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Safeguards and Sustainability Series Volume 1 - Issue 1 (Dec. 2013)

African Development Bank Group’s Integrated Safeguards System

Policy statement and operational safeguards

African Development Quality Assurance and Results Department Bank Group Compliance and Safeguards Division

Safeguards and Sustainability Series Volume 1 - Issue 1 (Dec. 2013)

African Development Bank Group’s Integrated Safeguards System

Policy statement and operational safeguards

African Development Quality Assurance and Results Department Bank Group Compliance and Safeguards Division

FOREWORD v

FOREWORD

It gives me great pleasure to introduce the African Development Bank’s Safeguards and Sustainability Series, a periodic publication on the effective and sustainable solutions the Bank promotes to address the challenges of environmental and social issues, climate change and green growth in the context of Africa’s development.The series offers insights and knowledge pieces produced by the Quality Assurance and Results Department and other Bank units.

Today, when Africa is experiencing unprecedented growth, the need for sustainable development is increasingly acute. Since 2000 the continent’s economy has tripled in size, to more than $2 trillion annually—but some 600 million Africans are still living in poverty. At the same time, the continent is vulnerable to the devastating effects of environmental degradation and climate change. Many have argued that Africa’s priority must be to meet the most basic needs of a population that is set to double by 2050, reaching 2 billion. To do this, Africa’s growth and development must be environmentally and socially sustainable.

The multilateral development banks understand that achieving sustainable development outcomes requires them to assist countries in the diligent examination of proposed development actions to manage their potential adverse social and environmental risks and impacts. The African Development Bank’s approach goes beyond managing risks and adverse impacts—the Bank designs its interventions in African countries to promote the inclusive and green growth that will improve people’s lives in a safe and sustainable environment.

I know that achieving this goal comes with challenges, but it also brings enormous opportunities to maximise the benefits of economic growth. The Bank is determined to assist in building the right capabilities and knowledge to overcome these challenges and take advantage of the opportunities.

This sustainability series will help us share—with both staff and stakeholders— the knowledge and experiences we have gained in working for sustainable development in Africa. I very much hope that both staff and partners will make good use of the knowledge pieces in this series and will join with us in a continuing dialogue about how best to make a difference for Africa.

Mr. Emmanuel E. MBI First Vice President and Chief Operating Officer ACKNOWLEDGEMENTS

This report has been prepared by the Compliance and Safeguards Division (ORQR3) of the African Development Bank, and coordinated by Mbarack Diop, Chief Safeguard Policy Officer, under the supervision of Anthony Nyong, Division Manager, and with the guidance of Simon Mizrahi, Director of the Quality Assurance and Results Department.

We acknowledge the contributions of the following staff: Justin Ecaat, Eskender Zeleke, Aimee Bella-Corbin, Anouk Fouich, Annah Rutebuka, Osman-Elasha Balgis, Mwila Musumali, and Uzoamaka Nwamarah. The document was peer-reviewed by Yogesh Vyas, Kurt Lonsway, Ken Johm, Awatef Siala Fourati, Kelello Ntoampe, Rachel Aron, Uche Duru, Elizabeth Ndinya, Modest Kinane, Eloise Fluet, Alexis Rwabizambuga, Francesca Russo, Kisa Mfalila, Laouali Garba, Alolo Alhassan Namawu, Massamba Diene, John Kanyarubona, Alfred Helm, Mamadou Kane, Souleye Kitane, Amadou Bamba Diop, Kalidou Gadio, Mamadou Deme, Felix Baudin, Adila Abusharaf, Grace Kimani, Zeneb Touré, May Ali Babiker, and Gisela Geisler.

The preparation of the report benefitted from the guidance of a Bankwide Technical Reference Group with members drawn from all relevant Bank complexes: OSAN, ORQR, OITC, OWAS, ONEC, GECL, ORPC, OSHD, OPSM, ONRI and SEGL. Contributions were also received from members of the Bank’s Environmental and Social Safeguards Network, from staff located in field offices, and from a wide range of stakeholders across the continent—government, civil society organisations, and the private sector, including ERM, UK.

Earlier drafts of the report have been reviewed by the IFC, World Bank, Asian Development Bank, and other members of the MFI Working Group on the Environment (MFI-WGE). Several of the Bank’s other international partner organisations have also contributed to this effort: IUCN, World Wide Fund for Nature, International Trade Union Confederation, Conservation International, Bank Information Center, CSO Coalition on the AfDB, Brookings Institute, and many others located in Africa: IRPAD/Afrique, Mali; Jamaa Resource Initiatives, Kenya; Lumière Synergie pour le Développement, Sénégal; and Both Ends.

The contributions of ORQR support staff Saoussen Bouzgarrou, Hela Selmi, Inès Saanoun, Meryem Khelifi, Hamida Riahi, and Samia Gharbi, and those of Faith Choga and Tamaro Kane, are duly acknowledged.

African Development Bank Group Safeguards and Sustainability Series: African Development Bank Group’s Integrated Safeguards System — Policy statement and operational safeguards

Note: In this report, “$” refers to US dollars. 1 UA = $1.53

African Development Bank Group Temporary Relocation Agency Angle de l’Avenue du Ghana et des rues Pierre de Coubertin et Hédi Nouira B.P. 323 - 1002 Tunis - Belvédère www.afdb.org Table of contents

Foreword v Preamble 1

EXECUTIVE SUMMARY 2

Approach and rationale for the Integrated Safeguards System 2 The Integrated Safeguards System 3

PART I: INTRODUCTION 5

Background 5 Context 5 Current Bank policies and safeguards 7 Key safeguard policy challenges 8 ISS structure and summary 9

PART II: INTEGRATED SAFEGUARDS POLICY STATEMENT 15

Background and context 15 Commitments and responsibilities 16 Definition of goods harmful to the environment in negative list 18 Incorporating climate change into development efforts 19

PART III: OPERATIONAL SAFEGUARDS 21

Operational safeguard 1 – Environmental and social assessment 21 Operational safeguard 2 – Involuntary resettlement: land acquisition, population displacement and compensation 31 Operational safeguard 3 – Biodiversity, renewable resources and ecosystem services 39 Operational safeguard 4 – Pollution prevention and control, hazardous materials and resource efficiency 45 Operational safeguard 5 – Labour conditions, health and safety 49 Figures, tables and boxes

List of figures

FIGURE 1: Structure of the Integrated Safeguards System 11

List of tables

Table 1: Key areas of operational safeguards among multilateral development banks 7

List of boxes

BOX 1: Contribution of the ISS to the Bank’s Strategy for 2013-2022 6 BOX 2: Vulnerable groups and indigenous peoples 17 BOX 3: Screening Bank projects for climate change risk 25 List of abbreviations

AfDB African Development Bank IUCN International Union for the Conservation of Nature ARAP Abbreviated Resettlement Action Plan MFI Multilateral financial institution AsDB Asian Development Bank MFI-WGE Multilateral Finance Institutions Working Group on the Environment CODE Committee on Development Effectiveness, AfDB OITC Transport and Information and Communication CSO Civil society organisation Technology Department, CSP Country Strategy Paper ONEC Energy, Environment and Climate Change Department, EBRD European Bank for Reconstruction and Development AfDB EHS Environment, Health and Safety ONRI Regional Integration and Trade Department, AfDB EIB European Investment Bank OPEV Operations Evaluation Department, AfDB EITI Extractive Industries Transparency Initiative OpsCom Operations Committee, AfDB ESAPs Environmental and Social Impact Assessment OPSM Private Sector Department, AfDB ESIA Environmental and social assessment ORQR Quality Assurance and Results Department, AfDB ESMF Environmental and Social Management Framework ORVP Vice -Presidency Operations I for Country and Regional Programs and Policy ESMP Environmental and Social Management Plan OS Operational Safeguard ESMS Environmental and Social Management System OSAN Agriculture and Agro-Industries Department, AfDB FAO Food and Agriculture Organization of the United Nations OSHD Human and Social Development Department, AfDB FRAP Full Resettlement Action Plan PCR Project Completion Report GECL General Counsel and Legal Services Department, AfDB RISP Regional Integration Strategy Paper GHG Greenhouse gas RMC Regional member country IADB Inter-American Development Bank SAP Business management software IESIA Integrated Environmental and Social Impact Assessment SEGL Secretariat General, AfDB IFC International Finance Corporation SESA Strategic Environmental and Social Assessment ILO International Labour Organization UNICEF United Nations Children’s Fund IRM Independent Review Mechanism, AfDB WB World Bank ISS Integrated Safeguards System ISTS Integrated Safeguards Tracking System African Development Bank Group’s Integrated Safeguards System viii Safeguards and Sustainability Series Policy statement and operational safeguards PREAMBLE 1

PREAMBLE

The African Development Bank Group (AfDB)1 presents its Integrated Safeguards System, a cornerstone of its strategy to promote growth that is socially inclusive and environmentally sustainable. Safeguards are a powerful tool for identifying risks, reducing development costs and improving project sustainability, thus benefiting affected communities and helping to preserve the environment.

With this Integrated Safeguards System the Bank will be better equipped to address emerging environmental and social development challenges. The Integrated Safeguards System not only promotes best practices in these areas but also encourages greater transparency and accountability. It upholds the voices of people who are affected by Bank-funded operations, especially the most vulnerable communities, by providing, for example, project-level grievance and redress mechanisms—a structured, systematic and managed way of allowing the voices and concerns of affected people to be heard and addressed during project planning and implementation.

The AfDB, in accordance with its mandate as set out in Article 1 of the Bank Agreement and Article 2 of the Fund Agreement, and the provisions in Article 38 of the Bank Agreement and Article 21 of the Fund Agreement, views economic and social rights as an integral part of human rights, and accordingly affirms that it respects the principles and values of human rights as set out in the UN Charter and the African Charter of Human and Peoples’ Rights. These were among the principles that guided the development of the Integrated Safeguards System. The AfDB encourages member countries to observe international human rights norms, standards, and best practices on the basis of their commitments made under the International Human Rights Covenants and the African Charter of Human and Peoples’ Rights.

The Integrated Safeguards System has been developed through extensive consultations. In particular, five regional workshops—in Nairobi, Lusaka, Libreville, Abuja and Rabat—provided the Bank with an opportunity to listen to and address concerns raised by our stakeholders and civil society.

All of this has contributed to what we believe is an unusually strong and well-considered policy package for the Bank—one that is built on broad experience, embodies today’s cutting-edge thinking, and will serve the Bank and Africa for many years to come.

It puts the Bank in the forefront of multilateral development banks, with a clear, integrated package of policies and procedures to address the safeguards issues that arise in development. We believe the Integrated Safeguards System will strengthen the Bank’s ability to carry out its mandate and will help increase the effectiveness and development impact of our operations.

But more than that, the Integrated Safeguards System will be one of the strongest tools we have for helping to promote the well-being of our true clients, Africa’s people.

1 The AfDB comprises the African Development Bank and the African Development Fund. African Development Bank Group’s Integrated Safeguards System 2 Safeguards and Sustainability Series Policy statement and operational safeguards

EXECUTIVE SUMMARY

This paper establishes the guiding principles for an Integrated Safeguards System (ISS) that consolidates and revamps the African Development Bank’s existing environmental and social safeguards. The paper presents two components of the ISS—the Integrated Safeguards Policy Statement and five Operational Safeguards.

Approach and rationale for the Integrated Safeguards System

The environmental and social • Better align the safeguards with and needs of regional member safeguards of the African Development the Bank’s new policies and countries in both the public and Bank (AfDB, or the Bank) are a strategies, including the Bank’s private sectors. cornerstone of the Bank’s support new Ten-Year Strategy (2013- for inclusive economic growth and 2022); 2. Operational Safeguards (OSs) environmental sustainability in Africa. – are a set of five safeguard As the Bank adapts to emerging • Adopt good international requirements that Bank clients are environmental and social development practice, including on climate expected to meet when addressing challenges, safeguards can quickly change; social and environmental impacts become out of date. and risks. Bank staff use due • Adapt policies to an evolving diligence, review and supervision To better articulate its safeguard range of lending products and to ensure that clients comply with policies while improving their clarity, innovative financing modalities; these requirements during project coherence and consistency, the preparation and implementation. Bank has developed an Integrated • Work toward greater Over time the Bank may adopt Safeguards System (ISS). The ISS harmonisation of safeguard additional safeguard requirements builds on the two previous safeguard practices across multilateral or update existing requirements policies—Involuntary Resettlement finance institutions; to enhance effectiveness, respond (2003) and Environment (2004)— to changing needs, and reflect and on three cross-cutting policies • Tailor safeguard approaches evolving best practices. and strategies: Gender (2001), the to different clients with varying Climate Risk Management and capacities; and 3. Environmental and Social Adaptation Strategy (2009) and the Assessment Procedures Civil Society Engagement Framework • Improve internal processes and (ESAPs) – provide guidance on (2012). resource allocation. the specific procedures that the Bank and its borrowers or clients It also builds on the Bank’s sector The ISS consists of four interrelated should follow to ensure that Bank policies: Health (1996), Integrated components: operations meet the requirements Water Resources Management (2000), of the OSs at each stage of the Agriculture and Rural Development 1. The Integrated Safeguards Bank’s project cycle. (2000, 2010), and Poverty Reduction Policy Statement – Describes (2004). It brings these policies common objectives of the Bank’s 4. Integrated Environmental and and strategies into a consolidated safeguards and lays out policy Social Impact Assessment framework that is intended to enhance principles. It is designed to be (IESIA) – Guidance Notes provide the effectiveness and relevance of applied to current and future technical guidance to the Bank’s the Bank’s work. In doing so, the ISS lending modalities, and it takes borrowers or clients on standards seeks to: into account the various capacities on sector issues, such as roads and EXECUTIVE SUMMARY 3

railways, hydropower, or fisheries, of its components—the Integrated after the Board formally approves or on methodological approaches Safeguards Policy Statement and the underlying policy principles. The clients or borrowers are expected the five Operational Safeguards. The ESAPs and the IESIA Guidance Notes to adopt to meet OS standards. other two components—the ESAPs are expected to be ready by the first and the IESIA Guidance Notes—are quarter of 2014; they will replace the In addition to laying the foundations for being prepared on the basis of the ESAPs and IESIA Guidance Notes the ISS, this paper covers the first two draft ISS but can only be produced produced in 2001.

The Integrated Safeguards System

Environmental and social Statement sets out the basic • Operational Safeguard 4: sustainability is key to economic tenets that guide and underpin the Pollution prevention and growth and poverty reduction in Bank’s approach to environmental control, hazardous materials Africa. The Bank’s Strategy for safeguards. In addition, the Bank and resource efficiency – This 2013-2022 emphasises the need has adopted five OSs, limiting their safeguard covers the range to assist regional member countries number to just what is required of key impacts of pollution, in their efforts to achieve inclusive to achieve the goals and optimal waste, and hazardous materials growth and transition to green functioning of the ISS: for which there are agreed growth. In addition, the Bank is international conventions, committed to ensuring the social • Operational Safeguard 1: as well as comprehensive and environmental sustainability Environmental and social industry-specific and regional of the projects it supports. The assessment – This overarching standards, including greenhouse ISS is designed to promote the safeguard governs the process gas accounting, that other sustainability of project outcomes of determining a project’s multilateral development banks by protecting the environment and environmental and social follow. people from the potentially adverse category and the resulting impacts of projects. The safeguards environmental and social • Operational Safeguard 5: aim to: assessment requirements. Labour conditions, health and safety – This safeguard • Avoid adverse impacts of • Operational Safeguard 2: establishes the Bank’s projects on the environment Involuntary resettlement requirements for its borrowers and affected people, land acquisition, population or clients concerning workers’ while maximising potential displacement and conditions, rights and protection development benefits to the compensation – This safeguard from abuse or exploitation. extent possible; consolidates the policy It also ensures greater commitments and requirements harmonisation with most other • Minimise, mitigate, and/ set out in the Bank’s policy multilateral development banks. or compensate for adverse on involuntary resettlement, impacts on the environment and incorporates a number of and affected people when refinements designed to improve avoidance is not possible; and the operational effectiveness of those requirements. • Help borrowers/clients to strengthen their safeguard • Operational Safeguard 3: systems and develop Biodiversity and ecosystem the capacity to manage services – This safeguard aims environmental and social risks. to conserve biological diversity and promote the sustainable The Bank requires that borrowers/ use of natural resources. It also clients comply with these safeguards translates the commitments in requirements during project the Bank’s policy on integrated preparation and implementation. water resources management into The Integrated Safeguards Policy operational requirements. African Development Bank Group’s Integrated Safeguards System 4 Safeguards and Sustainability Series Policy statement and operational safeguards PART I: INTRODUCTION 5

PART I: INTRODUCTION

Background

The African Development Bank (AfDB, or the Bank) adopted its Environmental Policy in 1990, a set of Environmental and Social Assessment Procedures (ESAPs) in 2001, the Involuntary Resettlement Policy in 2003 and a revised Policy on the Environment in 2004. These policies have provided the basis for the Bank’s current environmental and social safeguards, which set out the requirements for an appropriate level of environmental and social assessment and management measures to mitigate project-related risks.

The Bank also has other cross-cutting and sector policies that contain commitments to promote environmental and social sustainability in Bank operations: policies on health (1996), integrated water resources management (2000), agriculture and rural development (2000)1, gender (2001), co-operation with civil society organisations (2001), involuntary resettlement (2003), poverty reduction (2004), and the environment (2004), as well as the Civil Society Engagement Framework (2012). However, none of these policies provides specific safeguard requirements to mainstream environmental and social sustainability into the Bank’s investments as conditions for Bank funding.

The Bank has developed an Integrated Safeguards System (ISS) to update its safeguards policies and consolidate them into a set of Operational Safeguards (OSs) supported by revised ESAPs and Integrated Environmental and Social Impact Assessment (IESIA) Guidance Notes. This document introduces the ISS and presents the Integrated Safeguards Policy Statement and OSs. The ISS supersedes the provisions in previous policies on environmental and social safeguards and compliance aspects.

