Social Monitoring Report Semiannual Report February 2018 AZE: Power Distribution Enhancement Investment Program, Tranche 1 Prepared by Project Supervision and Management Consultant for Azerishig Open Joint Stock Company and the Asian Development Bank. This social monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Project Supervision and Management Consultant for Power Distribution Enhancement Investment Program, Tranche 1 Republic of Azerbaijan Semiannual Social Monitoring Report: Status of Resettlement Implementation, July-December 2017 ADB Loan No. 3407-AZE Project No. 42401-015 For: Asian Development Bank (ADB) “Azerishig” Open Joint Stock Company 4 January 2018 This report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents ABBREVIATIONS ADB - Asian Development Bank AP/AH - affected person/affected household AZN - Azerbaijan Manat (currency) CTS - compact transformer station DDR - due diligence review DMS - detailed measurement survey EA - executing agency IA - implementing agency LARF - land acquisition and resettlement framework LARP - land acquisition and resettlement plan MFF - multi-tranche financing facility OHL - overhead line OJSC - Open Joint Stock Company PIU - Project Implementation Unit PMC - Project Supervision and Management Consultant RESSD - Regional Energy Supply and Sales Department ROW - right-of-way SIW - self-insulated wire SPS - Safeguard Policy Statement (2009) SS - substation TL - transmission line WEIGHTS AND MEASURES ha - hectare km - kilometer kV - kilovolt m - meter m2 - square meters CONTENTS I. Background ........................................................................................................................ 1 II. Objectives of the Social Monitoring Report ..................................................................... 3 III. Methodology ..................................................................................................................... 3 IV. Status of Resettlement Implementation ......................................................................... 3 A. ADB concurrence to the DDR reports, LARP, and CAP .................................................. 4 B. Implementation of the CAP for Mr. Aghayev Zafar ........................................................... 5 C. Implementation of the Zardab-Udjar LARP ...................................................................... 6 D. Progress of construction works and resettlement issues arising therefrom ...................... 9 E. Grievance redress resolution ..........................................................................................10 V. Conclusion and recommendation ...................................................................................10 VI. Appendices ......................................................................................................................11 Appendix 1 August 2017 letter of Azerishig to the contractors ...............................................12 Appendix 2 Status of Work on 110 kV Substations as of 16 December 2017 ........................14 Appendix 3 Status of Work on 110 kV Lines as of 16 December 2017 ..................................15 Appendix 4 Status of Work on 35 kV Substations as of 16 December 2017 ..........................16 Appendix 5 Status of Work on 35 kV Lines as of 16 December 2017 ....................................16 Appendix 6 Status of Work on 0.4 kV SIW Conductors as of 16 December 2017 ..................23 Appendix 7 Status of Work on 10/6 kV Distribution Lines as of 16 December 2017 ..............23 Appendix 8 Empty logbooks from different contractors ........................................................ 232 LIST OF TABLES Table I-1 RESSDs and Project Districts ..................................................................................... 1 Table IV-1 Dates of Submission and Approval of DDR Reports, CAP, and LARP ...................... 4 Table IV-2 Crops Grown on the Affected ROW Land ................................................................. 6 Table IV-3 LARP Budget ............................................................................................................ 7 Table IV-4. Compensation distribution matrix…………………………………………………………8 LIST OF FIGURES Figure I-1: RESSD and Rayons in Tranche 1 ............................................................................. 2 Figure D-2: Shift of footprint of CTS ........................................................................................... 