Mongolia: Regional Improvement of Border Services Project–Additional Financing

Initial Environmental Examination (Draft)

Project Number: 47174-002 June 2019

Prepared by The Ministry of Finance for the Asian Development Bank

ABBREVIATIONS

ADB – Asian Development Bank AP – Affected person AQG – Air quality guideline BOD5 – 5-day biochemical oxygen demand CS-EMP – Construction Site EMP CSC – Construction Supervision Company DO – Dissolved oxygen EA – Executing agency EDC -- Engineering Design Consultant EHS – Environment, health and safety EIA – Environmental impact assessment EIR – Environmental impact report EMP – Environmental management plan EMR – Environmental monitoring report EPL – Environmental Protection Law ESE – Environmental supervision engineer FSR – Feasibility study report GDP – Gross domestic product GHG – Greenhouse gas GRM – Grievance redress mechanism IA – Implementing agency IEE – Initial environmental examination IEM -- Independent Environmental Monitor IPCC – Intergovernmental Panel on Climate Change LAeq – Equivalent continuous A - weighted sound pressure level LAR – Land acquisition and resettlement LAS – Linear alkylbenzene sulfonate LIS – Loan implementation service LIEC – Loan implementation environment consultant MSW – Municipal solid waste O&M – Operation and maintenance PAM – Project administration manual PCR – Project completion report pH – A measure of acidity and alkalinity PIC -- Project Implementation Consultant PIU – Project implementation unit PM2.5 – Particulate matter with diameter ≤ 2.5 μg PM10 – Particulate matter with diameter ≤ 10 μg PMC – Project management consultant PME – Powered mechanical equipment PIU – Project management office PPE – Personal protective equipment PPTA – Project preparation technical assistance PUSO -- Public Utility Service Organization REA – Rapid environmental assessment RP – Resettlement plan SEA – Strategic environmental assessment SO2 – Sulfur dioxide SPS – Safeguard policy statement

SS – Suspended solid TA – Technical assistance TOR – Terms of reference TRTA – Project Transaction Technical Assistance TSP – Total suspended particulate UNESCO – United Nations Educational, Scientific and Cultural Organization VOC – Volatile organic compounds WBG – World Bank Group WHO – World Health Organization WWTP – Wastewater treatment plant

CURRENCY EQUIVALENTS (as of 26 May 2019) Currency unit – Mongolian Tugriks (MNT) CNY1.00 = $0.00038 $1.00 = MNT 2627

WEIGHTS AND MEASURES o 2 /oo – part per thousand m – square meter oC – degree centigrade m3 – cubic meter cm – centimeter m/s – meter per second dB – decibel mg – milligram dB(A) – A-weighted sound pressure level (decibel) mg/L – milligram per liter g – gram mg/m3 – milligram per cubic meter g/kg – gram per kilogram mm – millimeter h – hour mm/y – millimeter per year ha – hectare mu – 666.67 square meters kg – kilogram mT – milli–Tesla Kg/d – kilogram per day no./L – number of individuals per liter kg/m3 – kilogram per cubic meter t – metric ton km – kilometer t/a – metric ton per annum km/h – kilometer per hour t/d – metric ton per day kV – kilo–volt µ – micron or micrometer kV/m – kilo–volt per meter µg – microgram kw – kilo-watt µg/m3 – microgram per cubic meter L – liter µT – micro–Tesla L/d – liter per day V/m – volt per meter m – meter

NOTE In this report, "$" refers to US dollars.

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

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 11 A. Introduction ...... 11 B. Project Description ...... 11 C. Potential Environmental Impacts and Mitigation Measures ...... 11 D. Climate Change Risk and Vulnerability Assessment...... 15 E. Environmental Management Plan...... 15 F. Information Disclosure and Public Consultation ...... 16 G. Grievance Redress Mechanism...... 17 H. Project Risks and Key Assurances ...... 17 I. Overall Conclusion ...... 17 I. INTRODUCTION ...... 18 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 20 A. Domestic Legislative Framework of Mongolia for Environment Impact Assessment ... 20 B. Applicable Domestic and ADB Polices ...... 23 C. International Agreements ...... 26 D. Domestic Assessment Standards for Project Construction and Operation ...... 26 E. Comparison between Mongolian and International Standards ...... 33 1 Waste Water ...... 33 Table II-10: National and International Wastewater Discharge Standards ...... 33 2 Ambient Air Quality ...... 34 Table II-11: National and International Ambient Air Quality Standards...... 34 3 Groundwater Quality ...... 35 Table II-12: National and International Groundwater Quality Standards ...... 35 4 Noise ...... 36 5 Boiler Emission ...... 36 III. DESCRIPTION OF THE PROJECT ...... 37 A. Introduction ...... 37 B. Rationale ...... 37 C. Impact, Outcome and Outputs ...... 38 D. Description of Project Site at Bichigt ...... 39 E. Description of Project Site at Borshoo ...... 50 F. Project Outputs ...... 59 1 Bichigt BCP ...... 59 2 Borshoo BCP ...... 62 IV. DESCRIPTION OF THE ENVIRONMENT ...... 65 A. Overview and Physical Setting ...... 65 6 GEOGRAPHY AND TOPOGRAPHY ...... 65 a. Topographical setting at Borshoo ...... 65 b. Topographical settings at Bichigt ...... 65 7 SOIL COVER ...... 66 a. Soil cover in Borshoo area ...... 66 b. Soil cover in Bichigt port ...... 67 8 SEISMOLOGY ...... 68 9 HYDROLOGY ...... 68 a. Surface water resources around Borshoo port ...... 69 b. Surface water resources at Bichigt port ...... 70 10 GROUNDWATER RESOURCES ...... 71

a. Ground water resources in Borshoo region ...... 71 b. Ground water resources in Bichigt region ...... 72 B. ENVIRONMENTAL QUALITY ...... 73 1 AIR QUALITY ...... 73 a. Air quality at Borshoo port ...... 73 b. Air quality at Bichigt port ...... 74 2 Solid Waste ...... 74 a. Solid Waste at the Borshoo BCP ...... 74 b. Solid Waste at the Bichigt BCP ...... 75 3 Surface water quality ...... 76 4 Ground water quality...... 77 C. SOCIO- ECONOMIC CONDITIONS...... 77 1 Socio-economic condition in the Borshoo area ...... 77 2 Socio-economic condition in the Bichigt area ...... 78 D. ECOLOGICAL RESOURCES AND ENVIRONMENT ...... 80 1 FLORA ...... 80 2 FAUNA ...... 84 3 Wildlife species in Borshoo region ...... 85 4 Wildlife species in Bichigt region ...... 86 5 Birds ...... 89 6 SPECIAL PROTECTED AREA ...... 90 a. Protected areas around Borshoo port ...... 90 b. Protected areas around Bichigt port ...... 91 1 Mount Lkhachinvandad ...... 91 2 Eastern Mongolian SPA – Section B ...... 91 E. PHYSICAL CULTURAL RESOURCES ...... 93 1 Cultural Heritage in the Borshoo area ...... 93 2 Cultural Heritage in the Bichigt area ...... 93 V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES ...... 94 A. Background of Project Areas ...... 94 B. Project Area of Influence and Sensitive Receptors ...... 94 C. Pre-construction Phase ...... 96 D. Construction Phase ...... 98 E. Operational Phase ...... 107 F. Climate Change Risk and Vulnerability Assessment...... 110 1 CRVA Methodology ...... 111 2 Meteorological Characteristics of Project Areas ...... 112 3 Projected Climate Change to Temperature ...... 118 4 Projected Climate Change to Precipitation ...... 123 5 Projected Climate Change to Extreme Temperatures ...... 128 6 Projected Climate Change to Extreme Precipitation ...... 130 7 Climate Change Impact to Project Design ...... 132 8 Adaption to Climate Change ...... 133 9 Summary ...... 134 G. Cumulative, Indirect and Induce Impacts ...... 135 VI. ANALYSIS OF ALTERNATIVES ...... 136 A. No Project Alternative ...... 136 B. Project Facility Design Alternatives ...... 136 VII. INFORMATION DISCLOSURE AND CONSULTATIONS ...... 137

A. Public Participation ...... 137 1 Identification of stakeholders ...... 137 2 Consultation discussion topics ...... 138 3 Key Findings of Public Consultation ...... 138 4 Outcome of consultations ...... 138 Table VII-3: Public consultation pictures ...... 142 B. Future Plans for Public Participation ...... 144 VIII. GRIEVANCE REDRESS MECHANISM ...... 145 A. Grievance Redress Mechanism Objective ...... 145 B. Grievance Redress Mechanism Introduction ...... 145 C. Proposed Grievance Redress Mechanism for the Project ...... 145 (1) Proposed Grievance Redress Steps and Timeframe ...... 146 (2) Accountability Mechanism of ADB...... 147 (3) Reporting...... 147 (4) Responsibilities of the PCU...... 147 (5) Multi-stakeholder meetings...... 148 D. Disclosure of the Grievance Process ...... 148 E. Record Keeping and Review ...... 148 IX. ENVIRONMENTAL MANAGEMENT PLAN ...... 150 X. CONCLUSIONS ...... 1 APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN ...... 2

LIST OF TABLES

Table II-1: Relevant environmental laws in Mongolia (1) ...... 21

Table II-2: Relevant environmental laws in Mongolia (2) ...... 22

Table II-3: Relevant international conventions of Mongolia ...... 26

Table II-4: Relevant Mongolian National Standards to be applied for Project Construction and Operation ...... 26

Table II-5: Mongolian National Environmental Standard and Guidelines...... 27

Table II-6 Full Parameters of the National Standard for Wastewater Discharge to Water Bodies (MNS 4943:2011) ...... 30

Table II-7 Allowable limits of industrial wastewater composition before letting effluents into public sewers and central wastewater treatment systems (Regulation No a/11/05/A/18) ...... 31

Table II-8: Mongolia Surface Water Quality Standards ...... 32

Table II-9: National Soil Quality Standards on Heavy Metals ...... 33

Table II-10: National and International Wastewater Discharge Standards ...... 33

Table II-11: National and International Ambient Air Quality Standards ...... 34

Table II-12: National and International Groundwater Quality Standards...... 35

Table II-13: National and International Noise Level Standards ...... 36

Table II-14: Boiler Emission Guidelines ...... 36

Table IV-1: Chemical test analysis for soil samples taken at Borshoo ...... 67

Table IV-2: Soil contamination test analysis ...... 67

Table IV-3: Chemical test analysis for soil sample taken at Bichigt ...... 67

Table IV-4: Exploitable ground water resources in the Uvs lake basin ...... 71

Table IV-5: Air quality test results at Borshoo port ...... 73

Table IV-6: Air quality test results at Bichigt port ...... 74

Table IV-7: Daytime noise level at Borshoo port ...... 75

Table IV-8: Daytime noise level at Bichigt port ...... 76

Table IV-9: Water quality test analysis ...... 76

Table IV-10: Results of water quality test analysis ...... 77

Table IV-11: Land use pattern in Erdenetsagaan soum ...... 79

Table IV-12: Plant species registered in the project area ...... 81

Table IV-13: Dominant plants in mountain steppe with a grass-peashrub-herb ...... 83

Table IV-14: Dominant plant species of semi-arid steppe with a grass-herb ...... 83

Table IV-15: Mammal species registered in the project region ...... 85

Table IV-16: Mammal families registered in the project region ...... 86

Table IV-17: Mammal species listed in CITES convention ...... 87

Table IV-18: Current population size of Mongolian gazelle in Erdenetsagaan soum ...... 87

Table IV-19: Bird families recorded in the project region ...... 89

Table IV-20: Key features of the Uvs lake SPA ...... 91

Table V-1: Mongolian Evaluation Standards and Assessment Areas Adopted for This Project ...... 95

Table V-2: Environmental Sensitive Receptors at the Bichigt BCP ...... 95

Table V-3: Environmental Sensitive Receptors at the Borshoo BCP ...... 96

Table V-4: Construction Equipment Noise Impact Distance ...... 102

Table V-5: Vibration Levels of Construction Machinery (Unit: dB) ...... 103

Table V-6: Summary of Climate Change Data/Scenario for CRVA ...... 111

Table V-7: Monthly precipitation level in Bichigt port area, mm ...... 114

Table V-8: Monthly average wind speed, m/sec ...... 115

Table V-9: Monthly maximum wind speed, m/sec ...... 115

Table V-10: Monthly precipitation level, mm, 2013-2018 ...... 117

Table V-11: Monthly average wind speed, m/sec, 2013-2018 ...... 117

Table V-12: Monthly maximum wind speed, m/sec, 2013-2018 ...... 118

Table V-13: Projected Changes in Temperature in Bichigt Due to Climate Change ...... 119

Table V-14: Projected Changes in Temperature in Borshoo Due to Climate Change ...... 123

Table V-15: Multi-Year Average Annual Precipitation ...... 125

Table V-16: Multi-Year Average Annual Precipitation ...... 127

Table V-17: Index definition of temperature extreme events in Bichigt ...... 129

Table V-18: Extreme temperature change in Bichigt...... 129

Table V-19: Extreme temperature change in Borshoo ...... 130

Table V-20: Index definition of precipitation extreme events in Bichigt ...... 131

Table V-21: Extreme precipitation change in Bichigt ...... 131

Table V-22: Index definition of precipitation extreme events in Borshoo ...... 132

Table V-23: Extreme precipitation change in Borshoo ...... 132

Table VII-1: List of local people met during public consultation at Borshoo ...... 139

Table VII-2: List of local people met during public consultation at Bichigt ...... 141

Table VII-3: Public consultation pictures ...... 142

LIST OF FIGURES

Figure II-1: IFC Environment Health and Safety Guidelines ...... 25

Figure III-1: Location of Bichigt and Borshoo BCPs ...... 38

Figure III-2: Comparison of the Existing and Proposed New Bichigt BCP Locations ...... 41

Figure III-3: Layout of the Bichigt BCP Facilities ...... 42

Figure III-4: Layout of the Existing and New Bichigt BCPs ...... 43

Figure III-5: Bichigt BCP in Relation to Adjacent Key Locations ...... 44

Figure III-6: Overview of the Existing Bichigt BCP ...... 45

Figure III-7: Overview of the Proposed New Bichigt BCP Location ...... 46

Figure III-8: A Herder Household (nomadic tent) in about 10 km north to Bichigt BCP ...... 47

Figure III-9: A deep well in about 10 km away north from BCP ...... 47

Figure III-10: Septic Tank for Wastewater storage ...... 48

Figure III-11: Wastewater carrying vehicle ...... 48

Figure III-12: Designated Solid Waste Disposal Site...... 49

Figure III-13: Borshoo BCP Location ...... 52

Figure III-14: Layout of the Borshoo BCP Facilities ...... 53

Figure III-15: Proposed Project Scope of RIBS-AF at the Borshoo BCP ...... 54

Figure III-16: Overview of the Existing Borshoo BCP...... 55

Figure III-17: Heating boiler in main building...... 56

Figure III-18: View of Borshoo BCP Facilities ...... 56

Figure III-19: View towards the Russian border at Borshoo BCP ...... 57

Figure III-20: An abandoned deep well located 4 km from the Borshoo BCP ...... 57

Figure III-21: Designated Solid Waste Disposal Site at Borshoo ...... 58

Figure III-22: Overview of the Proposed New Borshoo BCP Site ...... 58

Figure III-23: Preliminary Design of Bichigt BCP ...... 61

Figure III-24: Preliminary Design of the Borshoo BCP ...... 64

Figure IV-1: Topographical map of the Borshoo port ...... 65

Figure IV-2: Topographical map of Bichigt area ...... 66

Figure IV-3: Earthquake risk: Modified Mercalli Scale...... 68

Figure IV-4: Surface network map of Mongolia ...... 69

Figure IV-5: Surface water bodies in Borshoo area ...... 70

Figure IV-6: Surface water bodies in the Bichigt area ...... 71

Figure IV-7: The recommended site to create a new well, Burgastain Us ...... 72

Figure IV-8: Water well at the Bichigt port ...... 73

Figure IV-9: Temporary waste collection point and sewage pit at Borshoo port ...... 74

Figure IV-10: Temporary waste collection point and waste dumpsite ...... 75

Figure IV-11: Waste water septic tank and heat only boiler house ...... 75

Figure IV-12: Water reservoir at the Borshoo port ...... 76

Figure IV-13: Vegetation map of Mongolia and location of project area ...... 80

Figure IV-14: Mountain steppe with a grass-peashrub-herb community in the Lkhachinvandad Mount ... 83

Figure IV-15: Semi-arid steppe with a grass-herb community, the proposed new construction site ...... 84

Figure IV-16: Zoo-geographic zones in Mongolia ...... 84

Figure IV-17: Core habitat of Mongolian gazelle in the Sukhbaatar province ...... 88

Figure IV-18: Population size of red deer in Lkhachinvandad Mount SPA ...... 88

Figure IV-19: Core habitat of red deer in Sukhbaatar province ...... 89

Figure IV-20: Protected areas around Borshoo port ...... 90

Figure IV-21: Protected areas around the Bichigt BCP ...... 92

Figure V-1: Location of Border Crossing Station ...... 113

Figure V-2: Historical Annual Average Temperature at Bichigt ...... 113

Figure V-3: Historical Perennial Average Monthly Temperature at Bichigt ...... 114

Figure V-4: Location of Borshoo Border Station ...... 115

Figure V-5: Historical Annual Average Temperature at Borshoo ...... 116

Figure V-6: Historical Perennial Average Monthly Temperature at Borshoo ...... 117

Figure V-7: Projected Historical Annual Average Maximum and Minimum Temperatures at Bichigt ..... 119

Figure V-8: (A) Projected Annual Average Minimum Temperatures (2006-2100); (B) Projected Annual Average Maximum Temperatures (2006-2100) ...... 120

Figure V-9: Projected Historical Annual Average Maximum and Minimum Temperatures at Borshoo ... 121

Figure V-10: (A) Projected Annual Average Minimum Temperatures (2006-2100); (B) Projected Annual Average Maximum Temperatures (2006-2100) ...... 122

Figure V-11: Historical Annual Precipitation and Tendency during 1950 and 2005 ...... 123

Figure V-12: Projected Annual Precipitations under Low and High Scenarios (2006 to 2100) ...... 124

Figure V-13: Projected Monthly Precipitation under Low Scenario (A) ...... 125

Figure V-14: Historical Annual Precipitation and Tendency during 1950 and 2005 ...... 126

Figure V-15: Projected Annual Precipitations under Low and High Scenarios (2006 to 2100) ...... 127

Figure V-16: Projected Monthly Precipitation under Low Scenario (A) ...... 128

Figure VIII-1: Flow Chart of Grievance Redress Mechanism ...... 149

EXECUTIVE SUMMARY

A. Introduction

1 This is the initial environmental examination (IEE) for the proposed Additional Financing of the Regional Improvement of Border Services Project (“the Project”) in accordance with Asian Development Bank’s (ADB’s) Safeguard Policy Statement (SPS, 2009)..

2 The Asian Development Bank (ADB) is processing additional financing of $27 million, financed from the Asian Development Bank’s Concessional Ordinary Capital (COL) to scale up the Regional Improvements of Border Services (RIBS) project with two additional BCPs—namely, Bichigt bordering the People’s Republic of China (PRC) in the East, and Borshoo bordering the Russian Federation (Russia) in the West. The infrastructure, facilities and equipment at both BCPs are currently outdated and inadequate to maintain border clearance and immigration protection standards; and lack the capacity to support existing and anticipated growth in border trade.

B. Project Description

3 The two BCPs are expected to become increasingly functional gateways for Mongolia’s bilateral trade with the PRC and Russia. Current statistics show the growing usage of these BCPs despite their limited capacity. In Bichigt, domestic passenger flows have increased by approximately 80% (total) between 2015 and 2017, while trade turnover has more than tripled during the same period and represented $220 million in value (86% of which were exports). Export of goods, by value, at this BCP was six times higher in the first four months of 2018 as compared to the annual turnover in 2015. In Borshoo, trade turnover represented $22.5 million in value in 2017 (of which the majority consisted of exports of $22.27 million in value).

4 The Bichigt BCP is Mongolia’s closest gateway to a seaport in the PRC (Jinzhou Port), which is supported by extensive road and rail networks to the PRC’s northeast. Jinzhou Port is one of the few ports in the PRC that is rail-served and has good capacity to handle transit trade from Mongolia. Because of the poor shape of the facilities in Bichigt, the BCP is currently under- utilized (despite high throughput capacity, modern customs facilities and connectivity infrastructure on the PRC side of the border, at Zuun Khatavch).

5 The Borshoo BCP, in the western region, is anticipated to grow in strategic importance in the wake of its planned upgrading to international status in 2019. This is in line with a bilateral agreement of Mongolia and Russia, signed in 2007, which has gained renewed commitment following the Foreign Minister of Mongolia’s visit to Moscow in May 2018.

6 The project impact will be increased trade and competitiveness due to more efficient and predictable cross-border trade; and the project outcome will be reduced cost and time of compliance with trade procedures. The proposed additional financing will yield the following two outputs: (i) upgrading facilities and equipment at Bichigt and Borshoo BCPs (ii) provide capacity development support, including technical trainings to relevant border agencies in Mongolia. Sensitization on gender and environmental issues will be a cross-cutting element in both the capacity development and training support.

C. Potential Environmental Impacts and Mitigation Measures

7 The proposed project sites at the Bichigt and Borshoo BCPs have the following characteristics:

• There are no surface waterbodies (lakes or rivers) in the vicinity of the project sites at both Bichigt and Borshoo BCPs;

• There are no endangered, endemic or migratory species in the vicinity of the BCPs; • There are no other human settlements other than the port staff in the project areas; • There is no timber trade either in the Borshoo BCP or Bichigt BCP. Timber is traded through railroad via the Sukhbaatar BCP and Zamyn-Uud BCP only; • Wildlife around the BCPs is minimal and there is also no evidence of human trafficking • There are no tombs in the project areas at both Borshoo and Bichigt; • The gazelle habitat is located in a protected area that is far (about 200 km) away from the Bichigt BCP, and will not be affected by the project; and • The critical habitat area of the animals, such as the gazelle habitat, is about 250 to 300 km away from the BCP project area. • At the Bichigt BCP, the major exported goods include lignite (coal), petroleum, mineral products (iron ore, feldspar), beef, and horse/donkey meat, while the major imported goods include cement, barium sulphate, clay, sand, machinery/electrical, chemicals, metals, rice, stone/glass, trailers and semi-trailers, tubes and pipes, and vehicles for good transport.

• The major imported goods include cement; chemicals; machinery / electrical; metals; rice; stone / glass; trailers and semi-trailers; tubes and pipes; and vehicles for goods transport. • At the Borshoo BCP, the major exported goods include beef; food products; goat/sheep meat; and horse/donkey meat. The major imported goods include animal products; food; refined bituminous petrol; stone /glass; textiles; vegetable products; and wood.

Construction Phase

8 The potential environmental impacts during construction are mainly associated with fugitive dust, construction noise, soil erosion, runoff, vibration and solid waste. The results of the IEE indicate that the environmental impacts during the construction phase are localized and short- term in nature.

9 Anticipated environmental impacts during the construction phase of the project facilities include short period of increased noise and dust pollution during a few concentrated activities, such as earth moving and soil excavation, land leveling and site preparation, access road construction, concrete mixing and powering. Other potential impacts during the construction include earthwork related soil erosion, surface water contamination, solid waste and potential health and safety risks to workers and communities.

10 The construction is predicted not to have significant noise impacts. Runoff and wastewaters generated from construction sites would not be directly discharged into sensitive receivers. Adequate on-site sanitation facilities and sedimentation tanks will be setup for wastewater treatment prior to discharge. Solid wastes mainly include broken bricks, concrete, mortar, pile heads, and packaging materials. Proper mitigation measures have been proposed such as recycling the solid waste and collection of unusable wastes for landfilling disposal to reduce the impact of solid wastes.

11 No environmentally sensitive or culturally significant areas will be disturbed during the construction activities. The construction-related impacts are expected to be temporary and will be addressed by stringent site management and procedural provisions specified in the environment management plan (EMP). Environmental protection clauses will be included in the contracts for

12 civil works to ensure that contractors are aware of and committed to implementing environmental impact mitigation requirements associated with the works.

12 A series of mitigation measures have been proposed, such as low-dust construction technologies will be adopted during construction and operation, wet operation for chiseling and drilling will be applied, and the application of pre-splitting blasting, smooth blasting, buffer blasting and deep-hole short-delay tight-face blasting for blasting operation will be prioritized. With good implementation of the mitigation measures, no significant environmental impacts are anticipated from the Project during the construction phase.

Operational Phase

13 The potential environmental impacts resulting from of the operation of the project facilities include the generation of noise, wastewaters, and solid wastes. The noise level from the project facilities was predicted to meet the national noise limit standards. Provision of regular maintenance of vehicles and transport equipment is necessary to minimize the noise generated during operation.

14 There is currently one well for drinking water supply at each of the Borshoo and Bichigt BCPs, respectively. To cope with the potential increase in water demand, the GOM has requested the ADB project team to allocate a budget of 400 Million MNT (equivalent to USD 150,000) to conduct hydrogeological survey and construct one additional well for each of the Borshoo and Bichigt BCPs, respectively, as a backup for providing additional drinking water supply, when needed.

15 At both Bichigt and Borshoo BCPs, additional equipment will be installed to improve water quality from the wells, when needed a budget of USD 500,000/per BCP has been allocated in the project cost to install water supply and sanitary pipes to improve sanitation and toilet conditions.

16 The generated wastes will include food wastes from food establishments, sanitary papers, newspapers and a variety of disposable food containers from trucks and common passenger areas. The solid waste is collected and disposed of at a designated landfill acceptable to the local government. Considering the factors of small quantity of solid waste generated, no other human settlements in the project area, and the garbage is currently disposed of at a designated site, the impact of the project on solid waste is minimal. In addition, mitigation measures to minimize the impacts of solid wastes will include the introduction of waste collection programs, construction of waste collection and storage facilities to regularly collect the solid waste for disposal at the designated waste disposal sites.

17 Upon completion of the construction works, the project areas will be mostly greened with trees and grasses, and protected with road works such as geogrid, masonry stone retaining walls and concrete drainage ditches. Therefore, soil erosion due to operation of the facilities is minimal. Additional parking stalls will also be developed at Bichigt to allow trucks to park at designated parking locations to improve road safety.

18 For animal and plant originated products, as well as food products, Mongolian inspection and quality control standards are already applied to goods imported and exported. The project will further improve the quality standards through trainings and upgraded equipment and facilities. The project will also improve the cargo handling practice via provision of X ray machines and sealing of the truck at the sites to reduce the dust generation and avoid repeated transshipment. Upgrading of the cargo handling practices and inspection procedures will also help reduce the

noise from the cargo unloading and reloading. 1

19 Mitigation measures to reduce all the identified impacts have been developed and included in the environmental management plan (EMP). The EMP sets out the procedures and plans to carry out mitigation measures and monitoring procedures during sequential stages of the project from pre-construction stage, construction stage to operation stage. The overall operational impacts are expected to be minimal by appropriate design and implementation of the mitigation measures.

1 ADB. 2015. MON (46315-001) Regional upgrades of sanitary and phytosanitary measures for trade. Manila. This additional $15 million project will upgrade sanitary and phytosanitary (SPS) measures for trade by modernizing laboratories and inspections facilities, strengthening inspection management systems, and aligning SPS with international standards to benefit Mongolia’s livestock and agri-food exports.

Training

20 A training program (Table EMP-7) has been developed to address both the immediate and long term training needs. In addition to the training on construction, infrastructures management, road safety, emergency preparedness and response planning, additional trainings on legal trading, human trafficking and environmental best practices in international trading of goods, animals, foods, etc. will also be provided to border agencies, BCP staff, and facility operators. The trainings in this aspect will further strengthen the capacity of border officials on topics; including the identification of illegal items form legal items; use of X- Ray machines for inspection; ensure that the selection process of suppliers (from Russia or the PRC) accounts for adherence to international environmental standards for production and environmental externalities related to food and goods production; introduction of risk management approach for inspection of the production site; documentary and physical inspections, laboratory testing. A budget of $300,000 has been reserved for training and capacity development activities.

D. Climate Change Risk and Vulnerability Assessment

21 A climate risk and vulnerability assessment (CRVA) report is prepared for the two Bichigt and Borshoo BCP sites, respectively. The impact of climate change is projected to result in an increase in temperature in the project areas. The increased temperature may also result in intensified heat waves in summer times that may damage the road surfaces. The extreme heat weather conditions and high temperatures may have significant effects on pertinent project components. Therefore, future increases in summer temperatures need to be considered in designing the performance of the infrastructural surfacing materials in the project. The road surfaces are vulnerable to the extremes of temperature.

22 The increased intensity of extreme heat is a major climate risk to the project subprojects at both Bichigt and Borshoo. To avoid costly maintenance and/or business disruption in the future, the Project should additionally take into consideration of extreme heat and storm risks induced by the impact of climate change in designing engineering works of the Project at the stage of detailed engineering design.

23 Measures for adaptation to climate change should also be developed in project construction and operation. To be effective, an adaptation strategy must consider the climate risk as a normal part of decision-making, allowing governments, businesses and individuals to reflect their risk preferences just as they would in other sectors of risk management and strategic planning. To reach a point at which the climate risk can be assessed and adaptation strategies can realistically be developed will require enormous activities and efforts across multiple fields and sectors. Better information on regional climate change characteristics and potential consequences is a key requirement.