Context

The ISS has been developed at a time when new strategic priorities have emerged, the Bank’s Ten-Year Strategy has been adopted, and the multilateral financial institutions (MFIs) are increasingly harmonising their environmental and social safeguards.

Regional strategic priorities Africa faces exciting opportunities as well as serious challenges. Over the past decade, the region has undergone an economic transformation. With average annual growth rates of around 5%, the continent is increasingly seen as an important future driver of the global economy. There are prospects for innovation in technology and industries, increased production and consumption, and higher levels of prosperity.

1 The policy was supplemented in 2010 by an agricultural sector strategy that was further revised in 2012 to enhance the Bank’s contribution to agricultural productivity, food security and poverty reduction while ensuring the sustainability and resi- lience of agricultural infrastructure and protection of the natural resource base. This entails an increase in monitoring and audit, climate-proofing, use of renewable energy, and mitigation measures. African Development Bank Group’s Integrated Safeguards System 6 Safeguards and Sustainability Series Policy statement and operational safeguards

Yet several challenges impede rising rates of urbanisation, a huge Harmonisation of environmental sustained progress. Africa is still the infrastructure deficit and shifting and social safeguards poorest continent, with large portions consumption patterns all threaten Development of the ISS has taken of its population having inadequate future sustainability. Many of the place in the context of the MFIs’ access to goods and services— development decisions taken continued harmonisation and such as energy, clean water and today on infrastructure, energy upgrading of their environmental and sanitation—to meet basic human systems, food production systems social best practices. Following the needs. Growth has been uneven and education will have long-term Paris Declaration on Aid Effectiveness across the continent and within many consequences. in 2005, there has been greater countries. While six of the ten fastest- impetus for development agencies growing economies are African, many The prime objective of the ISS is to to harmonise environmental and countries on the continent continue mainstream sound environmental and social safeguards. The MFI Working to occupy some of the lowest ranks social management practices into all Group on the Environment (MFI-WGE) of the Human Development Index. Bank operations to ensure that they published a Common Framework for Hence, promoting inclusive growth, are sustainable and that public and Environmental Assessment in 2005 to which benefits all segments of society, private sector clients are supported encourage greater harmonisation of remains an urgent priority if the in meeting the requirements. environmental and social safeguards recent development gains are to be among its members. This is highly sustained. Alignment with the Bank’s significant for Bank co-financing with Strategy for 2013-2022 other MFIs. Ensuring that future growth The Bank has recently adopted its is sustainable is becoming a Strategy for 2013-2022 to promote In the past few years, almost all the daunting challenge, with worrying Africa’s transformation through MFIs have embarked on or have trends regarding pollution, waste, inclusive growth and transition to completed major revisions and environmental degradation and green growth. The ISS is aligned with upgrading of their environmental and climate change. Furthermore, and supports the key operational social policies and their safeguard population growth, food insecurity, priorities of the strategy (Box 1). requirements and standards2.

BOX 1: Contribution of the ISS to the Bank’s Strategy for 2013-2022

• Infrastructure development – The Bank is committed to investing in infrastructure that unlocks the growth and development potential of Africa. Infrastructure projects often come with substantial and sometimes irreversible environmental and social costs. The ISS helps to avoid or minimise these costs, helping to ensure that projects are sustainable and that beneficiaries receive the intended inclusive benefits. • Regional integration – As problems in one country often affect neighboring countries, the ISS enables the Bank to support regional projects that will sustain Africa’s transition to green growth through better environment and resources management, including by protecting fauna, flora, fresh water, and cultural heritage. Under the ISS, these large regional projects are also subject to strategic environmental and social assessments to address adverse cumulative effects. • Private sector development – To foster more inclusive growth, the ISS seeks to enhance the capacities of the private sector to mainstream environmental and social sustainability into their projects to ensure that project-affected populations participate in and derive sustained economic benefits from projects in their communities. • Governance and accountability – Previously, policy-based loans were not subjected to appropriate environmental and social due diligence, and loopholes excluded certain segments of the population from benefiting from the loans. With the ISS, all policy-based loans are subject to due diligence to build in environmental and social sustainability and strengthen environmental governance. • Skills and technology – Through the ISS, the Bank will strengthen individual and institutional capacities in regional member countries to design and implement sustainable projects, including the development of skills to address contemporary issues such as climate change.

2 The IFC adopted its Performance Standards on Environmental and Social Sustainability in 2006 and revised them in 2011. Since 2006, the IADB, EBRD, EIB and AsDB have all upgraded their safeguard systems, and the World Bank and the Islamic Development Bank are now upgrading theirs. In addition, major private banks providing international project finance and bilateral development finance institutions (such as the Dutch FMO or German DEG), with which the Bank often co-finances projects, have adopted the Equator Principles, which are based on the IFC’s Performance Standards on Environmental and Social Sustainability. PART I: INTRODUCTION 7

This process has resulted in borrowers to undertake the setting out the institution’s greater compatibility in coverage, appropriate type and level requirements for assessment requirements and procedures among of environmental and social and management or mitigation these institutions’ environmental and assessment of operations to measures relevant to those areas social safeguards. The multilateral be financed by the institution, of risk and, where appropriate, development banks’ safeguards using a system of project specific standards that need to include the following key common categorisation; be met; and features: • A set of supplementary • Greater consistency in the • An overarching safeguard that safeguards addressing specific risk areas covered by the sets out the requirements for environmental and social risks, safeguards.

Table 1: Key areas of operational safeguards among multilateral development banks

MFI- Area WB IFC EBRD EIB IADB AsDB AfDBa WGEb Environmental and social assessment Yes Yes Yes Yes Yes Yes Yes (ESA) Involuntary resettlement Yes Yes Yes Yes Yes Yes Yes Yes Pollution prevention Yes Yes Yes Yes Yes (in ESA) Yes Yes Biodiversity Yesc Yes Yes Yes Yes (in ESA) Yes Yesd Community impacts No Yes Yes Yes No (in ESA) (in ESA) Yes Labour conditions No Yes Yes Yes No (in ESA) Yes Yes Indigenous peoples Yes Yes Yes Yes Yes Yes (in ESA) Yes Cultural heritage Yes Yes Yes Yes Yes (in ESA) (in ESA) Noe Environmental flows Yesf No No No No No (In Biod.) Yes a As proposed in the ISS. c World Bank has safeguards on natural habitats and e Proposes safeguard on vulnerable groups, which includes b As contained in the Common Framework for forests. indigenous peoples. Environmental and Social Assessment. d Split into pollution and toxic and hazardous substances. f Safeguard is on water resource management.

Current Bank policies and safeguards

The Bank’s commitment to improving and information disclosure. The (iii) hindrances in implementation environmental and social sustainability 2003 Involuntary Resettlement Policy caused by conflicting priorities and in its investments is reflected in the provided a detailed and rigorous set potential conflicts between policies; several related policies and tools it of commitments and requirements and (iv) difficulties in monitoring the has adopted and the changes in its related to Bank projects involving compliance of borrowers and of the institutional set-up to ensure effective population displacement, relocation, Bank itself. implementation of these policies and compensation and restoration of living tools (see Figure 1). standards. The Bank’s ESAPs, produced in 2001 to make the Bank’s sector and cross- The 2004 Policy on the Environment An analysis of the Bank’s experience in cutting polices operational, have established the Bank’s commitment applying these policies highlighted the governed the implementation of the to integrating environmental following problems: (i) high transaction environmental and social safeguards considerations into its operations costs within the Bank and among its over the past decade. However, the through (i) systematic project clients, attributable to the time and implementation of the ESAPs has categorisation according to the level effort required to consider diverse revealed a number of inconsistencies of environmental risk, and (ii) the sources of policy; (ii) important issues and weaknesses: application of appropriate types of did not receive their due attention environmental assessments, with because of uneven coverage and • Project documents tend not to commitments to public consultation assigned weight in different policies; contain the technical information African Development Bank Group’s Integrated Safeguards System 8 Safeguards and Sustainability Series Policy statement and operational safeguards

necessary to categorise projects • Investment decisions are often including lending to the private at the appropriate stage in the made even when appropriate sector. project cycle; environmental and social due diligence has not been carried In late 2010, the Bank issued a • It has proved difficult to out; Concept Note, “Towards an Integrated categorise policy-based and Safeguards System,” signalling its intent programme lending and integrate • Some aspects of the ESAPs, to develop a coherent and integrated social considerations into them; including the specific steps policy commitment. It also issued required and associated roles a set of safeguard requirements on • Processing, storing and and responsibilities, are difficult environmental and social sustainability retrieving information on projects’ to understand and follow; and backed by improved procedures and environmental and social guidance materials. safeguards for project monitoring • The ESAPs do not cover all of or knowledge generation the forms of lending that the purposes is problematic; Bank currently engages in,

Key safeguard policy challenges

In developing the new ISS, the Bank Greater clarity on scope, requirements • Taking into account MFIs’ best has taken into account the changed and responsibilities. The ISS clearly practice in these areas, the ISS context of its operations, the current sets out its requirements for the makes it mandatory to apply state of its environmental and social environmental and social assessment Strategic Environmental and safeguards and the increased of operations and the appropriate Social Assessment (SESA) harmonisation and sharing of best levels of environmental and social to address the environmental practice among the MFIs. Much of management. It also establishes who and social issues arising the work has focused on addressing is responsible for the actions and from “upstream” operations, key safeguard challenges. decisions needed at different stages such as budget support and in the project cycle to implement investment programmes Improving policy coherence. The the ISS. Important elements of the managed by the client. It ISS brings together a range of ISS are its application to all Bank also makes it mandatory for environmental and social policy operations in both public and private clients implementing regional commitments into one coherent sectors, its clear definition of the or sectorwide programmes framework that addresses the Bank’s project categorisation process, and to develop Environmental conditions for financial support. its enumeration of how projects can and Social Management In particular, the commitments trigger specific policy requirements Frameworks (ESMFs) for to a systematic environmental to avoid or manage adverse impacts. identifying, appraising, and assessment process from the financing individual investments Policy on the Environment and Changing pattern of Bank operations. under the programme. on managing resettlement and For the Bank, as for other similar compensation issues from the institutions, the majority of operations • The challenge of managing Involuntary Resettlement Policy have shifted away from single public the environmental and social are combined to form the core of an sector project investments, for which risks associated with lending integrated environmental and social traditional environmental and social through financial intermediaries safeguards approach. The inclusion impact assessments are best suited, is well recognised among of a number of important social towards increased programme-based MFIs. The ISS focuses the issues, such as community impact lending providing budget support, more safeguard requirement on the and more systematic consultation, lending for regional or sector investment capacity and commitment of contributes further to overall policy programmes managed by the client the client financial intermediary coherence. The ISS also takes or borrower, and more private sector to adopt and implement an into account other Bank policy lending, especially through financial effective Environmental and commitments that had not been intermediaries and corporate loans. The Social Management System expressed in terms of safeguard ISS is designed to be relevant to this appropriate to the nature and requirements. changing profile of Bank operations. scale of its operations. PART I: INTRODUCTION 9

Needs of different Bank clients. The effective implementation of the Bank’s on vulnerable groups be determined, ISS acknowledges the changing profile environmental and social safeguard and their interest in and opportunity of Bank clients—especially the diverse systems. The ISS has further clarified to benefit from the Bank’s operations range of private sector clients. Private and translated the Bank’s policy be protected. sector clients typically engage with the on involuntary resettlement into an Bank later in the project cycle than OS, clearly establishing the Bank’s Enhanced public consultation. traditional public sector clients. This requirements and setting out the Meaningful consultation and has implications for the systematic contents of a Resettlement Action participation in the context of implementation of the ISS, which Plan. safeguards is vital. In line with is linked to key steps in the project MFIs’ best practice, the ISS sets cycle. The ISS requirement is adjusted The ISS recognises the challenge to out clear requirements for greater to accommodate these situations. development efforts brought about public consultation among and Public sector clients tend to have more by climate variability and change, as participation by communities and relevance to the “country systems” development interventions interact local stakeholders that are likely approach that the ISS supports. with the physical and ecological to be affected by the Bank’s One of the strategic objectives of environment. The ISS requires that operations. Consultation must meet the ISS is to help strengthen the Bank-sponsored projects be screened the requirements of being “free, prior “country systems”—the country’s and categorised according to their and informed” and of achieving broad own policies, procedures and vulnerability to the risks of climate community support, especially in institutional mechanisms—for applying change. The Bank’s new screening high-risk projects or projects affecting environmental and social safeguards. tool for climate change risk will support vulnerable groups. In particular, the the ISS in addressing vulnerability to ISS makes it clear how consultations Emerging issues. The ISS has also climate change and building adaptation should be integrated into specific incorporated several emerging issues, measures into Bank operations. steps in the assessment process, such as project-related issues on such as developing draft terms of cultural heritage, climate change, Group vulnerability. The Bank is reference for an environmental and biodiversity and ecosystem services, committed to protecting vulnerable social assessment, draft reports and labour conditions. groups that are affected by Bank of SESAs or Environmental and projects. The Integrated Safeguards Social Impact Assessments (ESIAs), Involuntary resettlement, although Policy Statement provides a definition and draft Environmental and Social not strictly an emerging issue, of vulnerable groups and requires that Management Plans for Category 1 remains a major challenge to the the effects of the Bank’s operations projects.

ISS structure and summary

The ISS consists of an Integrated Integrated Safeguards Policy that clients engage in meaningful Safeguards Policy Statement, Statement consultations with affected groups; and Operational Safeguards (OSs), a The Bank’s Integrated Safeguards (vi) respect and promote the protection revised set of Environmental and Social Policy Statement sets out the of vulnerable groups, in a manner Assessment Procedures (ESAPs) and) Bank’s own commitments to and appropriate to the African context. Integrated Environmental and Social responsibilities for delivering the Impacts Assessment (IESIA) Guidance ISS: to (i) ensure the systematic The Policy Statement also sets out Notes (see Figure 2). assessment of environmental and the Bank’s commitment to harmonise social impacts and risks; (ii) apply the environmental and social safeguards This document presents the OSs to the entire portfolio of Bank among MFIs and to co-ordinate with Integrated Safeguards Policy operations; (iii) support clients and co-financing partners. It highlights the Statement and the OSs. Since the countries with technical guidance importance of compliance monitoring ESAPs and the IESIA Guidance and practical support in meeting and supervision to ensure that the Notes provide guidance on the the requirements; (iv) implement an safeguards are implemented. Finally, it implementation of the OSs, they will adaptive and proportionate approach to includes a list of goods harmful to the be developed when the Bank’s Board environmental and social management environment for which Bank-provided of Directors has approved the Policy measures to be agreed with clients as a funds may not be used in either public Statement and the OSs. condition of project financing; (v) ensure or private investments.. African Development Bank Group’s Integrated Safeguards System 10 Safeguards and Sustainability Series Policy statement and operational safeguards

Operational Safeguards • Delineate the roles and property that emphasises the need to The Bank selected the OSs for responsibilities of the Bank maintain social cohesion, community inclusion in the ISS on the basis of and its borrowers or clients in structures, and the social interlinkages the following considerations: implementing projects, achieving that common property provides. sustainable outcomes, and • Commitments in the Bank’s promoting local participation; The safeguard retains the requirement existing policies; and to provide compensation at full replacement cost; reiterates the • Relevance to key environmental • Assist regional member importance of a resettlement that and social issues in the region; countries and borrowers/ improves standards of living, income- clients in strengthening their earning capacity, and overall means of • Lessons learned from applying own safeguards systems livelihood; and emphasises the need the environmental and social and their capacity to manage to ensure that social considerations, policies/procedures in the Bank; environmental and social risks. such as gender, age, and stakes in the project outcome, do not disenfranchise • Harmonisation with other The OSs are summarised below, and particular project-affected people. multilateral development banks their full text is presented in Part III. and alignment with relevant OS 3: Biodiversity and Ecosystem international conventions and OS 1: Environmental and Social Services – The overarching objective of standards; Assessment – This overarching this safeguard is to conserve biological safeguard governs the process of diversity and promote the sustainable • Outcomes of stakeholder determining a project’s environmental use of natural resources. It translates consultations; and and social category and the into OS requirements the Bank’s resulting environmental and social commitments in its policy on integrated • Limiting the number of OSs to assessment requirements: the scope water resources management and the just what is required to achieve of application; categorisation; use of UN Convention on Biological Diversity. the optimal functioning of the a SESA and ESIA, where appropriate; The safeguard reflects the importance ISS. Environmental and Social Management of biodiversity on the African continent Plans; climate change vulnerability and the value of key ecosystems to The OSs are intended to: assessment; public consultation; the population, emphasising the need community impacts; appraisal and to “respect, conserve and maintain • Better integrate considerations treatment of vulnerable groups; and [the] knowledge, innovations and of environmental and social grievance procedures. It updates and practices of indigenous and local impacts into Bank operations to consolidates the policy commitments communities… [and] to protect promote sustainability and long- set out in the Bank’s policy on the and encourage customary use of term development in Africa; environment. biological resources in accordance with traditional cultural practices that • Prevent projects from adversely OS 2: Involuntary Resettlement: are compatible with conservation or affecting the environment and Land Acquisition, Population sustainable use requirements3 . local communities or, where Displacement and Compensation – prevention is not possible, This safeguard consolidates the policy OS 4: Pollution Prevention and minimise, mitigate and/or commitments and requirements set Control, Greenhouse Gases, compensate for adverse effects out in the Bank’s policy on involuntary Hazardous Materials and Resource and maximise development resettlement, and it incorporates Efficiency – This safeguard covers benefits; refinements designed to improve the the range of impacts of pollution, operational effectiveness of those waste, and hazardous materials for • Systematically consider the requirements. In particular, it embraces which there are agreed international impact of climate change on comprehensive and forward-looking conventions and comprehensive the sustainability of investment notions of livelihood and assets, industry-specific standards that projects and the contribution of accounting for their social, cultural, and other multilateral development banks projects to global greenhouse economic dimensions. It also adopts a follow. It also introduces vulnerability gas emissions; definition of community and common analysis and monitoring of greenhouse

