Resettlement Planning Document

Resettlement Plan Document Stage: Revised Project Number: 35340 August 2008

People's Republic of China: Fuzhou Environmental Improvement Project Nantai Island Creek Rehabilitation Component -

Longjin River and Yuejin River Rehabilitation Works

Prepared by Fuzhou Engineering Consulting Center Fuzhou Urban Visual Construction and Development Company

The resettlement plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. CURRENCY EQUIVALENTS (as of 9 May 2008) Currency Unit – Yuan (CNY) CNY1.00 = $0.14285 $1.00 = CNY7.0005

ABBREVIATIONS AAOV – average annual output value ADB – Asian Development Bank APs – affected persons DRO – demolish and resettlement office EA – executing agency FB – financial bureau FDHDED – Fuzhou Diyuan Housing Demolition Engineering Department FMG – Fuzhou Municipal government FMRDC – Fuzhou Municipal Reform and Development Commission FUMRB – Fuzhou Urban Management Regulatory Bureau FPMO – Fuzhou project management office FUVCDC – Fuzhou Urban Visual Construction and Development Company GDP – Gross domestic product IA – Implementing agency LAR – land acquisition and resettlement LRB – land and resources bureau M&E – monitoring and evaluation NEULADRH – New East Urban Land Acquisition & Demolition and Resettlement Headquarter of Fuzhou City NGO – Non government organization PRC – People’s Republic of China RP – resettlement plan

WEIGHTS AND MEASURES

mu – 0.033 ha Ha – hectare km – kilometer km2 – square kilometer m – meter m2 – square meter m3 – cubic meter t – ton

NOTES (i) The fiscal year (FY) of the Government ends on 31 December. (ii) In this report, "$" refers to US dollars.

CONTENTS

KEY TERMINOLOGY ...... 7

EXECUTIVE SUMMARY...... 8

MAP1: LOCATION OF PROJECT SITE ...... 10 MAP2: PROJECT LAYOUT...... 11

1．PROJECT DESCRIPTION ...... 12

1.1 PROJECT BACKGROUND...... 12 1.2 PROJECT DESCRIPTION ...... 12 1.2.1 Geological Location...... 12 1.2.2 Works Scope ...... 13 1.2.3 Project Costs and Implementation Schedule ...... 13 1.2.4 Economical and Social Benefits of the Project ...... 13 1.3 IMPACT AREAS ...... 14 1.4 RP PREPARATION...... 14 1.4.1 Basis and Objective of the RP ...... 14 1.4.2 The Methodology of the RP Preparation...... 15

2 RESETTLEMENT IMPACTS...... 15

2.1 MEASURE OF MINIMIZE LAR IMPACTS ...... 15 2.1.1 Measures of Minimize LAR Impacts during the Project Design Period...... 15 2.1.2 Measures of Minimize LAR Impacts during the Project Implementation Period ...... 17 2.2 PROJECT IMPACT SURVEY ...... 17 2.2.1 Survey Contents...... 17 2.2.2 Survey Methodology...... 18 2.3 FINDINGS OF THE RESETTLEMENT IMPACT MEASUREMENT SURVEYS ...... 18 2.3.1 Land Use...... 20 2.3.2 Houses and Attached Facilities ...... 20 2.3.3 Individual Industrial and Commercial Shops...... 21 2.3.4 Enterprises and Institutions...... 27 2.3.5 Public Service Facilities ...... 27 2.3.6 Affected Population...... 27 2.3.7 Special Infrastructures...... 31 2.3.8 Scattered Trees ...... 32 2.3.9 Cultural Relics and Vulnerable Groups...... 32 2.4 IMPACTS ASSESSMENT ...... 32

3 SOCIAL ECONOMIC PROFILES OF THE IMPACT AREAS ...... 33

3.1 SUMMARY DESCRIPTIONS ON SOCIAL ECONOMICAL STATUS OF THE IMPACT AREAS...... 33 3.2 SOCIAL ECONOMIC PROFILES OF THE AFFECTED TOWNSHIPS AND VILLAGES...... 34 3.3 SOCIO-ECONOMIC STATUS OF AFFECTED HOUSEHOLDS ...... 37 3.3.1 Socio-economic Profiles of Affected Household ...... 37 3.3.2 Desires of APs ...... 39

3 3.4 IMPACTS OF LAR ON APS’ SOCIOECONOMIC STATUS ...... 39 3.4.1 Land Loss ...... 39 3.4.2 House/Apartment ...... 40 3.4.3 Enterprises/Businesses/Shops...... 40 3.4.4 Income Losses...... 40

4 LEGAL FRAMEWORK AND RESETTLEMENT POLICIES ...... 41

4.1 PRC LAWS & REGULATIONS AND POLICIES RELATED TO LAR ...... 41 4.1.1 Applicable Laws & Regulations and Decrees ...... 41 4.1.2 Relevant Clauses of the Laws & Regulations and Decrees...... 42 4.2 THE ADB INVOLUNTARY RESETTLEMENT POLICIES...... 43 4.2.1 Guidelines and Policies...... 43 4.2.2 The ADB Involuntary Resettlement Policies...... 43 4.3 POLICY DIFFERENCES BETWEEN THE ADB AND PRC...... 44 4.4 PROJECT POLICIES ON THE LAR ...... 46 4.4.1 Eligibility for Compensation...... 46 4.4.2 Resettlement Principles ...... 47 4.4.3 Compensation Standards ...... 48 4.5 COMPENSATION FUND FLOW AND TIMING...... 51 4.6 ENTITLEMENT MATRIX ...... 51

5 RESETTLEMENT SCHEME AND INCOME REHABILITATION...... 55

5.1 RESETTLEMENT TARGETS...... 55 5.2 RESETTLEMENT POPULATION ...... 55 5.2.1 Economic Rehabilitation Population ...... 56 5.2.2 Resettlement Population of Housing demolition ...... 56 5.3 OVERALL RESETTLEMENT SCHEME...... 56 5.4 RESETTLEMENT PLAN ...... 56 5.4.1 Production Resettlement Plan and Income Restoration Strategy...... 57 5.4.3 Rehabilitation Plan for the Affected Enterprises...... 64 5.4.4 Rehabilitation Plan for the Affected Institutions ...... 67 5.4.5 Rehabilitation Plan for the Affected Shops ...... 67 5.4.6 Rehabilitation Plan for Infrastructures and Ground Attachments ...... 69 5.4.7 Rehabilitation Plan for Other Public Service Facilities ...... 70 5.5 RESETTLEMENT SAFEGUARD MEASURES FOR VULNERABLE GROUPS ...... 70 5.6 GENDER ISSUE DURING RESETTLEMENT AND INCOME RESTORATION ...... 71

6 PUBLIC PARTICIPATION AND CONSULTATIONS...... 71

6.1 IDENTIFICATION OF STAKEHOLDERS ...... 71 6.2 APPROACHES AND MEASURES FOR PUBLIC PARTICIPATION...... 72 6.2.1 Approaches ...... 72 6.2.2 Measures ...... 72 6.3 PUBLIC CONSULTATION DURING THE PROJECT PREPARATION...... 73 6.4 INFORMATION DISCLOSURE ...... 76 6.5 PUBLIC PARTICIPATION DURING THE RP IMPLEMENTATION...... 76

4 6.5.1 Participation in House Relocation ...... 76 6.5.2 Participation in Disbursement and Management of Compensation Funds ...... 77 6.5.3 Participation in Project Construction...... 77 6.6 WOMEN PARTICIPATION ...... 77

7 GRIEVANCE PROCEDURES...... 78

7.1 POSSIBLE COMPLAINTS AND THEIR RESOLVING...... 78 7.2 MEASURE TO REDUCE GRIEVANCES...... 78 7.3 GRIEVANCE CHANNEL AND PROCEDURE...... 79

8 INSTITIONAL ORGANIZATION AND RESPONSIBILITIES...... 81

8.1 INSTITUTIONS ENGAGED IN RESETTLEMENT PLANNING ...... 81 8.2 RP IMPLEMENTATION AND MANAGEMENT ORGANIZATIONS AND THEIR RESPONSIBILITIES ...... 81 8.2.1 Management Organizations and Responsibilities...... 81 8.2.2 Implementation Organizations and Responsibilities...... 82 8.2.3 Relevant Organizations...... 84 8.3 SUPERVISION AND MONITORING ORGANIZATIONS...... 84 8.4 RESETTLEMENT MANAGEMENT SYSTEM...... 85 8.5 STAFFING AND FACILITY PROVISION FOR RESETTLEMENT ORGANIZATIONS ...... 85 8.5.1 Staffing ...... 85 8.5.2 Provisions of Equipment Facilities ...... 86 8.6 TRAINING PLAN...... 86 8.6.1 Resettlement Management Staff Trainings ...... 86 8.6.2 Production Skill Trainings for APs ...... 87 8.7 MEASURES FOR STRENGTHENING RESETTLEMENT ORGANIZATION ...... 87

9 ENVIRONMENT PROTECTION AND MANAGEMENT...... 87

9.1 THE NECESSITY OF ENVIRONMENT PROTECTION...... 87 9.2 DEMOLITION CLEANING ...... 88 9.3 ENVIRONMENT MANAGEMENT IN RESETTLEMENT SITES ...... 88

10 MONITORING AND EVALUATION ...... 88

10.1 INTERNAL MONITORING ...... 88 10.2 EXTERNAL MONITORING ...... 89 10.3 POST ASSESSMENT OF THE RESETTLEMENT...... 90

11 RESETTLEMENT BUDGET ...... 90

11.1 BASIS AND PRINCIPLES OF RESETTLEMENT COST ESTIMATE ...... 90 11.1.1 Main Basis ...... 90 11.1.2 Principles ...... 90 11.2 CALCULATION OF RESETTLEMENT BUDGET ...... 91 11.2.1 Land Requisition and Resettlement Costs ...... 91 11.2.2 Taxes and Fees ...... 91 11.2.3 Contingency Costs...... 91 11.2.4 Total Resettlement Costs...... 92 11.3 BUDGET FUNDING AND DISBURSEMENT PLAN...... 92

5 11.4 MANAGEMENT AND AUDITING OF RESETTLEMENT FUND ...... 93

12 RP IMPLEMENTATION SCHEDULE...... 93

12.1 ACTIVITIES PRIOR TO RESETTLEMENT ...... 93 12.2 ACTIVITIES DURING RESETTLEMENT ...... 94

APPENDICE...... 97

1 RELEVANT CLAUSES OF CONCERNED PRC LAWS & REGULATIONS AND DECREES.....97 2 RESETTLEMENT INFORMATION BOOKLET...... 111 3 TERMS OF REFERENCES (TOR) FOR ENTERNAL MONITORING AND EVALUATION .... 115

6 KEY TERMINOLOGY

The Resettlement Plan (RP) was prepared according to the relevant laws and regulations of the P.R. China, Fujian Provincial Government and Fuzhou Municipal Government and the ADB’s policies on Involuntary Resettlement. The purpose of the preparation of the RP is to work out a resettlement and rehabilitation action plan for the project affected people (APs) so as to ensure that the APs will benefit from the proposed project and improve their standard of living or at least to rehabilitate their standard of living after the completion of the project. Meanwhile, the affected business and production resources (including shops and enterprises), common properties and infrastructure and cultural asset will also be improved or at least remained to their original level before the project. Affected Persons： Affected persons (APs) include any person, household, enterprise or private unit that has following changes caused by the project: (i) Living level is subjected to negative influence; (ii) House, land (including house site, commercial land, agricultural land, woodland or grassland), water resource or any other movable property or real property gained or owned are subjected to restrictive and negative influence, wholly or partially, permanently or temporarily, so that their rights, qualifications or interests are subjected to affect; (iii) Businesses, occupations, works or living places or environments, which may be moved or may not be moved, are subjected to negative influence. Resettlement refers to the arrangement of the production or living of the APs so as to ensure that they can benefit from the project. It mainly includes: 1) Relocation of the living site; 2) Creation of new jobs for those whose employment is affected. 3) Rehabilitation (or compensation) of the affected land, working space, trees and infrastructures; 4) Rehabilitation provided to the PAPs whose living standard (living quality) is detrimentally affected (for instance, the contaminative or noxious gas etc.) due to the land acquisition and resettlement. 5) Rehabilitation or compensation provided to affected individuals or public enterprises. 6) Rehabilitation of affected culture or common properties. Rehabilitation refers to the rehabilitation of the capacity of the APs to continue the production activities or improve the standard of living of the APs or at least maintain it at the original level before the project. Replacement Cost: Replacement Cost refers to a method of asset evaluation that uses market price to replace lost property or uses its closet equivalent, adding any transaction cost, for example, administration cost, tax, registry fee and the cost for gaining (owning or using) qualification. If the standard is not stipulated in any national law, a replacement cost is necessary to be complemented to it. The replacement cost is determined on the basis of the higher one of the current market price and the market price prior to property lost. In the absence of the functional market, a compensation structure shall be used to make the living level of APs recover at least to the level when losing property, moving or limiting use (of the property).The replacement cost for most of the properties to be lost can be determined; however, under a system of collective land ownership where market price does not exist, Chinese government has adopted complementary means besides the compensation for land to be lost—resettlement subsidies can be increased (as FMG did, not limited to the stipulated times of average annual output value of land to be acquired), and reemployment training is provided for APs. In short, the key objective is to ensure that land loser’s livelihood and income level at least main the same level as that before the project or improved.

7

Executive Summary

1. In order to improve the flood prevention ability of Nantai Island creeks and treat the environmental pollution on both banks including the regional ecological environment, Fuzhou Municipal Government (FMG) intends to utilize part of the Asia Development Bank (ADB) loan for the Fuzhou Environment Improvement Project (FEIP) to launch a comprehensive rehabilitation and flood control improvement project of the Nantai island –Nantai Island Creek Rehabilitation Component, to be implemented by Fuzhou Urban Visual Construction and Development Company as the implementing agency. Longjin River and Yuejin River Rehabilitation Works is one sub-component of Nantai Island Creek Rehabilitation Component. The permanent requisition of land for this sub-component will directly affect 10 villages of 2 townships in Cangshan District; the sub-component will permanently requisition 420.97 mu of land (including 256.63mu state-owned land and 164.34mu collectively owned land), comprising 38.95mu farmland that will affect 194 persons in 46 farmer households. No temporary occupation of land will be required. A total of 197,636m2 residential housings/attached facilities and non-residential buildings/attached facilities will be demolished. Demolishment of 153,652m2 residential housings or attached facilities will directly affect 1531 persons in 561 households, including 532 households with the total population of 1433 are required to be resettled. Meanwhile, production structures & warehouses of 29 enterprises, part facilities of 4 schools, 1 research institution and business facilities of 33 stores will also be demolished, with the total demolishment area of 43,984m2. Total of 1,168 employees will be affected due to the production & operation suspending or business pending & stopping caused by the demolishment of enterprises and shops. In addition, the project will demolish some public service facilities like pump station, transforming house, clinic, village office building, elders’ entertainment center, sports yard, public toilet and garbage collection yard. 2. The impacts from LAR were minimized by close consultation with local officials and the village committees at the feasibility study report (FSR) stage, and alternative schemes had been compared and the optimized scheme selected. The present Resettlement Plan (RP) is prepared in accordance with all necessary PRC state legislation Provincial and Municipal related policies related to LAR and also with ADB’s Policy on Involuntary Resettlement. The RP has been updated and prepared on the basis of the project preliminary design and the RP for 13 creek rehabilitation of Nantai island (dated January 2005), and it will be updated based on the detailed engineering design if necessary. 3. Based on PRC land legislation and policy, the resettlement principles established for the sub-component of the Project are: (i) compensation and entitlements provided to the affected persons (APs) are adequate to at least maintain their “without project” standard of living, and with prospect of improvement; (ii) All APs will be provided with resettlement assistance and granted fair compensation based on their title status; (iii) where post- requisition cultivated land per capita is not sufficient to maintain livelihood, compensation in cash or kind for replacement land for other income-generating activities with be provided for the APs; (iv) all the APs will be adequately informed on eligibility, compensation rates and standards, livelihood and income restoration plans, project timing, and will be involved in the RP implementation process; (v) no land requisition will take place unless replacement land or sufficient compensation for resettlement is given to the APs; (vi) Fuzhou Municipal Government (FMG), the executing agency (EA) and an independent / third party will monitor compensation and resettlement operations; (vii) vulnerable groups will receive special assistance to ensure they are better off, so that the APs listed in the RP will have the opportunity to benefit from the project; (viii) RP will be combined with the overall City / District planning; and (ix) the resettlement budget will adequately cover the full aspects of all compensation required. 4. Compensation standards for permanent land requisition are determined at the integrated compensation rate of CNY 80,600/mu for the collectively owned farmland

8 requisitioned by the project in accordance with FMG policy, which includes land compensation, resettlement subsidies and compensation for green crops, beyond that, the affected villages are entailed to obtain 10% reservation farmland fund (10% of the total farmland to be acquired times CNY1million/mu) for the purpose of production and rural residents’ social security. Compensation standards for houses demolition are determined based on their property right status and construction time. The compensations are comprised of the house location price, replacement costs, and compensation for auxiliary facilities and decorations, in addition, the APs are qualified to obtain relocation incentives and subsidies if they can sign the resettlement agreement and relocate within the negotiation period. The affected families can select cash resettlement or asset for asset resettlement at their option. 5. The people affected have been notified about the key elements of the RP during meetings, interviews, focus group discussions, public consultation workshops, and community consultation meetings. Local representatives have participated in the planning process and concerns have been integrated into the RP. With the assistances of relevant institutions, the Fuzhou Project Management Office (PMO) will be responsible for the supervision of RP implementation, further consultation and grievance redress. The grievance redress procedures have been clearly described in the present RP. 6. Resettlement and income restoration strategies include cash compensation, skills training for the APs, project related employment and other measures. The APs from whom the land is acquired will find employment in either intensified farming work or non-agricultural employment to increase their income after related skills training. A budget of CNY300,000 for the skills training of APs has been allocated. 7. The land requisition and resettlement is scheduled to begin in August, 2008 and to be completed in January, 2009, hence lasting for 7 months. The civil works will not take place before compensation for the APs are paid in full. In addition to the planed internal monitoring and supervision, and in order to ensure successful implementation of the RP, an independent external monitoring agency that has been hired will conduct monitoring once every half a year. 8. The budget for the land requisition compensation and resettlement fee is estimated at CNY377.19million and comprises LAR costs, relevant taxes and fees, and a 10% base cost contingency. The resettlement plan budget amounts to about 84% of the total budget for the Project subcomponent.

9

MAP1: LOCATION OF PROJECT SITE

10

MAP2: PROJECT LAYOUT

11 1．PROJECT DESCRIPTION

1.1 Project Background

1. Nantai Island is located between the north and south ports in the lower reaches of the Min River. In terms of jurisdiction, the low-lying Nantai Island belongs to the Cangshan District of Fuzhou City. The administrative area of the island is 142 km2, with the total land coverage of about 118.2 km2.The population in Nantai Island totals 352,000, including 187,700 of urban residents and 164,300 of rural residents. 2. Nantai Island has been playing a very important role in the urban development of Fuzhou Municipality as the implementation of the urban development strategy of “East Expansion and South Development”. According to the overall urban development plan, Fuzhou Municipal Government and Cangshan District Government are carrying out the Nantai Island development strategy to promote local socio-economic development. Nantai Island Creek Rehabilitation Project is one of key infrastructure programs to improve the natural conditions and the investment environment. Fuzhou Municipal Government has accorded great importance to this project for the betterment of the quality of life of local people. 3. There are nine flood dikes in Nantai Island that include nine bank sections with the total length of 47.92 km. Their primary function is to protect people’s lives and property. The four major dikes, namely the Jianxin North Dike, Jianxin South Dike, Gaishan North Dike and Gaishan South Dike, each protect a minimum area of 10,000 mu (667 ha). The remaining dikes each have a protection area of between 1,000 mu and 10,000 mu (66.7~667ha). There are five existing drainage pumping stations with 14 sets of generators, with a total capacity of 1,178 kw, and 14 facilities. In spite of the 39 floodgates (15 along the north bank and 24 along the south bank, the drainage facilities are so weak that a rain will always cause flooding to a more or less extent. Moreover, many of the Nantai Island inland rivers suffer from serious siltation, which, together with many bends, has contributed to water logging. The drainage capacity of 80% of the inland rivers is lower than the standard of once every two years 4. Existing sedimentation and serious human-induced obstruction of the inland rivers have caused the decrease of flood drainage capacity year after year, therefore the drainage capacity can no longer meet the demands of agricultural production and urban sustainable development. In this regard, the proposed Project will straighten the bends, broaden the waterways and dredge up the riverbeds so as to safeguard people’s lives and production and ensure the sustainable development of the local economy. Twelve (12) dominant waterways have been selected to be rehabilitated in order to enhance the flood control capacity of inland rivers, reduce disasters from water logging, improve the natural environment of Nantai Island, enhance the quality of life of local residents and develop an attractive investment environment. The rehabilitation work of Longjin river and Yuejin river is the sub-component of Nantai Island Creek Rehabilitation of Fuzhou Environment Improvement Project partly funded by the ADB loan. Longjin river work will include the rehabilitation of 3.373km long existing waterway and open up 1.207km long new waterway, while Yuejin river work will include the rehabilitation of 6.094km long existing waterway.

1.2 Project Description

1.2.1 Geological Location 5. Nantai Inland is located at the south part of Fuzhou City. Min river, the largest river in Fujian province, surrounds it. Geologic coordinates: east longitude 119°12′~119°19’, and north latitude 26°02′~26°05’. Longjing river and Yuejing river are situated at the northeast part and north part of Nantai Inland. Longjing river originates from Fujian Police College, through

12 Shangsan road, Nantai road, south Liuyi road and south Lianjian road, and flows into Min river at Jiangban village, while starting at Xiahu village on the west connecting Yangque river, Yuejing river flows through Zexu avenue, south Lianjiang road, and flows into north port of Min river at Puxia village. The location and layout of the work are indicated at Map 1 and Map 2.

1.2.2 Works Scope 6. Nantai Island Creek Rehabilitation has been included in Fuzhou Environment Improvement Project partly funded by the ADB loan. According to the chosen work scale, and waterlogging prevention standard and project construction task, the rehabilitation work of Longjin river and Yuejin river will consist of : i) rehabilitating 3.373km long existing waterway of Longjin river by river dredging and riverbank strengthening, opening up two sections of new waterway including one section of 0.82km long with the river bed width of 10.5m at Zhengjin road 80m down Longjin river lower reach and the another section of 0.387km long with the river bed width of 10.5m at the lower reach of Longjin river 175m down Jiangban Elementary School in order to discharge water of Long river into Min river; ii) rehabilitating 5.324km long existing waterway of Yuejin river by river dredging, riverbank strengthening and partly river waterway curve cutting and straightening; and iii) constructing one two-gates sluice with the dimension of 5mX2m each gate on Yuejin river at the juncture of Longjin river and Yuejin river.

1.2.3 Project Costs and Implementation Schedule 7. According to Preliminary Design of Nantai Island Creek Rehabilitation Project Funded By the ADB Loan prepared by Fujian Water Conservancy and Hydropower Survey & Design Institute, the total project cost is estimated at CNY 449.16 million, including the resettlement costs of CNY377.19million. 8. According to the preliminary design, the work will completed within 10 months starting from later 2008.

1.2.4 Economical and Social Benefits of the Project 9. The implementation of the proposed work is expected to bring about significant environmental and socioeconomic benefits by improving the natural environment of the impact areas, protecting people’s lives and properties from flooding, and improving the local investment environment. Especially farmland, factories, shops and other productive or living facilities in the project areas will be protected from flooding. After inland river rehabilitation, the areas of parks and scenic landscape will be increased greatly. 10. The specific benefits from both the construction and operation periods are anticipated as follows: 1) Construction Period z Project construction will generate new employment opportunities and incomes; and, z The procurement of construction materials and agricultural products from local communities will increase earnings of the local people. 2) Operation Period z Increased long-term employment opportunities and income will accrue to local communities. z The protection of farmland from flood disaster will reduce the loss of agricultural production and the income of local farmers. z Other socioeconomic benefits will include the improved natural and ecological environment, expanded landscaping and scenery, improved residential and urban environment, reduced water pollution, and improved the living and health conditions for local people. z The Project will also promote the tourism value in the use of improved environmental resource, and the investment environment.

13 1.3 Impact Areas

11. According to Preliminary Design of Nantai Island Creek Rehabilitation Project Funded By the ADB Loan prepared by Fujian Water Conservancy and Hydropower Survey & Design Institute, the layout of Longjin river rehabilitation work will start from from Fujian Police College, lines through Shangsan road, Nantai road, south Liuyi road and south Lianjian road, and ends at Jiangban village, while the layout of Yuejin river rehabilitation work will start from Shangqie village on the west, lines through Zexu avenue, south Lianjiang road, and ends at Puxia village. The main engineering works that will involve in LAR will include waterway curve cutting and straightening, river dredging and widening, riverbank strengthening and newly building and sluice building etc. In addition, some work activities such construction material preparation sites and earth borrowing pits etc are anticipated to temporarily affect land uses. 12. The land acquisition areas due to the project refer to unrecoverable areas on which the residents are seriously affected in production and living due to the project construction in land acquisition area. In this phase, the land acquisition affected area is determined according to the recommended plan of the project preliminary design phase, the on-site laying out and adjustment shall accord with the 1/2000 topographic map and the designed vertical and transversal profiles. The scope of land acquisition is within the width of a ten (10) meters zone along the both banks of these two rivers. The work impact areas cover 10 villages in 2 townships of Cangshan District.

1.4 RP Preparation

1.4.1 Basis and Objective of the RP 13. The project design and the RP preparation are based on the following documents: 1) “The Tenth Five-year” Program of Fujian Province National Economic and Social Development and Long- term Program for 2015 2) “The Tenth Five-year” Program of Fuzhou Municipality National Economic and Social Development and Long- term Program for 2015 3) Overall Urban Development Plan of Fuzhou City (2001-2020) 4) Statistical Yearbook of Fuzhou Municipality (2004-2006) 5) Preliminary Design of Nantai Island Creek Rehabilitation Project Funded By the ADB Loan prepared by Fujian Water Conservancy and Hydropower Survey & Design Institute(2007) 14. The policies to prepare RP are based on the followings: 1) PRC Laws and Regulations 2) Regulations and Decrees Issued by Fujian Province 3) Regulations and Decrees Issued by Fuzhou Municipality 4) The ADB’s Involuntary Resettlement Policy 15. The policy objectives to develop the RP have been taken into consideration and incorporated as follows: 1) Adopt the engineering, technical, economic measures to avoid or minimize the quantities of material goods to be removed and relocated; If the LAR is unavoidable, the effective measures should be adopted as possible to minimize the impact on the local residents caused by LAR; 2) In project preparation phase, conduct the socio-economic and prepare the RP; 3) The resettlement shall be based on detailed physical indices in terms of relocated material goods and compensation standard in order to increase or at least maintain the income and production levels for the APs; 4) The development resettlement model should be promoted. The resettlement plan in the rural areas shall be developed on the basis of land, supplemented with possible employment generating from the development of manufacture industry and service industry;

14 5) The APs and original residents in the resettlement sites are encouraged to participate in the resettlement planning; 6) The privilege will be taken to resettle APs in the original communities; 7) The APs and the existing residents in resettlement sites shall all be benefited from the project.

1.4.2 The Methodology of the RP Preparation 16. As the IA, FUVDC is responsible for overall the RP preparation. The RP is prepared based on: (i) review and discussion with authors of the relevant project reports, especially the feasibility study report (FSR) and preliminary design for the Project, environmental impact assessment (EIA) report, the original Nantai Island Creek Rehabilitation RP report (2005) that was prepared by the IA with assistance of TA consultants; (ii) a latest field survey on the project design area that was carried out in January to March 2008; (iii) consultations with the affected household; and (iv) the social economic survey for the APs conducted during March-April 2008. Engineering data for the RP are taken from the latest preliminary design and considered reliable. 17. During the RP preparation, the staffs from FUVDC, FDDED and Fuzhou Engineering Consulting Center together with the relevant authorities of Cangsha District have held several consultation meetings attended by the representatives from affected township governments, village committees, and representatives of the APs and affected institutions to get views from various affected groups, and to discus the relevant resettlement aspects including the resettlement options, livelihood rehabilitation plans, compensation standards of the laws & regulations and policies applicable to the project as well. The draft RP was developed. 18. The draft RP was improved and finalized based on the findings of detailed analysis on the impact extent and feasibility of proposed rehabilitation for each affected township in the affected area that was carried out in accordance with the resettlement requirements stipulated in the prevailing PRC’s laws, regulations and decrees and the ADB’s involuntary resettlement policy, and the revise comments of the relevant experts. The final RP endorsed by FMG is to be submitted through FPMO to the ADB for review and approval.

2 RESETTLEMENT IMPACTS

2.1 Measure of Minimize LAR Impacts

2.1.1 Measures of Minimize LAR Impacts during the Project Design Period 19. Since the project was initiated, the river rehabilitation work scheme has been revised and optimized for several times in order to minimize the impacts of the work construction on local social economy. The construction scheme optimization is aimed to minimize the land acquisition, property loss, demolish and resettlement, and to reduce the project as well. During the preliminary design stage, two alternative options of each river works have been considered to optimize the design: i) Longjin river works: Alternative 1 is to take the existing embankment alignment as planned during the FS stage, while Alternative 2 is to realign and straight two sections including Zhenjian and Jianbuan and to take the existing embankment alignment in other sections. ii) Yuejun river works: Alternative 1 is to take the existing embankment alignment as planned during the FS stage, while Alternative 2 is to realign and straight Xiahu sections and to take the existing embankment alignment in other sections. After making the integrated comparisons, Alternative 2 is better than Alternative 1 in terms of impacts and investment costs. Although the permanent land acquisition for Longjin and Yuejun respective under the Alternative 2 will require 1.93mu and 2.5mu respectively more than Alternative 1, the demolition areas for Longjin and Yuejun respective under the Alternative 2 will be 2.491㎡ and 4,102 ㎡ respectively less than Alternative 1. Table 2.1-1 and 2.1-2 detail the comparisons of Alternative 1 and Alternative 2. The optimization of the

15 design has taken the LAR impact minimization as one of key factors to avoid use lands as possible and to reduce the housing demolition areas as much as possible. In addition, the detailed engineering design is to be optimized to shorten the construction period and reasonably schedule the housing demolition relocation with the requirement of construction in order to reduce the losses of APs’ properties as possible. For example, the work activities that will destroy of the farming land are to be carried out in the farm slack season, and the crops can be harvested after they are matured. The land within 10 m from both sides of the rivers that is to be permanently acquired is to be fully used as possible for stacking construction materials or building temporary houses for workers to avoid occupancy of lands for temporal uses. The inconvenience impacts caused by the constructions on the local residents that can be minimized through reasonably designing work construction schedule are to be considered in the detailed engineering design. In general, considering the convenience of local residents, the restoration of access roads and the facilities of water supply and power supply shall be timed right after their destroy in the design to ensure functioning of these facilities to service the residents. Table 2.1-1 Comparisons of Alternatives for Longjin River Works No. Item Alternative 1 Alternative 2 1 Descriptions To take the existing To realign and straight two embankment alignment as sections including Zhenjian planned during the FS stage and Jianbuan and to take the existing embankment alignment in other sections 2 Area of Farming Land 18.32 20.25 Acquisition(mu) 3 House Demolition 74,416 71,925 Area（㎡） 4 Quantity of Works Earth excavation and Earth excavation and backfilling: 327,258.21 m3 backfilling: 351,751.18 m3、 Stone works: 36,112.31m3 Stone works: 35,507.27m3 Concrete works: 8,112.36m3 Concrete works: 7,027.69m3 5 Total Costs 20915.3 20661.2 （CNY10,000） 6 Conclusion Not selection Selection

Table 2.1-2 Comparisons of Alternatives for Yuejun River Works No. Item Alternative 1 Alternative 2 1 Descriptions To take the existing To realign and straight Xiahu embankment alignment as section and to take the planned during the FS stage existing embankment alignment in other sections 2 Area of Farming Land 16.2 18.7 Acquisition(mu) 3 House Demolition 129,813 125,711 Area（㎡） 4 Quantity of Works Earth excavation and Earth excavation and backfilling: 401,332.17 m3 backfilling: 412,925.31 m3 Stone works:42,152.23m3 Stone works: 41,682.45m3、 Concrete works: 8,532.72m3 Concrete works: 8,249.9m3 5 Total Costs 24632.5 24254.4 （CNY10,000）

16 6 Conclusion Not selection Selection 2.1.2 Measures of Minimize LAR Impacts during the Project Implementation Period 20. The lands to be occupied in this work are distributed in linear form. As for the whole project area, the project construction will have not considerable impacts on the local industrial and agricultural production, people’s livelihood and social economy. The LAR along the linear area will not bring about much impact. But for minimizing the impacts of the constructions on the local areas as possible, special attention will be paid to set out the construction site and choose the construction scheme, and prevent the unnecessary land acquisition and housing demolition. The following measures shall be adopted: 1) Before demolition, the resettlement staffs are to be fielded to conduct the on-spot surveys to relocate less or do not relocate the houses that are unnecessary or can be partly removed in practice; 2) The compensation for the losses of residents caused by LAR shall be paid according to the replacement costs to minimize unfavorable impacts on APs as possible; 3) The resettlement sites shall be located at the place close to the original residential areas so as to maintain the existing social relationship for APs and to reduce the communication distance for APs; 4) The affected enterprises/institutions are to be notified in advance, while proper relocation sites are to be selected in time in order to shorten the interruption period as possible. Their losses shall be properly compensated, these enterprises/institutions should be properly consulted to resettle the affected employees; 5) During demolition and resettlement, the relevant agencies should provide the assistances whatever they can for APs and the affected enterprises/institutions so that the resettlement can be carried out smoothly and the losses untaken by APs and the affected enterprises/institutions can be minimized as possible; 6) The mechanism of public participation shall be strengthened. Before the construction, the notices/information on the project commencement time and construction schedule, compensation policies and resettlement plan shall be posted on the public bulletin boards in the project affected areas to undergo the supervision from the APs and original residents. During the construction period, the construction works shall use the local materials as possible and hire local transports and laborers if the technical conditions are allowed for the APs to benefit from the project construction; 7) The measures shall be taken to reduce the dust from the construction activities and the workers health management shall be strengthened. The construction contractors shall carefully plan the route for transporting the earthwork and stonework. Measures shall be adopted to guarantee that the soils and stones will not be sprinkled along the way while the truck full of loading, and thus affect the environment tidiness. During construction period, a large number of laborers will come to the worksite to undertake various kinds of construction works and services. In order to guarantee the public security and orders in work site and the health of various groups in construction area during the course of construction, the construction contractors shall be caused to supervise and urge the workers to obey the regulations of local environment sanitation department, toughen the management on the healthy protection for worker group, timely clear the domestic waste at the construction sites so as to keep the construction area tidy, and to prevent the occurrence and contagion of infectious diseases. 2.2 Project Impact Survey 2.2.1 Survey Contents 21. The measurement survey team consisting of the staffs from Inland River Management Office of Fuzhou City, Urban Management and Law Enforcement Bureau of Cangshan District, FUVDC and Fuzhou Engineering Consulting Center together with the representatives from the relevant authorities of Cangshan District Government, the affected township government authorities and the affected village committees conducted the measurement surveys in July 2003 and January - March 2008, respectively. The team conducted the census surveys on the project impacts in project-affected areas according to the coverage determined in the project

17 design and the geologic type topographic map of 1:2000 in hand. The contents of surveys included the land acquisition, APs caused by the land acquisition, houses and auxiliary facilities to be demolished and relocated, scattered trees, shops/stores, enterprises and institutions, public service facilities and the special infrastructures to be affected etc. 2.2.2 Survey Methodology 22. The two surveys employed the same methodology, including: 1) Land Acquisition The team fielded the sites with the topographic map of 1:2000 in hand to find out the ownerships and land tenure of various types of lands, taking the village as a measurement unit to measure them based on the land use types of cultivated land, orchard land, fish pond and forest land. 2） Demographic Census During the course of the LAR demographic census, APs were classified into three types, affected by land acquisition, affected by demolition and relocation, and affected by the demolition of facilities of enterprises/shops/institutions. The actual affected population was further divided based on their registration status (the household registered in the affected areas and the household not registered in the affected areas), through the comprehensive survey on every household in terms of the nationality, age structure, education background, and employment status. The population was checked on site according to the household register card, and the results of surveys were registered on the record books on the household basis. 3) Houses and Auxiliary Facilities The measurement surveys were conducted based on house structures. In accordance with the certified property rights and construction years of the affected houses, the floor area of every house building and the quantities of auxiliary facilities were measured and counted on the household basis, and then they were registered on the record book. 4) Scattered Trees The census of all the scattered trees in the affected areas that are likely to be destroyed was taken during the measurement surveys. The scattered trees were classified in line with the tree species and their mature status. 5) Shops/Stores The affected individual industrial and commercial units were surveyed on the shop basis. The contents of the surveys included business type, scope, areas, employees, annual business volume and operating profits etc.. 6) Enterprises/Institution The team fielded the sites to census all the affected enterprises/institution in the affected areas. The contents of the surveys included their names, ownership structures, date of establishment, total land coverage, production plant land coverage, building floor areas, employees, net fixed assets, annual output value of the main products, annual gross sales volume, annual paid taxes, annual operating profits and total monthly salaries/wages etc.. 7) Special Facilities The team fielded the sites with the aid of the topographic map of 1:2000 to census all the affected facilities including infrastructures of access roads, power supply, water supply, telecommunication, cable TV, and other public service facilities like water pump station, village office buildings, elders’ entertainment center, sports yard, public toilets and garbage collection yards etc. All these facilities were registered on the record book on the itemized basis. Finally, all the survey data was verified by the affected households and institutions/enterprises with the stamps or signatures.

