IPP437

Bayannaoer City Comprehensive Water

Public Disclosure Authorized Environment Treatment Project

Reclaimed Water Supply and Wastewater Treatment and Reuse Project

Public Disclosure Authorized Social Assessment Report For Appraisal Public Disclosure Authorized

Bayannaoer City Hetao Water Affairs Co., Ltd. Public Disclosure Authorized

June 2010 Contents

PREFACE ...... 1

SUMMARY...... 3

1. OUTLINE OF PROJECT...... 9

1.1 BACKGROUND OF PROJECT ...... 9

1.2 COMPOSITIONS OF PROJECT ...... 10

2 OUTLINE OF SOCIAL ASSESSMENT ...... 12

2.1 TARGETS OF SOCIAL ASSESSMENT ...... 12

2.2 SOCIAL ASSESSMENT METHODS ...... 12

2.3 IDENTIFICATION AND ANALYSIS OF MAIN RELATED SOCIAL ISSUES ...... 22

3 PROJECT-RELATED AREA SOCIO-ECONOMIC SITUATION ...... 23

3.1PROJECT AREA SOCIO-ECONOMIC SITUATION ...... 23

3.1.1 Bayanor City socio-economic situation ...... 23 3.1.2 Socio-economic situation of the Banners...... 24

3.2 INTRODUCTION TO THE WATER CONSUMPTION, WASTEWATER TREATMENT AND

AGRICULTURAL RETURN WATER CONDITION IN THE PROJECT AREA ...... 30

3.3 POVERTY IN PROJECT AREA...... 33

3.4 BASIC CONDITIONS OF QUESTIONNAIRE RESPONDENTS ...... 37

4. UNDERSTANDING AND ATTITUDE OF THE VILLAGERS TO THE PROJECT .. 43

5. ANALYSIS OF RELEVANT BENEFICIAL COLONY ...... 49

5.1 IDENTIFICATION OF RELEVANT BENEFICIAL COLONY ...... 49

5.2 REQUIREMENTS OF RELEVANT BENEFICIAL COLONY ...... 52

6. ANALYSIS OF SOCIAL IMPACT OF PROJECT ...... 56

6.1 POSITIVE IMPACT...... 56

6.2 NEGATIVE IMPACT...... 57

- i - 7. PROJECT AND ETHNIC MINORITIES...... 59

7.1 DISTRIBUTION OF ETHNIC MINORITIES IN PROJECT AREA ...... 60

7.3 AMALGAMATION OF ETHNIC MINORITIES ...... 62

7.4 CONCLUSION ...... 62

8. SUGGESTIONS ON PERFECTING ENGINEERING DESIGN ...... 64

9. IDENTIFICATION AND CONTROL OF SOCIAL RISKS ...... 66

9.1 IDENTIFICATION OF SOCIAL RISKS ...... 66

9.2 CONTROL OF SOCIAL RISKS ...... 69

10. PUBLIC PARTICIPATING MECHANISM...... 75

11. CONCLUSION AND SUGGESTIONS...... 77

11.1 CONCLUSION ...... 77

11.2 SUGGESTIONS...... 79

APPENDIX 1 SCHEDULE OF SOCIAL ASSESSMENT WORK OF BAYANOR CITY WATER ENVIRONMENT COMPREHENSIVE TREATMENT PROJECT ...... 81

APPENDIX 2 TOPICS AND VIEWPOINTS OF INFORMAL DISCUSSION OF BAYANOR CITY WATER ENVIRONMENT COMPREHENSIVE TREATMENT PROJECT ...... 83

APPENDIX 3 CALENDAR OF FARMING ACTIVITIES...... 84

- ii - Preface

July 2009, upon entrusting by Inner Mongolia Bayanor City Hetao Water Affairs Co., Ltd. (hereafter called as “BHWAC”), Hydrochina Huadong Engineering Corporation (hereafter called as “ECIDI”) undertook preparation of resettlement action plan and report of social assessment for World Bank loaned Bayanor City water environment comprehensive treatment project. At early July 2009, ECIDI completed “Terms of reference of resettlement action plan” and “Terms of reference of social assessment” and related survey sheets and questionnaires, clarified the purpose, contents and method of the work, laying a good foundation for the follow-up site survey and feasibility study report preparation. After deep communication and exchange with related experts of World Bank and the project owner, ECIDI made careful modification and perfection and provided both parties-agreed terms of reference, survey sheets and questionnaire, which will become the basis for further work. As per the work progress determined by the World Bank Project Delegation, ECIDI social assessment group divided the site survey into two stages. From July 7, 2009 to July 26, 2009 and from Nov. 10, 2009~Nov. 20, 2009, under great support and coordination of BHWAC and local government and departments of related banners (counties), ECIDI conducted social assessment and site survey in related townships, towns and villages of 6 banners (counties) (Urad Front Banner, Urad Middle Banner, Urad Back Banner, Hanggin Rear Banner, and Wuyuan County) for two times. During the site survey period, ECIDI made informal discussion, interview and questionnaire with project interest-related groups in 4 townships (towns), 1 state- owned farm, 1 state-owned pasture and related villages covered by the 5 banners (counties), further understand the opinions, complaints and related proposal interest groups on the project and overall collected materials necessary for social assessment. After completion of site survey, ECIDI immediately summarized, sorted out and

- 1 - analyzed the related materials and questionnaires, the “Social Assessment Report for Reclaimed Water Supply and Wastewater Treatment Reuse Works of World Bank- loaned Bayanor City Water Environment Comprehensive Treatment Project (for Pre- appraisal)” was completed in January 2010, and passed the pre-appraisal smoothly in April 2010 . With the combination of the related comments from the World Bank, ECIDI completed the “Social Assessment Report for Reclaimed Water Supply and Wastewater Treatment Reuse Works of World Bank-loaned Bayanor City Water Environment Comprehensive Treatment Project (for appraisal)”. This social assessment work was guided under and supported by Mr. Liu Zhefu of World Bank and the site survey was got active coordination by BHWAC, local government and related departments of each banners (counties). Here, we would like to express hereby our acknowledgement to them.

- 2 - Summary

The total investment of Bayanor City water environment comprehensive treatment project is 2.125 billion yuan RMB, the first phase investment is 1.2 billion yuan and the World Bank loan is 80 million USD. The project consists of three components, i.e., 1) reclaimed water supply project in the Industrial Park, including reclaimed water supply sub-project at Urad Back Banner Processing Park, reclaimed water supply sub-project at Ganqimaodu Port Processing Park, reclaimed water supply sub-project for the 3rd drain ditch and reclaimed water supply sub-project for the 7th drain ditch; 2) wastewater treatment and reuse project in industrial park, including the Processing Park (Hoh Town) wastewater treatment sub-project at Urad Back Banner, wastewater treatment and reuse sub-project at Ganqimaodu Port Processing Park (Delingshan Town) and wastewater treatment and reuse sub-project at Urad Front Banner Processing Park (XianfengTown); and 3) Wuliangsuhai comprehensive treatment project, including the Wuliangsuhai grid waterway sub- project, Wuliangsuhai artificial wetland project at eco-transition zone and non-point source demonstration sub-project. Scope of social assessment Through detailed discussion and consultation with related experts of World Bank, the scope of the social assessment as mentioned herein is determined as follows: Reclaimed Water Supply and Wastewater Treatment and Reuse Project in the industrial park. Targets of social assessment The main targets of this social assessment are determined as follows: To urge the project-affected groups and the project target groups to understand the project’s objectives and activities; To comprehend the basic socio-economic development situation of the project area, and analyze the main social factors affecting the achieving of project objectives. To identify the project interest-related groups and analyze their needs and impact; To evaluate potential positive and negative impacts of the project, analyze the potential social risks the project is proposed to bring and put forward measures to avoid or reduce the negative impacts and social risks;

3 To get to know the information necessary for project design and put forward a sound proposal on project design. Social assessment methods and identify the major social issues The following social issues associated with various sub-projects were mainly identified and analyzed: Present situation of production and living standard and socio-cultural characteristics of the habitants in the project-affected area, their needs, attitudes and opinions on the project, as well as the impact of the project implementation on them, particularly the poor and ethnic minorities in the affected area; The project will result in land-acquisition & removal, and involuntary resettlement, concern if the land-acquisition & removal of the project will cause involuntary resettlement, focusing on their means of livelihood as well as changes in social, cultural, and psychological aspects; The water consumption and wastewater drainage condition of the project service objectives - enterprises, as well as their will for connection of the reclaimed water, focusing on the sources, water quality requirements, costs and water consumption situation of the existing industrial water supply; the existing wastewater drainage mode of the enterprises, the availability of wastewater treatment facilities and network, and so on. Predicted main social effects Construction and operation of the project will improve the infrastructure situation in the project area and enhance the wastewater treatment capacity and industrial water supply capacity of each banner (county); To improve the water quality of each drain ditch, improve the living environment of the project area and upgrade the health level of the residents; To purify the water body of Wuliangsuhai, improve its ecological environment and protect water quality of the Yellow River; To improve the overall investment environment of the Bayanor City. To increase employment opportunities and increase the residents’ income. Project beneficial colony and demands We basically divide the related beneficial colony groups into main relevant beneficial colony and other relevant beneficial colony. The main relevant beneficial

4 colony include residents in the project area and the project served enterprises, other relevant beneficial colony include project owner, project design institute, project construction unit and related governmental departments. The survey shows that the demands of main relevant beneficial colony are as follows: Building wastewater treatment project and improving village environmental condition Treating the external wastewater in a scientific and safe manner to ensure clean water for production and life of the villages; Improving the village’s farmland water conservancy facilities Strengthening the popularization of agricultural science to reduce the agricultural cost; Taking part in the project construction to get work opportunity and increase income. Making land-acquisition compensation and resettlement work Reducing production cost as much as possible, looking forward to getting production water satisfying the production requirements and with a reasonable cost, meanwhile, minimizing the wastewater treatment cost whenever possible to gain maximum profit. The main demands of other relevant beneficial colony are as follows: Hoping the project can be implemented as early as possible to protect the ecological environment of the Bayanor City and to obtain better economic benefit; Desiring a practical and realistic technical scheme based on local conditions to effectively decrease construction and operation cost for the good of Bayanor City; Wishing the project to play an effective and demonstrative role and promote sustainable development of social economy of the region.  Analysis of social impact of project The social impact of this project includes positive impact and negative impact: Positive impact: Construction and operation of the project will improve the infrastructure situation in the project area, enhance the wastewater treatment capacity and industrial water supply capacity of each banner (county), and optimize the allocation

5 of water resources to provide a reliable water resources guarantee for the regional economic development. To improve the water quality of each drain ditch, improve the living environment of the project area and improve the health level of the residents; To purify the water body of Wuliangsuhai, improve its ecological environment, and effectively change water quality of the part of Yellow River within Bayanor City so as to prevent the Yellow River water body from being polluted; To improve the investment environment of the Bayanor City and attract more enterprises to invest in Bayanor City; To increase employment opportunities and increase residents’ income Negative impact The occupation of land for the project implementation will have certain effect on the production and living of the immigrants; Laying of pipe network will disturb and make inconvenience the production and living of the habitants along the project area; During project construction period, village habitants’ normal life would be disturbed; Implementation of the project may cause rise of the water consumption cost of some enterprises. Identification and control of social risks of project ECIDI social assessment work group thinks that in this project the liable potential social risks mainly include the followings: Risk of resettlement Risk of habitants’ production and life mode, insufficient town and township wastewater treatment facilities and realization of project target Risk of low will of enterprises to access reclaimed water; Risk of adaptability of project construction scale with enterprises water-use scale; The risk of secondary contamination The risk of project follow-up management The social assessment work group raises the following measures to control the risks:

6 Properly making resettlement. Optimized design shall be adopted to minimize acquisition land and temporary land occupancy and land not ever used shall be utilized to decrease impact on farmers’ production and life. For unavoidable permanent land-acquisition, rational compensation system and resettlement compensation shall be consistent with related policies to prevent immigrants’ life level from being lowered by the project construction. Provide employment opportunities and increase the income of rural residents in the project area The pipe network shall be laid in slack period whenever possible to minimize impact on farmers’ plantation. For place where the pipe network is laid over-cross ditch, pipe ejection process shall be used to decrease disadvantageous impact to surrounding farmland irrigation. The project owner and each government of banner and county are suggested to intensify studying on control of contamination of farmland-return water and each banner and county actively popularize application of fertilizer through soil- measurement and intensify instruction and training of farmers on scientific agricultural production. In addition, each government of banner and county is suggested to gradually perfect their wastewater treatment facilities. The related government departments of banner and county are suggested to intensify instruction and publicity to rural habitants on environmental protection, the habitants shall intensify their idea on environmental protection, improve and adjust their poor life habits. The design unit is suggested to intensify fore-phase survey and design contents, through discussion and consultation with project owner and industrial park’s in-charge persons fully understand enterprises’ expenses required to improve water quality, provide project owner and local government the base data for policies of use of reclaimed water and keep balance between protection of ecological environment and enterprises’ interests. The design unit is suggested to fully understand existing enterprises’ water demands, predict the construction scale of to-be-built enterprises and scientifically and rationally design project scale so as to meet enterprises’ demands and avoid waste of investment due to excessively high scale. The design unit is suggested to assess environmental impact, fully consider

7 the secondary contamination possibly generated during construction and operation and take advanced environmental protection measures to avoid the secondary contamination possibly generated in the project. The capacity of the mechanism shall be enhanced and the members of lead group shall be coordinate and communicate so as to decrease resistance during implementation. In addition, a perfect and coordinated follow-up management mechanism shall be established and more habitants may be allowed to participate in the project to keep sustainable realization of the effects.