3 UN Convention on Biological Diversity (1992). PART I: INTRODUCTION 11

FIGURE 1: Structure of the Integrated Safeguards System

Integrated safeguards policy Declaration of commitment to environmental and social statement sustainability and to reducing risk of non compliance

Operational safeguards Short and focused policy statements that follow Bank commitments and establish operational parameters

Procedural and process guidance ESAP revised procedures (documentation,analysis,review,and reporting) at each stage of projet cycle

Guidance notes revised IESIA Detailed (methodological,sectoral and thematic) guidance on guidelines integrated environmental and social impact assessment

gas emissions levels and provides knowledge and best practice. The (ISTS), to facilitate the tracking a detailed analysis of the possible revision of the ESAPs will include the of ISS compliance through the reduction or compensatory measures following: project cycle and to ensure framework. compliance before proceeding • Amending and updating the to the next stage of the project OS 5: Labour Conditions, Health current ESAPs to align with the cycle; and and Safety – This safeguard provisions of the OSs; establishes the Bank’s requirements • Providing procedural guidance for its borrowers or clients concerning • Providing a detailed and clear and user-friendly templates to workers’ conditions, rights and description of the steps needed facilitate the implementation protection from abuse or exploitation. to implement the OSs at every of the steps proposed in the It covers working conditions, workers’ stage of the project cycle, ESAPs during the project cycle. organisations, occupational health indicating who is responsible for and safety, and avoidance of child or each step; The revised ESAPs will be designed forced labour. to address the following types of • Ensuring the coverage of challenges in implementing the ISS: Environmental and Social both public and private sector Assessment Procedures lending, with specific provisions • Adopting one set of ESAPs for The ESAPs provide information on the designed to fit the different both public and private sector specific procedures that the Bank and circumstances applicable to lending, with different project its borrowers or clients should follow private sector projects; processing cycles; to ensure that Bank operations meet the requirements of the OSs at each • Addressing various key stages • Designing procedures to cover stage of the Bank’s project cycle. in the project cycle where the lending and investment plans compliance has been weak, for policy- and programme-based The revised ESAPs will help improve and introducing procedures to lending operations, which will project outcomes by replacing strengthen implementation; now be subject to categorisation, outdated environmental and social and the requirement to use SESA assessment procedures with upgraded • Introducing an Integrated for such operations that are processes based on cutting-edge Safeguards Tracking System categorised as 1 or 2; African Development Bank Group’s Integrated Safeguards System 12 Safeguards and Sustainability Series Policy statement and operational safeguards

• Ensuring borrowers’ effective Integrated Environmental and member country personnel. The implementation of Environmental Social Impact Assessment guidance notes will consist of three and Social Management Guidance Notes parts: Frameworks for regional and IESIA Guidance Notes provide sectoral investments, and technical guidance for the Bank • General guidance on ESIA, in financial intermediaries’ use and its borrowers on specific response to the requirements of Environmental and Social methodological approaches or set out in OS1; Management Systems; standards and management measures relevant to meeting • Topic-specific guidance, • Improving the timely compliance the requirements of the OSs. The relevant to specific themes and of all Bank operations with the Bank’s current IESIA Guidelines, requirements covered in the requirement to categorise all produced in 2003, contain generic OSs; and projects; and guidance on environmental and social impact assessments and • Sector-specific guidance, in the • Building a well-resourced and specific guidance on environmental form of brief keysheets. appropriate institutional structure and social issues for nine different and capacity to improve sectors for the Bank and its clients. The guidance notes will include key the level of supervision and The revised guidance notes will documents and standard forms that implementation of Environmental support the implementation of the describe roles and responsibilities, and Social Management ISS and provide the material for a the flow of documents and Plans and ensure effective training and capacity-development information, and other factors in implementation of the ISS. programme for Bank and regional implementing the OSs. 13 African Development Bank Group’s Integrated Safeguards System 14 Safeguards and Sustainability Series Policy statement and operational safeguards PART II: INTEGRATED SAFEGUARDS POLICY STATEMENT 15

PART II: INTEGRATED SAFEGUARDS POLICY STATEMENT

Background and context

The African Development Bank (AfDB or the Bank) is committed to making growth inclusive by broadening access to economic opportunities for more people, countries and regions, while protecting the most vulnerable. The Bank further recognises that human well-being in Africa depends on the quality of the environment and the sustainable use of natural resources. This is why it strives to ensure that Bank operations have no unintended adverse direct or indirect environmental or social impact on communities.

Recognising the relevance of safeguards to achieving sustainability in both public and private sector projects, during regional consultations stakeholders have called on the Bank to:

• Balance the trade-offs between short-term profits and long-term development and environmental sustainability in financing projects;

• Strengthen regional member countries’ (RMCs’) institutional frameworks and governance to underpin environmental and social sustainability;

• Strengthen the Bank’s compliance functions and units to ensure that mandatory and special environmental and social compliance monitoring and audit missions are fully implemented when the Integrated Safeguards System (ISS) is rolled out;

• Mobilise more financial resources to ensure the environmental and social sustainability of its investments and increase access to funding for civil society groups, as reliable and independent third parties, to support supervision and monitoring of projects;

• Participate with borrowers in supervising and monitoring compliance with environmental and social policies during project implementation; and

• Strengthen the capacity of RMCs’ country systems to implement the Bank’s environmental and social requirements.

This policy statement draws from applicable safeguards and other relevant cross-cutting and sectoral policies of the Bank. It aims to establish the objectives and scope of the ISS. African Development Bank Group’s Integrated Safeguards System 16 Safeguards and Sustainability Series Policy statement and operational safeguards

Commitments and responsibilities

Systematic assessment of impacts to providing its borrowers or clients and informed1 manner in decisions and risks –The Bank is committed with high-quality technical guidance about avoiding or managing to ensuring that its public and and practical support to carry environmental or social impacts. private sector operations comply out the necessary analytical and The Bank has also mainstreamed the with the Operational Safeguards procedural steps required under Extractive Industries Transparency (OSs) by assessing environmental, its OSs, including the appropriate Initiative (EITI) in its own sector climate change and social risks and level of environmental and social operations since 2006 and has impacts as early as possible in the assessment. At the same time, the supported RMCs’ participation in project cycle, and providing effective Bank expects the borrower or client the EITI process to ensure sound audit, monitoring and supervision to comply with national laws. extractive industry practices and of agreed environmental and social sustainable development. The Bank management measures during Proportionality and adaptive will continue to catalyse multiple implementation. If the Bank finds that management – The Bank takes a stakeholder engagement in the EITI the environmental or social impacts proportionate and adaptive approach process, using the Bank-hosted of any of its investments are not likely to the Environmental and Social Africa Legal Support Facility to to be adequately addressed, the Management Plans (ESMPs) that provide legal assistance to RMCs Bank may choose not to proceed it may agree upon with borrowers/ to negotiate complex extractive with the investment. clients as a condition for project resource contracts. financing: the agreed management Application of safeguards to measures should be proportionate Protecting the most vulnerable – the entire portfolio –The Bank to the level of environmental and As an integral part of its Strategy recognises the need to apply social risk, and should be flexible (2013-2022), the Bank is committed, the appropriate type and level of enough to be adapted to changing to protecting Africa’s most vulnerable environmental and social assessment circumstances during project people and providing them with to its range of operations. In implementation. To adequately opportunities to benefit from Bank addition to the Environmental and use and apply this principle, the operations. Of special concern to Social Impact Assessment (ESIA) Bank engages with the borrower the Bank are groups whose lives for investment projects, the Bank or client as needed during project and livelihoods are, or are likely to applies Strategic Environmental preparation to support successful be, adversely affected by a project and Social Assessment (SESA) for implementation and compliance. financed by the Bank2 and who its own regional, country and sector The Bank gives particular attention have less capacity than others to strategies and for its programme- to key decisions—for example, adapt to the new economic or social based lending operations when there scope of assessment, categorisation, circumstances brought about by are high levels of environmental and habitat designation—and to areas the project (Box 2). Depending on social risk. in which the borrower or client may the specific context of the project, need assistance or the issues are vulnerable groups might include, for Support to clients and countries – inherently complex. example, landless people; people The Bank recognises that RMCs without legal title to assets; ethnic, are very diverse in their capacity to Transparency, good governance religious or linguistic minorities; sustainably manage investment- and inclusivity – The Bank is some categories of children related environmental and social committed to ensuring that throughout (orphans, homeless); marginalised issues from the institutional, policy the environmental and social social groups and people who are and regulatory perspectives. The assessment process, the borrower sometimes referred to as indigenous Bank supports RMCs’ efforts to or client engages in meaningful peoples. improve and align their country and transparent consultation with safeguards systems and policies affected communities, particularly Where groups are identified as with international good practice as with vulnerable groups, to ensure that vulnerable, the borrower or client reflected in the ISS. It is committed they can participate in a free, prior implements appropriate differentiated

1 Free: of intimidation or coercion; prior: timely in relation to the assessment process, allowing sufficient time to access and understand information and prepare responses; informed: advance provision of relevant, understandable and accessible information, in the appropriate language. 2 The Bank’s approach to the handling of issues regarding people adversely affected by its financed projects is articulated in the Operating Rules and Procedures of the Bank’s Independent Review Mechanism. PART II: INTEGRATED SAFEGUARDS POLICY STATEMENT 17

BOX 2: Vulnerable groups and indigenous peoples to differentiate projects on the basis of the nature and category of the risks. For projects presenting high Vulnerable groups are identified in the context of an economic and social environmental and social risks, the analysis of the impact of the project. Bank may, at its own discretion, The project ESIA identifies interventions to improve a project environmentally perform compliance audits. The and socially and thereby enhance its benefits and (in order of priority) prevent, Bank’s Compliance and Safeguards minimise, mitigate, or compensate for adverse impacts. The ESIA process Division3 monitors the environmental ensures the distribution of benefits and opportunities among affected and social performance of Bank’s persons or groups through differentiated measures specially designed to projects in consultation with cater to their needs. These differentiated measures are incorporated into borrowers and/or clients. For complex the relevant impact mitigation instruments—the ESMP and Resettlement projects or when conflicts with host Action Plan and/or Community Development Plan. In the ESIA process, communities arise, the Bank makes the Bank develops and uses criteria for screening the projects it finances use of independent third parties— for negative impacts and for identifying those that are adversely affected— independent environmental and social including, when relevant, indigenous peoples. advisers, consultants, monitors and auditors—to monitor compliance. The Bank will strengthen the dialogue initiated with continental institutions The Bank ensures that the reports during the forum on Indigenous People in Development it organised of these monitoring exercises are in February 2013 to explore opportunities to increase knowledge and publicly available to all parties in understanding of what is an indigenous peoples group in Africa and how line with the Bank’s Disclosure and to better support the inclusion and economic development of such groups. Access to Information policy. From the deliberations and recommendations measures so that unavoidable adverse Accordingly, the Bank supports on such reports, the Bank’s sector impacts do not fall disproportionately harmonising the implementation department prepares, and agrees with on these vulnerable groups, and of the safeguards in the context the client on, an implementable action so that they are not disadvantaged of co-financing. When the Bank plan, with measurable indicators. in sharing development benefits participates in operations led by other The Bank’s efforts to strengthen and opportunities—such as roads, development finance institutions or the capacity of country systems do schools, and health care facilities other financial partners, the borrower not alter the role and function of the (see OS1, Section C5). or client performs supplementary due Bank’s accountability mechanisms. diligence as necessary to comply with Promoting gender equality and the ISS requirements. When the Bank The Bank’s grievance and redress poverty reduction – The Bank leads the operation, it supports the mechanism – The grievance and recognises that poverty, ecological borrower by facilitating the necessary redress system at the Bank comprises degradation and gender inequalities co-ordination to reduce transaction five elements: (i) policies and are often strongly interrelated. This is costs. procedures established by the Bank why the Bank pays special attention on addressing requests for dispute to reducing gender inequality and Compliance monitoring and resolution in the environmental and poverty by carrying out an assessment supervision of safeguards – The social context; (ii) public access to of gender issues for every project. It Bank recognises the importance of the process through the Bank country uses the findings as the basis for working in close co-operation with its office or through the Compliance project design and compensation borrowers and clients in implementing Review and Mediation Unit (CRMU); plans that lead to enhanced gender the OSs, with the aim of strengthening (iii) country-level responsibility balance (see OS1, Section C5). the capacity of country systems for receiving and responding to to manage the environmental and requests for redress; (iv) the CRMU, Harmonisation and facilitation of social assessment process. The Bank which provides a corporate window donor co-ordination – The Bank is monitors implementation through for receiving requests for dispute committed to maximising efficiency quarterly reports by borrowers and resolution and mediation process; and and minimising costs for its borrowers clients and during its own supervision (v) tracking and monitoring grievances and clients in complying with missions, using the proportionality and their resolutions. Although the environmental and social safeguards. and adaptive management principles Bank addresses grievances primarily

3 The Compliance and Safeguards Division (ORQR3) is currently tasked with this function. In case of any internal reorganisation in the Bank, this provision will refer to the new division or unit that will be tasked with monitoring and enforcing compliance with the Bank’s environmental and social safeguards policies. African Development Bank Group’s Integrated Safeguards System 18 Safeguards and Sustainability Series Policy statement and operational safeguards

at the country level, it has an interest people who are, or are likely to finding solutions to their problems; in ensuring that these processes are be, adversely affected by a project and (ii) a compliance review phase, responsive, treat claimants fairly, and financed by the Bank Group as led by a three-member panel drawn operate effectively. a result of violation of the Bank from the IRM roster of experts. Group’s policies and procedures Country-level grievance and with an avenue to request the Bank Approach to compliance – The redress mechanism – The Bank to comply with its own policies and ISS is closely tied to the Bank’s ensures that clients establish procedures. The requestors first business processes and products credible and independent local seek to resolve their complaints through compliance checkpoints that grievance and redress mechanisms with Bank Management; but if in generate key safeguard information4 to help resolve affected people’s their opinion, Bank Management that can be integrated into project grievances and concerns regarding has not adequately handled their documentation and used in requests the environmental and social impacts complaints, they may submit their and clearance processes. It is the of the project. requests to IRM. The IRM comprises superseding reference for all matters two separate, but related, phases: directly linked to safeguards and Independent Review (i) a grievance or problem-solving compliance, and for the management Mechanism – The mandate of phase, led by the CRMU reporting of environmental and social risks the Bank’s Independent Review directly to the Bank President, to associated with operations and Mechanism (IRM) is to provide assist project-affected people in programme activities.

Definition of goods harmful to the environment in negative list

The Revised Policy on Expenditures • Production of or trade in • Production of or trade in Eligible for Bank Group Financing (May radioactive materials, with the ozone-depleting substances 2008) includes a Negative List5 that bans exception of medical materials subject to international phase- public and private investment in goods and quality-control equipment for out; that are “harmful to the environment” which the radioactive source is without explicitly defining what this trivial and adequately shielded; • Trade in wildlife or wildlife means. On the basis of international best products regulated under the practice6, and with particular reference to • Production of or trade in or use Convention on International criteria provided in the various OSs, the of unbonded asbestos fibres Trade in Endangered Species Bank defines the following as harmful to or other products with bonded of Wild Fauna and Flora; the physical and social environment, and asbestos as dominant material; excludes them—in addition to the items • Purchase of logging explicitly mentioned in the Negative • Production of or trade in equipment for use in List—from its operations for both the pharmaceuticals, chemical unmanaged primary tropical public and private sectors: compounds and other rainforests; and harmful substances subject to • Production of or trade in any international phase-outs or bans, • Production and activities product or activity deemed including pesticides classified as involving harmful or exploitative illegal under host country laws Class Ia (extremely hazardous), forms of forced labour and/ or regulations or international Ib (highly hazardous) or II or child labour as defined by conventions and agreements; (moderately hazardous); national regulations.

4 Environmental and Social Compliance Note is provided as a template in the ESAPs. 5 The Negative List includes the following items: alcoholic beverages, tobacco, radioactive materials, platinum, pearls, precious stones, gold and related products, nuclear reactors and related products, weapons, ammunition and other goods used for military and/or paramilitary purposes, luxury consumer goods, and goods harmful to the environment. 6 Particularly with reference to the IFC exclusion list. PART II: INTEGRATED SAFEGUARDS POLICY STATEMENT 19

Incorporating climate change into development efforts

Climate variability and change has ecological environment may result in assessment of vulnerability to climate emerged as a major challenge to such unintended consequences as change as part of the environmental development efforts, with a high risk loss or degradation of natural and and social assessment process for its that it could undermine past and cultural resources and assets and public and private sector operations; complicate ongoing development biodiversity; unsustainable production any mitigating measures that result efforts, increase social problems, and and consumption, in particular, of from that assessment are included threaten environmental sustainability. energy; and increased vulnerability to in the operation with measures that The interaction of development climate change and climate variability. result from the larger environmental interventions with the physical and Therefore, the Bank requires an and social assessment itself. African Development Bank Group’s Integrated Safeguards System 20 Safeguards and Sustainability Series Policy statement and operational safeguards PART III: OPERATIONAL SAFEGUARDS 21

PART III: OPERATIONAL SAFEGUARDS

The Bank has adopted a series of five Operational Safeguards:

• OS1 sets out the Bank’s overarching requirements for borrowers or clients to identify, assess, and manage the potential environmental and social risks and impacts of a project, including climate change issues.

• OSs 2-5 support the implementation of OS1 and set out specific requirements relating to different environmental and social issues, including gender and vulnerability issues, that are triggered if the assessment process reveals that the project may present certain risks.

Operational safeguard 1 – Environmental and social assessment

Objectives

The objective of this overarching Operational Safeguard (OS), along with the OSs that support it, is to mainstream environmental and social considerations— including those related to climate change vulnerability—into Bank operations and thereby contribute to sustainable development in the region.

