP. The monitoring program covers air, water quality, noise level, sewage, dredged sediments, soil erosion, sludge and leachate disposal and management etc., with specific requirement on parameters, frequencies, time, locations, responsible agencies and estimated costs. The program also entails reporting and response procedures to ensure that appropriate actions shall be taken, in response to the findings of the monitoring. Monitoring reports will be compiled regularly and submitted to the PMO, all relevant agencies and the World Bank.

In order to ensure the effective implementation of such measures/plans, the EMP includes training programs for professional, managerial and technical personnel from the government, project proponents and operational units, environmental institutions, contractors, and construction supervisors as part of capacity building. Mandatory environmental training for contractors and construction supervisors will be held prior to the commencement of construction.

Involuntary Resettlement: The provincial PMO and Lijiang PMO have in the past implemented Bank projects and have resettlement specialists. However, some implementing agencies, particularly at prefecture and county levels, such as Wenshan, Dali, has not had prior experience with the Bank-financed project. Training on the Bank’s social safeguards policy has been provided and additional training will be provided. An independent consultant to monitor resettlement will be contracted under the project, and a semi-annual report will be prepared to inform the Bank supervision teams of resettlement progress.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Environmental Assessment: Two rounds of public consultation were conducted in each of the four project Municipalities or Prefectures during the preparation of the EAs; the first round was conducted during the EIA TOR preparation stage, the second round was conducted during the draft EIA report stage. Both rounds of public consultation focused primarily on the project-affected people and beneficiaries of different age groups, genders, educational backgrounds and occupations, relevant government organizations and experts from academic or public institutes on various environmental and socio- economic issues have also been consulted. The consultation was primarily through questionnaire surveys, public meetings of key affected people and other stakeholders, supplemented by special seminars or interviews. Public concerns and opinions expressed are addressed in the EAs and incorporated into the project design and environmental mitigation measures.

The project’s basic information, major anticipated adverse impacts and mitigation measures have been disclosed to the public through bulletins, posters, as well as local newspapers, TV and radio broadcasting. The draft final EA reports and EMPs have also been made available at the public libraries, PMOs and on the websites in each of project cities and Prefectures. The draft English version consolidated EA documents were submitted to the Bank in Oct 2007. The final EA Report, EMP, REA and EA Summary were submitted to the Bank in Nov 2007 and found to be satisfactory. The EA Reports will be sent to the Bank’s Infoshop in November2, 2007.

Resettlement Action Plan. Public consultation and participation was a key element in resettlement planning. The affected residents, business people and district governments participated in the census, inventory and formulation of the livelihood rehabilitation strategy, measures and relocation sites. Their feedback has been incorporated in determining the compensation rates and livelihood rehabilitation measures. The RAP contains a list of major consultation sessions. Participation and consultation process will continue in resettlement implementation. To facilitate active public participation, following complains handling mechanism has been established:

Step 1: Displaced persons can appeal by verbal or paper way to village committee or project demolition implementation institution if they are not satisfied with resettlement plan. For verbal appeal, village committee and demolition institution should record in a written form and solve the problems within two weeks; Step 2: If displaced persons are still not satisfied with the decision of Phase 1, they can appeal to municipal PMOs/ administration institutions after receiving decision notice and the latter should resolve it within two weeks; Step 3: If displaced persons are still not satisfied with the decision of municipal PMOs/ administration institutions, they can appeal to subproject leading team or local municipal construction commission after receiving decision notice. T he latter should handle the case within two weeks; Step 4: If displaced persons are still not satisfied with the decision of subproject leading team or local municipal construction commission, they can bring a lawsuit to a civil law court in case of objection to any aspect of the resettlement plan after receiving decision notice.

B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 10/29/2007 Date of "in-country" disclosure 10/24/2007 Date of submission to InfoShop 11/02/2007 For category A projects, date of distributing the Executive 05/01/2007 Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 09/07/2007 Date of "in-country" disclosure 08/31/2007 Date of submission to InfoShop 11/02/2007 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? N/A Date of receipt by the Bank 01/09/2008 Date of "in-country" disclosure 01/09/2008 Date of submission to InfoShop 01/11/2008 * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: IPP elements have been incorporated into overall project design. Therefore individual IPDP is not required.

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

OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? OP/BP 4.04 - Natural Habitats Would the project result in any significant conversion or degradation of N/A critical natural habitats? If the project would result in significant conversion or degradation of other N/A (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential Yes adverse impacts on cultural property? OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as Yes appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? If the whole project is designed to benefit IP, has the design been reviewed N/A and approved by the Regional Social Development Unit or Sector Manager? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process Yes framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? OP/BP 4.37 - Safety of Dams Have dam safety plans been prepared? Yes Have the TORs as well as composition for the independent Panel of Experts N/A (POE) been reviewed and approved by the Bank? Has an Emergency Preparedness Plan (EPP) been prepared and arrangements N/A been made for public awareness and training? OP 7.50 - Projects on International Waterways Have the other riparians been notified of the project? Yes If the project falls under one of the exceptions to the notification N/A requirement, has this been cleared with the Legal Department, and the memo to the RVP prepared and sent? Has the RVP approved such an exception? N/A The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank’s Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? D. Approvals

Signed and submitted by: Name Date Task Team Leader: Mr Takuya Kamata 12/10/2007 Environmental Specialist: Mr Yiren Feng 12/10/2007 Social Development Specialist Mr Chaogang Wang 12/10/2007 Additional Environmental and/or Mr Andres Liebenthal 12/10/2007 Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Panneer Selvam Lakshminarayanan 12/10/2007 Comments: Sector Manager: Mr Keshav Varma 12/11/2007 Comments: No comment.