E. Environmental Management Plan

24 A comprehensive environmental management plan (EMP) was developed for the project, and is included in the IEE report (Appendix 1) to ensure (i) implementation of identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts; (ii) implementation of monitoring and reporting; and (iii) project compliance with GOM’s relevant environmental laws, standards, and regulations and ADB’s SPS. Organizational responsibilities and budgets are clearly identified for execution, monitoring, and reporting

25 The EMP defines appropriate mitigation measures to minimize the anticipated environmental impacts, and defines institutional responsibilities and mechanisms to monitor and ensure the compliance with GOM’s environmental laws, standards and regulations, and the ADB SPS requirements. The EMP specifies (i) objectives; (ii) major environmental impacts and mitigation measures; (iii) implementing organization and responsibilities; (iv) inspection, 15 monitoring, and reporting arrangements; (v) training and institutional strengthening; (v) a feedback and adjustment mechanism; and (vi) the grievance redress mechanism. The EMP will be reviewed and updated after detailed design, as needed.

26 The EMP consists of two major components: one for implementing mitigation measures and the other for carrying out the environmental monitoring programs. It covers all phases of project implementation from preparation, construction, commissioning to operation, and aims to ensure the monitoring of environmental impacts and implementation of environmental mitigation measures. For each environmental impact identified, appropriate mitigation measures are proposed in the EMP. Organizational responsibilities and budgets were identified in the EMP for execution, monitoring, and reporting.

27 The EMP will be included as a separate annex in all bidding and contractual documents. The contractors will be made aware (through PIU) of their obligations to implement the EMP and to budget the EMP implementation costs in their bidding proposals. The PIU will assume overall responsibility for implementing, supervising, monitoring and reporting of the EMP. The implementation of the EMP will be supported through training and ongoing guidance from project implementation consultants. Training will be provided to improve the institutional capacities of the PIU and contractors with respect to environmental protection, and to help ensure that the environmental impacts during the construction and operational phases of the project are minimized.

F. Information Disclosure and Public Consultation

28 Information disclosure and meaningful public consultation for the project components were conducted through face to face meeting with local inhabitants at four locations in the Bichigt BCP on May 13, 2019, and at Sagil County, and Ulaangom center in the Borshoo BCP on 19-22 May, 2019.

29 A total of 45 local residents, including herders, shop keepers, kindergarten workers, local government officials were involved to the public consultation at the Borshoo BCP. Among the residents consulted, 33 persons are from Khandgait bagh of Davst County (seasonal inhabitants within 3-20 km from the Borshoo BCP); Borshoo Bagh of Sagil County (living within radius of 20- km away from the Borshoo BCP); Sagil County Center (50 km away from the project site) and Provincial and County officials at Ulaangom. At the Bichig BCP, public consultations were held with 12 residents living nearby or directly in the Bichig BCP area.

30 The key findings of the public consultation include the following:

• The current solid waste handling practices (no designated solid waste disposal site) should be changed; • Drinking water quality (at both the project locations in Bichigt and Boshoo) should be improved; • There are no adequate toilets available for travelers and service workers at the BCPs; • Services to the staff and residents at the two BCPs should be improved (such as connection to wastewater pipelines, central heating and drinking and hot water); • Treatment of sewage wastewaters at the BCPs should be improved and optimized to ensure its sustainability; • Use of greywater for greening and tree watering should be enhanced; • Possibility of connecting electricity of local residents should be considered if the BCP facilities are connected to centralized electricity grid network (Borshoo Bagh); and

• Preventive measures to avoid traffic accidents at Borshoo Bagh (due to increased traffic on paved road that goes through the bagh center).

G. Grievance Redress Mechanism

31 A project-level grievance redress mechanism (GRM) will be established in compliance with ADB’s SPS (2009) requirement to receive and facilitate resolution of complaints about the project during the construction and operation phases. The GRM includes procedures for receiving grievances, documenting key information, and evaluating and responding to the complainants in a reasonable time to address environmental, health, and safety concerns associated with the project construction and operation. The proposed project-level GRM, including a time-bound flow chart of procedures, is described in the project EMP.

32 The GRM must be accessible to all members of the community, including women, youth, and poverty-stricken residents. Multiple points of entry, including face-to-face meetings, written complaints, telephone calls, or e-mails, shall be available to the public. Confidentiality and privacy for complainants shall be honored in cases that personal information needs to be protected. The GRM had been discussed during public consultations and feedbacks from stakeholders were obtained.

H. Project Risks and Key Assurances

33 All ADB-funded projects are required to comply with environmental safeguards, which focus on compliance with national laws and the EMP for a specific project.

34 The project implementing agency has been implementing an ongoing ADB loan project with ADB some previous experience in ADB safeguard procedures. Some potential risks related to the environment safeguard compliance in this project include (i) weak institutional capacity of the PIU and implementing agencies in their environmental management; (ii) potential delay in the project implementation; (iii) delayed recruitment of EMP implementation monitors; and (iv) lack of O&M budget for operating environmental management facilities.

35 The risks will be mitigated by (i) providing training in sound environmental management under the project; (ii) appointing a full-time environmental officer in the PIU; (iii) appointing qualified loan environment implementation consultants and an experienced external environment monitor; (iv) following appropriate project implementation monitoring and mitigation arrangements; (v) ensuring adequate O&M budget by the IA; (vi) conducting regular project reviews by ADB missions; and (vii) project assurances covenanted in the loan and project agreement.

I. Overall Conclusion

36 The project IEE has: (i) identified potential negative environment impacts and established mitigation measures; (ii) assessed public support from the project beneficiaries and affected people; (iii) established a project GRM; and (iv) prepared a project EMP, including environmental management and supervision structure, environmental mitigation and monitoring plans, and capacity building and training.

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

I. INTRODUCTION

38 The Asian Development Bank (ADB) is processing additional financing of $27 million, financed from the Asian Development Bank’s Concessional Ordinary Capital (COL) to scale up the Regional Improvements of Border Services (RIBS) project with two additional BCPs—namely, Bichigt bordering the People’s Republic of China (PRC) in the East, and Borshoo bordering the Russian Federation (Russia) in the West. The infrastructure, facilities and equipment at both BCPs is currently outdated and inadequate to maintain border clearance and immigration protection standards; and lack the capacity to support existing and anticipated growth in border trade.

39 During the 2018 Country Programming Mis///sion (CPM), the Government of Mongolia (the government) requested for additional financing of $27 million, financed from the Asian Development Bank’s Concessional Ordinary Capital (COL) to scale up the Regional Improvements of Border Services (RIBS) project with two additional BCPs—namely, Bichigt bordering the People’s Republic of China (PRC) in the East, and Borshoo bordering the Russian Federation (Russia) in the West. The infrastructure, facilities and equipment at both BCPs is currently outdated and inadequate to maintain border clearance and immigration protection standards; and lack the capacity to support existing and anticipated growth in border trade.

40 The two BCPs are expected to become increasingly functional gateways for Mongolia’s bilateral trade with the PRC and Russia. Current statistics show the growing usage of these BCPs despite their limited capacity. In Bichigt, domestic passenger flows have increased by approximately 80% (total) between 2015 and 2017, while trade turnover has more than tripled during the same period and represented $220 million in value (86% of which were exports). Export of goods, by value, at this BCP was six times higher in the first four months of 2018 as compared to the annual turnover in 2015. In Borshoo, trade turnover represented $22.5 million in value in 2017 (of which the majority consisted of exports of $22.27 million in value).

41 The capacity of the Bichigt BCP will be extended with new facilities to be built in the Additional Financing project. The number of staff in the customs office at the BCP will be increased from the current 24 staff by 30%. In addition to the customs office, there are 10 additional state organizations with about 70 staff stationed in the Bichigt BCP. The number of staff of the state organizations are also expected to increase after the new BCP facilities are constructed. Statistics show that in 2018 there were 110,410 travelers and 68,016 vehicles of various types passing through the Bichigt BCP. It is expected that these numbers will increase as economic activities in the border areas expand with the PRC.

42 Borshoo BCP is located at the south upper edge of Khandgait River basin in between two hills on the east and west. Current border service buildings are located at the elevation of 1241 m above sea level and the elevation gradually increases to the south by 40 meters in two kilometer distance, where south border of new BCP area will be planned. It is covered with short grasses, which have been used as pasture historically. Khandgait River is located in about 4.5 km to the deep into BCP of Russian Federation and the river flows into Mongolian territory at about 10 km to the east of Borshoo BCP.

43 The scope of the proposed ADB AF interventions for the Bichigt and Borshoo BCPs include civil works and equipment installations for:

• Buildings and structures • Heating Supply: • Power source and lines: • Water supply, waste water treatment • Communication lines: • Roads for the border control zone 18

• Office equipment:

44 The project impact will be increased trade and competitiveness due to more efficient and predictable cross-border trade; and the project outcome will be reduced cost and time of compliance with trade procedures. The proposed additional financing will yield the following two outputs: (i) upgrading facilities and equipment at Bichigt and Borshoo BCPs (ii) provide capacity development support, including technical trainings to relevant border agencies in Mongolia. Sensitization on gender and environmental issues will be a cross-cutting element in both the capacity development and training support.

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

46 This IEE report was prepared in accordance with both GOM’s national environmental laws and regulations, and applicable international requirements (i.e., ADB policies and procedures).

47 The relevant GOM national laws and regulations, which the IEE preparation was in compliance with, include the GOM Law on Environmental Impact Assessment. The major applicable ADB policies, regulations, requirements, and procedures for environmental management and EIA of the Project are SPS 2009 and the Environmental Safeguards – A Good Practice Sourcebook (2012), which jointly provide the basis for this IEE. The SPS promotes good international practice as reflected in internationally recognized standards.

A. Domestic Legislative Framework of Mongolia for Environment Impact Assessment

48 Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation and strategies in place to manage protected areas such as national parks, to satisfy its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia comprises the Constitution, international treaties, policies, and environment and resource protection laws2

49 The overarching policy on environmental resources and their protection is set out in the 1992 Constitution of Mongolia. The Constitution provided the impetus for the Government of Mongolia (GoM) to enact a series of environmental laws, regulations and standards. Among these, the Law on Environmental Protection and Law on Environmental Impact Assessment provide the core framework and general procedure and guidelines on environmental assessment. Relevant environmental laws in Mongolia are shown in Table II-1

2 UNDP. 2008. Philips Tortell, Ts. Adiyasuren and N. Erdenesaikhan, Institutional Structures for Environmental Management in Mongolia. 20

Table II-1: Relevant environmental laws in Mongolia (1)

Law Year3 Purpose

Law on 1988 Regulates relations concerning the use and protection of subsoil in the Subsoil interests of present and future generations. Law on 1994 Regulates relations concerning the use and taking of areas under Special (2004) special protection (natural conservation parks, natural complex areas, Protected natural reserves and national monument areas). Areas Law on Land 1994 Regulates the possession and use of land by a citizen, entity and (2012) organization, and other related issues. Articles 42/43 provide guide on removing possessed land and granting of compensation relative to removing. Law on 1995 Regulates “relations between the state, citizens, economic entities and Environment (2012) organizations in order to guarantee the human right to live in a healthy al Protection and safe environment, have ecologically balanced social and economic development, and for the protection of the environment for present and future generations, the proper use of natural resources and restoration of available resources”. Article 7 requires the conduct of natural resource assessment and environmental impact assessment to preserve the natural state of the environment, and Article 10, the conduct of environmental monitoring on the state and changes of the environment. Law on Air 2012 Regulates the protection of the atmosphere to provide environmental balance and for the sake of present and future generations. Allows Government to set standard limits to emissions from all sources. Provides for the regular monitoring of air pollution, hazardous impacts and changes in small air components such as ozone and hydrogen.

Law on 2012 Regulates relations for protection, possession, sustainable use and Forests reproduction of the forest in Mongolia. Defines prohibited activities in protected forest zones and their regimes and conditions when undertaking allowed activities in the utilization zone forests and their regimes. Law on 1995 Regulates the protection, proper use, and restoration of natural plants Natural other than forest and cultivated plants. Plants Law on 2012 Regulates relations pertaining to the effective use, protection and Water restoration of water resources. Specifies regular monitoring of the levels of water resources, quality and pollution. Provides safeguards against water pollution.

3 Latest amended year

Table II-2: Relevant environmental laws in Mongolia (2)

Law on Water 2012 Introduces fees payable for pollution of water resources Pollution (2019) Fees Law on Plant 1996 Regulates the inhibition, protection, inspection of pasturelands and Protection (2007) plants.

Law on 1997 Regulates the determination of special protected area buffer zones and Buffer Zones the activities. Article 9 requires the conduct of detailed environmental assessment for the establishment of water reservoirs or construction of floodwalls or dams in buffer zones for special protected areas.

Law on 1998 Regulates “relations concerning protection of the environment, Environment (2012) prevention of ecological imbalance, the use of natural resources, al Impact assessment of the environmental impact and decision-making on the Assessment start of a project”. It sets out the general requirements and procedures for project screening and conduct of environmental assessment and review. Law on 1998 Governs relationships concerning maintenance of sanitary conditions, Hygiene defining the general requirements for sanitation in order to ensure the right of an individual to healthy and safe working and living conditions, ensuring normal sanitary conditions, and defining the rights and duties of individuals, economic entities and organizations with this respect.

Law on 2001 Regulates the collection, registration, research, classification, Protection evaluation, preservation, protection, promotion, restoration, possession of Cultural and usage of cultural heritage including tangible and intangible heritage. Heritage

Civil Code of 2002 Article 502 stipulates the liability for damage to environment. Mongolia

Law on 2012 Governs the collection, transportation, storage, and depositing in Waste (2017) landfills of household and industrial waste, and re-using waste as a source of raw materials to eliminate hazardous impacts of household and industrial waste on public health and the environment. Undertakings that generate significant amount of wastes must dispose of the wastes in designated landfills that meet prescribed standards.

Law on 2003 Regulates matters relating to the principles and full powers of disaster Disaster (2012) protection organizations and agencies, their organization and activities, Protection as well as the rights and duties of the State, local authorities, enterprises, entities and individuals in relation to disaster protection.

Law on soil 2012 Regulates matters related protection of soil deterioration, reclamation, protection and prevention from desertification and prevention from desertificatio n 22

B. Applicable Domestic and ADB Polices

50 All projects funded by ADB must comply with the ADB’s SPS 2009. The purpose of the SPS is to establish an environmental review process to ensure that projects funded under ADB loans are environmentally sound and to be operated in line with applicable regulatory requirements so that significant environment, health, or safety hazards are not likely to occur. The SPS promotes a good international practice as reflected in internationally recognized standards such as the World Bank (WB) Group’s Environmental, Health and Safety (EHS) Guidelines4. The principles and standards of the EHS Guidelines are adopted by the SPS. Some of the relevant EHS sector guidelines for this project cover general guidelines (including both occupational and community health and safety) and industry sector guideline on waste management facilities. The water, air and noise quality standards in the EHS guidelines provide a reference against project impacts.

51 The ADB SPS has a number of requirements for environmental assessment, including: (i) project grievance redress mechanism (GRM); (ii) definition of the project area of influence; (iii) assessment of indirect, induced and cumulative impacts; (iv) due diligence of associated facilities; (v) protection of physical and cultural resources; (vi) climate change mitigation and adaptation; (vii) occupational and community health and safety; (viii) impact on livelihoods through environmental media; (ix) biodiversity conservation; (x) environmental audit of existing facilities; and (xi) a project-specific EMP. This IEE report prepared for the project complies with these SPS requirements.

52 ADB categorizes proposed projects based on the significance of potential project impacts and risks. A project’s category is determined by the category of its most environmentally sensitive component, including the direct, indirect, cumulative, and induced impacts in the project’s area of influence. Each proposed project is scrutinized per its type, location, scale, sensitivity and magnitude of potential environmental impact. A project is assigned by ADB to one of the following categories:

(i) Category A. A proposed project is classified as category A when it is likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented. The impacts may affect an area larger than the sites or facilities subject to physical works. An environmental impact assessment, including an EMP, is required.

(ii) Category B. A proposed project is classified as category B if its potential adverse environmental impacts are less adverse and fewer in number than those of the category A projects. These impacts are site-specific, few if any of them are irreversible, and under most circumstances mitigation measures can be readily put forward than that for the category A projects. An initial environmental examination, including an EMP, is required.

(iii) Category C. A proposed project is classified as category C when it is likely to have minimal or no adverse environmental impacts. No environmental impact assessment or initial environmental examination is required although environmental implications need to be reviewed.

4 World Bank Group Environmental, Health, and Safety Guidelines, 30 April 2007, Washington, USA. See: http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-At- IFC/Policies-Standards/EHS-Guidelines#IndustryEHS

(iv) Category FI. A proposed project is classified as category FI if it involves investment of the ADB funds to or through a financial intermediary.

Environmental Policy of Mongolia

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

54 The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem in the ecological transition zone in Central Asia, where the great Siberian taiga, the Central Asian steppe, the high Altai Mountains, and the Gobi Desert converge.

55 The main policy documents include the National Environmental Action Plan of 1996, updated in 2000; the State Policy for Ecology of 1997; the National Plan of Action to Combat Desertification, updated in 2010; the Biodiversity Conservation Action Plan of 1996 (now the Rare Animals Protection Plan of 2012); and the National Plan of Action for Protected Areas, all developed under the Ministry of Environment and Tourism (MET) auspices, as well as the Mongolian Action Programme for the 21st Century, developed by the National Council for Sustainable Development in 1996.

56 The National Action Plan for Climate Change was added in 2000 and updated in 2011. Several program documents, e.g., the National Water Program (updated in 2011), National Forestry Program; Program of Protection of Air; Sustainable Development Education Program (2009-2019); Special Protected Areas; and Protection of Ozone Layer; were also completed during this period. In addition, other guidance documents with important environmental repercussions were developed under the auspices of other ministries and these include the Roads Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan. Interrelated documents, such as the annual Human Development Reports, have increasingly incorporated environmental aspects.

Requirement for Mongolian Domestic EIA

57 In accordance with the EIA laws and associated regulations of Mongolia, at the detailed design stage of construction facilities, the PIU or contractor should provide materials (including the final feasibility study report, environmental baseline report of the project site, detailed design documents) to the Ministry of Environment and Tourism (MET) to screen and issue a General Environmental Impact Assessment (GEIA) conclusion. The GEIA conclusion will lead to one of the following three actions based on MET’s review of the project documents:

• The project is allowed to proceed with construction, provided that certain conditions set in the GEIA conclusion are followed; or

• The project is not permitted to be implemented due to its irreversible negative impacts to the surrounding environment and/or community health; or

• The project is required to undergo a detailed EIA (DEIA) for identification of potential impacts, avoidance of negative impacts with mitigation measures, and elaboration of an EMP. The DEIA should be conducted by a government licensed EIA company. Upon completion, the DEIA will be reviewed by the EIA committee of the MET for approval.

ADB Safeguard Policy

58 The ADB safeguard policy statement (ADB 2009) along with the recent Good Practice Safeguard Sourcebook (2012) clarify the rationale, scope and content of an environmental assessment and supported by the comprehensive World Bank Group/IFC Environmental Health and Safety (EHS) Guidelines for development projects which provide general and industry - specific Good International Industry Practice (GIIP) guidelines. Projects are initially screened to determine the level of assessment that is required according to the following three environmental categories (A, B, or C).

59 Category A is assigned to projects that normally cause significant or major environmental impacts that are irreversible, diverse or unprecedented such as hydroelectric dams (an Environmental Impact Assessment is required). Category B projects have potential adverse impacts that are less adverse than those of category A, are site-specific, largely reversible, and for which mitigation measures can be designed more readily than for category A projects (an Initial Environmental Examination is required). Category C projects are likely to have minimal or no negative environmental impacts. An environmental assessment for Category C projects is not required but environmental implications need to be reviewed. the RIBS project is category B for environment.

60 The SPS (2009) requires a stakeholder consultation strategy be developed that embodies the principles of meaningful engagement, transparency, participation, and inclusiveness to ensure that affected and marginalized groups such as women and the poor were given equal opportunities to participate in the design of the project.

World Bank Guidelines

61 ADB requires that each environmental assessment takes into consideration the International Finance Corporation (IFC) / World Bank Group Environmental, Health and Safety (EHS) Guidelines.5 The structure of the guidelines is shown in Figure II-1: .

62 More stringent requirements among the EHS and national standards would be applied to the project

Source: TA consultant. Figure II-1: IFC Environment Health and Safety Guidelines

5 World Bank EHS Guidelines World Bank Group, 2007. Environmental, Health, and Safety General Guidelines. Washington, DC available on https://www.ifc.org.

C. International Agreements

63 Mongolia is a party to the international environmental conventions and protocols. It has passed state laws that implement the terms of these international conventions, with provision that: “If an international treaty to which Mongolia is a party is inconsistent with this law then the provisions of the international treaty shall prevail”. Relevant international conventions of Mongolia are shown in Table II-3: .

Table II-3: Relevant international conventions of Mongolia

International Convention / Protocol Year6 World Heritage Convention 1990 (a) United Nations Framework Convention on Climate Change 1993 (r) Kyoto Protocol 1999 (a) Convention on Biological Diversity 1993 (r) United Nations Convention to Combat Desertification 1996 (r) Vienna Convention for the Protection of the Ozone Layer 1996 (a) Montreal Protocol on Substances That Deplete the Ozone Layer 1996 (a) Washington Convention on International Trade in Endangered Species of Wild Fauna 1996 (a) and Flora (CITES) Basel Convention on the Control of Transboundary Movements of the Hazardous 1997 (a) Wastes and Their Disposal Ramsar Convention on Wetlands of International Importance 1998 (e) Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous 2001 (r) Chemicals and Pesticides in International Trade Stockholm Convention on Persistent Organic Pollutants 2004 (r) Minamata Convention on Mercury 2015 (r)

D. Domestic Assessment Standards for Project Construction and Operation

64 Key national standards of Mongolia that will be complied during Project construction and operation periods are listed in Table II-4. It gives relevant key environmental quality standards for this IEE and local GEIA and DEIA to be complied during the project construction and operation phases.

Table II-4: Relevant Mongolian National Standards to be applied for Project Construction and Operation

Environmental Media National Standard in Force Ambient air MNS 4585: 2007 Noise MNS 4584:2007 Soil MNS 5850:2008 Drinking water (groundwater) MNS 900:2016 Effluent wastewater MNS 4943: 2011 Ambient surface water MNS 4586:1998 Groundwater MNS 900: 2005

6 (a) accession;(e) entry into force; (r) ratification.

65 For wastewater reuse, the Mongolian effluent standards will be met (MNS 4943: 2011). In addition, World Health Organization (WHO) Guidelines7 for the safe use of wastewater will be met (for more details, comparison of Mongolian and international Standards is included in the following subchapter E). These guidelines specify health targets of ≤1 helminth egg per liter (l) for agricultural use. The guidelines state that ‘this level of health protection could be met by treatment of wastewater’. Stabilization ponds, because of the retention time, can be used as a surrogate to assure compliance with the ≤ 1 egg/l, therefore the chosen technology for the project will meet WHO standards because of the use of stabilization ponds, primary and secondary treatment.

66 In addition to the listed Mongolia National Standards in Table II-4, Mongolia also has an occupational health and safety standard (MNS 5002:2000). Article 16 of the National Constitution of Mongolia states that every employee has the right to ‘suitable conditions of work’. The Government adopted a National Program for occupational Safety and Health Improvement in 2001 and national standards are also adopted such as the National Standard on occupational Health and Safety MNS 5002:2000 which support the Law on Labor Safety and Hygiene (2008) which sets out policies, rules and regulations on occupational safety and health, and the most common requirements for workplace safety.

67 Table II-5 lists the relevant national environmental standards of Mongolia.

Table II-5: Mongolian National Environmental Standard and Guidelines

Code Name of Standards and Guidelines

MNS 6298:2011 Boiler Emissions Guidelines: The Permissible Level of Air Pollutants from Power and Heating Plants.

MNS 5919:2008 The Permissible Level of Air Pollutants from Operations of Water Heating and Steam Generating Facilities at Power and Heating Plants

MNS 17.5.1.18:1983 Environmental Protection: Rehabilitation of Eroded Land/Category of Eroded Land.

MNS 17.5.1.19:1992 Environmental Protection: The General Requirements for Rehabilitation of Eroded Lands

MNS 3473:1983 Environmental Protection. Land, Land Use and Terms and Definitions

MNS 17.5.13:1980 Environmental Protection: Rehabilitation of Eroded Land, Terms and Definitions

MNS 17.0.0.06:1979 The System of Standards for Environmental Protection and Basic Rules

MNS 5914:2008 Environmental Protection: Rehabilitation of Eroded Land, Terms and Definitions

MNS 5918:2008 The General Technical Requirements for Vegetation of Eroded Land

MNS 17.2.0.07:1979 Air Pollutants and Category

MNS 17.2.1.17:1980 The Terms and Definitions of Industrial Pollutants to Atmosphere

MNS 4585:2016 Air Quality, The General Technical Requirements

MNS 3383:1982 The Terms and Definitions of Pollutant Sources for Atmosphere

MNS 5885:2008 The Permissible Level of Pollutant Substance to Air/General and Technical Requirements

7 World Health Organisation Guidelines for the safe use of wastewater, excreta and greywater; Volume Wastewaterr use in agriculture 27

Code Name of Standards and Guidelines

MNS 3113:1981 The Technical Requirements for Determination of Air Emissions

MNS 17.2.3.16:1988 Guidelines for Monitoring of Air Quality in Urban Settlements

MNS 6063:2010 Air Quality: Permissible Level of Pollutants

MNS ISO 14064- Greenhouse Gas- Second Chapter: Indicative Guidelines for Reporting and 2:2015 Monitoring on Changes and Adsorption of Greenhouse Emissions

MNS 3384:1982 The General and Technical Requirements for Sampling of Air Quality Test

MNS 17.1.1.10:1979 The Terms and Definitions for Water and Water Use

MNS 4047:1988 Guidelines for Monitoring of Surface Water Quality

MNS 3342:1982 The General Requirements for Protection of Underground Water from Pollution

MNS 6148:2010 Water Quality: The Permissible Level of Pollutants for Underground Water

MNS ISO 5667 13 Water Quality-Sampling: Chapter 13: Sampling method for sludge from 2000 wastewater treatment plants

MNS 0899:1992 Sanitary Requirements for Sources of Water Supply to Urban and Household Purposes

MNS 0900:2005 Sanitary Requirements and Safety Assessment for Drinking

MNS ISO 5667:1:2002 Water Quality-Sampling: Chapter 1: Sampling method for drinking water

MNS ISO 5667-3:1999 Water Quality-Sampling: Chapter 3: Guidelines for handling of water samples

MNS ISO 5667:6:2001 Water Quality-Sampling: Chapter 6: Sampling method for rivers and streams

MNS 4943:2015 Water Quality: The General Requirements for Wastewater

MNS BS 8525-1:2015 The General Requirements for Grey Water MNS ISO 5667- 10:2001 Water Quality-Sampling: Chapter 10: Instructions for Sampling from Wastewater

MNS ISO 5667-7:2002 Water Quality-Sampling: Chapter 7: Instructions for Sampling from Water and Steam at Heat only Boilers (HOB)

MNS 6561:2015 Water Quality. General Requirements for Wastewater discharged to Sewerage Network

MNS 5666:2006 Water Biological Test: Determination Method of Dynamic Sludge ate Wastewater Treatment Plant

MNS 4288:1995 General Requirements for location, treatment process and levels of Wastewater Treatment Plant

MNS 3297:1991 Soil: Soil Quality Indicators and Norms in Urban Settlements

MNS 5850:2008 Soil Quality: The Permissible Levels of Soil Pollutants

MNS 3298:1991 Soil Quality: The General Requirements for Soil Sampling

MNS 3985:1987 Soil. Types of Sanitary Indicators of Soil

MNS 2305:1994 Soil. Instructions to Sampling, Packing and Storing of Soil Samples

MNS 4968:2000 Work Safety: General Requirements for Work Place

MNS 4994:2000 Work Safety: Vibrations Norm and General Requirements for Safe Operations

Code Name of Standards and Guidelines

MNS 5147:2002 Electric and Static Conditions. Permissible Acid Level at Workplace

MNS 5150:2002 General Requirements for Safety Procedures with Electric Appliances

MNS 5146:2002 Work Safety: Electric Works; Protection and Wiring.

MNS 5145:2002 Electric Safety: The Maximum level of voltage and electric current

MNS 5002:2000 The General Requirements for Work Safety: The noise norms

MNS 0012.4.005:1985 The Labor Protection Equipment. Tools and Types

MNS 4244:1994 The General Requirements for Fire Safety

MNS 5390:2004 Work Safety and Sanitary Conditions

MNS 6458:2014 The General Requirements for Handling Toxic and Hazardous Chemicals

MNS 3474:2003 Plant Protection: The Terms and Definitions

MNS 5344:2011 The General Requirements for Transportation of Household Wastes

MNS 5872:2008 The Service Requirements for Power Supply

MNS 5043:2011 The General Technical Requirements for Boilers with capacity of 0.10 МВт - 3.15МВт

MNS 5041:2001 The General Technical Requirements for Boilers with capacity up to 100 кВт

MNS 5045:2001 The Technical Requirements for Water Heating Boiler with solid fuel

MNS 5643:2006 The General Technical Requirements for Power Transmission Sub Station with Capacity of 25-2500 кВ•А

MNS 4084:1988 The General Technical Requirements for Water Heating Unit with Solar Panel

MNS 5207:2011 The Technical Requirements for Installation of the Fiber Optic Cable MNS AASHTO 86:2005 The Technical Requirements for Concrete Structure of Flood Protection Facilities

MNS ISO 24511:2012 Operation of Water Supply and Sewerage Network: Operations Management and Maintenance of the Sewerage Facilities

MNS ISO 24512:2012 Operations Management and Maintenance of the Water Supply Facilities

MNS 5682:2006 The Technical Requirements for Pedestrians and Access for Disable Persons

MNS 4597:2014 The Technical Requirements for Road Signs

MNS 4759:2014 The Technical Requirements for Road Marks

MNS 4596:2014 The Operational Instructions for Road Signs, Marks, Fences and Traffic Lights

MNS 5342:2007 The General Requirements for Auto Parking Facilities

68 Following two national regulations on waste water discharges are relevant to RIBS project and will be applied for the project activities.