The specific objectives are to:

• Mainstream environmental, climate change, and social considerations into Country Strategy Papers (CSPs) and Regional Integration Strategy Papers (RISPs);

• Identify and assess the environmental and social impacts and risks— including those related to gender, climate change and vulnerability—of Bank lending and grant-financed operations in their areas of influence;

• Avoid or, if avoidance is not possible, minimise, mitigate and compensate for adverse impacts on the environment and on affected communities;

• Provide for stakeholders’ participation during the consultation process so that affected communities and stakeholders have timely access to information in suitable forms about Bank operations, and are consulted meaningfully about issues that may affect them;

• Ensure the effective management of environmental and social risks in projects during and after implementation; and African Development Bank Group’s Integrated Safeguards System 22 Safeguards and Sustainability Series Policy statement and operational safeguards

• Contribute to strengthening and social risk management requirements set out in the regional member country (RMC) by assessing and building Integrated Safeguards System systems for environmental their capacity to meet AfDB (ISS).

Scope of application

This OS applies to all Bank public and by the Bank, except for short-term pose any specific risks covered by private sector lending operations— emergency relief, which is specifically OSs 2-5 and, therefore, whether including programme-based exempted. those requirements need to be met. operations, programme lending that The Bank reviews and discloses all leads to individual subprojects, and Environmental and social assessment documentation related to the impact lending to financial intermediaries— work carried out under this OS assessment before presenting a and project activities funded through determines whether the operations project to the Board. other financial instruments managed involve activities or components that

OS requirements

Country and regional level livelihoods—to determine the specific by unplanned but technically The Bank, in partnership with RMCs, type and level of environmental and predictable activities likely to be applies appropriate and relevant social assessment. The screening induced by the project. environmental and social assessment is carried out in accordance with tools to mainstream environmental the Bank’s Environmental and Social Project stages – The assessment and social considerations into CSPs Assessment Procedures (ESAPs). covers all stages of the project, and RISPs. from construction and operation Scope – Environmental and social through to closure/decommissioning. Project level assessment includes the project’s When appropriate, arrangements for Borrowers or clients are responsible area of influence (both upstream closure and decommissioning are for conducting the environmental and downstream), a comprehensive described, and provision is made for and social assessment (Strategic scoping of the project’s components, appropriate resources and budget to Environmental and Social Assessment, consideration of alternatives, and carry out detailed closure planning or SESA, or Environmental and Social assessment of cumulative impacts, at an appropriate period (usually Impact Assessment, or ESIA) and for where relevant. around 3-5 years) before the close developing, as an integral part of project of operations. documentation, an appropriate plan Area of influence – The project’s for managing possible impacts. The geographic and temporal area of Project scoping – Scoping Bank’s environmental and social staff influence is delineated and explicitly of a project considers the size, in operations support the due diligence covered in any impact assessment. processes, site design, construction process and ensure that borrowers The area of influence encompasses and expansion sequencing and any and clients are fully aware of Bank the following, as appropriate: new infrastructure for transportation, policies and procedures, while the energy, communications and public Bank’s Compliance and Safeguards • The area likely to be directly health, including drinking water; function ensures that deliverables and affected by the project; wastewater collection, treatment the compliance process are properly and disposal; waste management; conducted to ensure good quality. • Related or associated facilities1 raw materials used; sources and dependent on the project that means of access; releases to the Screening. Working with Bank are not funded by the project environment; and any plans for operations staff, the borrower or client and that would not have been pollution control and minimisation. screens the project for environmental implemented if the project did and social impacts—including climate not exist; and During the scoping phase, the change impacts, potential adaptation assessment determines the range and mitigation measures, and the • Areas, including the communities of likely potential risks and impacts vulnerability of populations and their within them, potentially affected and also determines whether specific

1 In some cases, associated facilities may be subject to other funding institutions’ environmental and social safeguard policies that are equivalent to the Bank’s OSs. PART III: OPERATIONAL SAFEGUARDS 23

requirements of the Bank’s OSs Local legislation and country adaptive management. The level apply. The assessment covers, in systems – To the extent possible, of assessment and management an integrated way, all relevant direct the assessment complies with the required should be proportionate and indirect environmental and social relevant legislation and standards to the level of risk that the project risks and impacts, including those applicable in the local jurisdiction, poses—as identified during specifically covered in OSs 2-5. bearing in mind the equivalence of categorisation and scoping—and Potential impacts include physical standards with those of the Bank, and the management measures adopted (e.g., geology and soils, surface it takes into consideration national- should be capable of being adapted and groundwater resources, air or regional- level programming to changing circumstances during resources and climate, noise and documents (i.e., CSP or RISP) that the full project cycle. vibration, prominent vista and aesthetic are under implementation or in features), biological (e.g., flora, resident preparation. In considering whether As needed, the assessment leads to and migratory fauna, ecosystems, another institution’s assessment the development of a comprehensive endangered and threatened species fulfils the Bank’s requirements, the and implementable ESMP with a and their habitats and protected Bank first assesses if the other realistic timeframe, incorporating areas, poaching), socioeconomic and institution’s requirements are the necessary organisational cultural (e.g., livelihood, resettlement, equivalent to AfDB’s, and it accepts capacity (including further training community social structure, gender, another institution’s assessment only requirements) and financial resources vulnerable groups, health, safety, if its standards are equivalent or if to address and manage the cultural property, ecosystem services), supplemental due diligence is done environmental and social risks that and transboundary and global to meet AfDB requirements. may occur during the full project impacts, including greenhouse gas cycle. emissions and vulnerability to climate Country systems – The Bank change effects. It discusses potential intends that the assessment process When a project component or adaptation and mitigation measures. will support and strengthen existing exact location remains uncertain, an country systems for environmental, ESMP cannot be developed, but an Where relevant, the assessment also climate, and social risk management, Environmental and Social Management covers possible cumulative impacts: including those specifically related Framework (ESMF)2 is developed to impacts on areas and resources that to OSs 2-5, such as systems and guide the identification, preparation, and result from the proposed project institutions covering resettlement, appraisal of components and activities. in addition to impacts from other biodiversity protection, pollution existing or planned developments, control, and labour standards. To The screening and categorisation including from any associated facilities, achieve this objective, the borrower required for programme-based regardless of which entity undertakes or client should conduct the operations—mainly budget support those actions. Cumulative impacts assessment and the preparation or other lending for regional or sectoral can result from individually minor but of an Environmental and Social programs—can trigger the preparation collectively significant actions that take Management Plan (ESMP) in a of a SESA if there is a significant place over a period of time. manner that complies with existing environmental and social risk. In country systems for assessing and such a case, the borrower designs Mitigation hierarchy – In line with managing environmental risk, as well and implements an ESMF to manage any relevant requirements in the Bank’s as with the AfDB’s requirements. the environmental and social risks of OSs, the assessment considers real The Bank takes this experience subprojects in compliance with the alternatives to the project’s location into consideration in developing its Bank’s safeguards. and/or design to avoid adverse assistance to RMCs for assessing impacts. It applies the mitigation and strengthening the capacity of The environmental and social hierarchy: if avoidance is not possible, country systems. assessment covers all relevant direct reduce and minimise potential adverse and indirect cumulative and associated impacts; if reduction or minimisation is Environmental and social facility impacts identified during the not sufficient, mitigate and/or restore; assessment – The assessment scoping phase, including any specifically and as a last resort compensate for is conducted according to the covered in OSs 2-5, for which there are and offset. principles of proportionality and specific requirements:

2 The ESMF is a safeguard document that establishes a mechanism to determine and assess future potential environmental and social impacts of a project or programme when uncertainty remains on the project component or exact location. African Development Bank Group’s Integrated Safeguards System 24 Safeguards and Sustainability Series Policy statement and operational safeguards

• OS 2: Involuntary Resettlement: resettlement is also deemed to be ESMP (for an investment project) or Land Acquisition, Population Category 1. ESMF (for a programme operation), Displacement and to manage the environmental Compensation Category 1 programme-based and social risks of subprojects operations or regional and sector in compliance with the Bank’s • OS 3: Biodiversity and loans require a SESA, and Category safeguards. Ecosystem Services 1 investment projects require an ESIA, both leading to the preparation Category 3: Bank operations with • OS 4: Pollution Prevention and of an ESMP. For a project requiring negligible adverse environmental Control, Greenhouse Gases, a FRAP, the ESIA includes, and—if and social risks – Category 3 Hazardous Materials and there are no other issues requiring projects do not directly or indirectly Resource Efficiency assessment—may be limited to, affect the environment adversely and the social assessment needed to are unlikely to induce adverse social • OS 5: Labour Conditions, Health prepare the FRAP. impacts. They do not require an and Safety environmental and social assessment. Category 2: Bank operations Beyond categorisation, no action is Categorisation follows the principle likely to cause less adverse required. Nonetheless, to design a of using the appropriate type and environmental and social impacts Category 3 project properly, it may level of environmental and social than Category 1 – Category 2 be necessary to carry out gender assessment for the type of operation. projects are likely to have detrimental analyses, institutional analyses, or Working with Bank operations staff, site-specific environmental and/or other studies on specific, critical the borrower proposes a category, social impacts that are less adverse social considerations to anticipate providing sufficient supporting than those of Category 1 projects. and manage unintended impacts on documentation and baseline data Likely impacts are few in number, the affected communities. to allow the Bank’s Compliance site-specific, largely reversible, and Safeguards function to review and readily minimised by applying Category 4: Bank operations and validate the proposed category. appropriate management and involving lending to financial The responsibility of appropriate mitigation measures or incorporating intermediaries – Category 4 projects categorisation is therefore shared internationally recognised design involve Bank lending to financial by the Bank and its borrowers and criteria and standards. An operation intermediaries that on-lend or invest should be based on reasonably that involves resettlement activity for in subprojects that may produce accurate due diligence material. which an Abbreviated Resettlement adverse environmental and social Action Plan (ARAP) is required impacts. Financial intermediaries Category 1: Bank operations likely under the ESAPs is classified as include banks, insurance, reinsurance to cause significant environmental Category 2. Most programme- and leasing companies, microfinance and social impacts – Category based operations and regional or providers, private equity funds and 1 projects are likely to induce sector programme loans designed investment funds that use the Bank’s significant and/or irreversible adverse to finance a set of subprojects funds to lend or provide equity environmental and/or social impacts, approved and implemented by the finance to their clients. Financial or to significantly affect environmental borrower or client are included in this intermediaries also include private or social components that the Bank category unless the nature, scale or or public sector companies that or the borrowing country considers sensitivity of the intended pipeline of receive corporate loans or loans sensitive. Some programme-based subprojects involves either a high for investment plans from the Bank operations or other regional and level of environmental and social risk that are used to finance a set of sector programme loans that have or no such risk. subprojects. Financial intermediary significant adverse environmental subprojects equivalent to Category or social risks and are deemed Category 2 projects require an 1 and Category 2 are subject to the to be Category 1. In some cases, appropriate level of environmental relevant OS requirements, as if they projects are included in Category 1 and social assessment (SESA for were directly financed Category 1 because of their potential cumulative programme operations, investment or Category 2 projects. However, impacts or the potential impacts of plans, and some corporate loans, or if a client will use a Bank corporate associated facilities. Any project ESIA for investment projects) tailored loan to finance high-risk investment requiring a Full Resettlement Action to the expected environmental and projects known at the time of loan Plan (FRAP) under the provisions social risk so that the borrower can approval, the loan can be considered of the Bank’s policy on involuntary prepare and implement an adequate Category 1. PART III: OPERATIONAL SAFEGUARDS 25

Financial intermediary operations are governance policies, apply the • Develop and disclose a further classified3 as FI-A, FI-B, and FI-C Bank’s OSs to its Category summary of the ESMS to the to reflect the potential environmental 1- and Category 2-equivalent public on its website and make and social impacts and risks of the subprojects, and comply with use of the Bank’s Negative financial intermediary’s existing or local environmental and social List (as defined in the ISS), proposed portfolio of subprojects, requirements; which includes goods that are based on the nature, type, scale and harmful to the environment, sector exposure. The main purpose of • Develop and maintain an ESMS when soliciting a loan or a grant this sub-categorisation is to determine in line with the Bank’s OSs that and before the loan can be the scope and function of the financial is appropriate for the scale approved. intermediary’s Environmental and and nature of its operations— Social Management System (ESMS) recognising that the operations The Bank carries out due diligence and the degree to which the client will of financial intermediaries vary on the ESMS and the financial be required to monitor and report on considerably and in some intermediary’s organisational capacity the environmental and social risks of cases may pose minimal before approving the transaction. its portfolio. environmental and social risk (particularly those of Screening for climate change • Subcategory FI-A: the financial reinsurance companies, which risk intermediary’s portfolio is may only need to develop a The Bank screens projects for considered high risk, and corporate environmental and climate change risk using the Climate it may include subprojects social policy); Safeguards System, which provides that have potential significant a category for project climate change adverse environmental, climate • Demonstrate that it has the risk (Box 3) and requires application of change, or social impacts and management commitment, the Adaptation Review and Evaluation that are equivalent to Category organisational capacity, Procedures that are commensurate with 1 projects. resources and expertise to that category. The Adaptation Review implement its ESMS for its and Evaluation Procedures should be • Subcategory FI-B: the financial subprojects; and mainstreamed into the project ESMP. intermediary’s portfolio is deemed to be medium risk, and may include subprojects that have potential limited BOX 3: Screening Bank projects for climate change risk adverse environmental, climate change, or social impacts and The Bank’s Climate Safeguards System is a set of decision-making tools that are equivalent to Category and guides that enable the Bank to assess investments in terms of their 2 projects. vulnerabilities to climate change, and to review and evaluate adaption and mitigation measures. Screening should be done as early as possible, as • Subcategory FI-C: the financial one element of project categorisation. intermediary’s portfolio is considered low risk and Category 1: Projects may be very vulnerable to climate change and require includes subprojects that a detailed evaluation of climate change risks and adaptation measures. have minimal or no adverse Comprehensive, practical risk management and adaptation measures environmental or social impacts should be integrated into the project design and implementation plans. and that are equivalent to Category 2: Projects may be vulnerable to climate change and require a Category 3 projects. review of climate change risks and adaptation measures. Practical risk management and adaptation options should be integrated into the project Each Category 4 financial design and implementation plans. intermediary is required to: Category 3: Projects are not vulnerable to climate change. Voluntary • Have adequate corporate consideration of low-cost risk management and adaptation measures is environmental and social recommended, but no further action is required.

3 The basis for determining the financial intermediary subcategories and their implications for the scope and function of the financial intermediary’s ESMS are described in the IESIA Guidance Note on ESMSs. . African Development Bank Group’s Integrated Safeguards System 26 Safeguards and Sustainability Series Policy statement and operational safeguards

Special screening measures ensure that identified a project includes environmental considerations risks and potentially adverse and social analysis, the gender All assessments should also impacts are addressed in a manner assessment may be carried out as systematically consider the full range commensurate with their nature part of this analysis. In particular, of potential impacts on local affected and magnitude. Avoiding risks and the Bank assesses the quality communities, and especially on adverse impacts is preferable to and relevance of gender data and vulnerable communities, and should minimising them. performance indicators, specific pro- consider possible impacts on cultural gender measures, and budgetary heritage. When some elements of risk or negative resources allocated for equality and impact still exist despite adequate empowerment for any project as Vulnerability and community attempts to avoid or minimise them, key criteria in investment decision- impacts – The environmental the borrower or client informs affected making process. and social assessment process communities of the risk or negative systematically identifies vulnerable impact in a socially and culturally Vulnerable status can be determined groups on the basis of a careful appropriate manner. The borrower by identifying a group’s likelihood screening and analysis of the social or client also establishes adequate of facing harder conditions as a and economic context in which emergency preparedness and response result of the project, owing to such the project will operate. The Bank plans so that it is prepared to respond to factors as gender, economic status, may assist borrowers and clients accidental and emergency situations that ethnicity, religion, cultural behaviour, to screen, identify and assess may pose a threat to local communities, sexual orientation, language or health vulnerability in project areas upon and to provide affected communities condition. Depending on the specific their request and within the limits of with appropriate information about context of the project, vulnerable available resources. The presence of emergency preparedness and response groups may thus include female- factors that cause vulnerability should activities, resources, and responsibilities. headed households, those below be analysed, as should potential the poverty line; the landless, some project impacts; the capacity to cope In assessing the potential impacts of categories of children (orphans, with, or adapt to, such impacts; a project on affected communities, homeless), marginalised social and the potential for such impacts the borrower or client makes use groups and indigenous peoples, to be mitigated in a way that takes of adequate and qualified expertise those without legal title to assets; account of the specific vulnerabilities to identify people and groups that ethnic, religious and linguistic or marginalisation status in question. may be directly, indirectly, and/or minorities; and those who are disproportionately affected by the physically handicapped. The borrower or client gives project because of their recognised particular attention to assessing vulnerable status. Guidance on the Where groups are identified as the risks and potentially adverse identification of vulnerable groups vulnerable, the borrower or client impacts of the project on local and vulnerability assessments is implements appropriate differentiated communities, including direct and found in the Integrated Environmental measures so that unavoidable adverse indirect impacts on their health and Social Impact Assessment impacts do not fall disproportionately or safety and indirect impacts on (IESIA) Guidance Notes. on these vulnerable groups, and their socioeconomic conditions so that they are not disadvantaged and livelihoods. The borrower or Using a gender mainstreaming in sharing development benefits client establishes preventive and approach, the Bank carries out an and opportunities (such as roads, management measures consistent assessment of gender issues for schools, and health care facilities). with good international practice4 as every project and uses the findings described in the World Bank Group as the basis for project design and Cultural heritage – The borrower Environmental, Health and Safety compensation plans that lead to or client is responsible for ensuring Guidelines (EHS Guidelines)5.These enhanced gender balance. When that project sites and designs avoid

