INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

I. Basic Information Date prepared/updated: 10/19/2009 Report No.: 51218 Public Disclosure Authorized 1. Basic Project Data Original Project ID: P083051 Original Project Name: BO Rural Alliances Country: Project ID: P111863 Project Name: BO (AF) Rural Alliances Task Team Leader: David Tuchschneider Estimated Appraisal Date: February 9, Estimated Board Date: April 7, 2009 2009 Managing Unit: LCSAR Lending Instrument: Specific Investment Loan Sector: General agriculture, fishing and forestry sector (45%);Agricultural marketing and trade (40%);Agro-industry (10%);Other industry (5%) Theme: Rural markets (25%);Rural non-farm income generation (25%);Participation and Public Disclosure Authorized civic engagement (25%);Rural services and infrastructure (25%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 30.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 Local Govts. (Prov., District, City) of Borrowing Country 0.86 Local Farmer Organizations 5.71 6.57 Environmental Category: B - Partial Assessment

Public Disclosure Authorized Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies)

2. Project Objectives The project objective, as established in the credit agreement for the Rural Alliances Project, is "to test a model to improve accessibility to markets for poor rural producers in the Pilot Areas." To achieve this, the project will continue to (i) promote strategic productive alliances between different economic players at the local level, (ii) empower rural producers through the strengthening of self-managed grass-root organizations, (iii) increase access to productive assets and technology, and iv) promote more effective, responsive and accountable service organizations at the local level.

Public Disclosure Authorized 3. Project Description The additional financing will help the Government of Bolivia to scale-up project activities in both the present pilot areas and in at least two additional areas of the country. The AF will finance the three components of the original project, with minor modifications: (a) institutional support, (b) implementation of rural productive alliances, and (c) project management.

Component 1: Institutional Support (Parent project: US$ 2.52 million; Additional Financing: US$ 2.77 million) This component finances technical assistance and training to provide the institutional and organizational support needed for the creation of productive alliances at the local level. The component gives a particular focus to the development of the institutional capacity of small producers to become partners in new marketing arrangements with the private sector. The component’s main outputs will bethe formation of rural productive alliances and the preparation of viable alliance plans. To realize this objective, the component will continue to: (a) support the implementation of a project dissemination campaign; (b) support collective action and empower groups of rural poor producers; (c) support the process of call for proposals, the preparation of pre-feasibility and feasibility studies and their evaluation and approval; and (d) assist with the organizational arrangements for the formalization of the alliances.

The component has the following sub-components: (a) communication and dissemination, (b) institutional facilitation, (c) capacity building for service providers and local governments, and (d) appraisal of alliances. No changes are contemplated for the revised project. Activities will continue in the pilot areas and will be replicated in the additional ones. Greater emphasis will be placed on reaching and supporting women and lowland minority indigenous groups.

Component 2: Implementation of Rural Productive Alliances (Parent project US$ 28.93 million; Additional Financing: US$ 28.57 million).

The aim of this component is to provide support for the implementation of the rural alliances prepared under component 1. The component’s main outputs will be: (i) to have producers and their marketing partners working together efficiently and effectively in long term relations; (ii) an improved production by the rural poor producers to meet their new market requirements; (iii) adapted systems in the markets to work with the alliances’ small producers; and (iv) the ensured co-participation in alliance plans of service providers and local governments. To achieve these outputs, the project cofinances one or more of these potential alliance members: small producers, market agents and/or local governments. This assistance is made available for one or more of the following: (a) to co-finance the implementation of producer’s subprojects up to the storage stage; (b) to co-finance local governments which decide to become alliance members in design and construction of public infrastructure aimed at supporting a local alliance in its productive goals; and (c) to provide technical assistance to market partners to mitigate the relatively higher costs and risks associated with entering into financing and marketing arrangements with small rural producers.

The component has the following revised sub-components: (a) producer organizations subprojects, and (b) municipal subprojects. The “financing enhancement incentives” sub- component will be eliminated from the revised project as practice has shown that demand for this service is low and that access to credit for the implementation of subprojects which include post-production transformation and processing can be favored through technical assistance interventions provided to the alliances themselves. The scope of the municipal subprojects subcomponent will also be reduced in order to reflect existing demand.

Component 3: Project Management (US$ 3.93 million; Additional Financing US$ 5.23 million)

This component’s outputs are the efficient and effective coordination of the project and an M&E system which can measure the improved access to markets by poor producers, and the enhancement in rural incomes. The component achieves this through the provision of technical assistance, goods, equipment and incremental operating costs which support the establishment and operation of a project coordinating team in the Ministry of Rural Development and Land (MDRT), the setting up and operation of a management information system, the implementation of monitoring, evaluation and learning arrangements, and the completion of technical studies. The component also ensures that effective fiduciary and safeguard arrangements are in place during implementation.