2.3 Findings of the Resettlement Impact Measurement Surveys 23. The measurement surveys found that the LAR for these two river rehabilitation works would involve 10 villages in 2 townships of Cangshan District. The summaries of the impact

18 measurement surveys are detailed in Table 2.3 – 1. Compared to the last survey in 2003, the impacts of the permanent land acquisition have reductions, whilst the demolition and its impacts have considerable increment. The following two facts have caused this increment of demolition impacts: i) a lot of illegal structures have been constructed since last survey in 2003. ii) the survey accuracy and extent is different. The survey in July 2003 based on the FS was preliminary and carried out by the survey team consisted of the staffs from relevant township authorities and representatives of the relevant villages, and the impact data was made based on the estimations, whilst this survey based on the preliminary design has been more detailed and carried out by the survey team consisted of the professional staffs from the qualified housing demolishment agency and the representatives of stakeholders, and all the impacts have been measured on the basis of house to house on spot. This measurement survey is more accurate than the last survey in 2003. Table 2.3-1 Summary of the Findings of the LAR Impact Survey Impacts Impacts Item Unit during FS in Final I Administrative Region 1. Township No. 3 2 2. Administrative Village No. 11 10 II Affected People 1. Land Acquisition Household household 97 46 Population person 513 194 Livelihood Resettlement Population person 116 2. Housing demolition Household Household 335 561 Population person 1311 1531 Household Required for House Relocation Household 532

Population Required for House Relocation person 1433

3. Affected Legal Entities unit 67 Including: Enterprise unit 17 29 Shop unit 4 33 Institutions unit Not count 5 Total Employee person 1603 1947 Affected Employee person 1603 1168 4.Total Affected People person 2893 III Housing/Building and Attached Structure

A Residential Housings and Attached Facilities m２ 56012.7 153,652

Brick-concrete structure m２ 103,976 Brick-wood structure m２ 20,242 Reinforcement fame structure m２ 14,532 Steel structure m２ 6,045 Wood structure m２ 4,342

19 Impacts Impacts Item Unit during FS in Final

Simple structure m２ 4,515

B Non residential Buildings and Attached Facilities m２ 17117 43,984

Brick-concrete structure m２ 35,369 Brick-wood structure m２ 6,322 Reinforcement fame structure m２ 847 Simple structure m２ 1,446 IV Scatter Tree Fruit Tree (Mango, Longan, Litchi, Chinese tree 555 olive, Banana) V Permanent Farmland Acquisition mu 184.76 38.95 Cultivated land (vegetable land) mu 35.02 Orchard mu 0.7 Other mu 3.23 VI Special Infrastructure Vehicle (passenger) bridge set 24 26 Power line km 3.25 1.469 Public lighting circuit m 2500 530 Telecommunication line m 840 696 Broadband cable m 2000 300 Water supply pipeline km 1.99 1.483 Drain-pipe km 1.955 Gas supply pipeline m 558

2.3.1 Land Use 1) Permanent Land Acquisition 24. The permanent requisition of land for this sub-component will directly affect 10 villages of 2 townships in Cangshan District; the sub-component will permanently requisition 420.97 mu of land (including 256.63mu state-owned land and 164.34mu collectively owned land), comprising 38.95mu farmland collectively owned by 7 villages (vegetable land 35.02mu, orchard 0.7mu and other cultivated land 3.23mu), 284.75mu construction land and 75.88mu unused land. Details are presented in Table 2.3 – 2. 2) Temporary Land Use 25. As the land within 10 m from both sides of these two rivers would be permanently acquired, there is sufficient space along the rivers that can be used for stacking construction materials or building temporary houses for workers, after the land transfer and implementation of resettlement. Therefore, temporary use of land for the construction works would be not required. 2.3.2 Houses and Attached Facilities 1) Residential Housings and Attached Facilities 26. Total of 153,652 m2 including 131,872m2 residential housings, 19,861 m2 their attached facilities and 1,919 m2 stores, with the brick concrete structures of 103,976m2, brick wood structure of 20,242m2, reinforcement structure of 14,532m2, steel structure of 6,045m2, wood structure of 4,342m2 and simple structure of 4,513m2 will be demolished, which will affect

20 561households (1,538 persons) in 9 villages of Gaishan Township and Cangshan Township in Cangshan District. Of these houses and structures, 31,473 m2 have been registered with the property right certificate, accounting for some 20.5%, while the remaining 122,179 have not titled property rights, accounting for 79.5%, of which, as stipulated by FMG, 8,079 m2 built before 5 January 1984 can be treated as titled property rights, accounting for about 5.3%, 58,389 m2 built in the period from 5 January 1984 to 26 October 2004 can be treated as partly titled property rights, accounting for about 38%, and 55,709 m2 built after 26 October 2004 are determined as illegal buildings following the latest stipulation set by FMG. Details of the affected residential housings and attached facilities are shown in Table 2.3 – 3. 2) Non-residential buildings and Attached Facilities 27. Total of 43,984m2 non-residential and attached facilities for office uses, production uses and commercial uses, including brick concrete structures of 35,369m2, brick wood structure of 6,322m2, reinforcement structure of 847m2and simple structure of 1,446m2, will be demolished, which will affect 29 enterprises, 24 public service facilities like sport yard and water pump etc., and 5 institutions including 4 schools and 1 research institute. Of these houses and structures, 4,371 m2 have been registered with the property right certificate, accounting for some 9.9%, while 6,250 m2 are illegal buildings as stipulated by FMG. Details are presented in Table 2.3 – 4. 3) Temporary Structure 28. No temporary structures in the LAR impact areas are affected by the rehabilitation works. 4) Illegal building 29. Since the project was initiated, some rural families have being built illegal buildings on the cultivated land on purpose of obtaining more compensation from the project. As stipulated by FMG, the structures built after 26 October 2004 when FMG issued Implementing Opinions of Enforcing Investigation & Treatment and Ascertaining Responsibilities Related to Illegal Occupying Land for Construction are determined as illegal buildings. Following the requirement, since the completion of the RP preparation for whole project (Nantai Island Creek Rehabilitation) in September 2003, with the concurrence of FPMO, IA has disseminated the Resettlement Information Booklet to the APs and relevant institutions in the affected whole project areas including these two river works affected area, which has indicated the cut-off date for the whole project. In order to be in harmony with the other project in new east urban area, the cut-off date has to be extended and the date of 26 October 2004 has finally been determined in line with FMG’s regulation. IA and Cangshan District Government have disseminated 26 October 2004 as the cut-off date for all the projects in the east new urban area that is stipulated in the FMG regulation disclosed in FMG official website to the affected townships, villages, institutions and APs through the meetings and circulars. In total, some 61,959 m2 illegal residential and non-residential buildings will be demolished. Most of the illegal residential structures were additional built or built in rush above the reasonable compensation area (per capita of 45m2) obtained by the residents, therefore, the Demolition of these illegal residential structures will have no significant impacts on the livelihood of families.

2.3.3 Individual Industrial and Commercial Shops 30. 33 individual industrial and commercial units with business licenses granted by the authorities will be affected. Total of 1,919m2 structures including brick-cement structure of1382 m2, framework structure of 249m2 and brick-wood structure of 288m2 are likely to be demolished, which will affect 109 employees. As these shops are the unprofessional ones used for both private residence and business, and the operators mainly use the old houses or rent them to others for residence or operation for groceries, hardware, clothing and restaurant etc., the scale is considerably small, and their main customers are local residents, and their businesses are ordinary. As individual small shops are mainly used for residence, the area has been counted in the residential housings to be removed. All of these shop owners will select cash compensation to relocate their stores or to stop business operations or to transfer to other activities at their options, therefore, a total of 109 employees will be affected due to

21 business suspension or stop. See table 2.3-5 for details.

22 Table 2.3-2 Summary of Permanent Land Acquisition for Longjin and Yuejun Works

Farmland (mu) Construction Land (mu) Unused Total Ownership Township Village Affected Land (mu) For Vegetable Family For For water (mu) Orchard Other Subtotal residents, Sub-total Land transport conservancy HH Person enterprises

Stated Owned 256.63 175.41 5.34 180.75 75.88

Cangshan 1.07 0.58 0.58 1 4 0.49 0.49

Xianfeng 5.51 5.51 5.51 Cangshan Xiahu 4.15 3.90 3.90 3.90 5 22 0.15 0.1 0.25

ZhenAn 3.77 3.77 3.77

Beiyuan 0.13 0.10 0.10 1 4 0.03 0.03 Collectively Baihu Owned 1.66 1.66 1.66 Gaohu 53.93 13.07 0.24 0.63 13.94 9 37 39.99 33.99 Gaishan Jianbian 49.02 14.51 0.46 0.43 15.40 21 91 32.48 0.52 0.62 33.62

Puxia 41.98 2.17 2.17 2 5 39.19 0.61 39.80

Shoushan 3.14 2.86 2.86 7 30 0.28 0.28

Subtotal 164.34 35.02 0.7 3.23 38.95 46 194 123.53 0.62 1.23 125.4

Total 420.97 35.02 0.70 3.23 38.95 46 194 284.75 5.96 1.23 304.38 75.88

23 Table 2.3-3: Summary of the Residential housings and Their Attached Facilities to Be Demolished APs (person) Total Demolition Area（㎡） House Structure（㎡） With Without property right

property certificate（㎡） Township Village right Built Built Built HH Tota Attached Brick- Brick- certificate before from after Male Female Total Housing Store Simple Reinforced Wood Steel l Facilities wood cement （㎡） 1984 1984 to 2004

2004 ban Jian 162 414 211 203 35716 32355 3050 311 2528 23372 749 4440 0 4627 10617 1719 15912 7468 Gaohu

242 687 352 335 57061 53504 2711 846 4863 43432 1590 1416 4342 1418 13356 3726 27134 12845 Baihu Baihu 23 54 32 22 3537 1997 1328 212 202 3295 40 0 0 0 891 381 1850 415 Gaishan yuan Bei 6 18 10 8 517 472 45 0 450 49 18 0 0 0 0 0 453 64 Shou shan 6 18 10 8 516 30 486 0 55 119 342 0 0 0 0 19 174 323 Puxia Puxia 1150 102 292 149 143 50008 37957 12051 0 28227 1604 8676 0 0 4772 2026 9189 34021 1 Xian fan 7 12 7 5 1775 1541 190 44 587 1016 172 0 0 0 0 114 1153 508 Can Cang shan g sha 11 30 15 15 3063 2597 0 466 56 3007 0 0 0 0 1838 95 1065 65 Zhen An 2 6 3 3 1459 1419 0 40 0 1459 0 0 0 0 0 0 1459 0

24 153 2024 TOTAL 561 789 742 153652 131872 19861 1919 103976 4515 14532 4342 6045 31474 8080 58389 55709 1 2

Table 2.3-4: Summary of Non-residential building and Attached Structure to be Demolished Total Demolition Area（㎡） House Structure（㎡） With property Without property right certificate（㎡） right Built Built Descriptions Quantity Houses / Attached Brick- Brick- Built from Total Simple Reinforced Wood Steel certificate before after Buildings Facilities wood cement 1984 to 2004 （㎡） 1984 2004 Enterprise 29 35349 6191 29159 5142 28885 498 824 0 0 4371 876 26048 4054

Institutions 5 2025 1197 828 667 903 455 0 0 0 1210 684 131

Public Service 24 6610 2049 4561 513 5581 494 22 0 0 0 2359 2186 2065 Facilities TOTAL 58 43984 9437 35239 6322 35369 1446 847 0 0 4371 4445 28918 6250

25 Table 2.3-5: Profile of the Affected Commercial Shops Business Annual Operating Affected Business Employee Township Village Owner Area Sale Value Profits Area a Activities （Person） （㎡） (CNY10000) (CNY10000/yr ) （㎡）

Zhenfuti grocery 65.10 2 7.20 0.7 65.10

Liufajie video rental 63.40 2 6.00 0.75 63.40

Zhenchunmu aluminium alloy 39.52 5 9.60 0.82 39.52

Liuxuhe aluminium alloy 44.26 5 11.00 1.05 44.26

Jianban Zhenyondon glass 48.30 7 12.00 1.21 48.30

motor, E-bike Chenmeijun 14.50 9 15.00 1.45 14.50 repair

Zhenmenhua E-bike repair 14.50 3 4.00 0.41 14.50

Zhenqinshen stainless steel 21.28 3 8.50 0.87 21.28

Wangxiancao grocery 20.00 3 6.50 0.63 20.00

Chenchenzon grocery 32.94 3 5.80 0.56 32.94

Gaishan Zhenyili grocery 29.00 2 3.60 0.36 29.00

Chenjian Super market 396.23 12 9.60 0.98 396.23 Gaohu Zhanfanli Super market 148.45 6 7.30 0.74 148.45

Chenbiyin aluminium alloy 48.45 5 6.10 0.59 48.45

Huanbinzhou aluminium alloy 68.02 7 12.00 1.21 68.02

Zhenchong restaurant 103.21 10 20.00 2.15 103.21

Chenlianzen mattress 38.86 1 12.00 1.18 38.86

healthcare Chenlianzen 7.04 1 12.00 1.32 7.04 products Baihu Chenlianzen cold metal 35.25 1 12.00 1.23 35.25

Zhenzuyin vehicle repair 89.88 4 36.00 3.8 89.88

Wangdexin recreation 41.26 1 7.20 0.78 41.26

Chenzonmin furniture 140.56 2 36.00 3.91 140.56

Zhongyifan restaurant 68.78 closed 68.78

Zhongjiwu hardware 49.40 1 72.00 7.35 49.40

Zhongjiwu petroleum shop 49.40 1 36.00 3.9 49.40

Cangshan Zhongjiwu restaurant 49.40 3 10.80 1.05 49.40

Zhongjiwu motorcycle repair 49.40 3 144.00 15.12 49.40

fruit juice & Cangshan Zhongjiwu 49.40 1 10.80 1.23 49.40 drinks

Zhongjiwu grocery 9.86 1 14.40 1.42 9.86

chicken & duck Huanweicao 11.00 1 3.60 0.41 11.00 butch Xianfen Huanweicao pharmacy 23.69 1 36.00 3.56 23.69

Huanweicao barbershop 9.00 1 1.80 0.2 9.00

Zhenan Chencuancen snack 40.00 2 16.20 1.56 40.00

Total 1919.3 109 605.00 1919.3 Notes: a the area tentatively determined as business-used area

26 2.3.4 Enterprises and Institutions 31. A total of 34 enterprises and institutions located in the affected areas are anticipated to be affected by the project construction, including 29 enterprises/factories, 4 schools (one college, one high school and two polytechnic schools) and 1 research institute. Of 29 enterprises, 8 enterprises will be resettled in the other areas outside the original locations, and while remaining 7 enterprises can be restored to operate in the original sites because only part of their facilities are likely to be demolished, and the remaining 14 enterprises are going to rent new plants adjacent area to restore operations or stop original production operation and to transit to other activities. In total, 1,059 employees including 320 permanent workers and 739 temporal workers will be affected due to the operation suspension. Profiles of these enterprises are summarized in table 2.3-6. Only part of office buildings or auxiliary facilities of the four schools are to be demolished and the main teaching facilities of these schools would not be affected, therefore, they can continue their normal teaching activities. The project will demolish the idle aged office buildings of the research institute, which are occasionally used for renting, whilst its main office building where the research facilities are settled will not be affected. Therefore, its normal research activities will not be affected by the project. Table 2.3-7 summarizes the profiles of these 5 institutions.

2.3.5 Public Service Facilities 32. In total, 24 public service facilities including water pump station, transformer house, clinic, village office, elder’s entertainment, sports yard, public toilets and garbage collection yard will be affected by the project construction. In addition, one temple will also be demolished.

2.3.6 Affected Population 1) Affected Population of Permanent Loss of Land 33. As the rehabilitation works are layout in the linear shape along these two rivers. Most of APs would only lose small piece of land. The measurement surveys found that 46 households (194 persons) would be actually affected by land permanent acquisition. The section 2.4-para 42 details the impact assessment on these APs. 2) Affected Population of Housing demolition 34. The measurement surveys found that the housing demolition would affect 561 households (1531 persons), of which, 29 households (98 persons) are be affected only for their auxiliary facilities but their residential housings are not affected. The residential housings with the total area of 131,872m2 are to be demolished. A total of 532 households (1,433 persons) are required to be resettled. 3) Affected Employees 35. The rehabilitation works would affect 29 enterprises and 33 shops, with the total employees of 1,947. Of them, 8 enterprises are to be relocated and 14 enterprises will rent new plants to restore their operations, or will stop their original operations to transfer other activities, and all shops are to be resettled in the other sites, while the remaining 7 enterprises can restore their affected facilities within their original plants and no employees are anticipated to affect. Therefore, the total employees to be affected by the production suspension or business operation pending of these enterprises and shops are estimated at1,168, of which 929 will be re-employed by the affected enterprises within the six months, while the remaining 239 (including 21 permanent staffs and 218 temporal workers) will lost the jobs due to shut down of the affected enterprises. The section 5.4.3 details the assistances provided by the project proponent to these employees. 4) Total Affected Persons 36. Total of 607 households (1,725 persons) would be affected by the LAR. Of them, 1,285 persons are registered permanent residence in the affected area, while the remaining 440 persons are not registered permanent residence in the affected area. In addition, 1055 persons employed by the enterprises and shops are likely to be affected by the production suspension or business operation pending of the resettlement of enterprises/ shops. Details of the affected population are shown in Table 2.3-8.

27 Table 2.3-6 Profiles of Affected Enterprises Employees (person) Fixed Asset Annual Sale Impacts Affected Employees (persons)

Permanent Temporal Value Revenue Attached Equip. with Permanent Temporal Resettlement No Enterprise Buildings Total (CNY10000) (CNY10000) Facilities value of Total Plan M F M F （㎡） M F M F （㎡） over 10,000

Shenguang

1 Aluminium & Plastic 145 55 50 20 20 1000 1000 100 540 50 145 55 50 20 20 B

Plant

Shenyi Wood 2 90 41 18 20 11 1100 300 324.46 33 A Co.(limited)

Gaishan Supply &

3 Marketing 30 20 10 500 96 824.28 30 20 10 B

Cooperative

Yexia Plastic 4 27 2 1 18 6 50 1209.06 862 27 20 7 B Processing Plant

5 Municipal Food Co. 34 2 2 24 6 55 1000 1249.09 384.96 3 34 2 2 24 6 B

Xindai Stationary 6 140 5 1 85 49 1700 2000 4429.85 50 A Co.(limited), Fujian

Qianyou Daily

7 Necessities Co., 120 4 2 76 38 1000 1400 1402.14 40 A

Fuzhou

Fongfei Sand-Cast 8 130 6 2 98 24 210 35 1165.99 2 130 6 2 98 24 D Plant

9 Nanhu Plastic Plant 32 3 1 21 7 528 150 2936.44 3 32 3 1 21 7 C

Henxin Shoes Ware 10 31 2 1 16 12 75 230 362.39 3 31 2 1 16 12 D Plant

Xulin Plastic Product 11 120 5 1 95 19 52 16 287.71 2 120 5 1 95 19 C Plant

28 Employees (person) Fixed Asset Annual Sale Impacts Affected Employees (persons)

Permanent Temporal Value Revenue Attached Equip. with Permanent Temporal Resettlement No Enterprise Buildings Total (CNY10000) (CNY10000) Facilities value of Total Plan M F M F （㎡） M F M F （㎡） over 10,000

Qinquo Sand-Cast 12 13 2 8 3 85 18 475.83 13 2 8 3 D Plant

World Chinese Olive 13 100 10 9 55 26 574 500 3187.46 10 100 10 9 55 26 D Plant

Gaohu Hardware 14 65 15 8 32 10 500 300 2470.13 30 65 15 8 32 10 D Machinery Plant

Chongshen 15 15 2 1 8 4 49 15 233.73 1 15 2 1 8 4 C Sand-Cast Plant

Jinqiu Bean Product 16 15 1 14 2 50 12 297.78 15 13 2 B Plant

Shenshen Glass 17 30 2 1 16 11 62 30 375.48 2 30 2 1 16 11 B Plant

Lianrong Handicraft 18 28 2 16 10 150 100 610.68 2 28 2 16 10 D Co.

19 Lianbo Plastic Plant 20 2 16 2 62 28 73.05 270.33 1 20 2 16 2 C

Chongrong Plastic 20 40 3 1 24 14 300 50 1515.24 1 40 3 1 22 14 C Plant

Xuyun Sand-Cast 21 2 1 1 10 54.7 2 1 1 C Plant

Minyong Sand-Cast 22 10 2 6 2 36 15 175.55 0 10 2 6 2 C Plant

Yinjun Hardware 23 12 2 1 5 4 49 24 32.88 204.35 1 12 7 5 B Plant

29 Employees (person) Fixed Asset Annual Sale Impacts Affected Employees (persons)

Permanent Temporal Value Revenue Attached Equip. with Permanent Temporal Resettlement No Enterprise Buildings Total (CNY10000) (CNY10000) Facilities value of Total Plan M F M F （㎡） M F M F （㎡） over 10,000

Huamin Transport 24 60 20 20 12 8 950 500 436.19 1218.93 60 20 20 12 8 D Machinery Co.

25 Metro Warehouse 120 2 1 38 79 10 188.15 A

Huawei Freight 26 100 50 10 33 7 400 1140 1125.86 951.9 100 50 10 33 7 D Fittings Center

Hongshen Color Box

27 Packaging Co., 95 40 40 8 7 500 2400 167.66 2582.99 23 A

Fuzhou

Aoti Shipai Plunge 28 200 10 3 140 47 200 150 560.08 60 1 A Plant

Urban & Rural 29 14 2 1 5 6 122.4 182.1 1819.84 A Construction Co.

A: 7

B: 7 Total 1838 313 185 909 435 10207 11681.4 6190.5 29158.76 258 1059 203 117 539 200 C: 7

D: 8 Note: M= male, F =female A = Backward Reconstruction and Rehabilitation, B = Re-renting Plant in Adjacent Areas, C = Shut down D = Resettlement in the Other Place

30 Table 2.3－7 Profiles of Affect Institutions

Total Area of Total Land Name of Buildings and Students/ Demolishing（m2） Type Coverage Institution Facilities（m2） Employee (mu) Buildings Facilities Buildings Facilities College Fujian Police 320 130000 11000 2100 131 89.5 College Polytechnic Fujian Youth 11 13500 2025 800 108 school League School Polytechnic Fuzhou 27.5 46670 5600 950 89 school Industrial School High school Fuzhou No. 40 45 7500 650 1200 541 High School

Research Semiconductor 8.2 3694 180 70 1066 institute Research Institute of Fujian Province Total 411.7 201364 19455 1197 827.5

37. Of these APs, 46 households with the total labors of 116 who are to be affected by permanent land acquisition are required to be resettled for their livelihood, while 532 households with the total population of 1,464 who are to be affected by the residential housing demolition are required to be resettled for their living facilities, while the 1,168 employees who are likely to be affected by the production suspension or business operation pending are required to be subsidized for their laying-off. Table 2.3-8 Summary of Affected Population Affected Type Household and Population Total Permanent Farmland Acquisition Quantity (mu) 38.95

Affected Household (HH) 46 Affected Person(person) 194 Labor to be Resettled (person) 116 Enterprise Demolishing Demolishing Quantity (m2) 37,024 Livelihood Affected Enterprise (No.) 29 Affected Employee(person) 1059 Permanent (person) 320 Temporal (person) 739 Shop Demolishing Demolishing Quantity (m2) 1,919 Affected Shop (No.) 33 Affected Employee (person) 109 Residential housing Demolishing Quantity (m2) 153,652 Housings Affected Household (HH) 561 Affected Person(person) 1,531 Households Required to be Relocated (HH) 532 Persons to be Resettled (person) 1,433 Note: the quantities of demolishing structures include legal and illegal buildings. 2.3.7 Special Infrastructures 38. The project construction will affect some special infrastructures, including 26 small size bridges, 1.469km power supply line, 530m road lighting power line, 696m telecommunication line, 300m broadband cable, 1.483km water supply pipelines, 1.933km drain-pipe and 558m gas supply pipeline.

31

2.3.8 Scattered Trees 39. The scatted trees around affected houses, villages and enterprises/institution, and various scattered mature trees in the fields and roadside/riverside have been surveyed according to their species and mature. In total, 555 scattered mature trees are to be chopped, including 140 mango trees, 200 longan trees, 60 litchi trees, 100 Chinese olive trees and 55 banana trees.

2.3.9 Cultural Relics and Vulnerable Groups 40. No cultural relic and historical site which shall be vitally protected in the impact area were found to be affected by the rehabilitation works. 41. According to the surveys, no minorities in the impact area are existed, and 16 households (54 persons) classified as the vulnerable groups (VGs) that can special assistances, as stipulated the poor with the per capita income of less CNY 240/month, or handicapped families, or lonely elders above 70 years old, are to be affected by land acquisition and housing demolition. These VGs will all be affected by the housing demolition, including lonely elders above 70 years old of 3, handicapped families of 6, and the poor families of 5. During the implementation of the resettlement plan, the these vulnerable groups affected by the project construction will be further verified according to the individual conditions such as the family structure, labor employment, family resources etc. as well as the information obtained by the civil administration department. Once the affected households are determined as vulnerable groups, the project implementing agency and relevant authorities will also provide with special assistance during project implementation.

2.4 Impacts Assessment

42. The impacts of LAR on cultivated land are not significant in comparison. Of the 420.97mu land to be occupied by the project, only 38.95mu farmland is to be acquired. The permanent arable land acquisition will involve 6 villages, only accounting for 3.298% of the total cultivated land in these villages. The land acquisition will affect 46 households with total persons of 194, accounting for 1.495% of the total population in these affected villages. Per capita will lost the farmland at 0.025mu to 0.434mu, in average of 0.2mu, accounting for 15% to 100% of their total contracted farmland. Incomes from farming activities account for 1.5% to 7.3% of the total family incomes of these households, averaging 2.3%, while the income loss due to the lost of the contracted farmland ranges from CNY300 to CNY 6,600 annually, accounting for 1.2% to 18.8% of their annual family incomes, averaging 9.4%. Therefore, the losses of land resources will have certain impacts on the villagers’ living makings, but the impacts are no significant. 43. The losses of residential housings caused by demolition are significant in comparison. Some 153,652m2 residential housings in 9 villages will be demolished, which will affect 561 households with the total persons of 1531 including 532 households with total persons of 1,433 to be resettled. Brick cement structures accounts for 73.79% of the total areas of structures to be demolished. Of these structures to be demolished, some 29.74% is illegal as stipulated by FMG. Most of the illegal residential structures were additional built or built in rush above the reasonable compensation area (per capita of 45m2) obtained by the residents, therefore, the demolition of these illegal buildings would have no significant impacts on living and livelihood of these households. 44. The LAR will include certain amount of non-residential buildings that are used for plants and shops/stores, which will directly affect the production or business operations of the enterprises or individual industrial and commercial units. As the scales of these affected enterprises and individual industrial and commercial units are generally small, the impacts will be partial and the operation restoration will be comparatively easy. Of 29 enterprises, 22 enterprises are likely to be relocated in the designated sites or re-rent new plants in the

32 adjacent areas due to the significant losses of their structures, including 4 state-owned enterprises or collectively owned enterprises and 18 private enterprises, while remaining 7 enterprises with the total employees of 779 due to the insignificant impacts, can continue their operating in their original locations after the affected structures are readjusted and rebuilt. 45. The project construction will demolish a few school/institutions facilities, but they are not geared to main teaching/research facilities, therefore, the impacts on the normal teaching order of the affected school and the normal research activities are very limited. The public service facilities to be demolished to the project construction are aged and some that have stopped for operation are even to be discarded. The impacts of demolishing these facilities on residents served are also minor. 46. There are no important special facilities in the impact areas, the affected facilities like some small size bridges, power supply line, telecommunication lines and water/gas supply pipelines etc. belong to the small size infrastructures 47. As a whole, the construction of project will damage the original production system in the affected area, and certain impacts will be brought to the local production and livelihood accordingly. The losses of the land resources will destroy the material conditions for livelihood of part of the farmers, so, they shall adapt to new environment for working and livelihood again. The design has fully considered the destructive effect of land acquisition on the local production and livelihood system during project design process, and accordingly, they have constantly optimized the project design, adopted project measures to reduce the land acquisition scope, and relieved the impacts of rehabilitation work on local production livelihood. Therefore, the rehabilitation work will not bring about catastrophic damage to the original production and livelihood system in the affected areas. As for the whole project area, the impacts are localized and can be controlled. The implementation of the project will not bring the significant negative impacts on the agricultural/industrial production, local people’s livelihood and local socio-economic development. Meanwhile, as the work layout will be along Longjin river and Yuejin river in the linear shape, most areas often suffer from flood and waterlogging disasters, which constrains the local socio-economic development. The project construction will provide a chance for the APs to re-establish their new production and livelihood pattern. Once the rehabilitation work is completed, the environment of socio-economic development will be greatly improved so that the local people’s livelihood will certainly be changed. So long as the compensation measures and resettlement plan are soundly formulated and implemented, and preferences on resettlement policies, technical and fund supports etc. are provided as well, the impacts will be minimized and all the affected villages, families and business units/institutions can quickly regain or overpass their original economic and livelihood level.