4 Good international industry practice is defined as the exercise of professional skill, diligence, prudence and foresight that would reasonably be expected from skilled and experienced professionals engaged in the same type of undertaking under the same or similar circumstances globally or regionally. 5 The MFI-WGE has adopted the World Bank’s EHS Guidelines as a standard. The EHS Guidelines are technical reference documents with general and industry-specific examples of good international industry practice. They contain the performance levels and measures that are normally acceptable to the World Bank Group and are generally considered to be achievable in new facilities, at reasonable cost, by existing technology. PART III: OPERATIONAL SAFEGUARDS 27

significant damage to cultural qualified experts is made and actions Consultation is based on stakeholder heritage, including both tangible consistent with this OS are identified. analysis and is preceded by disclosure and intangible cultural heritage6. of adequate project information and The borrower or client identifies and The Bank considers all options to environmental and social information qualifies the cultural heritage likely preserve tangible cultural heritage during to ensure that participants are fully to be affected by the project, and project preparation. The project shall not informed. It begins at an early stage experienced experts assess the remove any tangible cultural heritage during project preparation and continues project’s potential impacts on this unless the following conditions are met: as needed. It is conducted in a timely cultural heritage. When a project may manner in the context of key project affect cultural heritage, or access to it, • No technically or financially preparation steps, in an appropriate the borrower or client consults with the feasible alternatives to removal language, and in an accessible place. communities that use or have used it are available; The results of the consultation are within living memory and with relevant adequately reflected in the project national or local regulatory agencies • The overall benefits of the design and in the project documentation. that are entrusted with protecting project substantially outweigh cultural heritage, draw on indigenous the anticipated cultural heritage For Category 1 projects, the affected knowledge to identify its importance, loss from removal; communities are given the opportunity and incorporate the views of these to participate in key stages of project communities into the decision- • Any removal is conducted design and implementation. Therefore, making process. The purpose of in accordance with relevant stakeholders should be consulted to the consultation is to assess, present, provisions of national and/ obtain their input into the preparation and agree with communities on or local laws, regulations, and of the draft terms of reference of the acceptable financial and nonfinancial protected area management environmental and social assessment, compensatory measures. The findings plans and uses internationally the draft SESA or ESIA report and of the consultations are disclosed, accepted best available summary, and the draft ESMP. For except when such disclosure would techniques. Category 2 projects, the affected compromise or jeopardise the safety communities and stakeholders are or integrity of the cultural heritage. Consultation and participation consulted about the draft environmental The borrower or client is responsible for and social assessment report and the When the project is likely to have conducting and providing evidence of draft ESMP. Consultation should be adverse impacts on cultural heritage, meaningful consultation (i.e., consultation conducted with the objective of ensuring the borrower or client identifies that is free, prior and informed) with that the project—especially a Category 1 appropriate measures for avoiding or communities likely to be affected by project—has broad community support, mitigating these impacts as stipulated environmental and social impacts, and and that affected people endorse the in the Integrated IESIA Guidance with local stakeholders, and also for proposed mitigation and management Notes. These measures may include ensuring broad community support8, measures. avoidance, full site protection, and especially for Category 1 projects selective mitigation, including salvage and for projects affecting indigenous When the borrower or client has documentation. peoples. Consultation is undertaken identified vulnerable communities with reference to the updated IESIA that would potentially be affected When the proposed location of a Guidance Notes on consultation, by the project, the borrower/client project is in an area where tangible participation and broad community engages in meaningful informed cultural heritage is likely to be found, support, which also provide guidance consultation and participation with chance-finds7 procedures are included on affected communities’ involvement the vulnerable communities, beginning in the ESMP. Chance finds are not in the process of project planning, as early as possible in the project cycle disturbed until an assessment by implementation and monitoring. before the project is submitted for

6 Cultural heritage is defined in this document as a group of resources inherited from the past that people identify, independently of ownership, as a reflection and expression of their constantly evolving values, beliefs, knowledge and traditions. Tangible cultural heritage is movable or immovable objects, sites, structures, groups of structures or natural features or landscapes that have archaeological, paleontological, historical, architectural, religious, aesthetic or other cultural significance. Tangible cultural heritage may be located in urban or rural settings and may be above or below ground or under water. Its cultural interest may be at the local, provincial, national or international level. Intangible cultural heritage is practices, representations, expressions, knowledge, skills—as well as the instruments, objects, artifacts and cultural spaces associated therewith—that communities, groups and in some cases individuals recognise as part of their cultural heritage and that are transmitted from generation to generation. 7 Chance finds refers to the discovery of previously unknown cultural heritage resources, particularly archaeological resources, that are encountered during project construction or operation. 8 Broad community support is a collection of expressions by the affected communities, through individuals or their representatives, of support for the project. It can exist even if some individuals or groups do not support the project. African Development Bank Group’s Integrated Safeguards System 28 Safeguards and Sustainability Series Policy statement and operational safeguards

Board consideration and continuing project cycle. More specifically, the of the environmental and social throughout the project cycle. The ISTS has a number of key functions: assessment studies and to any borrower or client demonstrates that FRAP or ARAP. It also provides consulted individuals or groups can • Repository function – The the mechanism through which effectively represent the affected ISTS acts as a repository members of the public can groups. In particular, this process of for key environmental and request complete versions of engagement: social assessment information all environmental and social generated over the lifetime of assessment studies. • Involves representative bodies the project. At each stage of and civil society organisations, the project cycle, fundamental Environmental and social assessment as well as members from environmental and social documents are made public at relevant the vulnerable communities information relevant to that stage stages of the project cycle through the themselves; is inserted into the ISTS so that, ISTS, which is disclosed on the AfDB over the project lifetime, the websites. Borrowers also disclose • Ensures inclusivity in a socially required information is compiled assessment documents in appropriate and culturally appropriate into one document, to be used national and local settings under the manner; to facilitate periodic compliance direct responsibility and supervision checks. of relevant national/local authorities. • Provides sufficient time for the vulnerable groups’ decision- • Tracking function – The ISTS Disclosure commences early in project making processes; is linked to the Bank’s project preparation to allow the public, beyond management/SAP database the mandatory consultation process, • Facilitates the vulnerable system and is thus used to to genuinely participate in project groups’ expression of their directly monitor project progress. design and implementation. This views, concerns and proposals It is used to ensure that a project enables communities in project areas in the language and manner of can advance from the project to voice their concerns and aspirations their choice, without external preparation phase to the project and reap true benefits from project- manipulation, interference, appraisal phase only if the related developments. coercion, or intimidation; and relevant OS/ESAP requirements have been adequately • In most cases, the disclosure • Respects the culture, knowledge fulfilled—a step that is verified of key environmental and social and practices of vulnerable by the Bank’s Compliance assessment documents in the communities. and Safeguards function. The ISTS begins with the terms ISTS is also used to ensure of reference for SESA/ESIA Disclosure and access to that project documents can for Category 1 and 2 projects information be submitted to the Board and encompasses all relevant The Bank’s revised policy on Disclosure only after the relevant OS/ documents, including SESA/ and Access to Information is based on ESAP requirements have been ESIA summaries, ESMPs, the principle of maximum disclosure, adequately fulfilled; such project financial intermediaries’ enhanced access to information, and documents are accompanied ESMSs, and Resettlement limited exceptions. The Bank applies by the Environmental and Social Action Plans. these principles to the environmental Compliance Note issued by and social assessment process, the Bank’s Compliance and • For Category 1 public sector ensuring progressive disclosure of Safeguards function. projects, final and cleared documents at key stages during the versions of key environmental project cycle and making documents • Access to information and social assessment available to the public on request, function – The ISTS provides documents (SESA/ESIA, ESMP through the Integrated Safeguards a mechanism through which and Resettlement Action Plan Tracking System (ISTS). the public can access summaries) are disclosed at environmental and social least 120 days before Board The basic purpose of the ISTS, as assessment information. The consideration, and final an integral part of the ESAPs, is to ISTS is made available to the versions of Category 1 private facilitate the verification of project public when OpsCom approves sector projects are disclosed compliance with the requirements set the Project Concept Note. It at least 60 days before Board out in the OSs, over the course of the contains links to the summaries consideration. PART III: OPERATIONAL SAFEGUARDS 29

• For Category 2 public and with the ESIA or EMSP, is local grievance and redress mechanism private sector projects, a disclosed by the borrower in the to receive, facilitate and follow up on summary of the ESMP is made borrowing country and by the the resolution of affected people’s available to the public in the Bank in the Public Information grievances and concerns about the borrowing country, on the Centre and field offices, and is environmental and social performance Bank’s website and the ISTS, posted on the Bank Group’s of the project. The local grievance and through other appropriate website for public review and mechanism needs to be accessible channels of information for at comment. to the stakeholders at all times during least 30 days before Board the project cycle, and all responses to consideration. The ISTS is updated once the grievances are recorded and included summaries of environmental and in project supervision formats and • For Category 4 projects social assessment documents (SESAs reports. involving financial or ESIAs, including the ESMP and intermediaries or corporate required resettlement documents) for Implementation of safeguard loans9, the financial Category 1 projects are completed. measures intermediary ensures that the These summaries, prepared by During project implementation, the subprojects that require ESIAs Bank Group staff with the consent borrower or client is responsible for undergo the same information of the borrower, include the staff’s the implementation of the ESMP disclosure process as other conclusions and recommendations and reports to the Bank on key private sector Category 1 regarding environmental and social management or monitoring tasks projects funded by the Bank. impacts and preventive or mitigatory set out in the ESMP. For all projects, Financial intermediaries measures. the Bank coordinates with relevant are required to notify the national authorities to ensure that responsible sector department Sector and country departments implementation of environmental in the Bank if a subproject is address any public inquiry related to and social mitigation measures deemed to be Category 1, and the safeguards information released contained in the ESMP, Resettlement this information is passed on by the Bank, with the assistance Action Plan, and other relevant to the relevant Compliance of the Bank’s Compliance and loan covenants is duly and jointly and Safeguards function of the Safeguards function. The sector monitored and reported during Bank. and country departments document project supervision missions. The and keep on file the communications Bank may, through its Compliance • In projects in which a FRAP between the Bank Group and the and Safeguards function, conduct is required, it is released as public. compliance audits or appoint an a supplementary document independent monitoring team to the to the ESIA Summary. For Grievance and redress project if there is a serious risk of any project involving the mechanism noncompliance with Bank policies resettlement of fewer than 200 The borrower or client establishes a and procedures, or in other cases persons, an ARAP, together credible, independent and empowered that the Bank deems appropriate.

9 Most corporate loans involve implementation of various subprojects and thus can be treated like financial intermediary category investments. African Development Bank Group’s Integrated Safeguards System 30 Safeguards and Sustainability Series Policy statement and operational safeguards PART III: OPERATIONAL SAFEGUARDS 31

Operational safeguard 2 – Involuntary resettlement: land acquisition, population displacement and compensation

Objectives

This Operational Safeguard (OS) aims Badly planned or inadequately • Ensure that displaced people to facilitate the operationalisation implemented involuntary resettlement are meaningfully consulted of the Bank’s 2003 Involuntary can have long-term adverse and given opportunities to Resettlement Policy in the context consequences—in particular, severe participate in the planning and of the requirements of OS1 and impoverishment risks—for the people implementation of resettlement thereby mainstream resettlement affected and for communities in the programmes; considerations into Bank operations. surrounding region. Assets12 or income sources may be lost; people may • Ensure that displaced people It relates to Bank-financed projects be relocated to settings in which receive significant resettlement that cause the involuntary resettlement their productive skills are less useful; assistance under the project, of people. It seeks to ensure that competition for education, natural so that their standards of when people must be displaced they resources and other services may living, income-earning capacity, are treated fairly, equitably, and in a be greater, possibly resulting in civil production levels and overall socially and culturally sensitive manner; unrest; community13 institutions means of livelihood are that they receive compensation and and social networks may weaken; improved beyond pre-project resettlement assistance so that their kinship groups may be dispersed; and levels; standards of living, income-earning cultural identity, traditional authority capacity, production levels and overall and the potential for mutual social • Provide explicit guidance to means of livelihood10 are improved; responsibility, help, co-operation and borrowers on the conditions and that they share in the benefits cohesion may diminish. This OS aims that need to be met regarding of the project that involves their to assist borrowers or clients, with involuntary resettlement issues resettlement. support from relevant Bank staff, in in Bank operations to mitigate addressing the potential costs and the negative impacts of The term resettlement refers risks associated with involuntary displacement and resettlement, to both physical and economic resettlement and, in doing so, to actively facilitate social displacement. Resettlement is facilitate sustainable development. development and establish considered involuntary when the a sustainable economy and project-affected people are not in a The specific objectives of this OS society; and position to refuse the activities that mirror the objectives of the involuntary result in their physical or economic resettlement policy to: • Guard against poorly prepared displacement11.This occurs in and implemented resettlement cases of lawful expropriation or • Avoid involuntary resettlement plans by setting up a temporary or permanent restrictions where feasible, or minimise mechanism for monitoring the on land use, and in negotiated resettlement impacts where performance of involuntary settlements in which the buyer can involuntary resettlement is deemed resettlement programmes resort to expropriation or impose unavoidable after all alternative in Bank operations and legal restrictions on land use if project designs have been remedying problems as they negotiations with the seller fail. explored; arise.

Scope of application

This OS applies to all Bank lending through other financial instruments and social assessment process— operations, both public and private managed by the Bank. Its applicability specifically, during project screening, sector, and to project activities funded is established during the environmental when the magnitude, strategy and

10 Livelihood refers to the full range of economic, social and cultural capabilities, assets, and other means that individuals, families and communities use to satisfy their needs. 11 Physical displacement refers to relocation or loss of shelter; economic displacement refers to loss of assets, restriction of access to assets, loss of income sources or loss of means of livelihood. 12 Assets include both economically productive assets (e.g., land, forest, livestock and seeds) and assets that have social or cultural, rather than economic, value (e.g., sacred sites and community structures). 13 Community refers to a group of people who form around an underlying, instinctive commonality that is built upon, and sustained by, mutual confidence, interaction and co-operation. African Development Bank Group’s Integrated Safeguards System 32 Safeguards and Sustainability Series Policy statement and operational safeguards

timing of the resettlement should be When a project requires the temporary assets at the time of the census/ determined. relocation of people, the resettlement evaluation but can prove that activities should be consistent with they have a claim that would be It covers all components of a project, this OS, while taking into account the recognised under the customary including activities resulting in involuntary temporary nature of the displacement. laws of the country. This category resettlement that are directly and The objectives are to minimise may include people who may significantly related to a Bank-assisted disruption to the affected people, avoid not be physically residing at the project and necessary to achieve its irreversible negative impacts, provide project site or persons who may objectives—whether the resettlement is satisfactory temporary services and— not have any assets or direct led by a government, a private sponsor, where appropriate—compensate for sources of livelihood derived or both—and carried out or planned to transitional hardships. from the project site, but who be carried out contemporaneously with have spiritual and/or ancestral the project. It aims to clarify all aspects This OS does not apply to the settlement ties with the land and are locally of impacts related to land acquisition; of refugees and victims of natural recognised by communities as issues related to physical and economic disasters, nor to resettlement resulting customary inheritors. Depending displacement but not specifically related from voluntary land transactions—that on the country’s customary land to land acquisition are dealt with in OS1. is, market-based land transactions in use rights, they may also be which the seller is not obliged to sell and considered to have a claim if In line with the framework in the the buyer cannot resort to expropriation they are sharecroppers, tenant involuntary resettlement policy, this or other compulsory procedures if farmers, and seasonal migrants OS covers economic, social and cultural negotiations fail. or nomadic families losing user impacts associated with Bank-financed rights. projects involving involuntary loss of Eligibility and entitlements land, involuntary loss of other assets, or In accordance with the involuntary • Those who have no recognisable restrictions on land use and on access resettlement policy, three groups legal right or claim to the land to local natural resources that result in: of displaced people are entitled to they are occupying in the project compensation or resettlement area of influence and who do • Relocation or loss of shelter by the assistance for loss of land or other not fall into either of the two people residing in the project area assets taken for project purposes: categories described above, if of influence; they themselves or witnesses can • Those who have formal legal demonstrate that they occupied • Loss of assets (including loss rights to land or other assets the project area of influence for at of structures and assets of recognised under the laws of the least six months prior to a cut-off cultural, spiritual, and other country concerned. This category date established by the borrower social importance) or restriction generally includes people who or client and acceptable to the of access to assets, including are physically residing at the Bank. These groups may be national parks and protected project site and those who will be entitled to resettlement assistance areas or natural resources; or displaced or may lose access or other than compensation for suffer a loss in their livelihood as a land to improve their former living • Loss of income sources or means result of project activities. standards (compensation for loss of livelihood as a result of the of livelihood activities, common project, whether or not the people • Those who may not have formal property resources14, structures affected are required to move. legal rights to land or other and crops, etc.).