The component has the following sub-components: (a) studies, (b) technical services, (c) financial management, (d) monitoring and evaluation, (e) equipment, and (f) operating costs. As project management systems are well established and will require only minor adjustments to operate the Additional Financing, financing for this component will cover the incremental costs required to establish and operate project units in each of the new areas, and reinforcement of the central unit to ensure proper safeguard and fiduciary oversight.

4. Project Location and salient physical characteristics relevant to the safeguard analysis The parent project presently operates in a total of 65 municipalities located in three distinct geographical areas: (a) the sub-tropical lowlands of Santa Cruz, (b) the valley region extending from Cochabamba to Santa Cruz, and (c) the Altiplano area around the Uyuni Salt Lake in Oruro and Potosi. The Additional Financing will expand coverage at least to an additional 3 areas: (a) the 16 municipalities surrounding Lake Titicaca in the northern Altiplano; (b) 13 municipalities in the sub-tropical zone in the north of and west of Beni departments; and (c) 16 municipalities of the Chaco region covering a dry savannah and forest eco-region which includes Santa Cruz, Tarija, and Chuquisaca Departments in southwestern Bolivia.

5. Environmental and Social Safeguards Specialists Mr Francis V. Fragano (LCSEN) Ms Ruth Llanos (LCSSO)

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

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

Environmental Assessment (OP 4.01). No large scale, significant and/or irreversible negative environmental impacts are expected from the proposed Additional Financing. The impacts from the initial phase of the project have been positive or neutral and should continue to be so in the revised operation. As the Additional Financing would fund producer organization and municipal subprojects similar in scale and scope to those implemented under the original project, the project will maintain its Category B classification. An EA report is available for the parent project and has been licensed by the Bolivian environmental authorities. Lessons learned during implementation have been consistently incorporated into the framework. Management of environmental safeguards in the parent project has been satisfactory.

Supplementary EAs have been prepared for the scaling-up contemplated in the AF, reviewing the potential impacts in the new project areas. As with the initial project, no large-scale or irreversible impacts were identified for the new regions and impacts are generally positive for the types of rural alliances likely to be supported. Region-specific guidelines have been prepared based on expected or known typologies of projects that incorporate best practices for environmental sustainability.

Natural Habitats (OP 4.04) and Forests (OP 4.36). Lake Titicaca, Northern La Paz, and the Chaco regions encompass critical natural habitats that have been identified in the supplementary EAs. No activities are contemplated within critical natural habitats. Activities that might involve or induce any conversion or degradation of natural habitats are ineligible and will continue to be screened out early on during subproject identification. The project does not and will not support activities in natural forest areas. Timber subprojects are ineligible, and non-timber alliances may be financed if management plans for the use of the resource are satisfactory and approved by the pertinent national authorities. The project will not support alliances involving fishing in Lake Titicaca while aquaculture projects in the Pilcomayo sub-region of the Chaco region will be limited to native species if supported. A complete exclusion list of activities has been prepared and is part of the Environmental Management Plan to ensure that activities are in compliance with Bank Safeguards, international conventions, and national environmental laws. All EAs have been reviewed by the Bolivian environmental authorities and have received licenses authorizing implementation.

Pest Management (OP 4.09). Given the use of pesticides on the part of agricultural producers involved in some rural alliances, a PMP has been approved for the project and it is being applied to all relevant alliances. A review of implementation has been carried out to gauge its effectiveness and to propose additional instruments and activities. The process of improvement and capacity-building is ongoing and has been strengthened in the revised project with additional resources from the project allocated to training of extension personnel, project technical specialists, and producers of the alliances in each region. Specific guidelines for IPM have been prepared for the most important crops in each region and an outreach program for communication and dissemination of public information on safety and best practice information on pesticides will also be implemented in the AF phase.

Cultural Property (OPN 11.03). Subprojects that may have a negative impact on physical and cultural resources are ineligible, and screened out during the ex-ante review of alliances.