3 SOCIAL ECONOMIC PROFILES OF THE IMPACT AREAS

3.1 Summary Descriptions on Social Economical Status of the Impact Areas

48. Cangshan District is located in the southern part of downtown area of Fuzhou, and governs the entire Nantai Island. The District is faced with Gulou District, Taijiang District, Jin’an District, Mawei District, Minhou County and Changle City across the river. In total, it governs 7 blocks and 5 townships, inclusive of 45 community residents’ committees, 18 residents’ committees, and 113 administration villages. It has a total area of 142 square kilometers, with the total population of some 480,000. 49. Nantai Island, on which Cangshan District is located, is endued with a picturesque environment and an agreeable climate. According to historical records, there was ever a stretch of plum trees planted at the southern foot of Yantai Mountain; hence, Cangshan was ever famed as a “Flower Island”. Besides, this Island used to host a galaxy of foreign consulates, foreign trade bases and a navigation center as well. Within the territory of Cangshan District, there are many places of historical interest and scenic beauty, including Jinshan Ancient Temple, Chen Clan’s Temple, Former Residence of Chen Ruo-lin,

33 Mausoleum of Yan Fu, Former Residence of Chen Shao-kuan, Yantai Mountain Park, and Gaogai Mountain Park, etc. 50. Cangshan District is well known as an education center in Fuzhou city. The campus of 30 colleges/universities, vocational technical schools and staff training schools are located at the district. On top of it, there also lie over 200 schools of other types. The full-time students on campus within this district total about 70,000, accompanied by nearly 10,000 teachers. Actually, the total number of teachers, which accounts for 25% of the total population in the district. 100% of the children of the school age in the district have been enrolled in primary and high schools. 51. Cangshan is one of the fastest economic developed districts among the total 6 urban districts in Fuzhou city. In 2006, GDP of the district amounted to CNY 26.6 billion, ranking the second among the 6 urban districts just right after Mawei Economic and Technological Development Zone (Mawei District). The industrial production has witnessed an accelerated growth. In 2006, the output value generated from the industrial sectors in the whole district reached CNY 24.6 billion, at the annual growth rate of 14.08%, including CNY 22.45 billion from the scale industries, increased by 26.71%. The service industry has developed very quickly. The district puts a focus on developing marketplace facilities. So far, it has built 20 specialized markets (inclusive of a Flower Transaction Market, and a Second-hand Car Transaction Market). Besides, the tourism, information consultation and intermediary service sectors in this district have also been well developed. The living standard of the residents in this district is being constantly upgraded. According to the sampling survey, in 2006, the per capita income in the urban area averaged CNY 9674, with the annual growth rate of 8%, while the per capita income of the rural residents averaged CNY7115, with the annual growth rate of 6.62%. 52. As a whole, Cangshan District where the project is located enjoys the good natural conditions with a long historical culture. With good intrinsic, the residents settled in the district are readily receptive to new ideas and can easily understand the government policies and initiatives, including the government’s urban development plan and relevant development initiatives. The economic development level of the district ranks the forefront among the six urban districts of Fuzhou city, with high growth of three industries and steady employment demand, but its comparative backward urban infrastructures has constrained its further development. Therefore, the implementation of the project and its resettlement will likely be supported by the local relevant organizations and residents.

3.2 Social Economic Profiles of the Affected Townships and Villages

53. The LAR will have certain impacts on 10 administrative villages in 2 townships of Cangshan District. From March to April of 2008, under the arrangement of the municipal PMO, FUVDC organized District Resettlement Office and the other relevant local authorities as well as resettlement design unit to carry out the detailed survey on various aspects of basic socio-economic conditions and production as well as livelihood of affected townships and villages. 1) Socio-economic Profiles of the Affected Townships 54. The project will affect 2 townships in Cangshan District. The socio-economic profiles of these two townships are summarized in Table 3.2-1. Table 3.2-1 Socio-economic Profiles of the Affected Townships (in 2006) Item Unit Gaishan Cangshan Land Coverage Km2 36 5.8 Administrative Village No. 31 13 Household HH 21697 6077 Population Person 71752 18164 Urban residents 13942 12123

34 Arable Land Area mu 4542 1079 Total Economic Output CNY100 million 71.3 60.13 Total Agricultural Output 1.65 0.42 Fiscal Revenue CNY 10,000 4407 7916 Farmer Per Capita Net Income CNY 5050 7560 Number of Affected Villages No. 6 4

55. Gaishan Township is located in the middle east part of Nantai island, administrating 31 villages, with the total households of 21,697 and the total population of 71,751 (including 13,492 registered as urban residents). The total land coverage of the township is 36 Km2, while it has only 4,542mu farmland. The average per capita arable land holding is 0.078mu, substantially lower than the provincial average of 0.56mu. In 2006, the township achieved the economic incomes of CNY 713 million, with the fiscal revenues of CNY 44.07million, while the incomes from agriculture sector was only CNY16.5 million, accounting for 2.3% of the total incomes, indicating agriculture is not important income source in the township. Farmer per capita net income was CNY 5050 in 2006, 29% lower than the average of CNY 7115 in Cangshan District. As a whole, the socio-economic development level of Gaishan Township belongs to the middle to lower level of Cangshan District. The project will affected 6 villages in the township, including Jianbian, Gaohu, Baihu, Puxian, Beiyuan and Shoushan. 56. Gangshan Township is located in the middle part of Nantai island, administrating 13 villages, with the total households of 6077 and the total population of 18,164 （including 12123 registered as urban residents). The total land coverage of the township is 5.8 Km2, while it has only 1,079mu farmland. The average per capita arable land holding is 0.178mu, substantially lower than the provincial average of 0.56mu. In 2006, the township achieved the economic incomes of CNY601.3 million, with the fiscal revenues of CNY 79.16million, while the incomes from agriculture sector was only CNY4.2million, accounting for 0.7% of the total incomes, indicating agriculture is not significant income source in the township. Farmer per capita net income was CNY 7560 in 2006, higher than the average of CNY 7115 in Cangshan District. As a whole, the socio-economic development level of Cangshan Township belongs to the middle to higher level of Cangshan District. The project will affect 4 villages in the township, including Xianfen, Cangshan, Xiahu and Zhangan. 2) Socio-economic Profiles of the Affected Villages 57. The 10 villages affected by the LAR have the total households of 6,527 with the population of 21,513, including rural households of 4,821 (1,4672 persons). Rural population only accounts for 68.2% of the total population. A large number of farmlands in these villages have been continually decreasing due to the booming of the real estate development and urban construction. These 10 villages have the total cultivated land of 2,578.45mu, including 2,298.99 mu paddy land, of which two villages have no cultivated land any more, while per capita cultivated land of the maximum village is only 0.34 mu, and 9,895 labors in these villages are employed, of which 2,149 persons engage in farm activities, accounting for 21.74 % of the total employed labors, while the remaining 78.3% engage in off-farm activities, indicating these villages are being urbanized. 58. In 2006, the economic incomes of these villages ranged from CNY 6.6 million to CNY 665 million, of which incomes from agriculture activities only accounted for 1.2% of the total incomes (in weighted average of these villages), whilst the remaining was made from off-farm activities, indicating the natural resources like land are not the main sources for the villagers to make living. The weighted average per capita net income of these villages was CNY 6,281 in 2006, lower than the Cangshan District average level of CNY 7,115 in that year, ranging from CNY 5,129 to CNY 9,500. There are no minorities in these villages. Details are shown in Table 3.2-2.

35 Table 3.2-2 Socio-economic Profiles of the Affected Villages Indicator Unit Jianbian Puxia Baihu Shoushan Gaohu Cangshan Xianfen Zhenan Xiahu Beiyuan Total I Basic Data 1 Household household 953 1230 587 330 1570 199 413 220 345 680 6527 1) Non Rural household 310 95 336 120 270 199 200 90 61 224 1706 2) Rural household 643 1135 251 210 1300 None 213 130 284 456 4821 2 Population person 2697 4657 2013 1531 4960 584 1121 750 1100 2100 21513 1) Non Rural person 900 426 1100 501 1640 None 605 180 195 710 6841 2) Rural person 1797 4231 913 1030 3320 584 516 570 905 1390 14672 3 Labor person 1920 2120 1200 960 2435 520 722 560 630 1220 11767 Male person 910 1768 800 683 953 190 331 350 330 619 6934 Female person 1010 352 400 277 997 130 391 210 300 601 4668 4 Employment person 1920 1825 850 960 1950 520 722 560 630 1200 9895 Farm person 250 311 10 350 305 None None 90 273 560 2149 Off-farm person 1670 1514 840 610 1645 320 722 470 357 640 8788 II Arable Land Paddy (Vegetable) mu 250 1350 None 330 176.99 25 None None 92 100 2298.99 Orchard mu 95 None None None 0.237 None None None 3.899 45 144.14 Others mu 26 42 1.6605 21 40.643 None None 3.768 0.2535 0 135.32 Per Capita mu/person 0.2 0.32 0.002 0.34 0.065 0.043 None 0.007 0.08 0.1 III Economic Status 1 Total Incomes CNY10,000 15077 33350 1665 1480 62461 52000 66500 442.5 660 1550 235185.5 Farms CNY10,000 300 1140 None 210 372 105 None 40.5 101.7 200 2844.2 Off-farms CNY10,000 14777 32210 1665 1270 62089 51895 66500 402 558.3 1350 232871.3 2 Per Capita Net Income CNY 5500 5129 6300 9500 6515 7600 8500 5500 6000 5800 6,281a Note: a it is the weighted average of 10 villages

36 3.3 Socio-economic Status of Affected households

59. From March to April 2008, the resettlement survey team in active collaboration with the relevant government authorities, affected township governments and village committees carries out a detailed survey on the basic socio-economic conditions of the affected households and their resettlement’s desires. Its main objectives were: (i) to compile socio-economic information on the APs likely to lose land or property to the project sub-component; (ii) to obtain information on the extent of APs knowledge of the proposed sub component, and to disseminate the importance of the rehabilitation work to the APs as well; and (iii) to identify APs’ preferences regarding land acquisition, house relocation and income restitution measures, which can be served as the accurate base to formulate the resettlement program. 60. The survey included two aspects: one was the basic information on the socio-economic status of the APs, the other one concerned with the AP’s resettlement desires. 1) Basic Information Survey on the Affected Households 61. The random sampling method in the impact area was employed to investigate the basic information on the affected households. The survey went to the sampled household. After filling out the questionnaire explained by the survey team, head of the family verified it with his /her signature. Total of 76 households within the impact area were randomly selected to be the samples, accounting for 13.08% of the total affected households. The selected samples basically cover all affected townships and villages. The samples are representative and typical and can be used for basis for the project impact analysis. 62. The questionnaire to survey basic information of the affected households has the following items:1) family profile: Include family members, age, sex, educational level, career, nationality, housing area and structure; 2) family incomes and expenditures; including land holding, family income and source, expenditure items etc. 2) Resettlement Desire Survey 63. The sampling survey method with a sampling rate of 15% was adopted for the resettlement desire survey. The township government organized the relevant village committees to deliver the questionnaire that was developed by the resettlement design unit to the sampled APs for filling out In total, 100 questionnaires were delivered in the affected area, while 86 questionnaires were responded and returned. 64. The survey questionnaire on the resettlement desire mainly consisted of the awareness on the project, the channel to get the knowledge on the project, attitude on the project, expected resettlement mode, concerning issues, and the further information they wish to know etc.

3.3.1 Socio-economic Profiles of Affected Household 1) Demographic Features of APs 65. The average household size is 3.41 persons, slight lower than the national average of 3.58 surveyed in 2000. Of sampled APs, female accounts for 49.8%, while male accounts for 50.2%. The labour forces at age of 17~60 account for 71.25% of the total population, 16.12% for less than 17 years old and 12.65% for over 60 years old. In terms of age structure, the APs have the feature of elder society. No ethnic minorities are found in the surveyed APs. Of these surveyed APs, 67 persons completed primary school, accounting for 25.5%, 92 persons completed junior middle school, accounting for 35.2%, 60 persons completed high school, and 28 persons completed professional school or university, accounting for 10.8%, whilst the remaining is pro-school or illiteracies or half-illiteracies. The detailed demographic features of surveyed APs are listed in Table 3.3-1. 2) Housing Conditions of APs 66. The housing conditions showed that among the 76 households, 25 of them have houses leased out, with a larger floor space for owner occupied houses. The average area of owner occupied residential housings is 273 m2 for each household, and the average area for leased out houses is 128 m2 per household. This indicates that for household have abundant rooms

37 for living. Detailed information is listed in Table 3.3-2. All the houses surveyed are brick and concrete structures. Table 3.3-1 Demographic Features of Affected Persons Surveyed Male Female Total Item No. % No. % No. % Age ≤16 years 22 16.8 20 15.4 42 16.12 17-60 years 93 71 92 70.8 185 71.25 ≥61 years 16 12.2 18 13.8 34 12.63 Total 131 100 130 100 261 100 Education Pro-school 6 4.6 8 6.2 14 5.5 Primary 33 25.2 34 26.2 67 25.5 Junior Middle School 46 35.1 46 35.4 92 35.3 High School 31 23.7 29 22.1 60 22.9 Above High School 15 11.4 13 10 28 10.8 Total 131 100 130 100 261 100 Employment No Job 3 3.3 5 5.7 8 4.3 Farm/Chores 8 8.7 18 20.7 26 14.7 Off-Farm Worker 53 57.6 51 58.6 104 58 Business 21 22.8 8 9.3 29 16 Others 7 7.6 5 5.7 12 7 Total 92 100 87 100 179 100

Table 3.3-2 Housing Conditions of the APs Surveyed

Types Indicator Number Minimum Maximum Mean

Rooms (room) 3 9 5 Owner Occupied 76 Floor area (m2) 57.5 485 145 Rooms (room) 1 10 3 Rent-out 25 Floor area (m2) 25 416 128 Rooms (room) 3 19 6 All 76 Floor area (m2) 57.5 901 273

3) Land Cultivation 67. Among 76 households surveyed, 6 households replied that they have contracted the cultivated land, with an average area of 0.18 mu per households (see Table 3.3-3). The tenure of collective land in Fuzhou City were redistributed during the Second Round Contract in 1995, and no land reallocation has been conducted since then. As the urbanization progressing, more off-farm opportunities have been generated, lots of farmers in the outskirts of Fuzhou have given up cultivating arable land. Table 3.3-3 Arable Land Cultivated by the Affected Households Surveyed (mu) No. of Households that has Minimum Maximum Mean cultivated land 6 0.12 1.6 0.18

38 4) Household Financial Status 68. The household per capita net income was CNY6,625 in 2006, which is a little higher than that of the village level CNY6,281. Of the total net income, 45% was derived from off-farm wages, while incomes generated from farm activities only accounted for 2.3% (see Table 3.3-4). The expenditure patterns of all the 76surveyed households as a total（see Table 3.3-5）, showed that the largest single cost item was food, which accounted for 46.7% of the total household’s expenditure, and the shares for education and healthcare ranked 2nd and 3rd respectively in 2007. Table 3.3-4 Income Sources of Households Surveyed in 2006 Item Farm Off-farm Business Investment House Others Total Per Wage Rental Capita CNY 37,518 742,219 420,863 221,850 182,700 27,731 1,631,250 6625 % 2.3 45.5 25.8 13.6 11.2 1.7 100 Table 3.3-5 Expenditure Pattern of the Surveyed Households in 2006 Health- Culture Transport/ Item Food Clothes Housing Education Total care /Recreation Communication

CNY 578,963 126,454 42,152 267,786 177,284 21,076 26,035 1,239,750 % 46.7 10.2 3.4 21.6 14.3 1.7 2.1 100

3.3.2 Desires of APs 69. The sample survey found out: 1) Knowledge on the Project: 97% of the APs stated that they had knowledge of the project but 3% has no knowledge on the project; 2) Sources of information: 88% of the affected people get known from local government and project IA’s dissemination, whilst remaining 12% from the residents of the neighbouring villages. 3) Attitude to the Project : All APs hold an active attitude to support the implementation of the project; 4) Extent of the Project Impact: 83% of the APs think that the environment improvement effectiveness of the Project are obvious, and if the compensation is adequate and the resettlement plan is well formulated, the LAR negative impacts of the Project will be mitigated, while 9% think that the environment improvement effectiveness of the Project the LAR negative impacts are also significant, the remaining 5% think the project has no active on them, but the LAR will bring a certain negative impacts on their livelihoods or livings; 5) Resettlement desires: The project is mainly situated in the outskirts of urban area in Cangshan District, 47.3% APs have chosen the option of house relocation in adjacent sites in a way of assets for assets, while 52.7% APs have chosen the cash compensation to relocate their houses at their own option. 6) Livelihood rehabilitation: 77% APs are optioned to cash compensation, and 20% APs are favoured to be employed as off-farm workers arranged by the local government, while only 3% APs ask for replacement land through land adjustment.

3.4 Impacts of LAR on APs’ Socioeconomic Status

70. The project construction would have certain impacts on economic and social aspects of APs in the affected areas.

3.4.1 Land Loss 71. The land loss will definitely cause certain income reduction for households; however, with the exemption of agricultural taxes and fees related to land, losses to respective

39 communities are minor and generally concerning small strips land loss implying that few households will lose all their cultivated land due to the Project. The surveys showed that the agricultural incomes only accounted for small portion of their total incomes in the impact areas. In 2006, among six affected villages, agricultural incomes accounted for only 0.5 to 15.4 percent of total incomes, while the incomes from off-farm activities accounted for 84.5 to 99.5 percent of total revenues. As for those households that has the contracted farmland affected by the land acquisition, incomes from crops, fish, livestock and forestry only accounted for 2.3% of the total family incomes. Even if all the cultivated land of the affected families surveyed is acquired, the maximum income reduction will only account for 7% of their total incomes. Therefore, the impacts of the land loss on the APs’ way to make living will be limited. The uppermost concern for the villages and CRCs is a fair compensation for the land to be lost. Similarly and further to the village concern, the APs concern is to get fair and timely compensation. The positive impact for APs who will lose land is that this will be a chance for them to get paid cash for either small business or other investments.

3.4.2 House/Apartment 72. Residential structure demolition will have both advantages and disadvantage functions on the APs livelihood. The advantages include that the project will provide the chance for them to reselect and arrange the residential sites for themselves to improve their living conditions and to upgrade the quality of life, and the per capita floor area of all the APs will be ensured resulting from the basic protection policy of per capita floor area of 45m2 for the households registered as rural resident to be practiced by the project, while the disadvantages include : i) the housing demolition will bring about inconvenience for their normal life; ii) the compensation that the APs with large areas of illegal structures can obtain from the project could not meet the requirement of buy houses with the same floor areas to their original areas at the similar sites because the price of commercial houses at the nearby areas might be higher than that of their original houses; iii) the APs who rent the house rental will lost the rental income due to the housing demolition. 73. Generally, the housing demolition and relocation are the key issues for resettlement; however, the survey results showed that there are abundant houses within the potential AP households. Consequently, after they have received cash compensation, they can choose self-relocation or relocation with local government assistance, if required. This means therefore that resettlement of this sub-component will have a minor impact on APs.

3.4.3 Enterprises/Businesses/Shops 74. Non-residential building demolition will have certain negative impacts on the production operations of the enterprises/individual industrial and commercial units. Most of these affected operation units are currently profitable. Sound operation and revenues of these units are the important income sources for the owners, local staffs/workers and non-local workers. According the survey, the employees of these enterprises get the salary/wage of CNY800 to CNY1300, whilst the owners of these affected enterprises make the income of CNY30,000 to CNY80,000 annually from the operations of these enterprises. These units have also played an active role in the promotion of local villages’ economy development through encouraging local interaction production and consumption, which indirectly plays an effective role in increasing local residents’ income. The demolition or partial demolition will have a short-term negative impact on work and livelihood of owners, business operators, workers, and even tenant.

3.4.4 Income Losses

75. This is a key issue particularly for the extremely poor, aged, women-headed households, disease suffering households and other vulnerable households. As the local government has already started a social safeguard programs such as the least subsistence security line (LSSL)

40 program in rural areas and rural cooperative health insurance plan, special assistance will be provided by the local governments. The Project will provide non-cash support such as relocation assistance and off-farm job training. For the APs with land loss, measures will be taken to reinforce the future employment opportunities in order to minimize the income risks, for example, skills training would be useful to help find a proper occupation or to reinforce their existing farming abilities. 76. In summary therefore, if the RP is well prepared with reasonable compensation rates, all the resettlement issues can be minimized and the APs income levels can be more than rehabilitated under strong supervision from FMG, Cangshan District Government and relevant township governments.

4 LEGAL FRAMEWORK AND RESETTLEMENT POLICIES

4.1 PRC Laws & Regulations and Policies Related to LAR

4.1.1 Applicable Laws & Regulations and Decrees

77. The PRC has carried out the laws, regulations, and policies on the resettlement and compensations for many infrastructure projects. The project will follow the related Chinese laws, national and provincial regulations and local by-laws and policies. Since local regulations and by-laws cannot be in conflict with those of upper levels, the following listed documents are from the basis for Project land acquisition, demolition and resettlement: 1). The Land Administration Law of the PRC (revised, 2004); 2). The Real Estate Administration Law of the PRC (effective on January 1, 1995); 3). The Implementation Regulations of the Land Administration of the PRC (effective on January 1,1999); 4). The House Demolishing Administrative Rules of the PRC (effective on November 1, 2001); 5). The State Council Decisions on Deepening Reform of Strict Land Administration (State Council 【2004】28, 2004); 6). Procedures of Fujian Province on the Implementation of Land Administration Law of the People’s Republic of China (effective as of January 1, 2001); 7). The Urban House Demolishing Administrative Procedures of Fuzhou City (July 2000); 8). The Certain Stipulations on the Implementation of the Urban House Demolishing Administrative Procedures of Fuzhou City (June 30, 2001) 9). The Certain Interim Provisions of Implementing 《 Urban House Demolishing Administrative Regulations》and 《Urban House Demolishing Administrative Procedures of Fujian Province》(Fuzhou Municipal Government, 2005); 10). Circular on Market Evaluation Interim Procedures of Cash Compensation for the Urban house Demolishing of Fuzhou City (July 24,2006); 11) Fuzhou Municipal Government on the Approval of Detailed Implementation Rules & Regulations of Housing Demolition and Resettlement for New East Urban (Rongzhen Zhong 【2007】289) ; 12), Circular of General Office of Fuzhou Municipal Government on Transmitting The Implementing Opinions of New East Urban Land Acquisition & Demolition and Resettlement headquarter of Fuzhou City on the Compensations for Land Acquisition and House Demolishing (Trial) ((General Office of FMG No.【2007】106). 13). Circular of General Office of Fuzhou Municipal Government on Further Intensifying Work Opinions of Checking up and Punishing Illegal Constructions (General Office of FMG No. 【2008】14)

41

4.1.2 Relevant Clauses of the Laws & Regulations and Decrees

78. The above laws and regulations have improved the protection of those whose standard of living might decline because of the project development. This project can be implemented based on the PRC Land Administration Law (effective as of January 1, 1999) and the P.R.C. Urban Real Estate Administration Law (effective as of July 5, 1994) as well as the other rules and regulations related to them. Here listed are the most important excerpts from State Council No. 28 document, while the key clauses of the relevant laws, rules, regulations and decrees are listed in Appendix – 1. z Article 12: Improving land acquisition compensation practice: People’s Governments at the county level and above shall adopt practical measures to ensure that the farmers whose land is acquired shall not be made worse off. In accordance with provisions of current law, if land compensation and resettlement subsidies paid in accordance with the provisions of current law are still insufficient to help the land loss farmers to maintain their original living standards, the resettlement subsidies may be increased upon approval by the people’s governments of provinces, autonomous regions, and municipalities directly under the central Government. If the total of the land compensation and resettlement subsidies are still insufficient to help the land-loss farmers to maintain original living standards when reaching the legal upper limit, the local people’s governments may pay subsidies with income received from compensated use of state-owned land. Provincial level government shall formulate and publicize the annual average output values (AAOV) in uniform amount or comprehensive land price for each city/ county, and the compensation should be uniformed within the same type of land. The full costs of land acquisition for national key development projects shall be included in the overall project budget. z Article 13: Resettle the land loss farmers properly: County level and above government should specify detailed measures to secure APs’ long-term livelihood. Within the planned urban area, local governments must bring farmers who have suffered land loss caused by land acquisition into the urban employment system, and establish a social security system; outside of the planned urban area, local government must reserve necessary cultivated land in its administrative jurisdiction for these land-loss farmers when land acquisition occurs, or corresponding jobs will be provided for them. z Article 14: Improve land acquisition procedure Documentation on information disclosure to and confirmed by the farmers whose land is to be requisitioned should be treated as an integral part of the materials submitted for the approval of land acquisition. z Article 15: Strengthen supervision and management of the land acquisition process: In case the resettlement of land acquisition has not been carried out, use of the acquired land is not allowed. Provincial government shall formulate the internal distribution scenarios of the land compensation within the collective organization based on the principle that most of the compensation should be used for farmer households whose land has been requisitioned. The rural collective organization shall make the information on the revenues and allocation of the land compensation fund publicized to and supervised by its members. The agriculture, civil affairs and other departments shall strengthen the supervision over the distribution and use of the compensation fund within the rural collectives. 79. The project will also implement the resettlement policies issued by FMG. Here listed are the most important excerpt from FMG No. 【2007】289 document and General Office of FMG No.【2008】14 document, while the key clauses of the other relevant policies are listed in Appendix – 1. FMG No. 【2007】289 document - Article 6(1): i) The housings without the property right certificate but built before 5 January 1984 when the Urban Planning Regulation was effective

42 can be treated like that with the property right certificate if the users of the housings can provide the eligible original certificate documents such as the title land deem, land use certificate for construction, construction taxation records, the satellite photography imagines, or they are verified by the township government, village committee and are in public notice without doubt. ii) The housings without the property right certificate but built during the period from 5 January 1984 to 26 October 2004 when FMG promulgated Implementing Opinions of Enforcing Investigation & Treatment and Ascertaining Responsibilities Related to Illegal Occupying Land for Construction can be properly compensated in accordance with their structures in consideration of their new extents. iii) The illegal buildings built after 26 October 2004 should be demolished within the stipulated limit without compensation, but the CNY 30 to 50/m2 can be provided for demolishing work fees or self-demolishing subsidiary. General Office of FMG No.【2008】14 document - Article 5: The compensations and subsidies for the LAR should be strictly manipulated. The demolishing and compensation plan that will involve illegal buildings, prepared by the demolishing and resettlement implementation agency, can only be implemented after it has been consulted with Municipal Planning Bureau, Municipal Land Resources Administrative Bureau and Municipal Urban Administrative & Enforcement Bureau. The policies for new east urban areas are to be exercised gradually. Provided that the per capita floor of 45m2 of rural residents can be secured, no formal titled house built before 26 October 2004 are compensated at the replacement costs considering their newness status, while the illegal buildings built after 26 October 2004 should not be compensated without exceptions. The Municipal Real Estate Administrative Bureau is responsible to strictly examine and verify them. Meanwhile, the illegal occupying land areas should be deducted from the base area to compute the cash payment compensation of the reserving land for the farmland acquisition. If the responsible persons of the relevant agencies have violated the above provisions to make the compensation for illegal buildings, they should strictly be enforced party & administrative disciplines, and they should be enforced criminal responsibility by laws if they have committed crimes.

4.2 The ADB Involuntary Resettlement Policies

4.2.1 Guidelines and Policies 80. The implementation of the Project shall comply with the above PRC’s laws, regulations and decrees to meet the requirement of policies on the involuntary resettlement. ADB policies include: 1) Involuntary Resettlement Policy, ADB, November, 1995, 2) Operations Manual F2: Involuntary Resettlement, ADB, October 29, 2003.

4.2.2 The ADB Involuntary Resettlement Policies

81. ADB Involuntary Resettlement Policy (1995) and Resettlement Operations Manual (OM Section F2) have already specified the 3 important elements of the involuntary resettlement: (i) compensation to replace lost assets, livelihood, and income; (ii) assistance for relocation, including provision of relocation sites with appropriate facilities and services and (iii) assistance for rehabilitation to achieve at least the same level of well-being with the project as without it. 82. Some or all of these elements may be present in a project involving involuntary resettlement. For any ADB operation requiring involuntary resettlement, resettlement planning is an integral part of project design, to be dealt with from the earliest stages of the project cycle, taking into account the following basic principles: 1) Involuntary resettlement should be avoided whenever feasible. 2) Where population displacement is unavoidable, it should be minimized by

43 providing viable livelihood scenarios. 3) Replacing what is lost. If individuals or a community must lose all or part of their land, means of livelihood, or social support systems, so that a project might proceed, they will be compensated and assisted through replacement of land, housing, infrastructure, resources, income sources, and services, in cash or kind, so that their economic and social circumstances will be at least restored to the pre-project level. All compensation is based on the principle of replacement cost. 4) Each involuntary resettlement is conceived and executed as part of a development project or program. ADB and executing agencies or project sponsors, during project preparation, assess opportunities for affected people to share project benefits. The affected people need to be provided with sufficient resources and opportunities to reestablish their livelihood and homes as soon as possible, with time-bound action in coordination with the civil works. 5) The affected people are to be fully informed and closely consulted. Affected people are to be consulted on compensation and/or resettlement scenarios, including relocation sites, and socioeconomic rehabilitation. Pertinent resettlement information is to be disclosed to the affected people at key points, and specific opportunities provided for them to participate in choosing planning and implementation scenarios. Grievance redress mechanisms for affected people are to be established. Where adversely affected people are particularly vulnerable groups, resettlement planning decisions will be preceded by a social preparation phase to enhance their participation in negotiation, planning, and implementation. 6) Social and cultural Institutions. Institutions of the affected people, and, where relevant, of their hosts, are to be protected and supported. Affected people are to be assisted to integrate economically and socially into host communities so that adverse impacts on the host communities are minimized and socially harmony is promoted. 7) No formal title. Indigenous groups, ethnic minorities, pastoralists, migrants/floating population, people who claim for such land without formal legal rights, and others, who may have usufruct or customary rights to affected land or other resources, often have no formal legal title to their lands. The absence of a formal legal title to land is not a bar to ADB policy entitlements. 8) Identification. Affected people are to be identified and recorded as early as possible in order to establish their eligibility through a population record or census. A cut-off date is set preferably at the project identification stage, to prevent a subsequent influx of encroachers or others who wish to take advantage of such benefits. 9) The poorest. Particular attention must be paid to the needs of the poorest affected people, and vulnerable groups that may be at high risk of impoverishment. This may include those without legal title to land or other assets, households headed by females, the elderly or disabled and other vulnerable groups, particularly indigenous peoples. Appropriate assistance must be provided to help them improve their socio-economic status. 10) The full resettlement costs are to be included in the presentation of project costs and benefits. This includes costs of compensation, relocation and rehabilitation, social preparation and livelihood programs as well as the incremental benefits over the without-project situation (which is included in the presentation of project costs and benefits). The budget also includes costs for planning, management, supervision, monitoring and evaluation, land taxes, land fees, and physical and price contingencies.

4.3 Policy Differences between the ADB and PRC

44 83. Comparing the Gaps between ADB and PRC policies, Table 4.3-1 shows that distinctive difference are in the aspects of information disclosure and consultation which are lacking in the content or time delays. For the resettlement budget, regarding some domestic central government funded small-scale projects, only a budget for engineering works was prepared and the RP costs are left to either the county or township government. Fortunately, this situation is changing and this Project is beyond that scope. As Fuzhou has well prepared local by-laws for the LAR, it is foreseen that there is no distinctive difference from ADB policies for this project. 84. Notwithstanding the minor difference in clause or statement, the most significant difference is the procedural difference, ADB requires RP preparation starting from the beginning of the project preparation, but it will only be considered during the project land approval stage with no detailed social economic survey and no consultations with potential APs at that time. Meanwhile, during the project preparation time, there are no specific persons responsible for RP affaires of a proposed project. It is very unlikely that a project resettlement can achieve a successful result without a well-prepared RP. In short, the successful implementation of resettlement work needs strong enforcement of currently improved regulations and policies. Efforts have been made on this Project to bridge this gap, by training and coaching IA staff throughout. Furthermore, since the ADB involved in the project preparation and implementation, ADB senior resettlement specialist as well as consultants have explained to the IAs to ensure that they fully understand ADB requirements and PRC policies on involuntary resettlement. Further measures will be adopted before RP implementation to carry out the LAR in accordance with the RP approved by the ADB, with the assistance of the consultants. Table 4.3-1: Gaps between ADB and PRC Policies on Involuntary Resettlement No ADB IR Policy Comparison Remark 1 Involuntary resettlement should No difference Usually conducted with technical be avoided whenever feasible and financial optimization (alternative analysis) 2 Where population No difference c.f. Clause 13 of No. 28 displacement is unavoidable, it document should be minimized by providing viable livelihood scenarios 3 Replacing what is loss No difference With compensation and assistance 4 Each involuntary resettlement Slight difference ADB procedure is conceived and executed as Also see No. 10 has part of a development project been and will be or program. followed 5 The affected people are to be Different ADB procedure fully informed and closely Usually no consultation, and the information has consulted. disclosure are conducted after RP approval been and will be in China followed 6 Social and cultural Institutions No difference With compatibility analysis, experienced on this aspect 7 No formal title No difference. Negotiation on a agreed compensation price 8 Identification No difference (ADB statement “as early as possible” is vague) 9 The poorest No difference. Provided assistance

45 10 The full resettlement costs are Slight difference c.f. point of clause 12, No 28 ADB procedure to be included in the doc. has been and will presentation of project costs The full costs of land acquisition for national be and benefits key development projects shall be included in followed the overall project budget.

