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People's Republic of China: Inner Mongolia Sustainable Cross-Border

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People's Republic of China: Inner Mongolia Sustainable Cross-Border Environmental Assessment and Review Framework September 2020 People’s Republic of China: Inner Mongolia Sustainable Cross-Border Development Investment Program Prepared by the Government of Inner Mongolia Autonomous Region for the Asian Development Bank CURRENCY EQUIVALENTS (as of 25 August 2020) Currency unit – yuan (CNY) CNY1.00 = $6.9196 $1.00 = €0.8483 €1.00 = $1.1788 ABBREVIATIONS ADB – Asian Development Bank AQG – Air quality guideline BCP – Border crossing point BOD5 – 5-day biochemical oxygen demand BOIM – Bank of Inner Mongolia CSC – Construction Supervision Company EARF – Environmental Assessment Review Framework ECZ – Economic cooperation zone EHS – Environment, health and safety EIA – Environmental impact assessment EMP – Environmental management plan EMA – Environmental Monitoring Agency EMR – environmental monitoring report ESMS – Environmental and social management system FIL – Financial intermediation loan FI – Financial intermediary FSR – Feasibility study report GHG – Greenhouse gas GRM – Grievance redress mechanism IMAR – Inner Mongolia Autonomous Region IEE – initial environmental examination IMARG – Inner Mongolia Autonomous Region Government IPMO – Inner Mongolia Autonomous Region project management office MPMO – Municipal project management office MEE – Ministry of Ecology and Environment MEP – Ministry of Environmental Protection MFF – multi-tranche financing facility O&M – Operation and maintenance PIC – project implementation consultant PIC-ES – project implementation consultant – environment and ESMS specialist PIE – Project implementation entity PMO – Project management office PRC – People’s Republic of China RCI – Regional cooperation and integration REA – Rapid environmental assessment SME – Small and medium-sized enterprise SPS – Safeguard policy statement TRTA – Transaction Technical Assistance WBG – World Bank Group WHO – World Health Organization i NOTES (i) The fiscal year (FY) of the Government of the People’s Republic of China and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars, "€" refers to EURO. This environmental assessment and review framework 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 on ADB’s 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. ii TABLE OF CONTENTS I. INTRODUCTION 1 A. Report Purpose 1 B. Overview of Tranche 1 1 C. Indicative Pipeline of Subprojects for Tranches 2 and 3 of Investment Program 5 D. Project and Cross Border Trading Features 7 II. ASSESSMENT OF LEGAL FRAMEWORK AND INSTITUTIONAL CAPACITY 12 A. ADB Policies, Regulations and Requirements 12 B. PRC Environmental Policy and Legal Framework 13 C. International Commitments 17 D. Applicable Environmental Standards 18 III. ANTICIPATED ENVIRONMENTAL IMPACTS 24 IV. ENVIRONMENTAL ASSESSMENT FOR SUBPROJECTS AND/OR COMPONENTS 26 A. STEP 1: Screening and Categorization 26 B. STEP 2: Scoping and Selection of Environmental and Design Institutes 26 C. STEP 3: Environmental Assessment 27 D. Outline of Environmental Impact Assessment Report 28 E. Procedures for Preparing the Environmental Management Plan 32 F. Review of IEE/EIA Reports 32 G. Procedures for Assessment of FIs 32 V. CONSULTATION, INFORMATION DISCLOSURE, AND GRIEVANCE REDRESS MECHANISM 34 A. PRC Requirements 34 B. ADB Requirements. 34 C. Grievance Redress Mechanism 35 VI. INSTITUTIONAL ARRANGEMENT AND RESPONSIBILITIES 37 VII. MONITORING AND REPORTING 41 APPENDIX 1: PROHIBITED INVESTMENT ACTIVITIES LIST 43 APPENDIX 2: APPLICABLE RAPID ENVIRONMENTAL ASSESSMENT (REA) CHECKLISTS 44 A. Rapid Environmental Assessment (REA) Checklist - General 44 B. Rapid Environmental Assessment (REA) Checklist – Water Supply 47 C. Rapid Environmental Assessment (REA) Checklist - Sewage treatment 51 APPENDIX 3: OUTLINE OF AN ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM (ESMS) 54 APPENDIX 4: SCREENING CRITERIA OF FIL SUBPROJECTS 55 iii I. INTRODUCTION A. Report Purpose 1. This is the Environmental Assessment and Review Framework (EARF) prepared for the proposed Multitranche Financing Facility (the MFF) for Inner Mongolia Sustainable Cross-Border Development Investment Program (Investment Program) in Inner Mongolia Autonomous Region (IMAR) of the People’s Republic of China (PRC). 