Indigenous Peoples (OP 4.10). As part of the social assessment for the original project, particular attention was paid to the situation of various indigenous groups. A majority of the likely beneficiary population in the pilot areas self-identified as indigenous, and the project as a whole was therefore designed in compliance both with the Operational Directive 4.20 and Operational Policy 4.10 (which was then in draft form). No separate Indigenous Peoples Development Plan was prepared in order to avoid parallelism and contribute to better integration of indigenous groups# needs and concerns in the overall project design. Supervision shows that alliance implementation has been properly tailored to the cultural and organizational characteristics of producer groups. Project implementation in the parent project has validated this approach, as 98% of approved alliance members identify themselves as indigenous (whereas 70.4% of the target population does).

In the proposed 3 new areas, indigenous peoples also constitute a majority of the population and thus the existing approach will continue to be applied in the revised project (i) In the Lake Titicaca area, 93% of the population identifies itself as Aymara. This area is marked by strong empowerment processes, both at the organizational and productive levels, (ii) In the sub-tropical region to the north of La Paz and west of Beni departments, 68% of the potential beneficiaries consider themselves Aymara and 8% Quechua. Most of the potential beneficiaries are descendants of migrants from the highlands who went to the area in order to farm lands that were opened for colonization after 1952. In addition, in this area, minority indigenous groups (Leco, Tacana, Chiman, Moseten and Esse Ejja) add up to 8% of the population. The Leco and Moseten have been granted collective indigenous titles (TCO), but some conflicts over land with highland groups persist, (iii) In the Chaco region where the population is 294,360, 43.2% of which live in urban areas and 56.8% in rural areas. The majority of the native population of the region are Guarani, and have conserved their traditions and language. A minority of villagers are Weenhayek and Tapiete. According to villagers# self-reported identification, the number of Guarani villagers stands out among the indigenous populations, representing 19% of the Chaquena population, while Quechua and Amyaras villagers make up 12% and 2.2% respectively. Both Quechua and Amyaras populations have migrated from the Andes region.

The supplementary Social Assessment recommends that particular attention be paid to these minority groups in the north of La Paz and the Chaco region. Furthermore, the unequal access to women of opportunities to participate and exercise their rights is significant in the Chaco region. To address this inequality, strategies will be applied such that interventions are tailored to meet the differing needs of production systems and organizational structures.

Involuntary resettlement (OP 4.12). The project has not and will not finance any activities that may lead to physical or economic displacement. This has been incorporated into project plans and explicitly stated in the eligibility criteria for financing alliances.

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Long-term impacts are expected to be positive or neutral from a social and environmental standpoint. The project is seeking to improve productivity and rural income while mainstreaming environmental safeguards (including improved pesticide and water use, and organic production, among other aspects) into production. These investments have shown to generate positive impacts in the parent project and should continue in the revised operation.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Not relevant

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. An environmental assessment procedure that complies with Bank and national environmental standards is included in the Operational Manual, and supervision missions have verified that it has been applied effectively in the subproject cycle. Safeguards compliance under the project has been consistently rated Satisfactory. The project is managed by a PIU which has a central office and regional offices in each project area. In the central office, a social and environmental specialist monitors operations, ensures compliance with safeguards, and coordinates the activities of the social and environmental specialists in each of the regional offices. The regional teams are in charge of reviewing both social and environmental framework activities, supervising field implementation, providing technical assistance to alliance members and service providers, and generally ensuring safeguards compliance. Several forms and checklists are in place to monitor and evaluate subprojects. The information and vetting process is managed through an online project information system. Approved subprojects include a short environmental and social assessment, which determines potential risks, impacts and mitigation measures. The latter are included in the subproject agreements, fully financed, and the regional environmental and social specialists monitor their implementation, under the oversight and guidance of the central office.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The key stakeholders in regard to this project are indigenous rural inhabitants, in particular small farmers. Most of the farmers are Aymara or Quechua, though use of indigenous languages varies and most people are bilingual. In the north of La Paz, there are small indigenous groups practicing slash and burn agriculture combined with traditional forest use, though timber exploitation is growing. Most of the indigenous and campesino groups are well organized at several levels (local, regional, national) and some of their organizations have important roles in government. The potential beneficiaries in the Chaco region are the small, rural producers, primarily cheese producers, fishermen, artisans, and indigenous organizations within each municipality or department. Other stakeholders are buyers entering into alliances and municipal authorities and service providers, who also participate in some project activities.