OS requirements

Project design balancing environmental, social, and resettlement or finding other alternatives The borrower or client considers financial costs and benefits. When that can reasonably replace the project. feasible alternative project designs, the resettlement implications of a including re-siting and re-routing, project would appear to be particularly For greater transparency and fairness, to avoid or minimise physical severe, the borrower considers either the borrower or client involves or economic displacement, while downsizing the project to reduce all stakeholder groups as early as

14 Common property resources are those that have value in their entirety, are used communally, and are owned either by the government or by more than one individual on a shared or communal basis. PART III: OPERATIONAL SAFEGUARDS 33

possible, at least at the time when the • Effective advance dissemination in the negotiation of compensation first project plans are drafted; before by the authorities of relevant packages, and in decisions on completion of the project design, information, including land records resettlement assistance and how including their inputs so that the project and proposed comprehensive standards of living, income-earning design can be properly altered; and resettlement plans specifically capacity, production levels and overall continuing throughout implementation, addressing efforts to protect means of livelihood might be improved particularly in monitoring and evaluating vulnerable groups; through the Resettlement Action Plan. resettlement and compensation projects They are also consulted about decisions and programmes. • A reasonable time period for on eligibility requirements, the suitability public review of, comments on, of proposed resettlement sites and the Since the dissemination of findings and/or objection to any options of proposed resettlement timings. is critical to developing effective the proposed plan; and measures for mitigating adverse The borrower or client gives special impacts and optimising benefits, • Public hearings that provide attention to consultations that involve it should be a continuous process affected persons and/or their vulnerable15 groups. In the context incorporating the ongoing lessons legally designated representatives of gender vulnerability, for example, from the affected communities and with opportunities to challenge the borrower or client gives careful changes in the conceptual design the resettlement design and consideration to actively facilitating of the project. Beginning early in process, and/or to present and consultation with, and participation the design phase the borrower or discuss alternative proposals by, both women and men in ways client continually disseminates project and articulate their views and that are sensitive to the social and plans and assessment findings to development priorities. political constraints and barriers that stakeholders so that they have access women and men may face. Particular to information that they can use to When displacement cannot be avoided, attention is paid to the location and help identify options for avoiding or the borrower or client must consult in scheduling of consultation activities mitigating adverse impacts that might a meaningful way with all stakeholders, to ensure that people of all ages pose risks to project costs, schedules, particularly the people affected and the and social groupings can attend and affected people. This project host communities, and involve them at and participate with confidence and information must be well disseminated all stages of the project cycle in a clear ease. The ways in which information throughout the project area of influence and transparent manner—in designing, is disseminated are also carefully in a timely manner and in a form that planning, implementing, monitoring, considered, as levels of literacy and is appropriate and understandable to and evaluating the Resettlement Action networking may differ according local people. Plan discussed below. Community to age, gender, economic status participation helps to ensure that and other lines of social hierarchy/ Consultation, participation and compensation measures, development discrimination. broad community support programmes and service provisions Specific consultation, participation and reflect the needs and priorities of the The Bank considers broad community broad community support guidelines people affected and their hosts. Thus the support to be a key principle and are incorporated in the revised IESIA borrower or client makes it a particular an achievement that demonstrates Guidance Notes, which are part of priority to incorporate local knowledge that borrowers and clients have the ISS. Open, inclusive and effective into the Resettlement Action Plan. used openness, transparency, and consultation with local communities inclusiveness in making decisions includes the following elements: The borrower or client consults the about the project, and have made affected people about their preferences genuine efforts to maximise benefits • Appropriate notice to all potentially pertaining to resettlement and gives to communities and reduce any affected persons that resettlement them genuine choices among technically, harmful impacts. The Bank therefore is being considered and that there economically, and socially feasible requires that borrowers and clients will be public hearings on the resettlement options. In particular, they fulfil the requirements for broad proposed plans and alternatives; are given the opportunity to participate community support set out in OS1.

15 Vulnerable status can be determined by identifying a group’s likelihood of facing harder conditions as a result of the resettlement because of such specific factors as a group’s gender, economic status, ethnicity, religion, language or health condition. Depending on the specific context of the resettlement operation, vulnerable groups may thus include, for example, female-headed households, those below the poverty line, the landless, indigenous peoples, those without legal title to assets, those with physical handicaps, or ethnic, religious and linguistic minorities. Identifying vulnerable groups should be the result of careful analysis of the social and economic context, the presence of factors that may cause vulnerability and the capacity of the group to cope or adapt. African Development Bank Group’s Integrated Safeguards System 34 Safeguards and Sustainability Series Policy statement and operational safeguards

The Bank devotes adequate resources procedures, the borrower or client resettlement policy), or (ii) any project to monitoring consultation and establishes a cut-off date for eligibility that that is likely to have adverse effects on community participation, and to the is acceptable to the Bank. The borrower vulnerable groups16. The outline of a delivery and implementation of any or client documents the cut-off date(s) typical FRAP can be found in Annex A commitment made to communities and disseminates information about of the Involuntary Resettlement policy within the resources and lifespan of it (them) throughout the project area and the related IESIA Guidance Note. the project. of influence in a culturally appropriate and accessible manner, before taking For any project in which the number of Resettlement planning any action on clearing land or restricting people to be displaced is fewer than The borrower or client carries out a local community access to land. 200 people and land acquisition and comprehensive socioeconomic survey— potential displacement and disruption in line with international standards for As early as possible in the resettlement of livelihoods are less significant, social and economic baseline studies process, the borrower or client works the borrower or client prepares an as agreed to in the environmental and with informally constituted local Abbreviated Resettlement Action Plan social assessment process—including committees made up of representatives (ARAP). Annex B of the Involuntary a population census and an inventory from key stakeholder groups and, in Resettlement policy describes an ARAP, of assets (including natural assets upon particular, vulnerable communities and related guidance can also be found which the affected people may depend to establish a culturally appropriate in the relevant IESIA Guidance Note. for a portion of their livelihoods). This and accessible grievance and redress survey identifies the people who will mechanism to resolve, in an impartial Project planners work transparently to be displaced by the project; all the and timely manner, any disputes ensure that the affected people give relevant characteristics of those people, arising from the resettlement process their demonstrable acceptance to the including conditions of vulnerability; and and compensation procedures. The FRAP/ARAP and that any necessary the magnitude of the expected physical grievance redress mechanism, which displacement is done in the context and economic displacement. is monitored by an independent third of negotiated settlements with those party, does not impede access to people. The baseline survey includes gender- judicial or administrative remedies, and and age-disaggregated information it informs affected people about the The FRAP (i) demonstrates that local pertaining to the economic, social Bank’s Independent Review Mechanism knowledge has been used early on and cultural conditions of the affected (IRM). in project formulation to ensure that population. It contains various official resettlement is avoided or minimised, materials (maps, numerical records, The Bank co-operates with the borrower (ii) is evaluated through a participatory special reports, research and knowledge or client in the design and establishment process, with a clearly defined role for pieces, etc.), records of interviews with of the grievance and redress mechanism affected people, and (iii) is subject to a stakeholders about their preferences, to ensure that it is legitimate, accessible, midterm review to identify and resolve supply chain due diligence material, predictable, equitable and transparent. any problems arising during the and a protocol to fill any gaps in data The Bank also ensures that local process. The FRAP/ARAP includes and ancillary information, and it identifies communities are consulted on and an executive summary detailing the opportunities to improve community associated with the decision, and that size of the affected populations, welfare. The survey process also they understand the different forms and proposed resettlement measures ensures that ineligible people, such levels of the accountability framework and activities, implementation as opportunistic settlers, cannot claim under which the Bank intervenes. The timetable, outstanding issues, and benefits. However, seasonal resource Bank ensures that adequate monitoring dedicated financial resources for users may not be present in the project and evaluation of the grievance and the implementation of activities. area of influence during the time of the redress mechanism are incorporated The borrower or client submits the survey, so special consideration is given as essential elements. FRAP/ARAP as a formal document to their claims. to the relevant national, local and/ Resettlement Action Plan or municipal agencies and to the At a minimum, the borrower or The borrower or client prepares a Full Bank. The FRAP is finalised as client conforms to any relevant host Resettlement Action Plan (FRAP) for (i) a supplement document to the government procedures. In addition, any project that involves 200 or more Environmental and Social Impact or in the absence of host government persons (as defined by the involuntary Assessment report, and the ARAP is

16 This threshold is intended to be a primary divide in magnitude of resettlement but should not be seen as a cast-in-stone criterion; significance of disturbance for both physical and economic displacement may be evaluated using expert judgment and complementary information, when available. PART III: OPERATIONAL SAFEGUARDS 35

finalised as a supplement document Displaced people are provided with by the state or communally and settlers to the Environmental and Social targeted resettlement assistance17 are not entitled to land ownership. Management Plan (ESMP). with the aim of ensuring that their standards of living, income-earning The borrower or client makes every The Bank posts the FRAP/ARAP in its capacity, production levels and overall effort to provide opportunities to the Public Information Centre and on its means of livelihood are improved affected people to derive appropriate website for public review and comment, beyond pre-project levels. To this development benefits from the project in accordance with the Bank’s ESAPs. end, a comprehensive livelihood that involves their resettlement. The The FRAP is released to the public at improvement programme is formulated borrower or client specifically engages least 120 days before the proposed and implemented as part of the with the affected people as project operation is presented to the Board Resettlement Action Plan. Strategies beneficiaries and discusses with them and the ARAP at least 30 days before to improve livelihoods may involve how project-related development Board presentation. providing access to training through benefits—for example, access to appropriate technologies. electricity, roads, sources of irrigation Compensation procedures or domestic water supply—might be The units that are entitled to The affected populations are offered obtained and spread most effectively compensation (e.g., family, household, a range of different compensation among them. and individual) are decided through package, resettlement assistance, consultation with those to be and livelihood improvement options, Where the affected people do not displaced. as well as options for administering have land titles, cadastral surveys are these measures at different levels carried out to establish the basis for Affected people are compensated for (e.g., family, household and individual), compensation, and it may be necessary all their losses at full replacement costs and the affected persons themselves to establish procedures to regularise before their actual move; before land are given the opportunity to express and recognise claims to land, including and related assets are taken; and, if the their preferences. This option-based claims that derive from customary law project is implemented in phases, before resettlement planning is part of a and traditional usage. It is particularly project activities begin for each particular development approach that aims to important that the country’s national phase. The borrower or client gives ensure that the affected populations laws and legislation, as well as local preference to land-based resettlement are able to reconstruct their production definitions of land tenure, rights to strategies and as a matter of priority foundations and become self-sustaining common property resources, and offers land-to-land compensation and/ producers and wage earners. inheritance practices, are recognised or compensation-in-kind in lieu of and clearly explained to people who are cash compensation where feasible; Particular attention is given to ensuring entitled to compensation as well as to further, the borrower or client clearly that the interests of both women those groups that may not be eligible explains to affected people that cash and men and of the elderly and the for land-based compensation. compensation very often leads to rapid handicapped are taken into account impoverishment. when formulating and implementing The criteria for site selection are explicit compensation packages, resettlement and are discussed in detail with the The total cost of the project includes assistance measures and livelihood affected people. In rural resettlement the full cost of all resettlement activities, improvement measures. As a concrete programmes it may be important to factoring in the loss of livelihood and step to implementing this requirement, ensure that a whole community or village earning potential among the affected households headed by women— is resettled together. population. The calculation of the especially widows—are provided “total economic cost” also factors in productive land to improve their The criteria for assessing the value the social, health, environmental and income and livelihood sustenance of land, housing and other property psychological impacts of the project and capacity in rural areas where livelihoods are standardised and transparent, the displacement, which may disrupt are generally agriculture-based. In and the benefits of the resettlement productivity and social cohesion. The general, compensation arrangements, are clearly established. For urban resettlement costs are treated against resettlement assistance and livelihood resettlements, provisions may include the economic benefits of the project, improvement measures, such as skills financial compensation, housing, and and any net benefits to the affected training, are made equally available to provision of services—such as schools, population are added to the benefit all social groups and adapted to their health care facilities, transport, credit stream of the project. specific needs, even when land is owned facilities, training, capacity building and

17 Targeted resettlement assistance is assistance that is specifically oriented towards, and that responds to the particular needs of, the individuals or groups that will receive it. African Development Bank Group’s Integrated Safeguards System 36 Safeguards and Sustainability Series Policy statement and operational safeguards

other job opportunities. In rural areas, equivalent to, or an improvement on, can be conducted to ensure that the the resettlement programme gives those being lost. new site represents the same degree priority to land-for-land compensation of sacredness as the previous location. options for affected people whose The affected populations and host Social structures and community livelihoods are based on land. Whenever communities are provided with support networks among the affected persons replacement land is offered, displaced before, during, and after relocation, should be maintained. Support and people are provided with land for which for a transition period that covers a advice are made available to help the a combination of productive potential, reasonable period of time necessary affected persons cope with, and benefit locational advantages and other factors for them to re-establish themselves from, the resettlement process. is equivalent to, or better than, the and improve their standards of living, land taken. The land provided should income-earning capacity, production Host communities also provide access to safe drinking levels and overall means of livelihood. The borrower or client carries out a water and irrigation facilities. For rural detailed analysis of host communities resettlements, provisions may also Compensation payment procedures to identify potential problems associated include access to agricultural equipment are simple and are independently with receiving displaced people, and and other agricultural inputs. monitored. Accurate records are kept to address these problems so that of all transactions. adverse impacts on host communities The procedures for allocating land are minimised and the host communities plots are transparent and are agreed Considerable attention is given to are able to share in the development with the affected people. The project avoiding internal community conflict opportunities provided through the is required to establish quality control throughout the resettlement process. resettlement process. The assessment and monitoring systems to guarantee This is a particular focus in relation of host communities is based on that affected people receive the to decisions around compensation transparent information and effective promised compensation packages packages, resettlement assistance and consultation, and it results in a before project implementation on the livelihood improvement measures, and consensual agreement that must be ground—including clearing the right- their delivery to the affected people. conveyed to the borrower or client of-way—begins. The project promotes the notion of by representative community leaders, benefit sharing and improvement of and recorded in public consultation When land is not the preferred option the economic status of communities proceedings. of the displaced people whose when designing common property livelihoods are land-based, non-land- compensation provisions. Any payments due to the hosts for land based options—built around creating or other assets provided to the affected employment opportunity or self- When cash payments are made, the population are promptly rendered in line employment—are considered. affected people should be provided with with agreements reached with the host counselling to ensure that they have the communities. All housing for physically displaced knowledge to use the compensation people is provided with security of wisely. Conflicts between hosts and the affected tenure18. population may develop as increased In addition to material provisions, demands are placed on land, water, If possible, compensation is made the project addresses cultural and forests, services, and so on, or if those in kind for loss of common property psychological issues. It attempts to affected by the project are provided resources, such as rivers, lakes or forest avoid the destruction of cultural, religious with services and housing superior to resources. Particular attention is given to and archaeological sites—including those of the hosts. The borrower or replacing not only the common property natural sites and habitats valued for client carefully considers such impacts itself, but also the particular services and cultural, religious and archaeological when assessing the feasibility and community interlinkages that it provided. reasons —or to provide alternative costs of any proposed project involving sites that are acceptable to the affected displacement, and adequate resources When a project involves the loss of population. When relocation touches are reflected in the budget for mitigating public facilities, infrastructure, and religious sites, a comprehensive plan these additional environmental and common property resources, the is established in co-operation with social impacts. The dispute-settlement borrower or client consults with the religious and traditional community procedures should be sufficiently agile to affected community to identify and leaders to ensure that an alternative quickly resolve conflicts between hosts agree on suitable alternatives that are location is found and that all rituals and the affected population.

18 Security of tenure means that resettled people or communities are resettled to a site that they can legally occupy and from which they are protected from the risk of eviction. PART III: OPERATIONAL SAFEGUARDS 37

Vulnerable groups assets. Compensation payments an independent third party to perform Member countries and other borrowers/ to families are made to both the evaluation on their behalf, or using a clients are responsible for protecting the husbands and wives when this third party to implement the resettlement physical, social and economic integrity is technically feasible and socially activities, with an obligation to report of vulnerable groups and for paying acceptable. back to them both. particular attention to health needs, particularly for women, including access Borrowers or clients prepare a For large-scale resettlement operations to female health care providers and to Community Development Plan for quarterly reviews are recommended, and such services as reproductive health projects that have clear risks for in-depth reviews of midterm progress, care and appropriate counselling for affected communities, which need consistent with the overall project sexual and other abuses. to be mitigated. Specific risks scheduling, are critical. Such reviews associated with land, resettlement or are planned from the beginning to allow With respect to gender vulnerability in environmental damage are integrated the executing agencies and the Bank particular: in the Resettlement Action Plan or the to make the necessary adjustments in ESMP, and support measures should be project implementation. • Women’s groups and designed and managed in consultation men’s groups are involved with affected communities to respect Monitoring activities include a review of in resettlement planning, their cultural preferences. the grievance and redress mechanism management and operations, and of the physical progress and and in job creation and income Differentiated measures for vulnerable impact of the Resettlement Action generation. groups include the development of Plan. Monitoring also evaluates the mechanisms for consultation that ensure borrower or client’s commitment to • The provision of health care that sufficient time is provided for the the Resettlement Action Plan and services, particularly for pregnant traditional decision-making processes the availability of sufficient financial women and infants, may be and for employing intermediaries resources, as identified in the budget, important during and after such as specialist nongovernmental to carry out the Resettlement Action relocation, to prevent increases organisations that have expertise in Plan. Upon completion of the project, in morbidity and mortality due to working with vulnerable groups, in the borrower or client assesses the malnutrition, the psychological elucidating their concerns and needs, success of the Resettlement Action stress of being uprooted, and the and in developing measure to address Plan and includes relevant information increased risk of disease. these concerns and needs. in the Project Completion Report (PCR). The Bank then develops its own PCR. If • The Resettlement Action Plan Implementation, monitoring and either of these assessments reveals that includes a specific protocol evaluation any key objectives of the Resettlement specifying safeguards for the The borrower or client is responsible Action Plan were not achieved, follow- quality and quantity of land to be for the implementation, monitoring and up measures are developed to remedy allocated for women, especially evaluation of the activities set out in the the situation. widows and divorcees, to ensure Resettlement Action Plan, and it keeps their means to generate income the Bank informed of progress. The The borrower and the Bank carry out and achieve food security. resettlement component of an operation an independent ex-post evaluation—a is fully and specifically covered in the Resettlement Action Plan completion • Land titles at the resettlement site reports on the progress of the overall audit or implementation completion are in the name of both spouses project, and is included in the logical report. Among other things, this or of single heads of household, framework of the operation. The loan evaluation examines the effectiveness regardless of gender, if this does agreement specifies the monitoring and of the mitigation measures not conflict with the borrower or evaluation requirements and their timing. recommended and implemented client’s own laws and legislation. and derives lessons learned to inform An independent third party monitors similar types of projects in the future. • Husbands and wives, unmarried the implementation of large-scale or The evaluation compares the actual women, and elderly sons and complicated Resettlement Action Plans, situation with the planned or predicted daughters are explicitly included with regular feedback from the affected situation, including in particular the as eligible for compensation, people. Affected people are also given number of people affected, and reviews including compensation for the opportunity to participate in such the assumptions, the resettlement- loss of land, shelter, livelihoods implementation monitoring. The Bank induced and associated risks, and the and any other privately owned and borrower agree on either contracting uncertainties encountered. African Development Bank Group’s Integrated Safeguards System 38 Safeguards and Sustainability Series Policy statement and operational safeguards PART III: OPERATIONAL SAFEGUARDS 39

Operational safeguard 3 – Biodiversity, renewable resources and ecosystem services

Objectives

This Operational Safeguard (OS) Trade in Endangered Species of Wild minimising potentially harmful outlines the requirements for Flora and Fauna, the World Heritage impacts on biodiversity; borrowers or clients to (i) identify and Convention, the UN Convention implement opportunities to conserve to Combat Desertification and the • Endeavour to reinstate or and sustainably use biodiversity19 Millennium Ecosystem Assessment. restore biodiversity, including, and natural habitats, and (ii) Its recommendations also align with where some impacts are observe, implement, and respond the International Plant Protection unavoidable, through to requirements for the conservation Convention, which covers the implementing biodiversity and sustainable management of movement of invasive alien species, offsets to achieve “not net priority ecosystem services20. pests and pest risk analysis for loss but net gain” of quarantine pests, including analysis biodiversity; It reflects the objectives of the of environmental risks and living Convention on Biological Diversity modified organisms. • Protect natural, modified, and to conserve biological diversity critical habitats; and and promote the sustainable The specific objectives of the OS management and use of natural are to: • Sustain the availability resources. It also aligns with the and productivity of priority Ramsar Convention on Wetlands, the • Conserve biological diversity ecosystem services to maintain Convention21 on the Conservation of and ecosystem integrity by benefits to the affected Migratory Species of Wild Animals, avoiding or, if avoidance is communities and sustain the Convention on International not possible, reducing and project performance.