4.4 Project Policies on the LAR 4.4.1 Eligibility for Compensation 85. All the owners and users of the land to be acquired within the affected area of the project LAR are eligible to get reasonable compensations or subsidiaries, and all the owners of the structures to be demolished are eligible to get reasonable replacement compensation or subsidiaries distinguishing among differing cases of their property right status and construction years (built before 5 January 1984 when the Urban Planning Regulation was effective, built in the period from 5 January 1984 to 26 October 2004 when FMG promulgated Implementing Opinions of Enforcing Investigation & Treatment and Ascertaining Responsibilities Related to Illegal Occupying Land for Construction. 86. In this project, the date, 26 October 2004 when FMG promulgated Implementing Opinions of Enforcing Investigation & Treatment and Ascertaining Responsibilities Related to Illegal Occupying Land for Construction, has been set as the cut-off date to determine the eligibility of structures to get replacement compensation for the project. The structures built after the cut-off date are determined as the illegal buildings that are not eligible to get reasonable compensations or subsidiaries, but they are to be subsidized at the proper demolishing allowances. 87. The compensation eligibility of business-used houses with property right certificates is to be verified as follows. In case of that endorsed by the planning authority and verified by the real estate administrative authority as the business-used houses or of which the front room of the first floor along the street was changed to shop before 5 January 1984 and with the business licence and taxation certificate, these houses are eligible to be compensated at the business compensation standard. In case of that not endorsed by the by the planning authority and verified by the real estate administrative authority as business-used houses but of which the front room of the first floor along the street was changed to shop during 5 January 1984 to 1 April 1990 when the Urban Planning Law of PRC was effective with the business licence and taxation certificate, 80% of these houses are eligible to be compensated at the business compensation standard, and the remaining 20% are to be compensated at the original structure standard. In case of that not endorsed by the by the planning authority and verified by the real estate administrative authority as business-used houses but of which the front room of the first floor along the street was changed to shop during 1 April 1990 to 26 October 2004 with the business licence and taxation certificate, 60% of these houses are eligible to be compensated at the business compensation standard, and the remaining 40% are to be compensated at the original structure standard. 88. The structures that were built by the private enterprises on basis of leasing the collective land from villages or township governments before 26 October 2004 are to be compensated at the replacement costs. 89. Demolition agency will proclaim Houses Demolition Proclamation announcing the demolition responsible agency, scope of the demolition and the demolition deadline etc within 3 days after Houses Demolition and Relocation License has been granted; and notifies the relative authorities in written form to stop processing the following formalities within the demolition areas within the demolition period: 1) granting the business license in which the demolished house is to be used as business place; 2) formalities for trading, exchange, division, donation, transfer and mortgage etc. of the demolished house, excepting the effective judgements and procedures executed for adjudication issued by People’s Court or arbitration institutions; 3) Examination and approval formalities on new-building, expansion, rebuilding and

46 changing in nature of the demolished houses or auxiliaries.

4.4.2 Resettlement Principles 90. The compensation to the affected people and resettlement policies are made based on the ADB’s policies and the laws and regulations of China. The first objective should be to assure the APs of their income rehabilitation and the increase of their standard of living, while minimizing the social and environmental impacts. The preparation and the future implementation of the RP are based on the above targets. Special attention should be given to vulnerable groups, such as the poor, women, elderly, and disabled. 91. Table 4.4-1 summarizes the principles applied in the land acquisition and resettlement. The principles might be flexible regarding compensation, resettlement and rehabilitation considering the differences among communities (such as disbursement of cash, rehabilitation methods of communities and individual income rehabilitation). All these approaches are targeted at the APs to ensure adequate compensation during resettlement so as to rehabilitate and increase their livelihood. Table 4.4-1: Summary of Resettlement Principles No. Principles Assistance for rehabilitation to achieve at least the same level of well-being with the project as 1 without the project. Regarding distinct cases, the compensation and resettlement is given to all affected people 2 regardless their entitlement or not. Relocation of land should ensure affected people to maintain their livelihood level based on the 3 land after resettlement. In case land per capita is not sufficient to maintain the livelihood of affected people, 4 compensation will be provided with cash or similar economic activities. The affected people should be fully informed and closely consulted on resettlement and 5 compensation scenarios and standards, social and economic rehabilitation, project implement schedule, and participate in the implement of resettlement. 1) There is no deduction for depreciation or any kind of discount for tiled buildings and other properties compensation, which should be based on replacement costs. Compensation can be made in cash or in kinds (such as assets for assets). 2) No compensation or relocation could be given to the people who enters the project area and occupies any land or house beyond the deadline as stipulated and the illegal buildings built after 26 October 2004. 3) Land acquisitioned and the loss caused by the land acquisition should be compensated 6 reasonably. Compensation for land acquisition will be paid to the collective organization to develop the collective economy, improve the public facilities and provide rehabilitation to affected villagers. The resettlement subsidies will be paid to the resettlement sponsors or the resettled individuals to pay the insurance fee. 4) The owners of the infrastructure should be compensated. The compensation should be used for the reconstruction of affected infrastructure and rehabilitation of the function. 5) Land should not be acquired before the affected people obtain sufficient compensation or the replacement land. The executing agency and the independent third party conduct monitoring over the RP 7 implementation. Special attention should be given to poor people and other vulnerable groups to ensure their 8 living conditions are improved. The affected people should be provided opportunities to get benefits from the project. 9 The resettlement plan should be combined with the local development program. 10 The complaints made by the AP’s are to be seriously treated to help them in settle their difficulties and inconvenience in land acquisition and relocation reasonably and practically. The problems or dissatisfactions with the compensation standards should be resolved mainly through negotiation. If negotiation does not work, arbitration or even appeal is to be taken. Any compulsive actions taken by the resettlement IA should be complied with relevant laws. 11 The budgets of compensation and resettlement should be made complete and the funds should

47 be disbursed timely.

12 Any significant changes made during the RP implementation (such as lowering the compensation standards, changing the location or scale of the project LAR etc.) should be reported to ADB in advance. If necessary, the RP is to be revised or new RP is to be re-prepared.

4.4.3 Compensation Standards 1) Principles 92. Lost land and property should be compensated based on the principle of replacement value as follows: z The property is compensated in line with the principal of resettlement. Compensation fees are paid before the land is acquired. z Training and assistance and employment opportunities should be provided to the APs to ensure they maintain their standard of living. z Compensation for crops, green seedlings, trees and attachments will be paid according to their market prices. z Management of construction should be strengthened to ensure an optimization of the construction period so that negative impacts are reduced. z Compensation funds for resettlement subsidies will be given to the affected labor force so that they can continue their existing work once they get subsidies or to enable them to develop individual businesses. 2) Compensation Rates 93. After holding discussions with the staffs and representatives from the relevant government authorities, affected townships and villages, and APs, and referring to the prevailing policies of FMG and the compensate standards of similar projects as well, the compensation standards of LAR to be practiced in the proposed works have been formulated and are considered as adequate. a) Permanent Land Acquisition 94. Regarding to the permanent paddy land and orchard acquisition, the land compensation is at the 10 times of AAOV, resettlement subsidies are at 15 times of AAOV, and the losses of green crops are to be compensated at 1 time of AAOV. Therefore, the total compensations will be 26 times of AAOV. The compensation of collectively owned construction land will be 80% of that for paddy land. In addition, as stipulated by FMG, the affected villages are entailed to obtain 10% reservation farmland fund (10% of the total farmland to be acquired times CNY1million/mu) for the purpose of production and rural residents’ social security. Details are presented in Table 4.4-2. The project will manly affect vegetable land and orchard. Based on the agriculture statistic report and prevailing market prices of main produces, the AAOV of various crops are computed as follows: vegetable land with total annual production of 4 ton at the price of CNY 68/100kg is CNY 2,720/mu, while the citrus land is CNY 1760/mu. Taking the vegetable land as example, the integrated compensation rate amounts to 29.63 times of AAOV, that is almost the ceiling of land compensation set by the state law. Table 4.4-2 Compensation Rate for Permanent Land Acquisition Compensation Multiplier Compensation AAOV Land Type Land Resettlement Rate (CNY/mu) Green Crops Compensation Subsidy (RMB/mu) Farmland (vegetable , 3100 10 15 1 80,600 Orchard, other) Collectively owned 64,480 construct. land State-owned 3,000

48 unused land Note： AAOV is determined at the AAO times the price set by the state authority with the reference of location-based land value of Fuzhou city

b) Residential housings and Attached Facilities 95. The compensation for all the houses with the property right certificate and the houses built before 1 January 1984 that is to be determined based on the satellite photography images as full property right status is determined as the follow formula: the total compensation = verified area X (location-based price of CNY 1,800/m2 + compensation rate for structure + relocation encouragement incentive + t resettlement interim + relocation allowance) + compensations for other items (including decoration and attached facilities), whilst the compensation for the houses without the property right certificate but built during 1 January 1984 to 26 October 2004 is determined as the follow formula: the total compensation = demolishing area X (compensation rate for structure + relocation encouragement incentive + resettlement interim + relocation allowance) + compensations for other items (including decoration and attached facilities). The compensation rates for structure and decoration & attached facilities are detailed in Table 4.4-3. In the course of relocation, the APs who can sign the resettlement agreement and relocate their houses within the negotiation limit are eligible to get the relocation encouragement incentive of CNY 300/m2. The resettlement interim is CNY 7/m2 /month with the total duration of 24months (relocated building of 9 floors and below) to 36 months (relocated building of over 9 floors). The relocation allowance is set at CNY 6/m2. All the APs who are registered as the residents in the affected areas are eligible to get the subsidiary of CNY 350/m2 X 45m2. In addition, if the per capita floor area is less than 45 m2, the APs who are registered as the rural residents in the affected areas are eligible to get the floor shortfall subsidiary calculated as the follow formula: the floor shortfall subsidiary = shortfall floor area (45m2 - per capita floor area) X (location-based price of CNY1800/m2 +CNY300/m2). Table 4.4-3 Compensation Rates for Structure and Decoration & Attached Facilities Type Structure Unit Rate Remarks reinforcement CNY/m2 520 brick-cement CNY/m2 352 brick-wood CNY/m2 312 House wood CNY/m2 456 earth-wood CNY/m2 260 simple CNY/m2 190 Decorations and aluminium alloy door & window CNY/m2 120 Attached Facilities stone floor CNY/m2 30 cement and brick floor CNY/m2 25 terrazzo floor CNY/m2 35 quarry tiled wall CNY/m2 30 granite wall CNY/m2 60 ceramic tile floor CNY/m2 60 Chinese fir floor CNY/m2 30 hard wood floor CNY/m2 60 decorated wood wall CNY/m2 40

49 plaque hang ceiling CNY/m2 45 earth fence wall CNY/m2 80 brick fence wall CNY/m2 120 brick and stone well CNY/well 700 domestic firewood and coal oven CNY/No 150 domestic washing basin CNY/No 90 water store tank CNY/No 500 sunshine level ground CNY/m2 40 septic tank CNY/No 800 biogas pond CNY/No 1000 iron window bar CNY/m2 30 iron gate CNY/unit 175 water tower CNY/m2 90 cable TV CNY/HH 50 telephone CNY/HH 58 wide band CNY/HH 108

96. No compensations for the illegal buildings that were built after 26 October 2004 will be made, but they are to be subsidized with the demolishing allowance of CNY50/ m2. c) Non-residential buildings and Attached Facilities 97. Most of the non-residential buildings relocated in the project area are business-used houses, offices and plants & warehouse owned and used by the enterprises or institutions, with the main structures of brick-cement, brick-wood and reinforcement. 98. The compensation for the business-used houses that can be verified in line with the regulations is calculated as the follow formula: the total compensation = verified area X (location-based price rate+ compensation rate for structure + relocation encouragement incentive) + compensations for other items (including decoration and attached facilities). The location-based price rate is to be determined by the qualified evaluation agencies on the basis of the different locations of main street, next to main street or small back street. The compensation rates for structure and decoration & attached facilities are detailed in Table 4.4-3. The relocation encouragement incentives of CNY2000/m2, CNY1000/m2 and CNY600/m2 are to be given to the business-used houses located at main street, next to main street and small back street, respectively, if their relocation agreements are signed and they are relocated within the negotiation limit. In addition, operators of the first floor shops along the streets with the business license and taxation certificate being valid before 26 October 2004 are eligible to get business assistance subsidiary of 3 months (CNY100/m2 of the front room area). 99. The compensation for the office-used houses is determined as the follow formula: the total compensation = verified area X (CNY1800/m2+ compensation rate for structure + relocation encouragement incentive) + compensations for other items (including decoration and attached facilities), whilst the compensation for plants is determined as the follow formula: the total compensation = verified area X (CNY1350/m2+ compensation rate for structure + relocation encouragement incentive) + compensations for other items (including decoration and attached facilities).The compensation rates for structure and decoration & attached facilities are detailed in Table 4.4-3. The relocation encouragement incentive for these two types of houses is set at CNY200/m2.

50 d) Special Facilities 100. The compensation for the affected special facilities including infrastructures like bridges, power supply, water supply, gas supply, sewage and telecommunication and other public facilities is determined based on the costs to relocate & rebuild and resume their functions.

4.5 Compensation Fund Flow and Timing

101. Compensation fund for land acquisition and resettlement regarding Nantai Island Creek Rehabilitation – Longjin River and Yuejin River works will be paid by FUVCDC, According to Article 25 of the Regulations on the Implementation of the Land Administration Law of the PRC, payment of various expenses for land requisition should be effected in full within 3 months starting from the date of approval of the land requisition and resettlement plan. The fund disbursement of the Project is implemented according to the agreement signed between IA and APs. In practice, the fund must be fully paid to APs one month before land acquisition as a deadline. 102. In principle, compensation for the buildings and other attachments on the requisitioned land are directly paid to the legal owners themselves of these properties. For land acquisition, the resettlement subsidy will be paid by FUVCDC directly to the landowners or land users, while land compensation fee will be paid to the collective economic organizations (villager committees) and further to be determined how to allocate and use it though villager’s meeting. Figure 1 shows the compensation fund flow. Figure 1 Flow of Compensation Funds

Fuzhou Municipal FB

FUVCDC

NEULADRH

Villages APs Affected Owners of Special Government Agencies Units Infrastructures for Taxes & fees

4.6 Entitlement Matrix

103. A resettlement compensation entitlement matrix (see Table 4.6-1) is established according to the compensation principles and compensation qualifications. Table 4.6-1 Resettlement Entitlement Matrix Definition of Type of Implementation Application Entitled Compensation policy/ standards Impact issues person Permanent Productive a) 6 villages 1. The compensations including land FUVCDC will provide loss of land located in b) Farmers compensation, resettlement subsidiary recommendations/assi productive the who use the and green crop compensation are to be stance for transfer to land right-of-way land c. 46 made to the villages and the APs at the urban status. and, if (ROW) 38.95 HHolds c. rate of CNY80,600/mu for farmland and required to facilitate mu 194 APs CNY64,480/mu for collectively owned urban transfers and construction lands. training program 2. If the APs are resettled by the collective

51 organization, the resettlement subsidiary will be paid to the collective operation unit; if the APs are resettled by other resettlement organization, the resettlement subsidiary will be paid to the implementing agency; if the APs are resettled by themselves, the resettlement subsidiary will be paid directly to the APs or paid for their insurance with their agreements. 3. Compensation for the green crops and the attachments on the acquired land will be paid to the contractor and operator of the land or the property owner of the attachments; For those collectives that are not able to adjust and replace land to the APs to continue the contract and operation, the compensation will be paid to the affected farmers with not less than 70% of the land compensation. The use of land 4. The compensation funds legally obtained and reserved by the rural collectives shall be used for specified purpose such as buying insurance for the affected farmers, developing the secondary and tertiary industries and building rural public facilities. The funds shall not be distributed to households or used as the collective funds to pay debts of the collectives. 5 The use and management method of the compensation funds paid to the village collectives shall be determined by the members of the collectives through voting. Records of the income and expenses shall be published at least once every 6 months and reported to the national land management and supervision department of the county (city) or district. 6. In principle 10% of the land to be acquired can be reserved for self use and will be used to develop the collective economy of the affected village. Loss of Residential Owner of the 1. APs can choose resettlement modes Compensation shall be residential land located in building or according to their will. Cash compensation made to the APs in houses and or affected houses and assets for assets are available for time properties by the river c. 1531 them select. District and townships blue line c. 561 2. All the APs who are registered as the will provide assistance households rural residents in the affected areas are on relocation eligible to get the subsidiary of CNY 350 As APs will move to a /m2 X 45 m2. In addition, if the per capita new housing site floor area is less than 45 m2, the APs who before their are registered as the residents in the original housing affected areas are eligible to get the floor demolition, the shortfall subsidiary calculated as the follow transition allowance formula: the floor shortfall subsidiary = will not be paid to APs shortfall floor area (45m2 - per capita floor area) X (CNY1800/m2 +CNY300/m2). 3. The legal houses are to be compensated at the reasonable rate, that is the compensation rate for the house with the property right certificate and or

52 built before 5 Jan. 1984 is to be determined at the sum of the location –based price and compensation of structures, whilst the house built during 5 Jan. 1984 to 26 Oct. 2004 will be compensated at the structure compensation. Refer to 4.4.3 for details. 4. For assets for assets, several resettlement apartment modes ( 45m2, 60 m2,75 m2,90 m2,105 m2 and 13 m20) and sites are to be provided for the APs to select, at the average price of CNY 2800/ m2. The selection of relocation apartment in the way of assets for assets is based on the verified areas of their original houses. 5. The APs will be exempted from the relevant real estate taxes that shall be computed on the same value of the demolition houses when they buy a house (second-hand house or new house) for the purpose of their resettlement. 6. The APs who can sign the resettlement agreement and relocate their houses within the negotiation limit are eligible to get the relocation encouragement incentive of CNY 300/m2. 7. Within the designated transition period, if the APs or renter of the house arranges a residence by self, project proponent will provide a rental of 7yuan/ ㎡/month as the resettlement interim, with the total period of 24months to 36months. If the demolition period is postponed, the rental subsidy will be increased to 14yuan/ ㎡ monthly. Those whose temporary resettlement is arranged by the project proponent will not be eligible to get the temporary resettlement subsidy. 8. The APs can obtain the relocation allowance at the rate of CNY 6/m2 (if it is less CNY 200, the subsidy will be CNY 200/household), or the project proponent will be responsible for the resettlement transport. 9. No compensations for the illegal buildings that were built after 26 October 2004 will be made, but they are to be subsidized with the demolishing allowance of CNY50/ m2. 10.The compensation for the house facilities like cable TV, telephone etc is to be provided. Detailed in table 4.4-3 11. The priority selection of lower floors will be given to the families with disable and old members. 12. If the children of APs are required to transfer to the other school, the costs occurred during the school transferring will be paid by the project proponent. Non-residenti office Owners, 1 The cash compensation is provided for Based on face-to-face al buildings buildings , managers, the affected units. The compensation for measurement and and facilities workshops, employees of the legal structures is determined based negotiation loss of industrial the on the replacement costs, that is the sum Compensation shall be

53 enterprise/ warehouse enterprises of the location based compensation rate made to the APs in institution and or and compensation of structure. The time institutions location-based price rate for business-used houses is to be determined by the qualified evaluation agencies on the basis of the different locations of main street, next to main street or small back street, while the location-based price rates of office-used houses and plants are set at CNY1800/m2 and CNY1350/m2, respectively. The structure compensation rates are detailed in table 4.4-3 2. The relocation encouragement incentives of CNY2000/m2, CNY1000/m2 and CNY600/m2 are to be given to the business-used houses located at main street, next to main street and small back street, respectively, while the relocation encouragement incentive of office is CNY 600/m2. 3. The owner or manager of the affected units can obtain the relocation subsidy at the rate of CNY 10/m2 (if it is less CNY 200, the subsidy will be CNY200), or the project proponent will be responsible for the resettlement transport. 4. In case of temporary resettlement, if the owner or manager makes the temporary arrangement by themselves, the temporary resettlement subsidy will be made to them; while those whose temporary resettlement is arranged by the project proponent will not be eligible to get the temporary resettlement subsidy. If the transition resettlement period is prolonged, the two times of the normal subsidy will be paid starting from the month that is exceeded. 5 If the operation is terminated due to resettlement, in addition to the compensation for the loss of production termination to the affected unts according to the term of production termination, number of employees registered with the social security institution by the enterprise, and employees’ average wage of the previous year published by the government where the enterprise is, project proponent will give one-time economic compensation to the affected units according to the term of the production termination and enterprise’s monthly average profits after tax. For those without a profit and loss statement but with sales volume of legally-paid tax, the enterprise will be compensated on the basis of legal sales volume multiplied by the present average profit amount of the same trade. 6. During the period of production/operation termination, employee’s dismiss with the excuses of the resettlement is not allowed, and

54 welfares and other bonus of the employees will not be affected. 7. During the period of production termination, operator or manager can apply to the tax authority for relevant tax reduction and exemption, which shall be supported by departments related. 8. The equipment loss and costs incurred from equipment installation and commissioning will all be compensated. 9. When the demolition structures are for rent, the owner of the structure shall be given a one-time rent compensation of the three months according to the existing rent contract and rent standard filed with real estate trading and management department at the time when demolition is performed. 10. No compensations for the illegal buildings that were built after 26 October 2004 will be made, but they are to be subsidized with the demolishing allowance of CNY50/ m2. Loss of bridge: Owner of the Cash compensation will be made to the infrastructures power supply infrastructure owner of infrastructure by the project line, water proponent, while the owner of supply pipeline, infrastructure will be responsible to gas supply relocate rehabilitate them. pipeline, drain-pipe, communication line. Loss of trees Trees to be Owners of Cash compensation for mature trees at a Wood or trees will be cut off trees compensation rate of CNY750/tree for treated by their owners within the blue mango, CNY 1000/tree for longan, litchi line and Chinese olive, and CNY 60/tree for banana.

5 RESETTLEMENT SCHEME AND INCOME REHABILITATION

5.1 Resettlement Targets

104. The concrete resettlement targets for the project are set as follows: z Optimize the project design, by avoiding dense population/high buildings and minimizing the scope of impacts on involuntary APs. z The resettlement of APs will be considered as a component of the project and sufficient funds will be available to the resettlement process and APs will get benefits. z Assistance will be provided to the APs during the process of removal and resettlement. z APs will merge into the new community socially and economically. z APs will be encouraged to take part in the preparation and implementation of the RP. Their opinions should be fully respected in the RP. z The productivity and living standards of the APs will be rehabilitated up to the level before resettlement or before the start of the project implementation. 5.2 Resettlement Population

105. According to the surveys, 46 households with 194 persons are to be affected by the

55 project land acquisition, of which 116 rural labors should be resettled due to the loss of land, while the housing demolition will affect 561 households with 1531 persons. In addition, some employees are anticipated to be temporarily affected due to the business/production operation suspension of the shops/enterprises/institutions that are to be resettled. In line with the implementation schedule, the LAR will commence in the year of 2008, which is close to the survey year, therefore, the natural growth of the population is not be taken into account in determination of the resettlement population. 5.2.1 Economic Rehabilitation Population 106. The economic rehabilitation population means that of those who rely on agricultural land for living would lose major means of production and working object (cultivated land) and needed to provide them with new income sources for their livelihood. According to the surveys, the permanent land acquisition of 38.95mu will affect the 6 villages in 2 townships, 46 households with 194 persons will actually be affected and required to be provided with new income alternatives to make living, of which 116 are active rural labors, with the per capita land loss of some 0.2mu.

5.2.2 Resettlement Population of Housing demolition 107. Based on the latest impact census, the total residential housing floor area of 130, 520m2 in 10 villages of 2 townships will be demolished. The APs total to 1531 persons in 561 households, of which 532 households with the total population of 1433 are required to be relocated.

5.3 Overall Resettlement Scheme

108. The project will affect some houses and partial land in the villages along the rivers, but it has no disaster negative impacts on the productivity and living conditions in most of the affected villages. The opinions of APs will be gathered widely by means of their participatory planning in the affected townships and villages. According to the opinions and suggestions held by the APs and the situations in the affected areas, the overall resettlement scheme has been formulated as follows: 1) In accordance with the overall urban development plan of Fuzhou City, the impact areas are within the range of urban areas planned. Therefore, the project will not allocate any individual residential new yards for these affected urban residents and rural residents to build their houses by themselves. The scenarios of residential housing resettlement will mainly include assets for assets in the designated areas (on spot site/adjacent sites and other locations) and cash compensation. 2) As the impact area is located at the planned priority zone of the urban development of Fuzhou city, most of which along the work layout are planned or are developing as the new industrial zones to accommodate factories, available land resources are comparatively scare. In line with the environmental resource capacity and the principle of resource utilization efficiency, the resettlement scenario of localized off-farm employment will be adopted to resettle the rural labors affected by the permanent land acquisition. The surveys showed that the labors affected by the permanent land acquisition currently have jobs in factories or involve in the service sectors, therefore, the scenario of off-farm employment resettlement is acceptable to the affected villagers. 3), Where the village affected by the permanent land acquisition has no available land with the quantity and quality equal to the acquired land to adjust for the APs to cultivate, 70% of the land compensation shall directly be made to the APs, whilst the remaining 30% shall be used for alternative production development, surplus labors and the APs’ livelihood subsidiaries and villagers’ welfares.

5.4 Resettlement Plan

56 5.4.1 Production Resettlement Plan and Income Restoration Strategy 109. The permanent requisition of land for this sub-component will directly affect 7 villages of 2 townships in Cangshan District; the sub-component will permanently requisition 420.97 mu of land (including 256.63mu state-owned land and 164.34mu collectively owned land), comprising 38.95mu farmland collectively owned by 7 villages (vegetable land 35.02mu, orchard 0.7mu and other cultivated land 3.23mu), 284.75mu construction land and 75.88mu unused land. 116 labours in the 46 households affected by the permanent land acquisition are to be resettled for production. The impacts of farmland acquisition on the villages and APs were analyzed (see Table 5.4-1 and Table 5.4-2 for details). Because Fuzhou is located at the southeast coastal area of PRC, economy in Fuzhou has been comparatively developed and its urban and outskirts have been formed unique. Farmers don’t rely on the land for living any more in fact. Off-farm activities like engaging in manufactures, business and service industries or outside employment are the main income sources for these farmer families. Majority of the affected labours due to land acquisition are currently employed in enterprises or engaged in service industries. The impacts of land acquisition on their incomes are not significant. Table 5.4 - 1 Impact Analysis of Land Acquisition on Village Income Loss Before Land Acquisition Affected by LA Impact Rate (%) (CNY10,000) Village Arable Arable Loss Loss Total Populatio Affected Affected Population Arable Annual Land Land HH per per HH n HH Persons Land Loss (mu) (mu) HH capita Cangsh 199 584 25 0.58 1 4 0.503 0.685 2.320 0.158 0.158 0.039 an Xiahu 345 1100 96.14 3.90 5 22 1.449 2.000 4.057 1.06 0.212 0.048 Beiyuan 680 2100 145 0.10 1 4 0.147 0.190 0.069 0.027 0.027 0.006 Gaohu 1570 4960 454.63 13.94 9 37 0.573 0.746 3.066 3.79 0.421 0.102 Jianbian 953 2697 371 15.40 21 91 2.204 3.374 4.151 4.189 0.199 0.046 Puxia 1230 4657 1392 2.17 2 5 0.163 0.107 0.156 0.590 0.295 0.118 Shoushan 330 1531 351 2.86 7 30 2.121 1.960 0.815 0.778 0.111 0.026 Total 5307 17629 2834.77 38.95 46 194 0.867 1.100 1.374 10.594 0.230 0.055

Table 5.4-2 Impact Extent of Land Acquisition on Family Lost Income After Land Farmland Total Acquired Acquisition Compensation Percent of HH. After Land Farmland Farmland Percent of Total Received Loss No. Acquisition Amount (mu/hh) (mu/hh) Family Income (CNY/hh) (mu/hh) (CNY/hh) (%)

≤10％ ------

11％－20％ 6 2.0－3.5 0.4－0.7 1.6－2.83 1100－2000 3.7－7.8 28500－49900

21％－50％ 16 0.41－2.50 0.2－1.0 0.21－1.54 600－2900 2.0－13.8 14300－71300

51％－80％ 16 0.2－1.92 0.1－1.5 0.1－0.79 300－4300 1.2－18.8 7100－100700

81％－100％ 8 1.11－2.06 0.99－2.30 0.06－0.38 2800－6600 10.4－19.2 70600－1640000

110. To ensure that the living standard of the APs after resettlement would not be declined and the present per capita income can be restored and surpassed will be set as the resettlement target. Any production resettlement plan and income restoration strategy should respect, as far as possible, the preferences and desires of the APs. APs were interviewed during the socio economic survey and a total of 10 respondents answered the question on livelihood/income rehabilitation after land acquisition and resettlement. Results indicated that 40% of the respondents would continue to operate small-scale business themselves after

57 getting cash compensation, 35% would buy insurances related to healthcare and social security, and the remaining 15% respondent would explore off-farm income generation activities by using resettlement subsidy. No respondents chose farming. The survey found that majority of the affected labours due to land acquisition are currently employed in enterprises or engaged in service industries and the APs preferred to be resettled in a way of off-farm employment scenario. Considering the geological locations and available land resources of the affected villages/communities along the work layout and the preferences and desires of the APs as possible, giving the priority to the resettlement scenario of off-farm employment has finally been determined for the project, and their incomes are to be restored through the property investment for renting made by the affected villages collectively using the land compensation from the project, the employment provided by the project and skill trainings for off-farm employment etc. 111. The income restoration strategy will be flexible, democratically-based, and self-administered in accordance with the decisions of individual villages. The strategy will have the four main aspects; (i) Use of land compensation fund and investment by the community, primarily for the benefit of those who still live in the village. (ii) investment by individual APs, (iii) skill trainings and off-farm employment, and (iv) employment on project-related activities. 1) Use of Compensation Fund 112. The compensation fund provided by the project for the affected villages is detailed in Table 5.4-3. Following the regulations, the land compensation fee and 10% reserving farmland additional compensation fund(10% of the total acquired farmland X CNY1million/mu) will be used to assist farmers who have suffered land loss. Land reallocation is not feasible round the city fringe, and agricultural production in the affected villages will therefore decrease in the short-term. Compensation funds accruing to the villages (collectives) will therefore be based primarily around non-agricultural activities, or the development of agro-processing livelihoods. The use of compensation fees by the collectives shall be governed by the villagers’ meeting. The information on its receipts and expenses will be made know to the villagers and welcome the villagers for supervision. In addition, the village where some land should be requisitioned will be entitled to obtain 10% reserving farmland additional compensation fund to use later, so that they can build collective staff houses, a new urban, industrial parks supporting, commercial outlets, special markets and so on by concentrating the retained collective fund and some funds owned by the villagers. They can gain a steady income and share the benefits of increment in land value through house renting and setting up shops to provide varied services. Table 5.4-3 Summary of Income Loss and Compensations of Affected Village Estimated Income Compensations（CNY 10,000） Loss Village Land Resettlement 10% LA （CNY10,000/year） Total Compensation Subsidiary Reserving Fund Cangshan 0.158 1.80 2.70 5.80 10.30 Xiahu 1.06 12.09 18.14 39.00 69.23 Beiyuan 0.027 0.31 0.47 1.00 1.78 Gaohu 3.79 43.21 64.82 139.40 247.44 Jianbian 4.189 47.74 71.61 154.00 273.35 Puxia 0.590 6.73 10.09 21.70 38.52 Shoushan 0.778 8.87 13.30 28.60 50.77 Total 10.594 120.75 181.12 389.50 691.36

58

113. Regarding to individual use of compensation fund. The individual fund use is flexible as long as they can rehabilitate their livelihood and living standard at least reaches the levels of that before the project. It is an opportunity for the affected villagers to obtain the land compensation and resettlement subsidy. They can use the fund to develop individual business projects, and they can work in the factories as well. The surveys showed that the labors affected by the permanent land acquisition currently have jobs in factories or involve in the service sectors, therefore, the permanent land acquisition will have no big changes of the production modality to the most affected villagers. APs who have engaged in business/shop operation clearly stated that they will continue their businesses, thus the compensation fund including land compensation fee and part of the resettlement subsidies will assist them in their livelihoods. With the assistance of the villages, the APs can use the land compensation and resettlement subsidy to increase their incomes or to seek for the new jobs, APs can also use the money for investment or for children’s higher education, which in China or elsewhere of the world is the essential far-sighted measure to improve people’s living standards since a well educated person can find a well paid job easily. For those who can get an income from renting out houses, they can spend part of their compensation fund for house decoration in order to provide a better housing condition and get a good house rental. 114. The relevant government authorities will encourage the land-lost village collectives to build dormitories, business networks and specialized markets in new urban residential zones and industrial zones according to their own ability by centralizing the reserved land compensation funds and the private funds from the villagers and thus creating stable incomes through leasing the buildings and running shops and providing services. Cangshan district government shall take initiatives to request the relevant agencies including industrial and commercial registration, taxation and sanitation to provide service to the APs for the establishment of business entities. Preferential policies and measures such as tax exemption and reduction and procedure simplification etc. shall be implemented to help the land-lost farmers to solve problems faced when they start the service activities. The local government will also encourage the land-lost farmers to run factories or create economic entities locally through partnership and joint venture to produce assorting products which can match into the industrial chains in the centralized industrial zones or to run goods transportation and earthwork or to provide necessary services to the local enterprises so as to ensure the long term livelihood development of the land-lost farmers. 2) Skill Training for APs and Off-farm Employment 115. In order to help the affected rural labors to improve the employment abilities and their skills, particularly women, the project will sponsor an extensive series of training programs for them, with the free skill trainings at least one person time for the every affected family, including skills on motorcycle, vehicle, tractor and farm machinery repair, repair and maintenance of electrical goods, product marketing and small business registration and operation etc. The skill training courses will be offered both on site and at the training centers in the District and township centers. Payments will be made and directly disbursed to the training institution, e.g. the technical vocational school and the women's federation. Allowances will be paid for trainees attending courses away from their own villages. At the same time, the labor and social security department and agriculture offices at each level take the lead to organize the land-lost farmers to connect with the enterprises in local (township or district ) industrial zones. The targeted enterprises shall give privilege to hire the land-lost farmers. Meanwhile, the mechanism of training and employment service for the land-lost farmers is to be established to provide the land-lost farmers who are short of knowledge and skill with free occupational skill training and occupational guidance, employment information, the assistances in obtaining the relevant procedures in labor registration and management. The district government shall freely send those farmer-workers who are employed for the first time and send them to the factories, and the government will support them to get free training from the enterprises that employ them with the training fee of CNY100/person. In addition, the

59 integrated urban and rural labor market information service will be strengthened to improve the labor-use management. For those farmer-workers who are able ad willing to work but not employed locally, the project shall help and introduce them to work in the surrounding enterprises or in the downtown. For the land-lost farmers especially those males at the age of over 50 and females at the age of over 40, the project shall guide them gradually to work in social service sectors such as urban visual maintenance, road cleaning, property management and housekeeping etc. so as to help them to get local jobs in time. Enterprises applying for participating in biding on urban visual maintenance, road cleaning and property management in the new towns and districts shall employ at least 40% of the local farmer-workers. In addition, the relevant government departments shall also try to vacate more commonweal labor posts and create more new employment channels to provide jobs preferentially to the land-lost farmers especially those males at the age over 50 and females at the age over 40. 3) Project Related Income-generating Opportunities 116. During the project construction stage, APs living nearby the river alignment work can seek some income-generating opportunities—mainly providing services related to construction. For instance, APs can provide spare houses (if available) for construction contractors as temporary office or as residence of construction workers, operate grocery kiosks and provide food, cigarette and beer/spirits for the construction teams. That can provide temporary employment for certain APs of land loss as well as increase household cash income. 117. Additionally, after the project completion, full time workers will be required to undertake operation and maintenance of the newly constructed facilities such as cleaning up the water surface and river embankment. FUVCDC has planned to give the priority to the APs who would like to engage in the job. One worker per 500m long new river section is planned to be recruited to maintain the inland river, totaling 20 employment opportunities for the APs. 118. Based on the above overall resettlement options and income restoration measures, the specific rehabilitation options for the households in various villages are presented in Table 5.4-4. Outcomes from the proposed restoration actions are summarized as follows: i) Except Beiyuan village, the other 6 villages are planning to invest the land compensation funds allocated to the communities from the project in the properties like workshops, warehouses and stores for renting. Some labours (totaling about 8) are needed to manage these properties. From this action, in average about CNY 17 to CNY 170 varied with the villages are expected to provide the households within the village annually, whilst the affected families with the member employed from this action will increase the another incomes of about CNY12,000 annually. ii) 20 employment opportunities for the inland river maintenance generated from the project will be provided to the affected households. From this action, some CNY 12,000 are to be made by the beneficial families. iii) With the arrangements of the local relevant government authorities, the project will support to providing the free trainings on off-farm job skills to the affected families and to get off-farm jobs (totaling about 88 persons). The beneficial families are anticipated to generate the annual incomes of about CNY 12000 in average. In addition, the villages can also provide the subsidy of CNY 200 to CNY 500 to each affected households varied with the villages annually. Last, assuming the affected households deposit the compensation funds into the domestic banks, the interest income obtained ranges from CNY 300 to CNY 6810 at the prevailing annual interest rate of 4.15%. From the above proposed actions, the incomes of the affected households are expected to be restored or outstrip their current levels within one year. Table 5.4-4 Land Acquisition and Rehabilitation Options for HHs affected by farmland acquisition Total Labors Government Annual Options of Benefits from Timeframe Affect Village to be And village Interest ed HH Rehabilitations Proposed Actions (Year) resettled Subsidy Income

60 Labors Income Employed (CNY/HH)

Property Investment for Renting made by 30 One year the affected villages Cangshan 1 2 500 1720 Project- related 1 12000 Employment Skill Training and Off-farm 1 12000 One year Employment Property Investment for 122＋ Renting made by 1 One year 12000 the affected villages Xiahu 5 13 1100－ Project- related 200 2 12000 One year 2960 Employment Skill Training and Off-farm 10 12000 One year Employment

Skill Training and Beiyuan 1 1 Off-farm 1 12000 One year 300 300 Employment

Property Investment for 92 ＋ Renting made by 2 One year 12000 the affected villages 2960－ Gaohu 9 26 300 Project- related 6810 5 12000 One year Employment Skill Training and Off-farm 19 12000 One year Employment Property Investment for 170 ＋ Renting made by 3 One year 12000 the affected villages 1180－ Jianban 21 52 350 Project- related 3580 8 12000 One year Employment Skill Training and Off-farm 41 12000 One year Employment Property Investment for 17＋ Renting made by 1 One year 12000 the affected villages 2870－ Puxia 2 5 400 Project- related 3550 1 12000 One year Employment Skill Training and Off-farm 3 12000 One year Employment Property Investment for 91＋ Shoushan 7 17 Renting made by 1 One year 450 590－2960 12000 the affected villages Project- related 4 12000 One year Employment

61 Benefits from Government Annual Labors Total Proposed Actions Options of Timeframe And village Interest Affect to be Village ed HH Rehabilitations (Year) Subsidy Income resettled Labors Income Employed (CNY/HH) (CNY/HH) (CNY/HH)

Skill Training and Off-farm 12 12000 One year Employment Total 116 116 119. Above all mentions, the rehabilitation measures to be taken can basically make up the income loss caused by the land acquisition. Therefore, the off-farm resettlement options and proposed rehabilitation measures are feasible. The villagers affected by land acquisition can also use land compensation and resettlement subsidies to develop some individually-owned business, or to enter some enterprises to work; maybe, these are good opportunities to improve their living standards. The survey showed that since the existing labor force have been largely employed in enterprises or engaged in the tertiary Industry, the land acquisition has slight influence on the production methods for the majority of villagers.