As part of AF preparation, a supplementary Social Assessment was carried out in the proposed new pilot areas. For the first two pilot areas of Northern La Paz and the Lake Titicaca regions, the consultation process was carried out in two phases. In the first, carried out by the project implementation unit, a total of seven information workshops with 349 producers, social leaders and local authorities were held in the two proposed sub-regions. In the second phase, six workshops were held with 309 representatives of producer organizations, potential buyers, middlemen, transport companies, union leaders, financial entities, NGOs and municipal governments. An additional workshop was held in the north of La Paz with 120 representatives of small indigenous groups (Leco, Tacana, Chiman, Moseten and Esse Ejja). Key recommendations of the social assessment, have been incorporated into the revised project. In particular, increased attention to the specific needs of women and minority ndigenous groups will be supported by targeted dissemination, training and technical assistance. In the pilot area of the Chaco region, a total of 1,060 participants were involved in the 12 consultancy workshops in the Chaco region. Of these participants, 69% were men and 31% were women. Given the lower rate of participation of women in earlier meetings, two additional workshops were organized for women only.

Consultation was part of the process of the supplementary environmental assessment in the expansion areas. In the Northern La Paz region, workshops were held in the Provinces of Larecaja and Sud Yungas while in the Lake Titicaca region municipalities included Desaguadero, , Tiwanaku, Taraco, Puccarani, , , , Copacabana,Tiquina, Tito Yupanqui, , Carabuco, and . In the Chaco region 3 workshops were held, which included representatives from indigenous groups (TCO), communities, and municipalities. The methodology of the consultations was based on initial surveys conducted in the areas of interest, followed by meetings with community leaders and municipal authorities prior to the workshops. Based on the workshops and presentation of the EA, the most important issues highlighted by the participants include: (i) use and management of agricultural chemicals (ii) biodiversity, and (iii) capacity-building on environmental issues. These aspects have been noted and incorporated into the project AF preparation from both an investment and operational standpoint. In addition the final EA, EMP, and PMP considered these inputs for their inclusion in the AF phase documents prepared in this regard.

The revised and supplementary environmental assessments for the Northern La Paz and Lake Titicaca regions, the two initial expansion areas, were sent to the World Bank#s InfoShop prior to appraisal. The EA and the social assessment for all three expansion areas, including the Chaco region, have been posted in the project website and hard copies are available to the public in project offices in Bolivia.

B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 01/28/2009 Date of "in-country" disclosure 01/28/2009 Date of submission to InfoShop 01/28/2009 For category A projects, date of distributing the Executive

Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 01/29/2009 Date of "in-country" disclosure 01/29/2009 Date of submission to InfoShop 01/30/2009 Pest Management Plan: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 01/28/2009 Date of "in-country" disclosure 01/28/2009 Date of submission to InfoShop 01/28/2009 * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: Note: The above dates are for the 2 regions (Lake Titicaca and Northern La Paz) which were approved prior to negotiations. For the third area of Chaco, which was proposed by the Government thereafter, the relevant dates are date of receipt by Bank [09/28/2009], Date of in-country disclosure [09/25/2009] and Date of submission to Infoshop [09/30/2009].Note: The above are for the 2 regions (Lake Titicaca and Northern La Paz) which were approved prior to negotiations. For the third area of Chaco, which was proposed by the Government thereafter, the relevant dates are date of receipt by Bank [09/28/2009], Date of in-country disclosure [09/25/2009] and Date of submission to Infoshop [09/30/2009].

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

OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? OP/BP 4.04 - Natural Habitats Would the project result in any significant conversion or degradation of No critical natural habitats? If the project would result in significant conversion or degradation of other N/A (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? OP 4.09 - Pest Management Does the EA adequately address the pest management issues? Yes Is a separate PMP required? Yes If yes, has the PMP been reviewed and approved by a safeguards specialist or Yes SM? Are PMP requirements included in project design? If yes, does the project team include a Pest Management Specialist? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential N/A adverse impacts on cultural property? OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as No appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Sector N/A Manager review the plan? If the whole project is designed to benefit IP, has the design been reviewed Yes and approved by the Regional Social Development Unit or Sector Manager? OP/BP 4.36 - Forests Has the sector-wide analysis of policy and institutional issues and constraints N/A been carried out? Does the project design include satisfactory measures to overcome these N/A constraints? Does the project finance commercial harvesting, and if so, does it include N/A provisions for certification system? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank’s Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents?

D. Approvals

Signed and submitted by: Name Date Task Team Leader: Mr David Tuchschneider 10/15/2009 Environmental Specialist: Mr Francis V. Fragano 09/30/2009 Social Development Specialist Ms Ruth Llanos 10/05/2009 Additional Environmental and/or Social Development Specialist(s): Approved by: Sector Manager: Ms Ethel Sennhauser 10/16/2009 Comments: This ISDS has been prepared by Yurie Tanimichi, with extensive inputs from R. Llanos and F. Fragano and final review by Isabel Braga.