Table II-6 Full Parameters of the National Standard for Wastewater Discharge to Water Bodies (MNS 4943:2011)

Parameter Maximum allowance 1 Water temperature C 20 2 Hydrogen ion activity (pH) - 6-9 3 Odor No nad smell 4 Suspended solids(SS) mg/l 50 5 Biochemical Oxygen Demand (BOD) mg/L 20 6 Chemical Oxygen Demand (COD) mg/l 50 7 Permanganate mg/l 20 8 Dissolved salt mg/l 100 9 Ammonia Nitrogen (NH4-H) mg/l 6 10 Total Nitrogen (TN) mg/l 15 11 Total phosphorous (TP) mg/l 1.5 12 Organic Phosphorous (DOP) mg/l 0.2 13 Hydrogen Sulphide (H2S) mg/l 1 14 Total Iron (Fe) mg/l 1 15 Aluminum (AL) mg/l 0.5 16 Manganese (MN) mg/l 0.5 17 Total Chromium(Cr) mg/l 0.3 18 Chromium+6 (Cr+6) mg/l Not specified 19 Total cyanide (CN) mg/l 0.05 20 Free cyanide (CN) mg/l 0.05 21 Copper (CU) mg/l 0.3 22 Boron (B) mg/l 0.3 23 Lead (pb) mg/l 0.1 24 Zinc (Zn) mg/l 1.0 25 Cadmium(Cd) mg/l 0.03 26 Antimony (Sb) mg/l 0.05 27 Mercury (Hg) mg/l 0.01

29 Total Arsenic (As) mg/l 0.01 30 Nickel (Ni) mg/l 0.2 31 Selenium (Se) mg/l 0.02

33 Cobalt (Co) mg/l 0.02 34 Barium (Ba) mg/l 1.5 35 36 Vanadium(V) mg/l 0.1 37 Uranium (U) mg/l 0.05 38 Mineral oil mg/l 1 39 Fat oil mg/l 5 40 Surface active agents mg/l 2.5 41 Fhenol (C5H2OH) mg/l 0.05 42 Threchloretilen mg/l 0.2 43 Tetrachloretilen mg/l 0.1 44 Remained chlorine (CL) mg/l 1 45 ml

Table II-7 Allowable limits of industrial wastewater composition before letting effluents into public sewers and central wastewater treatment systems (Regulation No a/11/05/A/18) № Parameter In UB In other urban areas

1 Suspended solid(SS) 400.0 500.0 2 Biochemical Oxygen Demand (BOD) 200.0-400.0 250.0-500.0 3 Chemical Oxygen Demand (COD) 400.0-800.0 500.0-1000.0 4 Copper 0.5-1.0 0.5 5 Petroleum 0.07-0.1 5.0 6 Sulphate 1355.0-1500.0 1500 7 Sulphide 10 10 8 Nickel 0.5-0.65 0.65 9 Lead 0.07 0.1 10 Chromium+6 0.27-0.5 0.2-0.5 11 Total Chromium 2.5-5.0 2.5-5.0 12 Zinc 1.0 1.0 13 All types of washing chemicals 5.0-10.0 10.0-20.0 14 Phenol 0.5-1.0 1.0 15 Cadmium 0.032-0.1 0.1 16 Cyanide 0.08-1.5 0.1-1.5 17 Ammonia 10.0-15.0 10.0-20.0 18 Total Nitrogen 30 30 19 Hydrogen ion activity 6.5-8.5 6.5-8.5 20 Chlorine 900.0-1000.0 1000.0 21 Iron 0.27-1.0 0.5-1.0 22 Hydrogen ion 0.2 0.2 23 Synthetics 25.0 25.0 24 Sulphur paint 0.45 0.5 25 Water temperature 15-40°C 30C 26 Arsenic 0.1 0.1 27 Mercury 0.005 0.005 28 Cobalt 0.1 0.1 29 Fat oil 10.0-25.0 15.0-25.0 30 Silver 2.0 2.0 31 Selenium 0.1 0.1 32 Organic phosphorous 0.4 0.4 33 Total hydrocarbon 0.4 0.4 34 Aluminum 0.5 0.5

Table II-8: Mongolia Surface Water Quality Standards

Parameter MNS 4586-98

pH 6.5-8.5 DO mg0/l Not less than 6.4* BOD mg0/l 3 NH4-N mgN/l 0.5 NO2-N mgN/l 0.002 PO3-P mgP/l 9 PO4-P mgP/l 0.1 Cl mg/l 300 F mg/l 1.5 SO4 mg/l 100 Mn mg/l 0.1 Ni mg/l 0.01 Cu mg/l 0.01 Mo mg/l 0.25 Cd mg/l 0.005 Co mg/l 0.01 Pb mg/l 0.01 As mg/l 0.01 Cr mg/l 0.05 Cr5+ mg/l 0.01 Zn mg/l 0.01 Hg mg/l 0.1 Oil mg/l 0.05 Phenol mg/l 0.001 Active and washing mg/l 0.1 substances Benzapyren Mkg/l 0.005 *DO>6 mgO/l for summer time and DO>4 mgO/l for winter time

Table II-9: National Soil Quality Standards on Heavy Metals

MNS 5880 :2008 Elements Soil Mechanical Composition Maximum Acceptable Clay Loamy Sandy Amount, mg/kg Pb 100 70 50 100 Cd 3 1.5 1 3 Hg 2 1 0.5 2 As 6 4 2 6 Cr 150 100 60 150 Cr6+ 4 3 2 4 Sn 50 40 30 50 Sr 800 700 600 800 V 150 130 100 150 Cu 100 80 60 100 Ni 150 100 60 150 Co 50 40 30 50 Zn 300 150 100 300 Mo 5 3 2 5 Se 10 8 6 10 B 25 20 15 25 F 200 150 100 200 CN 25 15 10 25

E. Comparison between Mongolian and International Standards

69 The applicable Mongolian environmental standards the RIBS-AF project are presented below in comparison to the IFC-EHS guidelines. In accordance with the ADB Safeguards policy, the more stringent standards will be applied to the project.

1 Waste Water

70 In most cases, the Mongolian standards for wastewater discharge are more stringent than the IFC-EHC Guidelines except for total nitrogen and total coliform bacteria. The IFC-EHS guidelines for total nitrogen and total coliform bacteria will be applied.

Table II-10: National and International Wastewater Discharge Standards

Parameter Unit measure MNS 4943:2011 IFC-EHC Guideline pH pH 6.5-8.5 6-9 BOD mg/l 20 30 COD mg/l 50 125 Total nitrogen mg/l 15 10 Total phosphorus mg/l 1.5 2 Oil and grease mg/l 1-5 10 Total suspended solids mg/l 50 50 Total coliform bacteria MPM/100 ml N/A 400

2 Ambient Air Quality

71 For parameters where guidelines exist, the Mongolian standards for ambient air quality are generally equal to or more stringent than the IFC-EHS guidelines, so the Mongolian standards will apply to the RIBS-AF project with a few exceptions. The IFC-EHS guidelines for PM10 concentrations of 24-hour average and yearly average, PM2.5 average of 24-hour, are more stringent and will be applied to the project.

Table II-11: National and International Ambient Air Quality Standards

Parameter Period MNS 4585:2007 IFC-EHC Guideline SO2 10 minutes 500 500 20 minutes 400 N/A 24 hours 20 20 1years 10 N/A CO 30 minutes 60,000 N/A 1 years 30,000 N/A 8 hours 10,000 N/A NO2 20 minutes 85 N/A 1 hour N/A 200 24 hour 40 N/A 1 year 30 40 O3 8 hour 100 100 Total substance 30 minutes 500 N/A 24 hours 150 N/A 1 year 25 N/A PM10 24 hours 100 50 1 year 50 20 PM2.5 24 hours 50 25 1 year 25 25 Pb 24 hours 1 N/A 1 years 0.5 N/A C20H12 24 hours 0.001 N/A

3 Groundwater Quality

72 The national standard MNS 900:2005 for Drinking Water. Hygienic Requirement and Quality Control is the standard used for groundwater, which is the source for drinking water supply in Mongolia. The Mongolian national drinking water standard is compared to the WHO guidelines for drinking water in Table II-12. The majority of parameters in the WHO guidelines is not available, compared to national standard. Therefore, the national groundwater standard will be applied to the RIBS-AF project with a few exceptions of Lead (Pb) and Chlorine (Cl). The WHO guideline for Lead (Pb) and Chlorine (Cl) are more stringent and will therefore be used for the project.

Table II-12: National and International Groundwater Quality Standards

Parameter Mongolian National Standard WHO Guidelines for Drinking Water on MNS 900:2005 Quality, Fourth Edition.2011 Na - mg/l 200 None established K+ mg/l 200 None established Ca2+ mg/l 100 - Mg2+ mg/l 30 - 2 So4 mg/l 500 None established HCO3 mg/l - - 2 Co3 mg-l - Cl mg/l 350 Mg/l 5 P mg/l 0.7-1.5 - Br - None established Test by mark mg/l - Color Degree 2 Odor Mark 2 - Ph 6.5-8.5 None established Electric Conductivity - - YS/st General Minerals 1000 - Hardness mg-equ/l 7 None established Acidity potential mb - Solid remains g/l 1 - NH4 mg/l 105 None established NO3 mg/l 50 Mg/l 50 NO2 mg/l 1 Mg/l 3 PO4 mg/l 3.5 - As mg/l 0.01 Mg/l 0.01 Fe mg/l 0.3 None established Pb mg/l 0.03 Mg/l 0.01 Ni mg/l 0.02 Mg/l 0.07 Cr mg/l 0.05 Mg/l 0.05 Cu mg/l 0.1 Mg/l 2 Zn mg/l 5 None established Mn mg/l 0.1 None established Cd mg/l 0.003 Mg/l 0.003 Hg mgl 0.0005 Mg/l 0.006 B mg/l 0.5 Mg/l 2.4 Ba mg/l 0.7 Mg/l 0.7 Mo mg/l 0.07 None established Se mg/l 0.01 Mg/l 0.04 E coli or - Must not be detectable thermotolerant in any 100mi sample coliform bacteria

4 Noise

73 Table II-13 lists the Mongolian domestic and IFC guidelines for ambient noise level. The Mongolian noise standards are more stringent than the IFC guidelines for Industrial / Commercial areas.

Table II-13: National and International Noise Level Standards

Maximum allowable noise limit (hourly measurement) 1 hr LAeq in Db (A) Standard Day (07:00-22:00) Night (22:00-07:00) IFC Guideline : Industrial / Commercial 70 70 IFC Guideline : Residential /institutional / 55 45 Education MNS 4585:2007 60 45 Source: Oyu Tolgoi EIA 2012

5 Boiler Emission Table II-14: Boiler Emission Guidelines

Parameter Concentration (in mg/Nm3) MNS 6298:2011 WHO EHS Guidelines* 400 urban 3 3 SO2 mg/m mg/Nm 2000 600 remote areas 450-1,100 3 3 NOx mg/m based on volatile mg/Nm 650 coal

PM mg/m3 50-200 mg/Nm3 50-150

Dry Gas Excess O2 - - % 6 content * Small Combustible Facilities Emission Guidelines (3MWth-50MWth) – for Boilers using solid fuel NWth-Megawatt thermal Nm3 is at one atmospheric pressure, 0°C.

III. DESCRIPTION OF THE PROJECT

A. Introduction

74 During the 2018 Country Programming Mis///sion (CPM), the Government of Mongolia (the government) requested for additional financing of $27 million, financed from the Asian Development Bank’s Concessional Ordinary Capital (COL) to scale up the Regional Improvements of Border Services (RIBS) project with two additional BCPs—namely, Bichigt bordering the People’s Republic of China (PRC) in the East, and Borshoo bordering the Russian Federation (Russia) in the West. The infrastructure, facilities and equipment at both BCPs is currently outdated and inadequate to maintain border clearance and immigration protection standards; and lack the capacity to support existing and anticipated growth in border trade.

B. Rationale

75 The two BCPs are expected to become increasingly functional gateways for Mongolia’s bilateral trade with the PRC and Russia. Current statistics show the growing usage of these BCPs despite their limited capacity. In Bichigt, domestic passenger flows have increased by approximately 80% (total) between 2015 and 2017, while trade turnover has more than tripled during the same period and represented $220 million in value (86% of which were exports). Export of goods, by value, at this BCP was six times higher in the first four months of 2018 as compared to the annual turnover in 2015. In Borshoo, trade turnover represented $22.5 million in value in 2017 (of which the majority consisted of exports of $22.27 million in value).

76 The BCP of Bichigt is Mongolia’s closest gateway to a seaport in the PRC (Jinzhou Port), which is supported by extensive road and rail networks to the PRC’s northeast. Jinzhou Port is one of the few ports in the PRC that is rail-served and has good capacity to handle transit trade from Mongolia. Because of the poor shape of the facilities in Bichigt, the BCP is currently under- utilized (despite high throughput capacity, modern customs facilities and connectivity infrastructure on the PRC side of the border, at Zuun Khatavch).

77 The BCP of Borshoo, in the western region, is anticipated to grow in strategic importance in the wake of its planned upgrading to international status in 2019. This is in line with a bilateral agreement of Mongolia and Russia, signed in 2007, which has gained renewed commitment following the Foreign Minister of Mongolia’s visit to Moscow in May 2018.

78 Mongolia’s western region, and in particular the settlements of Ulaangom (located 114 km from Borshoo BCP), Ulgii and Khovd, has been identified as a priority cluster for investment as part of the National Urban Assessment conducted with ADB support in 2017. The assessment shows that, overall, the spatial distribution of developing soums is concentrated in the border regions and major transport corridors—illustrating the importance of export-led growth in the emergence of new functional economic centers in Mongolia. Forthcoming ADB investment to support the development of aimag and soum centers (planned in 2019), is prioritizing the western region for its first tranche of investment.

79 Strategic fit. The proposed additional financing is (i) aligned with the Action Plan of the Government of Mongolia, 2016–2020 to improve border crossing points and to expand trade; (ii) accorded high priority by the Government with a high degree of project readiness, which has completed the detailed engineering design for Borshoo BCP and conceptual design for Bichigt BCP is underway; (iii) consistent with the original project’s development objectives and replicating its approaches and application of innovative and state-of-the art technology in the context of Mongolia to new border areas in line with bilateral agreements of Mongolia with the PRC and Russia; (iv) consistent with the Country Partnership Strategy, 2017–2020, which emphasizes the need to improve physical connectivity and trade facilitation to enhance the competitiveness of the Mongolian economy (Pillar 2); (v) consistent with Strategy 2030 and Operational Cluster 2 (trade,

37 tourism and economic corridors) of CAREC 2030 (vi) contributing to implementation of Operational Directions 1 (connectivity) and 2 (competitiveness) of the RCI Operational Plan, 2016-2020; and will be (vii) based on firm due diligence to ensure technical feasibility, economic viability, and financial soundness of the proposed investment components.

80 The RIBS additional financing is an integral part of a wider framework of existing and new pipelines for RCI projects in the PRC and Mongolia. These regional arrangements enhance Mongolia’s potential to diversify its trade and integrate into the global value chains. The Zamyn- Uud Logistics Center, an intermodal container terminal with modern customs and quarantine facilities, is expected to be completed in 2019. The $45 million project will address the transit and transport logistics issues with increased capacity of 600 wagons a day. A $15 million project will upgrade sanitary and phytosanitary systems measures for trade by modernizing laboratories and inspections facilities, strengthening inspection management systems, and aligning SPS systems with international standards to benefit Mongolia’s livestock and agri-food exports.

81 Two key innovative features of the project are the tailor-made process that is used for the design of the BCP (fully reflective of local circumstances, instead of a one size fits all approach) and the use of a technology sophisticated custom’s information system.

C. Impact, Outcome and Outputs

82 The project impact will be increased trade and competitiveness due to more efficient and predictable cross-border trade; and the project outcome will be reduced cost and time of compliance with trade procedures.

83 The proposed additional financing will yield the following two outputs: (i) upgrading facilities and equipment at Bichigt and Borshoo BCPs (ii) provide capacity development support, including technical trainings to relevant border agencies in Mongolia. Sensitization on gender and environmental issues will be a cross-cutting element in both the capacity development and training support.

84 The two subproject locations at Borshoo and Bichigt are shown in the Error! Reference source not found..

Figure III-1: Location of Bichigt and Borshoo BCPs

D. Description of Project Site at Bichigt

Sie Condition: 85 The landscape of the project area at the Bichigt BCP is characterized by plain steppes with low lying hills. There are no surface waterbodies in the vicinity of the project area. 86 The locations of the existing and proposed new Bichigt BCPs are shown in Figures III-2 to Figure III-4. The new BCP will be closer in distance to the border with the PRC. The project site is at the remote area. It is approximately 272 km from the Barium URT provincial center as shown in Figure III-5. It is also far from other major county level centers.

Dwellers and Travelers: 87 The Bichigt BCP currently has 24 custom officers working in the current facilities. It is expected that the number of staff will increase by about 30% after the new BCP is constructed. In addition to the customs office, there are 10 representative offices from other state government organizations at the Bichigt BCP with about 70 persons currently working in the BCP. 88 According to the statistics in 2018, there were 110,410 travelers and 68,016 vehicles of various type that passed through the Bichigt BCP.

Water Availability: 89 Drinking water at the Bichigt BCP is supplied from an onsite deep well. It is estimated that the drinking water consumption is 5.9 m3 per day during the cold season, and 7.8 m3 per day during the summer season. 90 There is currently one well for drinking water supply at the Bichigt BCP. To cope with the potential increase in water demand after the new BCP is construct, the GOM has requested the ADB project team to allocate a budget of 400 Million MNT (equivalent to USD 150,000) to conduct hydrogeological survey and construct one additional well for each of the Borshoo and Bichigt BCPs, respectively, as a backup for providing additional drinking water supply, when needed. 91 Additional equipment will be installed to improve water quality from the well. A budget of USD 500,000 for the Bichigt BCP has been allocated in the project cost to install water supply and sanitary pipes to improve sanitation and toilet conditions.

Heating:

92 A boiler of 1.4 MW in capacity has been used for heating supply in the Bichigt BCP since 2016. It uses raw coal and distributes the heat to 8 buildings of various size across the BPC area.

Solid Waste

93 There is an offsite waste dump landfill designated for disposal of solid waste in the Bichigt BCP. The site was officially registered with the provincial authority. In accordance with to the Law of Mongolia on solid waste management, a local government is obliged to designate a solid waste disposal site and take measures to ensure that residents dispose of their wastes only at this designated site. Local residents need to make an agreement with the local government before they can make use of waste disposal site.

94 There are no other human settlements other than the port staff in the project areas, the quantity of solid waste produced at the BCPs is small. The solid waste is collected and disposed of at a designated landfill acceptable to the local government. Considering the factors of small quantity of solid waste generated, no other human settlements in the project area, and the garbage is disposed of at a designated site, the current practice of garbage disposal is considered to be environmentally sustainable.

Wastewater:

95 Wastewater from connected apartment buildings at the Bichigt BCP drains through pipelines to a septic tank of 35 m3, which was constructed in 2013. The BCP has obtained a vehicle to pump wastewater from this tank but it was malfunctioning. The wastewater is then hauled to an offsite disposal site by a truck.

Wildlife Habitat:

96 The gazelle habitat is located in a protected area that is far (about 300 km) away from the Bichigt BCP, and will not be affected by the project.

Cultural Resources:

97 There are no tombs in the project areas at the Bichigt BCP.

Trading:

98 There is no timber trade through the Bichigt BCP.

99 Wildlife trafficking is not an issue; there is also no evidence of human trafficking, but awareness about both issues will be included in capacity development activities. The road safety issue will be addressed by the design of the BCP facilities, such as increasing the designated parking stalls for trucks to divert the traffic flow and enhance the road safety.

BICHIGT BCP LOCATION

Border Column No.1,050

Proposed new location for Bichigt BCP (straight road to PRC) Current Bichigt BCP Zuun Khatavch Border Column Railway line (existing) No 1,045 Border Column No 1,044 Curved road to PRC due to Zuun Khatavch geographical condition, which road BCP in PRC leads to car accident

Figure III-2: Comparison of the Existing and Proposed New Bichigt BCP Locations

Figure III-3: Layout of the Bichigt BCP Facilities

Figure III-4: Layout of the Existing and New Bichigt BCPs

LOCATION OF BICHIGT BCP AND ADJACENT SITES

MATAD KHUUT site

BARUUN- Petrochina site URT/PROVINCIAL Sukhbaatar CENTER

Tukhum site Eruult site

ASGAT Site

Baruun-Urt-Bichigt unpaved road 272.17km ERDENETSA GAAN SOUM Bichigt BCP

Erdeniin bosgo site

Badmaarag khash site

Figure III-5: Bichigt BCP in Relation to Adjacent Key Locations

Figure III-6: Overview of the Existing Bichigt BCP

Figure III-7: Overview of the Proposed New Bichigt BCP Location

Figure III-8: A Herder Household (nomadic tent) in about 10 km north to Bichigt BCP

Figure III-9: A deep well in about 10 km away north from BCP

Figure III-10: Septic Tank for Wastewater storage

Figure III-11: Wastewater carrying vehicle

Figure III-12: Designated Solid Waste Disposal Site at Bichigt

E. Description of Project Site at Borshoo

Sie Condition: 100 The Borshoo BCP is located at the southern edge of the Khandgait River basin between two hills on the east and west. The elevation of the current border service buildings is 1241 m above the sea level and gradually increases to the south by 40 m at the proposed new BCP location, which is 2 km from the current BCP location.

101 The layout of the existing and proposed new Borshoo BCP facilities is shown in Figures III- 13 to Figure III-15. The current project RIBS-AF is to cover Phase I of the Borshoo BCP upgrading. The project site is at the remote area with very few settlements except of customs staff working at the BCP as shown by photos in Figures III-16-22.

Dwellers and Travelers: 102 There are about 80 staff working at the Borshoo BCP during both cold season and warm season. The number of travelers who pass through the Borshoo BCP is about 250-350 daily with a peak of about 450 daily during holidays. The number of vehicles through the BCP is in the range of 80 to 120 daily.

Water Availability: 103 Drinking water for the Borshoo BCP is transported in from Khandgait River, which is located 10 km to the east from the BCP. Drinking water usage is approximately 1.5 m3/d. There is a deep well at the BCP site that has been operated since 1994. Nonetheless, water from the well (pumped from 180 m below the surface) has high salinity and exceeds the drinking water quality standard. The water from this well is therefore only used for non-drinking purposes, such as watering, household washing, etc. 104 There is currently one well for drinking water supply at the Borshoo BCP. To cope with the potential increase in water demand after the new BCP is construct, the GOM has requested the ADB project team to allocate a budget of 400 Million MNT (equivalent to USD 150,000) to conduct hydrogeological survey and construct one additional well for each of the Borshoo and Bichigt BCPs, respectively, as a backup for providing additional drinking water supply, when needed. 105 Additional equipment will be installed to improve water quality from the well. A budget of USD 500,000 for the Borshoo BCP has been allocated in the project cost to install water supply and sanitary pipes to improve sanitation and toilet conditions.

Heating: 106 There are two small boilers in the Borshoo BCP. One is used for heating the BCP main service building and the other one is used for heating a two-storey apartment building occupied by the customs staff. Each boiler uses about 7 tons of raw coal monthly during the heating season from October to May. The other four one-storey apartment buildings were heated with individual small stoves in 17 households. Each stove consumes about 4 tons of coal during the heating season.

Solid Waste 107 Solid waste generated form the Borshoo BCP mainly composes of regular household solid wastes and ashes during the heating season. The solid waste is collected and then transported to a designated solid waste disposal site, which is located about 500 m from the BCP in southwest and occupies an area of about 100 X 500 m2.

Wildlife Habitat:

108 There are no any wildlife species in the vicinity of the project site at the Borshoo BCP.

Cultural Resources:

109 There are no tombs in the project areas at the Borshoo BCP.

Trading:

110 There is no timber trade through the Borshoo BCP.

111 There is also no evidence of wildlife and human trafficking. Nonetheless, awareness about both issues will be included in capacity development activities.

BORSHOO BCP - CURRENT CONDITION

Existing border protection unit

Border officials’ residences (current)

RUSSIAN MONGOLIA FEDERATION

Existing Borshoo BCP

Existing road

Figure III-13: Borshoo BCP Location

PROPOSED PLAN FOR BORSHOO BCP

Border Crossing Point Unit under Dog facility Border Protection Agency Existing Border Protection Unit FREIGHT TERMINAL/PHASE II (not part of RIBS AF)

МУ ОХУ

FREIGHT AND NOTE: PASSENGER BORDER AGENCIES TERMINALPHASE I Due to a limited funding source and RESIDENCE (planned (included under the based on an economic due diligence but not included in the RIBS AF) analysis, RIBS AF is limited to the RIBS AF) Engineering facilities’ upgrading of the First Phase (highlighted zone in orange) of the Borshoo BCP Development Plan. It meets the IR requirement “C”.

SERVICE AREA FOR PUBLIC (not included in the RIBS AF)

Figure III-14: Layout of the Borshoo BCP Facilities

PHASE I OF BORSHOO BCP TO BE INCLUDED IN THE RIBS AF

Figure III-15: Proposed Project Scope of RIBS-AF at the Borshoo BCP

Figure III-16: Overview of the Existing Borshoo BCP

Figure III-17: Heating boiler in main building.

Figure III-18: View of Borshoo BCP Facilities

Figure III-19: View towards the Russian border at Borshoo BCP

Figure III-20: An abandoned deep well located 4 km from the Borshoo BCP

Figure III-21: Designated Solid Waste Disposal Site at Borshoo

Figure III-22: Overview of the Proposed New Borshoo BCP Site

F. Project Outputs 1 Bichigt BCP

112 The preliminary design of the Bichigt BCP is shown Figure III-2. The landscape of the project area at Bickigt is shaped by plain steppes with low elevation mountains and hills with average slope.

113 The capacity of the Bichigt BCP will be extended with new facilities to be built in the Additional Financing project. The number of staff in the customs office at the BCP will be increased from the current 24 staff by 30%. The number of staff of the state organizations are also expected to increase after the new BCP facilities are constructed. Statistics show that in 2018 there were 110,410 travelers and 68,016 vehicles of various types passing through the Bichigt BCP. It is expected that these numbers will increase as economic activities in the border areas expand with the PRC.

114 The scope of the proposed ADB AF interventions for the Bichigt BCP included the following civil works and equipment installations:

(1). Buildings and structures • Main control building • Control canopy for passengers • One stop inspection building /BP, SI, Customs/ ( 6 шир) • Freight canopy 15х15 ( 2 pcs) • Heated storage, garage building -1 /SI, Customs/ • Detailed inspection canopy • Specialized Inspection (SI), Customs laboratory • SI agency • Drive-through disinfection basin 2 pcs • Guard and control station 4 pcs • Garage for mobile X ray machine 9х18 • Weighbridge base 3 pcs • Border protection unit building 20x35, 2-story, for 30 people • Chemical laboratory 3 pcs 7.5х5м • Other work to be done within BCP • Fence • zone separation fence • sidewalk and paved surface • Trees and bushes • barrier gates, limit barrier gate base

(2) Heating source and pipes: • Water and heating building with boiler, equipment • Outsidel heating pipelines • Mesh fence with concrete base

(3) Power source and lines: • High voltage cable lines • 0.4 cables • Outdoor lighting • 2х800 kWa trasnformer station building, equipment

• Diesel generator building, equipment

(4) Water supply, waste water treatment system • Water well building and pump • External water pipeline work inside BCP • External water pipelines, to settlement area • Waste water treatment plant equipment with 30 м3 pool • Waste water treatment plant building • External waste water pipelines, 1.5 км from BCP • External waste water pipelines, 2.5 км from settlement

(5) Fiber optic cables • Outdoor fiber optic cable installation • Cable trenching inside fence • Outdoor surveillance cameras

(6) Roads surfaces, flood protection: • Pavement of roads and surfaces within the BCP • Two-lane road from BCP to domestic road, with 1 lane in each direction • Two-lane road from BCP to Chinese border gate, with 1 lane in each direction • Flood protection

(7) Equipment: • Weighbridge 150 tn, 40 meter • Customs laboratory equipment • High Speed Automatic car and truck and bus traffic lane boom barrier gate with red and green exit lights • Front Loader for Low Thermal Coal Boiler (AB and BT) • Passport + ID scanners for car and truck primary lane processing installed inside booths plus software • Electronic Seal (RFID) • Closed-circuit television (CCTV) with infrared video cameras complete with 3 central control system equipment • Mobile X ray machine

115 The health and safety provisions of Mobile X ray machine will be defined after the equipment is procured. Training on the health and safety provisions will be part of the equipment supply contract.

Figure III-23: Preliminary Design of Bichigt BCP

2 Borshoo BCP

116 Borshoo BCP is located at the south upper edge of Khandgait River basin in between two hills on the east and west. Current border service buildings are located at the elevation of 1241 m above sea level and the elevation gradually increases to the south by 40 meters in two kilometer distance, where south border of new BCP area will be planned. It is covered with short grasses, which have been used as pasture historically. Khandgait River is located in about 4.5 km to the deep into BCP of Russian Federation and the river flows into Mongolian territory at about 10 km to the east of Borshoo BCP.

117 The scope of the proposed ADB AF interventions for the Borshoo BCP includes the following civil works and equipment installations:

(1). Buildings and structures • Renovation of old building • Main control building • Control canopy for passenger section • One stop inspection building /BP, SI, Customs/ • Heated storage, garage building -1 /SI, Customs/ • Detailed inspection platform with canopy - 1 / small -SI, Customs / • Customs laboratory • Specialized inspection laboratory • Vehicle disinfection facility 10x16 м / SI / • Disinfection basin • Guard, control station--1 /Border protection agency / • Building for mobile X ray machine, 9 х18 • Weighbridge base • Border protection unit building 20x35, 2-story, for 30 people • Dog facility • Dog training area • Fire and water reserve container • Green landscaping, pedestrian roads and areas • Large outside fence -1 • Commemoration monument • Direction board • Information board • Automatic barrier gates, x-shaped vehicle barricades

118 The safety of chemicals handing will be done when the technical specification of the disinfection basin will be prepared at the design stage.