5.4.2 Residential Housing Resettlement and Rehabilitation Plan 120. In March 2008, the resettlement team organized by FUVCDC carried out the on site survey, optimization and demonstration with the help of Cangshan district government authorities and township governments. According to the practical situation and the opinions of the APs, two different resettlement scenarios have been formulated, including cash compensation and assets for assets resettled at the local designated sites. A contract indicating the compensation methods, the sum of the compensation fee, floor area and site of relocation houses, time limit of relocation, the transition methods and transition period etc. should be signed between each affected household and the project proponent or housing demolition agent commissioned by the project proponent before demolishing houses. The AP has the right to choose resettlement scenario and resettlement locations upon their desire. The overall plan for the residential housing resettlement and rehabilitation is detailed in Table 5.4-5. Meanwhile, the project has also made the tentative arrangements for the transition. According to the preliminary statistics, some 310 households will require to have the transition resettlement with total required renting areas of some 23,800㎡. The survey showed that some 750 flats with the total floor areas of some 53,000 ㎡ in the project areas and the adjacent areas are available for renting, with the average rental rate of CNY 5 to CNY 6/㎡ /month. Therefore, on the basis of the verified demolishment areas, the project will provide the transition interim of CNY 7/㎡/month to the households who will make the transition arrangement by themselves, or the project will provide the transition shelters to the households. The resettlement options are summarized as follows:

Table 5.4-5 Summary of Overall Plan for Residential Housing Resettlement and Rehabilitation Village Resettlement Plan Total Jianbian Puxia Bahu Shoushan Gaohu Cangshan Xianfen Beiyuan Zhenan Housings to be

Resettled Household 162 102 23 6 242 11 7 6 2 561 Persons 414 292 54 18 687 30 12 18 6 1531 Resettlement Plan Scenario 1 Household 16 11 2 25 1 1 1 2 59 Persons 40 31 5 71 3 2 3 6 161

62 Village Resettlement Plan Total Jianbian Puxia Bahu Shoushan Gaohu Cangshan Xianfen Beiyuan Zhenan Scenario 2 Household 70 42 11 3 107 5 6 2 246 Persons 178 120 26 8 303 14 10 6 665 Scenario 3 Household 76 49 10 3 110 5 3 256 Persons 196 141 23 10 313 13 9 705 Note: Scenario 1 = cash compensation and resettlement with the surplus houses of villages Scenario 2 = cash compensation to purchase commercial house/apartment Scenario 3 = assets for assets resettled in the local designated sites Scenario 1: Cash Compensation and Resettlement with the Surplus Houses of villages The survey found that a few APs own two or more houses, one of which is used for themselves living, the others for renting. Or one house is temporarily vacant for getting cash compensation in the demolition stage, the other one is kept for their own use when the old houses must be demolished. The villagers who have at least two houses, one of which does not need a demolition, favor for the model of cash compensation and resettling with the surplus houses of villages. Based on the estimation, the interest income from the compensation fund provided by the project will more than the monthly rental income (the rental income of the house with the floor area of 100㎡is CNY500 to CNY600, whilst the compensation of the house with the floor area of 100㎡ will be around CNY280,000 in line with the compensation standard and the interest of this compensation funds deposited into the domestic banks at the prevailing annual interest rate of 4.15%), therefore, in accordance with the agreed compensation standards, the incomes of the households who will lost the house for rental will not be decreased due to the housing demolition, but their incomes are likely to be slightly increased. In addition, the LAR will only affected small part of the residential housings or only attached facilities, whilst the major parts of their living structures will not be affected. The affected parts or attached facilities can be easily restored after the cash compensation is made by the project. It is estimated that some 59 HHs(about 10% of APs) will adopt this scenario. Scenario 2: Cash Compensation to Purchase Commercial House/Apartment Since 2003, the real estate market in Fuzhou has witnessed sound growth. The supplies and markets of the real estate have being kept rapid growth and the real estate prices are remaining on an acceptable level. The real estate market in the city was not a seller’s market any more, but a buyer’s market. There are now an increasing number of houses for choice by displaced persons. In accordance with the survey, some 246 HHs (about 44% APs) will likely select this scenario. The estimation showed that this category HHs can get some CNY550,000/HH in average, which are enough for them to purchase a commercial real estate with the floor area of 120㎡in the project area at the prevailing market price of CNY4600/㎡. Under this option, these households will obtain the compensation in cash in line with the project compensation policies and standards, so that they will have more choices to improve the living conditions as they like, in particular, those households that are willing to buy houses of much better conditions by use of such compensation and their own savings. Scenario 3: Assets for Assets Resettled in the Local Designated Sites Cangshan District Government has planned four plots at the adjacent project areas (in Jianbian, Gaohu, Puxia and Shoushan) to build the apartment type housing estates to resettle families affected by the project and other projects in group. The construction floor areas of these 4 resettlement plots have been planned as follows: Jianbian plot of 76,900m2, Gaohu plot of 100,000 m2, Puxia plot of 33,830 m2 and Shoushan plot of 95,320 m2. It is planned that their constructions will be completed by the end of June 2010. These 4 plots can meet the requirement to resettle the APs of the project. FUVCDC will purchase these apartments for the APs to select. The relocation plans of these 4 sites are shown in Table 5.4-6. The

63 difference between the compensation for the original houses and the price of new estates (determined at CNY2800/ m2) will be liquidated between the concerned APs and the project proponent. As these estates are close to the affected villages, the social relationship and living habits of villagers can be maintained, many APs are satisfied with this arrangement. In order to meet the different requirements of various APs, several types of apartments have been designed, so that the APs have many choices. According the plan, the standard floor areas per apartment have been designed at 45m2, 60 m2, 70 m2, 90 m2, 105 m2 and 130 m2. If the resettlement area is over 105 m2, separate apartments will be adopted to resettle. The water supply, power supply, transportation, gas supply, communication and cable TV etc in these four housing estates will be provided according to the plan and design. Infrastructures such as school, post office, bank, market, bus terminals and hospital can also be provided near the estates to facilitate the daily existence and trips and improve the living quality of the APs. Some 256 HHs (about 46% APs) have indicated their desires to select this scenario. Table 5.4-6 Number and location of Relocation sites for residential structures S.N. Village No. of No. of residential Identified Location of Total land Total Building Relocation structures Relocation sites coverage for Area of sites required requiring relocation site relocation site for residential relocation (mu) (㎡) structures 1 Cangshan 5 2442

2 Shoushan 3 856 Plot 12（Shoushan Block） 64.99 95320 3 Baihu 10 3646

4 Beiyuan 3 725

5 Gaohu 110 22893 Plot 13（Gaohu Block） 91.25 100000

6 Jianban 76 14615 Plot 15（Jianban Block） 54.93 76900

7 Puxia 49 10620 Plot 14（Puxia Block） 25.37 33830 Total 256 55797 236.54 306050

121. FUVCDC and its resettlement agent are responsible for providing all the assistances to the APs in the whole process of the resettlement activities: 1) Understanding the APs’ needs and satisfying them as possible before the resettlement. 2) Help the APs dealing with their troubles such as arranging the vehicles and assisting the remove during the process of resettlement. 3) Having the knowledge about the APs’ comfortableness after they are resettled in the new locations and providing assistances in overcoming their difficulties in time.

5.4.3 Rehabilitation Plan for the Affected Enterprises

122. According to the survey, 29 enterprises are to be affected by the project demolishment. After having stakeholders’ consultations including the project proponent, township and district governments, owners/managers of the affected enterprises, relevant government authorities, it is agreed that the cash compensation of backward reconstruction and rehabilitation resettlement and rebuilding resettled at the other locations will be adopted for 29 affected enterprises. Table 5.4-7 summarizes the overall rehabilitation plan for the affected enterprises. Scenario 1: The Cash Compensation and Backward Reconstruction and Rehabilitation According to the survey, the demolishment will only affect part of the structures owned by 7 enterprises, furthermore, they have sufficient unused lands and some of them have the plant yard of 40 to 50 meter in depth. As some the enterprises will not be heavily affected (affected structures like auxiliary structure, gate house and fence), limited requisitioned land

64 will not produce fatal affect on its normal operation of the affected enterprise. Therefore, it is unnecessary to resettle such enterprise in another place. Usually, it is to resettle such industrial enterprise within the redline area through reconstructing its auxiliary structure with backward method. The project will make the cash compensation to undertake the costs incurred during the reconstruction and rehabilitation. The rehabilitation of the affected facilities within their original plants will not affect their operations and the incomes of their employees and owners will not be affected as well, therefore, it is not necessary for the project to provide the special assistances to restore their incomes. Scenario 2: The Cash Compensation and Re-renting Plant in Adjacent Areas In addition, according to the survey, 7 affected enterprises are small village-run manufacture factories, or small private plants that rent local workshops or family workshops to operate. These enterprises mainly operate plastic processing, foam products, shoes and clothing manufacture; correspondingly, they have small-scales, backward technologies and low-quality products. So, resettlement locally is a quite appropriate mode; the affected private enterprises’ owners have also expressed such kind of desire and they are pleasure to accept local resettlement. Therefore, the survey team also visited the local and nearby villages, knowing that the local villages have sufficient economic assets like workshops and other rental properties collectively owned by village committees to rent. The project proponent will directly make the cash compensation to these affected enterprises, in turn, the enterprises will use the compensation to rent the workshops from the villages to continue their productions. In addition, a few enterprises are likely to be closed to switch to other products due to heavy pollutions or energy consumption following to the updated government policies. The project proponent will provide assistances or advices to these enterprises for their production transitions if any. Scenario 3: The Cash Compensation and Resettlement in the Other Place The affected enterprises that are not willing to resettled within the villages or are not be able to rehabilitate locally will be resettled at the other places. The project proponent will make the compensation payment in cash directly to the affected enterprises. Meanwhile, the project proponent will consult with them and provide the assistances in purchasing/leasing the plants in the new industrial zones that are developed in accordance with the urban development plan. Following the sectors’ characteristics, the affected enterprises will be resettled in group, which will facilitate to achieve the aim of standardized management, scaled operation, improving the efficiency and reducing production costs. Juyuanzhou Industrial Zone located at the west part of Cangshan District and Gaishan Investment Zone located adjacent the affected area have been selected as the candidate resettlement locations to accommodate the affected enterprises. These two zones have developed a large number of standard workshops and other facilities to attract the investors to set up the plants. 8 enterprises have indicated their desires to select this resettlement scenario. Table 5.4 -7 Summary of the Rehabilitation Plan for the Affected Enterprises Village Rehabilitation Plan Total Baihu Gaohu Xianfen Zhengan Beiyuan Quantities to Be Resettled Enterprise (No.) 5 19 1 2 2 29 Worker (person) 326 943 14 295 260 1838 Rehabilitation Plan Scenario 1 Enterprise (No.) 1 1 1 2 2 7 Worker (person) 90 120 14 295 260 779 Scenario 2 Enterprise (No.) 4 10 14 Worker (person) 236 296 532

65 Village Rehabilitation Plan Total Baihu Gaohu Xianfen Zhengan Beiyuan Scenario 3 Enterprise (No.) 8 8 Worker (person) 527 527 Note: Scenario 1 = the cash compensation and backward reconstruction and rehabilitation Scenario 2 = the cash compensation and re-renting plant in adjacent areas or closed to switch production Scenario 3 = the cash compensation and resettlement in the other place 123. For industrial enterprises whose land is permanently requisitioned, in addition to implementation of resettlement policy as set forth in the “Existing Policy Table”, project proponent will take the following rehabilitation measures: 1) Original real estate of the industrial enterprise: land, houses, structures, road, electricity, power lines and gas pipelines shall be compensated according to the repurchasing prices or rehabilitated according to the original scale. 2) Costs incurred from enterprise’s equipment loss, equipment installation and commissioning will be all compensated. In case of difficulty, the resettlement implementing agency will offer assistance, including invitation of specialists and fees incurred there from. 3) During the process of enterprise’s construction and rehabilitation, the resettlement implementing agency will assist in submission of construction for approval. 4) In accordance with Fuzhou’s industrial layout plan and original nature of an industrial enterprise, the resettlement implementing agency will resettle it to a proper industrial zone. Communications, power supply, gas supply and drainage needed for production will be guaranteed. And it will guarantee that production cost of the resettled enterprise will not rise due to resettlement. 5) If the affected enterprise wants to change its production to other trade, the resettlement implementing agency will be responsible for resettling it to a proper industrial zone and try best to help it transit stably and change its production. 6) The socio-economic survey found out that mainstream enterprises in the project area are hi-tech ones, and there is a few space to develop small traditional factories. Therefore, the resettlement implementing agency will attach importance to those factories and give certain assistance and consultation services to them. For example, project proponent will provide complete service to an industrial enterprise that changes into a hi-tech enterprise or help it resettle to another industrial zone. 7) During the removal, the affected enterprise may either select resettlement transport subsidy or select the resettlement implementing agency to provide resettlement service. 124. The project will provide the following policy supports to the owners of the affected enterprises whose incomes will be affected due to the demolition: If the operation is terminated due to resettlement, in addition to the compensation for the loss of production termination to the affected units according to the term of production termination, number of employees registered with the social security institution by the enterprise, and employees’ average wage of the previous year published by the government where the enterprise is, project proponent will give one-time economic compensation to the affected units according to the term of the production termination and enterprise’s monthly average profits after tax. For those without a profit and loss statement but with sales volume of legally-paid tax, the enterprise will be compensated on the basis of legal sales volume multiplied by the present average profit amount of the same trade. In case of the employees who will lost their jobs due to the shut down of the affected enterprises, the project proponent will coordinate the relevant government authorities to provide the following policy supports to them: 1) If they have

66 participated the unemployment insurance program initiated by the government, the social security authority shall deliver the unemployment premium to them; 2) If they have not participated the unemployment insurance program but they are qualified to apply for the least substance security line, the civil service authority shall give the priority to them as the persons of the least substance security line and provide the monthly least substance to them in time; 3) Free trainings will be provided to them for re-employment; 4) The labor authority shall provide free information on employment, and the authority shall follow their willingness to coordinate the labor wanted units to give the priority of re-employment to them.

5.4.4 Rehabilitation Plan for the Affected Institutions

125. According to the survey, 5 institutions including 4 schools and 1 research institute are to be affected by the project demolishment. Only part of office buildings or auxiliary facilities of 4 schools are to be demolished and the main teaching facilities of these schools would not be affected, therefore, they can continue their normal teaching activities. The project will demolish the idle aged office buildings of the research institute, which are occasionally used for renting, whilst its main office building where the research facilities are settled will not be affected, which its normal research activities will not be affected by the project. Therefore, it is not necessary to relocate these 5 institutions in the other locations. After having stakeholders’ consultations including the project proponent, the affected institutions and the authorities concerned, the cash compensation payment will be provided by the project proponent to the affected institutions for them to restore the affected buildings and attached facilities through readjusting their offices or constructing new substitution buildings or facilities inside sites on their own decisions.

5.4.5 Rehabilitation Plan for the Affected Shops

126. All of the 33 affected shops use their own house to run businesses. In general these shops are quite small, averaging only 45 m2 per shop. The main customers are local residents with some from outside floating population. The survey showed that the businesses of these shops were not very good and a few shops were in close or nearly in close. Of these 33 shops, one is in close, the annual operating profits of the 14 shops are less than CNY10,000, and that of the 16 shops are less than CNY40,000, whilst the annual operating profits of the best two shop are CNY73,500 and CNY154,000, respectively. The details are referred to Table 2.2-5. Some business owners have expressed the desire to close down and move to other places, therefore, the project proponent and relevant government authorities will provide the assistances of the latest information on shop and store markets to facilitate them to transfer for the other activities or to seek for the new shop to reopen their business. Since most of those family shops are small service shops, their customers are the public, so it is relatively easy to be rehabilitated. It will not have long-term affect on them and deprive them of permanent work and income due to implementation of the project. 127. After having consultations with the stakeholders, the scenario of cash compensation for them to recover businesses by themselves will be adopted to resettle these affected shops in order to facilitate them in terminating business of their own accord, seeking for other activities, or opting new shops at the new location in their own hands. Based on the survey, 5 shops will not continue their shop business operations due to the bad businesses and switch to the other activities after the APs have obtained the compensations from the project, whilst 16 shops will purchase or rent the stores at the appropriate locations in Fuzhou city after they have obtained the compensations from the project. According to the relevant statistic data issued by the real estate trading center of Fuzhou City, the real estate price or rental at the similar location to the project area in Fuzhou city are CNY11,000/㎡ or CNY6,000/㎡/year, respectively. The compensation is enough for them to purchase or rent the stores with the similar area to their original shops to restore their business operations. The remaining 16

67 shops will restore their business operations at the relocation sites after they have obtained the compensations from the project. According the relocation plans, plot 14, plot 13 and plot 12 have all planned to construct the commercial sections with the total area of 8000㎡, 2000 ㎡ and 3000㎡, respectively, for the business activities of cloth, general merchandise and groceries etc. The store price at the relocation sites will likely be around CNY10,000/㎡, therefore, desired APs can purchase the business operating estates similar to their original stores at the relocation sites. The restoration plan for the affected shops is detailed in Table 5.4-8. Meanwhile, the shops owners/operators located at main street, next to main street and small back street are entailed to get the relocation encouragement incentives of CNY2000/m2, CNY1000/m2 and CNY600/m2 , respectively, if their relocation agreements are signed and they are relocated within the negotiation limit. In addition, operators of the first floor shops along the streets with the business license and taxation certificate being valid before 26 October 2004 are eligible to get business assistance subsidiary of 3 months (CNY100/m2 of the front room area).

Table 5.4－8 Rehabilitation Plan for the Affected Shops Demolition Operating Rehabilitation Township Village Owner Business Activity Profits (CNY Area（㎡） Plan 10,000/year) Zhenfuti grocery 65.10 0.7 A Liufajie video rental 63.40 0.75 B Zhenchunmu aluminium alloy 39.52 0.82 C Liuxuhe aluminium alloy 44.26 1.05 B Jianban Zhenyondon glass 48.30 1.21 B motor, E-bike Chenmeijun 14.50 1.45 B repair Zhenmenhua E-bike repair 14.50 0.41 B Zhenqinshen stainless steel 21.28 0.87 A Wangxiancao grocery 20.00 0.63 A Chenchenzon grocery 32.94 0.56 A Gaishan Zhenyili grocery 29.00 0.36 A Chenjian Super market 396.23 0.98 A Gaohu Zhanfanli Super market 148.45 0.74 A Chenbiyin aluminium alloy 48.45 0.59 C Huanbinzhou aluminium alloy 68.02 1.21 B Zhenchong restaurant 103.21 2.15 A Chenlianzen mattress 38.86 1.18 B healthcare Chenlianzen 7.04 1.32 B products Baihu Chenlianzen cold metal 35.25 1.23 A Zhenzuyin vehicle repair 89.88 3.8 A Wangdexin recreation 41.26 0.78 A Cangshan Cangshan Chenzonmin furniture 140.56 3.91 B Zhongyifan restaurant 68.78 C Zhongjiwu hardware 49.40 7.35 A Zhongjiwu petroleum shop 49.40 3.9 B

68 Demolition Operating Rehabilitation Township Village Owner Business Activity Profits (CNY Area（㎡） Plan 10,000/year) Zhongjiwu restaurant 49.40 1.05 C Zhongjiwu motorcycle repair 49.40 15.12 B fruit juice & Zhongjiwu 49.40 1.23 A drinks Zhongjiwu grocery 9.86 1.42 A chicken & duck Huanweicao 11.00 0.41 A butch Xianfen Huanweicao pharmacy 23.69 3.56 B Huanweicao barbershop 9.00 0.2 A Zhenan Chencuancen snack 40.00 1.56 C Note: A = restore business operating at the relocation sites, B= purchase or rent stores in other locations, C = switch to other activities 128. For the affected shops, beside they will be compensated according to the resettlement policy, following rehabilitation measures will be taken for them: 1) There is a preparation period of 60 days for move before the shop is demolished. The preparation period is counted from the day of demolition notice published. In case of difficulty, the resettlement implementing agency will give assistance. 2) For those who are willing to operate for a certain period of time at the original site, the shop shall be demolished before the construction starts on the premise of not affecting the progress of construction. 3) In case that the original shop has a poor business, the chap person of the shop has right to change the business with the consent from the shop owner. The resettlement implementing agency shall be responsible for helping the chap person look for a proper business site. 4) The project proponent shall provide the shop keepers with the consulting information on business operation orientation and changes as possible, e.g. the resettlement implementing agent will pay attention to the commercial shops that are faced with a survival crisis, such as low-level restaurants, retailers without advantages. Taking the opportunity of demolition, the resettlement implementing agent shall help them to transfer from the ordinary food cooking to special food cooking and high quality fruits activities that have high demands in the communities, so as to improve their operation returns. 5) If the shop keepers wish to rent shops to do business at another sites, the resettlement implementing agency shall provide service to facilitate their initiatives to restore their businesses as soon as possible. 6) If shop keeper/owner selects to resettle the shops that are to be purchased in groups by the project proponent at the resettlement site, the resettlement implementing agent will do its best to contact with property management company to offer a preferential property management fee within a certain period of time

5.4.6 Rehabilitation Plan for Infrastructures and Ground Attachments 129. The cash compensation for the affected infrastructures and ground attachments will directly be paid to the owner of these facilities by the project, while the owner of these facilities will be responsible to relocate or reconstruct them. The restoration measures of the affected infrastructures shall be well planned and arranged in advance and adjusted according to the local conditions, whilst the project implementation shall also be carried out according to the

69 actual situation on sites punctually and precisely with safety and high efficiency to minimize the negative impacts on the surroundings and publics. The resettlement implementing agent shall demolish the infrastructures according to the layout of piles and detailed engineering drawings of the works by taking no impacts on the project construction activities as the principle to minimize the structure demolition as possible. As for the relocation of pipelines the resettlement implementing agent shall coordinate with the owner of these facilities to rebuild or relocate the pipeline before their demolition to ensure that the normal living order of the residents (including those do not need to be relocated) along the alignment will not be influenced.

5.4.7 Rehabilitation Plan for Other Public Service Facilities 130. The functions of the affected public service facilities including pump station, sports yard, elder entertainment center, villager affair office building and sanitation shall be fully considered to avoid their transition. In general, they shall be rebuilt and rehabilitated in neighborhood to maintain their service networks. 131. For public service facilities of which all are to be permanently requisitioned, in addition to implementation of the relevant stipulations on the project, project proponent will take the following rehabilitation measures: 1) If the requisitioned public service facilities have an indispensable social service function at the original community, e.g. the sole clinic, elders’ entertainment center, villager affairs office, project proponent will resettle such facilities within the area of the same community. 2) If the public facilities which land is requisitioned is able to be relocated, with the consent of the urban planning department, project proponent will resettle such facilities in another place, for example, a resettlement site that will accommodate a large number of the APs, therefore, urban resources will be readjusted and reallocated by make full use of this resettlement opportunity, which could make the urban development plan more reasonable. 3) Providing that the relevant construction rules and regulations can be complied, in line with the requirements of the administrative institutions of these public service facilities, the project will likely adjust the internal structures and service functions of the resettlement sites through this resettlement opportunity so as to improve their social service functions and service level. If the costs of above-mentioned items are over the compensation fees, the project proponent will settle balance account with these administrative institutions according to the construction costs. 4) During the removal, the affected public service administrative institutions may either select resettlement transport subsidy or request the resettlement implementing agent to provide resettlement service.

5.5 Resettlement Safeguard Measures for Vulnerable Groups

132. The 16 VGs are all the HHs to be affected by the housing demolition, including lonely elders above 70 years old of 3, handicapped families of 6, and the poor families of 5, with the housing demolition areas of 28㎡to 390㎡. During the course of resettlement and relocation, the project proponent will pay special attention to the vulnerable groups’ resettlement. Based on their actual situations and resettlement desires, they are all to be relocated at the designated sites in a way of assets for assets and they can select the flat type with the floor area one grade higher than their original houses without additional payment for the floor area shortfall (for instance, the floor area of the original house is 85㎡, the flat with the floor area of 90㎡ at the relocation sites is to be given to them, no payment for the floor increment compared to the original floor area is required). The project will carry out the relocation according to the resettlement plan and offer them additional financial and physical assistance

70 so that they can complete task of relocation. 1) Those who have enjoyed the least subsistence security line with per capita floor area of less than 6 ㎡ are qualified to apply for renting cheaper house/apartment, the rental of the cheaper house/apartment will be applied according to the relevant regulations, in addition, they can receive a settling -allowance of CNY 3,000 per family; Those with per capita floor area of less than 10 ㎡ can also apply for renting the cheaper house/apartment after they select the cash compensation scenario and move out during the negotiation period, and agree to deposit the compensation money into the “ resettlement account” that is managed by Fuzhou Municipal FB. 2) Those with per capita income of less than CNY 400/month and the average floor area of less than 12 ㎡ per capita are qualified to apply for purchasing an “Economic and Practical” apartment, after their qualifications has been verified by sub-district affairs office and CRC and publicized without question as well. They can also apply for the loan at the 3 year interest assistance provided by FB for purchasing the apartment with the standard floor area of less than 60 ㎡. 3) After these vulnerable groups have been resettled, relevant agencies in charge of provision of community services in the concerned locations shall contact them to offer employment opportunities to serve as house keepers or staff in shops in the vicinity, etc. Free trainings will be provided to them. 4) The elderly, ill and disabled APs will be resettled on lower floors

5.6 Gender Issue during Resettlement and Income Restoration

133. Women have equal entitlement with men in receiving compensation, employment and training. However, older women particularly those over 35 years old are in the weak position, local villages and townships have decided to incorporate the training for women into local government training scheme which is called “4050” scheme, on the purpose to help those labor (both man and woman) over 40 or 50 years old to find a job through training. 134. Now the domestic helpers are of great potential for these women. Currently the minimum wage for a domestic helper is CNY8/hour, and if a trained women labor can work 8 hours per day and 20 days per month, then she will get CNY1280 per month, which is almost one year net income from farming. Based on the preliminary statistic, some 40 women expressed they will likely to employed as the domestic helpers, accounting for about 80% of the total female labors of 51 who are to be resettled due to the land loss. According to the employment demand survey information issued by the labor authority of Fuzhou City, the domestic help demand in Fuzhou City is about 52,000, whilst the supply is about 46,000, the shortfall is about 6,000. The wage of the domestic helper ranges from CNY8/hour to CNY12/hour. Therefore, the demand of domestic help is still vital with the attractiveness of wage. If they are willingly, they can easily find the job as the domestic help with the good wage. The key concern should be employment of women labor through training after land acquisition and resettlement. With a well organized re-employment program, the AP’s livelihood and living standard can be rehabilitated in 1-2 years.

6 PUBLIC PARTICIPATION AND CONSULTATIONS

6.1 Identification of Stakeholders

135. Public participation and consultation are important procedures according to ADB policies and Chinese laws and regulations. Above all, the stakeholders should be identified and categorized as primary and secondary stakeholders. 136. Primary stakeholders are identified as those directly or adversely affected and those who will purely benefit from the project, it mainly includes: (i) people directly affected by land

71 and property losses, (ii) social and public institutions affected by the LAR; (iii) all villages as well as townships/sub-districts traversed by the river alignment; and (iv) all institutions and companies directly involved in the project construction and operation, such as construction contractors. 137. Secondary stakeholders include the indirect beneficiaries such as the construction material suppliers, government organizations involved with the project processing as well as those who are interested in the project and participated in the project related activities. 138. The purpose of identifying the project stakeholders is to ensure extensive public participation of; and consultation to; APs particularly those adversely affected; in order to ensure the smooth implementation of the project without affecting AP’s livelihood. The following sections describe procedures that have been and must still be done to achieve the Project goals.

6.2 Approaches and Measures for Public Participation

6.2.1 Approaches 139. When the surveys are prepared, the terms of reference (TOR) is formulated. The local governments are invited to make the comments and suggestions on TOR of the surveys and send their representatives to participate the surveys. When the surveys are conducted, the leaders of the affected townships/sub-districts and villages and the representatives of APs are also invited to participate the surveys, meanwhile, the survey teams shall explain them the importance of project, project benefits, project impacts, LAR compensation principles and implementation schedule, and hold the consultation discussions on the compensation rates and resettlement scenarios with the APs. During the RP preparation, the resettlement designers hold discussions with various stakeholders to get their opinion, needs and the issues/problems, and to identify the resettlement sites as well. The results of the stakeholder consultations are supposed to be incorporated into the RP as possible. Meanwhile, the local stakeholders shall also participate in the on-spot surveys. All these stakeholder consultations will have the active impacts on the RP implementation.

6.2.2 Measures 140. Public participations and stakeholder consultations mainly adopts two modalities: i) face to face meeting, and ii) the sampling survey of AP’s desires. The APs can get understandings on project purpose, project importance and project activities through these modalities, and the concerned matters on the resettlement can also be discussed and settled. Through investigation, the resettlement plan designer shall make great efforts on public participation and stakeholder consultations, which will facilitate the preparation of the RP that can satisfy the APs. 141. During the RP implementation, the participations and stakeholder consultations of the face to face meeting and the sampling survey of the AP’s desires are also to be adopted to collect the AP’s opinions and their desires to further the RP improvement, meanwhile, the APs shall be encouraged to present their grievances, opinions, demands and suggestions to villages, the relevant resettlement agencies and supervising agencies, and the resettlement office shall response them in time in accordance with the handling procedures. 142. In order to ensure that the APs and local government can fully understand the RP in detail, in the whole course of the project from the project initiating until the completion, PRC laws/regulations on resettlement and the ADB policy on involuntary resettlement will be made awareness to the APs through the various approaches including the public participation and stakeholder consultation ( face to face meeting) and medias (TV and newspapers), so that the AP’s can well know the indices & quantities of the losses in kind, the methodology to calculate the compensation rates, compensation scenarios, rehabilitation measures, disbursement and uses of resettlement fund proceeds, their entitlement and preferential policies to them etc. The resettlement information is also to be publicized to the residents in the resettlement locations so that they can get the knowledge on the land acquisition, compensation rates and

72 fund proceeds’ uses, and the AP’s resettlement, which will increase the transparencies of resettlement activities and get the trusts and supports from the APs and ordinary residents to ensure the smooth implementation of the RP.