9 Figure D-3: Photo of complaint logbook……………………………………………………………...10 iii I. Background 1. The Government of Azerbaijan and the Asian Development Bank (ADB) have agreed to implement the Power Distribution Enhancement Investment Program in 3 tranches, starting in 2016 until 2022, as a multi-tranche financing facility (MFF). On 19 July 2016, ADB approved Loan 3407-AZE to finance the power program’s $350 million Tranche 1. Of this amount, $250 is being provided by ADB, while $75 million is government’s counterpart. Loan 3407-AZE became effective on 2 September 2016 and its closing date is on 30 June 2019. Project construction works are targeted for completion by 31 December 2018. Subprojects under Tranche 1 include, among others, the rehabilitation and expansion of aging medium- and low-voltage distribution networks comprising approximately 4 units of 110 kilovolt (kV) substations (SS); 16 units of 35 kV substations; 1,157 units of 6-10 kV transformer stations; 54 km of 110 kV distribution lines; 124 km of 35 kV distribution lines; and 1,237 km of 6-10 kV distribution lines. 2. The Azerishig Open Joint Stock Company (OJSC)1 is the executing agency, while the implementing agencies (IAs) are the respective Regional Energy Supply and Sales Department (RESSD) of the following cities and rayons2 (districts), namely, Baku, Shimal Garb, Janub, Garb, Aran, Shimal, and Markazi Aran. Districts covered by the Project are Absheron, Siyazan, Shamakhi, Oghuz, Gakh, Ganja, Goranboy, Mingechevir, Zardab, Saatli, Imishli, Neftchala, Salyan, Hajigabul, Masalli, and Lankaran. The Project Supervision and Management Consultant (PMC) provide day-to-day assistance to the EA. Table I-1 RESSDs and Project Districts RESSD Rayon Baku Absheron (Khirdalan, Alat) Shimal Siyazan (Sumgayit) Shimal Garb Gakh, Oghuz, Shamakhi Garb Ganja, Mingechevir Markazi Aran Goranboy Aran Saatli, Imishli, Zardab Janub Lankaran, Masalli, Neftchala, Hajigabul, Salyan 3. Until the end of the first half of 2017, Tranche 1 was categorized as C for involuntary resettlement. This categorization was subsequently changed to B in the third quarter of 2017 following two successive ADB safeguard missions in July and August 2017 where it was learned that a private landholding had been acquired in November 2016 in the expansion of the 110/35/10 kV Dalimammadli SS and that landholdings had to be acquired in the second half of 2017 for the footings of 9 steel lattice towers of the 35 kV overhead line (OHL) that runs from the 110/35/10 kV Udjar SS to the 35/10 kV Zardab SS3, not to mention temporary use of land and disruption in the farming activities of residents during the stringing of transmission towers. 4. This social monitoring report covers the period July-December 2017. 1 Referred to hereinafter as Azerishiq. 2 The country is divided into 10 economic regions, 66 rayons and 77 cities. Twelve of the cities, including Baku; Ganja; and Mingachevir, are directly governed by the central government. 3 These matters are discussed further in Section IV of this report. 1 Figure I-1: RESSD and Rayons in Tranche 1 Source: Initial Environmental Examination, August 2015 2 II. Objectives of the Social Monitoring Report 5. The project’s Facility Administration Manual (FAM) mandates the PMC to assist Azerishiq in preparing a semi-annual social safeguard monitoring report to be submitted to ADB for disclosure.4 As stipulated in the FAM, social safeguard monitoring is intended to ensure that “all land acquisition and resettlement activities, if any, are implemented in compliance with (i) all applicable laws and regulations of the Government relating to land acquisition and involuntary resettlement; (ii) the involuntary resettlement safeguards under ADB's Safeguards Policy Statement (2009); and (iii) all measures and requirements set forth in the resettlement plan, and any corrective or preventive actions set forth in the safeguards monitoring report.”5 III. Methodology 6. Information for this report has been culled from various social safeguard documents that Azerishiq and the PMC prepared and submitted to ADB in the second half of 2017, in addition to field reports prepared and submitted by PMC consultants to Azerishiq. IV. Status of Resettlement Implementation 7. Following receipt of complaints from two persons6 in May 2017 and June 2017, ADB fielded a safeguard review mission on 2 – 7 July 2017 to look into the status of safeguard compliance in the Project. During that mission, it was found out that Azerishig acquired 0.36 ha from AP