Sustainable Highlands Highway Investment Program (RRP PNG 48444) Initial Environmental Examination Project Number: 48444 Date: June 2017 Document status: Final Draft Papua New Guinea: Multi-tranche Financing Facility for the Sustainable Highlands Highway Investment Program Prepared by the Department of Works (DOW) for the Asian Development Bank This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. 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. CURRENCY EQUIVALENTS (as of 1 Feburary 2017) Currency Unit – Kina (K) K1.00 = $0.32 $1.00 = K3.10 ABBREVIATIONS ADB – Asian Development Bank AEP – aggregate extraction plan AIDS – acquired immunodeficiency syndrome BOQ – bill of quantities CEMP - Construction Environmental Management Plan CEPA – Conservation and Environmental Protection Authority CEPA-MD – CEPA-Managing Director CRVA _ Climate Risk Vulnerability Assessment DSC – Design and Supervision Consultant DMR – Department of Mineral Resources DLPP – Department of Lands and Physical Planning DOW – Department of Works EARF – environmental assessment and review framework EHSG _ Environmental Health and Safety Guidelines EHSO _ Environment, Health and Safety Officer EIS – environmental impact statement EMP – environmental management plan EP – environmental permit EPAR – Environmental (Prescribed Activities) Regulations ESO – environmental and safety officer (contractor) ESSU – Environmental and Social Safeguards Unit (in DOW) GoPNG _ Government of Papua New Guinea GRM – grievance redress mechanism GFP – grievance focal points HCRN – Highlands Core Road Network HIV – human immunodeficiency virus HRMG – Highlands Road Management Group HRRIIP – Highlands Region Road Infrastructure Investment Program IEE – initial environmental examination IES – international environmental specialist (in DSC) LARP – land acquisition and resettlement plan MFF – Multi-tranche financing facility MPFF _ Multi-partner Financing Facility OPRC _ Output and Performance Based Road Contract NDOH – National Department of Health NGO – non-governmental organization NRA – National Road Authority PCP – Public Communications Policy 2011 (of ADB) PCR – physical cultural resources Sustainable Highlands Highway Investment Program (RRP PNG 48444) PFR – periodic financing request PMO – program management office PNG – Papua New Guinea PPE __ personnel protection equipment QMP – quarry management plan QPR – quarterly progress report LARF – land acquisition and resettlement framework SHHIP _ Sustainable Highlands Highway Investment Program SPS – Safeguards Policy Statement 2009 (of ADB) STI – sexually transmitted infection SR – safeguard requirement (of the SPS) UNESCO – United Nations Educational, Scientific, and Cultural Organization WMA _ Wildlife Management Area NOTE (i) The fiscal year (FY) of the Government of Papua New Guinea and its agencies ends on 31 December. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2011 ends on 31 December 2011. (ii) In this report, "$" refers to US dollars unless otherwise stated. Your attention is directed to the “terms of use” section on ADB’s website. CONTENTS Page I. Introduction .................................................................................................................... 1 A. Background .......................................................................................................... 1 B. Objectives, impacts and outcome of the investment ............................................. 1 C. Project Description ............................................................................................... 1 D. Strategic context .................................................................................................. 1 E. Program concept.................................................................................................. 1 II. Legal and Policy Framework .......................................................................................... 3 A. Papua New Guinea Environmental Laws ............................................................... 3 B. Asian Development Bank Safeguard Requirements ............................................... 5 III. Description of the Projects Under Tranche 1 .................................................................. 6 A. Description of Output and Performance based Road Contract 1 (OPRC 1) ........... 6 B. Description of Output and Performance based Road Contract 2 (OPRC 2) ........... 7 C. Description of Road Investment Contract (RIC) in Simbu Province ........................ 8 IV. Description of the Environment .................................................................................... 10 A. Physical Environment .......................................................................................... 10 B. Biological Environment ......................................................................................... 15 C. Socio-Economic Environment .............................................................................. 20 V. Anticipated Environmental Impacts and Mitigation Measures ....................................... 24 A. Design and Pre-Construction Phase .................................................................... 24 B. Construction Phase .............................................................................................. 29 B.1. Impacts on the Physical Environment ......................................................... 30 B.2. Impacts on the Biological environment ....................................................... 42 B.3. Impacts on the Socio-economic environment.............................................. 44 C. Operation Phase .................................................................................................... 49 C.1. Operation Impacts on Physical Environment……….…...……..………….… 49 C.2. Operation Impacts on the Biological Environment ...................................... 50 C.3 Operation Impacts on the Social Environment ............................................ 51 VI. Analysis of Alternatives ................................................................................................ 52 VII. INFORMATION DISCLOSURE, CONSULTATION, AND PARTICIPATION……........ 54 A. Result of Consultation ........................................................................................... 54 B. Ongoing Consultation and Disclosure .................................................................. 55 VIII. Grievance Redress Mechanism During Operation ....................................................... 56 IX. Environmental Management Plan ............................................................................... 58 A. Institutional Arrangement and Responsibilities ....................................................... 58 B. Monitoring and Reporting ...................................................................................... 63 C. EMP and Monitoring Matrix .................................................................................... 66 D. Indicative Environmental Monitoring Cost……….……………………………….…… 66 Annexes Annex A List of International Treaties and Agreements to which PNG is a signatory Annex B Highlands Highway Chainage and Zones Annex C List of Critically Endangered & Endangered Species of Papua New Guinea Annex D SHHIP Information Leaflet for the Provincial Consultation Meetings Annex E Minutes of Provincial Consultation Meetings Annex F Indicative Environmental Monitoring Cost Sustainable Highlands Highway Investment Program (RRP PNG 48444) EXECUTIVE SUMMARY 1. Background. The Highlands Highway traverses the Highland Region to Lae in Morobe Province of Papua New Guinea (PNG). These regions are major contributors to the PNG economy through agricultural production and mineral resources, as well as commercial and shipping activities. While the Government of PNG has made significant investments in improving the road network, a lack of maintenance has resulted in deterioration not only of its core road network but also the Highlands Highway itself where only about 3% of the investment program section is in good condition. 2. In order to address the further deterioration of the Highlands Highway, the Government of Papua New Guinea requested the Asian Development Bank (ADB) to financially support the implementation of a Sustainable Highlands Highway Investment Program (SHHIP) through a multi-tranche financing facility (MFF). This will include four highlands provinces (excluding Enga and Southern Highlands), and Morobe Province of the Momase Region from the Nadzab Airport turnoff near Lae City to the Kagamuga Airport turnoff in Mt. Hagen. The executing agency for the Program is the Minsitry of National Planning and Development and the implementing agency is the Department of Works (DOW). 3. Objectives, impacts and outcome of the investment program. The overarching objectives are to improve access to health and education, and to raise standards of living; increase opportunities for equality and prosperity in rural areas; and provide well integrated, safe, financially and environmentally sustainable transport systems.