6.3 Public Consultation during the Project Preparation 143. The public consultation activities for the Project have been conducted since July 2003 with a series of surveys by FPMO and FUVCDC. This was followed by further surveys and consultations carried out by the Fuzhou Municipal Consulting Center and FUVCDC in 2007-2008 and an in-depth socio-economic survey conducted by the survey teams in January-March 2008. This survey also served to make the IA aware of local conditions and of APs’ concerns. Public consultations that have been conducted during the preparation stage are summarized in Table 6.3-1. 144. During the preparation and finalization of this RP, the stakeholders have taken part in the activities indicated as follows: 1) During December 2007 to March 2008,staffs from FPMO, Fuzhou Urban Management Regulatory Bureau, FUVCDC, Cangshan District Government, related

73

Table 6.3-1 SUMMARY OF PUBLIC CONSULTATION Stakeholders Name and number of key participants Date of Issues Raised / Concern Measures Proposed Action Taken/Proposed Consultation (M/F) Consultation expressed Forum on the LAR Hong Mingde (M, Gaishan Township), He 5 January Compensation Standards Understanding and Formulation of the impacts of Longjin Zihua(F, Cangshan Township), Zhen 2008. and Resettlement Policies Tentative Agreement Compensation Standards and and Yuejin river Geshan(M), Zhen Xidi(M), Liu Ershou (M) Meeting Room, on the issues of LAR to Resettlement Policies and rehabilitation Lin Hexian(F), Huang Weixian (M), Zhou Gaishan be reach by the Development of Entitlement Tianping(M), Zheng Yunbin (M), Lin Township participants. Matrix, and they are to be Rong(F), Lin Shen (M) etc. Total 33 Government carried out during LAR participants. Office implementation Conference on Chen Gua (M), Lin Rong(F), Hong 21 January Demolition requirement and LAR activities should The transparency, impartial and Demolition and Mingde(M),LinMudong (M), Zhen Jun 2008 general procedures, be transparency, fair has been determined as the Relocation of (M), Huang Wenzhen (F), Chen Tianchen Meeting Room, Issues on LAR detailed impartial and fair. discipline to carry out LAR Longjin and Yuejin (M), Si Youping (F), Liu Mushong (M), Gaohu Village implementation practices Implementation and activities. The demolition agency river rehabilitation Zhang Derong (F) etc. Total 26 Committee management of LAR has made the commitments to the project participants Office activities should be APs, that is: to disclose the data more canonical, on the property right areas, actual transparency, and all house area, members of HHs and activities should be resettlement, information on effectively supervised compensations and relocation, by the APs order to relocate houses, order to select relocation house, information on the relocation house quantities, towards and level.

74 Stakeholders Name and number of key participants Date of Issues Raised / Concern Measures Proposed Action Taken/Proposed Consultation (M/F) Consultation expressed Face to face Zheng Yunbin(M), Chen Gua(M), Lin 26 March 2008 Issues on the Increasing the With the concurrence of FMG, the discussions with Rong(F), Guo Ping (F), Zhang Derong(F), Meeting compensation standards for compensation compensation fees for illegal some APs Lin Ronguang(M), Zheng Banqing (M), Room, Gaohu illegal structures. standards for illegal structures built during 26 Oct. Zheng Banji(M), Liu Ershou (M), Huang Village Issues on the income structures built after 2004 and 26 Aug. 2006 have Mingguang(M), Liu Haiqing(M), Lin Committee restoration of farmers Providing the been agreed to increase from Hexian(F), Chen Mingjin(M), Si Baoyin (F), Office affected by land acquisition assistances for the CNY 30-50/㎡ to 50% of their Li Yunping(M), Guo Fei(M). etc., total 16 Issues on the income farmers affected by construction costs participants restoration of shop land acquisition to get FMG has set a policy to construct keepers. off-farm jobs and appropriate commercial facilities Issues on resettlement and restore their incomes. at the relocation sites in new east relocation site selection Providing the urban area to be sold to the assistances for the relevant village communities at affected shops to the preference price. re-open their business Three resettlement options and to restore their including self re-build in cash incomes. compensation, self purchase Provide more commercial flat/house in cash relocation selections compensation and relocation in assets for assets are available to the APs based on their option. 4 relocation sites have been planned for the APs to select at their options, including Jianban Block of 76900㎡, Puxia Block of 33830㎡, Gaohu Block of 100000 ㎡ and Shoushan Block of 95320 ㎡. Bidding activities to select design institute for Puxia and Jianban Blocks, and the overall plan for Shoushan Block has been completed.

75 township governments, and representative from the affected villages and APs all participated in the loss census survey and socio-economic survey. During the RP drafting, the resettlement plan designers wend down to the affected villages to hold several face to face consultation discussions or to take sampling questionnaires to obtain these stakeholders’ opinions and suggestions, including the demands and suggestions related to the selection of the resettlement locations, rehabilitation measures and policies on the LAR, all these matters were extensively consulted.. 2) FPMO, FUVCDC and Cangshan District Government have initiated several public awareness meetings attended by the staffs from the government authorities, leaders of the affected villages, and representatives of the APs to introduce and interpret the prevailing resettlement policies issued by national, provincial and municipal governments and the ADB policy on involuntary resettlement and to get their opinions on how to minimize the project impacts, how to resettle the APs and compensation rates of various losses, and all the concerning issues were extensively discussed and consulted. 3) During the resettlement planning, the resettlement information was also publicized to the residents in the resettlement locations through the modalities of holding the face to face meetings attended by the leaders of villages and the resident’s representatives and sampling questionnaires for them to get the knowledge on the land acquisition, compensation rates and fund proceeds’ uses, and the AP’s resettlement scenarios etc. 4) In March of 2008, under the assistances of various authorities of the affected area, a sampling survey on the APs’ willingness was conducted. The questionnaires were distributed to the sampled AP’s.

6.4 Information Disclosure 145. Resettlement is a critical social activity. The information dissemination work will be performed well in advance to ensure that all people concerned understand the purpose of the project and the policies and procedures regarding land acquisition, resettlement, compensation, payment, and provision of grievance redress and appeal procedures. The EA/IA distributed a resettlement information booklet on 25 March 2008. The RP will be disclosed to all affected villages by August 2008. The summary of resettlement information disclosures is shown in Table 6.4-1. Table 6.4-1 Information Disclosure Document Disclosure Way Disclosure Date Disclosure Location Cut-off Date Information 1. Public Bulletin Column Sept. 2004 to Project area 2. Meetings March 2008 Situation introduction of the project 1 Public Bulletin Column December 2007 Project area (including land occupation) 2 Meetings Introduction of the project LAR 1. Resettlement March 2008 Project area Information Booklet 2. Meetings Disclose of the RP Summary Public Bulletin Column July 2008 Project area Disclose of RP 1. Public Bulletin Column August 2008 Project area 2. Published in Municipal Government Website

6.5 Public Participation during the RP Implementation 6.5.1 Participation in House Relocation

76 1) Compensation Rate for the Housing demolition 146. The compensation standards for house will directly affect the interests of the relocated household. Before the houses are demolished, the relevant resettlement authority will consult and sign an agreement with the relocated household on the compensation standards for the houses. The consultation results will be declared publicly after the agreements are signed, so as to put the resettlement under public supervision. 2) House Relocations and Resettlement Modality 147. During the RP preparation stage, the relevant authority carried out survey on the resettlement sites and the house resettlement modalities. According to the results of resettlement survey, nearly half of the affected households are willing to select the resettlement scenario of assets for assets to be resettled in the locations nearby their own villages. The resettlement agencies and local government authorities will provide corresponding assistances to them at different stages for housing demolition, if any.

6.5.2 Participation in Disbursement and Management of Compensation Funds 148. The compensation for the land and other collective properties that can be retained by the village in accordance with the relevant regulations should be collectively managed by the village committees, any other units or individuals shall not withhold and appropriate. After the compensation payment has been made to the village committee, it should be planned as a whole in order to ensure special funds for special purposes. The fund cannot be used until they have been discussed and agreed in meeting with the attendance of all village members, and be supervised by villager representative.

6.5.3 Participation in Project Construction 149. The project construction will cause certain impacts on the local communities. In order to ensure the APs to benefit from the project construction as possible, the local villagers/residents will be actively encouraged to take part in the construction activities, and favorable conditions will be created to use local materials and local labor forces.

6.6 Women Participation

150. Since the very beginning of the project, the project proponent and local governments have attached very importance on the roles for women to play. The demands of Women and families where women are heads of the householders have being concerning with and their roles will be fully given to play during the RP implementation. 151. In the affected area, women are equal to men in terms of rights, interests and their social status. Women play an important role in economic development activities and housework. Especially in the rural areas, most women stay at home, more and more men go into the urban areas to seek for off-farm jobs. Besides family responsibility women play an important role in farm and off-farm activities. Therefore, in the project affect area, women have shown more enthusiasm than men on the project. They not only take part in every stage of resettlement activities but also play an outstanding role in the consultation of the direction in which the APs are to be resettled and the resettlement modalities. 152. During the surveys, all directors of all women unions in affected villages were invited to participate in order to communicate better with affected women. In the small consultation meetings, more than 40 percent of participants were female. Besides supporting the project actively, they showed that they pay more attention to the accuracy of surveyed physical indices, rationality of compensation standard and whether the compensation can reach in time, etc. In the RP formulation, the RP designers actively invited the female APs to attend the stakeholder consultation discussions to obtain their opinions, concerns, requirements and issues on various aspects including the plans and measures of livelihood rehabilitation and income restoration, and the resettlement modalities. These consultations have brought effective effects on releasing women’s worries about the future income sources and the

77 possible changes of traditional livelihood, ensuring that women can equally benefit from the project. 153. In addition, at least one female staff is to be assigned for the RP implementation and management agencies, which will facilitate to encourage women to participate in the RP implementation in certain sense. The resettlement implementation agencies and relevant authorities will attach further importance on the women participation in resettlement activities, particularly their livelihood rehabilitation, and the priorities of the employment opportunities generating from the project construction are to be given to women.

7 GRIEVANCE PROCEDURES

7.1 Possible Complaints and Their Resolving

154. The RP is formulated based the general situations of the overall project affected areas to provide the basis to implement overall resettlement activities. In the implementation process, individual AP’s complaint may appear because of the change of actual situation and deviation of operation. According to resettlement experiences got from the constructing and constructed projects in Fuzhou, the following possible complaints from the APs have been tentatively identified at this stage: 1) Loss Indices Because of the errors likely incurred in the process of surveying, statistics and computation, the occupied and demolition physical indices may be missed out or input incorrectly, which will have impact on the APs. When such problems happen, the APs through village committee can report to the resettlement agency- FDHDED in oral or written. After processed by them, the appeals should be submitted to the resettlement office of FUVCDC and NEULADRH, while the later will report to FPMO and supervision unit. Under the coordination of FPMO, FUVCDC and NEULADRH will cause FDHDED to send organize professional personnel to re-verify on the spot, sign and issue final opinions, ratify and register the missed out or incorrect items and compensate according to the standard. 2) Compensation Standard A few number of the APs might have concerns on the compensation could not meet the requirements of house resettlement or production rehabilitation due to lack clear understanding about national resettlement policies and compensation. Prior to the RP implementation, the design personnel should further explain the basis to formulate the RP, interpret national resettlement policies, explain the methodology to determine the compensation standard in order to make the APs understand that compensation standard is compiled with the prevailing national laws and regulations, which will ensure that APs can move out of the resettled houses happily, live in the designated resettlement sites comfortably, and develop, so that their misgivings can be released. 3) The Resettlement Funds In the construction process, due to slow allocation of resettlement funds, houses relocation, and economic rehabilitation might be affected, which will further impact the APs’ life. The managers and concerned staffs are required to strengthen the controls of funds, schedule, and quality of the resettlement activities to ensure that the resettlement funds can be used effectively as their purposes. FB and concerned departments are to be coordinated and caused to disburse the required resettlement fund proceeds in accordance with the implementation schedule.

7.2 Measure to Reduce Grievances

155. The following measures are to be taken in the course of the LAR in order to reduce grievance as possible: 1) extensive dissemination of the LAR policies. IA, demolition and

78 resettlement agency in corporation with the local government authorities shall interpret the LAR policies in details to the APs through meetings, face to face forum and household interviews etc so that the APs can fully understand the compensation & resettlement principles, relevant provisions and the compensation & resettlement standards etc as much as possible. 2) increasing the intensity of the information disclosure. The related information, including the impact inventory data, signing of resettlement agreements, disbursement of compensation fund proceeds, relevant resettlement information, construction progress of resettlement blocks and information on IA and demolition agency etc, should be disclosed in time on the relevant media and public notice board, which will facilitate the APs to monitor and supervise the whole process of the LAR. 3) strengthening the communications and consultations with the APs. IA, demolition and resettlement agency and local government authorities shall seriously listen to opinions and demands of the APs in the process of the LAR, and communicate and consult with them sincerely, and assist them to handle and settle down the difficulties and problems encountered in the process of the LAR and to make the efforts to meet their reasonable demands as possible, so that the contradictions will be resolved at the very beginning.

7.3 Grievance Channel and Procedure

156. Attention should be paid to participation of APs and affected organizations during the preparation and implementation of the RP. Mechanisms of grievance redress for undergoing projects of the IA are available and can be applied for this Project. In case APs are dissatisfied with compensation rates, arrangements made by the resettlement agencies, or they feel they are treated unfairly or unreasonably, they can seek settlement through grievance or appeal redress procedures. The grievance system for the project is detailed in Figure 7-1.

1) Grievance Channels

157. Generally there are following channels for grievance redress. 1) The Project IA: This is the direct channel to redress the project related grievance since the project proponent will establish an on-site land acquisition and resettlement office with telephone number disclosed, and most of the appeals will be settled at this level. 2) Village Committee, Township Government, The District Real Estate Administrative Bureau, LRBs and NEULADRH: This is a formal project procedure for grievance redress to enable problems aired for those that cannot be settled by lower level institutions. However for each level, the solution must be done within two week, if it cannot be solved, then it must be submitted to its immediate higher authority for a solution. 3) The Authorities of Letters and Calls: Various governments from Cangshan District and Fuzhou Municipality to Fujian Province have all set up the specialized authorities to accept letters and calls from their residents. The authorities can also accept the complaints and appeals from the APs. In coordination with the concerned authorities, these authorities will carry out the investigation activities on the general complaints and settle them as well. 4) Independent Resettlement Monitoring Institution: The independent resettlement monitoring institution carries out the monitoring activities in accordance with the relevant regulations, and has the responsibilities to maintain the APs’ lawful rights and interests. It can accept the complaints related to the issues to violate APs’ rights and interests, and it has the obligation to report them to the concerned authorities for the follow-up actions. 5) Administrative Supervision and Lawsuit: In case any of the above solutions are not accepted by APs, they can appeal to the People’s Court according to Administrative Case Law or the P.R.C Ministry of Land and Resources. AP can

79 appeal against any aspects of resettlement work, including compensation standards. Various governments from district, municipality to province and the nation have all set up the supervision authorities including administrative supervision, auditing, discipline supervision, and judiciary and prosecutorial organs. These organizations can accept and handle respected APs’ administrative complaints, civil cases and criminal cases that have violate the relevant laws and regulations.

Legal Departments from FPMO District to Province

Discipline Departments FUVCDC from District to Province

Authorities of Letters and Resettlement M&E Calls from District to NEULADRH Institution

Province

FDHDED

Village Committee

APs

Figure 7.2-1 Appeal System of Project Resettlement

2) Appeal Procedures

158. If any AP does not agree with resettlement plan, he/she can reflect to village committee. The village committee or the APs can consult with local resettlement office directly, or appeal to superior resettlement office in oral or written form. After accepting the appeal, superior resettlement office shall keep records and consult with village committee and local resettlement office within 14 days. If the contradiction and dispute can not be resolved in the way of consultation, in accordance with appeal channel, village committee can appeal to administrative setups step by step such as project office, resettlement management office, resettlement monitoring institution, authorities of letters and calls, administrative supervision, disciplinary inspection and procuratorial department) according to Administrative Procedure law of People’s Republic of China . If APs are still not satisfactory, appeal to people’s court directly. The appeal procedures are shown in Figure 7.2. Resettlement office is responsible for keeping records of all the appeal problems and solving process.

80 159. The complaints and appeal procedures will be conveyed to APs through public meetings and other information dissemination procedures, to ensure they fully understand their rights and the mechanisms for complaint and appeal. Any complaints raised by APs must be registered in written form by each organization that receives these grievances. Complaints will be formally filed with adequate follow-up for eventual resolution, and this documentation will be made available for the external monitoring officer at a later date.

Stage 1: Any APs, who encounter any infringement on their entitlements during land acquisition, housing demolition and resettlement, may report to the villagers’ committee.

The villagers’ committee or the APs may directly appeal to the resettlement offices of town or district for resolution. The resettlement offices must record the complaints and resolve the problems within two weeks after the receipt of such complaints through discussion and consultation with the local villagers’ committee and the APs.

Stage 2: If the APs who lodge the complaints are not satisfied with the results of stage 1, they may lodge grievance to NEULADRH after receiving the decision. The latter will make resolution within two weeks.

Stage 3: If the persons who lodge the complaints are still not satisfied with the decision of the FPMO, they may, after receiving the decision, lodge complaints to the administrative organs for arbitration level by level according to Administrative Procedure Law of the People's Republic of China.

Stage 4: If the persons are still dissatisfied with the above decision, they may, after receiving the arbitration decision, appeal to the People’s Court in accordance with Civil Procedure Law of the People’s Republic of China.

Figure 7-2 Diagram of Grievance Procedure for APs

8 INSTITIONAL ORGANIZATION AND RESPONSIBILITIES

8.1 Institutions Engaged in Resettlement Planning

160. FPMO in corporation with FUVDC has organized the experts and staffs from the relevant government authorities to carry out the LAR impact surveys and socio-economic survey, and to formulate the RP. Cangshan District Government, Townships/Sub-district and 9 affected villages have sent their staffs and representatives to participate the surveys, public consultations and the RP preparation.

8.2 RP Implementation and Management Organizations and Their Responsibilities

8.2.1 Management Organizations and Responsibilities

81 Resettlement Leading Group of Fuzhou Municipality 161. The resettlement leading group of Fuzhou Municipality is consisted of the leaders in charge from FMG, FMRDC, Fuzhou Municipal FB, FUMRB, FLRB and Cangshan District Government. It will take the responsibilities to strengthen the leadership of the project construction activities and resettlement activities, provide the policy guidance on the LAR and RP implementation, supervise the activities carried out by the relevant organizations and coordinate the activities of various resettlement institutions.

Fuzhou Municipal ADB Project Management Office (FPMO) 162. FPMO under FMRDC is mainly responsible to organize the activities of the RP preparation, provide the assistances in formulating the resettlement policies and coordinate the work relationships of various resettlement organizations. A resettlement office is to be set up with FPMO to handle the daily activities related to the project resettlement. Its main responsibilities include: 1) Responsible to administrate the implementation activities of the RP approved by the ADB, to organize the internal resettlement M&E, to coordinate and supervise the resettlement activities and progress, to supervise the resettlement uses, and to review whether the resettlement activities comply with the RP and the ADB policy on the involuntary resettlement: 2) Providing the assistances in coordination of various resettlement organizations, including the municipal authorities with the down level organizations; 3) Responsible to engage the external monitoring institution to be verified by the ADB, to enter into the contract with the external monitoring institution in order to define the duties, interests and obligations of two parties, and to make the payments to the external monitoring institution; 4) Providing the assistances for the external monitoring institution to perform their duties, reviewing the external monitoring reports on the resettlement prepared by the external monitoring institution; 5) Accepting the ADB missions to review and evaluate the resettlement activities; 6) Assisting in handling and settling the APs complaints and grievances; 7) Organizing the acceptance and evaluation activities in time after the completion of the resettlement.

8.2.2 Implementation Organizations and Responsibilities

Fuzhou Urban Visual Construction and Development Company (FUVCDC) 163. As the project proponent and implementation agency, FUVDC will undertake the full responsibilities to implement the RP. A resettlement office is to be set up within FUVDC to undertake the daily activities of the RP implementation. Its main responsibilities include: 1) Carrying out the census of actual land acquisition and structure demolition; 2) Applying for the LAR formalities including the land acquisition license and housing demolition license. 3) Signing the LAR agreement and the compensation agreement with the township government/district government. 4) Preparing the resettlement budget, collecting resettlement funds and disbursing the compensation and resettlement proceeds; 5) Conducting the internal resettlement M&E, and preparing the internal resettlement M&E report on the regular basis; 6) Providing the assistances for the external monitoring institution engaged by FPMO to carry out M&E activities; 7) Assisting to handle and settle the APs complaints and grievances; 8) Providing assistances for the APs during the resettlement and after they are resettled if any.

82 Specialized and Qualified Housing demolition Agency 164. Following the regulations specified in Article 11 of Fuzhou Municipal Urban Housing Demolition Management Regulations, the Housing demolition Qualification Certificate is a indispensable condition to implement structure demolition. Any agencies without the qualification certificate must entrust an agency with the certificate to implement demolition. The APs have the right to refuse the negotiation with staff from the agency without the demolition credentials on the demolition. 165. The project proponent intents to authorize the Fuzhou Diyuan Housing Demolition Engineering Department for the implementation of the LAR. The FDHDED will establish an office with 8 staff members responsible for the implementation of the LAR, and it is recommended that at least half of which should be female. Its main responsibilities include: 1) Carrying out thorough resettlement investigations, together with the village committees. 2) Consulting the compensation rates with the project proponent. 3) Consulting related government departments and the village committees on the compensation rates, and signing LAR and compensation agreement. 4) Negotiating the compensation rates with the APs concerning houses, relocation and transportation costs, and sign the resettlement agreement and the compensation agreement. 5) Disbursing the compensation payment to APs through township/district government. 6) Assisting the APs to restore their incomes and rehabilitate their livelihood 7) Assisting the jobless APs in seeking for job opportunities, in corporation with the labour service center and enterprises. 8) Providing necessary helps to the APs during the resettlement. 9) Settling appeals concerning compensation and resettlement. 10) Carrying out internal supervision and monitoring of the LAR implementation. 11) Preparing the internal supervision report and take remedial measures if necessary.

New East Urban Land Acquisition & Demolition and Resettlement headquarter of Fuzhou City (NEULADRH) 166. NEULADRH consisted of the staffs from the relevant authorities including LRB, public security, civil affairs administration and the leaders from the township governments and villages is headed by the government leader in charge of Cangshan District Government. Its main responsibilities include as follows: 1) To participate in the investigation of the Project and assist the preparation of Resettlement Plan; 2) To organize people to participate and make them understand the resettlement policies; 3) To implement, examine, supervise and record resettlement activities of all APs in the township/district; 4) To organize the land hand-over activities; 5) To handle the procedure of APs relocation; 6) To be responsible for disbursement and management of land compensation funds; 7) To supervise land acquisition, demolition of house and affiliated buildings, as well as relocation and house reconstruction; 8) To report the situation of LAR to the Fuzhou land administration bureau and Fuzhou resettlement management office; 9) To solve any conflicts and problems that may occur during the LAR process.

Township Resettlement Office(RO) and Village Committee 167. Township RO and village committee or community resident committee is responsible to coordinate its APs and provide assistances for the relevant resettlement agencies to implement the RP. Its main responsibilities are summarized as follows: 1) To participate in the survey of the socio-economic impacts.

83 2) To organize public consultations and make them understand the LAR policies. 3) To provide the assistances for the APs to select house/apartment for resettlement. 4) To carry out land reclamation, adjustment and allocation, to organize resettlement activities like production rehabilitation and development. 5) To allocate and manage the land compensation fund, and to disburse the land compensation payments to the APs. 6) To collect APs’ comments and suggestions and report them to the relevant authorities. 7) To provide assistances for APs with financial and other hardship difficulties to obtain the supports.

8.2.3 Relevant Organizations

Fuzhou Municipal/Cangshan District Land and Resources Bureau 168. Its main responsibilities for the RP implementation include: i) reviewing and distributing the right of way approval documents of the state-owned land, ii) granting the land use license of construction and issuing the right of way certificate of state-owned land, and iii) suspending the processing of land leasing etc.

Fuzhou Municipal Real Estate Administration 169. Its main responsibilities for the RP implementation are summarized as follows: 1) Administrating on behalf and handling the preservation and notarization of the evidences 2) Handling the activities on house surveying and mapping, examination and property right determination 3) Undertaking the administrative adjudication on disputes incurred during the house demolishing based on the laws, regulations and rules; 4) Reviewing and issuing the housing demolition license; 5) Conducting the activities on public awareness and interpretation of the housing demolition public notice 6) Notifying the relevant authorities to suspending the processing of the relevant formalities including new construction, expansion and reconstruction of houses, use changes of houses and lands, and house renting and marketing etc.; 7) Handling the relevant disputes; 8) Supervising the uses of the compensation and resettlement fund proceeds 9) Guiding the administration of the LAR records; 10) Punishing the behaviors that violate the Urban Demolition Administration Regulations. People’s Courts of Cangshan District and Fuzhou Municipality 170. As the judicial departments, People’s Courts of Cangshan District and Fuzhou Municipality will perform the duties of judicial adjudication on the disputes incurred during the RP implementation. Their duties include: 1) Responsible for placing the administrative lawsuit case of housing demolition on file for investigation and examination, holding a court to hear and make the judgment order, and review and accept the demand of the mandatory housing demolition; 2) Undertaking the trials on the civil dispute cases incurred during the implementation of demolition and resettlement; 3) Undertaking the trials on the criminal cases that violate the urban demolition law.

8.3 Supervision and Monitoring Organizations

171. As the project management agency, FPMO shall preside over and check the internal monitoring, prepare the progress report on the LAR on the regular basis and report to the

84 Municipal Government and the ADB, identify the issues and problem incurred during the implementation of the RP and propose the remedy measures for the relevant agencies to take, so that the duties and responsibilities of resettlement institutions at all levels in the course of project implementation can be soundly performed, their activities can also be coordinated satisfactorily, and the RP implementation status can be held. 172. In accordance with the requirements on the LAR set by the ADB, FPMO has engaged an independent LAR M&E agency – Center for Involuntary Resettlement Research under Wuhan University, to conduct external M&E activities. The external monitor will perform its duties to conduct the M&E activities independently to ensure that the AP household for this subcomponent will not be dispossessed of their land and assets before full compensation for lost assets is provided. Its main responsibilities are summarized as follows: 1) Preparing the Terms of Reference of the resettlement external M&E and determining the working content, working methodology, working procedure, schedule and staff of the external monitoring. 2) Carrying out the baseline survey and monitoring according to the Terms of Reference of the resettlement M&E approved by the ADB; 3) Collecting data and information of the resettlement implementation and relevant information of the social and economic development within the project area during the project implementation through means of site visit and survey etc. to evaluate the implementation and effect of the resettlement, find out problems existing during the implementation and dope out potential problems and work out improvement measures and mitigation recommendations; 4) Monitoring the uses of resettlement funds; 5) Conducting the tracking socio-economic and living level survey after the resettlement, and carrying out the comparison study on basic life security; 6) Monitoring the land acquisition activities, including: i) land acquisition procedure, ii) the determination of the employment alternatives for the affected rural labors; 7) Monitoring the APs resettlement; 8) Monitoring the production rehabilitation of the affected enterprises; 9) Monitoring the business rehabilitation of the affected shops and their profitability; 10) Monitoring the rehabilitation progress and quality of the affected infrastructures and public service facilities; 11) Monitoring the adequateness and rationality of the stakeholder consultations: 12) Assessing the efficiency resettlement activities and the resettlement effectiveness, identifying issues/problems or issues likely to be encountered during the process of RP implementation and recommending the remedy measures; 13) Evaluating the effect of the resettlement and preparing the external M&E report. At the same time, submitting the report to FPMO and the ADB. 8.4 Resettlement Management System

173. The project proponent responsibility systems, project supervision system, project bidding system and contract management system will also be adopted in the RP implementation management. FPMO undertakes the responsibility to manage the RP implementation activities and engages the independent agency to conduct external M&E on the RP implementation. The management norms and work procedures related to resettlement policy, loss censuses survey, contract, position duties and extent of power to handle the exceptional cases etc. are to be formulated. In addition, a computerized resettlement information system that connects with all the resettlement institution is required to be developed to properly manage all the resettlement data and records.

8.5 Staffing and Facility Provision for Resettlement Organizations

8.5.1 Staffing

85

174. In order to implement the RP smoothly, all the resettlement implementing agencies and management agencies will be staffed with the competent and qualified personnel, with the total staffs of 150 in a whole (detailed in Table 8-1), which will facilitate the information flows among the resettlement agencies. The staffs will be administrative clerk and professions with the professional levels, management qualification and working experience on resettlement.

Table 8-1 Staffing Plan for the RP Implementation and Management Agencies No. of Staffs Agency Note Male Female Various expertises including FUVCDC 17 3 administration, finance, technician, engineering, law, socio-economics etc Various expertises including FDEC 25 13 administration, finance, engineering, law, socio-economics etc NEULADRH 7 5 Professions and social workers Villager committees 60 20 Professions and social workers TOTAL 109 41

8.5.2 Provisions of Equipment Facilities

175. The offices of the resettlement agencies will be equipped with office facilities and equipments including chairs, desks, tables, computers and copying machine etc, vehicles and communication equipments including telephones and fax machine. The costs to purchase these equipments and facilities are incorporated into the resettlement cost estimates.

8.6 Training Plan

176. The training programs to the APs and management staffs on the resettlement agencies are required to be formulated and carried out ensure that the RP can be implemented progressively. The training programs include: i) the training program on the resettlement management for the administrative staffs of the resettlement management agencies; and ii) the training program on production skills and vocational abilities for the APs.

8.6.1 Resettlement Management Staff Trainings 177. The resettlement personnel training and human resource development system for the agencies of various levels from the municipal level down to the village/CR are to be formulated. Various types of administrative staffs can be adopted, including leader/expert lectures, technical seminars/workshops, visiting and studying the similar resettlement works in other areas, and on-spot trainings for the technicians and staffs. The training modules include as follows: 1) Resettlement principles and policies, including the ADB policy on vulnerary resettlement, the RP, PRC’s resettlement policies and work procedures etc.; 2) Resettlement planning and implementation management; 3) Social-economic survey and asset inventorying; 4) Public consultation & participation, and grievance redress handlings: 5) Financial management on the resettlement funds; 6) Management information system; 7) Resettlement monitoring and evaluation; 8) Resettlement activities’ management;

86 8.6.2 Production Skill Trainings for APs 178. The resettlement skill trainings will mainly involve in improving the APs’ knowledge and skills. The trainings of long-term integrated with short-term and key skills are to be adopted. The young AP’s with the certain qualifications are to selected and sent to professional schools for long-term trainings, which will train a number of the technical backbone for the project affected area. The short-term skill trainings will include: 1) Off-farm employment training: the APs who will change from farming activities to off-farm activities shall be provided with free skill trainings, meanwhile, those APs who will involve the manufacture sectors or service sectors will also be trained. The trainings will be organized by the local government authorities and the affected villages will undertake the training costs by using the land compensation fee retained by the village committee. 2) Production skill trainings: the APs who will still involve in agriculture sectors are also be provided with free farming technical trainings that will be organized by the township government with the costs shared by the affected villages using the land compensation fee, and those APs who will change their jobs due to the affected enterprise resettlement will be provided with the trainings on the relevant technical skills that will be organized by the relevant enterprises with the support of the project proponent. The detailed training programs including time, location, cost, modules and lectures will be finalized during the RP implementation stage.

8.7 Measures for Strengthening Resettlement Organization

179. A variety of measures will be taken to support capacity building and ensure effective implementation and control of the RP. These include: 1) The PMO should have sufficient funds and equipment to assure the efficiency of the work; 2) Information system should be established with computers to guarantee the smooth information delivery between the authority and the lower levels; 3) Vertical linking agencies will set up a reporting system, to report once a month; 4) Horizontal linking agencies will hold coordinating meetings once a quarter to enhance information exchange; 5) Issues put forward by the APs will be reported and disseminated through the resettlement offices at each level; 6) Issues which occur during construction will be reported by the resident engineer, first to his/her organizational level and then, if necessary, upwards through each of the hierarchical levels; 7) Disciplinary measures will be introduced to constrain individuals from shifting responsibilities onto others and from delaying the resettlement process. People responsible for causing trouble will be punished, and those with good performance will be rewarded. 8) The external M&E and early alarm mechanism will be developed.

9 ENVIRONMENT PROTECTION AND MANAGEMENT

9.1 The Necessity of Environment Protection

180. The environment impact evaluation of main resettlement activities shall include the resettlement impacts on the environment. The resettlement planning shall be conducted together with environment impact evaluation. It is necessary to demarcate the borderline of the relocation sites and calculate the increment of population density in unit area. In case of agricultural project, if the number of the immigrates is more than the original number of this relocation sites, the environmental problems will be aggravated, such as deforestation,

87 excessive pasturage, soil and water losses, sanitary conditions and pollution etc. Therefore the RP shall include appropriate mitigation measures (including the training of APs), and other resettlement alternative sites for selection as well. The urban APs will cause the relevant problems related to the population density (such as communication capacity, drinking-water source, hygienic system and medical & healthy treatment etc.) Constructive environmental management methods can provide both good opportunities and benefits to resettlement and the residents in the relocation sites. If the resettlement causes an unacceptable consequence, the other resettlement site is to be looked for or additional resettlement sites are to be included.