Scope of application

This OS applies to all Bank lending • Are located in any type of • Extract renewable natural operations, both public and private habitat22; resources as a main purpose sector, and project activities funded (e.g., plantation forestry, through other financial instruments • Are located in areas providing commercial harvesting, managed by the Bank. Its ecosystem services upon agriculture, livestock, fisheries applicability is established during the which potentially affected and aquaculture); or environmental and social assessment stakeholders are dependent for process. survival, sustenance, livelihood • Involve the use and or primary income, or which commercialisation of an The OS specifically applies to Bank are used for sustaining the indigenous knowledge operations that: project; system23.

19 Biodiversity is “the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are a part; this includes diversity within species, between species, and of ecosystems” (The Convention on Biological Diversity). 20 Ecosystem services are the benefits that people derive from ecosystems. There are four types of ecosystem services: (i) provisioning services, which are the products people obtain from ecosystems (food, freshwater, wood and fiber, fuel), (ii) regulating services, which are the benefits people obtain from the regulation of ecosystem processes (climate regulation, flood regulation, disease regulation, water purification), (iii) cultural services, which are the nonmaterial benefits people obtain from ecosystems (aesthetic, spiritual, educational, recreational), and (iv) supporting services, which are the natural processes that maintain the other services (nutrient cycling, soil formation, primary production). 21 For the purposes of this Convention, the following are considered as “natural heritage”: natural features consisting of physical and biological formations or groups of such formations, which are of outstanding universal value from the aesthetic or scientific point of view; geological and physiographical formations and precisely delineated areas that constitute the habitat of threatened species of animals and plants of outstanding universal value from the point of view of science or conservation; and natural sites or precisely delineated natural areas that are of outstanding universal value from the point of view of science, conservation or natural beauty. 22 Habitat is defined as a terrestrial, freshwater, or marine geographical unit or an airway passage that supports complexities of living organisms and their interactions with the non-living environment (IFC PS 6 (Version 2010)). 23 In the emerging global knowledge economy, a country’s ability to build and mobilise knowledge capital is equally essential for sustainable development as the availability of physical and financial capital. The basic component of any country’s knowledge system is its indigenous knowledge. It encompasses the skills, experiences and insights of people, applied to maintain or improve their livelihood (World Bank 1997). African Development Bank Group’s Integrated Safeguards System 40 Safeguards and Sustainability Series Policy statement and operational safeguards

OS requirements

Environmental and social Conservation of habitats and • Areas that are associated assessment biodiversity with key evolutionary As part of the environmental and The implementation of this OS processes; social assessment, the borrower or involves the following habitat client identifies and assesses the categories: • Areas that are important potential opportunities for, risks to, to species that are vital and impacts on biological diversity • Natural habitats: habitats with to ecosystems, such as and ecosystem services, including original populations of native keystone species26; and direct, indirect, cumulative and pre- flora and fauna whose species mitigation impacts. composition, richness and • Areas that supply ecological abundance have not been networks. The borrower or client applies modified by human activities. the mitigation hierarchy: to avoid Critical habitats can include areas potentially adverse impacts; if • Modified habitats: habitats that are not being protected or avoidance is not possible, to reduce whose primary ecological managed, and they may be outside and minimise potential adverse functions have been legally protected and designated impacts; if reduction or minimisation significantly altered by human areas. Habitats may be considered is not sufficient, to mitigate and/ activities and whose original critical if their ecosystem functions or restore; and as a last resort to species composition, richness or species rely on or provide compensate for and offset. and abundance have been connectivity with other critical reduced, with evidence of habitats, including legally protected Special attention is given to the colonisation by non-native critical habitat areas. The Bank major threats to biodiversity and species of flora and fauna. does not finance projects in critical ecosystem services, such as pollution habitats downgraded merely to allow and contamination, land conversion, • Critical habitats: natural or the project to proceed. habitat fragmentation, natural habitat modified habitats that have a loss, deforestation, over-exploitation high biodiversity value; they To ensure objectivity and accuracy, of natural areas and resources, include the following: the determination as to whether invasive alien species, migration a habitat is natural, modified, or barriers, the capturing of wild animals, • Habitats important to critically critical is made in consultation with the harvesting of endemic species endangered and footprint- recognised habitat and biodiversity and indigenous ornamental flora and impacted species24; institutions and experts, and takes fauna, and wildlife poaching. into account designations by national • Habitats of significant and local authorities. The borrower or client obtains the importance to endemic and/ advice of and uses recognised experts or restricted-range species For projects that are being developed to assess biodiversity and ecosystem and subspecies; in natural habitats, modified habitats services values—for example, cultural, with significant conservation value, aesthetic, spiritual, educational, • Habitats of significant critical habitats or legally protected and recreational values—identified importance to globally areas, the borrower or client by potentially affected community significant concentrations incorporates the best available members and other stakeholders. of migratory species and/or science and engages internationally congregatory species25; recognised biodiversity experts in The borrower or client ensures that conducting the impact assessment access to and commercialisation of • Regionally significant and/or and in developing and implementing indigenous knowledge is based on highly threatened or unique mitigation and management equitable benefits. ecosystems; strategies.

24 As per the IUCN classification. 25 Congregatory species are those that gather in globally significant numbers or concentrations at a particular site at a particular time of their lifecycle for feeding, resting, roosting or breeding (IFC 2008, Langhammer et al. 2007). 26 A keystone species is a species that has a disproportionately large effect on its environment relative to its abundance. Paine, R.T. (1995), “A Conversation on Refining the Concept of Keystone Species,” Conservation Biology 9(4): 962–964. PART III: OPERATIONAL SAFEGUARDS 41

If the project is to take place in or near measures to reduce fragmentation, feedback into) the client’s a natural or critical habitat, or near and restoration of ecosystem management programme. a legally protected or internationally functioning. As a last resort, this recognised area, the assessment can be done by the development For such projects, project activities considers the potential risks and of a biodiversity offset programme, may also seek to enhance critical impacts that may occur at the in accordance with the biodiversity habitat and protect and conserve landscape or seascape level27. offset principles established by biodiversity (that is, have a positive the Business and Biodiversity conservation outcome). In modified habitats, the borrower Offsets Programme or comparable or client makes every effort to organisations and programs. When Any assessment and/or planning by minimise any further degradation or considering biodiversity offsets, the the borrower/client with respect to habitat conversion. If the borrower borrower/client uses a landscape/ critical habitat meets the following or its consultants identify areas of seascape-scale planning process conditions: biodiversity and conservation value to identify the most environmentally within the project’s area of influence, sound approach. • It is developed on a case-by- the borrower or client takes steps to case basis in consultation with promote conservation activities in such The Bank may agree to finance recognised experts such as areas, with appropriate indicators and a project in a critical habitat if the the International Union for the monitoring. borrower or client can demonstrate, Conservation of Nature (IUCN). using appropriate measurement and In all projects, the borrower or client monitoring methods, that: • Before the project commences ensures that the project will not cause it uses good quality baseline significant modification28 of natural • The mitigation hierarchy has data to assess the dimensions habitats, except when: been implemented; of the study area and describe relevant physical, biological, • There are no technically and • The project provides clear and socioeconomic conditions, cost-effective viable alternatives benefits and positive outcome including the current status of to implementing the project in for biodiversity and ecosystem the critical habitat and critically the natural habitat; services; endangered or endangered species and any changes • The biodiversity mitigation • The project-related activities will anticipated. hierarchy has been properly not have adverse effects (direct, implemented and appropriate indirect, or cumulative) on the • It reflects the conservation plans mitigation measures have been criteria for which the critical of relevant governments and designed; and habitat was designated; regional and/or international bodies. • The opinions and concerns • The project will not have any of affected communities, negative effects on critically • It uses a landscape/seascape as identified through the endangered or endangered analysis. consultation process, have been species; addressed in the design of the • If the primary objective of mitigation measures. • The project will achieve the the proposed project is not previous two points without conservation, it explores If projects are to be developed in offsets or a “net gain” analysis; possibilities for positive (not just natural habitats, or are to have and neutral) conservation outcomes potential adverse downstream in the critical habitat, including impacts on natural habitats, they • A robust, appropriately through consultations with local include mitigation measures to designed and funded, long- stakeholders and conservation achieve either net benefit or no net term biodiversity monitoring officials. In such a case, the loss of biodiversity—for example, and evaluation programme is borrower or client develops and ecological restoration of habitats, integrated into (i.e., provides implements a Biodiversity Action

27 The concept of “landscape/seascape” encompasses areas such as an eco-region or biome, and broadens the zone concept to apply beyond international waters or a particular zoned area. 28 Significant conversion or degradation is the elimination or severe diminution of the integrity of a habitat caused by a major, long-term change in land or water use, or a modification that substantially minimises the habitat’s ability to maintain viable populations of its native species (IFC PS 6). African Development Bank Group’s Integrated Safeguards System 42 Safeguards and Sustainability Series Policy statement and operational safeguards

Plan29 and ensures sufficient • In accordance with any existing The borrower therefore assesses and organisational capability for the applicable regulatory framework manages environmental flows for the implementation of the action plan undertaken by the relevant conservation and sustainable use of throughout the project cycle. international organisations for biodiversity and ecosystem services. such introduction; or In addition to environmental flows, When the habitat/biodiversity the assessment needs to give equal implications of a project would appear • The introduction is subject to attention to other aspects of the aquatic to be particularly severe, the Bank may a risk assessment, which may ecosystem, such as sedimentation and decide not to finance the project. be part of the environmental the viability of fisheries. assessment, to determine the Legally protected areas and potential for invasive behaviour. The borrower or client ensures that internationally recognised areas Under no circumstances are flows are maintained so that they are Where national regulations permit species known to be invasive optimally managed to allow for the a project to encroach on legally introduced into new environments. multipurpose use of water, including protected areas or internationally The borrower or client assesses water’s ecological functions, and the recognised areas or on areas that the possibility of accidental integrity of river systems and wetlands. are proposed for protection or or unintended introduction The member country (or group of international recognition, the borrower of invasive alien species, and countries) in which the project takes or client complies with national and identifies measures to minimise place is responsible for ensuring local regulations for appropriate the potential for release. compliance through its appropriate environmental management, and water resources management agency. consults with relevant stakeholders If invasive alien species already exist in during the preparation of management the area, the borrower or client does not The borrower or client ensures that the and mitigation measures. The borrower undertake activities that may enhance environmental and social assessment or client ensures that any proposed their competitiveness in comparison uses appropriate methodologies to development is consistent with the with native/indigenous species or address the issue of environmental flows area’s management plan or, in the promote their spread. The borrower or according to best practice, including absence of a management plan, client assesses the feasibility and cost- the recommendations of the World with the objectives determined by effectiveness of eradicating the invasive Commission on Dams. Before beginning the responsible natural resource, alien species. any waterflow project, the borrower or protected area, or wildlife agency. The client conducts a participatory water borrower or client also determines Genetically engineered organisms needs audit to determine, in consultation whether the area is critical, natural or The Bank’s approach to genetically with relevant stakeholders who depend modified, and then implements the engineered organisms will be demand- on the river flows for various needs, relevant requirements of this OS. The driven and consistent with the laws and the minimum baseline ecological flow borrower or client does not encourage policies of regional member countries requirements. the degazetting or downgrading of and sub-regional entities. Where the protected areas status, and the Bank relevant provisions regarding risk-related Environmental flow analysis and does not finance projects developed assessments do not exist, the Bank will management are carried out to the in areas that have been degazetted be guided by the Cartagena Protocol extent feasible in the context of river or downgraded for the purposes of on Biosafety30. basin planning, so that the basin’s encouraging development. entire water balance—now and in Environmental flows the future—is the framework in which Invasive alien species For projects that affect water resources, environmental flows are determined. The borrower or client takes precautions the borrower or client avoids significantly If no river basin plan exists, it is to avoid introducing any potentially altering flow regimes in ways that especially important that the project- invasive alien species (that is, species prevent water resources from fulfilling based analysis consider the value of not currently established in the country their functions for important upstream water across social, economic and or region of the project) unless such an and downstream ecosystems and environmental objectives so that these introduction is: their services to local communities. objectives are not jeopardised by an

29 The Biodiversity Action Plan is a stand-alone plan that offers an additional level of assurance (as an annex) to the ESIA or the ESMP in areas that have been recognised as important to biodiversity. 30 The Cartagena Protocol on Biosafety to the Convention on Biological Diversity is an international agreement that aims to ensure the safe handling, transport and use of genetically engineered organisms that result from modern biotechnology and that may have adverse effects on biological diversity, taking also into account risks to human health. It was adopted on 29 January 2000 and entered into force on 11 September 2003. PART III: OPERATIONAL SAFEGUARDS 43

individual project or the cumulative in accordance with relevant services, the borrower or client performs impacts of multiple projects. national laws and international an ecosystem services review to identify good practice, the borrower or the risks. Renewable natural resources client implements the principles In projects whose main objective and standards set out in the FAO The value of ecosystem services is includes the extraction of renewable Code of Conduct for Responsible determined in terms of their value for natural resources—such as forestry, wild Fisheries and complies with the welfare and livelihoods of affected fisheries, agriculture, animal breeding all relevant conservation and communities, the benefits they provide and aquaculture—these resources are management measures. When to the sustainable operation of the managed in a sustainable manner, with promoting the development of project (e.g., water), and the benefits preference for internationally recognised artisanal fisheries, the borrower they provide at the landscape/seascape systems of certification of sustainable or client uses methods that are level or existence options values33. management and use. in accordance with all relevant However, any decisions on assessing national laws and multilateral rules, the value of ecosystem services, • Plantation forestry and commercial are sustainable and not harmful to establishing priorities, and/or developing harvesting. The borrower or client the ecosystem, avoid destructive strategies to avoid/mitigate impacts assesses the type of habitat that or illegal fishing practices, and should be made in consultation with will potentially be affected and are culturally appropriate to the governmental resource management/ follows the requirements of this communities concerned. protection agencies and local community OS, especially for palm oil, cocoa, representatives to ensure that ecosystem coffee, tea and other commercial Supply chains services critical to existing conservation crop plantations. The borrower or If the borrower or client uses external and/or development objectives are client implements industry-specific suppliers of living resources but does preserved. After the value of ecosystem best international management not have management control over their services is assessed, the borrower practices and available sourcing and the resources are key to or client identifies, in consultation technologies. the project’s core functions, the borrower with resource managers and local or client develops and implements a communities, those ecosystem services • Agriculture and livestock. The sustainable resources procurement that should be protected through the borrower or client assesses policy, procedures, and action plan to biodiversity mitigation hierarchy as the type of habitat that will ensure that: “priority ecosystem services.” The potentially be affected and follows impact assessment takes into account the requirements of this OS. • Only resources of a legal and the same factors as are considered in The borrower or client follows sustainable origin are purchased; the value assessment. For the priority agricultural and livestock best ecosystem services, the impact and practices, and uses methods • The origin of the resources is dependence of the project are assessed that do not deplete the natural monitored; and in terms of change in communities’ well- resource base. being and project performance. • The resources do not originate • Fisheries and aquaculture. The from legally protected areas31 or The borrower or client attempts to borrower or client assesses the internationally recognised areas of avoid adverse impacts on priority type of habitat that will potentially high conservation value32. ecosystem services. If such impacts be affected and follows the are unavoidable, the borrower or client requirements of this OS. To Management of ecosystem identifies ways to reduce these impacts support sustainable fisheries and services and implement restoration measures to avoid significant adverse impact If during the environmental and social maintain the value and functionality of to the target species by catch, assessment it is determined that the those priority ecosystem services. These habitat, and associated species project may affect important ecosystem measures are included in the ESMP.

31 The IUCN definition of a legally protected area is: “a clearly defined geographical space, recognized, dedicated and managed, through legal or other effective means, to achieve the long-term conservation of nature with associated ecosystem services and cultural values.” Legally protected and designated areas include IUCN Protected Categories (I-V), including marine areas, and established corridors between such sites. 32 Internationally recognised areas include UNESCO Natural World Heritage Sites; UNESCO Man and the Biosphere Reserves; Key Biodiversity Areas; and wetlands designated under the Convention on Wetlands of International Importance (the Ramsar Convention). 33 Value is attached to the ecosystem services’ importance to communities’ welfare and livelihoods and to their contribution to ecological equilibrium (of landscapes and seascapes) rather than to intrinsic economic value and contribution to the national economy. This option derives from the Bank’s mandate to fight poverty and promote sustainable development beyond economic growth. Therefore, prioritisation of ecosystem services should be coherent with this option. African Development Bank Group’s Integrated Safeguards System 44 Safeguards and Sustainability Series Policy statement and operational safeguards PART III: OPERATIONAL SAFEGUARDS 45

Operational safeguard 4 – Pollution prevention and control, hazardous materials and resource efficiency

Objectives

This OS outlines the main pollution34 resulting from the project— This OS draws on and aligns Bank prevention and control requirements for including hazardous and non- operations with existing international borrowers or clients to achieve high- hazardous waste—so that they do conventions and standards related quality environmental performance, and not pose harmful risks to human to pollution, hazardous materials efficient and sustainable use of natural health and the environment; and and waste, and related issues35. resources, over the life of a project. It also requires compliance • Set a framework for efficiently with internationally accepted The specific objectives are to: using all of a project’s raw environmental standards, particularly materials and natural resources, the World Bank Group Environmental • Manage and reduce pollutants especially energy and water. Health and Safety (EHS) Guidelines.

Scope of application

This OS applies to all Bank lending through other financial instruments environmental and social assessment operations, both public and private managed by the Bank. Its process. sectors, and project activities funded applicability is established during the

OS requirements

Pollution prevention and levels or measures are appropriate to principles of cleaner production36. control, and resource efficiency specific project circumstances, the The borrower or client applies borrower or client provides full and Throughout the different phases pollution prevention and control detailed justification for any proposed of the project’s lifecycle—planning measures consistent with national alternatives through the environmental and design, construction, legislation and standards, applicable and social assessment process. This commissioning, operations and international conventions, and justification demonstrates that the choice decommissioning—the borrower internationally recognised standards of any alternate performance levels is assesses and evaluates resource- and good practice, particularly the consistent with the overall requirements efficiency and pollution-prevention EHS Guidelines. of this OS and internationally agreed techniques and implements them, best available techniques and best taking into consideration their When national legislation and regulations environmental practice. technical and financial feasibility differ from the standards and measures and cost-effectiveness37. presented in the EHS Guidelines, The borrower or client includes borrowers or clients are normally resource-efficiency and pollution- The borrower or client avoids or, required to achieve whichever is more prevention principles as part of the where avoidance is not possible, stringent. However, if less stringent project policy, in accordance with the controls and reduces the generation

34 Pollutants: Hazardous or non-hazardous chemicals in the solid, liquid or gaseous phases; includes other forms, such as pests, pathogens, thermal discharge to water, greenhouse gas emissions, nuisance odors, noise, vibration, radiation, electromagnetic energy and the creation of potential visual impacts including light (IFC PS 3). 35 International conventions and standards include the Convention on Long-range Transboundary Air Pollution, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes, the London Convention for Ocean Disposal, the Stockholm Convention on Persistent Organic Pollutants and the Montreal Protocol on Substances that Deplete the Ozone Layer, the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, and the Minamata Convention on Mercury. 36 Cleaner production refers to the concept of integrating pollution reduction into the production process and design of a product. This involves continuous application of an integrated preventive environmental strategy to processes, products, and services to increase overall efficiency and reduce risks to humans and the environment through the conservation of raw materials, water and energy and through the reduction or elimination of the use of toxic and hazardous raw materials. Cleaner production can also mean taking advantage of renewable energy sources (IFC EHS Guidelines (Guidance note No. 3) and UNEP). 37 Technical feasibility: the proposed measures and actions can be implemented with commercially viable skills, equipment and materials, taking into consideration prevailing local factors such as climate, geography, demography, infrastructure, security, governance, capacity and operational reliability. Financial feasibility: the ability to apply sufficient financial resources to install the measures and maintain them in operation in the long term. Cost-effectiveness: determined according to the capital and operational cost and also financial benefits of the measure, considered over the life of the measure (IFC PS 3). African Development Bank Group’s Integrated Safeguards System 46 Safeguards and Sustainability Series Policy statement and operational safeguards

of pollutants at their source. If waste cannot be recovered or Upon completion of the GHG tracking reduced, the borrower or client tool38, the Bank will report ex-ante The borrower or client prevents the adopts treatment measures and on GHG emissions estimated to be discharge of pollutants into the air, environmentally sound disposal produced by the Bank’s investments surface water and groundwater, land practices. on a project-by-project basis and will and soil during planned activities report on GHG emissions (gross and as well as unplanned events or At the early stages of the project net) in project documentation. The emergencies that may result in local, and in accordance with applicable Bank will also report reductions in regional, and transboundary impacts. international treaties and best practices, emissions achieved as a result of the If total prevention is not feasible, the borrower or client identifies the Bank’s investments. In reporting on the borrower or client takes specific potential hazardous waste to be GHG emissions the Bank will be guided actions to reduce or minimise the generated throughout the project’s by two principles: effluents or volume of discharges. lifecycle to determine cost-effective alternatives for its environmentally sound • Full disclosure of information in line As part of project preparation, in the disposal. with its Disclosure and Access to environmental and social assessment Information policy. the borrower or client evaluates If significant production, use or the potential impacts of pollutant generation of hazardous materials • Graduated reporting: the Bank discharges and resulting ambient or waste cannot be avoided, the will initially report on emissions concentrations to the environment, borrower or client, in consultation for all Category 1 operations (see considering potential receptors, and with potentially affected workers and OS1, Section C3) and will use assesses the following: communities, prepares a management the findings of the GHG tracking plan in the framework of a lifecycle tool pilot to gradually refine and • Environmental carrying capacity; assessment (transport, handling, expand its reporting on GHG storage, recycling and disposal), emissions. • Land use (current and future), incorporating management and soils, and agriculture; reporting practices and including Hazardous materials management preventive and contingency measures. At the early project stages, the borrower • Surrounding communities and In particular, the borrower or client looks or client determines the potential poverty conditions; at opportunities to recycle waste and hazardous materials to be used or reuse material by preparing a recycling generated throughout the lifecycle of • Local, regional, and and reutilisation plan identifying the project and considers alternatives transboundary potential impacts; recyclable material and assessing the that use or generate less hazardous potential for reinjection of waste in the materials. The borrower or client does • Proximity to environmentally process. If third parties are to be used not manufacture, trade, donate or sensitive areas and populations; for hazardous waste management use any chemicals that are banned or and disposal, the borrower or client subject to phase-out by international • Proximity to surface and evaluates their legitimacy and legality treaties, including ozone-depleting groundwater sources; for conducting hazardous waste substances and persistent organic management activities and obtains pollutants. • Current and future water body the chain-of-custody documentation. use; and Hence, the borrower or client is Pesticide use and management responsible for ensuring that the third For projects that involve the use • Potential cumulative impacts. party complies with the rules of the of pesticides, the borrower or Basel Convention. client assesses the need for and, if Waste management appropriate, plans and implements The borrower or client avoids or, Greenhouse gas emissions an integrated pest management and/ where avoidance is not possible, The Bank will develop and pilot a tool to or an integrated vector management controls and reduces the generation track greenhouse gas (GHG) emissions programme for pest-management of hazardous and non-hazardous in accordance with the provisions of the activities for the full lifecycle of the waste at source, in compliance with UNFCCC, without prejudging current project. The integrated pest or applicable international conventions. negotiations under the Convention. vector management programme

38 It is expected that the GHG emissions tracking tool will be finalised by December 2015. PART III: OPERATIONAL SAFEGUARDS 47

should involve pest-control methods, manufacture or trade in any chemical— to accidents or emergency events including cultural practices, biological including ozone-depleting substances that may pose risks to human health control, genetic control and, as a last and persistent organic pollutants—for and the environment. resort, chemical means. which manufacture, trade or use is banned by an international treaty. Resource efficiency If pesticides are used for pest control, The borrower or client does not Borrowers or clients evaluate and, the borrower or client selects only use pesticides classified as Class if appropriate, implement financially low-toxicity pesticides that do not Ia (extremely hazardous), Ib (highly feasible and cost-effective measures pose a threat to human health or the hazardous) or II (moderately hazardous). for improving efficiency in the environment, and that will not affect project’s consumption of resources natural pest enemies. The borrower Emergency preparedness and such as energy, water, raw materials, or client manages and disposes response and other resources. of pesticides in accordance with The borrower or client determines good international industry practice, whether the project poses any Staffing implications such as the Food and Agriculture operational risk of accident or For the appropriate management Organization (FAO) International emergency events, and assesses of all issues related to this OS, the Code of Conduct on the Distribution the options for responding to borrower or client has the obligation and Use of Pesticides. such situations. If appropriate, to have permanent environmental the borrower or client develops health and safety staff with relevant In connection with the project, the an emergency response plan— experience, and a training action borrower or client does not use, proportionate to the risk—to respond plan. African Development Bank Group’s Integrated Safeguards System 48 Safeguards and Sustainability Series Policy statement and operational safeguards PART III: OPERATIONAL SAFEGUARDS 49

Operational safeguard 5 – Labour conditions, health and safety

Objectives Scope of application agreements do not exist, or do not address working conditions40 and Labour is one of a country’s most This OS applies to investments in terms of employment, the borrower important assets in the pursuit of both the public and private sectors in or client provides reasonable working poverty reduction and economic which the Bank is a direct contractual conditions and terms of employment growth. The respect of workers’ partner. Its applicability is established that, at a minimum, comply with rights is one of the keystones for during the environmental and social national law and are otherwise developing a strong and productive assessment process. consistent with this OS. workforce. This OS outlines the main requirements for borrowers OS requirements Migrant workers are employed in or clients to protect the rights of accordance with local laws and on workers and provide for their basic Working conditions and comparable terms and conditions needs. management of worker as non-migrant workers who are relationship employed in similar work. The specific objectives are to: Human resources policies and procedures. When the borrower Where the borrower or other • Protect workers’ rights; or client intends to employ a third parties directly or indirectly workforce for a project, it develops provide residential or temporary • Establish, maintain, and and implements a human resources accommodation to workers, facilities improve the employee– policy and procedures appropriate shall provide all basic services41, employer relationship; to the nature and size of the project, including water and sanitation; in with the scale of the workforce in certain cases, medical care should • Promote compliance with alignment with this OS and with also be provided. The services are national legal requirements applicable national laws. provided in a manner consistent with and provide supplemental due the principles of non-discrimination diligence requirements where The borrower or client provides and equal opportunity. national laws are silent or all employees with documents inconsistent with the OS; that contain information on their Worker’s organisations. The borrower employment terms, conditions and or client shall allow workers to form, • Align Bank requirements with rights, including national employment join, and participate in workers’ the ILO Core Labor Standards, law. These documents should, as organisations, such as trade unions and the UNICEF Convention appropriate, include information on or alternative organisations of their on the Rights of the Child, at least the following areas: working own choosing, to express their where national laws do hours, wages and benefits, rest joint requests and grievances and not provide equivalent periods, overtime arrangements, protect their rights regarding working protection; leave entitlement for illness and conditions and terms of employment. maternity/paternity, and grievance The borrower or client shall not seek • Protect the workforce from mechanisms. to exert influence on or try to control inequality, social exclusion, these workers’ organisations. child labour, and forced Working conditions and terms of labour; and employment. Where the borrower The borrower or client shall allow or client is party to a collective workers to freely elect their own • Establish requirements to bargaining39 agreement with a representatives and to engage provide safe and healthy workers’ organisation, it respects in collective bargaining. Within working conditions. that agreement. Where such the employment relationship, the

39 The term collective bargaining extends to all negotiations that take place between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more workers’ organisations, on the other, to (a) determine working conditions and terms of employment, and/or (b) regulate relations between employers and workers, and/or (c) regulate relations between employers or their organisations and a workers’ organisation or organisations (ILO Collective Bargaining Convention, 1981). 40 Reasonable working conditions and terms of employment could be assessed by reference to (i) conditions established for work of the same character in the trade or industry concerned in the area/region where the work is carried out; (ii) collective agreement or other recognised negotiation between other organisations of employers and workers’ representatives in the trade or industry concerned; (iii) arbitration award; or (iv) conditions established by national law. 41 Basic services may include security arrangements; appropriate work temperature; safe food; drinking water; access to safe exit in emergency conditions; segregated toilets, washing facilities and sleeping areas for women and men; and access to means of communication with areas outside the project boundary.. African Development Bank Group’s Integrated Safeguards System 50 Safeguards and Sustainability Series Policy statement and operational safeguards

borrower or client shall engage with requirements of this OS. Where national Protecting the workforce workers’ representatives and workers’ law is inconsistent with this OS, the Child labour. The borrower or client organisations, and provide them with borrower or client should endeavour to does not employ children in any manner the information needed for meaningful carry out its operations consistent with that is economically exploitative, negotiation in a timely manner. The this OS and/or ILO standards, without or is likely to be hazardous or to borrower or client shall not discriminate contravening applicable laws. interfere with the child’s education or or retaliate against workers who to be harmful to the child’s health or participate, or seek to participate, Retrenchment. When the borrower or physical, mental, spiritual, moral, or in such organisations and engage in client proposes to implement collective social development as stipulated in collective bargaining. dismissals, it conducts an analysis national laws in compliance with the of alternatives to retrenchment. If the provisions of ILO Convention C138 Non-discrimination and equal analysis does not identify alternatives and C182. All work is subject to an opportunity. The borrower or to retrenchment, the borrower or appropriate risk assessment and client does not make employment client develops and implements a regular monitoring of health, working decisions on the basis of personal retrenchment plan to mitigate the conditions, and hours of work. characteristics unrelated to inherent adverse impacts of retrenchment job requirements, including race, on workers. The retrenchment Forced labour. The borrower or client gender, nationality, religion or belief, plan is based on the principle of does not employ forced labour—that disability, age, sexual orientation, non-discrimination and reflects the is, any work or service not voluntarily or ethnic, social and indigenous borrower’s consultation with workers, performed that is exacted from an origin42. The borrower or client bases their organisations and, where individual under threat of force or the employment relationship on the appropriate, the government. The penalty. This covers any kind of principle of equal opportunity and borrower or client complies with all involuntary or compulsory labour, fair treatment, and does not exclude legal and contractual requirements such as indentured labour, bonded or discriminate against employees related to notification of public labour, or similar labour-contracting with respect to any aspects of the authorities, and provides information arrangements. employment relationship, such as to and consults with workers and their recruitment and hiring, compensation organisation. The borrower or client The borrower or client does not (wages and benefits), working complies with national laws in terms employ trafficked persons. Women conditions and terms of employment, of supplying severance payments and children are particularly vulnerable access to training, promotion, and benefits. to trafficking. termination of employment or retirement, and disciplinary practices. Grievance and redress mechanisms. Occupational health and safety. The principles of non-discrimination The borrower or client ensures that The borrower or client provides the apply to migrant workers. a workforce grievance mechanism workers with a safe and healthy work is permanently available to workers environment, taking into account The borrower or client takes special (including workers supplied by third risks inherent in the particular sector measures to address harassment, parties) and their organisations to and specific classes of hazards intimidation, and/or exploitation, raise reasonable workplace concerns in the borrower’s or client’s work especially in relation to women. The in a transparent manner without areas—including physical, chemical, borrower or client also prevents social fear of retribution. The grievance biological, and radiological hazards. exclusion of or employment inequalities mechanism is made known to workers to women and workers with family at recruitment. The mechanism Within the environmental and social responsibilities and, to the extent does not impede access to other management system, the borrower possible, allows employment not to judicial or administrative remedies or client includes a health, safety conflict with family responsibilities. that might be available under the and environmental programme that law or through existing arbitration includes plans or procedures to When national laws are silent on procedures, nor does it substitute prevent accidents, injury, and disease non-discrimination in employment, for grievance mechanisms provided arising from, associated with, or the borrower or client meets the through collective agreements. occurring in the course of work by:

42 Discrimination is (a) any distinction, exclusion or preference made on the basis of race, color, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; (b) such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the member concerned after consultation with representative employers’ and workers’ organisations, where such exist, and with other appropriate bodies. Any distinction, exclusion or preference in respect of a particular job based on the inherent requirements thereof shall not be deemed to be discrimination (ILO). PART III: OPERATIONAL SAFEGUARDS 51

• Identifying and minimising, as • Developing emergency Supply chains. When there is a high far as reasonably practicable, prevention, preparedness and risk of child labour, forced labour, the causes of potential safety response arrangements. or significant occupational, health and occupational hazards to or safety issues, the borrower or workers, including exposure to The borrower or client complies with client considers the adverse impacts inappropriate levels of noise, all local and national environmental, associated with supply chains. In the temperature, radiation or health and safety laws and regulations. primary supply chains, the borrower lighting; or client identifies any such risks, Workers procured by third parties. consistent with the requirements of • Providing preventive and In respect of workers procured by this OS, and takes appropriate steps protective measures, including third parties to work directly on or to address them. modification, substitution, support the project, the borrower or or elimination of hazardous client ascertains that the contractors, When there is a high risk of these conditions or substances; subcontractors, or intermediaries that issues, the borrower or client procure these workers are reputable continuously monitors the primary • Providing appropriate and legitimate enterprises and have supply chain and introduces equipment to minimise risks, appropriate management systems procedures and mitigation measures and requiring and enforcing its to operate in a manner consistent to ensure that primary suppliers are use; with the requirements of this OS. taking steps to prevent or to correct The borrower or client establishes imminent danger, death or serious • Training workers and providing policies and procedures for managing harm to workers. When the borrower appropriate incentives for them these contractors, subcontractors or client has an insufficient level of to use and comply with health and intermediaries and monitors management control or influence and safety procedures and their performance in relation to the over its primary suppliers to enforce protective equipment; requirements of this OS. In addition, these remedies, over time it shifts the borrower or client incorporates the project’s primary supply chain • Documenting and reporting these requirements in contractual to suppliers that can demonstrate on occupational accidents, agreements with its contractors, that they are complying with this diseases and incidents; and subcontractors and intermediaries. requirement.

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African Development Bank Group