(2) Heating Supply: • Heating supply building with boiler, equipment and fence • Outdoor heating pipelines

(3) Power source and lines: • Outdoor power lines 10kW • 04kW cable lines, electricity for outdoor facilities: installation of diesel ABP board, outside lighting • 2х800 кW transformer sub-station building and equipment • Diesel generator 455кW

(4) Water supply, waste water treatment • Water reservoir pump building and equipment • Water supply pipeline work • Waste water treatment plant equipment • Waste water treatment plant building • External waste water pipelines

(5) Communication lines: • Surveillance telescope 04kW cable line ААВБ 4х4 мм2 - 630м, 4х6мм2 - 1049м • Surveillance cameras -43pcs • Control unit -3pcs • Loudspeaker - 4 pcs • 1500 m 2-row cable trench 110*99*5.5 мм2 , well 33pcs • Fiber optic cable installation 24 кор • Fire alarm outdoor cable RS-485-4200м • information system -5pcs , RS-232-2250м • Radiation control system -1, fiber optic cable 12 кор -1800m, 8 wire cable-60m

(6) BORDER CONTROL ZONE - OUTSIDE AREAS AND UTILITY LINES • Roads and paved surfaces

(7) Equipment: • Weighbridge 150 ton, 40 meter • High Speed Automatic car and truck and bus traffic lane boom barrier gate with red and green exit lights • Front Loader for Low Thermal Coal Boiler (AB and BT) • Passport + ID scanners for car and truck primary lane processing installed inside booths plus software • Electronic Seal (RFID) • Closed-circuit television (CCTV) with infrared video cameras complete with 3 central control system equipment • Mobile X ray machine

119 The health and safety provisions of Mobile X ray machine will be defined after the equipment is procured. Training on the health and safety provisions will be part of the equipment supply contract.

Figure III-24: Preliminary Design of the Borshoo BCP

IV. DESCRIPTION OF THE ENVIRONMENT

A. Overview and Physical Setting 6 GEOGRAPHY AND TOPOGRAPHY a. Topographical setting at Borshoo

120 Geographically, Borshoo port locates in the Huut valley in-between western, middle and eastern Termis hill ranges which are branches of the Western Tagna Mountain range. Western Termis hills ranges are (1904m above sea level) on west and southwestern side of the port while Middle Termis hills (1587m above sea level) range is on south and Eastern Termis hills (1736m above sea level) range is on eastern side of the port. Landscape of project area is shaped as plain steppes and valleys between small hills and mountains with average slope. Altitude of such small hills and mountains vary between 1500m-1700m above sea level with moderate elevation above the surroundiing area (200-400m only). Land surface at and around the small hills and mountains are covered with rocks. Topographical map of the project area is shown in below Figure.

Figure IV-1: Topographical map of the Borshoo port b. Topographical settings at Bichigt

121 In terms of topographical division, the project area locates in the eastern Mongolia steppe zone. In a broader regional level, it belongs to the Mongol-Daur steppe region and to the Pacific ocean watershed in terms of hydrology. Landscape of the project area is shaped by plain steppes with low elevation mountains and hills with average slope. Lkhachinvandad mountain is on the western side of the Bichigt.

122 Geomorphology of the project area is characterized by steppe small hills, tip, ridges, side as well as foot of the mountain range, and the valley lying in between them. Two types of surface

66 formation are identified; erosion-transportation surface distributed around top, back, front side and foot of the mountain and the part of the midst valley, and transportation-accumulation surface at some part of the valleys amongst the shorter mountains and hills. South side slope of the mountain is moderate and divided by dry wadi and creeks of the valley in between the mountains.

Figure IV-2: Topographical map of Bichigt area

123 Geographic location of the project area belongs to eastern Mongolia geomorphological region which has morphological features of elevated steppe, rift hills and moderate lowlands.

124 The land surface around Bichigt is featured with hillocks and plain fields. The rift hillocks spread over majority of the region are a few tens of meters in relative height and have very slopy as well as globular tops. Among the hillocks lay a small concave or flat surface and broad valleys with sloped edge and flattish floor. Some rift hills with rather non-steep sides and sometimes pointy tops stand here and there in the middle of the hilly steppe.

7 SOIL COVER a. Soil cover in Borshoo area

125 In terms of natural zone division, Borshoo port locates in the Depression of Great lakes in western Mongolia. In terms of soil-geographic division of Mongolia, it locates in Uvs lake subzone and Greater Northern Gobi soil zone. It is surrounded by Uvs lake basin lowland on the east and by low hills and mountains on its south and west. The predominant soil type distributed in the project area is steppe brown soil.

Table IV-1: Chemical test analysis for soil samples taken at Borshoo

Sampling Depth, рН CaСО3 Humus ЕС (1:2.5) Ingredients per 100g

location sm (1:2.5) % % dS/m P2O5 K2O Borshoo 0-25 7.89 2.29 2.141 0.161 1.34 14.2 port current 25-40 8.32 8.65 0.592 0.161 0.48 8.7 site Proposed 0-25 7.72 1.38 2.061 0.539 1.57 11.9 new construction 25-40 8.15 6.83 0.384 0.301 0.29 9.4 site Source: Od Dynamic LLC, August, 2018

Table IV-2: Soil contamination test analysis Sampling Content of heavy metals, mg/kg Depth, sm location Cr Pb Cd Ni Zn Cu Co

Proposed new 0-30 10.8 24.5 0.39 12.9 195.5 23.7 37.1 construction site

Mongolian standard (MNS 100 50 150.0 100.0 3.0 150.0 300.0 5850 : 2008) Source: Od Dynamic LLC, August, 2018

b. Soil cover in Bichigt port

126 In terms of soil-geographical division of Mongolia, the project area belongs to the district of eastern Mongolia depression where the indistinct concave and convex surface pattern of the hillock steppe is predominant in general and there is not much difference in types of the soil cover.

127 In relation with the landscape characteristics, especially the land surface features of the project area, the common chestnut soil and steppe brown soil with salt content are widespread in the area.

128 According to the laboratory analysis, the brown soil contains small amount of humus which is 1.04% in the upper layer and it tends to increase slightly in layer due to content and distribution of plant roots. Moreover, the soil is strong alkaline (pH 8.77-8.89) in all layers. Abundance of N- nitrate (NO3-N) used by plants is moderate whereas sufficiency level of moveable phosphorus (P2O5) is low.

129 The thin humus-bearing layers (8-22 cm), range of humus reserve between 15.8 and 59.5 t/ha and the light loam, loam and sandy composition of different types of soil distributed along the route indicate that natural abundance of soil fertility is not high in the area and the soil formation is fragile.

Table IV-3: Chemical test analysis for soil sample taken at Bichigt

Sampling Depth, рН Humus NO3-N Ingredients per 100g Ca2 % location sm (1:2.5) % Mg/kg P2O5 K2O Proposed 0-5 8.77 6.2 1.04 8.52 1.3 18.0 new 5-30 8.86 5.8 1.2 14.9 1.2 14.0 construction 30-40 8.89 18.3 0.68 10.3 1.2 9.0 site 40< 8.84 15.4 0.63 19.0 1.3 7.0 Source: Od Dynamic LLC, September, 2018

8 SEISMOLOGY

130 Figure below illustrates seismic hazard in terms of macro-seismic intensity, using the Modified Mercalli Scale which is an alternative hazard metric to the older peak ground acceleration measure. Intensity is a generic bounded damage scale used to relate observed (or expected/forecasted) damage to the earth and built environment directly to earthquake magnitude. Macro-seismic intensity is a subjective scale requiring a personal interpretation of damage experienced by buildings after an earthquake, and is largely based on post-earthquake field surveys of building and site damage. Borshoo port falls in zone VII which is classified as “very strong” earthquake intensity risk while Bichigt port falls in zone I-V which has moderate earthquake risk.

Figure IV-3: Earthquake risk: Modified Mercalli Scale

Earthquake Intensity Risk Zones This map shows earthquake intensity zones in accordance with the 1956 version of the Modified Mercalli Scale (MM), describing the effects of an earthquake on the surface of the earth and integrating numerous parameters such as ground acceleration, duration of an earthquake, and subsoil effects. It also includes historical earthquake reports. The Zones indicate where there is a probability of 20 percent that degrees of intensity shown on the map will be exceeded in 50 years. This probability figure varies with time; i.e., it is lower for shorter periods and higher for longer periods. I. Instrumental VII. Very Strong II. Feeble VIII. Destructive III. Slight IX. Ruinous IV. Moderate X. Disastrous V. Rather Strong XI. Very Disastrous VI. Strong XII. Catastrophic

Source: http://www.preventionweb.net/files/15692_mngearthquakeriskv1100816.pdf

9 HYDROLOGY

131 In terms of surface water network of Mongolia, the Borshoo port is located in the Uvs lake water basin which then belongs to the Arctic ocean watershed. The Bichigt port is located in Menen eastern Mongolian steppes water basin which then belongs to Pacific ocean watershed. Location of the project sites are shown in the surface network map of Mongolia.

Source: Ministry of Environment and Tourism, Water Basin Administration Department

Figure IV-4: Surface network map of Mongolia

a. Surface water resources around Borshoo port

132 Geographically, Borshoo port locates within the Depression of Great Lakes. There are no any surface water resources in the vicinity of the project area. However, in the broader project region, the main surface water bodies include Uvs lake (in 30km distance) and its tributary rivers Borshoo (27km distance) and Handgait (10km distance) rivers.

133 Uvs lake is the biggest lake in Mongolia by surface area, covering 3,350 km2. Main tributaries for Uvs lake is Tes river, Harhiraa river, Sagil river and Borshoo river. No river is stemming from the lake which makes it a highly saline lake.

Source: ADB Consultant, 2018

Figure IV-5: Surface water bodies in Borshoo area

b. Surface water resources at Bichigt port

134 There are no any surface water bodies in the immediate vicinity of the project site. The closest surface water resources to the project area are Hairtiin lake (in 25km distance) and Jaran river (in 53km distance). There are a couple of dry riverbeds located at 45°45'15.83"N 115°50'21.10"E and 45°45'38.88"N 115°56'10.55"E nearby Zuun Araat mount which is in 4km distance from the project site. Below map shows surface water bodies in the project region.

Source: ADB Consultant, 2018

Figure IV-6: Surface water bodies in the Bichigt area

10 GROUNDWATER RESOURCES a. Ground water resources in Borshoo region

135 The project area is located in the Uvs lake basin which is abundant in ground water resources. As of today, a total of 8 ground water deposits have been discovered within the Uvs lake basin which is in 40-200km distance from the project site. Estimated exploitable ground water reserve in Uvs lake basin is shown in below table.

Table IV-4: Exploitable ground water resources in the Uvs lake basin Ground water deposits Total exploitable reserve, million Total catchment area, кm2 m3/year Deposit 1 12,887.00 1.000 Deposit 2 505.00 0.000 Deposit 3 1,759.00 36.000 Deposit 4 4,809.00 3.000 Deposit 5 263.00 1.000 Deposit 6 22,342.00 116.00 Deposit 7 8,819.00 181.00 Deposit 8 2,126.00 67.000

136 The main challenge for further development of the port is water supply issue because the port residents are currently using transported water from 10km distance. A potential solution is to create a new deep well and construct water pipelines to the new port. The recommended well creation site, called Burgastain Us, is located in 3km distance from the proposed new construction site.

Source: ADB Consultant, 2018 Figure IV-7: The recommended site to create a new well, Burgastain Us

b. Ground water resources in Bichigt region

137 Bichigt port belongs to Eastern Mongolian Stepes hydrogeological zone which is defined as a semi-arid zone with limited ground water resources. The project area is surrounded by mountainous zone on its west side where impermanent water flow occurs down to the sloping mountain side and causes intensive washout of the soil and furthermore formation of the creeks. Edges of the creeks are broken and there is an accumulation of cobble stone migrated and rolled over along the creek floor.

138 According to the “Renewable ground water survey map of Mongolia with 1:1000 000 scale, 1995”, the total renewable ground water reserve for the whole Eastern Mongolian Stepes hydrogeological zone is estimated at 300 mm/year.

139 Drinking water supply for residents of the Bichigt port relies on a deep water well nearby the apartment buidlings.

Source: ADB Consultant, 2018 Figure IV-8: Water well at the Bichigt port

B. ENVIRONMENTAL QUALITY 1 AIR QUALITY a. Air quality at Borshoo port

140 In order to determine air quality condition at the Borshoo port, air samples were taken at the newly proposed construction site on August 30, 2018. Below table shows the air quality test results:

Table IV-5: Air quality test results at Borshoo port

Test parameters Measuring unit Test results Maximum allowed level MNS 4585:2016 Sulphur dioxide SO2 mg/m3 0.004 0.450 Nitrogen dioxide, NO2 mg/m3 0.032 0.200 Dust PM10 mg/m3 0.009 0.100 Total suspended mg/m3 0.056 0.500 particulates, TSP Source: Od Dynamic LLC, August, 2018

b. Air quality at Bichigt port

141 Air quality measurements were conducted at the Bichigt port at 2 spots: nearby the current customs facility and the proposed new construction site on September 07, 2018. Below table shows the air quality test results:

Table IV-6: Air quality test results at Bichigt port

Test parameters Measuring Test results at Test results at Maximum allowed unit the current the proposed level customs facility new construction MNS 4585:2016 site Sulphur dioxide SO2 mg/m3 0.009 0.001 0.450 Nitrogen dioxide, NO2 mg/m3 0.067 0.001 0.200 Dust PM10 mg/m3 0.020 0.002 0.100 Total suspended mg/m3 0.093 0.005 0.500 particulates, TSP Source: Od Dynamic LLC, September, 2018

142 Based on the results of air quality measurement conducted by Od Dynamic LLC in August and September 2018, it can be concluded that there is no air pollution at the project areas currently, except some dusts that happens when vehicle goes along the unpaved road. Measured values of all key parameters were well within the required range by the national air quality standard MNS 4585:2016.

2 Solid Waste a. Solid Waste at the Borshoo BCP

143 Since the project area is located within the border zone, there are no any human settlements and economic activities other than the Borshoo port. Physical pollution in the project area is minimal to non-existent. There is no any sewage system for the port. The port residents use wooden toilets outside their apartments and once the toilet pits are full, it’s landfilled. Waste water from households are disposed into a waste water pit nearby the apartment area. Domestic solid waste from households and office building are collected at a temporary solid waste collection point nearby apartment area. The collected solid waste is disposed to a dumpsite in 500 m distance on weekly basis.

Figure IV-9: Temporary waste collection point and sewage pit at Borshoo port

144 Baseline noise level at Borshoo port was measured on August 30, 2018. Below table shows the measured noise level at the current port and proposed construction spot against the national standard.

Table IV-7: Daytime noise level at Borshoo port

Location Measured noise level, decibel National standard MNS 4585:2016 Current port 31.6 60 Proposed 17.3 60 construction site

b. Solid Waste at the Bichigt BCP

145 There are no any human settlements around the proposed new construction site of Bichigt port which locates in 3km distance from the current customs facilities. Thus, any physical pollution is not observed during the field survey in September, 2018.

146 The central waste dumpsite for Bichigt port locates on the eastern side of the port in 1km distance. Domestic solid waste from households and office building are collected at a temporary solid waste collection point nearby apartment area before being disposed to the dumpsite on weekly basis.

Figure IV-10: Temporary waste collection point and waste dumpsite

147 Heating for the existing buildings is supplied from a coal burning heat only boiler at the port. There is an existing old sewage system. However, it has not been working properly due to some connection and infiltration issues. Customs staffs at the port uses wooden toilets outside their office. Waste water from households are disposed into a septic tank nearby the apartment area.

Figure IV-11: Waste water septic tank and heat only boiler house

148 Baseline noise level at Bichigt port was measured on September 07, 2018. Below table shows the measured noise level at the current port and proposed construction spot against the national standard.

Table IV-8: Daytime noise level at Bichigt port

Location Measured noise level, decibel National standard MNS 4585:2016 Current port 52.8 60 Proposed new 16.1 60 construction site

3 Surface water quality

149 The drinking water for the Borshoo port residents is supplied from the Khandgait river which flows in 10km distance from the port. Water is transported from the river with Border Military truck on daily basis and stored in a reservoir tank with capacity of 0.5 metric tons.

Figure IV-12: Water reservoir at the Borshoo port

Source: ADB Consultant, 2018

150 In order to determine quality of the drinking water, a water sample was taken from the water reservoir at the port. The water sample was tested at the laboratory of the Institute of Meteorology of Uvs province. Lab test results in below table shows the river water used for drinking purposes at Borhsoo meets the national drinking water standard, thus can be used for human drinking.

Table IV-9: Water quality test analysis Test parameters Unit of measurement Test results Maximum allowed level MNS: 0900:2018 Ph mg/l 7.89 6-9 TSS mg/l 6.0 Hardness 5.25 7.0 Mineralization mg/l 668.8 NH4 mg/l 0.18 0.5 NO2 mg/l 0.005 0.02 NO3 mg/l 0.08 9.0 SO4 mg/l 124.3 100 PO4 mg/l 0.01 0.1 F mg/l 0.36 1.5 HCO3 mg/l 272.1 Mg mg/l 20.2 Na+K mg/l 71.9 Mn mg/l 0.08 0.1 Source: ADB Consultant, 2018

4 Ground water quality.

151 A water sample was taken from the well at the Bichigt port on September 07, 2018. Water test results are shown in below table.

Table IV-10: Results of water quality test analysis

Test parameters Unit of measurement Test results Maximum allowed level MNS: 0900:2018 pH mg/l 8.19 6-9 TSS mg/l 0.65 Hardness 6.12 7.0 NH4 mg/l 0.10 0.5 NO2 mg/l 0.08 0.02 NO3 mg/l 5.52 9.0 SO4 mg/l 0.03 100 Fe3 mg/l 1.20 Fe2 mg/l 1.50 1.5 HCO3 mg/l 463.75 Mg mg/l 27.00 Na+K mg/l 87.8 Cl mg/l 24.85 0.1

C. SOCIO- ECONOMIC CONDITIONS 1 Socio-economic condition in the Borshoo area

152 Davst soum of Uvs province is located on the northern pat of the Uvs province in 1,552km from UB city and in 135km distance from Ulaangom city. The soum territory is divided into 3 bags: Zuunhuvuu (the soum center), Torhilog and Khandgait (within which the Borshoo port locates). Borshoo port locates in the Khangait bag of Davst soum on Russia-Mongolia border in 28km distance from Davst soum center, in 116km from Ulaangom and in 1,527km from UB.

Demography

153 As of 2017 year end, Uvs province had population of 82,600 people belonging to 21,800 households. Uvs province is divided into 19 Soum and 93 bag administration. Provincial center Ulaangom city has 30,900 residents. Davst soum has a population of 1687 persons belonging to 432 households in 3 bag administration units as of August 2018. Of which, 855 are male residents and 832 are female residents. 37% of the population resides within the soum center while 7% are rural herders. Annual population growth is at 1%. Average life expectancy in Uvs province is at 68.84 years which is 1 year below than national average. The figure is 63.93 years for males and 72.87 years for female residents.

154 Borshoo port population is 70 persons which includes staffs of 4 major state entities (Customs, Border military, Specialized inspection agency and Immigration Office) and their family members.

Education

155 There are 12 children under age 6 at the port. Port staffs send their elder children above age 6 to Ulaangom city for attending middle school. There are 10 kindergartens in Ulaangom city that have 2,233 children and 61 teachers. 7 middle schools in Ulaangom employ 412 teachers who teach a total of 7,691 pupils. There are 2 colleges in Ulaangom city: Uvs TVET and a branch of Labour College of Mongolia. In total, the two colleges have 1531 students and 81 teachers.

Health services

156 The Uvs province hospital is the nearest health service center to the Borshoo port which has a total of 336 employees which includes 70 doctors, 180 nurses and over 80 technical and service workers. Its capacity is 250 beds for in-patients. It offers health services to 110,000 patients each year.

Unemployment and poverty

157 Total workforce in Uvs province is 49,100 persons which includes 3177 unemployed persons. Labor participation rate is at 77.2% and unemployment rate in Uvs province is at 8.4%. In Davst soum, there are 24 registered unemployed persons in August 2018, of which 13 are female residents.

Economic development

158 Uvs province is one of the relatively well developed provinces in Mongolia with GDP of 130 million USD. The main economic sectors in Uvs province are livestock breeding, crop planting, light industry, service sector and mining. In 2017, Uvs had 3.13 million heads of livestock and planted wheat, vegetables and seabuckthorn at 9,235 hectares of field. There are 3 coal mines,1 gold mine, 3 salt mines and 3 common mineral mines are operating in the province. Light industry in the province includes flour mills, food production, wool processing and power production. Production of seabuckthorn products are the key brands of Uvs province. It produces 60% of total seabuckthorn harvest in the nation with around 550 entities are engaging in seabuckthorn plantation. They produce seabuckthorn juice, crème and several other products at 13 processing plants and export to 4 foreign countries. 140 biggest business entities in Uvs province produced a total of 13.6 billion MNT output in 2017.

Infrastructure condition

159 Borshoo port is connected the provincial center Ulaangom town and Russian counter port Khandgait with paved road. Such road connection allows residents of Tuva region of Russia to visit Mongolia for trading and sightseeing. Elelctricity is imported from Russian side with 220 volt power transmission line. Heating for the existing buildings is supplied from a coal burning heat only boiler at the port. Water is supplied from a river which locates in 11 km distance from the port. There is no any sewage system for the port. Waste water from households are disposed into a waste water pit nearby the apartment area.

2 Socio-economic condition in the Bichigt area

160 Bichigt port is is located within Erdenetsagaan soum of Sukhbaatar province. Erdenetsagaan soum rank first in Sukhbaatar province in terms of territory and ranks second biggest soum in Sukhbaatar province in terms of population.

Demography

161 Erdenetsagaan soum has population of 6309 persons who belong to 1564 households in 8 bags (smallest administrative division). Average annual population growth is at 1.5%. Average life expectancy in Sukhbaatar province is at 72.07 years which is nearly 2.2 years higher than the national average of 69.89 years. The figure is 67.17 years for males and 76.97 years for females.

Land use

162 The soum territory is 16,948km2, of which 14,210km2 of area (83.8% of the soum territory) is being used by agricultural sector (mainly as livestock pastureland) and 2,700km2 of area is under protected areas while 15.5km2 of area is occupied by infrastructure facilities and 5.8km2 area is occupied by the soum center which is the only major settlement area in the soum. Below

79 table shows land use patterns in Erdenetsagaan soum.

Table IV-11: Land use pattern in Erdenetsagaan soum No. Land occupation by Size of area (hectares) Percentage of soum territory 1 Agricultural sector, of which 142,100 83.8% 1.1 Livestock pasture 141,015 83.21% 1.2 Fodder planting fields 10,000 0.59% 1.3 Crop planting fields 639 0.05% 2 Surface water bodies 545 0.03% 3 Special protected areas 271,113 16% 4 Infrastructure facilities 1542 0.09% 5 Settlement area 578 0.03% Source: ADB Consultant,2018

Education

163 There is one middle school complex, which comprises of primary, middle and high schools in itself, in Erdenetsagaan soum center. It was founded in 1925. In the academic year of 2018- 2019, the middle school complex has 1200 pupils and 80 teachers. There are 2 kindergartens at the soum center that have 180 childens and 26 teachers.

Health services

164 The soum health center was founded in 1936. Currently, it has 17 staffs which includes 2 doctors, 2 midwives and 9 nurses. The soum health center serves around 13,000 people annually and receives over 600 emergency calls from herders in rural areas. Its in-patient department receives 110 patients per year.

Unemployment and poverty

165 As of 2017 year end, there were 80 registered unemployed persons in Erdenetsagaan soum, of which, 49 were female residents. In total, there are 3,000 unemployed persons in Sukhbaatar province and the unemployment rate is at 10.6%, as of 2017 year end. Overall, the poverty level (percentage of people living under the minimum livelihood standard) in Sukhbaatar province is at 47% which is one of the highest in Mongolia and 17.4 percentage points higher than the national average figure of 29.6%.

Economic development

166 Economy of Erdenetsagaan soum heavily depends on livestock breeding (animal husbandry) sector. The soum has 180,000 heads of livestock herded by 925 herder households. Average number of livestock per herder households is 195 heads. The soum is famous in its Uzemchin breed of sheep. Although the livestock breeding sector of Erdenetsagaan soum has sufficient pastureland in size, access to drinking water is limited. In total, there are only 18 herder water wells are registered in the entire soum. Coal and non-ferrous metals mines within the soum have a total of 208 deep water wells, some of which are shared for livestock breeding.

167 The second biggest economic sector in Erdnetsagaan is mining. There are 13 small and medium sized mines in the soum which includes 8 coal mines, 2 molybdenum mines, 2 wolfram mines and 1 rare earth metals mine. Nearly all of coal mines are located in the southern part of the soum and coal export transportation trucks constitute a big part of traffic at the Bichigt port. The coal mines possess over 50 pieces of land nearby Bichigt port where the truck drivers dwell temporarily during their shift to Bichigt.

168 There are a total of 43 shops, 1 bakery and 2 construction materials factories in the soum.

Almost all service sector outlets are concentrated in the soum center.

Infrastructure

169 Erdenetsagaan soum is connected to power distribution, mobile telephone and fiber optic cable networks of Mongolia. There is no any paved roads in the soum. It connected to the provincial center Baruun-Urt town with a 200km dirt road.

D. ECOLOGICAL RESOURCES AND ENVIRONMENT 1 FLORA

170 In terms of vegetation-geographic division, Ulaangom city falls in the Vegetation zone of Depression of the Great Lakes in western Mongolia. Further within the zone, Borshoo port locates within the semi-arid steppe sub-zone. The Bichigt area is located in the Middle Khalkh semi-arid grassland zone within the Eastern Mongolian Steppe District (Ulziikhutag, 1989) in accordance with the plant-geographical segments.

Source: Division of Vegetation zones in Mongolia,N.Ulziikhutag,1989 Figure IV-13: Vegetation map of Mongolia and location of project area

Plant species in Borshoo region

171 Vegetation survey at the project site was conducted on August 30, 2018. A total of 23 plant species of 18 types and 13 plant families have been registered in the project area as shown in Table II-.

Table IV-12: Plant species registered in the project area

Scientific names Mongolian names Type

species

# of # plant

Plant types Plant Plant families Plant

Grasses family Cleistogenes Хазаар өвс songorica Perennial

Agropyron cristaturn Саман ерхөг 1 4 4 Perennial Achnatherum Гялгар дэрс splendens Perennial

Carex duriuscula Ширэг улалж Perennial Lily family

Allium Sp. Сонгино 1 1 2 Perennial

Allium senescens Мангир сонгино Perennial Asparagales order 1 1 1 Iris Bungei Бунгийн цахилдаг Perennial Flowering plants family 1 1 2 Salix sp. Бургас Perennial Nettle family 1 1 1 Urtica cannabina Олслиг халгай Perennial Goosefoot family 1 1 1 Chenopodium album Цагаан лууль Annual Poppy family 1 1 1 Papaver nudicaule Нүцгэн намуу Perennial Rose family

Potentilla bifurca Имт гичгэнэ Perennial 1 2 3 Potentilla anserine Галуун гичгэнэ Perennial Sanguisorba Эмийн сөд officinalis Perennial Herbaceous family 1 1 1

Andrasace incana Буурал далан товч Perennial Aromatic flowing plants family 1 1 1 Bupleurum bicaule Хоёр ишт бэрш Perennial Plantain family 1 1 1 Plantago major Их таван салаа Perennial 1 4 6 Composite family

Artemisia frigida Агь шарилж Perennial

Artemisia dracunculus Ишгэн шарилж Perennial

Artemisia Sp Шарилж Perennial

Cirsium esculentum Иддэг азаргана Perennial

Taraxacum officinale Эмийн багваахай Perennial

Scorzonera Sp. Хависгана Perennial

172 The predominant plant families distributed along the road corridor includes Grasses family, Goosefoot family, Herbaceous family, Composite family, Plantain family, and Nettle family. There are no any forest areas in the vicinity of the project site. There are no any rare and endangered plant species at the project site.

Plant species in Bichigt region

173 The predominant plant species around Bichigt region are Krilov and large grass, bridlegrass, agit, forb, and wild leek. A total of 168 species of 10 plant families in the vascular plants are registered in this region which includes: Compositae (Asteraceae), Gramineae (Poaceae), Rose (Rosaceae), Bean (Fabaceae), Goosefoot (Chenopodiaceae), Liliaceae (Liliaceae), Carnation (Caryophyllaceae), Labiatae (Lamiaceae), Scrophulariaceae (Scrophulariaceae) and Crowfoot (Ranunculaceae).

174 Wormwood (Artemisia), Cinquefoils (Potentilla), Onion (Allium) and Astragalus (Astragalus), Oxytropis (Oxytropis), Needle grass (Stipa), Chenopodium (Chenopodium), Sedge (Carex), Iris (Iris), Polygonum (Polygonum), Orostachys (Orostachys) and the prevailing genus of grass.

175 There are no any endemic plant species in the project region, but there are a total of 12 subendemic species of 10 genus in 7 families including: Desert needlegrass (Stipa gobica), Caucasian needlegrass (Stipa glareosa), Leek onion (Allium polyrrhizum), Mongolian onion (Allium mongolicum), Desert asparagus (Asparagus gobicus), Desert baby’s breath (Gypsophila desertorum), Ptilotrichum canescens, Golden sea-leavander (Limonium aureum), Mongolian dogar (Caryopteris mongolica), Central Asian Mussel (Asterothamnus centraliasiaticus), Broadly scrozonera (Scrozonera divaricata) and Ajania trifida.