9.2 Demolition Cleaning

181. All kinds of rubbish generated during the demolition of varied structures and their auxiliaries within the engineering range, shall be spoiled in the designated places set by FUMRB. The houses and their auxiliaries in the engineering range shall be demolished; their walls shall be torn down and leveled. And the interior pollution source within the engineering range shall be removed and disinfected. The existing wastewater of industrial enterprises within the engineering range shall be drained according to specifications. Poisonous slag shall be delivered to the designated sites and buried. And the storehouse for stocking the chemical materials shall be treated by eliminating poison and neutralizing, so that the soil can meet the hygiene standards.

9.3 Environment Management in Resettlement Sites

182. The environment protection shall be fully considered during the designing and construction of relocation sites to make their surroundings beautiful and comfortable as possible. The house construction and the public facilities reconstruction shall avoid the trees’ cutting and soil erosion as possible. Before the APs move in the relocation sites, the surroundings are required to be made orders such as weeding and waste containers’ cleaning.

10 MONITORING AND EVALUATION

183. The FPMO and FUVCDC will regularly monitor and evaluate the implementation of the LAR activities in order to ensure resettlement work is implemented successfully in accordance with the RP, and to achieve the target of appropriate livelihood restoration for the APs. The monitoring will comprise two components: internal monitoring and external monitoring. Internal monitoring will be mainly conducted by the project leading group, FPMO and FUVCDC to ensure that organizations involved in implementation of the LAR work abide by principles and schedules of the RP. 184. The aim of internal monitoring is to encourage the concerned organizations to carry out good performance while the external M&E will be conducted by an independent agency regularly on the activities of land acquisition, demolition and resettlement. Usually monitoring on resettlement is conducted by covering data collection, analysis, reporting, physical target and financial target, entitlement of APs. 185. Resettlement monitoring will focus on the following two aspects: (i) The progress of disbursement and provision of entitlements to APs and (ii) Comparison of APs and villages /CRC pre and post resettlement socio-economic situation, particularly livelihood restoration. Background socio-economic data collected during the AP inventory and census will be used in this assessment.

10.1 Internal Monitoring

88 186. Internal M&E activities will be undertaken by the FPMO and FUVCDC, to assure the concerned departments abide by the RP. The objectives of internal monitoring are: (i) To inspect the progress of demolition, displacement and land acquisition, (ii) To ensure the smooth communication channel between project managerial staff and affected people, (iii) To ensure timely full disbursement of compensation, (iv) to ensure timely settlement of appeals by the APs, and (v) to ensure that the compensation disbursed is legally appropriate and that corruption is prevented. 187. The EA will take major responsibility for (i) Internal monitoring, covering the activities of APs, entitlement, advice, grievance, problems, efficiency, timing, and budget, (ii) Disbursement of entitlements to AP: compensation, housing, cultivated land, and employment as specified in the RP, (iii) Social adaptability and cohesion: impacts with a gender perspective on APs and vulnerable groups, public participation, non-government’s role, AP’s attitudes and commons after resettlement, number of complaints and appeal procedures, implementation of preferential policies and income restoration measures, and improvements in women’s status in villages, (iv) Timing of housing demolition and restoration: provision of residential land, disbursement of compensation for house replacement costs, and reconstruction of adequate housing and updating of resettlement schedule and resettlement budget where required, (v) Rehabilitation of community infrastructure facilities and services: timely rehabilitation of community facilities and services and ensuring that mitigation measures to minimize impacts are implemented, (vi) Public participation and consultation: involvement of AP in resettlement implementation as per the public consultation plan outlined in the RP. Review of grievance register and responses to complaints, and (vii) Assistance to vulnerable groups. 188. It is anticipated that internal monitoring reports will be brief documents reporting on progress to date and identification of issues, how issues were resolved, consultations undertaken, and revisions of the resettlement schedule and disbursement of budget where required. Internal M&E reports will be submitted quarterly by FUVCDC to FPMO, while FPMO will summit the internal M&E reports attached to the semi-annual project progress report to the ADB every six months.

10.2 External Monitoring

189. Required by the ADB, an independent agency is to be appointed to carry out the external monitoring and evaluation on resettlement. The independent agency should have a good reputation, be well experienced and fully understand the ADB’s policy and requirements on resettlement. FPMO with the concurrence of the ADB has engaged an independent LAR M&E agency – Center for Involuntary Resettlement Research under Wuhan University, to conduct external M&E activities for this project. The terms of reference for the external monitor are contained in Appendix 3. The external monitor will perform its duties to conduct the M&E activities independently to ensure that the AP household for this subcomponent will not be dispossessed of their land and assets before full compensation for lost assets is provided. 190. The objectives of external monitoring and evaluation are as follows: (i) Certify the level of rehabilitation of APs after the LAR, (ii) Identify the causes of any problems with the policies or implementation in case rehabilitation is not fully made, (iii) Assess the performance, effect, affection including the response of APs, resettlement policies, and sustainability, and (iv) Evaluate whether AP’s living conditions, livelihoods and incomes have been fully restored. 191. The methodology of external M&E are listed as follows: z The Independent agency will conduct a baseline survey on the affected area and acquire the baseline data of the APs. The investigation about production and AP’s living conditions will be made every year to measure the change. A sample trace investigation will be adopted. Irregular interview or site visits will be made to acquire sufficient data for evaluation. z Group discussion and consultation with various groups of people from government,

89 non-government, community and APs. z Interview with key persons such as local CRC leaders and village heads regarding resettlement implementation. z Community public meetings to collect further information about resettlement. z Purposeful direct observations regarding progress of demolition and replacement and visits to the individuals or groups. z Informal investigation or interview by non-sampling means such as with the APs, villagers and staff engaged with resettlement. 192. The independent monitoring agency will monitor and evaluate the resettlement relative to the project and consolidate their findings and assessment into a report to ADB, FPMO and other concerned departments. These reports can be helpful in policy-making by these concerned departments. The APs and non-government organizations and communities will participate in the activities of assessment. 193. Monitoring and assessment will cover the following: (i) Progress of land acquisition and housing demolition; (ii) Progress of old house and facilities demolition; (iii) Progress of reconstruction of resettlement houses; (iv) Progress of resettlement of APs; (v) Progress of reconstruction of facilities; (vi) The compensation fee being settled and allocated;(vii) The housing demolition and resettlement of APs; (viii) Analysis and evaluation on the situation of house and living environment pre and post resettlement; bear in mind with a gender perspective, (ix) Livelihood restoration of APs; and (x) The operation and efficiency of the resettlement institutions. 194. The external M&E reports will be submitted to FPMO and the ADB every six months by the independent evaluator during the RP implementation period. The external M&E activities will be continued once every year after the completion of the resettlement until the construction works completed or the APs livelihood fully rehabilitated whichever the latter, submitting the report to FPMO once every year.

10.3 Post Assessment of the Resettlement

195. After the completion of the resettlement implementation, on the base of monitoring and evaluation, a post assessment of the resettlement will be conducted by applying theory and approached of the post evaluation. The assessment will sum up the successful experience and the lessons learned in the LAR activities including land acquisition, housing demolition, production restoration of enterprises, income rehabilitation etc, which will provide referenced experience for future resettlement activities. After resettlement, the evaluation unit to be engaged by the IA is responsible for developing evaluation outline and evaluation index system, conducting the of socio-economic survey, and preparing the post evaluation report on the RP implementation to be submitted to the EA and the ADB.

11 RESETTLEMENT BUDGET

11.1 Basis and Principles of Resettlement Cost Estimate

11.1.1 Main Basis 196. The resettlement budget has been prepared on the basis of the relevant laws, rules and regulations on LAR promulgated by the national government, Fujian provincial government and Fuzhou Municipal government, and the guidelines and norms like 《Resettlement Design Norms for Water Conservancy and Hydropower Schemes》issued by the government authorities.

11.1.2 Principles

90 197. The principles to estimate the resettlement costs are set as follows: 1) The cost items of production resettlement, relocation resettlement, special facilities relocation and reconstruction are to be designed and determined in accordance with the rules and regulations, and the relevant cost estimate guidelines, while the costs are to be computed in accordance with the design scenarios and their corresponding quantities (or physical amount). 2) Standards on land compensation and resettlement subsidy, and compensation for standing crops shall be estimated and determined according to relative provisions specified in Procedures of Fujian Province for Implementation of the Land Administration Law of the People’s Republic of China; 3) Costs for houses compensation and resettlement are computed based on the compensation standards that are determined according to the property right status and construction years, relocation encouragement incentive, relocation allowance, resettlement interim subsidiary, and basic policy protection subsidiaries etc; 4) Compensation of special facilities shall be estimated based on replacement of their original scale, original standard, and original function according to the actual rehabilitation situation.

11.2 Calculation of Resettlement Budget

11.2.1 Land Requisition and Resettlement Costs 198. The computation of the LAR costs is summarized as follows: 1) Permanent land requisition: The Project will permanently requisite 38.95mu of collective-owned farmland and total compensation will be CNY3.15 million. This includes a resettlement subsidy, land compensation fee and compensation for green crops. 10% of farmland acquisition reservation fund will be CNY 3.9million, while the use fees of state-owned unused land will be CNY0.23 million. Therefore, total costs of land acquisition was estimated at CNY 7.26million. 2) Demolition Cost: The project will affect 197,636m2 of resident and non-resident buildings and the demolition cost will amount to CNY185.4million. 3) Compensation for land attachments and Special Facilities: The ground attachments and special facilities including fruit trees and infrastructures like bridges, power supply, water supply etc. are affected, with the total compensation costs of CNY16.176 million. 4) Other Subsidies: The other subsidies mainly include the basic policy protection subsidiaries, relocation encouragement incentive, relocation allowance, resettlement interim subsidiary etc., totaling CNY 128.271million. 5) Total Costs of LAR: Total of above 4 times is CNY 337.10 million

11.2.2 Taxes and Fees 199. Monitoring and evaluating fees are calculated at 0.5% of the basic costs for land requisition (including green crops compensation), demolition compensation and resettlement, and infrastructure; administration cost account for 0.5% and land mapping fees are calculated at 0.5% of the basic costs. Cost for AP’s skill training is about CNY300,000 which is calculated based on five training course sessions, taxes and duties for permanent land acquisition like arable land reclamation fee, onerous use fees of additional construction land, arable land occupying tax and land acquisition working expenditures etc. are also included. The calculated taxes and fees are CNY 5.798million in total.

11.2.3 Contingency Costs 200. The unforeseen expenses are calculated at 10% of the basic costs totaling CNY34.29 million.

91 11.2.4 Total Resettlement Costs 201. The total investment of the project subcomponent is CNY 449.16 million, and the total cost of land requisition and resettlement is about CNY 377.19 million, which represents 84% of the budget. Details are listed in Table 11-1. Table 11-1 Cost Estimate for Land Requisition and Resettlement (CNY) Item Amount Remarks I Land Acquisition Land Compensation 1,207,450 Resettlement Subsidiary 1,811,175 Green Crops Compensation 120,745 Farmland Acquisition Reservation Fund 3,895,000 Use Fees of State-owned Unused Land 227,640 Sub-Total 7,262,010 II House Demolishing and Relocation House Compensation 169,046,455 Decoration and Attached Facilities Compensation 16,346,998 Illegal building Demolishing Subsidy 2,316,674 Sub-Total 185,393,453 III Ground Attachments and Special Facilities Trees Compensation 468,300 Special Facilities Restoration 15,708,526 Sub-Total 16,176,826 IV Resettlement Subsidiaries Basic Policy Protection Subsidiaries 75,197,304 Relocation Encouragement Incentive 35,696,600 Relocation allowance 587,664 Resident Resettlement Interim Subsidiary 16,454,592 Enterprise/Institution Relocation allowance 315,670 Shop Relocation allowance 19,190 Sub-Total 128,271,020 Total of I to IV 337,103,309 V Taxes and Fees M&E Fees 1,685,517 Administrative Fees 1,685,517 Mapping and Design Fees 1,011,310 Trainings 300,000 Taxes and Fees Related to Permanent Land Acquisition 1,115,812 Sub-Total 5,798,155 Total of I to V 342,901,464 VI Contingency 34,290,146 GRAND TOTAL 377,191,610

11.3 Budget Funding and Disbursement Plan

92 202. The budget for land acquisition and resettlement of the Sub-component will be financed by Fuzhou Municipal Finance Bureau. According to the implementation schedule, 60% of the resettlement budget will be used in 2008 and the remaining 40% will be used in 2009 (see Table 11-2). Table 11-2 RP Fund Disbursing Plan Year 2008 2009 Total Fund(CNY million) 22631.5 15087.66 37719.16 % 60% 40% 100%

11.4 Management and Auditing of Resettlement Fund

203. FUVCDC will submit the annual resettlement budget prepared in accordance with the project implementation progress schedule and resettlement funds utilization schedule to Fuzhou Municipal FB. FUVCDC shall strictly comply with the rules and regulations on the utilization management and auditing of the public funds in the whole process of the resettlement funds. The uses of fund proceeds shall be checked one level by one level, that is, they shall be checked by the official in charge of the resettlement activities within FUVCDC, the official in charge of financial management within FUVCDC, and manager of FUVCDC. Following the approved resettlement budget and the instructions indicated by the official in charge, financial department in FUVCDC disburses the resettlement fund proceeds to the resettlement office after they are accurately verified and determined that they conforms to the standard specified in the RP. Fuzhou Municipal FB in corporation with FPMO will carry out the mid-term review on the uses of the resettlement funds and make appropriate modifications of the resettlement budget as required in accordance with the actual implementation progress.

12 RP IMPLEMENTATION SCHEDULE

12.1 Activities Prior to Resettlement

1) Determine scope of land requisition and dismantling of houses 204. According to project design and layout, identify and peg land requisition areas based on detailed designs. Resettlement will be announced to the affected villages through meetings and notices regarding land acquisition will be displayed in the villages. The IA will organize investigation and registration of the status of land, households, subsidiaries, and house properties within the pegged area. 2) Field check of land requisition and dismantlement areas 205. With the supports of the relevant authorities, IA organized appropriate staff to visit the affected sites, check and register land, houses, subsidiaries, utilities, equipment etc, and determine the nature and proprietary rights of infrastructure, and record the information in detail. 3) Draw up the plan of LAR and confirm and compile the budget 206. According to findings of investigation, the resettlement design institute jointly with IA will prepare the compilation of the land acquisition and resettlement plan and prepare a budget based on relevant policies and regulations, and then will submit the plan and budge to Fuzhou Municipal LRB, Fuzhou Municipal Real Estate Administrative Bureau and Fuzhou Municipal FB for review and verify. 4) Contract signing 207. Under the coordination and guidance of the PMO, IA will sign land requisition contract agreement with the relevant township governments and the demolition contract agreement with the qualified demolition and resettlement agency, further agreement with APs will be signed based on the project compensation standards with respect to the detailed loss items

93 after detailed measurement survey. The agreements (on land loss, structure loss, trees, etc.) are of a formality and reliable documentation for compensation paid to APs before land or properties are displaced.

12.2 Activities during Resettlement

208. Cangshan District LAB will disburse the land compensation fees to the communities/villagers according to the signed agreement. Villages provide land, through the readjustment of village land distribution. On the premise agreed by 2/3 villagers, villages can use the funds of land acquisition and compensation fees to adjust industrial structure and increase villagers’ income. The DRO in cooperation with IA and concerned authorities will provide houses for those affected by dismantled households, or allocate the displacement compensation fees to the affected people. 1) Land usage permission 209. Project IA should make efforts in going through the formalities of obtaining land usage permission so as to complete the procedure timely. IA will apply for the land use permission to land administration department level by level. 2) Facilities displacement and reconstruction 210. The dismantling of facilities and utilities affected by the project will be supervised by the EA. IA will disburse compensation fees to the proprietor and the proprietor arranges displacement, restoration and reconstruction of these facilities and utilities 3) Resettlement 211. The APs will be resettled by IA in corporation with district and township/sub-district governments and the concerned villages. Improvement has been achieved recently in communication, medical treatment, culture, education, business, telecommunication, public utilities and residential environment, comparing to previous years. 4) Internal and external monitoring and evaluation 212. The IA will be responsible to carry out internal monitoring and it will prepare and submit a monitoring report to the EA every 3 months. External monitoring will be the responsibility of the EA, who will contract this work to an independent consultant and will submit monitoring reports every year to the ADB. The external monitoring targets will be focused on the AP’s income rehabilitation and maintenance of their livelihood after land acquisition and demolition. In case the targets are not achieved, constraints will be identified. 213. In line with the project implementation schedule, the land acquisition and structures demolition shall be completed ahead of the construction activities to ensure the completion of the project implementation. The RP implementation is scheduled in three years starting from 2008. 50% and 30% of the activities are to be completed in 2008 and 2009, respectively, while the remaining is to be completed in 2010. The resettlement implementation schedule is shown in Table 12-1. Table 12-1 Resettlement Implement Schedule (Supervision Milestone) Status Completion and No. Resettlement Tasks Target Responsible Agency Deadline Additional Deadlines 1. Disclosure 1.1 Information booklet 620 copies IA/FDHDED/NEULADRH March 2008 completed Resettlement plan distribution to IA/FDHDED/NEULADRH 1.2 100 copies Aug. 2008 resettlement offices/villages/APs 1.3 RP placed on ADB website ADB Aug. 2008 Detailed Measurement Survey 2. (DMS)

94 Status Completion and No. Resettlement Tasks Target Responsible Agency Deadline Additional Deadlines

2.1 Detailed Measurement Survey IA/FDHDED/NEULADRH July 2008 completed

Updated RP based on DMS and 2.2 distribution to resettlement 100 copies IA/FDHDED/NEULADRH Aug. 2008 offices/villages/APs 3. Training Cangshan District, 3.1 Technical training plan for APs 116 APs Nov.2008 relevant townships 4. Resettlement Plan and Budget 4.1 Complete redline survey (map) FDHDED July 2008 completed 4.2 Approval of RP & budget Fuzhou Municipal FB June 2008 completed 4.3 Approval of compensation rates FMG June 2008 completed Signing Compensation 5. Agreements 5.1 Sign Village agreements 10 village IA/FDHDED/NEULADRH Aug. 2008 Sign Enterprise/Institution 5.2 34 units IA/FDHDED/NEULADRH Aug. 2008 agreements 5.3 Sign Household agreements 607 HHs IA/FDHDED/NEULADRH Aug. 2008 6. Implementation Capacity 6.1 NEULADRH resettlement staff 12 staff NEULADRH March 2008 Completed 6.2 Designate village representatives 9 staff Cangshan District May 2008 Completed IA/FDHDED 6.3 Training of staff 20 of staff June 2008 Completed /NEULADRH Setting up grievance redress IA/FDHDED 6.4 5 of staff July 2008 completed committees /NEULADRH 7. Monitoring and Evaluation 7.1 Baseline survey 10% of APs External Monitor Oct. 2008 7.2 Set-up internal supervision As per RP FPMO, IA Sept. 2008 7.3 Contract external monitor As per RP FPMO Oct. 2006 Completed 7.4 Internal monitoring reports Quarterly IA Dec. 2007 7.5 External monitoring reports Semi-annual External Monitor Dec. 2009 7.6 Evaluation reports (tracer surveys) Annual External Monitor Dec. 2010

7.7 Resettlement Completion Report External Monitor/ IA Dec. 2009

IA/FDHDED 8. Documentation of Consultation As per RP Dec. 2009 /NEULADRH IA/FDHDED 9. Documentation of Grievances As required Dec. 2009 /NEULADRH 10. Flow of Funds / Compensation 10.1 Fuzhou FB to Executing or Fuzhou FB, IA Aug. 2008

95 Status Completion and No. Resettlement Tasks Target Responsible Agency Deadline Additional Deadlines Implementing Agency IA – Resettlement Units IA/FDHDED 10.2 Sept. 2008 /NEULADRH IA/NEULADRH, related 10.3 To affected households 607 HHs Sept.2008 townships 11. Commence Resettlement 420.97mu including IA/NEULADRH, related 11.1 Land acquisition Oct. 2008 33.9mu townships farmland 197,636m2 IA/FDHDED 11.2 Housings and buildings removal Dec. 2008 /NEULADRH

96 APPENDICE

1 RELEVANT CLAUSES OF CONCERNED PRC LAWS & REGULATIONS AND DECREES

I Land Acquisition

A. Relevant Provisions Specified in Constitution of the PRC 1. Article 10: Land in the cities is owned by the State, while land in the rural and suburban areas is owned by collectives, except for those portions that belong to the State in accordance with the law. Collectives also own house sites and private plots of cropland and hilly land. The State may, in the “public interest”, lawfully expropriate land by paying compensation to collectives.

B. Relevant Provisions Specified in Land Administration Law of the PRC 2. Article 2: The State may, on the necessity of public interest, requisition land collectively owned in accordance with law. The State practices the system of paid-for use for state-owned land in accordance with law. However, appropriation of state-owned land use right by the State within the scope prescribed by law is excluded. 3. Article 10: Peasants' collectively-owned land that belongs to peasants' collective ownership of a village according to law shall be managed and administered by the village collective economic organization or villagers' committee; the land that belongs separately to more than two rural collective economic organizations and owned collectively by peasants shall be managed and administered by the respective rural collective economic organizations or villagers' teams; the land that belongs to township(town) peasants' collective ownership shall be managed and administered by the township(town) rural collective economic organization. 4. Article 14: Land collectively owned by peasants shall be contracted for management by members of the respective collective economic organization for cultivation, forestry, animal husbandry and fishery production. The duration of land contracting and management shall be 30 years. The contract issuing party and the contractor should conclude a contract agreeing on the rights and obligations of both parties. Peasants who contract management of the land have the obligation to protect and utilize the land pursuant to the agreement in the contract. Peasants' right to contract land for management is protected by law. Within the duration of land contracting and management, in the event of appropriate adjustment of land contracted among individual contractors, it must have the consent of over two thirds of the members of the villagers' conference or over two thirds of the villagers' representatives, and be submitted to the competent department of agriculture administration of township/town People’s Government and People’s Government at the county level for approval. 5. Article 31: The State protects cultivated land and strictly controls turning cultivated land into non-cultivated land. The State practices the system of compensation for the occupation and use of land. For the occupation and use of cultivated land for non-agricultural construction with approval, the unit that occupies and uses cultivated land shall be responsible for the reclamation of cultivated land equivalent to the quantity and quality of cultivated land occupied and used in accordance with the principle of "quantity of reclaimed land being equivalent to that occupied". Where there are no conditions for reclamation or the reclaimed land does not conform to requirements, cultivated land reclamation fee should be paid as prescribed by the provinces, autonomous regions and municipalities directly under the Central Government, the special-purpose fund shall be used for the reclamation of new cultivated land. 6. Article 46: For land requisitioned by the State, local People’s Government at or above the county level shall, upon approval pursuant to legal procedures, make an announcement

97 and organize its implementation. Owners and persons of the right to use of the requisitioned land should, within the specified time period of the announcement, bring the ownership certificates to the competent departments of the local People’s Governments to enter into registration for compensation for land requisition. 7. Article 47: For requisition of land, compensation shall be given in accordance with the original use of the requisitioned land. Compensation fee for the cultivated land requisitioned includes land compensation fee, subsidies for resettlement as well as compensation fee for ground appendixes and young crops. Land compensation fee for the cultivated land requisitioned shall be 6-10 times of the average annual output value in the three years prior to requisition. Subsidies for resettlement for the cultivated land requisitioned shall be calculated on the basis of the agricultural population that requires resettlement. The agricultural population that requires resettlement shall be calculated on the basis of the amount of cultivated land requisitioned divided by the average occupancy of cultivated land of the unit requisitioned. The rate of subsidies for resettlement per head of the agricultural population that requires resettlement shall be 4-6 times of the average annual output value in the three years prior to requisition of the said cultivated land. However, the maximum subsidies for resettlement for cultivated land requisitioned per hectare shall not exceed 15 times of the average annual output value in the three years prior to the requisition. The rate of land compensation fee and subsidies for resettlement for the requisition of other lands shall be fixed by the provinces, autonomous regions and municipalities directly under the Central Government, taking the rate of land compensation fee and subsidies for resettlement for the requisition of cultivated land as reference. Rate of compensation for ground appendixes and young crops on the requisitioned land shall be fixed by the provinces, autonomous regions and municipalities directly under the Central Government. For requisition of suburban vegetable plots of municipalities, the land use unit should, pursuant to relevant provisions of the State, pay to the new vegetable plot development and construction fund. Additional subsidies for resettlement may be provided for those peasants who require resettlement and cannot maintain their original living standards on the basis of land compensation fee and subsidies for resettlement the payment of which is effected pursuant to the provisions of the Second Paragraph of this Article subject to the approval of People’s Governments of the provinces, autonomous regions and municipalities directly under the Central Government. However, the total of land compensation fee and subsidies for resettlement shall not exceed 30 times of the average annual output value in the three years prior to requisition of the land. The State Council may, in accordance with the level of social & economy development, increase the rate of land compensation fee and subsidies for resettlement under extraordinary circumstances. 8. Article 48: Upon determination of the scheme for compensation and resettlement for land requisition, the local People’s Government concerned should make an announcement and seek the views of the rural collective economic organization and peasants of the requisitioned land. 9. Article 49: The rural collective economic organization of the requisitioned land should publish the revenue and expenditure of the compensation fee of the requisitioned land for the members of the respective collective economic organization and accept supervision. It is forbidden to embezzle or divert the land compensation fees and other related expenses. 10. Article 50: Local People’s Governments at all levels should provide support for rural collective economic organizations and peasants of the requisitioned land for development, management and establishment of enterprises.

98 11. Article 54: Use of state-owned land for a construction project should be obtained in the form of onerous use such as transfer. However, the following use of land for construction may be obtained in the form of appropriation subject to the approval of the People’s Government at or above the county level in accordance with law: (1) Land use by state organs and land use for military purposes; (2) Land use for urban infrastructure and land use for non-profit undertakings; (3) Land use for such infrastructure as energy, communications and water conservancy to which the state renders key support; (4) Other land uses prescribed by laws and administrative regulations. 12. Article 62: One household of villagers in a rural area can only possess one homestead, the area of which shall not exceed the standards prescribed by the provinces, autonomous regions and municipalities directly under the Central Government. Construction of villagers' residences in the rural areas should conform to the overall planning for township/town land utilization, and the best possible use of original house sites and idle land in the village.

C Relevant Provisions Specified in Procedures of Fujian Province for Implementation of the Law of the Land Management of the People's Republic of China

13. Article 20: Before apply for the land acquisition, the land administrative department of the municipal or the county government shall verify the area and the type of the land to be acquired and the compensation standard and the ownership together with the related departments. After consulting with the owner and the contractor and operator of the affected land the land acquisition scheme shall be worked out and submitted to the people's government at the same level for review. 14. Article 22: Upon the approval the municipal or county people's government shall issue the notice of land acquisition within 10 days after the approval. The notice shall be placarded in the place where the owner and the contractor and operator of the land to be acquired are located. The land acquisition notice shall state clearly the follows: (1) Approval documentation of the land acquisition; (2) The area, location and the scope of the land to be acquired; (3) Planned use of the land to be acquired; (4) Object and time limit of the registration for compensation and documentation bound to submit; (5) Land acquisition implementing agency; (6) Prohibitions and other issues need to be disclosed. After the land acquisition notice is released, the owner and the contractor of the land to be acquired shall not rush-plant any crops or rush-build any structures. 15. Article 23: After the registration of the compensation is confirmed, the administrative department of the municipal or county people's government shall check the current situation of the land to be acquired, the quantity of the young crops and the attachments of the land together with the related department. The compensation and resettlement scheme shall be worked out within a stated period. The compensation and resettlement scheme will include the follows: (1) The summary of the land acquisition compensation and resettlement allowance; (2) The standard, the calculation method and the mode of payment of the compensation for the land acquisition; (3) The object of the payment of the compensation for land acquisition, the resettlement allowance and the compensation for the young crops and the attachments on the land; (4) The resettlement scheme for the land-acquired farmers; The compensation and resettlement scheme shall be published timely to collect the

99 public opinions. The owner and the contractor of the land to be acquired shall be consulted with and the time limit for consultation is 15 days. The consultation notice shall state clearly the follows: (1) The approved compensation and resettlement scheme; (2) The time and location for drawing the land compensation and resettlement allowance; (3) Time for the hand over of the land; (4) The method and time limit for putting forward any objection; (5) Other issues need to be consulted. 16. Article 25: The unit that acquires the land shall pay the compensation for land acquisition, the resettlement allowance and the compensations for young crops and the attachments on the land. 17. Article 26: The compensation for land acquisition shall be paid to the unit that operates and manages the collective land and acts as the owner of the land. If the land to be acquired has been contracted to and operated by the farmers or if the land is the private plot, and the unit that operates and manages the collective land can not adjust any other land with the same quality and quantity to the farmers to continue the contract and operation, then not less than 70% of the land compensation shall be paid to the land-lost farmers. For those collective land operating and managing units who have the conditions to spend the land compensation on the development of production and livelihood of the farmers, the land compensation can be used in a unified way upon the agreement of the land-lost farmers. If other land can be adjusted and distributed to the land-lost farmers but with different quality and quantity the distribution ratio of the land compensation can then be determined through the negotiation of the collective land operating and managing unit and the affected farmers. The collective land operating and managing unit shall establish the special account to manage the land compensation fund received according to the previous clause for the development of the production, arrangement of the surplus labors and the living subsidy of the land-acquired farmers. The way of using and managing the land compensation shall be determined by members of the affected collective through voting. The revenue and expenditure shall be published at least every 6 months to receive the supervision of the members of the collective. Any interception, embezzlement, misappropriation or unauthorized use in any other forms of the land compensation fund by any units or individuals is prohibited. 18. Article 27: The land compensation will be calculated and paid according to the following standards: (1) For the acquisition of cultivated land (paddy field, vegetable plot and fish pound) the land compensation rate is 8-10 times of the average annual output value of the land in past 3 years. For acquisition of other farmland，the land compensation rate will be 6-8 times of the average annual output value of land in past 3 years； (2) For the acquisition of or other economic woodland the compensation will be 60-70% of that for the paddy field. For acquisition of cultivated land the compensation will be that as for the same type of the land. (3) For acquisition of non-economic woodland, the compensation will be 40% of that for the paddy field. (4) For acquisition of water surface and mud flat the compensation will be 60-70% of that for the paddy field. (5) For acquisition of non-economic woodland, the compensation will be 40% of that for the paddy field. (6) For acquisition of unused land, the compensation will be 15% of that for the paddy field. 19. Article 28: For those who need to be resettled in a unified way by the collective the resettlement allowance will be paid to the collective land operating and managing unit. For those who will be resettled by other unit the resettlement allowance will be paid to the implementing unit. For those who do not need to be resettled in a unified way the resettlement allowance will be paid to the affected individuals or paid for the insurance of the affected

100 people upon their agreement. 20. Article 29: Resettlement allowance for cultivated land acquired shall be calculated according to the agricultural population need to be resettled. The agricultural population need to be resettled shall be calculated according to the amount of the cultivated land to be acquired divided by the occupancy of the cultivated land per capita before the land acquisition. The resettlement allowance for each farmer after the farmland acquisition shall be 4-6 times of the average annual output value of the acquired farmland in the past 3 years. For acquisition of orchard and other economic woodland the resettlement allowance will be 3-5 times of the average annual output value of the land in the past 4 years. For acquisition of brine pan and water surface or mud flat for aquiculture the resettlement allowance will be 2-4 times of the average annual output value of the land in the past 4 years. 21. Article 30: Compensation of the young crops and attachments above the land will be paid to the land contractor or the property owner of the structures. The compensation of the young crops or the attachments will be calculated and paid according to the following standards: (1) Compensation of the crops will be 1 time of the average annual output value in past 3 years. (2) Compensation of the man-made aquiculture facilities will be its replacement price associated with the percentage of the newness and compensation of the young plant will be 60% of the production cost. (3) Compensation of the housing and other buildings and structures will be the replacement price associated with the percentage of the newness. The concrete standard will be worked out by the municipal and county people's government and will be reported to the people's government at higher level for approval. If the attachments on the land to be acquired are trees (fruits or bamboo) the trees (fruits or bamboo) logged after the acquisition will be returned to the original owner. The compensation will be calculated and paid according to the following standards: (1) Compensation for the young forest of the timber forest will be 2 times of the production cost. That for the immature timber forest will be 40-60% of the output value of the ripe wood. And that for the ripe wood will be 30% of the output value of the ripe wood. (2) Compensation of bamboo wood will be 2 times of the output value. (3) Compensation of fruit trees and other economic woodlands will be 2-7 times of the average annual output value in the past 4 years. Compensation of the fruit trees without production will be 2 times of the production cost. Compensation of the fruit trees with production will be 4-7 times of the output value depending on the growth cycle and the richness of the trees. (4) Compensation of the forest for special purpose and the protection forest will be 4-7 times of that for the forests with the same kinds. (5) Compensation of the firewood forest will be 40-60% of that for the timber forest. Illegal building and crops planted after the publication of the land acquisition notice will be compensated. 22. Article 31: The land compensation, resettlement allowance and the compensations for the attachments and young crops on the acquired land for the following construction projects will be paid according the lower limit of this stipulation. (1) Land used for national defense and military affairs; (2) Land used for urban infrastructure and public welfare; (3) The land used for infrastructures supported by the state or the province as key projects such as energy source, transportation and water conservancy etc. (4) The land used for the construction of permanent constructions and other facilities for rescue and disaster relief; the land tax will be exempted for the construction of underground anti-aircraft defense. 23. Article 32: If the land compensation and resettlement allowance provided according to this method will not enable the affected farmers to maintain their original living stand,

101 additional resettlement allowance can be provided upon the approval of the province people's government. However, the maximum allowance per hectare shall not exceed 15 times of the average annual output value of the land in the past 3 years. After the adjustment of the land compensation and resettlement allowance standards for cultivated land acquisition by the State Council the province people's government shall make the relevant adjustment according to the actual conditions in the province. 24. Article 33: The average annual output value shall be calculated as: The average annual output of the land in the past 3 years (past 4 years for fruit trees and economic forest) times the state stipulated price. For those without state stipulated price the market price published or approved by the price administrations of the municipal or county will be used for the calculation. The average annual output referred to in the previous item will take the average annual output of the town recorded in the local statistical department as the standard. 25. Article 34: For the acquisition of the national land such as farmland, forest, pasture, orchard, tea garden and fishery or the collective-owned land used for the non- agricultural construction approved, the calculation and payment of the compensation and the resettlement allowance shall refer to the standard of the compensation for land acquisition.