8 1. Outline of project 1.1 Background of project Bayanor City is located in western Inner Mongolia Autonomous Region, connected with Baotou City at the east, adjacent to Alxa League at the west, Erdos City is at the south across the river and bordered with Mongolia at the north. By the end of 2003, approved by the State Council, the Meng is withdrawn and it became a prefecture-level city at western of the AR. The city’s total area is 64.4 thousand square kilometers, covering 4 banners, 2 counties and 1 district. The economic growth of Bayanor City mainly depends on the Yellow River in the AR. The Hetao irrigation area will divert around 4.5 billion to 5.2 billion cubic meter water from Yellow River per year, and the drainage amount is around 0.3 billion ~0.6 billion cubic meter per year. After years of construction, the Hetao Irrigation area has gradually formed an independent irrigation and drainage system, the artery drain ditch is the main body of the drainage system of the irrigation area, covers the farmland drainage, Langshan flood, and urban sewage from all levels of drain ditches. It is an important water system for the Yellow River Basin in the Bayanor City. In recent years, with the economic development of the irrigation area and the growth of urban population, the amount of industrial wastewater and urban sewage has been increasing year by year, and the contamination of the artery drain ditch has become more and more serious. The rich nutrition of Wuliangsuhai is a major problem. The total phosphorus, total nitrogen, chemical oxygen demand (COD) in the lake water exceeds 3 to 5 times of the III class national surface water, and the water quality belongs to poor class. The ecological functions of the lake are receding, if not being remedied, a few years later Wuliangsuhai may completely disappear. In addition, before the flood season, in order to allow sufficient flood storage capacity, the check gate at the outlet of the artery drain ditch shall be opened to drain water towards the Yellow River. The large amount of wastewater accumulated in the lake will be a significant threat to the contamination of the Yellow River. Over the years, the city’s total gross value of agricultural production accounts for a larger proportion of GNP, and the agricultural water use accounts for 98% of the city’s total water consumption. After the withdrawal of Meng and establishment of city, Bayanor City put forward a development strategy to transfer from agricultural- oriented economy to industrial-oriented economy, accordingly, the city’s industrial and

9 urban water consumption increased rapidly. In addition, according to the economic development strategy of Inner Mongolia Autonomous Region and the Bayanor City, Bayanor City plans to set up industrial base, including Qingshan Industrial Park, Jinquan Industrial Park, Shahai Industrial Park, Linhe Chemical Industrial Park and Urad Industrial Base. Meanwhile, by making full use of the rich mineral resources of Mongolia, Bayanor City is proposed to be built into an important heavy chemical industry base in Inner Mongolia Autonomous Region. According to this series of industrial development planning, it is expected that by the end of “12th Five-year Plan”, the industrial water consumption will be increased from current 60 million cubic meters to 49.3 million cubic meters. Consequently, on the one hand, the contamination condition of the water environment in Bayanor City is increasing, on the other hand, due to economic and social development, the demand for the water resources is more and more urgent. Therefore, we must fundamentally treat the water contamination at all levels of drain ditches in Hetao irritation area and in Wuliangsuhai, to eliminate the threat of contamination to the Yellow River, and achieve reuse and optimal configuration of the water resources. It is light of the above, in accordance with the overall requirements on building of ecological and civil society mentioned in the report of the 17th National Congress of the CPC, Bayanor City put forward the Inner Mongolia Bayanor City Water Environment Comprehensive Treatment Project. 1.2 Compositions of project This project mainly consists of 8 sub-projects: Urad Back Banner Processing Park reclaimed water supply sub-project, Urad Back Banner Processing Park (Hoh Town) wastewater treatment sub-project, Ganqimaodu Port Processing Park reclaimed water supply sub-project, Ganqimaodu Port Processing Park (Delingshan Town) wastewater treatment and reuse sub-project, 3rd drain ditch reclaimed water supply sub-project and 7th drain ditch reclaimed water supply sub-project, Urad Front Banner Processing Park (XianfengTown) wastewater treatment and reuse sub- project and Wuliangsuhai grid waterway sub-project1. Sub-projects position of the Bayanor City water environment comprehensive treatment project is shown in attached drawing 1: The distribution map of Bayanor City water environment comprehensive treatment project. The detailed construction contents of each sub-project are shown in Table 1.2 -1.

10 List of Contents for Bayanor City water environment comprehensive treatment project Table1.2-1

No. Sub-project name Project contents and scale Urad Back Banner water supply plant capacity35,000t/d 1 Processing Park Reclaimed Water Supply Water delivery pipe network construction Urad Back Banner wastewater treatment plant capacity20,000t/d Processing Park (Hoh 2 Town) Wastewater water supply pipe network construction in the Treatment and Reuse park Ganqimaodu Port water supply plant capacity40,000t/d 3 Processing Park Reclaimed Water Supply Water delivery pipe network construction Ganqimaodu Port wastewater treatment plant capacity30,000t/d Processing 4 ParkDelingshan Town reclaimed water plant capacity24,000t/d Wastewater Treatment water supply pipe network construction in the and Reuse park reclaimed water plant capacity20,000t/d 3rd Drain Ditch Reclaimed 5 Water Supply water delivery and supply pipe network construction reclaimed water plant capacity20,000t/d 7th Drain Ditch Reclaimed 6 Water Supply water delivery and supply pipe network construction Urad Front Banner wastewater treatment plant capacity30,000t/d Processing Park (Xianfeng 7 reclaimed water plant capacity20,000t/d Town) Wastewater Treatment and Reuse water supply pipe network construction in the park Wuliangsuhai Grid Waterway Works Wuliangsuhai Area 8 Wuliangsuhai ecotone artificial wetland project Treatment and non-point source demonstration and popularization project

11 2 Outline of social assessment 2.1 Targets of social assessment

The main targets of this social assessment are determined as follows: To promote the project-affected groups and the project target groups to understand the project’s objectives and contents, and get to know the understanding and attitude of the mass in the project area to the project. To understand the basic socio-economic development situation of the project area, and analyze the main social factors affecting the achieving of project objectives. To identify the project interest-related groups and analyze their needs and impact; To evaluate potential positive and negative impacts of the project, analyze the potential social risks the project is proposed to bring and put forward measures to avoid or reduce the negative impacts and social risks; To get to know the information necessary for project design and put forward a sound proposal on project design. 2.2 Social assessment methods

Survey method From July 7, 2009 to July 26, 2009 and from Nov. 10, 2009~Nov. 20, 2009, ECIDI social assessment group conducted social assessment and site survey in the project area in two stages, totaled 30 days. During the site survey period, ECIDI adopted such survey method as informal discussion, interview and questionnaire and collection of related references. Informal discussion During the site survey period, ECIDI social assessment work group totally made 23 times of informal discussion with related banners (counties), townships, towns and villages and as per different stress points for objects and contents, the informal discussion is divided into 3 types: I. Informal discussion with each banner (county) government and related departments. This type of informal discussion was totally undertaken for 8 times and mainly sought for their understanding and proposal on the

12 project, as well as the impact of the project on the work of related departments. II. Informal discussion with collective leading team of project-involved (land requisition) farm, pasture and villages. This type of informal discussion was totally undertaken for 9 times, mainly sought for their opinions and attitude on the project, as well as the basic condition of each enterprise (collective). III. Informal discussion with rural habitants directly impacted by the project and the rural habitants around the project area. This type of informal discussion was totally undertaken for 6 times, mainly through briefing compositions and targets of project sought for their demands, environmental idea, existing wastewater treatment mode, participation willing and mode, worried issues and proposal on design, construction and operation. According to basic statistics, about 280 governmental officials and people took part in the informal discussion conducted by this social assessment work group. The particulars of informal discussions carried out by ECIDI in sub-project- involved banners (counties) are shown in Table 2.2-1 List of informal discussions of social assessment for Bayanor City Water Environment Comprehensive Treatment Project Table 2.2-1 Times of informal discussion

Informal discussion Urad Urad Urad Hanggin Stage objects Wuyuan Front Middle Back Rear County Subtotal Banner Banner Banner Banner Each level government and 2 1 1 2 2 8 st Farm, Pasture and 1 1 2 1 1 1 6 stage Village collectives Rural habitants 0 1 1 1 1 4 Subtotal 3 4 3 4 4 18 Each level government and 0 0 0 0 0 0 related departments 2nd Farm, Pasture and stage Village collectives 1 0 0 1 1 3 leading Rural habitants 1 0 0 1 0 2 Subtotal 2 0 0 2 1 5 Total 5 4 3 6 5 23

13 Governmental departments’ informal discussion undertaken by social assessment work group in Hanggin Rear Banner (1st stage)

Village cadres’ informal discussion undertaken by social assessment work group in Wuyuan County (1st stage)

14 Informal discussion between the responsible persons of Qinshan Cement Co. Ltd and social assessment work group (1st stage)

Information discussion between BHWAC and social assessment work group (2nd stage)

15 Questionnaire The project involves 4 towns (townships), 1 state-owned farm and 1 state-owned pasture under the jurisdiction of 5 banners (counties), the affected areas was large and dispersed arranged in spot-shape. To ensure that the survey will include all ages, all occupations, gender, poverty population and ethnic minority people, fully reflect the basic situation of different groups, their attitudes and opinions on the project, ECIDI social assessment work group took a purposive sampling of the rural residents in the project affected area according to the distribution feature of the project, to conduct a questionnaire survey. It is particularly worth mentioning that the design of the questionnaire fully integrated the related conditions of the project (including the objective and contents of the project, etc.), the first stage of the investigation was mainly directed at the newly-built wastewater treatment and water supply projects, the second phase aimed at laying of transmission and distribution pipe network. In the questionnaire survey process, ECIDI social assessment work group also inform the survey respondents relevant information of this project, which can help the villagers to deepen the understanding of the project and to make accurate judgments. It is also to achieve one of the objectives of this social assessment – a principle measure to promote project-affected groups and the project target groups to understand the project's objectives and activities. The questionnaire is filled and recovered at the scene. The social assessment work group members asked and guided the survey respondents to fill the questionnaire throughout the process. In the first stage of survey, social assessment work group distributed 30 questionnaires at each banner (county), a total of 150 questionnaires issued, 144 questionnaires were recovered, of which 132 valid questionnaires, effective recovery rate of 88%. In the second stage, the social assessment work group distributed 15 questionnaires in Hanggin Rear Banner and Wuyuan County respectively, and 20 questionnaires in Urad Front Banner, a total of 50 questionnaires issued, 48 questionnaires were recovered, of which 48 valid questionnaires, effective recovery rate of 98%. Completion state of social

16 assessment questionnaire is shown in Table 2.2-2 List of social assessment questionnaires for Bayanor City Water Environment Comprehensive Treatment Project Table 2.2-2

Involved Percentage of Quantity of delivered Quantity of collected Quantities of effective Stage banner effective questionnaire copies questionnaire(copies) questionnairecopies (county) questionnaire% Urad Front 30 27 24 80.00% Banner Urad Middle 30 29 27 90.00% Banner

st Urad 1 Back 30 30 27 90.00% stage HangginBanner Rear 30 30 26 86.67% Banner Wuyuan County 30 28 28 93.33%

Subtotal 150 144 132 88.00% Urad Front 20 19 19 95% HangginB 2nd Rear 15 15 15 100% stage Banner Wuyuan 15 14 14 93.3% County Subtotal 50 48 48 98% Total 200 192 180 90%

17 The questionnaire survey undertaken by the social assessment work group and Hanggin Rear Banner to the rural habitants (2nd stage)

Deep interview Interview is a basic means to understand people’s thoughts, feelings, and behavior on certain issues. During the survey period, ECIDI Social assessment work group interviewed 15 rural habitants and 5 enterprise directors. With this in-depth conversation, the assessment work group members understand the livelihood mode of villagers in the project area and their production and living mode, in-depth understand the views of villagers on the project and their recommendations. In addition, the enterprise leaders were interviewed to understand the current water use and wastewater treatment mode of the enterprises, as well as their opinions on using reclaimed water as industrial water. Collection of materials In addition to informal discussion, questionnaire and deep interview, collection of materials is also one of main contents for this social assessment survey and the social assessment work group shall collect materials mainly in following aspects: Design information related to the project, e.g. feasibility study report of the

18 project and the land requisition and resettlement impact condition, etc. quantity and structure of population, each economic index (income and outcome), professional composition, cultural quality and labors flow of project-involved counties (districts) and related villages, mainly collecting 2008 statistic yearbook and related reports and tables Collecting related local customs, habitants’ minimum living security, and development of social undertaking of health and aid-the-poor, and related policies; Collecting related local implementation method and policy and standard for compensation and resettlement for land-acquisition and removal According to the characteristics of this project, collecting sewage remediation-related laws and regulations, and policy literature in the project area, as well as information involving the use of water source and wastewater treatment measures of the project-involved companies. The above materials necessary for social assessment are collected from competent departments of each county (district) government and are the latest statistics materials and prevailing applicable policies and standards.

Through combination use of above four kinds of social assessment survey methods, the social assessment work group mastered the actual situation of the project area and had full understanding of the mutual adaptation between the project and the local community, collected relevant information required for social assessment. The social assessment survey methods adopted by the ECIDI social assessment work group in this project are shown in Table 2.2-3

19 List of Social Assessment Methods for Bayanor City Water Environment Comprehensive Treatment Project Table 2.2-3

Method Duration Participants Survey contents

Study of 5 persons from social From July 7 to Project-involved related assessment work July 17 references references group 5 persons from social assessment work group, 4 persons from project current situation of local From July 7 to owner, 90 in-charge environmental Information July 24, From persons from protection, water source discussion Nov. 10 to governmental use and wastewater Nov. 20 departments, 10 discharge condition of enterprises owners and different groups 180 villagers in the project area Livelihood of local mass, 5 persons from social From July 7 to water use mode and assessment work group, 4 Deep July 20, From wastewater treatment persons from project interview Nov. 10 to mode of the enterprises owner, 15 households, 5 Nov. 20 and the potential impact enterprises owners a of the project on them Production and living mode of the habitants in the project area, From July 7 to 5 persons from social environmental protection July 20, From assessment work group, consciousness, village questionnaire Nov. 10 to 270 villagers in the project contamination condition, Nov. 20 area opinions, suggestions on the project and their will to participate in the project construction Selection of survey points The main principles for selection of this social assessment survey points are: covering the project-benefited groups and the project-affected (negative affect)

20 groups, including the residents and enterprises, the poor, women, disadvantaged groups, etc in the project area; focus on the core regions suffering negative affect by the project, especially the areas affected by land requisition; covering the main ethnic minorities within the project area; select the survey points with different levels of economic development. Based on the above principles, this social assessment survey selected 4 townships, 1 state-owned farm and 1 state-owned pasture under the jurisdiction of 5 banners (county), of which the state-owned farm, state-owned pasture and 9 villages are the important survey points. The location of social assessment survey points for Bayanor City Water Environment Comprehensive Treatment Project is shown in attached figure 2: The resettlement action plan and social assessment survey points distribution map for Bayanor City Water Environment Comprehensive Treatment Project. List of selected social assessment survey points for Bayanor City Water Environment Comprehensive Treatment Project Table 2.3-4 Locatio N n Survey Reasons for survey point O Sub-project name Town (banner point selection . /county) Urad Back Land acquisition impacted Banner Hongqi village, informal 1 Processing Park Village discussion and Reclaimed questionnaire Water Supply Urad Qinshan Urad Back Rear Town Banner Banner Dashuwa Processing Park Close to artery drain 2 n Wastewater ditch, questionnaire Village Treatment and reuse Ganqimaodu Port Urad Muyangh Processing Park 3 Middle ai / / Reclaimed Water Banner Pasture Supply

21 Locatio N n Survey Reasons for survey point O Sub-project name Town (banner point selection . /county) Ganqimaodu Port Processing Park Jinquan 4 Wastewater Industrial / / Treatment and Park Reuse Land aqusition impacted Shawan village, informal 3rd drain ditch Hanggi Village discussion and Shanba 5 reclaimed water n Rear questionnaire Town supply Banner Dashunc Along the pipe network, heng informal discussion and Village questionnaire Land aqusition impacted Jiucheng village, informal 7th drain ditch Wuyua Longxing Village discussion and 6 reclaimed water n chang questionnaire supply County Town Along Yihe Channel, Wuxing informal discussion and Village questionnaire Land aqusition impact, Zhongtan Farm informal discussion and Urad Front questionnaire Banner Urad Dengcun Along 8th drain ditch, Processing Park Xixiaozha 7 Front dian informal discussion and Wastewater o Town Banner Village questionnaire Treatment and Along 9th drain ditch, Reuse Xin’an Xinghuo informal discussion and Town Village questionnaire

2.3 Identification and analysis of main related social issues

Aiming at the characteristics of various industrial park reclaimed water supply and wastewater treatment and reuse sub-projects, ECIDI social assessment work group made identification and analysis on the following social issues related to the sub-projects. Present situation of production and living standard and socio-cultural characteristics of the habitants in the project-affected area, their needs, attitudes and opinions on the project, as well as the impact of the project implementation on them, particularly the poor and ethnic minorities in the affected area; Among them, need to focus on: if construction of the project can improve the living environment and

22 living conditions of the poor; if the construction of the project can provide employment opportunities for the poor to increase their incomes; if the construction of project has learned about the specific requirements of the ethnic minorities through consultations and obtained the support of majority of minority communities; seek for social risks may affecting the achievement of project objectives. The project will result in land-acquisition & removal, and involuntary resettlement, concern if the land-acquisition & removal of the project will cause involuntary resettlement, focusing on their means of livelihood as well as changes in social, cultural, and psychological aspects; The water consumption and wastewater drainage condition of the project service objectives - enterprises, as well as their will for connection of the reclaimed water, focusing on the sources, water quality requirements, costs and water consumption situation of the existing industrial water supply; the existing wastewater drainage mode of the enterprises, and the availability of wastewater treatment facilities and network, and so on.

3 Project-related area socio-economic situation 3.1Project area socio-economic situation 3.1.1 Bayanor City socio-economic situation

Bayanor City has under its jurisdiction 4 Banners (Urad Front Banner, Urad Back Banner, Urad Middle Banner, Hanggin Rear Banner), two counties (Wuyuan and Dengkou) and one district (Linhe) with its core area in Hetao irrigation district. By the end of 2007, Bayanor City was a Han-dominated ethnic area with Mongolian ethnic minorities to be main body. The city has a total population of 1,741,900 with ethnic minorities of 113,500 accounting for 6.5% of the city’s total population, including Mongolian 84,100, accounting for 4.8% of the total population and other ethnic minorities population (Hui, Manchu, Tibetan, Korean, Daur, Kazakhstan Ewenki, etc.) of 29,400, accounting for 1.7% of the total population. In 2007, the city accomplished GDP of 35.515 billion yuan, up 17.3% over the

23 previous year on the comparable prices basis, including the first industry added value of 8.901 billion Yuan, up 4.4%; the second industry added value of 16.851 billion Yuan, up 24.5%; and the tertiary industry added value of 9.763 billion Yuan, up 18.9%. The city’s GDP composition ratio of the three industries accounted for 25.1:47.4:27.5, respectively. In 2007, the city’s per capita disposable income of urban residents reached 10,360 yuan, up 1,350 yuan and up 15.0%; per capita net income of farmers and herdsmen reached 5,435 yuan, up 716 yuan over the previous year, up 15.2%, including farmers income of 5,510 yuan, up 730 yuan; herdsmen income of 3,877 yuan, up 403 yuan. Engel coefficients for urban residents and residents in farming and pastoral areas accounted for 30.6% and 39.3%, respectively. Cultural undertakings have developed steadily: in 2007 the city had a total of 8 performing arts groups, 8 public libraries, 30 library service points, 8 cultural centers, 5 museums, 9 cultural relics protection administrations, 8 archives; and, by the end of the year the city owned one radio broadcasting and a television station. Public health advances: in 2007 the city had a total of 165 health institutions, including 140 hospitals and clinics, 8 Disease Control & Prevention Centers, 8 Maternal & Child Health Hospitals, 7 Health Authorities, and one blood transfusion center. The city’s agriculture and herdsmen population participating in cooperative medical program reached 824.8 thousand, accounting for 90.32% of the city's resident agriculture and animal husbandry population. 3.1.2 Socio-economic situation of the Banners

Urad Middle Banner overview Urad Middle Banner is located northeast of Bayanor City with Baotou City Daerhan Maoming’an joint Banner and Guyang County in the east, Urad Front Banner, Wuyuan County, Linhe district and Hanggin Rear Banner in the south, and Urad Back Banner in the west, and Nangaobei Province of the People's Republic of Mongolia in the north. The Banner has a borderline of 184.4km with 203km from east to west and 148.9km from south to north, covering a total area of 23,096 square kilometers. The Banner has under its jurisdiction 4 towns, 4 Sumus, 62 Gachas, 84

24 administrative villages and 278 villagers groups. By the end of 2007, the Banner had 47,646 residents with a total population of 139,823 people including Han population of 112,596 people, accounting for 80.53% of the total population, Mongolian population of 26,174, accounting for 18.72% of the total population, and other minority populations of 1,053 accounting for 0.75% of the total population. In 2008, the Banner accomplished GDP of 3.824 billion yuan, up 22.9% over the previous year on the comparable prices basis, including the first industry added value of 1.004 billion yuan, up 8.3%; the second industry added value of 2.251 billion yuan, up 31.9%; and the tertiary industry added value of 0.569 billion yuan, up 21.5%. The Banner’s GDP composition ratio of the three industries was 26.3: 58.9: 14.8, respectively. In 2008, the Banner’s per capita disposable income of urban residents reached 12,748.31 yuan, up 2,326.31 yuan and up 22.31% over the previous year; per capita net income of farmers and herdsmen in the Banner reached 5,727 yuan, up 37.5%, including the farmers per capita net income of 5784 yuan, up 37.5%; herdsmen per capita net income of 5537 yuan, up 38.5%. Engel coefficients for urban households and residents in farming and pastoral areas were 29.0% and 39.6%, respectively. In 2008, the Banner had a total crop area of 1.1446096 million mu. The grain and bean area of 0.6320096 million mu, including wheat area of 0.3309494 million mu, corn area of 0.2780602 million mu, grains area of 23,000 mu; cash crops area of 0.3829 million mu, including oil-bearing area of 307,000 mu, sugar beet area of 600 mu, Pythium area of 37000 mu, melons area of 1200 mu, vegetables area of 3,100 mu, tomato area of 18,000 mu, calabashes area of 16,000 mu, medicinal herbs area of 300 mu, and fruit trees area of 400 mu and 129,000 mu of cultivated pasture within the farmland. In 2008, the Banner had 19 schools of various types, including 2 teacher training schools, 2 complete middle schools, 3 junior middle schools, one nine-year-system school, 1 vocational middle school and 9 regular primary schools, and 2 state-run kindergartens. The Banner had 10,068 school students and day-care children, including 1,207 in senior middle school, 1,910 in junior middle school, 6,951 in

25 primary school and 1,503 day-care children. Urad Back Banner overview Urad Back Banner is located north-west of Bayanor City, one of the 19 bordering Banners of Inner Mongolia Autonomous Region, with Urad Middle Banner in the east, Alashanzuo Banner in the west, Dengkou County and Hanggin Rear Banner in the south, adjacent to the border with the People’s Republic of Mongolia in the north. The Banner is 210km from east to west, and 130km from south to north with a border length of 195.25km, and a total area of 25,000 square kilometers, accounting for 38% of the total area of the city. The Banner has under its jurisdiction 3 towns, 2 Sumus, 51 Gachas, and 19 residents committees, and is an ethnic area with Han ethnic as majority and Mongolian ethnic minorities as main body. By the end of 2007, the Banner had a total population of 64,313 with Han population of 47,045 accounting for 73.15% of the total population, Mongolian population of 84,100 accounting for 26.41% of the total population, and other ethnic minorities (Hui, Manchu, Tibetan, Korean, Daur, and Uygur, etc.) population of 285, accounting for 0.44% of the total population. In 2008, the Banner accomplished GDP of 5.002 billion yuan, up 22.5% on the comparable prices basis, including the first industry added value of 196 million yuan, up 8.3%; the second industry added value of 4.263 billion yuan, up 27.4%; the tertiary industry added value of 543 million yuan, up 22.2%. GDP composition ratio of the three industries was 3.9:85.2:10.9. In 2008, the Banner per capita disposable income of urban residents hit 11,598 yuan, up 1,868 yuan and up 19.2% over the previous year; per capita net income of farmers and herdsmen hit 4,056 yuan, up 980 yuan and 31.9% over the same period of the previous year. In 2008, the Banner had 5 primary schools, 1 regular middle school, 2 complete middle schools, 1 state-run kindergarten, 3 Sumu (town) Central kindergartens and 4 private kindergartens; the Banner had a total of 6,112 students in primary and middle schools.

In 2008, the Banner had 12 health institutions, including 10 clinics, 2 hospitals;

26 45 individual clinics, 1 sanitation and epidemic prevention agency and 1 maternal and child health agency (MCH), having 297 health technicians and 317 beds. Urad Front Banner overview Urad Front Banner is located in southeastern Bayanor City of Inner Mongolia Autonomous Region, southeast of the Hetao Plain, with the heavy industrial city Baotou in the east, facing Ordos City across the Yellow River in the south, being the country’s key grain and oil production base, an industrial raw material base, and one of the National 300 water-saving top counties. The Banner has a total area of 7,476 square kilometers with 9 Sumus and 93 Gachas under its jurisdiction. By the end of 2008, the Banner had a total population of 339,000, with the Han population of 323.1 thousand accounting for 95.31% of the total population, and minority population of 15.9 thousand, including the Mongolian population of 13.3 thousand accounting for 3.92% of the total population, and other ethnic minorities (Hui, Manchu, Zhuang, Korean, etc.) population of 2,600 accounting for 0.77% of the total population. In 2008, the Banner accomplished GDP of 7.461 billion yuan, up 20.1% over the same period of the previous year, including the first industry added value of 1.939 billion yuan, up 8.6%; the second industry added value of 3.639 billion yuan, up 22.7%; the tertiary industry added value of 1.882 billion yuan, up 22.7%. The Banner’s GDP composition ratio of the three industries accounted for 26.0:48.8:25.2. In 2008, the per capita disposable income of urban residents reached 11,879 yuan, up 16.1%; farmers and herdsmen per capita net income hit 6,680 yuan, up 22.4% over the same period of the previous year, including 6,714 yuan income of the farmers, 5,740 yuan income of the herdsmen, and 1,223 yuan income of the farmers and herdsmen coming from the animal husbandry, accounting for 18.3% of the net income. In 2008, the Banner had 34 health institutions, including 25 hospitals and clinics, 1 sanitation and epidemic prevention agency, 1 health surveillance and 6 community health service centers. Medical and health units have 836 beds and 1,158 health technicians. In 2008, the Banner had 36 primary schools and 17 regular middle schools. All

27 primary and middle school students in the Banner amounted to a total of 39,178, including 21,279 pupils and 17,899 regular middle school students. Wuyuan County Overview Wuyuan County is located in the southern Bayanor City and the Hetao Plain hinterland, with the Yellow River in the south, Yinshan in the north, Urad Front Banner and Linhe area in the east and west, respectively. The county has a total area of 3.739 million mu, having jurisdiction over 7 towns and 118 administrative villages and 774 communities. By the end of 2008, the county had a total household number of 52,978, and a total population of 303,000, including the Han population of 293,200, accounting for 96.77% of the total population, minority population of 9,800, including Mongolian 6,100, accounting for 2.01% of the total population, and other ethnic minorities population of 3,700, accounting for 1.22% of the total population. In 2008, the county achieved GDP of 4.659 billion yuan, up 21.3% over the same period of the previous year, including the first industry added value of 1.498 billion yuan, up 9.8%; the second industry added value of 1.769 billion yuan, up 28.1%; the tertiary industry added value of 1.392 billion yuan, up 25.1%. In 2008, per capita disposable income of urban residents reached 11,954 yuan, up 22.2%; farmers and herdsmen per capita net income of 7,189 yuan, up 33.7% over the same period of the previous year. In 2008, the county had a total of 32 primary and middle schools, including 1 senior middle school, 2 complete middle schools, 5 junior middle schools, 8 county- run primary schools, and 16 center schools in rural areas. The county had a total of 33,008 students. In 2008, the county had a total of 216 medical and health institutions, including Wuyuan County People’s Hospitals, the Sino-Mongolian hospital, MCH, Center for Disease Control and Prevention (CDC), Wuyuan drug rehabilitation center, 4 community health service centers, 3 Community Health Service Centers, 7 Center Hospitals, 12 general hospitals, 20 township epidemic prevention stations 117 village clinics, 6 clinics and 48 individual clinics. Hanggin Rear Banner Overview

28 Hanggin Rear Banner is located in the southwest Bayanor City, the Hetao Plain hinterland, with the Yellow River in the south, Yinshan in the north, Bayanor City government-seated Linhe District in the east, facing the Ulan Buh Desert in the west. The Banner has a total area of 1,708 square kilometers, having jurisdiction over 8 towns, 107 village committees. By the end of 2008, the Banner has a total household number of 96,074, with a total population of 323,017, including the Han population of 316,521, accounting for 97.99% of the total population, minorities population of 6,496, including Inner Mongolia population of 3,375, accounting for 1.04% of the total population, and other ethnic minorities population of 3,121, accounting for 0.97% of the total population. In 2008, the Banner achieved GDP of 7.047 billion yuan, up 16.5% over the same period of the previous year, including the first industry added value of 1.994 billion yuan, up 6.8%; the second industry added value of 3.101 billion yuan, up 22.5%; the tertiary industry added value of 1.952 billion yuan, up 14.8%. The Banner’s GDP composition ratio of the three industries was 28.3:44.0:27.7. In 2008, the per capita disposable income of urban residents reached 11,519 yuan, up 16.5%; farmers and herdsmen per capita net income of 6,995 yuan, up 23.5%, over the same period of the previous year. The urban and rural Engel coefficients were 36.02% and 43.51%, respectively. In 2008, the Banner had 39 primary schools, 13 regular middle schools, 1 vocational middle school, 6 kindergartens. The Banner had a total of 30,873 students, of which, 15,237 in primary school, 15,624 in regular middle school. In 2008, the Banner had a total of 29 health institutions, 939 medical beds and 1,273 health workers, including 1,089 health technicians. Social assessment survey shows that a high growth in national economy and further improvement in rural and urban resident’s living standards, income levels, education, cultural and health undertakings and basic social services to meet people's basic needs have been achieved in Bayanor City and its Banners, and a steady development and continuous improvement trend have been demonstrated.

29 3.2 Introduction to the water consumption, wastewater treatment and agricultural return water condition in the project area

After establishing Bayanor City instead of Meng, the municipal government proposed a strategic transformation from agriculture-based economy to industrial-led development economy. The city experienced a rapid rise in industrial and civil water consumption. According to the "Bayanor City Industrial Water Supply Planning", the city’s industrial water consumption will increase from the current 87.7 million m3 to 524 million m3 by the end of the "Eleventh Five-Year", and hit 643 million m3 in 2020; the Industrial Park water consumption will reach 488 million m3 in 2010, and 570 million m3 in 2020. However, with water consumption on the rise, Bayanor City’s construction of urban industrial wastewater and township wastewater treatment facilities is still lag behind. During the survey, the social assessment work group found that the Banner government -seated towns have already built or is building wastewater treatment plants (mainly used to collect urban resident domestic sewage). Other towns and villages do not have wastewater treatment facilities, and industrial wastewater and domestic sewage have to be directly drained to the individual drain ditches, bringing great contamination to the water body of the artery drain ditch and the individual drain ditches. Survey on rural residents domestic water consumption and sewage discharge 112 of the 180 surveyed households take domestic water from wells, accounting for 62.22 percent of the total surveyed households, 68 households (residents nearby towns) have running water (sourced also from the groundwater), accounting for 37.78%; 98 households believe that their water is preferable in quality, accounting for 54.44%, 41 believe that the water quality is just OK, accounting for 22.78%, the remaining 41 think that their living water quality is poor, accounting for 22.78%. They claim it is the large amount of wastewater effluents from neighboring industrial enterprises that bring contamination to the groundwater through the artery drain ditch and the individual drain ditches. In terms of wastewater disposal, all the 180 surveyed admit that domestic wastewater is disposed arbitrarily. Generally speaking, rural residents in the project area have domestic water from

30 underground water sources. Places where Banner government is seated have built wastewater treatment plants or have wastewater treatment plants under construction, the other towns and villages have no wastewater treatment systems at all. The domestic sewage from the villagers is not treated, and sewage is directly discharged and affects the water body of the artery drain ditch and the individual drain ditches. Most of the people do not realize that the domestic sewage discharged arbitrarily by them would cause hazards to the artery drain ditch and the groundwater. Survey on enterprises industrial water consumption and wastewater treatment During field survey and interviews with enterprises and BHWAC, the social assessment work group found that all the enterprises in the Banners (county) get water from three sources, namely tap water, self-supplied wells, and the artery drain ditch. Among these sources, the enterprises using tap water are at the highest cost, the enterprises using water through the artery drain ditch is less expensive, and the enterprises using water through self-supplied wells is at the lowest cost. Tap water is used by majority of enterprises. The water supply company delivers water to individual company after underground water exploitation and purification treatment at a market price of 2.5 to 3.0 yuan per ton. Self-supplied wells are used by a small part of enterprises. These enterprises need approval from the government for their extraction of groundwater from wells. The cost for well drilling and water supply varies with the depth of groundwater level and enterprises water usage, and is ranging from tens of thousand yuan to hundreds of thousand yuan per ton. Getting water from the artery drain ditch is suitable to some enterprises which do not insist on higher water quality. Water companies (or some individual enterprises approved by the government) draw water from the artery drain ditch and supply water to the individual company after simple water purification treatment at the cost of around 1.8 yuan per ton. In addition, the social assessment work group also visited the Environmental Protection Bureau and related enterprises of various Banners (county) to investigate

31 their respective ways of wastewater treatment. Enterprises within the service area of township wastewater treatment plant: The industrial wastewater of these enterprises is to be collected and treated by the wastewater treatment plant through water pipeline. However, industrial wastewater effluent that seriously exceeds the quality expectations of the wastewater treatment plant shall be primarily treated by wastewater treatment facilities set up by the enterprise owner before being discharged into the wastewater pipeline until to be acceptable by the wastewater treatment plant. Enterprises located outside the Banner government-seated township and with own high-standard wastewater treatment facilities: Though the enterprise-seated township has no wastewater treatment plants, the enterprises should set up advanced wastewater treatment facilities to ensure that the treated industrial effluent meets the national environmental protection requirements before direct discharge. Enterprises outside the Banner government-seated township and without own high-standard wastewater treatment facilities: Since the enterprise-seated township has no wastewater treatment plants and the enterprises only had simple wastewater treatment facilities, the industrial sewage cannot meet the national environment protection direct discharge standards (typically wastewater COD indicator under 60 is required), and can only reach the water quality (with wastewater COD indicator under 150) required by the wastewater treatment plant. The contamination to the water body of the drain ditches is inevitable. Farmland return water The social evaluation team found that farmland return water also contributed to the water environment contamination in Bayanor City. As one of the irrigated agriculture security measures, the farmland drainage water used to maintain water and salt balance also drains contaminant-contained water to the downstream, which further exacerbated the contamination due to lack of effective governance. The amount of contaminants discharged into the drain ditches have exceeded the capacity the water body can bear, resulting in contamination of the Yellow River water body. According to "Water Related Project" and relevant documents, the farmland

32 return water from the Inner Mongolia Hetao irrigation district accounts for 6-8% of the water drawn from the Yellow River. After accepting the contaminant-contained water from the irrigation district, the farmland return water will be collected in the artery drain ditch via drain ditches, and further arrives at Wuliangsuhai, and eventually returns to the Yellow River. The contaminant contains not only that entrained by farmland return water, but also domestic sewage and industrial wastewater etc from the irrigation district. Contaminants due to farmland return water will eventually turn the Wuliangsuhai into the top contamination source threatening the Yellow River in the Inner Mongolia Hetao irrigation district after many years of accumulation. It can be seen that farmland return water does not only waste the water resources, but also lead contamination to groundwater in irrigation district, lakes, and the water body of the Yellow River. In the mean time, drain ditches only act as a trash and contaminants conveyer, failing to play the role of contaminants interception, and leaving some of the lakes in irrigation district and wetlands to be contaminants storage. 3.3 Poverty in project area

Poverty The "poverty" mentioned in this report is based on the definition made by the National Bureau of Statistics referring to such an extreme shortage of material that a person or a family can not attain the socially acceptable minimum standard of living. i.e., the "minimum standard of living", an important basis commonly used to define the poor. On-site investigation by the ECIDI social assessment work group found that Bayanor City is the only prefecture-level city in Inner Mongolia Autonomous Region that there is no state-level poor county. The poverty line is set by the Municipal Poverty Alleviation Office as annual net income of 1,500 yuan in rural areas and 1,800 yuan in pastoral areas, slightly higher than the nationally determined poverty line standard of 1196 yuan. An analysis of sub-project areas on rural poor population shows that Urad Front Banner tops the rural poverty population of 54,889; Urad Middle Banner tops the rural poor population percentage 18.84 % of the Banner. In

33 order to effectively secure the basic necessities of life for people in rural and pastoral areas from 2006 onwards, Bayanor City has established and implemented the minimum living security system for residents in rural and pastoral area. The social evaluation team learned from informal discussions with the individual Banner Civil Affairs Bureau that, rural areas in project-related Banner have a rural minimum living security line of 1100-2000 yuan (due to different economic development level, the Banner rural minimum living security line varies) and a total of 54,371 people are enlisted into the rural minimum living security program, with an average annual per capita grant level of not less than 824 yuan. According to statistics, Urad Front Banner has a maximum of 17,294 people really enlisted in the rural minimum living security program. The social evaluation team found that the project-related townships as a whole are by no means of poverty, and the socio-economic conditions of the affected villages among their respective townships are also OK. The people populated in the project area are mainly engaged in agriculture and animal husbandry with an annual per capita net income of 7,913 yuan, and only 9 households have an annual per capita income of less than 1,500 yuan, accounting for 5% of the population surveyed. Causes of poverty The ECIDI social assessment work group learned through informal discussion with the individual Banner Poverty Alleviation Offices that the main causes of poverty for the project area residents are summarized below: deficient resources, harsh natural environment, water scarcity, perennial drought, regional location constraints, weak economic development foundation; poor infrastructure, especially in the fields of water, electricity and roads construction, the backward social undertakings development in education, civilization, and health care fields; poverty-stricken regional industrial structure, extensive production mode, narrow income channel; conservative concept of people in poor areas, low in overall quality of the people, weak self-development ability, always exist of "wait, see and ask for" mentality; low in agriculture and animal husbandry industrialization, lack of leading personnel who understand plantation, technology, management and marketing skills, ill-

34 Informed and clogged, loose in the organization, weak ability adapting to the market. Project impact on the poor Poor people in the project area hold positive attitudes toward implementation of this project which, they think, can alleviate to a certain extent the pressure of poverty, achieving poverty reduction effects. Positive impacts of the project on the poor will be reflected in the following aspects: to improve living environment of the poor. Due to poor economic income, poor families can be satisfied with basic standards of living, let alone poor living environment improvement. Implementation of this project can to a certain extent, improve the living condition and standard of the poor families. to reduce the incidence of water-related diseases among the poor. Implementation of the project can effectively improve the water quality of various drain ditches, achieve the groundwater protection objectives, reduce the incidence of water-related diseases, and protect the health of poor families. to provide relevant job opportunities. The implementation of this project can be effective in improving the city’s investment environment, increasing in investment opportunities and attracting more enterprises to settle in Bayanor City, thereby boosting employment opportunities. In addition, due to a long project construction period, the project implementation can create more job opportunities for local residents and especially the poor population, who will have more jobs to do.

35 List of poverty and lowest life security state in the project area Table 3.3-1

Rural Ratio Rural Criteria of Rural Total povert of lowest life lowest life Rural population Sited popul y povert security security poverty in lowest No Sub-project banner/c ation popul y line (A, B, C) 1 line life ounty (perso ation popul (RMB) security n) (perso ation (RMB/pers (RMB/pers (person) n) (%) on/y) on/y) Urad Back Banner Processing Park Agricul 1200/900/ 1 reclaimed water supply tural 600 Urad system area15 12.21 Back 63554 7763 1200 6266 Urad Back Banner 00/ % Banner Industry Park pastur 2 wastewater treatment e 1800 and reuse project Agricultura l area: Ganqimaodu Port 1100/900/ Agricul 3 Processing Park water Agricultura 600 tural supply project Urad l pasture : 13983 area15 18.84 Middle 26343 area1100/ 10876 2000/1500 4 00/ % Banner pasture /1000 pastur Ganqimaodu Port 2000 e 1800 Processing Park 4 wastewater treatment and reuse project 3rd drain ditch Hanggin 31959 13.51 5 reclaimed water supply Rear 1500 43172 1400 10135 8242 5 % system Banner 7th drain ditch Wuyuan 27198 11.90 1400/840/ 6 reclaimed water supply 1500 32366 1400 9800 County 3 % 600 system Agricultura Agricul Agricultura l area: Urad Front Banner tural Urad l 1300/800/ Industry Park 33682 area15 16.30 7 Front 54889 area1300/ 17294 660 wastewater treatment 5 00/ % Banner pasture pasture : and reuse project pastur 1400 1400/800/ e 1800 660 11317 16453 Total / / 14.5% / 54371 / 91 3

1 Type A: key security object, Type B: special security object, Type C: basic security object 2 Weighed mean of type A, B and C

36 3.4 Basic conditions of questionnaire respondents In 2 stages of social assessment totally 200 questionnaires were distributed, including 180 effective questionnaires. Through sorting and analysis, the social assessment work group obtained the basic conditions of questionnaire respondents: The 180 questionnaires respondents include 148 men, accounting for 82.22% of total respondents, and 32 women, 17.78% of total respondents. In nationality structure, the respondents include 156 Han people, 86.67% of total respondents, and 24 Mongolian people, 13.33% of total respondents. In age structure, the ages of 180 respondents are mainly age 36 to 45, age 46 to 55 and age 55 to 65, which are 54 persons, 63 persons and 39 persons, respectively accounting for 30%, 35% and 21.67% of total respondents, i.e. 36~65-aged persons are the main respondents of this questionnaire, accounting for 86.67% of total respondents, most of them are in age 46~55. In education background of the 180 respondents, 54 and 77 respondents have primary school and junior middle degree, accounting for 30% and 42.78% of total respondents respectively. The respondents also include 14 illiterates and 34 habitants of senior middle education background. Of the 180 respondents, merely one person was subjected to higher education. In occupation, 171 respondents are farmer, accounting for 95% of total respondents. The respondents include 5 common labors, 2 persons self-engaging in secondary and tertiary industry and 2 other professionals and they account for 5% of total respondents. In family annual income, there are 37, 54 and 30 households whose family annual income is RMB 20000-30000, RMB 30000-40000 and RMB 40000-50000 respectively and they account for 67.22% of total surveyed households. In income source, 136 respondents selected agriculture and husbandry income as their main family income source, 75.56% of total respondents, 22 respondents selected wage and labor income as main family income source, 12.22% of total respondents, 7 respondents selected income of self-owned secondary and tertiary industry, 3.89% of total respondents, and 13 respondents of other professionals, 8.83% of total respondents. In general, agriculture and husbandry income and labor income are the main family income source of most respondents. The social assessment survey shows that the main respondents of the social assessment questionnaires are age 36~65 farmers and they have relatively low

- 37 - education degree. The distribution feature is basically consistent with the fact that currently in Bayanor City the young rural labors worked outside and the farmers in rural have low education degree and the elder farmers of no competitive power engage in other non-agriculture jobs in other places. The basic conditions of questionnaires respondents are shown in Table 3.4-1and Fig. 3 .4-1.

- 38 - List of basic conditions of questionnaires respondents Table 3.4-1 Survey Basic conditions of respondents Unit data Remark Men Person 148 Men accounts for Sex 82.22% of total composition Women Person 32 respondents. Han Person 156 Han accounts for Nationality 86.67% of total Composition Mongolian Person 24 respondents. Up to 18-age Person 0 18-25 age Person 0 36~65 aged 26-35 age Person 14 respondents Age accounts for 86.67% structure 36-45 age Person 54 of total respondents, most of them are in 46-55 age Person 63 age 46~55. 56-65 age Person 39 Over 66 age Person 10 Illiterate Person 14 Primary school Person 54 Most of them are of degree of primary Junior middle school Person 77 school and junior Education middle school, which background Senior middle school Person 34 respectively account for 30% and 42.78% Junior college Person 1 of total respondents. College or higher Person 0 Farmer Person 171 Common labor Person 5 The farmers account Owner of self-owned for 95% of total secondary and Person 2 respondents and tertiary industry common labor, owners of self- Occupation Official Person 0 owned secondary and tertiary industry Teacher Person 0 and other professionals Retired cadre Person 0 account for 5% total Unemployed or respondents. waiting-for-job Person 0 Other Person 2 RMB 10000-20000 Household 8 The households of family annual RMB 20000-30000 Household 37 income RMB 20000- RMB 30000-40000 Household 54 30000, RMB 30000- Total family 40000 and RMB income RMB 40000-50000 Household 30 40000-50000 account for 67.22% RMB 50000-60000 Household 37 of total surveyed Over RMB 60000 Household 14 households. farming and husbandry Household 136 Wage and labor income Household 22 Agriculture and animal Main husbandry income are income Income from self- the main family income source engaged secondary Household 7 source of most and tertiary industry respondents. Others Household 15

- 39 - Distribution diagram of ages

35.00% Up to 18-age 18-25 age 26-35 age 30.00% 36-45 age 21.67% 46-55 age 56-65 age 5.56% Over 66 age 7.78% 0.00% 0.00%

Distribution diagram of education background

0.00% 42.78% Illiterate Primary school College or higher 30.00% Junior middle school 0.56% Junior college Senior middle school 18.89%

7.78%

Distribution diagram of profession

1.11%

2.78% far mer 0.00% Common labor 0.00% 0.00% Owner of secondary and tertiary 0.00% industry Official 1.11% Teacher

Unemployed or waiting-for-job

Retired cadre

oth er s 95.00%

- 40 - Distribution diagram of income 7. 78% 4.44%

20.56%

20.56% 10000 20000 RMB 20000 30000 RMB 30000 40000 RMB 40000 50000 RMB 50000 60000 RMB 16.67% over 60000 RMB 30.00%

Fig.3 .4-1: Distribution diagram of questionnaires respondents On the question on treatment of habitants’ domestic refuses and wastewater, of 180 respondents only 3 persons answered centralized stacking of refuses, 1.67% of total respondents and other 177 respondents answered arbitrary stacking of domestic refuses, 98.33% of total respondents. On the question on discharge mode of domestic wastewater (washings and sewage of toilets and animal sheds), 180 respondents selected “No collection arbitrary flow”. On the question on farmland irrigation mode, 98 respondents selected “flooding irrigation with Yellow River water”, accounting for 54.44% of total respondents, and 82 respondents selected “Well- pumping economical irrigation”, accounting for 45.56% of total respondents. In addition, 169 respondents applied fertilizer as per their individual experiences, accounting for 93.89% of total respondents, and merely 11 respondents applied fertilizer under guide of agricultural technicians, accounting for 6.11% of total respondents. The social assessment survey shows that non-scientific production and life mode of villagers in the project area is one of main factors for water source contamination. Firstly, in rainy day, the contaminants in the arbitrary stacked refuses will with the rainwater along surface runoff flow into near drain ditch and contaminate water environment. Secondly, in case of arbitrary discharge of domestic wastewater, contaminants will infiltrate to soil or groundwater through soil or enter the drain ditch in rainy day together with rainwater. Thirdly, the farmers are lack of agricultural guide and fail to scientifically apply pesticides chemical fertilizer, thereby the surplus pesticides and chemical fertilizer will together with irrigation water discharge to and thus contaminate the artery drain ditch.

- 41 - In addition, at two survey stages of the project, social assessment work group surveyed farming activities of local farmers and prepared a calendar of farming activities (shown in Appendix 3). Each banner and county almost planted wheat, corn, sunflower, tomato and calabash and the region of high salinity soil is mainly planted with sunflower. Since the city is in northern region of China, main crops are one season every year. Local farming activities are mainly from March to September. From October icing period begins and thus the period from October to February of next is slack period.

- 42 - 4. Understanding and attitude of the villagers to the project Learning the understanding and attitude of the habitants in the service area to the project is one of main tasks of this social assessment. At two survey stages of the survey, the social assessment work group made major survey with the particulars as follows: Understanding and attitude of the villagers to environment At two survey stages of the survey, the social assessment work group surveyed the most obvious problem- environment. Of 180 effective questionnaires (multi- option), 24 households selected domestic refuses, 13.33% of total respondents, 51 households selected plant-generated air contamination, 28.33% of total respondents, 159 households selected industry-resulted water contamination, 88.33% of total respondents, 12 households selected agriculture-resulted water contamination, 6.67% of total respondents, and 30 households selected habitants’ live-resulted water contamination, 16.67% of total respondents. Hence, the surveyed villagers thought that the industry-resulted water contamination is the most serious environment problems of their respective banner and county.

Fig. 4- 1 Most serious envi ronment probl ems of their local banner and county

100. 00% domestic refuses 90. 00% 88. 33% 80. 00% 70. 00% plant-generated air 60. 00% contamination 50. 00% 40. 00% Industry-resulted 30. 00% 28. 33% water contamination 20. 00% 13. 33% 16. 67% 10. 00% 6. 67% agriculture-resulted r 0. 00% r - r r c n i n n n water contamination i e e s e e t t - t o a t o o o i v i i i e s - a i e t t a t t a l r s d y e a a a ’ - r w a w u u w t e t t f n n n s habitants’ live-resulted t n m i l i i t i n s d d e d a o u n r a r u e e m m l m e m t c t water contamination d t i a d l l e a l a p a t a r t t i t t n u u n u I g n b n n s n s e s a o o o e o e a g e r r c c r c c h

Understanding of the villagers to wastewater treatment Of 180 effective questionnaires, merely 11 households knew that non-scientific application of fertilizer would result in contamination of drain ditch water, 6.11% of

- 43 - total respondents, and other 169 households did not know that non-scientific application of fertilizer would result in contamination of drain ditch water, 93.89% of total respondents. On the question on control of domestic sewage, 11 respondents thought that it is very necessary, 6.11% of total respondents, 68 respondents thought it is rather required, 37.78% of total respondents, 55 respondents generally accepted sewage control, 30.56% of total respondents, and other 46 respondents thought that their village requires no sewage control, 25.55% of total respondents. In addition, 117 household respondents thought that sewage of drain ditch impacts villagers’ life, 65% of total respondents, 52 respondents thought that sewage of drain ditch has no impact, 28.89% of total respondents, and other 11 respondents are unclear on impact, 6.11% of total respondents. Of 180 respondents, 79 respondents knew how the drain ditch water is contaminated, 43.89% of total respondents and they thought that the enterprises in the industrial park are the main factor for contamination of drain ditch water and 101 respondents did not know how the drain ditch water is contaminated, 56.11% of total respondents. On question on how to decrease drain ditch water contamination, 60 respondents selected “Knowing”, 33.33% of total respondents and they thought that enterprise’s discharge of wastewater should be controlled and other 120 respondents did not know how to effectively decrease drain ditch water contamination, 66.67% of total respondents.

Fig. 4-2 Schematic diagram of villagers’ understanding on wastewater treatment

100. 00% 90.00% 80.00% Knowing that non-scientific 70.00% application of fertilizer would result 60.00% in contamination of drain ditch water 50.00% 43. 94% Knowing how the drain ditch water 40.00% 33. 33% 30.00% is contaminated 20.00% 10.00% 6 .06% Knowing how to effectively 0. 00% decrease drain ditch water Knowing th at no n- Knowing how the Kno wing ho w t o contamination scientific application drain ditch water is effectively decrease of fertilizer would co nta minat ed dra in dit ch wa ter result in contamination contamination of drain dit ch water

The social assessment survey shows that most villagers have shallow

- 44 - understanding on domestic sewage treatment, unilaterally thought that enterprise wastewater is the main factor for drain ditch contamination and did not know that their incorrect production and life mode also impacts the artery drain ditch. Through explanation and introduction of related contents on questionnaires, the villagers have new understanding on water contamination and wastewater treatment. Villagers’ supporting degree to and conflicting with the project At two survey stages of the survey, after fully informing of contents and purpose of the project, the social assessment work group mainly learnt villagers’ supporting degree to the project. 180 respondents all support the project and they thought that project will improve their living environment. On question of possibility of impacting their village by the project, 27 respondents thought that this project will not impact their village, of them, 17 respondents worried about secondary contamination resulted from the project, 9.44% of total respondents, and other 10 respondents worried about impact on rural production by project’s water conveyance pipe network, 5.56% of total respondents. 145 respondents thought that project will not generate disadvantageous impact on their village, 80.56% of total respondents and other 8 respondents were unclear on adverse impact on their village, 4.44% of total respondents. When 180 households were informed of the influence of the project and they will be compensated by the project owner as per laws, they all expressed to overcome the impact and support the project.

Fig. 4-3: Supporting degree to and conflicting with the project Supporting degree on the project 100. 00% 100.00% 80.00% 60.00% No adverse impact on village by 40.00% 15.00% 20.00% 9.4 4% 5.56% t he pro je ct 0.00% Supporting No adverse Worrying about Worrying about Worrying about secondary degree on the impact on village secondary impa ct o n rural contamination resulted from the project by the project contamination production by project resulted from the project’s water project conveyance Worrying about impact on rural pip e net wo rk production by project’s water conveyance pipe network

The social assessment survey shows that the villagers in project area suffered from all levels of drain ditches. Since the contamination for long time and they highly support the project and desire that the operation of this project decrease surrounding environmental contamination. Because in other previous projects, the

- 45 - land was not restored after laying of pipe network, and villagers worried about environmental contamination, some villagers were suspicious on the project. If they were not clear on implementation scheme and compensation measures, they would conflict with the project. Attitude of the villagers’ participation in the project Firstly, Will of understanding basic conditions of project: The result of 180 social assessment survey questionnaires shows that 162 respondents required learning project-related information, such as implementation place, time and scheme, construction impact, land acquisition and resettlement, 90% of total respondents. 18 respondents did not care the project, 10% of total respondents, since they thought they have not high education level and even their understanding of the project has no meaning. 128 respondents expressed that after acquisitioning related information they will raise their opinions and suggestions to related bodies as per actual conditions, 71.11% of total respondents and 37 respondents expressed not to raise their opinions and suggestions, 20.56% of total respondents. They raised no opinions because they were impossible to raise opinions due to low education degree and insufficient understanding of the project, and secondly they worried that even they raised opinions related bodies would not take action. 15 respondents did not know what suggestions to raise, 8.33% of total respondents. Secondary, will of participating in the project: the result of 180 social assessment survey questionnaires shows that 153 respondents will participate in the project provided the project offers opportunity of job, such as work in site, provision of raw materials or small trade near the site, 85% of total respondents; and 27 respondents will not participate in the project, since they are more than 60-age and have no capacity for corresponding work..

- 46 - Schematic diagram of villagers’ participation will

100.00% 90.00% 85.00% 80.00% Ratio of respondents who will learn 71.11% project information

60.00% Ratio of respondents who will raise opinions 40.00% Ratio of respondents who will p articip at e in the proje ct 20.00%

0.00% Ratio of respondents Ratio of respondents Ratio of respondents who will learn project who will raise who will participate in information o pinio ns t he pro je ct

The social assessment survey shows that under proper mode and mechanism, most villagers strongly will participate in the project and few of villagers have weak participation idea since they worried about their own capacity. Understanding and attitude of the villagers to non-point contamination When social assessment work group told the villagers that non-scientific fertilizer-application and cultivation mode is the main cause for water environmental contamination of the project area, 180 respondents expressed to accept training on agricultural popularization knowledge and jointly control the non-point contamination. On question on their most desired training mode (multi-option) ), 30 respondents selected “in village guide by technician”, 16.67% of total respondents, 24 respondents selected “conducting corresponding training course”, 13.33% of total respondents, 18 respondents selected “regular guide through mobile message”, 10% of total respondents, 81 respondents selected “issuing materials of agricultural popularization knowledge”, 45% of total respondents, and 27 respondents selected “setting fixed guide point”, 15% of total respondents. On question on correction of previous non-scientific fertilizer-application and cultivation mode after studying agricultural popularization knowledge, 177 respondents expressed to make correction, 98.33% of total respondents, and merely 3 respondents expressed to conduct the fertilizer-application and cultivation as per their previous experiences, 1.67% of total respondents. The social assessment survey shows that though farmers did not understand

- 47 - that their non-scientific fertilizer-application and cultivation mode would result in water environment contamination, after publicity, most farmers will accept agricultural popularization knowledge, participate in project and do their best to decrease non- point contamination. When they are informed of that control of non-point contamination through fertilization formulation after soil measurement will reduce their input in chemical fertilizer, their initiative was much higher.

- 48 - 5. Analysis of relevant beneficial colony 5.1 Identification of relevant beneficial colony  The relevant beneficial colony is the person, group or mechanism which has direct or indirect interest relation with the project and directly or indirectly impacts the successes of the project. The construction of this project will render positive or negative impact on different person, group or mechanism. ECIDI social assessment work group for the project makes analysis and site survey. It divides the relevant beneficial colony of this project into the following types: habitants in project area, project-serving enterprises, immigrants, weak group, ethnic minorities, project owner, engineering design unit, project construction unit and other relevant governmental departments. As per the features of this project, the relevant beneficial colony is basically divided into main relevant beneficial colony and other relevant beneficial colony. The main relevant beneficial colony The main relevant beneficial colony includes the object served by and benefited from project and the group negatively impacted by the project. For the water supply and wastewater treatment and reuse project of the industrial park, the direct project beneficial includes habitants and enterprises in the service range of this project and the group negatively impacted by the project is the group impacted by project construction and construction land-acquisition, including immigrants, weak group and ethnic minorities. Habitants in project area Habitants in project area include project-benefiting habitants, construction land- acquisition resulted immigrants, ethnic minorities and weak group. In the last years with the development of industrial park and growth of urban population of each banner and county of Bayanor City, industrial wastewater and domestic sewage gradually increased. Except for town and township of the locality of government of banner and county, wastewater treatment facilities and necessary pipe network in other towns and townships are not perfect and great amount of industrial wastewater and domestic sewage are discharged into various drain ditches, which results in serious contamination of water in each drain ditch. The wastewater in 7th drain ditch and 9th drain ditch generates bad odor and seriously impacts the life of surrounding habitants. In the site survey, the social assessment work group found

- 49 - that 87 respondents of 180 had the opinion that wastewater is the top contamination problems of their respective village, accounting for 48.33% of total respondents. The construction of this project will effectively release the obvious environmental problems and improve the living environment for the habitants in the project area. Project construction likely generates unavoidable interference and impact to habitants near the project area and the construction requires their supports. The construction of this project will unavoidably generate land-acquisition impact. As per survey of ECIDI social assessment work group, the sub-projects will totally acquisition land 758-mu, including rural collective land 350-mu and thus it will unavoidably generate non-voluntary resettlement. In this project, the land-acquisition has impact on the husbandry community in Hongqi Village, Qingshan Town, and Urad Back Banner. The husbandry community is a region concentrated with ethnic minorities and at the same time, the project- benefiting area is also distributed with given amount of ethnic minorities. The project construction shall focus on ethnic minorities’ opinions, suggestions and requirements on the project. Through the interview with husbandry community habitants in Hongqi Village, the social assessment work group found that in husbandry community the Mongolia habitants keep harmonic with Han and the life habits, religion and production and life mode of Mongolia and Han people are very similar. In this project, the weak group includes poverty population, woman, the disabled and the aged. The social assessment work group shall survey a given amount of poverty population, woman, the disabled and the aged, mainly focus on and understand their care, and their ideas and suggestions on the project construction. Project serving-enterprises In this project, the reclaimed water supply and wastewater treatment and reuse project serves enterprises in the industrial parks of various banners and county. In accordance with policies of Bayanor City, enterprise in the city, and each banner and county shall gradually use reclaimed water and they will become the service objects of this project. Other relevant beneficial colony Other relevant beneficial colony denotes personnel or mechanism related with scheme, planning, design and implementation of the project, mainly including project owner, project implementation mechanism and related governmental departments.

- 50 - Project owner BHWAC, as the owner of this project, is responsible for project’s fore-phase verification and study, middle-term construction and post-phase operation. Successful implementation and advancing of this project and realization of ecological environmental protection and good business benefits are highly dependent on the operation mode and method of the project. Engineering design unit and construction unit The engineering design unit and construction unit are linked with the project through the project owner and are the close related beneficial colony. This project has big BOQ and long construction period. The design of project is related to project scale, impact degree and smooth implementation of the project. During the project construction period, the construction unit would somewhat impact habitants in the project area and the construction quality will directly affect effectiveness of wastewater treatment. Related governmental departments The construction and implementation of this project surely require supports and aids of competent governmental departments and governmental related policies would greatly affect project’s construction and operation. Hence, related governmental departments are also the beneficial colony of this project. Relevant beneficial colonies of Bayanor City Water Environment Comprehensive Treatment Project are shown in Table 5.1-1.

List of relevant beneficial colonies of Bayanor City Water Environment Comprehensive Treatment Project Table 5.1-1 relevant beneficial Project group name colony project-benefiting habitants project-serving enterprises Main relevant immigrants beneficial colony weak group Comprehensive water ethnic minorities environmental control project owner of Bayanor City engineering design unit Other relevant project construction unit beneficial colony related governmental departments

- 51 - 5.2 Requirements of relevant beneficial colony Analysis of requirements of main relevant beneficial colonies will be advantageous to identify project’s main social issues, avoid potential social risks and promote smooth implementation of the project. Because of different position in the project, the relevant beneficial colony has different requirements and even the same type of beneficial colonies their requirements are different due to different social and economical development level in their respective areas. For their requirements, the social assessment work group will acquisition related information mainly through informal discussion and interview with them. Requirements of habitants in project area The habitants in project area include main relevant beneficial colony such as project- benefiting habitants, immigrants, ethnic minorities and the weak group. The survey found that habitants in project area are affected by water and air contamination and they urgently desire to mitigate wastewater impact, improve life quality and own a healthy and safe living environment through the water environment treatment project. The social assessment work group made questionnaire to the habitants in project area and analyzed their specific requirements. As per statistic and analysis of 180 respondents, they all support construction of wastewater treatment project and they thought the surrounding environment of their village should be improved. For the issues mostly need to be improved for village development, 75 respondents require to improve farmland water conservancy facilities, 41.67% of total respondents, and 45 respondents require to improve village traffic condition, 25.00% of total respondents. In addition, after briefing of basic conditions of the project, surveyed habitants will participate project construction and 153 respondents will participate project construction provided that the project provide them project job opportunity, e.g. job in construction site, supply of raw materials, and small trade nearby the site, accounting for 85% of total respondents. The analysis and summary of questionnaire and interview shows that the habitants in project area mainly require the followings: building wastewater treatment project to improve village environmental, scientifically and safely treating incoming wastewater to ensure clean production and life water, intensify popularization of agricultural technology to lower agricultural cost, improving farmland water conservancy facilities, and participating in project construction.

- 52 - Case 1: Habitants of husbandry community in Qingshan Town, Urad Back Banner Before, the environmental of this village was good, air was fresh and water was clean. After establishment of the industrial park, the environmental was worsening. Habitants drink groundwater, but the groundwater was contaminated and has many deposits. The habitants complained this problem to related departments and some had the contaminated water analyzed days ago, but result has not come out. If the water really contains harmful substance, they worried about how the worsen life environment will last In addition, the air is also seriously contaminated. Every morning, when window is opened, the room is dusty. The habitants generally think that the living environment should be improved.

This project will unavoidably acquisition land and the production and life of the immigrants would be impacted. In addition to common requirements of the habitants in project area, they have their own unique requirements. The social assessment work group found that most immigrants strongly support the water environment treatment project and they request: the compensation standard and policy of land- acquisition and resettlement shall be informed of as early as possible and kept open, just and transparent, the resettlement scheme for land compensation shall be reasonable, and the land-acquisition compensation fee shall be sufficiently and fully issued. In addition, the survey also found that the weak group in project area is mostly the aged people, poverty population, woman and the disabled. The implementation of this project will improve environment and water quality, decrease disease occurrence, indirectly lower their curing fee, and mitigate family’s economical burden. The weak group requires supplying them job during the construction and operation period of project. Requirements of enterprises in project area The enterprises in project area require keeping lowest-possible production cost and wastewater treatment cost, obtaining massive qualified reasonable-priced production water and getting the highest profits.

- 53 - Case 2: Xingang Chemical Co., Ltd. This company mainly produces calcium carbide. It started to build in 2004 and put into operation in 2006. Its water consumption is not high and the industrial water is mainly for cooling. It established a circulation water system and only around 100-t make-up water was required every day. The enterprise does not have high requirement on the water quality, and general industrial water ok. Currently its water is supplied from water supply plant at rate of RMB 2.50 yuan/t. If the reclaimed water is cheaper than the current price, the company certainly will use the reclaimed water and thus its production cost can be greatly lowered.

Requirements of project owner, design and consultation unit, construction unit and other relevant governmental departments Through informal discussions with each unit and departments, the social assessment work group found that they almost focus on how to accelerate project examination and approval procedures and organization of its implementation to ensure smooth implementation and commissioning and playing predicted role. The analysis and summary shows that their requirements are mainly as follows: Hoping the project can be implemented as early as possible to protect the ecological environment of the Bayanor City and to obtain better economic benefit; Desiring a practical and realistic technical scheme based on local conditions to effectively decrease construction and operation cost for the good of Bayanor City; Wishing the project to play an effective and demonstrative role and promote sustainable development of social economy of the region. The requirements of each relevant beneficial colony are shown in Table 5.2-1. List of requirements of each relevant beneficial colony of Bayanor City Water Environment Comprehensive Treatment Project

- 54 - Table 5.2-1 Beneficial colony Main requirements Building wastewater treatment project to improve village environment Scientifically and safely treating incoming sewage to ensure clean production and life water Intensify popularization of agricultural technology to Habitants in Main lower agricultural cost; project area relevant Improving farmland water conservancy facilities beneficial Participating in project construction to obtain colony opportunity of job and income-increase Treating land-acquisition compensation and resettlement Project- Keeping lowest-possible production cost and wastewater serving treatment cost, obtaining massive qualified reasonable- enterprises priced production water and getting the highest profits Project Hoping the project can be implemented as early as owner, possible to protect the ecological environment of the design and Bayanor City and to obtain better economic benefit; Other consultation Desiring a practical and realistic technical scheme relevant unit, based on local conditions to effectively decrease beneficial construction construction and operation cost for the good of Bayanor colony unit and City; related Wishing the project to play an effective and governmental demonstrative role and promote sustainable departments development of social economy of the region.

- 55 - 6. Analysis of social impact of project

The project construction and implementation would somewhat generate different social impacts, which are divided into positive impact and negative impact. Analysis of the positive and negative impact will effectively identify, control and avoid social risks of project construction. 6.1 Positive impact

To improve infrastructure of the project area and enhance wastewater treatment capacity and industrial water supply capacity of each banner and county As per site survey of the social assessment work group, merely the government- seated town and township of each banner (county) were built with or are to be built with wastewater treatment facilities, but the service range is limited to urban domestic sewage and partial enterprises’ wastewater. In industrial park, the industrial water supply and wastewater discharge of enterprises require support from reclaimed water supply and wastewater treatment and reuse system of each sub-project. Construction of this project will obviously improve the wastewater treatment and industrial water supply capacity of enterprises in industrial park and provide reliable water resource for regional economical development. To improve the water quality of each drain ditch, improve the living environment of the project area and improve the health level of the residents Implementation of this project will enhance wastewater treatment capacity of enterprises in industrial park, effectively control the wastewater discharged to drain ditches, indirectly upgrade the water quality of artery drain ditch and each drain ditch, release the negative impact of various drain ditches on nearby habitants’ living environment and improve their health level. To purify the water body of Wuliangsuhai, improve its ecological environment, and protect the Yellow River water quality; Currently, the wastewater in each drain ditch is almost entirely discharged to Wuliangsuhai and then discharged to Yellow River after purification in Wuliangsuhai. Hence, improvement of wastewater quality in various drain ditches can mitigate Wuliangsuhai’s purification burden, improve Wuliangsuhai’s ecological environment, - 56 - delay its marsh progress, gradually recover biological diversity of the wet land, to make the water quality drainage system of Hetao Irrigation Area conform to related state standards, and effectively improve Yellow River water quality in Bayanor City and protect the water from being contaminated. To improve Bayanor City’s overall investment environment and promote optimization of the industrial structure. The implementation of project will allocate industrial park of 5 banners (counties) with reclaimed water supply and wastewater treatment and reuse sub-project, improve their respective infrastructure level and industry base’ service capacity, benefit investment invitation and promote optimization of industrial structure of the said region. To increase employment opportunity and habitants’ income During the project construction period, the nearby habitants may obtain opportunity to provide labors or trade and increase their income. In addition, improvement of project area’s investment environment will absorb more enterprises to settle in Bayanor City and in turn provide habitants in project area more jobs. 6.2 Negative impact

Occupying construction land will somewhat impact the production and life of the immigrants In the project, new-building water works will unavoidably occupy land. As per the feasibility study report, in order to decrease impact of local land-acquisition impact the uncultivated land is used. During construction, several sub-projects occupy cultivated land of state-owned farm, state-owned pasture and farmers, which would somewhat impact the production and life of immigrants. As per the site survey and interview, since the interest of the immigrants is involved, local habitants highly focus on land-acquisition, hence the compensation and resettlement is very important to the project and proper compensation and resettlement shall be used to mitigate the impact. Since they may obtain a rather high compensation fee, they generally welcome sitting of project in their village and acquisitioning their land. Laying of piping network will disturb and make inconvenience the production

- 57 - and living of the habitants along the project area; Laying of pipe network will temporarily occupy habitants’ land along side, which not only impacts farmers’ cultivation of this season, but also results in decrease of output of cultivated land. In addition, as per social assessment work group’s survey, the pipe network in Wuyuan County will pass Yihe Canal, which would generate disadvantageous impact on surrounding farmland irrigation. The project owner and construction unit shall properly arrange construction to minimize impact on habitants. Interference on habitants’ normal life during project construction period The project construction would bring potential risks such as noise contamination, dust arising and unsafe traffic to nearby habitants and enterprises. Laying of pipe network would destroy farmers’ previous infrastructure, cut off or occupy partial roads to impact village habitants’ accession, and generate noise, dust and security problems. The project implementation would increase water cost of some enterprises.. Bayanor City has formulated related policies, which require enterprises of each banner and county use reclaimed water as industrial water and prohibit arbitrarily intaking groundwater. Since the reclaimed water supply and sewage treatment and reuse facilities in each banner and county are not perfect, the implementation range and force of above policies would somewhat impacted and enterprises of each banner and county adopt several water-use modes. With the advancing of the project, reclaimed water supply and sewage treatment and reuse facilities in industrial park will be perfected. From project’s economical yield, the policy will be widely executed. The enterprise used to use groundwater will cut off their wells and uses reclaimed water, which would surely include the enterprises having high requirement on water quality, e.g. winery. From interview, it is learnt that if such enterprises use reclaimed water, they will put equipment and funds to further purify the reclaimed water till conforming to industry water standard, hence their industrial water consumption cost would exceed the previous level.

- 58 - 7. Project and ethnic minorities

This section is to identify mutual impact between ethnic minorities and the project, avoid social risks likely generated by the project onto people of ethnic minorities and promote them to better participate in this project. ECIDI social assessment work group made informal discussion with Nation Religion Affair Bureau of the project-involved banners (county), and learn the conditions of ethnic minorities of project area and the impact of project on them. In addition, ECIDI social assessment work group carried out fore-phase learning- truth participation in project impacted ethnic minorities group, main including : collecting materials of communities in project area, holding informal discussion, household survey, survey summary of social assessment work group, feeding back of information. The details of fore-phase learning-truth participation are shown in Table 7-1. List of fore-phase learning-truth participation survey

- 59 - Table 7-1 Participating Participating objects Target activities Share of project information Analysis of project Project impacted habitants Informal discussion, requirements (including immigrants, 1 time Assessment of engineering poverty household, ethnic Deep interview 5 design minorities and woman), persons Analysis of project impact project owner, and Questionnaire 30 Analysis of problems in the members of social persons project assessment work group Raising expectation and suggestions Share of project information Analysis of project Government officials, Informal discussion, requirements project owner, and 2 times Assessment of engineering members of social interview design assessment work group of collecting Analysis of project impact banner and county of documentary Analysis of problems in the locality of project materials project Raising expectation and suggestions

7.1 Distribution of ethnic minorities in project area

Bayanor City is a multinational region mainly with Mongolia and Han. The entire city has total population of 1,741,900 and population of ethnic minorities is 113500, accounting 6.5% of total population, including Mongolia 84,100, 4.8% of total population, and other ethnic minorities (Hui, Man, Tibetan, Korean, Daur and Owenk) 29,400, 1.7% of total population. The distribution of ethnic minorities in each sub- project-involved banner and county is shown in Table 7.1-1. Mongolia is distributed in entire city and mainly in pastoral area and urban area, and the area of Sumu (so-called town) accounts for 75% of the entire city area. They engage in husbandry and administration. Mongolia population in Urad Front Banner, Urad Middle Banner and Urad Back Banner accounts for 60% of that of the entire city. Hui is also distributed in the entire city, mainly in agricultural area and urban area, and they engage in agriculture and commerce. Hui population in Linhe District, Dengkou County and Wuyuan County accounts for 70% of that of the entire city. Other ethnic minorities are scattered in entire city, mainly in urban and agricultural

- 60 - area, and they engage in industry, commerce, administration and agriculture. Distribution of ethnic minorities in each sub-project-involved banner and county Table 7.1-1 Urad Urad Urad Hanggin Composition of Entire Wuyuan Front Middle Back Rear nationalities city County Banner Banner Banner Banner Total population 174.19 33.9 13.98 6.43 32.30 30.3 (10000) Han (%) 93.48% 95.31% 80.53% 73.15% 97.99% 96.77% Ethnic minorities (%) 6.52% 4.69% 19.47% 26.85% 2.01% 3.23% Including: Mongolia (%) 4.83% 3.92% 18.72% 26.41% 1.04% 2.01% Other ethnic minorities 1.69% 0.77% 0.75% 0.44% 0.97% 1.22% (%)

As per policy standard of World Bank OP 4.10, “Ethnic minorities” refers to ethnic minorities in general meaning and they are unique and weak social and cultural group and have the following features: The ethnic minority is verified as a member of unique ethnic minorities group and the verification is recognized by others. They collectively live in a unique geographic community in project area and depend on the natural resources there. They have traditional cultural, economical, social or political system different from trend social and cultural system They have ethnic minority language different from official language of this country or this locality. On basis of the above standard, ECIDI social assessment work group identified state of ethnic minorities in each area impacted by sub-project construction land- acquisition. In sub-project areas, merely Qingshan Town of Urad Back Banner has ethnic minority communities (ethnic minorities population is relatively larger), and their place and mode of production and life, economical and social system and owning condition of natural resources are basically same to Han and other nationalities lived nearby, they have no unique ethnic minority features. The ethnic minorities in other areas impacted by project construction and land-acquisition in

- 61 - each banner and county live mixed with Han. They enter the project area because of work and marriage. Their mutual contact and marriage are not restricted by ethnic minority. Though each ethnic minority has its own traditional culture, they are mutual affected and mutual fermented during social intercourse. 7.3 Amalgamation of ethnic minorities

Through informal discussion with Ethnic Affairs Committee of each banner and county, social assessment work group understood that in Bayanor City each ethnic minority has a long history, and has its own religion, culture, art and custom. In the long social development course, however, each nationality made wide social, economical and cultural exchange and they mutually mixed. For example, Mongolia has its own language and they internally communicate with own nationality language and outwards communicate with Han language. Ethnic minorities amalgamate in the following aspects: Firstly, each ethnic minority generally uses Han language and takes Han language as official language. Local Mongolia, Hui and Man ethnic minorities use Chinese Characters as written language. They together celebrate major festivals such as Spring Festival of Han and Nadam of Mongolia. Secondary, the ethnic minorities not only enjoy equal right in society, economy and culture as Han but also enjoy favorable policy in education, employment and financial supports. Bayanor City formulates favorable policies for ethnic minority poverty village and enterprises. Thirdly, the people of all the ethnic minorities contact closely and intermarriage is common. Hence, currently in project area the ethnic minorities fully amalgamate with Han and other nationality. 7.4 Conclusion

Through truth-learning participation type survey with impacted ethnic minorities communities, ECIDI social assessment work group found that in each area impacted by sub-project construction and land-acquisition, production and life place and mode, economical and social system, and natural resources owning condition of ethnic - 62 - minorities people are basically same to that of the Han people nearby. The ethnic minority people have the general opinion that project construction will improve project area’s environmental condition and their life quality and they support the project. The related requirements of ethnic minorities will be shown together with that of other habitants of the project area through the project construction and the positive benefits of the project will be embodied in ethnic minorities.

- 63 - 8. Suggestions on perfecting engineering design

Through site survey, informal discussion and interview, ECIDI social assessment work group found some problems in engineering design and raised proposals on perfecting engineering design. The engineering design shall be coordinated with other project of each banner and county and the base survey shall be well made. Survey finding: The site initially selected for the 3rd drain ditch reclaimed water supply project is overlapped with exit of the under-planning expressway. Through consultation with the planning bureau and land administration bureau, the said site is shifted backwards by 200m. Suggestions: Before engineering design, the design unit shall fully make related investigation, communicate with competent governmental departments, fully understand overall land utilization plan, industrial park planning and village planning, conduct site survey and select proper site to avoid conflicting with land for other projects. The enterprise shall primarily estimate expense to improve water quality, fully understand its water consumption and required water quality, and perfect the design scheme. Survey finding: The enterprises in project-involved banner and county adopt several water-use modes and their production water is mainly from city water, self- well and artery drain ditch. After project operation, the reclaimed water shall be used as industrial water for industrial park and enterprises’ previous water-use mode would change, which would result in increased water cost for enterprises requiring high water quality and will in turn impact their will to access to reclaimed water. In addition, up to survey day, except Qingshan Industrial Park of Urad Back Banner and Jinquan Industry Base of Urad Middle Banner, which have reached a given scale, other industrial parks are basically in construction and investment-invitation stage. The quantity and types of enterprises settling in industrial park are uncertain, and thus the reclaimed water supply and sewage scale are also uncertain.

- 64 - Suggestions: The design unit shall at site make sampling survey for some enterprises requiring high water quality, primarily calculate expense to improve water quality, and provide basis to the project owner and local government for their working out post-phase policies. In addition, the design unit shall intensify prediction of water supply and sewage scale, understand types and water consumption of enterprises likely settling in industrial park, and perfect the engineering design.

- 65 - 9. Identification and control of social risks 9.1 Identification of social risks

The analysis of social risks identifies the social factors which would likely impact project, predicts the social factors which would last for a long period and likely results in serious contradiction, and analyzes their possible social environment and conditions it will especially analyze the factors which likely initiate national contradiction and religion contradiction and propose preventive measures to decrease social risks. Through informal discussion, deep interview and questionnaire with each level local government and related departments, project owner and habitants in project area, ECIDI social assessment work group identifies social risks which are related with engineering design and likely impact realization of project target and seeks for measures to avoid social risks. This project mainly has the following potential social risks: Risk of resettlement This project is planned to build 4 reclaimed water supply works and 3 wastewater treatment plants. As per social assessment work group’s site survey, the reclaimed water works and wastewater treatment plants will involve with 4 towns and townships, 1 state-owned farm and 1 state-owned pasture in 5 banners (county) and acquisition land 758-mu. In addition, the reclaimed water and wastewater treatment facilities require necessary water conveyance and supply pipe network and will temporarily occupy land 2839.25-mu. The unavoidable permanent land-acquisition and temporary land occupancy require the project owner, local government and related departments to conduct resettlement compensation. Improper resettlement, especially improper resettlement measures or failure to timely and sufficiently issue resettlement fee would result in group-contradiction and in turn impact entire project construction. Risk of habitants’ production and life mode, insufficient town and township wastewater treatment facilities and realization of project target

- 66 - ECIDI social assessment work group found that rural habitants’ daily production and life mode is closely related with water environment. Through informal discussion with and Environmental Protection Bureau of each banner and county, social assessment work group understands that agricultural non-point contamination is also one of factors leading to water contamination of artery drain ditch and each drain ditch. For long period, farmers lacked of knowledge on scientific fertilizer-application and they merely made cultivation with their experiences. The surplus pesticides and other contaminants in farmland irrigation water-use will in rain or irrigation process flow to drain ditches and other water body in the form of surface runoff, soil flow, agriculture drain water and underground water leakage and result in contamination. The survey found that most farmers had no idea on the impact of their unscientific fertilizer-application mode to artery drain ditch water body and did not know that for purification and control of each stage drain ditch and Wuliangsuhai they shall change daily production and life behaviors such as unscientific fertilizer-application, arbitrary stacking refuses and arbitrary discharge of sewage. In addition, the new-built sewage treatment plant mainly treats the enterprises discharged wastewater in industry and is impossible to treat rural habitants’ domestic sewage. The insufficient and imperfect wastewater treatment facilities of town and township result in impossible effective treatment of agricultural irrigation wastewater, urban enterprises’ wastewater and urban habitants’ domestic sewage and thus the wastewater in artery drain ditch and each drain ditch is not well controlled and improved. If the town and township wastewater treatment facilities are not as early as possible built, agricultural irrigation wastewater, urban enterprises’ wastewater and urban habitants’ domestic sewage are not properly treated, realization of the final target would be seriously impacted. Risk of low will of enterprises to access reclaimed water In accordance with policies of Bayanor City to overall use reclaimed water for all enterprises, implementation of this project will surely impact the existing water supply mode and enterprises have no way but to use reclaimed water for production. Through informal discussion with in-charge persons of enterprises in the park, social assessment work group found that some in-charge persons of enterprises have no

- 67 - idea on the reclaimed water and sewage treatment and reuse project. In addition, different enterprises have different requirements on water quality, some enterprises’ in-charge persons worry that their technical process would not adapt the reclaimed water or the self-responsible reclaimed water purification would increase their cost. Hence, if the project owner and related governmental departments do not rationally work out and effectively carry out related policies, some enterprises would be impossible to or will not use reclaimed water and thus predicted targets would be difficult to realize. Risk of adaptability of project construction scale with enterprises water-use scale Through site survey ECIDI social assessment work group found that in this project-involved 5 industrial parks, merely Qingshan Industry Park and Jinquan Industry Park were basically formed and there totally tens of enterprises were resettled and they engage in chemicals, non-ferrous metals and food processing. In addition, as per feasibility study report the daily capacity of the water supply works and wastewater treatment plant to be built in each industrial park is 20,000-40,000 t. There is a potential risk, i.e. adaptability of project construction scale with enterprises water-use scale. In case of smooth investment invitation, many resettled enterprises and high water demands, the to-be-built water supply works and wastewater treatment plant would be impossible to meet requirement and thus the benefits of the entire project would be impacted. In contrary, in case of smooth investment invitation, a few of resettled enterprises and low water demands, the capacity of the to-be-built water supply works and wastewater treatment plant would be surplus, and thus excessive project scale would result in waste of investment. Risk of secondary contamination The social assessment work group during site survey found that project local habitants worried about secondary contamination generated by the wastewater treatment plant. The so-called secondary contamination denotes the destruction and impact by contaminants to air, water and soil during treatment of wastewater, refuses and river slurry. Through identification and analysis, the social assessment work

- 68 - group thought that this project-related possible secondary contaminations are as follows: 1. Impact on water and soil by the contaminants leaked during wastewater treatment process, 2. Impact on water and soil by direct land filling (without effective disposal) of sludge generated in the wastewater treatment plant, and 3. Impact on water and soil by the wastewater escaping during laying of wastewater pipes. Failure to note the risks of secondary contamination would not only harm habitants’ interests and their participation activity but also impact realization of final target of entire project. Risk of follow-up management of project This is a water environment comprehensive treatment project and it will finally control and protect water quality of drain ditches of Hetao Irrigation Area and Wuliangsuhai. It is well known that environmental treatment project is not a no- profiting project with effects invisible in short term. Thus, after completion of project its follow-up management is very important. Currently, the project in this city is yet at fore-phase preparation stage, each party stresses on project identification and has no idea on its follow-up management mechanism. In addition, governmental participation and supports are very important, but the execution mechanism of this project (BHWAC) as an enterprise has insufficient coordination capacity with governmental departments. Failure to set project management mechanism and increase government departments’ supports would increase the risk of follow-up management. 9.2 Control of social risks

The social assessment work group identifies the social risks and seeks for measures to avoid these social risks. In order to minimize the project-generated social risks, ECIDI social assessment work group made site survey, fully discussed with relevant governmental departments, project owner, and habitants and enterprises, and proposed risks control measures, including: Properly making resettlement: Optimized design shall be adopted to minimize acquisition land and temporary land occupancy and land not ever used shall be utilized to decrease impact on farmers’ production and life. For unavoidable permanent land-acquisition, rational compensation system and resettlement

- 69 - compensation shall be consistent with related policies to prevent immigrants’ life level from being lowered by the project construction. Providing jobs opportunities and increasing rural habitants’ income. Job opportunities will be provided during the construction and operation period of project. The project owner, implementation mechanism and local labor departments and woman’s federation shall cooperate in preferential arrangement of non-technical jobs to poverty population, woman and ethnic minorities and increase their long-term and short-term employment. The poverty population shall be mainly arranged to make them benefit from the construction and operation of project and increase their family income. From survey of time of farming activities of habitants in project area (shown in Appendix3), social assessment work group found that from October to February next year farmers are basically in slack state. Hence, it is suggested to lay pipe network during this time section whenever possible to minimize impact on farmers’ plantation. For place where the pipe network is laid over-cross ditch, pipe ejection process shall be used to decrease disadvantageous impact to surrounding farmland irrigation. In order to realize the target of control Wuliangsuhai, BHWAC is actively studying on control of contamination of farmland-return water and each banner and county actively popularize application of fertilizer through soil-measurement. These measures will greatly mitigate agricultural non-point contamination. The project owner and each government of banner and county are suggested to take measures, intensify instruction and training to farmers on scientific agricultural production, provide them diversified agricultural technical popularization activities and eliminate their unscientific agricultural production mode. In addition, each government of banner and county is suggested at maturated conditions to gradually perfect wastewater treatment facilities, effectively treat industrial sewage and rural-urban domestic sewage, and effectively control the wastewater entering drain ditches and Wuliangsuhai. The related government departments of banner and county are suggested to intensify instruction and publicity to rural habitants on environmental protection. In the

- 70 - current condition of insufficient hardware input, the habitants shall intensify their idea on environmental protection, improve and adjust their poor life habits and make contribution to decrease wastewater volume. The design unit is suggested to intensify fore-phase survey and design contents, through discussion and consultation with project owner and industrial park’s in-charge persons, fully understand enterprises’ expenses required to improve water quality, provide project owner and local government the base data for policies of use of reclaimed water and keep balance between protection of ecological environment and enterprises’ interests. The design unit is suggested to fully understand existing enterprises’ water demands, predict the construction scale of to-be-built enterprises and scientifically and rationally design project scale so as to meet enterprises’ demands and avoid waste of investment due to excessively high scale. The design unit is suggested to assess environmental impact, fully consider the secondary contamination possibly generated during construction and operation and take advanced environmental protection measures to avoid the secondary contamination possibly generated in the project. For this project one implementation mechanism has been established, Bayanor City Project Lead Group (headed by vice mayor Li) will take charge of project implementation (including coordination in feasibility study and resettlement) and BHWAC will be overall responsible for affairs of project. The social assessment work group thought that control of follow-up management risk depends on a strong and powerful institution; suggested to strengthen the institution capability construction, bring into full play the role of coordination and communication of the members of lead group so as to decrease resistance during project implementation. In addition, a perfect and coordinated follow-up management mechanism should be established and more habitants may be allowed to participate in the project to keep sustainable realization of the effects. The potential social risks and avoidance measures for Bayanor City Water Environmental Comprehensive Treatment Project are shown in Table 9.2-1.

- 71 - List of potential social risks and avoidance measures for Bayanor City Water Environmental Comprehensive Treatment Project Table 9.2-1 Implementation No. social risks Avoidance measures for social risks Participators time Properly making resettlement: Optimized design shall be adopted to minimize acquisition land and temporary land occupancy and land not ever used shall be utilized to decrease impact on farmers’ production and life. For unavoidable permanent land-acquisition, rational compensation system and resettlement compensation shall be consistent with related policies to prevent immigrants’ life level from being lowered by the project construction. Local Providing jobs opportunities and increasing rural habitants’ income. Job government, opportunities will be provided during the construction and operation period of design unit, Risk of project. The project owner, implementation mechanism and local labor Entire project implementation 1 resettlement departments and woman’s federation shall cooperate in preferential period mechanism, arrangement of non-technical jobs to poverty population, woman and ethnic impacted minorities and increase their long-term and short-term employment. The villages and poverty population shall be mainly arranged to make them benefit from the their habitants construction and operation of project and increase their family income. (3) It is suggested to lay pipe network during this time section whenever possible to minimize impact on farmers’ plantation. For place where the pipe network is laid over-cross ditch, pipe ejection process shall be used to decrease disadvantageous impact to surrounding farmland irrigation.

Risk of (1) It is to actively popularize application of fertilizer through soil- habitants’ measurement. These measures will greatly mitigate agricultural non-point Project owner, production contamination. The project owner and each government of banner and county each level and life are suggested to take measures, intensify instruction and training to farmers Entire project governmental 2 mode, on scientific agricultural production, provide them diversified agricultural period departments, insufficient technical popularization activities and eliminate their unscientific agricultural each village town and production mode. In addition, each government of banner and county is habitants township suggested at maturated conditions to gradually perfect wastewater treatment

- 72 - Implementation No. social risks Avoidance measures for social risks Participators time wastewater facilities, effectively treat industrial sewage and rural-urban domestic sewage, treatment and effectively control the wastewater entering drain ditches and facilities and Wuliangsuhai. realization of The related government departments of banner and county are suggested to project target intensify instruction and publicity to rural habitants on environmental protection. In the current condition of insufficient hardware input, the habitants shall intensify their idea on environmental protection, improve and adjust their poor life habits and make contribution to decrease wastewater volume. Risk of low The design unit is suggested to intensify fore-phase survey and design Project owner, will of contents, through discussion and consultation with project owner and local Fore-phase enterprises to industrial park’s in-charge persons, fully understand enterprises’ expenses government, 3 preparation access required to improve water quality, provide project owner and local government design unit and stage reclaimed the base data for policies of use of reclaimed water and keep balance enterprises in water between protection of ecological environment and enterprises’ interests. project area Risk of adaptability of Project owner, project The design unit is suggested to fully understand existing enterprises’ water local Fore-phase construction demands, predict the construction scale of to-be-built enterprises and government, 4 preparation scale with scientifically and rationally design project scale so as to meet enterprises’ design unit and stage enterprises demands and avoid waste of investment due to excessively high scale. enterprises in water-use project area scale Project owner, The design unit is suggested to assess environmental impact, fully consider local Risk of the secondary contamination possibly generated during construction and Entire project government, 5 secondary operation and take advanced environmental protection measures to avoid the period design unit and contamination secondary contamination possibly generated in the project. enterprises in project area Risk of follow- The social assessment work group thought that control of follow-up Entire project Project owner, 6 up management risk depends on a strong and powerful institution; suggested to period local

- 73 - Implementation No. social risks Avoidance measures for social risks Participators time management strengthen the institution capability construction, bring into full play the role of government, of project coordination and communication of the members of lead group so as to design unit and decrease resistance during project implementation. In addition, a perfect and enterprises in coordinated follow-up management mechanism should be established and project area more habitants may be allowed to participate in the project to keep sustainable realization of the effects.

- 74 - 10. Public participating mechanism During the entire project period, a perfect public participating mechanism shall be established, including regular information opening system, and complaint mechanism and public consultation system. Information opening mechanism During project preparation, implementation and operation period, in order to make each relevant beneficial colony timely obtain project-related information and enjoy equal opportunity to raise their suggestions and opinions and also enable the project owner and construction unit to master project trend and as per actual conditions to make scientific decision, the social assessment work group thought that the information at each stage shall be opened, timely issued and collected to ensure free passage of information and smooth implementation. The regular information opening system and fixed information exchange channel shall be established and information closely related with beneficial colony shall be regularly announced in common place of community. The project implementation particulars shall be informed of to main beneficial colonies in many ways such as meeting, slogan, TV, broadcasting newspaper and advertising sheets. Complaint mechanism During the entire project period, a complaint mechanism shall be established. The project office of each banner and county is suggested to appoint a contact person and announce the contact mode and he shall receive impacted object’s opinions and suggestions and make feeding back and reply in 2 weeks after the said reception. Public consultation mechanism Any issue related with the impact-objects shall be fully be discussed with them and shall be consistent with the consultation result, e.g. deciding intermediate water price, resettlement mode, and holding of public hearing suggestions. In addition, during the public participation process it is to help the main relevant beneficial colony to set up correct idea, understand the impact of their production and life mode on water environment, actively carry out water environment protection to eliminate their troubles, and actively participate in the implementation and operation of the project. During preparation, implementation and operation stage of the project, the construction contents and purpose shall be fully advertised. The function of the

75 community cadres shall be brought into full play, their participation are required for advertising, mobilizing, and reflecting habitants’ requirements, finding out the problems existing in the course of project implementation as well as conflicts coordination and follow-up management, etc. During project construction stage, try best to absorb main relevant beneficial colonies in participating in project construction, employ them to provide paid service, and allow them to provide logistics service for the project construction.