176 Based on the landscape type, plant communities in the project region can be divided into 2 groups: (i) Grass-peashrub-herb community and Grasses-forb community.

177 The Grass-peashrub-herb community is spread mainly in the mountainous areas such as Lkhachinvandad Mount SPA which is in 2km distance from the current Bichigt port and 5km distance from the proposed new construction site. The vegetation cover is 50-60% and the average plant height is 15-40 cm. Dominantly Krylov’s needlegrass (Stipa krylovii), Needlegrass.sp (Stipa grandis), Crested wheatgrass (Agropyron cristatum), Bridlegrass (Cleistogenes squarrosa), but subdominant Needleleaf sedge (Carex duriuscula), Spiked speedwell (Veronica incana), Pasqueflower (Pulsatilla ambigua), Littleleaf peashrub (Caragana microphylla), Desert thymus (Thymus gobicus) are taken part.

Table IV-13: Dominant plants in mountain steppe with a grass-peashrub-herb community in the Lkhachinvandad Mount SPA

Community Cover Indiviudal Dominant species Subdominant species (%) number Mountain steppe with a Krylov’s needlegrass Needleleaf sedge grass-peashrub-herb Needlegrass.sp Spiked speedwell 50-60 25-30 Crested wheatgrass Pasqueflower Bridlegrass Littleleaf peashrub Desert thymus

Figure IV-14: Mountain steppe with a grass-peashrub-herb community in the Lkhachinvandad Mount

178 Grasses-forb community spreads in the plain steppe areas. The vegetation cover 35-40% and the average plant height is 10-20 cm. Dominantly Krylov’s needlegrass (Stipa Krylovii), Bridlegrass (Cleistogenes squrrosa), Littleleaf peashrub (Caragana microphylla), but the sub dominantly Crested wheatgrass (Agropyron cristatum), Amman’s bindweed (Convolvulus ammanii), Prairie sagewort (Artemisia frigida) and peashrub sp (Caragana stenophylla) are involved.

Table IV-14: Dominant plant species of semi-arid steppe with a grass-herb community nearby the proposed new construction site

Community Cover Indiviudal Dominant species Subdominant species (%) number Dry steppe with Krylov’s needlegrass Crested wheatgrass a grasses-forb 35-40 12-18 Bridlegrass Amman’s bindweed Littleleaf peashrub Prairie sagewort Peashrub communities

Figure IV-15: Semi-arid steppe with a grass-herb community, the proposed new construction site

2 FAUNA

179 In terms of zoo-geographic division, the Borshoo area falls in the Northwestern Mongolia Wildlife subzone with the Desert steppe zone. The Bichigt area belongs to the Eastern Mongolia semi-arid steppe zone within the Mongol-Daurian Steppe District in terms of zoo-geographic division.

Figure IV-16: Zoo-geographic zones in Mongolia

Source: National Geographic Atlas

3 Wildlife species in Borshoo region

180 There are no any wildlife species in the vicinity of the project site. However, in a broader project region, 41 species of mammals, 13 species of birds and 24 species of insects are recorded.

Table IV-15: Mammal species registered in the project region

2001

1987,1997

lia (2006)

Mongolian names Scientific names appendix

Law onFauna Red Red List

Law onHunting

CITES I, I, CITES

Redbookof Mongo

Rarelist species of Mongolia, IUCN IUCN Red (2006)List category Global

ÀRTIODACTYLA Хар сүүлтий* Gazella subgutturosa* VU + + - VU NT NT CARNIVORA Øèë¿¿ñ мий Lynx lynx NT + - II NT NT HV Мануул мий Otocolobus manul NT - - II NT - HV Ñààðàë ÷îíî Canis lupus LC - - II NT - HV Øàð ¿íýã* Vulpes vulpes* LC - - - NT - HV Хярс үнэг* Vulpes corsac* LC - - - NT - HV Эрээн хүрнэ Vormela peregusna LC + + - DD NT NT ªìõèé ¿åí Mustela eversmanni LC Öàãààí ¿åí Mustela erminae LC Õîòíû ¿åí Mustela nivalis LC Ìîäíû ¿åí Mustela sibirica LC Õàëçäàé äîðãî Meles meles LC LAGOMORPHA Áîðîëçîí òóóëàé* Lepus tolai* LC - - - LC - HV ¯õýð îãäîé Ochotona pallasi LC Дагуур огдой Ochotona dauurica LC RODENTIA Õ¿ìæ áàðàã÷èí Alticola barakshin LC Òàâøãàð áàðàã÷èí Alticola strelzovi LC Ñ¿¿ëëýã øèø¿¿õýé Cricetulus longicaudatus LC Цомч шишүү Allocricetulus curtatus LC Õºõ øèø¿¿õýé Cricetulus barabensis NT - - - DD - - Орог зусаг* Phodopus campbelli* LC - - - LC - - Элсний зусаг Phodopus roborovskii LC - - - LC - - Шаргал чичүүл* Merionus meridianus* LC - - - LC - - Õóë ÷è÷¿¿ë Meriones unguiculatus LC - - - LC - - Çýýðä ñîõäîé Ellobius tancrei LC Ìýõýýð÷ îãîòíî Microtus oeconomus LC Сибирь алагдаага* Allactaga sibirica* LC - - - LC - - Таван-хуруут атигдаахай Cardiocranius paradoxus VU - + - DD - - Ìîíãîëæèí äààõàé Stylodipus andrewsi LC Ýëñ÷ ñàâãàäààõàé Dipus sagitta LC Ãýðèéí õóëãàíà Mus musculus LC CHIROPTERA

2001

1987,1997

lia (2006)

appendix Mongolian names Scientific names

Law onFauna Red Red List

Law onHunting

CITES I, I, CITES

Redbookof Mongo

Rarelist species of Mongolia, IUCN IUCN Red (2006)List category Global

Óìðûí ñàðñààõàé Eptesicus nilssoni LC Óññàã áàãâààõàé Myotis daubentoni LC Ñàõàëò áàãâààõàé Myotis mystacinus LC Æèæèã ñîîòãîé Plecotus auritus LC Буурал сармаахай Vespertilio murinus LC INSECTIVORA Дэлдэн зараа* Hemiechinus auritus* LC - - - LC - - Äààãàí àòààõàé Sorex caecutiens LC Цармын атаахай Sorex tundrensis LC Өөдсөн атаахай Sorex minutissmus LC

Source: ADB Consultant, 2018 Hint: DD-Data Deficient; LC-Least concerned; EN-Endangered; NT-Near threatened; VU-Vulnerable; HV-hunting value;

4 Wildlife species in Bichigt region

181 The gazelle habitat is located in a protected area that is far (about 300 km) away from the Bichigt BCP.

182 A total of 40 Mammal species of 7 different families are registered in the project region. The project region surrounding Bichigt port is considered a part of habitat for steppe ungulate species such as Mongolian gazelle (Procapra gutturosa) and forest ungulate species such as red deer (Cervus elaphus).

Table IV-16: Mammal families registered in the project region № Order Family Genus Species Percent Positon 1 Rodentia 4 13 14 35.0 I 2 Carnivora 3 5 9 22.5 II 3 Insectivora 1 2 7 17.5 III 4 Chiroptera 1 4 4 10.0 IV 5 Artiodactyla 2 3 3 7.5 V 6 Lagomorpha 2 2 2 5.0 VI 7 Erinaceomorpha 1 1 1 2.5 VII Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016

183 By the criteria of the International Union for Conservation of Nature (IUCN), out of the 40 species of mammals registered in the project region, only 20 (50%) of them are classified under category Least concern. Under the category of “Data deficient” includes insectivore species such as Siberian shrew (Crocidura sibirica), least shrew (Sorex minitissimus), tundra shrews (Sorex tundrensis), even-toothed shrew (Sorex isodon), flat-skulled shrew (Sorex roboratus), chiropter species including brown long eared bat (Plecotus ognevii), rodents including daurian squirrel (Spermophillus dauuricus), narrow headed vole (Microtus gregalis), Eurasian harvest mouse (Microtus minutus), 9 species in total.

184 Red deer (Cervus elaphus) is listed under the category of “Vulnerable” while Mongolian gazelle (Procarpa gutturosa), Mongolian marmot (Marmota sibirica) are listed under category of “Endangered”. Under the category of “Near threatened”, pallas’s cat (Otocolobus manul), grey wolf (Canis lupus), red fox (Vulpes vulpes), corsac fox (Vulpes corsac), totally 4 species are listed.

Table IV-17: Mammal species listed in CITES convention Convention on International Trade Convention on Migratory Species of (CITES) Wild Animals (CMS) Gray wolf (Canis lupus) Mongolian gazelle (Procapra gutturosa) Pallas cat (Otocolobus manul) Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016

185 Mongolian gazelle population in Erdentsagaan soum is shown in below table.

Table IV-18: Current population size of Mongolian gazelle in Erdenetsagaan soum Soum Distribution (km2) Density(D) Population size 95% CI (N) Erdenetsagaan 11812.8 1.8±0.5 21489 11937-36685 Total 18909.2 1.8±0.4 35241 21680-56094 Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016

Figure IV-17: Core habitat of Mongolian gazelle in the Sukhbaatar province Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016

Red deer distribution and population size.

186 As of 2014, the Red deer spreads and localizes in the environment conditions with empty rocky mountain area with dry grasses include Baruun Araat, Zuun Araat, Lkhachinvandad Mountain, Hetsuu Janjin, Shovdol Mountain, Unegt and Uushig of the Lkhachinvandad Mountain Nature Reserve totally in 1019 км2 field with 354±17 coordinates which is being placed 2.7 in 1000 hectares. It follows that underpin of the local community is increased in recent years, the number of Lkhachinvandad Mountain red deer and its distribution locations are spread in expansion territory.

500

400

300

200

100

0 1980 1997 2002 2004 2011 2014

Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016 Figure IV-18: Population size of red deer in Lkhachinvandad Mount SPA

Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016 Figure IV-19: Core habitat of red deer in Sukhbaatar province

5 Birds

187 A total of 60 bird species of 22 genus belonging to a total of 9 orders and most of the 37 species of birds are migrant an 23 species are registered as a settled wintering in in the wider project region. Most of these birds have accounted for the majority of the tribe for sparrows.

Table IV-19: Bird families recorded in the project region № Family Genus Species Percent 1 Galliformes 1 1 1.7 2 Anseriformes 1 8 13.3 3 Podicipediformes 1 1 1.7 4 Phoenicopteriformes 2 2 3.3 5 Falconiformes 2 10 16.7 6 Charadriiformes 1 1 1.7 7 Columbiformes 2 3 5.0 8 Strigiformes 1 1 1.7 9 Passeriformes 11 33 55.0 Source: Biodiversity Survey Report for Baruun-Urt-Bichigt road corridor, 2016

6 SPECIAL PROTECTED AREA a. Protected areas around Borshoo port

188 There are no any protected areas in the immediate vicinity of the project site. Buffer zone of the Uvs Lake SPA is located in 19.7km from the project site.

Source: ADB Consultant,2018 Figure IV-20: Protected areas around Borshoo port

Table IV-20: Key features of the Uvs lake SPA

Name of the SPA Uvs lake – Strictly Protected Area

Date of protection status 1993-11-12 given

Size of area for the SPA 755,244 hectares

Uvs lake is the biggest lake in Mongolia in terms of surface area. The lake has surrounded by very unique landscapes including deserts, desert steppes, forest steppes, highly elevated mountains with glaciers and meadowlands. The lake water is 5 times more saline than ocean water. Uvs lake SPA was registered in the list of world natural heritages in 2003 Key features of protection and in RAMSAR convention list in 2004. Over 80 mammal species, 240 bird species and 5 fish species and over 430 plant species are distirbuted in the Uvs lake SPA which includes 67 medicinal species, 24 vegetable species, 12 protected species and 10 species listed in the Redbook of Mongolia.

Distance from the project site 19.7 km

Source: ADB Consultant,2018

b. Protected areas around Bichigt port

189 There are 2 protected areas around the project site. Mount Lkhachinvandad SPA is located in 1.3km from the current customs facility and in 4km distance from the proposed new construction site on western side. Eastern Mongolian SPA – Section B is located in about 40km distance from the project site.

1 Mount Lkhachinvandad

190 The Mount Lkhachinvandad is a main habitat for red deer populaton in eastern Mongolia and was given protection status of “Natural reserve area” in 1995 in order to protect the red deer population which was estimated at 200 heads in 2011. The SPA territory occupies an area of 588km2. Top of the Mount Lkhachinvandad is elevated 1230m above sea level and is a home to a number of rare plant species.

2 Eastern Mongolian SPA – Section B

191 Eastern Mongolian steppes are one of the last untouched steppes in the world and is a core habitat for Mongolian gazelle. Eastern Mongolia SPA is divided into 2 section: A section covers the Menen steppes in Dornod province while the Section B covers areas around Lag lake in Sukhbaatar province. Its territory occupies an area with size of 5,704km2.

Source: ADB Consultant,2018 Figure IV-21: Protected areas around the Bichigt BCP

E. PHYSICAL CULTURAL RESOURCES 1 Cultural Heritage in the Borshoo area

192 There are no any cultural heritages in the immediate vicinity of the Borshoo project site. However, if a new water well will be created at Burgatain Us, there are 7 ancient tombs adjacent to the potential ground water deposit sites. Visibility fencing needs to be made in order to protect the tombs during the well drilling.

193 In the wider region, there are a number of heritages as described below:

Ancient rock paintings at Hoo uzuur

194 Ancient rock paintings depicting ibex are located in Khandgait bag of Davst soum in about 20 km distance from the project site.

Deer stones at Zaagiin am

195 Ancient roack paintings depicting camels and ibex are located at Zaagiin am in Davst soum in about 18km distance from the project site.

Rock paintings at Burgastai

196 A series of roack paintings depicting deers, ibex and bowing men are located in 3.5km northwest of the project site.

197 Other cultural heritage sites that are located in more than 20km distance from the project site includes roack paintings at Haniin uvuljuu, stone sculpture at Yenhuldug and honorary stone statue for former Mongolian leader Yu.Tsedenbal.

2 Cultural Heritage in the Bichigt area

198 There are no any cultural heritage sites in the immediate vicinity of the Bichigt port. However, in the broader region, territory of Erdenetsagaan soum is rich in historical remaining from the stone age, bronze age and medieval periods. There are a number of ancient town remains and tombs at Hargiltai, Haniin gol, Gurvan Hadtai, Hongor Ovoo, Urtiin Tsagaan Ovoo, Morin Hoshuu and Hadiin river. Also, there are several rock paintings and deer stones existing throughout the soum Unu The Uglugt Buddhist temple is one of the most important cultural heritages in Erdenetsagaan soum. The temple was built in 1780 by a famous Buddhist monk Yeguzer Khutagt lama at Nomch Dov hills. The temple was destroyed during the 1930s but has been resumed its operation since early 1990s.

199 According to a survey conducted by Institute Archeology in 2016, 16 ancient tombs and a deer stone were found nearby the Tohoin river valley which is located in 101km distance from the project site. Other notifiable cultural heritage site within the territory of Erdenetsagaan soum is Yeguzer Monk Temple which is located nearby the soum center (in 70km distance from the project site).

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

200 Potential environmental impacts were assessed through site visits and technical analysis for both construction and operational phases of the project.

A. Background of Project Areas

201 The proposed project sites at the Bichigt and Borshoo BCPs have the following characteristics:

• There are no surface waterbodies (lakes or rivers) in the vicinity of the project sites at both Bichigt and Borshoo BCPs; • There are no endangered, endemic or migratory species in the vicinity of the BCPs; • There are no other human settlements other than the port staff in the project areas; • There is no timber trade in both Borshoo and Bichigt; • Wildlife around the BCPs is minimal and there is also no evidence of human trafficking • There are no tombs in the project areas at both Borshoo and Bichigt; • The gazelle habitat is located in a protected area that is far (about 200 km) away from the Bichigt BCP, and will not be affected by the project; and • The critical habitat area of the animals, such as the gazelle habitat, is about 250 to 300 km away from the BCP project area.

B. Project Area of Influence and Sensitive Receptors

202 To define the geographic scope of impact assessment, the concept of “project area of influence” and “sensitive receptors” were identified. The project area of influence was defined as the total area which might be subject to adverse impacts of the project. This was based on the locations of sensitive receptors, defined as settlements and/or environmental values that might be affected by the project construction and/or operation.

The receptors comprise: (i) any villages, communities and/or public buildings (e.g. schools, offices) that may exist in the project areas and may be potentially subject to impacts of noise and/or vibration, air pollution, and others environment-related issues during construction and/or operation of the project facilities; (ii) public service facilities vulnerable to disturbance or pollution e.g. water source protection areas and reservoirs; and (iii) vegetation, fauna habitats, and agricultural lands targeted for construction works.

203 The following distances were adopted to identify the sensitive receptors: (i) for construction and/or operational noise – receptors within 200m of the noise-generating source; (ii) for construction-related air quality impacts (e.g. odor from waste mining) – receptors within 500m; (iii) for surface water – project-related adjacent rivers and water bodies; (iv) for groundwater – groundwater of project site; (v) for ecology – receptors within 1km of project site. These distances, combined with the direct construction sites, were assumed to encompass the total project area of influence.

Table V-1: Mongolian Evaluation Standards and Assessment Areas Adopted for This Project

Type of Environmental Applicable Mongolian Assessment Area Standard Media Standard Environmental Ambient air quality MNS 4585: 2007 Up to 200 m beyond the permanent and quality temporary project footprint Noise MNS 4584:2007 Up to 200 m beyond the permanent and temporary project footprint or up to 200 m beyond the project road red line. Surface water MNS 4586:1998 From 100 m upstream to 500 m quality downstream of the project sections of Tuan River. Groundwater MNS 900: 2005 Permanent and temporary project footprint and adjacent areas. Ecology No applicable standard Permanent and temporary project footprint and adjacent areas. Soil quality MNS 5850:2008 Permanent and temporary project footprint. Physical cultural No applicable standard Permanent and temporary project resources footprint. Occupational No applicable standard Construction sites within the “footprint” of health and safety the permanent and temporary engineering land take areas and within the facilities during operation. Community health No applicable standard Up to 200 m beyond the permanent and and safety temporary project footprint

204 The environmental sensitive receptors defined for the Bichigt BCP and Borshoo BCP are shown in Table V-2 and Table V-3, respectively.

Table V-2: Environmental Sensitive Receptors at the Bichigt BCP

Direction / Environmental Affected Applicable Sensitive Receptor distance from the aspects People Standards site boundary No surface waterbodies in the immediate vicinity of Surface water MNS 4586:1998 the project site Hairtiin lake E, 25 km

MNS 900: 2005 Groundwater A groundwater well 3 km

Mount Lkhachinvandad SW, 4 km Specially SPA protected area Eastern Mongolian SPA – (SPA) N, 40 km Section B

N=north; E=east; W=west; SW=south west; SE=south east; NW=north west Source: TA consultant

Table V-3: Environmental Sensitive Receptors at the Borshoo BCP

Khandgait River E, 10 km Uvs Lake S, 30 km 8 ground water deposits 40 to 200 km Groundwater A new deep well, MNS 900: 2005 3 km Burgastain Us No SPAs in the immediate Specially vicinity of the project site protected area SE,19,7 km (SPA) Uvs Lake SPA

N=north; E=east; W=west; SW=south west; SE=south east; NW=north west Source: TA consultant

C. Pre-construction Phase

205 Prior to construction, the following measures will be implemented in the engineering design and pre-construction phases to ensure the project’s readiness for environment management. i) Preparation of environment management in pre-construction planning and detailed design stage.

206 The following safeguards will be addressed:

➢ Appointment of one environmental officer within the PIU to coordinate EMP implementation. ➢ Recruiting LIEC by the PIU for training on EMP implementation, site specific EMP development, project specific environmental quality monitoring, developing detailed monitoring plan for construction and operation periods in accordance to the monitoring plan. ➢ Updating of the EMP prior to tendering and construction as necessary and including EMP requirements in tender and contract documents. ➢ Developing a plan to implement the GRM, including developing subproject operational GRMs; provide training for PIU staff and GRM access points; disclose GRM phone numbers, addresses, and emails to the public on information boards at each construction site; establish database for feedbacks. ➢ Consulting and informing residents and key stakeholders near the construction sites regarding construction timing and approach. ii) Contractor environment management plan in pre-construction planning and detailed design stage

207 Prior to contraction, a site-specific EMP should be prepared to fully respond to the requirements set in the project EMP, and shall include a number of sub-plans, including the following:

➢ Soil erosion protection plan, identifying likely areas of soil erosion and the mitigation measures which the contractor will employ to minimize potential erosion around any excavations and construction areas. ➢ Borrow and spoil management plan, specifying location of borrow pits, quarries and spoil disposal sites, as needed. Contractors will ensure that (i) borrow areas will be located away from residential areas, water bodies and will avoid valuable pasture/grazing land, (ii) after use borrow pit areas will be graded to ensure drainage and visual uniformity, and (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; ➢ Water protection plan, defining measures to be taken during construction to avoid/mitigate pollution arising from construction site drainage (silt), use of chemicals, construction around existing landfills containing leachate and other potential pollution sources; ➢ Health and safety risk management plan for management of community and occupational health and safety; ➢ Spill management plan, defining the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response following an incident; ➢ Waste management plan, defining procedures for management of household waste, construction waste, detailing arrangements for storage and transportation of the waste to landfills; ➢ Traffic management and access plan, identifying construction activities that may affect the local traffic and communicating with local traffic control agencies on the timing and locations of construction activities; and iii) Soil resources.

208 The project activities may cause a loss of land and topsoil, increasing risk of erosion. To mitigate the impact on soil resources, following measures are recommended.

➢ Minimize land acquisition for development. ➢ Incorporate landscape and revegetation features in design; ➢ Retain/incorporate landscape features in design. ➢ Optimize balance between cut and fill and avoid deep cuts and high embankments to minimize earthworks. ➢ Maximize reuse of spoil and other material within the construction or adjacent construction works. ➢ Select spoil disposal sites and develop spoil management and rehabilitation plan. ➢ Specify removal and storage of topsoil for restoration works prior to main earthworks. ➢ Specify vegetation that serves specific bioengineering functions and is of local provenance. ➢ Design appropriate drainage systems for slopes to reduce soil erosion. iv) Emission.

209 To minimize the air emissions of project activities, following measures will be adopted.

➢ Specify local materials to minimize transport distance.

➢ Locations for borrow areas and concrete batching stations must be at least 300 m downwind of the nearest household. v) Runoff

210 To minimize risk of polluted run-off, the following measures will be adopted.

➢ Technical design must ensure that drainage design and discharge locations are specified to minimize risk of polluting nearby water bodies, if any. ➢ Design the on-site wastewater treatment facilities with appropriate technology and adequate capacities. ➢ Ensure water is treated to the relevant standard prior to discharge to the environment. vi) Bidding documents and contract documents

211 The related clauses in the EMP will be included in all the bidding documents and contracts for procurement of civil works, goods and services. All contractors and subcontractors will be required to comply with the EMP. vii) Contractor obligations.

212 All contractors, in their bids, will respond to the environmental clauses in the bidding documents for EMP requirements.

D. Construction Phase

213 During construction, major environmental impacts are associated with increased level of noise and dust due to the use of heavy vehicles and construction machineries, waste soil and construction debris generated during excavation, backfill, foundation work, concrete structure and building decoration. Risks to occupational and community health and safety from construction activities are also a concern.

1. Environmental management on construction sites

214 During construction, the assigned environmental management officers of the PIU, together with environmental supervision engineers from the CSC, will be responsible for enhancing site supervision, management and appraisal, for timely identification and resolution of any issues.

2. Soil erosion and contamination

215 Soil erosion. Soil erosion mainly occurs during the construction phase. It may be caused by excavation of borrow pits, stockpiles and spoils from earthworks during groundworks for the project sites. The factors that are expected to contribute to accelerated erosion in the project area are any exposed soil during periods of rainfall from June to August.

216 Soil contamination. Localized contamination of soil in the construction phase may result from the inappropriate transfer, storage, and disposal of petroleum products, lubricants, chemicals, hazardous materials, liquids and solid waste. These impacts are particularly associated with construction site chemical storage, and during refueling of plant and equipment.

217 The impacts on soil will be mitigated through a number of measures which are defined in the EMP, and which will be incorporated in the bid documents and construction contracts.

218 Mitigation measures for soil erosion control to be adopted is summarized as follows:

i) Implement soil erosion control measures. Before construction, the contractor will be required to prepare a Site Drainage and Soil Erosion Management Plan (as part of the CS-EMP) to prevent soil erosion. The plan will include the following soil erosion control measures; ii) Maintain slope stability at cut faces by implementing erosion protection measures such as terraces and silt barriers during road constructions; iii) Stabilize all cut slopes, embankments, and other erosion-prone working areas while constructions are going on; iv) Stabilize all earthwork disturbance areas within 30 days after earthworks have ceased at the sites; v) Minimize active open excavation areas during trenching activities and use appropriate compaction techniques for pipe trenches construction; vi) Provide temporary detention ponds for containment to control silt runoff; vii) Prevent runoff entering construction sites, and divert runoff from sites to existing drainage or open ground for watering the vegetation by constructing intercepting ditches and drains; viii) Strip and stockpile topsoil, and cover or seed temporary soil stockpiles; ix) Limit construction and material handling during periods of rains and high winds; x) Properly slope or re-vegetate disturbed surfaces, such as compacted pipeline trenches and cut banks and; xi) Appropriately set up temporary construction camps and storage areas to minimize the land area required and impact on soil erosion.

219 Mitigation measures for the soil contamination control to be adopted is summarized as follows:

i) Properly store petroleum products, hazardous materials and wastes on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination; ii) Remove all construction wastes from the site to approved waste disposal sites; iii) Establish emergency preparedness and response plan (Spill Management Plan); and iv) Provide spill cleanup measures and equipment at each construction site and require contractors to conduct training in emergency spill response procedures.

220 Internal inspection and monitoring should be conducted by contractors and Construction Supervision Companies (CSCs) while compliance inspection and monitoring shall be conducted by the Independent Environmental Monitors (IEMs) or licensed institutes. The inspection and monitoring results will be submitted to the PIU to serve as basis for project implementation progress reports.

3. Air Quality

221 Anticipated sources of air pollution from construction activities include: (i) dust generated from earth excavation, filling, loading, hauling, unloading; (ii) dust generated from disturbed and uncovered construction areas, especially in windy days; (iii) dust generated by the movement of vehicles and heavy machinery on unpaved access and haul roads; (iv) dust from aggregate preparation and concrete-mixing; (v) vehicle emission from construction vehicles and heavy diesel machineries and equipment (gaseous CO, CH and NO2); and (vi) asphalt flue gas during road pavement. The dust and gaseous air emissions could affect nearby sensitive receptors.

222 A particular emission from road construction is asphalt flue gas. During the asphalt heating

100 and mixing process, the fuel burning will produce smoke, and the asphalt will produce flue gases emissions.

223 The quantity of dust generated by the construction activities depends on the force of the wind, the humidity of the material, the level of construction and the state of site. It is estimated that under the general condition (with an average wind speed of 2.5 m/s) in the area of 150 m downwind from the construction, the dust becomes less apparent and disturbing. For dust generated by transporting earth and other construction powdery materials, the impact exceeds 60 m on both sides of the transport route. However, dust concentration decreases rapidly as the distance increases, so there are basically no significant impacts beyond 200 m downwind.

224 A series of mitigation measures are defined for reducing the impact of air emission:

i) Spraying water on construction sites and earth/material handling routes where fugitive dust is being generated; ii) Locating asphalt plants and mixers as far away as possible (at least 500 m downwind) from the nearest residential areas and other sensitive receptors; iii) Paying particular attention to dust suppression near sensitive receptors such as schools, hospitals and residential areas; iv) Transport vehicles will be limited to low speeds in construction sites; v) Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission; vi) Covering materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation; and vii) Construction site roads will be well maintained and watered and swept on an as-needed basis.

225 With the above mitigation measures, the impact of construction on ambient air quality is anticipated to be not significant, considering that there are no major environmental sensitive receptors with the 200 m range from the proposed project site.

4. Wastewater

226 Construction wastewater. Wastewater produced during construction will come from washing aggregates, pouring and curing concrete, wastewater from maintenance and cleaning of mechanical equipment and vehicles, and domestic solid wastes proposal the construction sites.

227 Impact on groundwater. As the proposed project interventions are facility construction and equipment installation, no major impacts on groundwater resources are anticipated in either the construction or operational phases of the BCPs and auxiliary facilities. No imminent wells/hand pumps are located in the area of potential impact. However, fuels and chemicals used for road construction could contaminate groundwater if they are not properly stored and disposed. Spills of toxic substances resulting from traffic accidents during construction may also contaminate groundwater if no proper emergency response is undertaken.

228 Measures to avoid surface water and groundwater pollution include the followings:

i) During road and building construction, contractors will be required to pump slurry to shore and properly dispose cutting materials. This will reduce the disturbance of sediments and the impact to water quality; ii) Contractors will be required to develop contingency plans for control of oil and other dangerous substances (Spill Management Plan) as part of the construction site EMP;

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iii) Wastewater from construction activities will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil; iv) Wastewater should be disposed of at designated disposal sites after treatment; v) All areas where construction equipment is being washed will be equipped with water collection basins and sediment traps; vi) Fuel storage, maintenance shop and vehicle cleaning areas must be stationed at least 500 m away from the nearest water body; vii) Storage facilities for fuels, oil, and other hazardous materials will be within secured areas on impermeable surfaces with 110% volume of the materials stored, and provided with bunds and cleanup installations; viii) Labor camps will be located at least 500 m from rivers and other surface water bodies; ix) Eco-toilets and on-site wastewater pre-treatment systems will be installed at construction camps along with proper maintenance protocols; and

x) Water quality (for pollutants such as SS, CODcr, NH3-N and Petroleum) in rivers will be monitored during construction in accordance with the EMP monitoring program to identify and confirm results of the impact assessment and effectiveness of adopted mitigation measures.