II. Compensation for Housing Demolition

A. Relevant Provisions Specified in Administrative Regulations on Urban Housing demolition of the People's Republic of China

26. Article 3: Demolition of urban houses must abide by the city’s overall layout plan, and be conducive to reconstruction of old urban areas and improvement of the ecological environment in the city, as well as protection of cultural relics and historic sites. 27. Article 4: The resettlement implementing agency shall observe the stipulations under the present regulations to make compensation to the affected party and help the affected party resettle; the affected party shall move out of the site prior to the expiration of the move period. 28. Article 8: When issuing the permit for housing demolition, the authority in charge of housing demolition work shall issue a public notice upon housing demolition to make public the name of the resettlement implementing agency, scope of demolition, and demolition period, which are stated clearly on the permit for housing demolition. The authority in charge of housing demolition work and the resettlement implementing agency shall disseminate and explain necessary information to the affected party in time. 29. Article 13: The resettlement implementing agency and the affected party shall both observe the stipulations under these regulations to enter into an Agreement upon Compensation for Demolition Work with regard to the modes and amount of compensation, area of resettlement houses and resettlement site, time limit for move, mode of provisional residence during the move, and the term of occupancy in the provisional residence, etc. When it comes to demolish those leased-in houses, the resettlement implementing agency shall conclude an Agreement upon Resettlement Work and Compensation for Demolition Work with the affected party and the lessee of the house to be demolished. 30. Article 20: The resettlement implementing agency shall put the entirety of its compensation and resettlement funds for the purpose of implementation of housing demolition work only, and must be embezzle such funds for any other purpose. Those housing demolition authorities under the local People’s Governments at county level or above shall reinforce their supervision over the utilization of such funds for resettlement and compensation for demolition work. 31. Article 22: The resettlement implementing agency shall observe the stipulations under these regulations to make compensation to the affected party. Those illegal buildings and temporary establishments which still exist beyond the term of validity of the governmental approval for their existence, which are to be demolished, are not entitled to any compensation.

102 Those temporary establishments existing within the term of validity of the governmental approval for their existence, which are to be demolished, are entitled to appropriate compensation. 32. Article 23: The modes of compensation for demolition work are available in “cash compensation” and “swapping for property rights”. 33. Article 24: The amount of cash compensation shall determined based on the evaluated price in the real estate market and in line with such factors as the locality, usage, and building area, of the house to be demolished; details in this regard are to be formulated by the People’s Government in the concerned province, autonomous region and municipality. 34. Article 25: When it comes to swapping for property rights, the resettlement implementing agency and the affected party shall follow the stipulations under Article 24 under these regulations, to reckon the amount of compensation for the house to be demolished and the price of that house to be swapped for, and square up the price difference between the 2 houses involved in the swapping for property rights. 35. Article 26: As to those houses used for public welfare purpose which have to be demolished, the resettlement implementing agency shall follow the requirements under related laws and regulations, and the city’s overall layout plan, to reconstruct houses for such usage, or make cash compensation. 36. Article 33: If the demolition work of any non-residential buildings has caused suspension of production or business operation, the resettlement implementing agency shall render appropriate allowances to the affected party.

B. Relevant Provisions Specified in Administrative Regulations on Urban Housing demolition of Fujian Province

37. Article 4: The modes of compensation for demolition work are available in either cash compensation, or swapping for property rights of houses; it is encouraged to make cash compensation. 38. Article 7: The applicant for a Permit for Housing demolition shall open a special account in a financial institution which takes in deposits, and deposit its funds for resettlement and compensation for demolition work into this account, as well as enter into an agreement with the same institution with regard to the scope of utilization of such funds, planning for and supervision over such funds, etc. Such an agreement and the Certificate upon the Availability of the Funds for Resettlement and Compensation for Demolition Work presented by the financial institution shall be rendered by the applicant for the Permit for Housing demolition to the competent authority in charge of housing demolition work. The authority in charge of housing demolition work shall reinforce its supervision the funds for resettlement and compensation for demolition, and check the contribution of such funds and how such funds have been used on a regular basis. Funds for resettlement and compensation for demolition include the cash compensation for the demolished houses, removal allowance, temporary resettlement allowance and other compensations for demolition work. Funds for resettlement and compensation for demolition must be used in full for the purpose of resettlement and compensation for housing demolition work only, and shall not be used for any other purpose. 39. Article 8: The authority in charge of management over housing demolition work shall make public the file reference number of the Approval Document for the Housing demolition Work, name of the resettlement implementing agency, name of the organization in charge of implementation of the demolition work, scope of demolition work, and time limit for completion of demolition work, etc., by issuing a public notice on an eye-catching position in the region where the demolition work is to take place within the ensuing 3 days after issuing the Permit for Housing demolition Work; and notify related authorities in writing to suspend handling those formalities in relation to construction of new houses, reconstruction of houses, change

103 of usage of houses and land sections, and leasing of houses, etc. 40. Article 12: The resettlement implementing agency and the affected party shall sign a written agreement upon resettlement and compensation for housing demolition work. Such an agreement must state clearly the following matters: 1) Structure, area, locality, floor number, direction and pattern of acquisition of the right t use of land of the house to be demolished. 2) Pattern of compensation for demolition work. 3) Time limit of move. 4) Amounts of cash compensation, removal allowance, and other compensations for demolition work, and terms of payment and time limits for payment. 5) Responsibilities for breach of agreement. 6) Other matters that the parties concerned deem it necessary to clarify. 41. Article 13: When it comes to swapping for property rights of houses, the agreement upon resettlement and compensation for demolition work shall not only state clearly those matters as specified under Article 12, but also state clearly the following matters: (1) The building areas, localities, grades, partitioning types, structures of those resettlement houses outside the demolition work area, or the descriptions of those houses planned to be built up for resettlement purpose within the planned and approved demolition work area. (2) Mode of provisional residence during the period of move and term of such a transition. (3) Localities and areas of those houses for provisional occupancy purpose. (4) Method and time of settlement of the prime difference between the houses involved in the swapping for property rights. (5) Terms of payment and time limit of payment for the temporary resettlement allowances. 42. Article 14: When it comes to demolition of those leased-out houses, the resettlement implementing agency shall enter into an agreement upon resettlement and compensation for demolition work with the affected party and the lessee of the house to be demolished. Such an agreement shall state clearly the matters provided under these regulations and whether or not the lease relationship between the affected party and the lessee of the house to be demolished shall be dissolved. 43. Article 15: In case that the demolition affected party is in extreme financial difficulties, and unable to buy the resettlement house, it is required to make appropriate resettlement arrangements for the affected party; concrete method of resettlement in such a case shall be formulated by the People’s Government in the City governing the concerned district where the demolition work is to take place. 44. Article 16: Before an agreement upon resettlement and compensation for demolition work is signed, no organization is allowed to force the demolition affected party or the lessee of the house to be demolished to move out, by means of discontinuing the supply of water, or power, or gas. 45. Article 17: When it comes to make cash compensation for demolition work, the amount of such cash compensation may be determined by the two parties through negotiations. When such negotiations come of no avail, the resettlement implementing agency shall appoint a Property Evaluation Organ (the evaluator, for short) to conduct an evaluation, and use the evaluated price as the basis, on which the two parties shall negotiate with each other the amount of cash compensation. When it comes to swap for property rights of other houses, the resettlement implementing agency and the affected party shall follow the stipulations under the preceding Article, to calculate the amount of the house to be demolished and the price of that house whose property right is to be swapped for, and then square up the price difference between the two houses involved in the swapping scheme. When it comes to swap for property rights of other houses, the resettlement implementing agency shall provide the Certificate of Property Right of the house whose property right is to be swapped for by the agreed time limit. 46. Article 18: The resettlement implementing agency shall make public the Proposal for

104 Resettlement and Compensation for Demolition at an eye-catching place in the zone where the demolition work is to take place. 47. Article 20: If the resettlement implementing agency dissents from the evaluation report, it is allowed to render a written application for re-evaluation to the original evaluating organization within the ensuing 15 days after its receipt of the evaluation report; while the evaluating organization shall then present a re-evaluation report within the ensuing 10 days after its receipt of such an application. If the affected party dissents from the amount of cash compensation determined under the evaluated price, and thus cannot reach an agreement with the resettlement implementing agency upon the amount of cash compensation, it is allowed to appoint another qualified evaluating organization to conduct an evaluation within the ensuing 15 days after its receipt of the evaluation report, or apply to authority in charge of management over housing demolition work for judgment. If the affected party refuses to negotiate with the resettlement implementing agency and has failed to appoint another evaluating organization or apply for judgment within the ensuing 15 days after its receipt of the evaluation report, the resettlement implementing agency can apply to the authority in charge of management over housing demolition work for judgment. 48. Article 21: If the resettlement implementing agency and the affected party appoint two different evaluating organizations, the two parties shall then negotiate with each other in accordance with the results of evaluation reached by these two evaluating organizations to determine the amount of cash compensation; if the two parties are not able to reach an agreement upon resettlement and compensation for demolition work yet, it is allowed to apply to the authority in charge of management over housing demolition work for judgment. 49. Article 22: If either party does not obey the judgment made by the authority in charge of management over housing demolition work, it is allowed to institute legal proceedings to the People’s Court in jurisdiction according to laws. 50. Article 23: The usage of the house to be demolished shall refer to that specified on the Certificate of Property Right of the same house. Registration of the usage of a house shall be based upon the legitimate and effective documents rendered by the City Planning Department. If the Certificate of Property Right of the house has not specified the usage of the same house, then the Property Right Registration Department shall conduct an survey and verify the usage of the same house by use of its powers of office, or according to the application filed by the house owner. If the house in concern has already been put into another usage than that as specified on its Certificate of Property Right for a continued period of time prior to the implementation of the “City Planning Law of the People’s Republic of China”, then the house owner shall apply to the Property Right Registration Department for handling the formalities of change of registration with regard to the change of the usage of the house. 51. Article 30: If the demolition of a non-residential building has caused the operator to stop his or her operation or production, the demolition organ shall not only compensate the operator according to the period of time that the stop of production or operation has lasted, the number of workers and staff whom the operator has registered with the competent social security organization, and also the average wages & salary of workers and staff in the previous year as made public by the local government (of the place where the concerned house is nestled); but also make economic compensation at one go, referring to the length of time that has witnessed the suspension of production or business operation, and also according to the amount of monthly after-tax profit on average recorded by the operator in the previous year. If the non-residential building subject to demolition has been leased out, it is required to compensate the demolition-affected person with three months’ rentals at one go, according to the rental standard which has been stated on the Lease Agreement filed with the Real Estate Transaction Administration, and remained in effect at the time of demolition further still.

105 52. Article 31: Demolition personnel shall be held responsible for making repair or compensation for damage(s) incurred, during the course of demolition work, upon any of the peripheral buildings, structures and other facilities

C Relevant Provisions Specified in Administrative Regulations on Urban Housing demolition of Fuzhou Municipality

53. Article 5: Demotion of houses shall observe the principle going as “well-arranged resettlement, appropriate compensation and making resettlement before dismantling”. 54. Article 6: Those residents whose houses are to be demolished shall be subjected to either monetary resettlement or housing resettlement at one go. It is encouraged to make monetary resettlement. 55. Article 14: The resettlement implementing agency and the affected party shall observe the stipulations under the present Method, to enter into a written agreement upon resettlement and compensation for demolition work, before dismantling houses. Such an agreement shall make provisions upon the mode f resettlement, locality of resettlement, resettlement area, amount of compensation, terms of payment, time limit for payment, responsibilities for breach of agreement, and other Articles that the parties concerned deem it necessary to include. The resettlement implementing agency shall issue a public notice to make public its handling results of resettlement and compensation for demolition work, and accept the supervision effected by the general public. 56. Article 20: The calculation formula of the amount of monetary resettlement is: Amount of monetary resettlement = Basic prices of those ordinary commodity houses located at different localities in the zone where the demolition work is to take place * the building area of the house to be demolished – the price difference to be paid by the affected party. 57. Article 27: When it comes to dismantle a residential housing in the possession of the affected party, it is necessary to make resettlement on the basis of the original building area of the same house, and handle as per the following stipulations: (1) To base the counting of the number of households upon the property right certificate, or the credential of lawful lease, of the house to be demolished. (2) The building areas of those houses with standard partitioning types are respectively 45, 60, 75, 90, and 105 m2. If the building area of the resettlement house exceeds 105 m2, it is allowed to make resettlement by the partitioning types of houses. (3) The standard partitioning types for those resettlement houses shall abide by the architectural criteria set down by the State. (4) Resettlement at one go shall be made by use of houses with standard partitioning types, as pre the grading results of different houses to be demolished, after having augmented the resettlement area within the amplitude ratified by the Municipal People’s Government. 58. Article 34: Prices of those resettlement houses shall be calculated according to the following stipulations: As to an affected party who possesses the property right of the concerned house and chooses to swap for property right of another house, the equivalent building area and the building area that shall be augmented for the purpose of resettlement at one go shall have their prices calculated by the costs of erection and installation of the resettlement houses; the building area that is added for the purpose of rounding up to a standard partitioning type of house shall have its price calculated by 80% of the cost price; the building area that is added for the purpose of escalating to another partitioning type of house at a higher level shall have its price calculated by the cost price; the building area that is added for distribution of partitioning types of houses or for other reasons shall have its price calculated by the prices of commodity houses. 59. Article 35: Those illegal buildings or temporary establishments whose terms of use have expired already are not entitled to resettlement and compensation, and must be

106 dismantled by their owners or users on their own. If these owners or users refuse to dismantle them beyond the set time limit, it is allowed to have these structures or establishments dismantled according to laws. Those temporary establishments, whose approved terms of use have not expired and which have to be demolished, are entitled to appropriate compensation, but subjected to no resettlement. 60. Article 41: If the demolition work has given rise to suspension of production or business operation, during the course of such suspension, the resettlement implementing agency shall make compensation to those workers and staff whose names appear on the roster of the organization whose houses are demolished, as per the city’s minimum wage standard, amount of social insurance premiums and price allowances set down by the State; pay the medical insurance premiums for those retirees; and render economic allowances to individual units of industry and commerce according to the city’s minimum wage standard. It is necessary to grant moving costs to each affected party.

D. Relevant Provisions Specified in the Certain Stipulations on the Implementation of the Urban House Demolishing Administrative Procedures of Fuzhou City (June 30, 2000)

61. Article 7: Once the scope of the demolishing is determined, the authority in charge of the house demolishing should inform the relevant authorities to suspend processing some procedures in the designated areas, including the registration of business license, the review and approval of the construction application, real estate trading, modification of property right and use right, immigration of household and separation of households etc., meanwhile, the real estate administrative authority is to be informed to check the property right of houses within the demolishing limit. The suspending period of processing the procedures is six months starting from the issuing date of notification. If no further notices to extend are issued, the suspending measures will be automatically released. The procedures obtained during the suspending period should not be taken as the basis for compensations. 62. Article 13: The property right certificates or legal leasing, borrowing documents of the house to be demolished that are presented by the resettlers should be taken as the basis to count the household for resettlement. 63. Article 15: The house to be demolished can be priced for compensation, which should be made based on the location, structure and newness of the targeted house. 64. Article 17: The resettlement flat indicated in the Section 1 of Article 17 in Procedures means the flat with independent bed room, living room, kitchen, bath room and balcony ( the usable area: kitchen no less than 4.5m2, living room no less than 8 m2, bath room no less than 2 m2, balcony no less than 3 m2). Utility room and collective garage booth can not be accounted into the areas for assets for assets. 65. Article 19: For resettlement within the same area, the part of the floorage of the resettled house which is the same as the floorage of the original house is appraised based on the construction and installation costs of the resettled house. 66. Article 24: For demolition of rented or lent private houses or houses taken care by units, if the property right owners require for exchange of property rights (or not), the exchange of property rights should be (or not be) carried out based on the total original rented or lent floorage (including distribution of public floorage on certain scale)1. 67. Article 31: The affected people that used illegal buildings will not be compensated and not resettled in principle. However, those who had residential difficulty and used the illegal buildings as bedrooms should be properly resettled. 68. Article 34: For the termination of production or business caused by demolition of houses, during the termination period of production or business, the demolition agency should provide subsidy based on the average monthly standard of the basic salaries and price

1 The original housing status will be maintained after housing demolition.

107 subsidies of the registered staff of the resettled unit (including registered staff) six months before the resettlement notice is published. The administrative unit should deduct the production target or change or terminate contracts. The reduction of profits during the termination period of production and business should be compensated. z Under the situation that the registered staff can not be identified, the compensation is made according to the following standards with approval of the administrative unit of the resettlement. z For the termination of production or business of state-owned or collectively-owned units, staff are calculated based on the standard of one person per 20 m2 floorage of houses for commercial use and every person is paid a subsidy of 300 RMB/month for termination of production or business. For individuals registered in the commercial and industrial unit, the staff is calculated based on the standard of one person per 10 m2 floorage of houses for commercial use and every person is paid a subsidy of RMB 300/month for termination of production or business. 69. Article 35: The relocation subsidy standard is RMB 300 for per household that has less then 4 people and RMB 400 for per household that has more than 5 people. For households that are relocated for the second time, the relocation subsidy should be doubled. If the floorage of the house for commercial use is less than 50 m2, a lump-sum subsidy of RMB 400 is provided; if the floorage is more than 50 m2, a lump-sum subsidy of RMB 800 is provided.

E Relevant Provisions Specified in Certain Stipulations on Administrative Regulations on Urban Housing demolition of the People's Republic of China and Administrative Regulations on Urban Housing demolition of Fujian Province issued by Fuzhou Municipal People’s Government (2005)

70. Article 16: If the residential housing has been changed into the business uses and its owner has not applied for the amendments of the house uses when the housing demolition notification is promulgated, the compensation and relocation will be made in accordance with the uses indicated in the property right certificate. The compensation for the non-business use house that has been changed to the business uses without the approval from the planning authority and the verification from the real estate authority but with the property right certificate and the effective business license (or the initial business certificate issued by the industrial & commercial administrative authority) is to be made in accordance with the following situations: z If the front room of the first floor along street was changed to the business uses before 5 January 1984 when the Urban Planning Regulations was taken effectiveness, it can be compensated in cash or in assets for assets following the business use compensation modality, while the remaining floor areas will be verified and compensated in accordance with their original use indicated in the property right certificate. z If the front room of the first floor along street was changed to the business uses during the period from 5 January 1984 to 1 April 1990 when the Urban Planning Law of PRC was taken effectiveness, 80% of its business use areas can be compensated in cash or in assets for assets following the business use compensation modality, while the remaining floor areas will be verified and compensated in accordance with their original use indicated in the property right certificate. z If the non-business use house was changed to the business uses after 1 April 1990 when the Urban Planning Law of PRC was taken effectiveness, it will be verified and compensated in accordance with their original use indicated in the property right certificate without exceptions, but the priority to purchase the business use houses will be given. 71. Article 23: If resettlers whose houses will be demolished by the project belonging to state key projects, or special urban infrastructure projects, or aged house rehabilitation projects, or land reservation projects set by the municipal government, determined as the

108 vulnerable groups, are not able to tailor-out their housing difficulties through cash compensation modality or assets for assets modality, they can apply for the low rental housing initiative once they can meet the requirement of the low rental housing initiative. The costs to purchase low rental houses will be undertaken by the project sponsor.

F Relevant Provisions Specified in Interim Measures on the Market Evaluation of Cash Compensation of Urban Housing demolition of Fuzhou Municipality

72. Article 2: For those select cash compensation, the calculation formula of the amount of cash resettlement is: Amount of cash resettlement = Cash compensation unit price * the building area of the house with property rights to be demolished ＋Cash compensation premier ＋Advance moving premier ＋ Other compensation premier 73. Article 3: Cash compensation unit price comprises two parts : area price of the house and replacement price of the structure. Area price of the house is the basic prices of those ordinary commodity houses located at different localities in the zone where the demolition work is to take place. Five or more qualified organization in charge of evaluation of price of real estate shall be selected with the drew method under the supervision of the resettlement implementing agency so as to evaluate the compensation price impartially. Replacement price of the structure will be set according to the “Guidance of cash compensation and property right exchange price of urban housing demolition” 74. Article 4: Cash compensation premier. Resettlement with cash compensation is encouraged, if the APs sign the cash compensation resettlement contract and move to other place within the time of negotiated moving date, the APs will be awarded with cash compensation premier, which will be 10% of the area price of the house each square metre at highest. 75. Article 5: Advance moving premier. Those leaving within the negotiated moving date will receive an advance moving premier.For residential housings , the standard will be 85 yuan/㎡(no more than 850yuan×10% /㎡);For non-residential building, the standard for each square metre house will be“ area unit price ×3～5% /㎡”.Those moving exceeding the negotiated leaving date will not receive such advance moving premier. 76. Article 6：Other compensation premier. It will be set according to the “Guidance of cash compensation and property right exchange price of urban housing demolition” 77. Article 7: Those who have enjoyed the rural lowest living safeguard standard with per capita housing area below 6 ㎡ can apply for houses for leasing out at low rentals , and receive 3,000 yuan of settling-in allowance also; Those with per capita housing area below 10 ㎡ who select cash compensation and agree to leave within the negotiated moving date, and agree their area compensation of houses being managed by “accountings for resettlement ”which managed by Financial Bureau of Fuzhou, they can also apply for houses for leasing out at low rentals. 78. Article 8: Those with per capita income below 400yuan/month and with the average floor area less than 12 ㎡ per capita, after their qualifications being approved by Street Communities and Community Committees and also approved by public without question, can apply for economical house. They can apply for a 3-year loan and the Financial Bureau of Fuzhou will bear the interest of the loan which within the standard of 60 ㎡ each household . 79. Article 9: As to each displaced person the floor area of whose original house is less than 45 ㎡ with the average floor area less than 10 ㎡ per capita and is willing to select monetary resettlement and leave within the negotiated moving date, after their qualifications being approved by Street Communities and Community Committees and also approved by public without question, they can receive difficulty allowance, and the amount is the area price of the house × (45－original floor area). Those who divided the property of their current houses and thus per household’s floor

109 area is less than 45 ㎡ after the implementing of “Interim measures on the market evaluation of cash compensation of demolition of urban houses in Fuzhou ” can not get the difficulty allowance. 80. Article 11: Those chose the resettlement mode of exchanging of house property right, the marketing price of the house they expect to exchange will be evaluated as mentioned above. 81. Article 12: Real estate management department will announce the trading price for second-hand house of different location of Fuzhou semiannually for APs.

110 2 RESETTLEMENT INFORMATION BOOKLET

Nantai Island Creek Rehabilitation is a key component of Fuzhou Environmental Improvement Project financed by ADB loan, whilst Longjin river and Yuejin river works are the sub-component of Nantai Island Creek Rehabilitation. The works constructions will affect the location of your family (unit) to some extent. The booklet is distributed to inform the APs on the basic status of the sub-component of the Project, relevant land acquisition and relocation policies of the state and the impacts on the APs household. Longjing river originates from Fujian Police College, through Shangsan road, Nantai road, south Liuyi road and south Lianjian road, and flows into Min river at Jiangban village, while starting at Xia village on the west connecting Yangque river, Yuejing river flows through Zexu avenue, south Lianjiang road, and flows into north port of Min river at Puxia village. The rehabilitation works of Longjin river and Yuejin river will consist of : i) rehabilitating 3.373km long existing waterway of Longjin river by river dredging and riverbank strengthening, opening up two sections of new waterway including one section of 0.82km long with the river bed width of 10.5m at Zhengjin road 80m down Longjin river lower reach and the another section of 0.387km long with the river bed width of 10.5m at the lower reach of Longjin river 175m down Jiangban Elementary School in order to discharge water of Long river into Min river; ii) rehabilitating 5.324km long existing waterway of Yuejin river by river dredging, riverbank strengthening and partly river waterway curve cutting and straightening; and iii) constructing one two-gates sluice with the dimension of 5mX2m each gate on Yuejin river at the juncture of Longjin river and Yuejin river. Total costs of these works were estimated at CNY 71.96 million, of which CNY 34.54 million (equivalent to US$ 5.2million) is to be financed by the ADB loan.

1 The Scope and Quantity of the Works Impacts

The works will affect the farmland, houses/buildings and attached facilities, and relevant public service facilities and infrastructures within the 10m from the both banks of these two rivers. Some 38.95mu farmland is anticipated to be acquired, and some 0.2 million m2 houses/buildings and attached facilities will be demolished, which will affect 10 villages of Gaishan and Cangshan townships, including Jianban, Gaohu, Beihu, Puxia, Beiyuan, Shoushan, Xiahu, Xianfen and Zhenan.

2 Compensation Rates

The compensation rates of land acquisition and resettlement are determined on the basis of sufficient surveys, with reference to involuntary resettlement principle of Asian Development Bank, state laws and regulations and Fujian province and Fuzhou municipality by-laws and aimed to restore and improve living standard of affected persons in short period after resettlement. The compensation rates applied to Longjin river and Yuejin river rehabilitation works and the other works of Nantai Island Creek Rehabilitation Component as well are tabulated in Table A1-1. Table RIB 1-1 Compensations Rates for Land Acquisition and Resettlement Item Compensation Rates Remarks 1 Permanent Land Vegetable land and orchard: Including: land compensation, Acquisition CNY80,600/mu resettlement subsidiary and Other farmland: CNY64,480/mu green crops compensation

10% reserving farmland to be acquired: Village collectively for the CNY 1 million/mu purpose of economic development and social welfares. Mango: CNY750/tree, Longan, Litchi 2. Scatter Trees and Chinese olive: CNY 1000/tree, Mature tree Banana: CNY60/tree.

111 Item Compensation Rates Remarks 1 houses/buildings with the property 1. The construction year is to be right certificate and /or built before 5 determined based on based on Jan.1984, the total compensation = the satellite photography verified area X (CNY 1,800/m2 + images. compensation rate for structure + 2 The location-based price relocation encouragement incentive + t rates: resettlement interim + relocation Residential housing / allowance) + compensations for other Office-used building: items (including decoration and CNY1800/m2 attached facilities) Business-used house: to be 2 houses/buildings built during 1 determined at the market 3. Housings/Building January 1984 to 26 October 2004: the evaluation price total compensation = verified area × Other buildings/houses: (compensation rate for structure + CNY1350/m2 relocation encouragement incentive + 3. The compensation rates for resettlement interim + relocation structure and other items allowance) + compensations for other (decorations and attached items (including decoration and facilities) are referred to doc. attached facilities) No. of RongFC【2007】193 3 the buildings built after 26 October 2004 : no compensation, but CNY 50/m2 for demolishing residential housing：CNY 30/m2 sign resettlement agreement 4 Relocation 2 shop：CNY 600-2000/m and relocate within the Encouragement Incentive 2 plant: CNY 30/m negotiation limit residential housing: CNY 6/m2 5 Relocation allowance 2 non-residential building: CNY 10/m The transition period: 24 months for the 9 floors and below of Residential housing: CNY 7/m2 /month assets for assets resettlement (less than 30, 30 m2 is to be house, 36 months for the over 6 Resettlement interim accounted.） 9 floors of assets for assets resettlement house. double the rate in the extension period due to IA per capita: CNY 350/m2×45 m2 household registered in the affected areas. 7 Basic Policy Protection Allowance allowance for floor area shortfall= Legal floor area less than 45㎡ shortfall area×（location-based price per capita CNY1800/㎡+ CNY300/㎡）.

3 Estimated Time of the Implementation Table RIB 1-2 Proposed Schedule for Key Activities Items Time Remark Promulgate bulletin of land June 2008 RIB distribution completed. And acquisition and relocation sequential information will be publicized Compensation payment Aug. to Oct.-2008 Compensation for individual APs will be fully paid in one month before land acquisition commence. Land acquisition and September to Dec. 2008 relocation Move into new house July to Dec. 2010 Preparation for the project July 2007 to June 2008 Implementation of the project Sept.2008 to Dec. 2009

112 4 Rights and Obligations of the APs

(1) Rights of affected objects Get all kinds of deserved compensation in complete conformity with the above compensation rates; reflect opinion and suggestions to land acquisition and relocation offices or project resettlement offices of village committees, township, district progressively, specific contents of which including base number of compensation quantity, compensation rate, time of compensation payment, house relocation, etc. various resettlement officials must reply to complaints of affected people and problems subordinate resettlement office reflects within 7 days. (2) Obligation of affected persons z Actively cooperate with implement of state project. z New buildings shall not be constructed within the scope of the resettlement survey, otherwise the compensation fund will be canceled. z Demolish buildings within the red-line /blue-line scope of project planning.

5 Assistances to Vulnerable Groups

Vulnerable households would get non-cash assistance as listed below: z Labor assistance. Village would provide labor assistance in house relocation for those households lack of labor. z Give them priority in flat selection for house relocation and provide guidance on relocation

6 Grievance Procedure

Any APs who are not satisfied with the compensation and resettlement arrangement or have been treated partially in the course of resettlement can seek for resolution following the appeal procedures indicated as follows:

Stage 1: Any APs, who encounter any infringement on their entitlements during land acquisition, housing demolition and resettlement, may report to the villagers’ committee. The villagers’ committee or the APs may directly appeal to the resettlement offices of town or district for resolution. The resettlement offices must record the complaints and resolve the problems within 2 weeks after the receipt of such complaints through discussion and consultation with the local villagers’ committee and the APs.

Stage 2: If the APs who lodge the complaints are not satisfied with the results of stage 1, they may lodge grievance to NEULADRH after receiving the decision. The latter will make resolution within two weeks.

Stage 3: If the persons who lodge the complaints are still not satisfied with the decision of the FPMO, they may, after receiving the decision, lodge complaints to the administrative organs for arbitration level by level according to Administrative Procedure Law of the People's Republic of China.

Stage 4: If the persons are still dissatisfied with the above decision, they may, after receiving the arbitration decision, appeal to the People’s Court in accordance with Civil Procedure Law of the People’s Republic of China.

113 7 Implementation Organizations of Land Acquisition and Resettlement

Fuzhou Diyuan Housing Demolition Department Address: Building 4, Yangxia Garden, North Liuyi Rd., Jinan District, Fuzhou Telephone: 87585928 New East Urban Land Acquisition & Demolition and Resettlement headquarter of Fuzhou City Address: The Third Floor of Office Building of Fengyuan Group, Gaishan Investment Zone, Cangshan District, Fuzhou Telephone: 83493596 Fuzhou Urban Visual Construction and Development Company Address: South Baimai Rd. 211, Taijian District, Fuzhou Telephone: 83945776

8 Right of Interpretation of the Booklet

The right of interpretation of the booklet belongs to Fuzhou Urban Visual Construction and Development Company and New East Urban Land Acquisition & Demolition and Resettlement headquarter of Fuzhou City

114 3 TERMS OF REFERENCES (TOR) FOR ENTERNAL MONITORING AND EVALUATION

1. Objectives

According to ADB’s Resettlement Handbook and ADB’s Social Analysis Guideline, independent monitoring and assessment will be made on the resettlement to analyze and compare the change of living level of AP via checking and tracking the progress and fund and management relative with resettlement. The report that is provided to the ADB, the EA and concerned departments will provide sufficient information and suggestions for reference to the concerned departments to keep them informed of the progress and status of resettlement so as to assure them identify the problems and propose suggestions on the improvement.

2. Tasks for Monitoring and Evaluation

Progress of land acquisition and demolition includes: z Progress of land acquisition; z Progress of temporary land occupation; z Affected progress of the project. Progress of housing demolition and resettlement includes: z Progress of housing demolition and status of compensation; z Progress of house construction for APs; z Progress of removal. Progress of funds availability and payment includes: z Payment of fund allocation; z Expenditure (budget and factual expenditure). Monitoring and assessment on living level of AP includes: z Living level of AP prior resettlement; z Living level of AP after resettlement; z Employment of AP prior and after resettlement. Monitoring on availability of compensation, rehabilitation and reconstruction of public facilities and progress of construction; AP’s participation in the processes of preparation of RP, land acquisition and resettlement and income rehabilitation; Monitoring on mechanism and efficiency of grievance procedure; Collection of monitoring data and establishment of data file; Comparison analysis; Report submission.

3. Technical Procedures

Prepare RP working outline; prepare questions and tables for investigation; prepare the scheme of random sampling; base investigation; set up information management system; supervise survey; establish data files; compare analysis and make assessment; prepare monitoring report; check the completion of monitoring; draw conclusion.

4. Independent Monitoring Agency

An independent monitoring agency will be engaged to take the responsibility of monitoring on the resettlement of the project by FPMO. The PMO and IA will provide assistance to the external monitoring and evaluation agency, particularly in the aspects of field survey, staffing and logistics.

5. Monitoring and Evaluation Methods

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A combined method of field survey, analysis and comprehensive assessment; An overall and site survey of progress, funds, institution and management and a random sampling survey. Sampling according to classification. Tracking the samples at the percentage of 10% of house-demolished households and 10% of households who loss land. Overall survey including table investigation, meetings, and file review. Collection of photos, tape records, video records, physical substance except for written documents.

6. Schedule of Monitoring and Assessment

Dec. 2005 Contract an outline; independent evaluator, prepare the working program June 2008 prepare monitoring such as outline of survey, tables, establishment of monitoring system, defining assignment, and selection of monitoring samples; Oct. 2008 Baseline and first survey, submit No. 1 monitoring report;

Jan. 2009 Second survey, submit No. 2 monitoring report; June.2009 Third survey, submit No. 3 monitoring report;

Dec. 2009 Fourth survey, submit No. 4 monitoring report; Dec. 2010 Fifth survey, submit No. 5 monitoring report;

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