76 11. Conclusion and suggestions 11.1 Conclusion ECIDI social assessment work group thought that main social benefits of the project include the followings: The construction and operation of project will improve infrastructure of the project area and increase each banner and county’ wastewater treatment capacity and industrial water supply capacity. It will improve water quality of each drain ditch, habitants’ living environment and health level. It will purify Wuliangsuhai water body, improve the ecological environment there and protect Yellow River water quality. It will improve overall investment environment of Bayanor City. It will increase employment opportunity and increase habitants’ income. The potential social risks of the project identified by the social assessment work group include the followings: Risk of resettlement The unavoidable permanent land-acquisition and temporary land occupancy would generate disadvantageous on production and life of impacted group, lower their life level and even lead to a series of potential, long-term social, cultural and psychological impact. Risk of habitants’ production and life mode, insufficient town and township sewage treatment facilities and realization of project target Most farmers had no idea on the impact of their unscientific fertilizer-application mode to artery drain ditch water body and did not know that for purification and control of each stage drain ditch and Wuliangsuhai they shall change daily production and life behaviors such as unscientific fertilizer-application, arbitrary stacking refuses and arbitrary discharge of sewage. In addition, the new-built sewage treatment plant mainly treats the enterprises discharged wastewater in industry and is impossible to treat rural habitants’ domestic sewage. The insufficient and imperfect wastewater treatment facilities of town and township result in impossible effective treatment of agricultural irrigation wastewater, urban enterprises’ wastewater and urban habitants’ domestic sewage and thus the wastewater in artery drain ditch and each drain ditch

77 is not well controlled and improved. Risk of low will of enterprises to access reclaimed water Some in-charge persons of enterprises have no idea on the reclaimed water and sewage treatment and reuse project, some enterprises’ in-charge persons worry that their technical process would not adapt the reclaimed water or the self-responsible reclaimed water purification would increase their cost. Hence, if the project owner and related governmental departments do not rationally work out and effectively carry out related policies, some enterprises would be impossible to or will not use reclaimed water Risk of adaptability of project construction scale with enterprises water-use scale In case of smooth investment invitation, many resettled enterprises and high water demands, the to-be-built water supply works and wastewater treatment plant would be impossible to meet requirement and thus the benefits of the entire project would be impacted. In contrary, in case of smooth investment invitation, a few of resettled enterprises and low water demands, the capacity of the to-be-built water supply works and wastewater treatment plant would be surplus, and thus excessive project scale would result in waste of investment. Risk of secondary contamination The possible secondary contaminations generated in the project are as follows: 1. Impact on water and soil by the contaminants leaked during wastewater treatment process, 2. Impact on water and soil by direct land filling (without effective disposal) of sludge generated in the wastewater treatment plant, and 3. Impact on water and soil by the waster escaping during laying of wastewater pipes. Risk of follow-up management of project This project is yet at fore-phase preparation stage; each party stresses on project identification and has no idea on its follow-up management mechanism. In addition, governmental participation and supports are very important, but the execution mechanism of this project BHWAC as enterprises has insufficient coordination capacity with governmental departments. Failure to set project management mechanism and increase government departments’ supports would increase the risk of follow-up management.

78 11.2 Suggestions For the above possible social risks, the social assessment work group raises the following suggestions: Properly making resettlement: Optimized design shall be adopted to minimize acquisition land and temporary land occupancy and land not ever used shall be utilized to decrease impact on farmers’ production and life. For unavoidable permanent land-acquisition, rational compensation system and resettlement compensation shall be consistent with related policies to prevent immigrants’ life level from being lowered by the project construction Provide employment opportunities and increase the income of rural residents in the project area. The pipe network shall be laid in slack period whenever possible to minimize impact on farmers’ plantation. For place where the pipe network is laid over-cross ditch, pipe ejection process shall be used to decrease disadvantageous impact to surrounding farmland irrigation. The project owner and each government of banner and county are suggested to intensify studying on control of contamination of farmland-return water and each banner and county actively popularize application of fertilizer through soil- measurement and intensify instruction and training of farmers on scientific agricultural production. In addition, each government of banner and county is suggested to gradually perfect their wastewater treatment facilities. The related government departments of banner and county are suggested to intensify instruction and publicity to rural habitants on environmental protection, the habitants shall intensify their idea on environmental protection, improve and adjust their poor life habits. The design unit is suggested to intensify fore-phase survey and design contents, through discussion and consultation with project owner and industrial park’s in-charge persons fully understand enterprises’ expenses required to improve water quality, provide project owner and local government the base data for policies of use of reclaimed water and keep balance between protection of ecological environment and enterprises’ interests. The design unit is suggested to fully understand existing enterprises’ water demands, predict the construction scale of to-be-built enterprises and scientifically

79 and rationally design project scale so as to meet enterprises’ demands and avoid waste of investment due to excessively high scale. The design unit is suggested to assess environmental impact, fully consider the secondary contamination possibly generated during construction and operation and take advanced environmental protection measures to avoid the secondary contamination possibly generated in the project. The capacity of the mechanism shall be enhanced and the members of lead group shall be coordinate and communicate so as to decrease resistance during implementation. In addition, a perfect and coordinated follow-up management mechanism shall be established and more habitants may be allowed to participate in the project to keep sustainable realization of the effects.

80 Appendix 1 Schedule of social assessment work of Bayanor City Water Environment Comprehensive Treatment Project

Time Place Working content Establishing work team and conducting planning 09.6.27 09.6.30 Hangzhou and discussion Preparing “Outline for Social Assessment” and 09.7.1 09.7.3 Hangzhou questionnaire and exchanging work method and contents with experts of World Bank Modifying “Outline for Social Assessment” and 09.7.3 09.7.6 Hangzhou questionnaire and preparing site work scheme Discussing with the project owner on 09.7.7 09.7.8 Bayanor implementation of social assessment work and deciding the work scheme Hanggin Making survey in Shanba Town and visiting 09.7.9 09.7.10 Rear environmental protection bureau Banner Making survey in Qingshan Town and conducting Urad Back 09.7.11 09.7.13 informal discussion with enterprises in industrial Banner park Urad Making survey in Delingshan Town, Muyanghai 09.7.14 09.7.16 Middle Pasture Banner Making survey in Lingxingchang Town and Wuyuan 09.7.17 09.7.18 conducting informal discussion with enterprises in County industrial park Urad Front Making survey in Zhongtan Farm and visiting 09.7.20 09.7.21 Banner environmental protection bureau Involved Collecting materials in Urad Back Banner, Urad 09.7.22 09.7.23 banners Front Banner, Urad Middle Banner, Hanggin Rear and county Banner and Wuyuan County Sorting and summarizing materials, and checking 09.7.24 09.7.25 Bayanor and making up omissions Preparing social assessment report (Preliminary 09.7.26 09.8.15 Hangzhou edition) Preparing survey questionnaire and site work 09.11.2 09.11.9 Hangzhou scheme of second stage Discussing with the project owner on social 09.11.11 0911.12 Bayanor assessment work of second stage and deciding the work scheme Hanggin Making informal discussion in Shanba Town and 09.11.13 09.11.14 Rear conducting interview and questionnaire in Banner surrounding villages of 3rd drain ditch Making informal discussion in Lingxingchang Wuyuan Town and conducting interview and questionnaire 09.11.15 09.11.16 County in surrounding villages of 7th drain ditch and Yihe Canal

81 Making informal discussion in Xin’an Town and Urad Front 09.11.17 09.11.18 conducting interview and questionnaire in Banner surrounding villages of8th and 9th drain ditch Sorting and summarizing materials, and checking 09.11.19 09.11.20 Bayanor and making up omissions Preparing social assessment report (Pre- 09.11.21 09.12.30 Hangzhou evaluation Version) 10.4.26 10.4.29 Bayanor The World Bank Pre-appraisal 10.4.30 10.6.30 Hangzhou Completing the SA(for Appraisal)

82 Appendix 2 Topics and viewpoints of informal discussion of Bayanor City Water Environment Comprehensive Treatment Project

Type of informal Topics Collected materials discussion Hearing from in-charge persons of Development and Reform The status of ethnic minorities, Bureau, State Land poverty population and low- Administration, Planning Bureau, income population, wastewater Informal Environmental Protection discharge and environmental discussion with Bureau, National Affairs Bureau, condition of local enterprises, government Poverty-Supporting Office, Civil local industrial water tariff and bodies Affairs Bureau, And Health collection mode, opinions and Bureau of each banner and suggestions on wastewater fee county on opinions and and other materials related with suggestions and the impact of social impact assessment the project on respective body Production scale, annual profits, idea on and altitude to Informal environmental protection, current discussion with situation of wastewater Topics-related contents enterprises’ in- discharge, wastewater treatment charge persons capacity and will to access reclaimed water of enterprises Informal Introducing the project to leaders discussion with of farm and village collectives, leaders of farm, hearing their opinions, Topics-related contents pasture and suggestions on the project, as village well as the impact of the project collectives on their farm and villages Informal discussion with villagers Informal to understand their production discussion with and life mode, living Topics-related contents villagers environment, and opinions and comments on the project

83 Appendix 3 Calendar of farming activities Dashuncheng Village, Shanba Town, Hangjin Rear Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack

1,Preparing wheat seed wheat field management March 2. Purchasing chemical April Preparing sunflower seed fertilizer Preparing calabash seed 3 Seeding wheat wheat field management Seeding sunflower May June sunflower field management Seeding calabash calabash field management 1. Harvesting wheat 1. Sunflower field July 2. Sunflower field August management management 2. Calabash field 3 C l b h field t Harvesting sunflower September October Slack Harvesting calabash November Slack December Slack

Shawan Village, Shanba Town, Hanggin Rear Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack

1. Preparing wheat seed 1. Wheat field management March 2. Purchasing chemical April 2. Preparing sunflower seed fertilizer 3. Preparing calabash seed 3. Seeding wheat 1. Wheat field management 1. Seeding sunflower May June 2. Sunflower field 2. Seeding calabash management 1. Harvesting wheat 31. SunflowerCalabash fieldfield July 2. Sunflower field August management management 2. Calabash field 3 C l b h field t 1. Harvesting sunflower September October Slack 2. Harvesting calabash

November Slack December Slack

84 Hongqi Village, Qingshan Town, Urad Back Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack

1. Preparing wheat seed 1. Wheat field management March 2. Purchasing chemical April 2. Preparing sunflower seed fertilizer 3. Preparing corn seed 3. Seeding wheat 1. Wheat field management 1. Seeding sunflower 2. Sunflower field May June 2. Seeding corn management 3. Corn field management 1. Harvesting wheat 1. Sunflower field 2. Sunflower field July August management management 2. Corn field management 3. Corn field management 1. Harvesting sunflower September October slack 2. Harvesting corn

November slack December slack

Dashuwan Village, Qingshan Town, Urad Back Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack

1. Preparing wheat seed 1. Wheat field management March 2. Purchasing chemical April 2. Preparing sunflower seed fertilizer 3. Preparing corn seed 3 Seeding wheat 1. Wheat field management 1. Seeding sunflower May June 2. Sunflower field 2. Seeding corn management 3 C field management 1. Harvesting wheat 1. Sunflower field July 2. Sunflower field August management management 2. Corn field management 3 C field management 1. Harvesting sunflower September October slack 2. Harvesting corn

November slack December slack

85 Wuzhen Village, Delingshan Town, Urad Middle Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack 1. Preparing wheat seed 1. Wheat field management 2. Purchasing chemical March April 2. Preparing sunflower seed fertilizer 3. Preparing corn seed 3. Seeding wheat 1. Wheat field management 1. Seeding sunflower May June 2. Sunflower field 2. Seeding corn management 3 Corn field management 1. Harvesting wheat 1. Sunflower field July 2. Sunflower field August management management 2. Corn field management 3 C field management 1. Harvesting sunflower September October Slack 2. Harvesting corn

November Slack December Slack

Wuxing Village, Longxingchang Town, Wuyuan County Farming activities and job Farming activities and job Month Month division division January slack February slack

1. Preparing wheat seed 1. Wheat field management 2. Purchasing chemical 2. Seeding corn March April fertilizer 3. Preparing sunflower seed 3. Seeding wheat 4. Preparing tomato seed 4 Preparing corn seed 1.Seeding sunflower 1. Wheat field management 2.Seeding tomato 2. Corn field management May June 3.Wheat field management 3. Sunflower field 4.Corn field management management 4. Tomato field 1.Harvesting wheat 2.Harvesting tomato 1. Corn field management July 3.Corn field management August 2. Sunflower field 4. Sunflower field management management Harvesting sunflower September October Slack Harvesting corn

November Slack December Slack

86 Jiucheng Village, Longxingchang Town, Wuyuan County Farming activities and job Farming activities and job Month Month division division January Slack February Slack 1. Preparing wheat seed 1. Wheat field management 2. Purchasing chemical 2. Seeding corn March April fertilizer 3. Preparing sunflower seed 3. Seeding wheat 4. Preparing tomato seed 1.4 SeedingP i sunflower d 1. Wheat field management 2. Seeding tomato 2. Corn field management May June 3. Wheat field management 3. Sunflower field 4. Corn field management management 1. Harvesting wheat 1. Corn field management July 2. Harvesting tomato August 2. Sunflower field 3. Corn field management management 4. Sunflower field 1. Harvesting sunflower September October Slack 2. Harvesting corn November Slack December Slack

Dengcundian Village, Xixiaozhao Town, Urad Front Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack 1. Preparing wheat seed 1. Wheat field management 2. Purchasing chemical 2. Seeding corn March April fertilizer 3. Preparing sunflower seed 3. Seeding wheat 4. Preparing tomato seed 1.4 SeedingP i sunflower d 1. Wheat field management 2. Seeding tomato 2. Corn field management May June 3. Wheat field management 3. Sunflower field 4. Corn field management management 1. Harvesting wheat 1. Corn field management July 2. Harvesting tomato August 2. Sunflower field 3. Corn field management management 4. Sunflower field 1. Harvesting sunflower September October Slack 2. Harvesting corn

November Slack December Slack

87 Xinghuo Village, Xin’an Town, Urad Front Banner Farming activities and job Farming activities and job Month Month division division January Slack February Slack 1. Preparing wheat seed 1. Wheat field management 2. Purchasing chemical 2. Seeding corn March April fertilizer 3. Preparing sunflower seed 3. Seeding wheat 4. Preparing tomato seed 1.4 SeedingP i sunflower d 1. Wheat field management 2. Seeding tomato 2. Corn field management May June 3. Wheat field management 3. Sunflower field 4. Corn field management management 1. Harvesting wheat 1. Corn field management July 2. Harvesting tomato August 2. Sunflower field 3. Corn field management management 4. Sunflower field 1. Harvesting sunflower September October Slack 2. Harvesting corn

November Slack December Slack

88 89