229 As stated in Section A of Chapter V, nearby surface water and groundwater sensitive receptors are located 3 km and beyond from the project site, the proposed project activities are not expected to cause significant impacts on hydrology and water quality. With the additional mitigation measures for construction site management described above to be implemented, the environmental impact of the project intervention to surface water and groundwater resources is anticipated to be not significant.

5. Noise

230 The major sources of noise are movement of construction vehicles, haulage of construction materials to the construction sites and the noise generating activities at the construction sites. Foundation works, concrete mixing and material movements are the primary noise generating activities and will be uniformly distributed over the entire construction period.

231 Each construction machine can be treated as one point noise source. The point source noise attenuation formula and noise superimposed formula have been used to predict the major construction machinery noise impacts during construction.

Point source noise attenuation formula:

 r  L = L − 20 lg  2  − L 2 1    r1  Noise superimposed formula:

n  0.1Leqi  Leqs = 10 10   i=1  Where, L1,L2 - the noise value at points of r1.r2 (dB(A)); r1,r2 - the distances of the points to the noise source(m); △L- Houses, trees and other shield contributions to noise attenuation value (dB(A)); Leqs -The equivalent sound level value at the prediction point (dB(A));

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Leqi - Equivalent sound level of the i-th point source on the prediction point (dB(A)).

232 Without consideration of the construction fence contribution to machinery noise attenuation (i.e., the △L=0), machinery attenuation only rely on spatial distance natural attenuation, the intensity and scope of the noise caused by the project have been modeled.

233 Noise levels at different distances were derived for different types of equipment as defined in Table V-4.Error! Reference source not found. The daytime Mongolian noise standard of 60 d B(A) and WHO noise guideline level of 55 dB(A) are the thresholds applied to this project

Table V-4: Construction Equipment Noise Impact Distance Noise from the sound source attenuated by distance Equipment (dB(A)) 10 m 20 m 30 m 60 m 100 m 150 m 200 m Excavator 75.0 69.0 65.5 59.4 55.0 51.5 49.0 Bulldozer 74.0 68.0 64.5 58.4 54.0 50.5 48.0 Loader 75.0 69.0 65.5 59.4 55.0 51.5 49.0 Pile 67.5 59.0 55.5 49.4 45.5 41.5 39.0 Roller 67.5 59.0 55.5 49.4 45.5 41.5 39.0 Truck 67.5 59.0 55.5 49.4 45.5 41.5 39.0 Cumulated 81.6 75.2 71.7 69.2 60.0 57.5 49.6 Source: TA consultant

234 Noise generated from sole construction machinery, will decay as the distance increases Table V-4 shows that for construction machinery noise in the unobstructed case, single noise source, the impact zone at daytime will be 60-100 m distance (i.e., distance to meet the requirements of noise standards). If all of the machinery and equipment operate at the same time, the distance increases to about 200 m at daytime.

235 The predicted noise levels in Error! Reference source not found. were compared to the l ocations of sensitive receptors (Error! Reference source not found.Error! Reference source not found. and V-2) to evaluate the noise impact of the project. As stated in Section A of Chapter V, there are no noise sensitive receptors within the 200 m area from the project site, the proposed project activities are not expected to cause significant impacts on noise.

236 Contractors will be also required to regulate their construction activities and implement the following mitigation measures to ensure compliance with the relevant regulatory provisions:

(i) To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and movement of heavy vehicles between 20:00 and 06:00 the next day in accordance with the GOM regulations; (ii) Maintain equipment and machinery in good working condition; undertake regular equipment maintenance, ensure compliance with GOM standards. (iii) Install temporary anti-noise barriers to shield buildings where non-compliance is monitored. (iv) Disseminate information on procedures of handling complaints through the GRM. (v) Ensure that noise levels from equipment and machineries conform to the Mongolian standard of MNS 4585:2007 and maintain construction vehicles and machineries properly to minimize noise. (vi) Apply noise reduction devices and methods for high noise equipment operating within 200 m of the sensitive sites, e.g. schools, villages, residential areas.

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(vii) Locate high-noise activities (e.g. rock crushing, concrete-mixing) >1 km from sensitive areas. (viii) Place temporary hoardings or noise barriers around noise sources during construction. (ix) Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation. (x) Conduct regular interviews with residents/villagers adjacent to construction sites to identify noise disturbance. Community feedback will be used to adjust work hours of noisy machinery.

237 With the additional mitigation measures for construction site management to be implemented, the environmental impact of the project intervention on the acoustic environment is anticipated to be not significant.

6. Vibration Impact

238 Vibration impacts are expected during infrastructure works, including vibrations from roadbed compacting and rolling, etc. The impact of vibration during construction is mainly reflected by the impact of construction machineries with strong vibration on sensitive receptors that are close to the construction sites. Machines that generate vibration during construction include excavators, bulldozers, road rollers, and air compressors.

239 On the proposed construction sites, different degrees of mechanical vibration will occur. Such vibration is sudden and discontinuous, which can annoy people nearby the sites and construction workers. Main construction machineries include vibrating road rollers, land scrapers, loaders, stone crashers and spreading machines, among which the impact of vibrating road rollers is the higher.

240 Table V-5 shows the levels of vibration caused by construction machinery from the Japanese Handbook of Environmental Impact Assessment.

Table V-5: Vibration Levels of Construction Machinery (Unit: dB)

Equipment At 5 m At 10 m At 20 m At 30 m Vibratory hammer 75 67 48 44 Roller 58 53 50 48 Diesel truck 62 58 54 51

241 Vibration level decreases quickly from the machinery source over distance. The vibration level decreases from the 60 dB range at 10 m from the machine to the 50 dB range at 30 m. The national standard is 67dB for the night and 70dB for the day time. This indicates that the vibration level will diminish quickly at approximately 30 m from the source of machine vibration. It is anticipated that vibration generated during construction will have very limited impacts in the project areas.

242 Mitigation Measures. Mitigation measures for reducing the vibration impact during construction include:

(i) To prohibit the pilling and compaction operations at night, which will effectively reduce the vibration impact; (ii) No sensitive receptor site is closer than 20 m from a construction area, although some

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residential areas are between 20 m and 100 m of construction areas; (iii) High noise activities, such as compaction operations will be prohibited at night; (iv) Communities will be consulted prior to large earthworks to ensure they are informed; (v) To avoid sensitive timing e.g. exams at nearby schools or festivals.

243 Overall, vibration impacts during construction would be of short duration. There are no permanent residents living in the project sites that are significantly affected by the construction activities. Potential sensitive receptors will be exposed to short term, temporary and localized impacts. With the proposed mitigation measures in place, potential vibration impacts during construction would be reduced to acceptable levels.

7. Solid waste

244 Solid waste from workers’ camps. An average of 0.5 kg/day per worker of garbage is estimated to be produced in construction camps. It will be the responsibility of the construction contractors to provide sufficient garbage bins at proper locations and to ensure that these garbage bins are protected from birds and vermin, and emptied regularly. The contractors’ responsibility is included in the EMP and will be included in bidding documents and construction contracts.

245 Construction wastes. Construction wastes could have adverse impacts on the surroundings if not properly managed. Construction wastes that cannot be used will be collected on site and not be discarded in a way that will damage the immediate environment. Construction wastes will be regularly transported off-site by the contractor for disposal at disposal sites approved by local government authorities in compliance with the GOM laws.

246 Currently, there are two separate solid waste disposal sites at the Bichigt BCP: one is located within the BCP and the other is in the west side of town for travelers and temporally settlers. At the Borshoo BCP, a solid waste disposal site is located about 500 m from the BCP to the south west, with an area of approximately 100m X 500 m of virgin land.

247 According to the Law of Mongolia on solid waste management, a local government is obliged to designate a solid waste disposal area and take measures to allow local people dispose of their wastes only in the designated area. Those entities who dispose their wastes, would need to make an agreement with the local government before using the waste disposal site.

248 Mitigation Measures. For the construction sites, solid waste will be managed as follows.

(i) Existing domestic waste containers will be used for domestic waste collection at work sites. (ii) A centralized waste collection point will be established at each project site. (iii) Construction waste dumpsters will be provided at all construction sites. Construction waste will be collected on a regular basis by a licensed waste collection company and transported for recycling, reuse, or disposal at a licensed landfill, in accordance with relevant GOM regulations and requirements. (iv) Site borrow area and spoil disposal site for station construction at least 300 m from residential areas so as to reduce potential dust and noise impacts from these sites. (v) Rehabilitate and vegetate spent borrow area and spoil disposal site within one month after closure to prevent soil erosion and dust generation. (vi) Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, spoil, that remain on the site after construction.

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8. Impacts on Biological Resources.

249 The potential impact of construction activities on biological resources is anticipated to be minimal as the environmental baseline showed a lack of flora and fauna of high ecological value in the project areas. There are no any forest areas in the vicinity of the project site, and here are no any rare and endangered plant species, and there are no any wildlife species in the vicinity of the project sites.

250 The mitigation measures defined for soil, surface and groundwater protection will effectively protect ecological resources during construction activities. No protected flora or fauna are expected near the proposed project sites or affected areas.

9. Impacts on Physical Cultural Resources

251 There are no known cultural resources near the proposed project sites. Nonetheless, provisions on handling any cultural resources that might be uncovered incidentally during construction will be included in the EMP. If paleontological fossils are encountered during construction, all activities will be suspended and an established action plan will be implemented (e.g notification of local administration on paleontology). Works will recommence only after appropriate measures have been taken and the resumption of works has been confirmed by the appropriate authority.

10. Impacts on Socio-Economic Resources

252 Land acquisition and resettlement. The proposed project facilities for the Bichigt and Borshoo BCPs will be constructed on government owned lands, and there will be no land acquisition and resettlement issues involved in the project.

253 Risks to public utilities and community health and safety. Traffic congestion may worsen as construction traffic in the project areas increases, causing temporary inconvenience to traffic, travelers, residents, and commercial operations. The potential impacts on community health and safety will be mitigated through a number of activities defined in the EMP. The contractors will implement the following measures:

i) Traffic management. A traffic control and operation plan will be prepared, to be approved by the local traffic management administrations before construction. The plan will include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings, selecting transport routes to reduce disturbance to regular traffic, reinstating roads, and opening them to traffic as soon as the construction is completed; ii) Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals; iii) Information disclosure. Residents and businesses will be informed in advance through media of the construction activities, given the dates and duration of expected disruption; and iv) Construction sites protection. Clear signs will be placed at construction sites in view of the public, warning people against potential dangers such as moving vehicles, hazardous materials, excavations etc., and raising awareness on safety issues. Heavy machinery will not be used at night. All sites will be secured, disabling access by the public through appropriate fencing whenever appropriate.

254 The Bichigt and Borshoo BCPs are located in the remote areas, and there are no a large number of residents and travelers in the project areas. The overall level of project impact to public utilities and community health and safety is expected to be insignificant.

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255 Risks to occupational health and safety. The construction industry is considered to be one of the most hazardous industries to occupational health and safety. The intensive use of heavy construction machinery, tools, and materials presents physical hazards including noise and vibration, dust, handling heavy materials and equipment, falling objects, work on slippery surfaces, fire hazards, chemical hazards such as toxic fumes and vapors, etc. Contractors will implement adequate precautions to protect the health and safety of their construction workers.

256 The occupational health and safety risks will be managed by applying measures in the following order of preference: avoiding, controlling, minimizing hazards, and providing adequate protective equipment. The mitigation measures will include the following:

i) Environmental, health and safety officer. An environmental, health and safety officer will be appointed by each contractor to implement and supervise the environmental, health, and safety management plan ii) Environmental, health and safety management plan. Each contractor will prepare such a plan for the construction works on the basis of the EMP. The plan will include the following provisions: ✓ Clean water. Provide a clean and sufficient supply of fresh water for construction sites and for all camps, offices and workshops; ✓ Sewage and wastewater. Provide an adequate number of latrines and other sanitary arrangements at construction sites and work camps, and ensure that they are cleaned and maintained in a hygienic state; ✓ Solid waste. Garbage receptacles at construction sites and camps will be set up, which will be periodically cleared to prevent outbreak of diseases; ✓ Personal protection. Provide personal protection equipment, such as safety boots, helmets, gloves, protective clothing, goggles, and ear protection, in accordance with relevant health and safety regulations for workers; iii) Emergency preparedness and response. An emergency response plan to take actions on accidents and emergencies will be prepared, including environmental and public health emergencies associated with hazardous material spills and similar events, and submitted to the local authorites for review and appraisal. Emergency phone link with hospitals in the three project towns will be established. A fully equipped first-aid base in each construction camp will be organized; iv) Records management. A records management system that will store and maintain easily retrievable records against loss or damage will be established. It will include documenting and reporting of occupational accidents, diseases, and incidents. The records will be reviewed during compliance monitoring and audits; v) Safety communication. Occupational health and safety matters are given a high degree of publicity to all persons regularly or occasionally on each construction site. Posters will be displayed prominently in relevant areas of the site; and vi) Training, awareness and competence. Trainings to all construction workers will be provided on basic sanitation, general health and safety matters, and on the specific hazards of their work.

257 Other Social Issues. No other social risks and/or vulnerability are anticipated as a result of the project. The project construction workers will be engaged locally. Prevention and control of transmissible diseases and HIV/AIDS, and community disturbance training and sensitization will be provided to the contractors, as well as drug and human trafficking education will be provided to the local communities, ensured in the loan assurances and monitored in the social action plans. Core labor standards will be implemented. Civil works contracts will stipulate priorities to (i) employ local people for works, (ii) ensure equal opportunities for women and men, (iii) pay equal wages for work of equal value, and pay women’s wages directly to them; and (iv) not employ child or forced labor. Specific targets for employment have been included in the gender action plan

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(GAP).

E. Operational Phase

258 No significant negative environmental impact is anticipated during operation of the project facilities. Minor concerns include noise from vehicles, air-conditioners and ventilation facilities, heating systems, dust from warehousing and logistics facilities, municipal solid wastes and domestic sewage. 259 Comprehensive training and appropriate technological design will contribute significantly to reducing operational risks of the project. Operations at the BCPs that remain unchanged both before and after the project will have no impact on existing conditions. For example, wildlife trafficking will not likely increase as a result of the RIBS project, and the greater efficiency of border operations which is a project objective may or may not impede such trafficking, dependent on factors other than the construction and operation of the proposed access road and the placement of additional facilities.

1. Water supply and wastewater 260 Current water supply at the Bichigt BCP is from an onsite deep well to 16 apartments in two buildings. The two apartment buildings are equipped with boilers for hot water supply. According to the data from the Water Supply and Sewerage Agency, each person consumes 139L per day. Assuming each family of these apartments has 2 family members, then the total water consumption in the two buildings is 2 x 16 x 139 = 4,448 liters of water per day. Apart from these apartment dwellers, there are other employees of about 70 working in the BCP, who are only connected to heating but not to water supply and wastewater pipelines. The water consumption rate for these people together with their family members is estimated to be 10 liters per day, which would add to the total water usage of 70x2x10 L/d = 1400 liters per day. In addition, the water use in the BCP office building may add to about 300 liters per day, resulting in a total water use at the Bichigt BCP of approximately 6,000 L/d or 6 m3/d. In the summer months, the water usage may be higher due to outdoor planting and watering, etc. Subsequently, the water usage in the Bichight BCP is estimated to be in magnitude of 6 to 10 m3 per day. 261 At the Borshoo BCP, there are about 80 people living in the project area, including the BCP staff and their family members. The water usage is estimated to be about 2 m3/d. The water is transported from Khandgait River, which is located 10 km away to the east of the Borshoo BCP.

262 The amount of water usage after the new facilities have been constructed under the AF project is expected to be in the same of magnitude as the current level of water usage. Water saving considerations can be considered in the engineering design of the new project works, including:

i) Installation of low flow and no touch faucets. The faucets are sensor-operated, turning on when hands are present and off when hands move away. This helps limit water flow and prohibits the spread of germs from touching the faucet handle. Low-flow faucets use an aerator to mix air in the water, reducing the flow necessary to achieve the same wetness by about two-third. ii) Use of dual-flush toilets. dual-flush toilets use less water to flush urine (2.5-3 liters per flush) and more for faces (5-6 liters per flush). iii) Use of water-free urinals and latrines. Water-free urinals and latrines do not flush, so they use no water. Each water-free urinal can save up to 150 m3 of water each year as compared to a traditional urinal. iv) Proper control of runoff from vehicle disinfection facilities will be included in the facility design, including covering of facility and proper site/surface layout.

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2. Solid Waste 263 During operation, the buildings will generate municipal solid waste (MSW) such as paper, cardboard, plastics, and general refuse by routine activities. 264 There are two separate solid waste disposal sites at the Bichigt BCP: one is located within the BCP zone and the other is at the west side of town for travelers and temporally settlers. The disposal site in the BCP zone has a dimension of about 3 meters in radius, and solid wastes are disposed of at the site periodically by service persons. The second waste disposal site is officially registered by the provincial government. According to the Law of Mongolia on waste management, a local government is obliged to designate a solid waste disposal area and take measures to make local people dispose of their wastes only in the designated area. 265 Solid waste at the Borshoo BCP comprises mainly of ash during the winter heating season and household solid wastes. The wastes are collected in collecting points and then transported to a temporary waste disposal site of about 100 X 500 m2 of virgin land that is located about 500 m away from the BCP to the southwest. There is no a specially designated disposal site for the Borshoo BCP site. 266 Mitigation. Solid and hazardous waste management activities at the Bichigt and Borshoo BCPs should include at a minimum the following: i) Waste burning will not be allowed at any project locations. ii) Open burning should be prohibited and the operation of the prescribed waste incinerators at the BCP quarantine facilities should be done in conformance with equipment and Mongolian standards. iii) Proper waste separation and disposal at nearby waste management facilities. Domestic waste should be properly separated from laboratory wastes and collected by local collection trucks for proper disposal near all facilities. iv) The amount of MSW to be disposed can be reduced through the application of 3R (reduce, reuse, and recycle) methods. MSW shall be segregated into biodegradable and non-biodegradable wastes. 267 For the newly designated equipment and chemicals storage building/site, and for all other potentially hazardous materials storage and handling sites at the BCPs, any such storage facility should be: (a) secured with a strong lock accessible only to authorized personnel; (b) be erected on an impermeable surface; (c) surrounded by an impermeable berm of sufficient height and width to securely contain an accidental spill equal in volume to the total design capacity of solid and liquid waste to be stored; and, (d) posted with warning signs in Mongolian, and other foreign languages.

3. Air quality

268 Indoor air pollution in the new buildings is mainly a result of improper decoration. Decoration materials, such as paints, strippers, sealants, glues, adhesives, and carpets emit volatile organic compounds (VOC).

269 Toxic formaldehyde causes short-term and long-term health issues. The mitigation measures include: (i) in addition to ensure the decoration materials that the new buildings used are water-based or formaldehyde-free products, an indoor environmental monitoring after completion of decoration works will be conducted in the framework of project acceptance check; (ii) make sure to air out newly painted areas and carpets after decoration; and (iii) take remedy measures if the monitoring data exceed the national standard.

270 For potential air pollution issues, the following mitigation measures will be implemented: i) Chemical substances will have clear labeling, be stored in specially-designed places (or warehouses), protected from evaporation.

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ii) The chemical substances will not be left at an open place or in vessels without closure, and will be used in strict accordance with the safe operational instructions; iii) Air quality in the work place will be periodically monitored and analyzed for air pollution parameters relevant to the chemicals in use in the facility; iv) Proper operations of quarantine incineration facilities and elimination of open burning of wastes at all locations. v) Improve the cargo handling practice via provision of X ray machines and sealing of the truck at the sites to reduce the dust generation and avoid repeated transshipment.

4. Operational Noise

271 Noise sources from the project facilities during operation mainly include air conditioning and ventilation systems, as well as pumps, and air compressors, and will have minimal noise impact.

272 The operational noise impact will be mainly associated with the vehicular traffic at the BCPs. The mitigation measures include (i) proper installation, maintenance of noise and vibration control facilities on air conditioning and ventilation systems; (ii) installation of ventilated sound insulation windows on the buildings if needed; and (iii)upgrading of the cargo handling practices and inspection procedures to reduce the noise from the cargo unloading and reloading.

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5. Occupational Health and Safety

274 Facility operators may be injured by slips, trips and falls on wet floors; by falls into ponds, pits, or vats and by splashes of hazardous liquids, and by suffering cuts and pricks from sharp tools, contusions, etc. Also there are hazards related to work in confined spaces.

275 The following measures will be implemented to safeguard the occupational health and safety:

i) Use safety shoes or boots with non-slip soles; ii) Wear personal protective equipment and chemical resistant clothing to avoid exposure of skin or eyes to corrosive and/or polluted solids, liquids, gases or vapors; iii) Post safety instructions in each laboratory regarding the storage, transport, handling or pouring of chemicals; iv) Check electrical equipment for safety before use; verify that all electric cables are properly insulated; take faulty or suspect electrical equipment to a qualified electricity technician for testing and repair; v) Wear safety goggles in all cases where the eyes may be exposed to dust, flying particles, or splashes of harmful liquids; vi) All workers will undergo periodic examinations by occupational physician to reveal early symptoms of possible chronic effects or allergies; vii) Health and safety will be incorporated into the regular staff training programs.

6. Potential Social and Economic Impacts

276 Social and gender issues, including human trafficking and transmission of communicable diseases, are not liable to be influenced negatively or positively by the proposed improvements.

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277 About 98% of mining exports currently go through Gashuun Sukhait, Shivee Khuren and Zamiin-Uud BCPs. Illegal mining practices are very minor and purely domestic, i.e., very small quantities of coal that are sold to poor households.

278 The proposed Additional Financing is mainly focused on modernization and upgrading of existing facilities, water use is not expected to increase significantly. Moreover, the secured land will be purely used for upgrading and expansion of the BCPs. No residential area, except for those dormitories for border officials is planned or proposed.

279 There are gazelles in Eastern Mongolia, albeit in different parts of the region. The bulk of the gazelle population lives in a strictly protected area far from Bichigt. Strengthening regional cooperation and connectivity remains a high priority for the Mongolian government, with sufficient resources allocated to support the various initiatives.

280 The BCP of Bichigt is Mongolia’s closest gateway to a seaport in the PRC (Jinzhou Port), which is supported by extensive road and rail networks to the PRC’s northeast. Jinzhou Port is one of the few ports in the PRC that is rail-served and has good capacity to handle transit trade from Mongolia. Because of the poor shape of the facilities in Bichigt, the BCP is currently under- utilized (despite high throughput capacity, modern customs facilities and connectivity infrastructure on the PRC side of the border, at Zuun Khatavch).

281 The BCP of Borshoo, in the western region, is anticipated to grow in strategic importance in the wake of its planned upgrading to international status in 2019. The Russian Government is investing in developing this border area as a node of cross-border connectivity by constructing a connecting road to the M54 federal highway (linking the area to a vast road network), with completion expected by 2020.This is in line with a bilateral agreement of Mongolia and Russia, signed in 2007, which has gained renewed commitment following the Foreign Minister of Mongolia’s visit to Moscow in May 2018.

282 For animal and plant originated products, as well as food products, Mongolian inspection and quality control standards have already been applied to goods imported and exported. The potential exporters are required to have specific certificates and forms from the relevant ministries and agencies for permission to carry out the import and export of animals or animal parts. The project will further improve the quality standards through the provision of trainings and upgraded equipment and facilities.

283 For food imported into Mongolia, environmental best practices will be considered when choosing suppliers from Russia or the PRC. Suppliers that adhere to international environmental standards for production are given a priority. The current practices that the General Agency for Specialized Inspection (GASI) applies include (i) mandatory inspection of the production site before first consignment which is a pre-condition to issue an import permit and export certificate; (ii) documentary and physical inspections followed by laboratory testing on each consignment at the border; and (iii) random inspection and lab testing at retail points. There is no timber trade in either the Borshoo BCP or Bichigt BCP. Timber is traded through railroad only. Timbers are imported only via railroad in the Sukhbaatar BCP from Russia. If timber is destined in transit to China, the timbers are transported from Russia to China through the Trans-Mongolian railway, and then pass through the Zamyn-Uud BCP. The Sukhbaatar BCP and Zamyn-Uud BCP are the only two BCPs that have railroads goring through. There is no import or export of timbers via truck, because of high cost of transport in relation to long distance. Both Borshoo and Bichigt BCPs have never had dealt with timbers.

F. Climate Change Risk and Vulnerability Assessment

284 A climate risk and vulnerability assessment (CRVA) was conducted in this IEE report. Data from the Coupled Model Inter-comparison Project Phase 5 (CMIP5) climate models for the area

111 of this project were compiled and reviewed. The downscaled climate scenarios that were derived from the General Circulation Model (GCM) runs conducted under the CMIP5 were established for Bichigt City. The CRVA was conducted for greenhouse gas emission scenarios known as Representative Concentration Pathways (RCPs) used in the Fifth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC).

1 CRVA Methodology

285 The CMIP5 climate projections were obtained through model simulations for four different scenarios, namely RCP2.6, RCP4.5, RCP6.0, and RCP8.5, respectively, which represent different levels of greenhouse gas emission. The scenario of RCP2.6 represents the lowest level of greenhouse gas emission that corresponds to the agreed outcomes of the Paris agreement (i.e. no more than 2.0°C of temperature increase over pre-industrial). RCP4.5 and RCP6.0 are the medium and high scenarios but their differences are mainly in projections for the end of this century with little difference by 2050. RCP8.5 is the extreme scenario that represents the highest level of greenhouse gas emission with the most significant level of climate change.

286 In this project, a conservative approach was adopted to use RCP4.5 as a reference scenario and RCP8.5 as a challenging scenario for this CRVA analysis. Future climate hazards, such as floods and temperature extremes, etc. were derived by analyzing these two scenarios at a local level to the project area. This is to ensure that both the climate change impact assessment and the resulting proofing measures are adequate for the proposed project components.

287 The simulated climate data from the General Circulation Model (GCM) used in this assessment include both the historical baseline and future timeframes under both the RCP 4.5 and RCP 8.5 scenarios, respectively. The historical scenario covers the GCM precipitation and temperature data for a 55-year historical baseline period from 1950 to 2005, while the RCP4.5 and RCP8.5 scenarios include the projected precipitation and temperature data for a 80-year projection period from 2021 to 2100. The GCM model data for each period of the time scale can be viewed as a statistical realization of that climatic period.

288 The precipitation and temperature data from the GCM were applied in this CRVA to project future climate change conditions. A combination of different RCP and climate sensitivities could be used to characterize the future climate change scenarios and their associated uncertainty ranges. The RCP4.5 scenario with low-climate sensitivity and RCP8.5 with high-climate sensitivity were used as an indicator of the corresponding low and high bounds of the uncertainty range. Projected precipitation/temperature data were obtained for the following three climate change scenarios: Historical, RCP 4.5 and RCP 8.5 as shown in Table V-6.

289 Three key periodical timeframes were defined for the CRVA: 1) PA, the past 30 years from 1976 to 2005; 2) NF, the near-term future from 2021 to 2050; and 3) LF, the long-term future from 2071 to 2100. Projected climate variables (such as the maximum temperature, minimum temperature and precipitation) that may cause hazardous to the proposed project in Bichigt were obtained for the three periods, respectively.

Table V-6: Summary of Climate Change Data/Scenario for CRVA Climate Representative Climate Variable Data Projection Concentration Sensitivity Series Pathways

Historical Historical data - Daily Precipitation, Daily 1950- Scenario Maximum Temperature, 2005 Daily Minimum Temperature

112

Climate Representative Climate Variable Data Projection Concentration Sensitivity Series Pathways

Low RCP4.5 Low Daily Precipitation, Daily 2021- Scenario Maximum Temperature, 2100 Daily Minimum Temperature

High RCP8.5 High Daily Precipitation, Daily 2021- Scenario Maximum Temperature, 2100 Daily Minimum Temperature

2 Meteorological Characteristics of Project Areas

290 Mongolia is located in north latitude 44 ° - 52 ° N, east longitude 88 ° - 120 ° E. Mongolia is a country with scarce water resources, belonging to semi-arid, arid and ultra-arid region. The annual rainfall is only 50-400mm, with the largest annual precipitation in the north and the least in the south. Mongolia has a high rate of surface atmospheric evapotranspiration, nearly 90% of the annual precipitation is evaporated, and only 10% of the annual precipitation forms surface runoff and some of it is used to supplement groundwater. Mongolia's annual temperature range is large, cold and long winter, short and hot summer. The annual average temperature 0.7 ℃, the annual number of sunny days is 260 days.

291 Mongolia is a typical continental climate, morning and evening temperature difference is big. The lowest temperature in Winter can reach 40 degrees below zero, the highest temperature in Summer can reach 35℃. Spring in Mongolia (May to June) is shorter, and it is not until mid-May that the weather warms, trees sprout and grasslands turn green. In summer (July to August), the days are hot, the nights are cool and the ultraviolet ray is strong. In autumn (September to October), the weather is changeable, and it may suddenly become cold and even snow. Winter (from November to April) is very cold, with snow falling almost every day during the long winter.

(1). Observed Meteorological Data at Bichigt

292 Bichigt is a border city in the south of Mongolia and located in north latitude of 45.7603 N, and east longitude of 116.1959 E.

113

Figure V-1: Location of Border Crossing Station

Air Temperatures

293 Temporal temperature data observed from 1969 to 2018 are shown in Figure V-2. The change in temperature over time in Bichigt is not obvious. The observed perennial monthly average, minimum and maximum temperatures are approximately 1.32, -25.2 and 44.1 °C, respectively. Figure 2 shows that a general trend of temperature increase in the past 40 years at Bichigt. The annual average temperature has increased by approximately 2 °C at Bichigt over the period from 1969 to 2018.