2. The Investment Program will include the development of essential trade related facilities and services to enhance the border transport connectivity within economic cooperation zones (ECZs) and border crossing points (BCPs), and provide support for small and medium enterprises (SMEs) in IMAR. 3. An initial environmental examination (IEE) report has been prepared for the investment loan subprojects under Tranche I. This EARF is developed to provide guidance on screening, categorization, assessment, planning, and institutional arrangement for subprojects under subsequent tranches of the Investment Program. B. Overview of Tranche 1 4. The proposed Investment Program will promote sustainable development of cross-border areas and mutually beneficial regional cooperation and integration (RCI) between IMAR and Mongolia. The geographical areas to be covered by the whole Investment Program include: (i) Erenhot Municipality; (ii) Darha Muminggan United Banner (Damaoqi County) and Qingshan District in Baotou Municipality, (iii) Arxan City in Xing’an League (Xing’an Municipality); (iv) Alxa Left Banner (Azuoqi County) in Alxa League (Alxa Municipality); (v) Bayannur Municipality; and (vi) SMEs1 located in IMAR through financial intermediaries (FIs). 5. Tranche 1 of the Investment Program covers the following subprojects: • Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot Municipality. • Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port of Baotou Municipality • Subproject 3: Establishment of Quarantine Station in Mandula Port, Upgrading of Stud Sheep Breeding Bases and Sheep Industry Comprehensive Development in Baotou Municipality. • Subproject 4: SMEs in Cross Border Businesses Expansion in IMAR. • Subproject 5: Project Management and Institutional Capacity Strengthening. 6. The above investment loan subprojects under Tranche 1 are geographically located in two municipalities of: i. Erenhot Municipality; and ii. Baotou Municipality (with project components in Mandula Port, Damaoqi County and Qingshan District of Baotou Municipality). 7. More details of project information on each subproject are described as follows: Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot. 1 The classification of SMEs is defined in Statistical Methods on Classification of Micro, Small, Medium, and Large-Sized Enterprises, which was enclosed by National Bureau of Statistics, PRC on 28 December 2017. 1 8. Erenhot is a county-level city of the Xilin Gol League, in Inner Mongolia Autonomous Region, located in the Gobi Desert along the PRC-Mongolian border, across from the Mongolian town of Zamyn-Uud. The operation of the Erenhot highway port began in 1992, but it was a mixed road used for both passenger and goods transport. The infrastructure and inspection conditions were very simple then. To modernize Erenhot highway port, the government expanded it in July 2000, greatly improving its customs clearance efficiency. An agreement has been signed on 4 June 2019 for the Construction of Erenhot–Zamyn-Uud ECZ between the PRC and Mongolia2. Based on the agreement, both sides will further promote the mutual supplement between PRC and Mongolia in economic advantages, facilitate trade and investment and personnel exchanges, push ahead industrial cooperation between the two countries, accelerate the regional development of the border areas of the two countries, and benefit the border areas and the people of the two countries. 9. The purpose of this subproject is to establish inspection area in the PRC-Mongolian Erenhot– Zamyn-Uud ECZ, and improving living conditions of local and border towns in Mongolia. This Erenhot subproject includes the following components: a) Component 1: Inspection Area Construction for the PRC-Mongolian Erenhot– Zamyn-Uud ECZ, including (1) construction of inspection area; and (2) establishment of smart port management platform; (3) construction of cross border economic cooperation center; (4) establishment of fencing, alarming and monitoring system in the ECZ; (5) construction of clean energy heating and pipe network for the ECZ; b) Component 2: Ecological Restoration for the PRC-Mongolian Erenhot–Zamyn- Uud ECZ, including (1) ecological protection greenbelt along the central axis, including reclaimed water storage and irrigation facilities, and landscape lighting; and (2) ecological protection greenbelt along roadsides, including reclaimed water storage and irrigation facilities; c) Component 3: Waste Collection and Transfer Stations, and Sanitation Intelligent Cloud Platform for the ECZ, including (1) construction of one waste collection and transfer station; (2) procurement of supporting facilities; and (3) establishment of sanitation intelligent cloud platform; d) Component 4: Upgrading Medical Equipment for
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