294 The monthly distribution of temperature is shown in Figure V-3.. The temperature is the highest in July and lowest in January. High temperature occurs in the months of May to September with the average temperature of -15.3°C. November to March are is the cold season with the average temperature of -13.2°C.

Figure V-2: Historical Annual Average Temperature at Bichigt

114

Figure V-3: Historical Perennial Average Monthly Temperature at Bichigt

Precipitation

295 Average annual precipitation level in Bichigt area is around 228.1 mm. Over 80% of the total annual precipitation falls during the summer months of June, July and August. Monthly precipitation level recorded in Bichigt area during last 5 years are shown in the table below

Table V-7: Monthly precipitation level in Bichigt port area, mm Months Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 2013 4.5 2.5 4.1 2.8 7.9 51.8 61.1 72.1 7.3 2.8 6.3 7.8 231.0 2014 2.6 2.0 2.3 11.1 10.7 90.6 35.3 50.0 19.5 15.1 4.2 6.0 249.4 2015 5.4 4.7 3.1 5.1 31.3 98.7 22.1 37.6 15.7 4.8 5.4 6.3 240.2 2016 1.9 0.2 0.4 5.8 33.8 62.7 31.0 15.0 60.9 10.9 9.8 5.3 237.7 2017 0.7 1.7 3.6 4.8 15.2 4.2 88.6 31.9 18.7 3.6 6.9 2.3 182.2 2018 4,2 6,9 9 5,9 14,7 18,9 42,2 56 44,4 16,8 1,6 1 1,2 Source: Institute of Meteorology of Mongolia

Wind regime

296 The predominant wind direction in Bichigt area is from northeast to southwest and west to east. Wind speed is relatively high during the spring months of March, April and May while it slows down a bit during the winter months of January and February. Monthly average and maximum wind speed for the last 5 years are shown in tables below.

115

Table V-8: Monthly average wind speed, m/sec

Months Year 1 2 3 4 5 6 7 8 9 10 11 12 2013 2.7 4.1 4.6 5.6 4.9 3.0 2.2 2.9 3.6 4.2 4.1 3.4 2014 3.7 2.5 2.5 3.8 4.0 2.2 2.9 3.1 3.1 4.0 4.2 3.9 2015 2.9 2.9 3.1 4.7 4.8 2.0 1.9 2.1 3.0 4.1 1.6 3.0 2016 3.9 3.4 3.9 4.8 5.2 2.2 2.2 2.3 2.3 2.9 3.2 2.6 2017 2.8 2.7 2.5 4.3 5.4 2.1 2.4 2.5 3.4 2.8 3.7 3.4 2018 3.5 2.8 2.6 4.0 3.0 3 2.7 2.3 3.8 3.3 3.4 4 Source: Institute of Meteorology of Mongolia

Table V-9: Monthly maximum wind speed, m/sec

Months Year 1 2 3 4 5 6 7 8 9 10 11 12 2013 20.0 20.0 20.0 24.0 24.0 18.0 16.0 18.0 18.0 18.0 18.0 14.0 2014 14.0 14.0 18.0 18.0 18.0 14.0 14.0 18.0 20.0 14.0 20.0 14.0 2015 16.0 18.0 18.0 20.0 24.0 16.0 10.0 14.0 14.0 18.0 16.0 18.0 2016 14.0 14.0 22.0 20.0 24.0 14.0 16.0 16.0 10.0 10.0 12.0 14.0 2017 10.0 10.0 12.0 18.0 24.0 12.0 16.0 16.0 18.0 16.0 18.0 12.0 2018 14.0 12.0 20.0 16.0 16.0 14.0 12.0 10.0 14.0 16 18 18 Source: Institute of Meteorology of Mongolia

(2). Observed Meteorological Data at Borshoo

297 Borshoo is a border city in the north of Mongolia and located in north latitude 50.6934N, east longitude 92.0653E.

Figure V-4: Location of Borshoo Border Station

116

Air Temperature

298 Monthly average air temperature data of 43 consecutive years were available at Ulaangom Meteorology Station, which is located in 72 km away (air line) from the project Borshoo site. Although the closest meteo station located at Davst County Center in distance of 25 km away from the project site, air temperature data was available in last 22 years, due to its rather limited capacity and work regime. Therefore, for estimating a long term trend of air temperature, available data of Ulaangom station is suitable. The below table shows monthly average air temperature of Ulaangom station over 43 years since 1975.

299 Temporal temperature data observed from 1969 to 2018 are shown in Figure V-5.. The change in temperature over time in Borshoo is not obvious. The observed perennial monthly average, minimum and maximum temperatures are approximately -2.1, -38.3and 23 °C, respectively. Figure 2 shows that a general trend of temperature increase in the past 40 years at Borshoo. The annual average temperature has increased by approximately 2 °C over the period from 1975 to 2018.

300 The monthly distribution of temperature is shown in Figure V-6.. The temperature is the highest in July and lowest in January. High temperature occurs in the months of May to September with an average temperature of 15.2°C. November to March are is the cold season with an average temperature of -22.1°C.

Figure V-5: Historical Annual Average Temperature at Borshoo

117

Figure V-6: Historical Perennial Average Monthly Temperature at Borshoo

Precipitation

301 Total annual precipitation level in Davst soum is around 103.6 mm. Most of the precipitation falls in the warm months between June and September. Monthly recorded precipitation levels for the last 6 years are shown in table below.

Table V-10: Monthly precipitation level, mm, 2013-2018 Months Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 2013 0.0 2.5 0.6 0.2 1.3 16.1 17.1 56 5.5 4.0 7.7 5.2 116.2 2014 5.1 0.0 1.7 5.4 5.4 19.0 3.6 11.3 2.3 7.2 2.8 2.4 66.2 2015 0.8 2.4 2.1 14.1 5.4 30.8 8.4 5.5 15.1 2.2 8.8 2.2 97.8 2016 2.8 1.6 7.1 11.2 2.4 15.0 3.0 52.8 23.4 13.5 17 4.7 154.5 2017 6.5 0.6 2.7 0.0 3.0 8.6 10.5 32.1 7.4 2.5 9.2 0.2 83.3 2018 0.3 3.5 5.7 14.6 0 2 26.5 10.5 14.2 15.1 11.3 1.9 105.6 Source: Institute of Meteorology of Mongolia

Wind regime

302 The predominant wind direction in Davst soum is northwest to southeast and west to east. Wind speed is relatively high during the spring months of April and May while it slows down a bit during the winter months of January and February. Monthly average and maximum wind speed for the last 5 years are shown in below tables.

Table V-11: Monthly average wind speed, m/sec, 2013-2018 Months Year 1 2 3 4 5 6 7 8 9 10 11 12 2013 1.8 1.9 1.9 2.9 3.3 2.7 2.7 2.6 2.7 2.2 2.1 2.4 2014 2.0 1.9 1.8 2.4 3.2 2.8 3.0 2.5 2.7 2.9 2.4 2.2 2015 2.1 2.0 2.0 2.6 3.6 2.6 2.8 3.0 2.9 3.0 2.4 2.4 2016 2.4 2.2 1.7 2.3 2.3 2.2 2.2 2.3 2.4 2.4 1.6 1.4 2017 1.2 2.1 1.8 1.9 2.6 2.4 2.4 2.2 2.1 2.1 1.7 1.8 2018 1.2 1.3 1.8 3 3.5 2.8 2.6 2.6 2.9 2.7 2.3 1.6 Source: Institute of Meteorology of Mongolia and Uvs Provincial meteorology department

118

Table V-12: Monthly maximum wind speed, m/sec, 2013-2018 Months Year 1 2 3 4 5 6 7 8 9 10 11 12 2013 5 10 12 12 14 14 12 7 8 12 6 6 2014 4 3 4 14 12 7 6 7 7 7 6 5 2015 4 7 5 16 14 5 8 16 12 16 6 5 2016 4 4 9 12 9 6 5 7 7 7 5 5 2017 3 3 5 5 12 5 7 5 10 10 5 5 2018 5 6 12 14 21 17 15 13 14 19 16 14 Source: Institute of Meteorology of Mongolia and Uvs Provincial meteorology department

3 Projected Climate Change to Temperature

(1). Bichigt

303 The proposed project is in a continental temperate grassland climate zone. Figure V-7 shows the projected temperatures for the historical baseline scenario for the period from 1950 to 2005. The annual average maximum temperature is around 8.6°C and the annual average minimum temperature is around -4.9°C. The variation trend of the annual average maximum and minimum temperature is nearly parallel, with the temperature rising 0.21°C and 0.24°C per 10 years. There is no obvious change in temperature over the past 56 years at Bichigt.

304 Figure V-8 shows the projected future annual mean maximum and minimum temperatures and their trend lines during 2006 and 2100, which reveals that the temperature at the project area is projected to rise in the future.

305 Table V-13: shows the projected changes in temperature at Bichigt due to climate change. Compared to the historical baseline, the annual average maximum temperature is projected to increase by 2.11°C and 2.56°C, respectively, in the near-term future to 2050 under the low and high scenarios, and by 2.97°C to 5.87°C, respectively, in the long-term future to 2100. For the annual average minimum temperature, it is projected to increase by 2.12°C and 2.64°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 2.95°C and 6.27°C in the long-term future to 2100.

306 Overall, temperature is projected to increase especially in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a temperature increase, which, on the one hand, implies an increased high temperature heat in Summer, on the other hand, can alleviate the white disaster and low temperature damage to some extent in dry season in Winter.

119

Figure V-7: Projected Historical Annual Average Maximum and Minimum Temperatures at Bichigt

Table V-13: Projected Changes in Temperature in Bichigt Due to Climate Change Historical RCP4.5 (low) RCP8.5 (high) Baseline Near- Long- Past Near-term Long-term Projected maximum and term term minimum temperatures and PA NF LF NF LF changes from baseline 2021- 2071- 2021- 1976-2005 2071-2100 2050 2100 2050 Projected T_MAX/℃ 8.96 11.07 11.93 11.52 14.84 Change/℃ from Baseline - 2.11 2.97 2.56 5.87

Projected T_MIN/℃ -4.57 -2.45 -1.63 -1.93 1.70 Change/℃ from Baseline - 2.12 2.95 2.64 6.27

120

Figure V-8: (A) Projected Annual Average Minimum Temperatures (2006-2100); (B) Projected Annual Average Maximum Temperatures (2006-2100)

121

(2). Borshoo

307 The proposed project is in a continental temperate grassland climate zone. Figure V-9 shows the projected temperatures for the historical baseline scenario for the period from 1950 to 2005. The annual average maximum temperature is around 8.62°C and the annual average minimum temperature is around -4.56°C. The variation trend of the annual average maximum and minimum temperature is nearly parallel, with the temperature rising 0.27°C and 0.30°C per 10 years. There is no obvious change in temperature over the past 56 years at Borshoo.

308 Figure V-10 shows the projected future annual mean maximum and minimum temperatures and their trend lines during 2006 and 2100, which reveals that the temperature at the project area is projected to rise in the future.

309 Table V-13: shows the projected changes in temperature at Borshoo due to climate change. Compared to the historical baseline, the annual average maximum temperature is projected to increase by 2.28°C and 2.85°C, respectively, in the near-term future to 2050 under the low and high scenarios, and by 3.64°C to 6.78°C, respectively, in the long-term future to 2100. For the annual average minimum temperature, it is projected to increase by 2.29°C and 2.88°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.79°C and 7.05°C in the long-term future to 2100.

310 Overall, temperature is projected to increase especially in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a temperature increase, which, on the one hand, implies an increased high temperature heat in Summer, on the other hand, can alleviate the white disaster and low temperature damage to some extent in dry season in Winter.

Figure V-9: Projected Historical Annual Average Maximum and Minimum Temperatures at Borshoo

122

Figure V-10: (A) Projected Annual Average Minimum Temperatures (2006-2100); (B) Projected Annual Average Maximum Temperatures (2006-2100)

123

Table V-14: Projected Changes in Temperature in Borshoo Due to Climate Change Historical RCP4.5 (low) RCP8.5 (high) Baseline Near- Long- Past Near-term Long-term Projected maximum and term term minimum temperatures and PA NF LF NF LF changes from baseline 2021- 2071- 2021- 1976-2005 2071-2100 2050 2100 2050 Projected T_MAX/℃ 4.36 6.64 8.00 7.20 11.14 Change/℃ from Baseline - 2.28 3.64 2.85 6.78

Projected T_MIN/℃ -8.95 -6.66 -5.16 -6.07 -1.90 Change/℃ from Baseline - 2.29 3.79 2.88 7.05

4 Projected Climate Change to Precipitation

(1). Bichigt

311 Precipitation in Bichigt is characterized by relative high inter-annual variability and seasonality. Figure V-11 shows the projected baseline of historical annual precipitation during 1950 and 2005. There is an obvious change in annual precipitation during this period and the average increase was 14.4 mm per 10 years.

Figure V-11: Historical Annual Precipitation and Tendency during 1950 and 2005

124

312 The projected time series of annual precipitations is shown in Figure V-12. The projected annual precipitation is presented in Table V-15: along with the historical baseline. The annual average precipitation is projected to increase by 12.1% in the near-term future to 2050 and increase by 16.7% in the long-term future to 2100 under the low scenario (RCP4.5). Under the high scenario (RCP8.5), it is projected to increase by 21.3% in the near future to 2050 and increase by 36% in the long-term future to 2100, respectively. These projected results indicate that the annual precipitation in Bichigt is likely to keep roughly steady in near future but will increase by 21.3 to 36% in the long-term future.

313 Figure V-13 shows the projected monthly precipitation for different timeframes under the low and high scenarios in Bichigt. The projected largest change takes place in the months of June to September, when the rainfall is the most intensive during the year. Precipitation in June to September are projected to increase significantly compared to the baseline condition, whereas in other months of the year, precipitation does not change significantly.

314 Overall, rainfall is projected to increase in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a rainfall increase, which, on the one hand, implies an increased flood risk in flood season, on the other hand, can alleviate the drought to some extent in dry season in the future.

Figure V-12: Projected Annual Precipitations under Low and High Scenarios (2006 to 2100)

125

Table V-15: Multi-Year Average Annual Precipitation Baseline RCP4.5 RCP8.5 Past years Near-term Long-term Near-term Long-term

PA NF LF NF LF # 1976-2005 2021-2050 2071-2100 2021-2050 2071-2100 Annual Precipitation /mm 249.19 279.46 302.18 290.72 338.98 Change/% from Baseline - 12.1% 21.3% 16.7% 36.0%

Figure V-13: Projected Monthly Precipitation under Low Scenario (A) and High Scenario (B)

126

(2). Borshoo

315 Precipitation in Borshoo is characterized by relative high inter-annual variability and seasonality. Figure V-14 shows the projected baseline of historical annual precipitation during 1950 and 2005. There is an obvious change in annual precipitation during this period and the average increase was 7.4mm per 10 years.

Figure V-14: Historical Annual Precipitation and Tendency during 1950 and 2005

316 The projected time series of annual precipitations is shown in Figure V-15 for the low and high scenarios during 2006 and 2100 in Borshoo. The statistics of the projected annual precipitation is presented in Table V-15: along with the historical baseline. The annual average precipitation is projected to increase by 9.7% in the near-term future to 2050 and increase by 17.2% in the long-term future to 2100 under the low scenario (RCP4.5). Under the high scenario (RCP8.5), it is projected to increase by 19.8% in the near future to 2050 and increase by 30.8% in the long-term future to 2100, respectively. These projected results indicate that the annual precipitation in Borshoo will increase by 19.8 to 30.8% in the long-term future.

317 Figure V-16 shows the projected monthly precipitation for different timeframes under the low and high scenarios in Borshoo. The projected largest change takes place in the months of June to September, when the rainfall is the most intensive during the year. Precipitation in June to September are projected to increase significantly compared to the baseline condition, whereas in other months of the year, precipitation does not change significantly.

318 Overall, rainfall is projected to increase in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a rainfall increase, which, on the one hand, implies an increased flood risk in flood season, on the other hand, can alleviate the drought to some extent in dry season in the future.

127

Figure V-15: Projected Annual Precipitations under Low and High Scenarios (2006 to 2100)

Table V-16: Multi-Year Average Annual Precipitation Baseline RCP4.5 RCP8.5 Past years Near-term Long-term Near-term Long-term

PA NF LF NF LF # 1976-2005 2021-2050 2071-2100 2021-2050 2071-2100 Annual Precipitation /mm 396.54 434.96 474.98 464.60 518.71 Change/% from Baseline - 9.7% 19.8% 17.2% 30.8%

128

Figure V-16: Projected Monthly Precipitation under Low Scenario (A) and High Scenario (B)

5 Projected Climate Change to Extreme Temperatures

319 The results of CRVA as described above indicate that the temperature on an annual basis is projected to have an increase in the long-term future to 2100 overall. To further examine the impact of climate change on the temperature extreme events. In this study, four indexes of daily extreme maximum temperature, daily extreme minimum temperature, high-temperature days and low-temperature days were selected as indicators for analyzing the changes of extreme temperature in Bichigt. The definitions of these four indicators are shown in Table V-17: .

129

Table V-17: Index definition of temperature extreme events in Bichigt Index Definition Daily extreme maximum temperature Maximum daily maximum temperature Daily extreme minimum temperature Maximum daily minimum temperature High-temperature days Days of daily maximum temperature above 35°C Low-temperature days Days of daily minimum temperature is below 0°C

(1). Bichigt

320 Table V-18: shows the projected extreme temperature change in Bichigt under the different climate change scenarios. For the daily extreme maximum temperature, it is projected to increase by 2.54°C and 1.59°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.57°C and 5.44°C in the long-term future to 2100. For the daily extreme maximum temperature, it is projected to increase by 2.26°C and 3.01°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.53°C and 3.84°C in the long-term future to 2100. The increase of temperature brings about the increase of high-temperature days and the decrease of low temperature days. The index of high-temperature days rises by 4.79% under the high scenarios in the long-term future to 2100. The index of low-temperature days decreases by 4.55% and 8.79% under the low and high scenarios in the long-term future to 2100.

Table V-18: Extreme temperature change in Bichigt Historical RCP4.5 RCP8.5 Baseline Near-term Long-term Near-term Long-term # (1976-2005) (2021-2050) (2071-2100) (2021-2050) (2071-2100) PA NF LF NF LF Daily extreme 39.13 41.67 42.70 40.72 44.57 maximum temperature Change - 2.54 3.57 1.59 5.44

Daily extreme -36.55 -34.29 -33.02 -33.55 -32.71 minimum temperature Change - 2.26 3.53 3.01 3.84

High-temperature 30 58 187 97 555 days Proportion 0.27% 0.53% 1.71% 0.89% 5.07% Change - 0.26% 1.43% 0.61% 4.79%

Low-temperature days 6000 5649 5502 5558 5038 Proportion 54.79% 51.59% 50.25% 50.76% 46.01% Change - -3.21% -4.55% -4.04% -8.79%

130

(2). Borshoo

321 Table V-18: shows the projected extreme temperature change in Borshoo under the different climate change scenarios. For the daily extreme maximum temperature, it is projected to increase by 4.93°C and 5.55°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 4.61°C and 8.23°C in the long-term future to 2100. For the daily extreme maximum temperature, it is projected to increase by 6.75°C and 4.62°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.22°C and 7.8°C in the long-term future to 2100. The increase of temperature brings about the slight increase of high-temperature days and the obvious decrease of low temperature days. The index of high-temperature days rises by 1.25% under the high scenarios in the long-term future to 2100. The index of low- temperature days decreases by 6.16% and 10.77% under the low and high scenarios in the long- term future to 2100.

Table V-19: Extreme temperature change in Borshoo Historical RCP4.5 RCP8.5 Baseline Near-term Long-term Near-term Long-term # (1976-2005) (2021-2050) (2071-2100) (2021-2050) (2071-2100) PA NF LF NF LF Daily extreme 31.79 36.72 36.40 37.34 40.02 maximum temperature Change - 4.93 4.61 5.55 8.23

Daily extreme -49.78 -43.04 -46.56 -45.16 -41.99 minimum temperature Change - 6.75 3.22 4.62 7.80

High-temperature 0 2 5 4 137 days Proportion 0.00% 0.02% 0.05% 0.04% 1.25% Change - 0.02% 0.05% 0.04% 1.25%

Low-temperature days 6652 6289 5977 6200 5473 Proportion 60.75% 57.43% 54.58% 56.62% 49.98% Change - -3.32% -6.16% -4.13% -10.77%

6 Projected Climate Change to Extreme Precipitation

(1). Bichigt

322 The results of CRVA as described above indicate that the precipitation on an annual or monthly basis is projected to have an increase in the long-term future to 2100 overall. To further examine the impact of climate change on the precipitation extreme events. In this study, three indexes of daily extreme precipitation, daily maximum precipitation, no rain days were selected as research objects to analyze the changes of extreme precipitation in Bichigt. The definitions of these three indicators are shown in Table V-18: .

323 Table V-23: shows the projected extreme precipitation change in Bichigt under the different climate change scenarios. For the daily extreme precipitation, it is projected to increase by 8.28% and 22.78% under the low and high scenarios, respectively, in the near-term future to 2050, and by 24.75% and 42.18% in the long-term future to 2100. For the daily maximum precipitation, it is

131 projected to increase by 5% and 14% under the low and high scenarios, respectively, in the long- term future to 2100. The increase of precipitation results in the decrease of high-temperature days and the decrease of low temperature days. The index of no rain days decreases by 3.79% under the high scenarios in the long-term future to 2100.

324 Overall, climate change causes increased precipitation. On the one hand, daily maximum precipitation and daily extreme precipitation increase the risk of flood in Summer. On the other hand, decreased no rain days will alleviate the drought to some extent.

Table V-20: Index definition of precipitation extreme events in Bichigt Index Definition Daily extreme precipitation Precipitation greater than 95% of precipitation events occurrent Daily maximum Daily maximum precipitation amount precipitation No rain days Days without rain

Table V-21: Extreme precipitation change in Bichigt Historical RCP4.5 RCP8.5 Baseline Near-term Long-term Near-term Long-term # (1976-2005) (2021-2050) (2071-2100) (2021-2050) (2071-2100) PA NF LF NF LF Daily extreme 326.18 353.18 406.90 400.47 463.76 precipitation Change - 8.28% 24.75% 22.78% 42.18%

Daily maximum 32.51 29.33 69.46 34.03 37.14 precipitation Change - -10% 114% 5% 14%

No rain days 7918 7797 7768 7785 7503 Proportion 72.31% 71.21% 70.94% 71.10% 68.52% Change - -1.11% -1.37% -1.21% -3.79%

(2). Borshoo

325 The results of CRVA as described above indicate that the precipitation on an annual or monthly basis is projected to have an increase in the long-term future to 2100 overall. To further examine the impact of climate change on the precipitation extreme events. In this study, three indexes of daily extreme precipitation, daily maximum precipitation, no rain days were selected as research objects to analyze the changes of extreme precipitation in Borshoo. The definitions of these three indicators are shown in Table V-18: .

326 Table V-23: shows the projected extreme precipitation change in Borshoo under the different climate change scenarios. For the daily extreme precipitation, it is projected to increase by 7.24% and 26.74% under the low and high scenarios, respectively, in the near-term future to 2050, and by 19.07% and 29.52% in the long-term future to 2100. For the daily maximum precipitation, it is projected to increase by 61% and 64% under the low and high scenarios, respectively, in the long- term future to 2100. The increase of precipitation results in the decrease of high-temperature days and the decrease of low temperature days. The index of no rain days decreases by 5.56% under the high scenarios in the long-term future to 2100.

327 Overall, climate change causes increased precipitation. On the one hand, daily maximum precipitation and daily extreme precipitation increase the risk of flood in Summer. On the other

132 hand, decreased no rain days will alleviate the drought to some extent.

Table V-22: Index definition of precipitation extreme events in Borshoo Index Definition Daily extreme precipitation Precipitation greater than 95% of precipitation events occurrent Daily maximum Daily maximum precipitation amount precipitation No rain days Days without rain

Table V-23: Extreme precipitation change in Borshoo Historical RCP4.5 RCP8.5 Baseline Near-term Long-term Near-term Long-term # (1976-2005) (2021-2050) (2071-2100) (2021-2050) (2071-2100) PA NF LF NF LF Daily extreme 486.84 522.07 579.67 617.00 630.55 precipitation Change - 7.24% 19.07% 26.74% 29.52%

Daily maximum 22.10 27.46 35.60 33.43 36.22 precipitation Change - 24% 61% 51% 64%

No rain days 5403 5285 5004 5236 4794 Proportion 49.34% 48.26% 45.70% 47.82% 43.78% Change - -1.08% -3.64% -1.53% -5.56%

7 Climate Change Impact to Project Design

328 As indicated in previous sections, the results of CRVA indicate that the project area is likely to experience higher temperatures in the future due to the impact of climate change.

329 At Bighigt, the annual average maximum temperature is projected to increase by 2.11°C and 2.56°C in the near-term future to 2050, and by 2.97°C to 5.87°C in the long-term future to 2100. The annual average minimum temperature is projected to increase by 2.12°C and 2.64°C in the near-term future to 2050, and by 2.95°C and 6.27°C in the long-term future to 2100.

330 At Borshoo, the annual average maximum temperature is projected to increase by 2.28°C and 2.85°C, respectively, in the near-term future to 2050 under the low and high scenarios, and by 3.64°C to 6.78°C, respectively, in the long-term future to 2100. For the annual average minimum temperature, it is projected to increase by 2.29°C and 2.88°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.79°C and 7.05°C in the long- term future to 2100.

331 This may be beneficial to the road and railway transport systems because of the reduced frequency of foggy and frost weather conditions in winter times, hence resulting in a reduction in the risk of stoppage and damage to the transportation systems.

332 On the other hand, the increased temperature may also result in intensified heat waves in summer times that may damage the road surfaces. With a projected increase in annual maximum temperature, the extreme heat weather conditions and high temperatures may have significant effects on pertinent project components. Therefore, future increases in summer temperatures need to be considered in designing the performance of the infrastructural surfacing materials in the project. The road surfaces are vulnerable to the extremes of temperature.

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333 For a projected increase in annual minimum temperature, the index of low-temperature days decreases by 4.55% and 8.79% at Bichigt, and by 6.16% and 10.77% at Borshoo under the low and high scenarios in the long-term future to 2100. From this view, the increase of temperature can alleviate the frost disaster in the cold season.

8 Adaption to Climate Change

334 As discussed previously, the increased intensity of extreme heat and storm events is a major climate risk to the project subprojects in Bichigt and Boshoo. To avoid costly maintenance and/or business disruption in the future, the Project should additionally take into consideration of extreme heat and storm risks induced by the impact of climate change in designing engineering works of the Project. Measures for adaptation to climate change should also be developed in project construction and operation.

335 While mitigation can be viewed as a means of reducing the likelihood of adverse climate conditions, adaptation to climate change can be viewed as a measure of reducing the impact severity if adverse climate change conditions prevail. An adaptation strategy aims to increase the resilience of natural, human and economic systems to possible hazards to reduce the level of damage that might otherwise occur.

336 To be effective, an adaptation strategy must consider the climate risk as a normal part of decision-making, allowing governments, businesses and individuals to reflect their risk preferences just as they would in other sectors of risk management and strategic planning. To reach a point at which the climate risk can be assessed and adaptation strategies can realistically be developed will require enormous activities and efforts across multiple fields and sectors. Better information on regional climate change characteristics and potential consequences is a key requirement.

337 Adaptation to climate change may include “Hard” adaptation measures and “Soft” measures. The “Hard” measures refer to adjustments to the design of relevant project components to accommodate the climate change. The “Soft” measures may include ecological solutions, institutional and technical capacity building to enhance the ability to assess and manage the climate change risks. It will be more effective to adopt both “Hard” engineering measures and “Soft” non-structural measures to reduce the climate change risk and vulnerability in the proposed project areas.

338 Building walls at the Bichight BCP consist of bricks in 24 cm + polystyrene in 5 cm + iron net (to keep/sustain the plaster) + plaster. This type of insulation is very common in most of buildings constructed in Mongolia from late 1990 through these years.

339 Coal is the major source of energy in Mongolia as coal is the cheapest energy source in Mongolia. Natural gas, although with less emission, is not available on the local market. LPG is locally available, but costly compared to the conventional coal heating. There are several good insulation materials existing in the Mongolian market that can be used for buildings at the new BCP. They are rock wool basalt, wool, polyurethane, and/or XPS, EPS with about 10 mm width, which are good for insulating ceilings, basement of buildings, windows with triple glasses, and doors. All these options should be considered in building design of the new BCP.

340 Also, Mongolia is sunny for about 300 days in a year. Therefore building designs (including windows, their locations) should consider this advantage to keep the building warm with less use of thermal heating.

341 The proposed BCP sites are located in windy regions. The design and construction materials for all facilities should therefore be considered this specific weather condition. There is no continuous permafrost in these regions of Mongolia. However, seasonal frost is happening on the top soil during cold seasons which takes place in mid-September through mid-May. So, heating, water supply and wastewater pipelines should be designed in adequate depths below

134 the ground frozen level, with relevant chosen materials that are cold resistant and installed in a proper way..

9 Summary

(1). Bichigt

342 Compared to the historical baseline, the annual average maximum temperature is projected to increase by 2.11°C and 2.56°C, respectively, in the near-term future to 2050 under the low and high scenarios, and by 2.97°C to 5.87°C, respectively, in the long-term future to 2100. For the annual average minimum temperature, it is projected to increase by 2.12°C and 2.64°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 2.95°C and 6.27°C in the long-term future to 2100.

343 Temperature is projected to increase especially in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a temperature increase, which, on the one hand, implies an increased high temperature heat in Summer, on the other hand, can alleviate the white disaster and low temperature damage to some extent in dry season in Winter.

344 Precipitation in Bichigt is characterized by relative high inter-annual variability and seasonality. Compared to the historical baseline, the annual average precipitation is projected to increase by 12.1% in the near-term future to 2050 and increase by 16.7% in the long-term future to 2100 under the low scenario (RCP4.5). Under the high scenario (RCP8.5), it is projected to increase by 21.3% in the near future to 2050 and increase by 36% in the long-term future to 2100, respectively. These projected results indicate that the annual precipitation in Bichigt is likely to keep roughly steady in near future but will increase by 21.3 to 36% in the long-term future. Overall, rainfall is projected to increase in the long-term future to 2100 in the project area under the high climate change scenario.

345 The projected largest change takes place in the months of June to September, when the rainfall is the most intensive during the year. Precipitation in June to September are projected to increase significantly compared to the baseline condition, whereas in other months of the year, precipitation does not change significantly. Climate change will possibly lead to a rainfall increase, which, on the one hand, implies an increased flood risk in flood season, on the other hand, can alleviate the drought to some extent in dry season in the future.

346 The results of CRVA indicate that the project area is likely to experience higher temperatures in the future due to the impact of climate change. This may be beneficial to the road and railway transport systems in the winter because of the reduced frequency of foggy and frost weather condition in winter times, hence resulting in a reduction in the risk of stoppage and damage to the transportation systems. On the other hand, the increased temperature may also result in intensified heat waves in summer times that may damage the road surfaces. With a projected increase in annual maximum temperature by 2100 under the upper bound greenhouse emission scenario, the extreme heat weather conditions and high temperatures may have significant effects on pertinent project components. Therefore, future increases in summer temperatures need to be considered in designing the performance of the infrastructural surfacing materials in the project. The road surfaces are vulnerable to the extremes of temperature

(2). Borshoo

347 Compared to the historical baseline, the annual average maximum temperature is projected to increase by 2.28°C and 2.85°C, respectively, in the near-term future to 2050 under the low and high scenarios, and by 3.64°C to 6.78°C, respectively, in the long-term future to 2100. For the annual average minimum temperature, it is projected to increase by 2.29°C and 2.88°C under the low and high scenarios, respectively, in the near-term future to 2050, and by 3.79°C and 7.05°C in the long-term future to 2100.

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348 Temperature is projected to increase especially in the long-term future to 2100 in the project area under the high climate change scenario. Climate change will possibly lead to a temperature increase, which, on the one hand, implies an increased high temperature heat in Summer, on the other hand, can alleviate the white disaster and low temperature damage to some extent in dry season in Winter.

349 Precipitation in Borshoo is characterized by relative high inter-annual variability and seasonality. Compared to the historical baseline, the annual average precipitation is projected to increase by 9.7% in the near-term future to 2050 and increase by 17.2% in the long-term future to 2100 under the low scenario (RCP4.5). Under the high scenario (RCP8.5), it is projected to increase by 19.8% in the near future to 2050 and increase by 30.8% in the long-term future to 2100, respectively. These projected results indicate that the annual precipitation in Borshoo will increase by 19.8 to 30.8% in the long-term future.

350 The projected largest change takes place in the months of June to September, when the rainfall is the most intensive during the year. Precipitation in June to September are projected to increase significantly compared to the baseline condition, whereas in other months of the year, precipitation does not change significantly. Climate change will possibly lead to a rainfall increase, which, on the one hand, implies an increased flood risk in flood season, on the other hand, can alleviate the drought to some extent in dry season in the future.

351 The results of the CRVA indicate that the project area is likely to experience higher temperatures in the future due to the impact of climate change. This may be beneficial to the road and railway transport systems in the winter because of the reduced frequency of foggy and frost weather condition in winter times, hence resulting in a reduction in the risk of stoppage and damage to the transportation systems. On the other hand, the increased temperature may also result in intensified heat waves in summer times that may damage the road surfaces. With a projected increase in annual maximum temperature by 2100 under the upper bound greenhouse emission scenario, the extreme heat weather conditions and high temperatures may have significant effects on pertinent project components. Therefore, future increases in summer temperatures need to be considered in designing the performance of the infrastructural surfacing materials in the project. The road surfaces are vulnerable to the extremes of temperature

G. Cumulative, Indirect and Induce Impacts

352 Cumulative impacts are defined as the combination of multiple impacts from the existing projects, the proposed project, and anticipated future projects that may result in adverse and/or beneficial impacts that would not be expected for a single standalone project. They could arise from other projects in the vicinity that are being constructed concurrently with the construction stage of this project.

353 As of the time of this report writing, no information is available on construction works for other projects that could overlap and concur with the construction phase of the within the proximity of the project.

354 Construction related cumulative impacts, if any, will be effectively minimized by adopting proper mitigation measures, including: (i) coordination between all project components and other projects in the area of influence in terms of construction schedule, possible access road and borrow/disposal sites and spoil sharing; (ii) contractors will develop material transport plan with consultation of local road management authority and local community; (iii) enforcement of good construction management to minimize dust, noise and waste generation; (iv) education of construction workers to minimize social disturbance and cultural conflict; (vi) provision of temporary access to local traffic; (vii) proper maintenance of the access roads and timely restoration/strengthening upon completion. With effective implementation of good construction management measures, these common construction-related cumulative impacts can be adequately mitigated to acceptable levels.

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355 Induced impacts are adverse and/or beneficial impacts on areas and communities from unintended but predictable developments caused by a project that may occur later or at a different location. Once the project begins operation, it will result in improved connectivity and reduced travel time and cost. Rural households will then be able to increase and diversify their agricultural productions because of the expanded access to various markets and the increased ability to move bulk goods. Their quality of life will be improved due to enhanced access to goods, services and social infrastructure at reduced costs.

VI. ANALYSIS OF ALTERNATIVES

356 The primary objective of alternative analysis with respect to environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits. The range of alternatives considered depends on the infrastructure sector and its characteristics, and the following key environmental factors were used in comparing the alternatives: (i) resettlement and land occupation; (ii) minimization of community disturbance; (iii) adaptation to local context (climatic constraints, earth, etc.); (iv) minimize facilities energy consumption, and (v) eco-friendly. The alternative analysis also included the no-project alternative.

A. No Project Alternative

357 Without the project, the development of transport and logistics capacities would be delayed or hindered, and local economic development would be slower.

358 For the BCPs at Bichigt and Borshoo, the no project alternative would imply that the current congested traffic condition and the adverse safety issues along the approach and service roads would continue, and likely worsen as traffic increases over time. Customs, quarantine, and laboratory functions, etc., would continue to be inefficiently carried out, with multiple back and forth trips by users between customs, border security, laboratories, etc., Idling of trucks and consequent air pollution and noise effects would be significantly greater without the speedier through-processing intended for the proposed project.

B. Project Facility Design Alternatives

359 The choice of BCP locations was not done as part of the project, but a given (they existed already) following the MON-PRC and MON-RUS intergovernmental agreement on border crossing points;

360 The detailed considerations for the rehabilitation / upgrading of the existing BCPs will be discussed in the detailed design of the both locations.

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VII. INFORMATION DISCLOSURE AND CONSULTATIONS

361 Meaningful participation and consultation during project planning, feasibility study, design and implementation is an important environment safeguards requirement. It can directly reflect the public’s perceptions of environmental quality in the project’s area of influence.

362 In order to make key documents widely available to the general public, ADB’s SPS requires submission of finalized EIA for Category A projects, and the final IEE for Category B projects to ADB for posting on ADB website. ADB’s SPS requires that borrowers to take a proactive disclosure approach and to provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders. The SPS also requires that the borrower to carry out meaningful consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Meaningful consultation goes beyond information disclosure. It involves two-way communication between the borrower and the affected communities and stakeholders, and active participation of affected communities and stakeholders in project design and implementation.

363 ADB’s SPS (2009) has specific requirements for information disclosure and public consultation. Information disclosure involves delivering information about a proposed project to the public and to affected communities and other stakeholders, beginning early in the project cycle and continuing throughout the life of the project. Information disclosure is intended to facilitate constructive engagement with affected communities and stakeholders over the life of the project.

364 The ADB’s SPS requires that borrowers take a proactive disclosure approach and provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders. In addition, to make key documents widely available to the public, the SPS requires submission of following documents for disclosure on ADB’s website (Category B Projects):

(i) final IEE (upon receipt of Board approval, whichever is earlier)； (ii) updated IEE, if required during project implementation； (iii) corrective action plans (for major noncompliance, if any) prepared during project implementation； and (iv) environmental monitoring reports.

365 ADB’s SPS also requires that the borrower carry out consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Consultations should include presentations on environmental impacts, benefits and mitigation measures, project GRM, and ADB's Accountability Mechanism.

A. Public Participation

366 Public consultations where conducted through face to face meeting with local inhabitants at four locations in the Bichigt BCP on May 13, 2019, and at Sagil County, and Ulaangom center in the Borshoo BCP on 19-22 May, 2019

1 Identification of stakeholders

367 A total of 45 local residents, including herders, shop keepers, kindergarten workers, local government officials were involved to the public consultation at the Borshoo BCP. Among the residents consulted, 33 persons are from Khandgait bagh of Davst County (seasonal inhabitants within 3-20 km from the Borshoo BCP); Borshoo Bagh of Sagil County (living within radius of 20- km away from the Borshoo BCP); Sagil County Center (50 km away from the project site) and Provincial and County officials at Ulaangom.

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368 At the Bichig BCP, public consultations were held with 12 residents living nearby or directly in the Bichig BCP area. Attendance sheets are shown in Table VII-1. Photos of the consultations are in Table VII-2:

2 Consultation discussion topics a. Project introduction

• Project objectives, outputs and outcomes • Project phases and list of actions

b. Project Potential and Expected Environmental Impact • ADB Safeguard Policy Statement (2009), domestic information disclosure, and public consultation requirements on EIA • Overview of project potential and expected impacts • Negative impacts during construction and operational phases • Overview of mitigation measures to be taken during project implementation • Social impacts (positive economic and possible consequences like drug, increased traffic flow/accidents) and SPS and domestic EIA requirements on mitigation/elimination measures

3 Key Findings of Public Consultation • The current solid waste handling practices (no designated solid waste disposal site) should be changed; • Drinking water quality (at both the project locations in Bichigt and Boshoo) should be improved; • There are no adequate toilets available for travelers and service workers at the BCPs; • Services to the staff and residents at the two BCPs should be improved (such as connection to wastewater pipelines, central heating and drinking and hot water); • Treatment of sewage wastewaters at the BCPs should be improved and optimized to ensure its sustainability; • Use of greywater for greening and tree watering should be enhanced; • Possibility of connecting electricity of local residents should be considered if the BCP facilities are connected to centralized electricity grid network (Borshoo Bagh); and • Preventive measures to avoid traffic accidents at Borshoo Bagh (due to increased traffic on paved road that goes through the bagh center).

4 Outcome of consultations

369 Participants were thankful to gain knowledge about the environmental and social impacts of the project and the relative laws and policies. Also provided to the participants was the explanation of the project grievance redress mechanism (Chapter VIII), and contact details of people who can answer other questions about property appraisal etc.

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Table VII-1: List of local people met during public consultation at Borshoo

No Name and contract address of persons met Remark/Telephone #

Public consultaton meeting was taken place at the County Center of Sagil on May 20, 2019. Nine herders of Borshoo Bagh (2nd Bagh of Sagil) that is located in 30 km from the BCP have attended. Rest participants are from differrent parts of Sagil, which is the largest settlement located next to Borshoo BCP. Photocopy of Participants list in Mongolian is shown, including participants’ names, position, location and signature.

1 Mr. Tegshjargal D, unemployed, 5th bagh, Sagil County, Uvs Province

2 Mr. Sanjjav L, unemployed, 5th bagh, Sagil County, Uvs Province

3 Mrs. Ganchimeg, Ch, unemployed, 5th bagh, Sagil County, Uvs Province

4 Mrs. Sarantuya Kh, herder, 4th bagh, Sagil County, Uvs Province

5 Mrs. Unurzaya, N, herder, 4th bagh, Sagil County, Uvs Province

6 Mr. Tegshjargal, herder, 4th bagh, Sagil County, Uvs Province

7 Ms. Suren E, herder, 4th bagh, Sagil County, Uvs Province

8 Mr. Nyambayar N, herder, 4th bagh, Sagil County, Uvs Province

9 Mr. Tseveengerel T, herder, 4th bagh, Sagil County, Uvs Province

10 Mrs. Ariunaa S, herder, 4th bagh, Sagil County, Uvs Province

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11 Mrs. Tsagaankhuu E, herder, 4th bagh, Sagil County, Uvs Province

12 Mr. Bat erdene O, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

13 Mr. Damiran, Kh, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

14 Mrs. Soyol erdene N, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

15 Mr. Lkhagva N, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

16 Mrs. Sarantuya Ch, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

17 Mr. Batsuuri Ch, herder, 4th bagh, Sagil County, Uvs Province

18 Mr. Davaasuren Y, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

19 Mrs. Yanjintugs G, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

20 Mrs. Nansalsuren B, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

21 Mr. Enkhtaivan, herder, Borshoo (2nd) bagh, Sagil County, Uvs Province

22 Mr. Amartur A, Speaker, citizen representative meeting of Borshoo (2nd) bagh, Sagil County, Uvs Prs, ovince

23 Mr. Tserendorj, herder, 1th bagh, Sagil County, Uvs Province

24 Mr. Tunerev, herder, Borshoo (2nd)bagh, Sagil County, Uvs Province

25 Mrs. Gongoo, herder, 4th bagh, Sagil County, Uvs Province

26 Mr. Davaa, herder (husband) Khandgait bagh, Davst County, Uvs Province 9947-2586

27 Mrs. Altantsetseg, herder (wife) Khandgait bagh, Davst County, Uvs Province

28 Mr. Amartuvshin, herder at Borshoo bagh, Sagil County, Uvs Province 9045-5900

29 Mr. Batbayar, head, Department of Environment and Tourism, Uvs Province 8808-7122

30 Mrs Buyankhishig, senior engineer, Uvs Meteorology Department, Uvs 9945-9414 Province

31 Mrs. Tsetsegmaa, NGO chairwoman, Ulaangom , Uvs Province 9945-9472

32 Mr. Sharavkhuu, retired citizen Ulaangom, Uvs Province 9945-2288

33 Mrs. Gantsetseg, engineer, Uvs Meteorology Department, Uvs Province 9945-0325

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Table VII-2: List of local people met during public consultation at Bichigt

No Name and contract address of persons met Remark/Telephone #

1 Mr. Gantulga, herder living in 10 km away from Bichigt BCP

2 Mrs. Dugersuren, kindergarten worker 80910291

3 Mr. Gansukh, local citizen at Bichigt, Erdenetsagaan County, Sukhbaatar Province 9411-9032

4 Mr. Tumurbar, local citizen at Bichigt, Erdenetsagaan County, Sukhbaatar Province 9908-1381

5 Mrs. Bolortsetseg, baby-sitter, at Bichigt, Erdenetsagaan County, Sukhbaatar 9979-9402 Province

6 Mrs. Kherlen, kindergarten worker, at Bichigt, Erdenetsagaan County, Sukhbaatar 9941-2690 Province

7 Mrs. Suvd-Erdene, grocery-store keeper, at Bichigt, Erdenetsagaan County, 9548-0492 Sukhbaatar Province

8 Mrs. Gerelmaa, book-keeper, at Bichigt, Erdenetsagaan County, Sukhbaatar 9999-9861 Province

9 Mr. Enkhtaivan, service person, at Bichigt, Erdenetsagaan County, Sukhbaatar 9666-0613 Province

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Table VII-3: Public consultation pictures

Public consultation pictures

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B. Future Plans for Public Participation

370 Meaningful consultation to safeguard the environment and local residents will continue before and throughout the construction and operational phases of the project facilities. The forms of public consultation will include information disclosure on the web sites of the project proponent and relevant governmental departments, posting of project information on community notice boards, and discussion forums.

371 A dialogue channel will be maintained with the affected public and stakeholders throughout project implementation by continued public consultation. Such dialogue will ensure that public concerns are understood and dealt with in a timely manner. Future public consultation will be conducted via questionnaires surveys, household visits, workshops, and consultation meetings per schedule or when there are complaints or unanticipated negative environmental impacts.

372 Prior to construction, the PIU will inform the affected people of the planned project interventions and the likely disturbances through information disclosure in the local newspaper. The GRM entry points will be briefed, which will in turn ensure that information is disseminated to project affected areas. During construction, affected people will be consulted at least once a year through formal questionnaire surveys and a public workshop. The surveys and the public workshop will be conducted by the implementing agencies supported by environment consultant. On-site environmental engineers of the construction contractors or construction supervision companies will conduct informal interviews with affected people on a regular basis. Public consultation will focus on complaints about community disturbances from construction activities, such as construction noise, dust, solid waste and wastewater, as well as public concerns about soil erosion, air pollution and water pollution.

373 The PIU will be responsible for organizing the public consultations, with the support of the LIEC and the loan implementation consultant (LIC) team. The contractors will be required to communicate and consult with the communities in the project area of influence, especially those near the stations. Clearly visible public notice boards will be set at each work site to provide information on the purpose of project activities, the duration of disturbance, the responsible entities on-site (contractors), and the project level Grievance Redress Mechanism (GRM).

374 Contact information on all the GRM entry points and the PIU complaint center hotline will be disclosed on the information boards of construction sites. Consultation will focus on public nuisances from construction and operational activities, such as noise, dust, traffic disturbance, and public concerns about the environmental and social impacts.

375 Future consultation and participation will include (i) involvement of affected people in discussion forums during inspection and monitoring of the EMP implementation during construction and operational phases; (ii) participatory evaluation of the environmental and social- economic benefits and impacts in these forums; and (iii) consultation with the public after the project completion.

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VIII. GRIEVANCE REDRESS MECHANISM

A. Grievance Redress Mechanism Objective

376 A grievance redress mechanism (GRM) has been developed in compliance with ADB’s SPS (2009) requirement to address environmental, health, and safety concerns associated with the project construction and operation. The GRM is designed to achieve the following objectives: i) provide channels of communication for local communities to raise concerns about environmental grievances which might result from the project; ii) prevent and mitigate adverse environmental impacts to communities caused by project construction and operation; iii) improve mutual trust and respect and promote productive relationships between the IA and local communities; and iv) build community acceptance of the project.

377 The GRM is accessible to all members of the community, including women, youth, and poverty-stricken residents. Multiple points of entry are available, including face-to-face meetings, written complaints, telephone conversations, e-mail, and social media. Public grievances related to the project construction may include damage to public roads, interruption of public services, dust emissions, noise, soil erosion, inappropriate disposal of waste materials, and safety for the public and construction workers. The details of the project GRM, including a time-bound flow chart of procedures, are included in the project EMP (Appendix 1 of this IEE).

378 Residents and/or organizations affected by the project activities were encouraged to participate in the preparation of the domestic EIAs, the IEE and the EMP. However, environmental issues and concerns usually develop during both construction and operation periods. Project- level GRMs in the subproject cities / counties have been developed in order to solve problems effectively, as well as guaranteeing that the project will be implemented smoothly and successfully. Grievances and complaints of potentially affected people and organizations will be recorded, addressed and solved completely and quickly through the mechanism.

B. Grievance Redress Mechanism Introduction

379 A project grievance can be defined as an actual or perceived project related problem that gives ground for complaint by an affected person (AP). During consultations for environmental assessment, APs are invited to comment on the project and suggest mitigation measures; in addition, as the project das strong public support and will not involve any involuntary land or property acquisition or resettlement. Therefore, significant grievances are unlikely, however during construction and operation it is possible that unanticipated impacts may occur if the mitigation measures are not properly implemented, or unforeseen issues arise.

380 Therefore, the GRM will be accessible to diverse members of the local communities, including vulnerable groups, youths and the elderly. Multiple points of entry, including face-to-face meetings, written complaints, telephone calls, or e-mail, will be available. Requests for confidentiality and privacy for complainants will be honored where requested

C. Proposed Grievance Redress Mechanism for the Project

381 The Environmental and Social Officers of PIU will be the leading coordinators for GRM implementation. However, all project agencies and staff will be trained required by the GRM and will take an active role in supporting these staff as and when necessary.

382 At the PIU level, the Environmental Officer and Social Officer will establish a GRM tracking and documentation system, conduct daily coordination with the PIUs’ officers, arrange meetings and conduct site visits as necessary, maintain the overall project GRM database, and prepare the reporting inputs for progress reports to ADB. Besides, the environment and social officers will instruct contractors and CSCs on the GRM procedures, and coordinate with the local government

146 divisions as necessary.

383 The contact persons for different GRM entry points, such as the PIU Environmental and Social Officers, contractors, and operators of project facilities (OPFs) will be identified prior to construction. The contact details for the entry points (phone numbers, addresses, e-mail addresses) will be publicly disclosed on information boards at construction sites.

384 Once a complaint is received and filed, the PIU officers will identify if complaints are eligible. Eligible complaints include those where (i) the complaint pertains to the project; and (ii) the issues arising in the complaint fall within the scope of environmental issues that the GRM is authorized to address. Ineligible complaints include those where: (i) the complaint is clearly not project- related; (ii) the nature of the issue is outside the mandate of the environmental GRM (such as issues related to resettlement, allegations of fraud or corruption); and (iii) other procedures are more appropriate to address the issue. Ineligible complaints will be recorded and passed to the relevant authorities, and the complainant will be informed of the decision and reasons for rejection.

385 The GRM does not affect the right of an affected person to submit his/her complaint to any agency he/she wishes to, for example the local village committee, community leaders, courts, PIU, district/county government, and/or ADB.

386 The PIU shall bear any or all costs of implementing the GRM, including meeting, travel, and/or accommodation costs for project staffs or affected persons. The GRM will be implemented throughout project construction and at least the first year of operation for each project facility.

387 Complaints will be received by the PIU staff or the environmental supervision engineer. Grievance focal points will be designated at these levels to receive, help resolve, report or forward complaints received from the people. People may visit, call or send a letter or email to any of the grievance focal points to register their comments or complaints related to environmental issues or other aspects of the project.

388 The PIU will maintain a record-book to register the complaints and keep track of their status. Reports and complaint resolution will be subject to follow-ups by the Program Director. The grievance focal points will also be tasked to regularly coordinate with the PIU to keep track of the complaints received, related actions taken and the status of resolution. Complaint forms will be distributed to the heads of local governments to facilitate the recording of complaints

(1) Proposed Grievance Redress Steps and Timeframe

389 Procedures and timeframes for the grievance redress process are as follows and shown in Figure VIII-1.

Stage 1 (maximum 7 days): If a concern arises during construction, the affected person may raise the issue with the contractor. All stakeholders including local residents and the contractors will be aware of the GRM and will be requested to immediately report any incidents to the Project owner. If the issue is resolved directly between the affected person and contractor, no follow-up is required. But the log/record shall be saved in the GRM logbook at the Project owner.

Stage 2 (maximum 15 days): If the issue is not resolved, the affected person can submit an oral or written complaint to the bag or soum officials. The soum and the Project owner will reply within two weeks and keep a written record of the whole process.

Stage 3 (maximum 15 days): If the issue is still not resolved, the project owner will, if agreed by the affected person, arrange a meeting with the soum officials and relevant community representatives to identify a solution. If the issue still cannot be resolved it will be referred to the relevant higher-level authorities including the specialized inspection agency in the aimag. The project owner may report the process to ADB at 147

any of Stages 1–3, but will do so immediately if Stage 3 is reached.

(2) Accountability Mechanism of ADB.

390 In addition, affected people may always contact the Complaints Receiving Officer of the ADB via the following addresses:

Complaints Receiving Officer, Accountability Mechanism Asian Development Bank ADB Headquarters, 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines (+632) 632-4444 loc. 70309 (+632) 636 2086 [email protected]

Instructions available dere:dttp://www.adb.org/site/accountability- mecdanism/dow-file-complaint)

(3) Reporting.

391 The PCU will record the complaint, investigation, and subsequent actions and results, and include this information in the quarterly progress reports to the PSC. In the construction period and the initial operational period until project completion report, the EA will periodically report complaints and their resolution to ADB in the quarterly project progress reports and environmental monitoring reports.

392 The complaint resolution process will be documented in the environmental monitoring reports.

(4) Responsibilities of the PCU.

393 The responsibilities of the PCU are as follows:

✓ The PCU will instruct contractors and construction supervisors to refer any complaints that they have received directly to the PCU. Similarly, the PCU will coordinate with local government departments to capture complaints made directly to them; ✓ The PCU will log complaints and date of receipt onto a complaints database and inform the PUSO and the Contractor; ✓ The PCU will investigate the complaint to determine its validity and to assess whether the source of the problem is because of project activities, and identify appropriate corrective measures and responsible persons; ✓ The PCU will inform the AP of investigation results and the action taken; ✓ If a complaint is transferred from local government agencies, the PCU will submit an interim report to local government agencies on status of the complaint investigation and follow-up action within the time frame assigned by the above agencies; ✓ The PCU will review the contractor’s response to the identified corrective measures, and the updated situation; ✓ The PCU will undertake additional monitoring, as necessary, to verify as well as review that any valid reason for complaint does not reoccur.

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(5) Multi-stakeholder meetings.

394 The invitees to this meeting will depend on the nature of the complaint. For example if the complaints relate to health, land disputes, or labor issues, the appropriate specialist in this field will be invited to the stakeholder meeting.

395 This may include officers from the Land Administration (land rights issues), Women's Union NGO (gender issues), Health authorities (health issues), aimag environment protection authorities, aimag Professional Inspection Agency (occupational and community safety as well as environmental issues); and the Ministry of Labor & Social Security Officer (labor issues).

D. Disclosure of the Grievance Process

396 Wide public awareness campaigns will ensure that awareness on grievance redress procedures is generated through the campaign. The Project owner and their designated focal person (environment and social issue) will conduct community -wide awareness campaigns to ensure that all herding households within 5km of the Project are made aware of grievance redress procedures and entitlements and will work with the contractor to help ensure that their grievances are addressed.

397 Weather-protected complaint boxes will be placed at all constructions sites, existing social service buildings, and at soum offices as a formal location for people to submit written comments/issues during construction phase. Information at all boxes will be updated contact names for the project owner, local contractor. Also included at each box will be simple forms and pencils to facilitate the communication process.

398 In addition to the project GRM, ADB's overall accountability mechanism (2012) applies.8 This mechanism provides opportunities for people adversely affected by ADB-financed projects to express their grievances; seek solutions; and report alleged violations of ADB’s operational policies and procedures, including safeguard policies. ADB’s accountability mechanism comprises two separate, but related, functions: (i) consultation, led by ADB’s special project facilitator, to assist people adversely affected by ADB-assisted projects in finding solutions to their problems; and (ii) providing a process through which those affected by projects can file requests for compliance review by ADB’s Compliance Review Panel.

E. Record Keeping and Review

399 Careful documentation of the name of the complainant, date of receipt of the complaint, address/contact details of the person, location of the problem area, and how the problem was resolved will be undertaken.

400 Records of all grievances received, including contact details of complainant, date the complaint was received, nature of grievance, agreed corrective actions and the date these were effected and final outcome will be kept by the PIU. The number of grievances recorded and resolved and the outcomes will be displayed/disclosed in the PIU office, and on the web, as well as reported in monitoring reports submitted to ADB on a semi-annual basis.

401 The Project owner’s officer (responsible for environment and social) will periodically review the functioning of the GRM and record information on the effectiveness of the mechanism, especially on the project’s ability to prevent and address grievances

8 The revised accountability mechanism became effective on 24 May 2012.

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Affected person

Field Level Contractor, the Project owner Yes (TGC) designated focal person

(environment and social Within 7 days Grievance redress issue), bag or soum Stage 1 and record keeping representatives

Yes The Soum Office Within 15 days Designated person of the Grievance redress Stage 2 soum and the Project owner and record keeping designated focal person (environment and social issue), & ADB contact.

The Aimag Level Yes The Project owner designated Within 15 days Stage 3 focal person (environment and Grievance redress

social issue), aimag inspection and record keeping staff, soum representatives

Figure VIII-1: Flow Chart of Grievance Redress Mechanism

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IX. ENVIRONMENTAL MANAGEMENT PLAN

402 An environmental management plan (EMP) has been prepared for the project and the details of the EMP are presented in Appendix 1.

403 The EMP defines mitigation measures for the anticipated environmental impacts, institutional responsibilities, and mechanisms to monitor and ensure compliance with GOM environmental laws, standards and regulations and ADB’s SPS. The EMP specifies major environmental impacts and mitigation measures, roles and responsibilities, inspection, monitoring, and reporting arrangements, training, and the GRM. The EMP will be updated by the LIEC after detailed design, as needed. It will be included as separate annex in all biding documents for subcomponents involving civil works. Contractors will be required to develop site-EMPs that are fully responsive to the EMP.

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X. CONCLUSIONS

404 An initial environmental examination (IEE), including an environmental management plan (EMP), was prepared, in accordance with ADB’s Safeguard Policy Statement (2009), for the components to be supported through additional financing.

405 The IEE presented in this report has: i) identified potential environmental impacts; ii) developed appropriate mitigation measures; ii) assessed public support from the project beneficiaries and affected people; iv) established a project GRM; iv) prepared a project EMP, including environmental management and supervision mechanisms, environmental monitoring plans, and capacity building and training arrangements .

406 The EMP includes mitigation and monitoring requirements and institutional responsibilities to ensure proper environmental management throughout construction and operation and maintenance (O&M).

407 No unprecedented or irreversible impact on the environment is anticipated. Short-term impacts are anticipated during construction, including dust, noise, and waste generated during earthwork and civil works activities. Operation and maintenance training and performance monitoring will minimize operational impacts and risks, and optimize environmental benefits. The project’s climate risk is low.

408 The IEE concludes that effective EMP implementation, together with training, will result in residual impacts within the limits of the Mongolian standards defined in the EMP. Full and effective implementation of the safeguard measures described in the IEE and its EMP will combine to minimize adverse environmental impacts of the project and contribute to the project achieving its goal. The EMP will ensure that these measures are implemented in an appropriate institutional framework and are supported through comprehensive training, monitoring and reporting arrangements.

APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN