Environmenta l and Social Monitoring Report Project Number: 47046-002 July-December 2020 February 2021 PRC: Gansu Featured Agriculture and Financial Services System Development Project Prepared by the Project Management Office of Gansu Featured Agriculture and Financial Service System Development Project for the Asian Development Bank. This environmental and 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. Gansu Featured Agriculture and Financial Service System Development Project Loan Number: 3312-PRC Safeguard Monitoring Report Reporting Period July 1 – December 31, 2020 Prepared by the Project Management Office of Gansu Featured Agriculture and Financial Service System Development Project Date: February 26, 2021 Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告 TABLE OF CONTENTS ABREVIATIONS AND ACRONYMS.................................................................................................. 3 I. INTRODUCTION.......................................................................................................................... 4 II. IMPORTANTACTION AND SAFEGUARD..............................................................................8 II.1. MAJOR ACTIONS..................................................................................................................... 8 II.2. SAFEGUARD..........................................................................................................................10 II.2.1. Environment Safeguards of FIs................................................................................. 10 II.2.1.1. ZRCB.....................................................................................................................................10 II.2.1.2. Yuzhong SPD Rural Bank (RFSP)......................................................................................11 II.2.2. Good practices of environment management.............................................................18 II.3. SOCIAL SAFEGUARD............................................................................................................. 19 II.3.1. Land acquisition and involuntary settlement.............................................................19 II.3.2. LAND USE RIGHT TRANSFER..............................................................................................20 II.3.3. ETHNIC MINORITY.............................................................................................................20 II.3.4. SOCIAL AND GENDER.........................................................................................................21 II.3.4. PROHIBITED INVESTMENT ACTIVITIES................................................................................ 23 II.4. INFORMATION DISCLOSURE.................................................................................................. 23 II.5. OPERATION OF IMPLEMENTING GRIEVANCE REDRESSING MECHANISM................................ 23 II.6. APPLICATION OF MIS SYSTEM IN ESMS..............................................................................25 III. EFFECTIVENESS AND IMPACT OF PROJECT ENVIRONMENTAL MONITORING. ....................................................................................................................................................25 IV. PROBLEMS ENCOUNTERED IN ESMS IMPLEMENTATION AND SOLUTIONS........26 IV.1. ISSUES.................................................................................................................................... 26 IV.2. SOLUTION...............................................................................................................................27 V. LESSONS LEARNT AND NEXT STEPS.................................................................................. 28 V.1. LESSONS LEARNT................................................................................................................. 28 V.2. NEXT STEPS........................................................................................................................29 1 Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告 LIST OF APPENDIX APPENDIX 1: SOCIALAND GENDERACTION PLAN MONITORING............................. 30 APPENDIX 2: ETHNIC MINORITY DEVELOPMENT MONITORING-1............................ 33 APPENDIX 3: ETHNIC MINORITY DEVELOPMENT MONITORING-2............................ 34 APPENDIX 4: RECORDS OF COMPLAINTS............................................................................40 APPENDIX 5: CREDIT MONITORING......................................................................................41 APPENDIX 6: CAPACITY BUILDING ACTIVITIES............................................................... 45 APPENDIX 7: FURTHER SUBLOANS OF THE PROJECT....................................................57 APPENDIX 8: SNAPSHOTS OF MIS...........................................................................................60 2 Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告 ABREVIATIONS AND ACRONYMS ADB AsianDevelopmentBank BARA CountyAgricultureand RuralAffairs Bureau BOF CountyBureauofFinance BOG BankofGansu BOL BankofLanzhou CNY Chinese Yuan CPMO CountyProjectManagementOffice DARA Provincial Department ofAgriculture and RuralAffairs DOF ProvincialDepartmentofFinance EES ExpenditureStatement EM EthnicMinority EMDF Ethnic Minority Development Framework EMDP EthnicMinorityDevelopmentPlan ESMS Environment andSocial Management System EUR EuropeanDollar IEE InitialEnvironmentEvaluation FI FinancialIntermediary GOC GovernmentofChina JRCB JingningRuralCommercialBank LRCB LintaoRuralCommercialBank MARA Ministry ofAgriculture and RuralAffairs M&E MonitoringandEvaluation MIS ManagementInformationSystem MOU MemorandumofUnderstanding PMO Project Management Office PPMO Provincial Project Management Office RFSP RuralFinancialServiceProvider SGAP SocialandGenderActionPlan USD United States Dollar WHO World Health Organization ZRCB ZhuanglangRuralCommercialBank COVID 19 Corona Virus Disease 19 3 Gansu Featured Agriculture and Financial Service System Development Project Safeguard Monitoring Report 甘肃特色农业及金融服务体系建设项目 安保监测报告 I. INTRODUCTION 1. Asian Development Bank (hereafter refers to as ADB) approved the Gansu Featured Agriculture and Financial Service System Development Project (hereafter refers to as the Project) on November 12, 2015. ADB and the Chinese Government signed the Loan Agreement on December 8, 2015 and the project became effective on March 29, 2016. The planned total investment of the project is EUR 184.5 million, including EUR 92 million of ADB loan, EUR 63.28 million input from Financial Intermediary (hereafter refers to as FI), EUR 22.76 million contributions of beneficiaries and EUR 6.22million input of Gansu Provincial Government. The implementation period of the loan project is five years, completion on set on December 31, 2020 and the project closure is June 30, 2021. The maturity of the loan is 15 years including 9 years of grace period. The maturity date of the loan is November 1, 2030. 2. Project resources will be used to support the achievement of four outputs as (i) inclusive and environmentally-friendly featured agricultural production bases developed; (ii) farmer cooperatives and agricultural enterprises financed and strengthened; (iii) rural financial service system developed and enhanced; and (iv) capacity for project implementation and management strengthened. The objective of the project is to enhance the participation of farmers in more productive and market-oriented agricultural activities to achieve income growth. The Implementation Kick-off Workshop convened in Lanzhou of Gansu on June 2, 2016 symbolized the official start of project implementation. 3. As an innovative project of “agriculture + financing”, the most striking difference comparing this project with other projects operated through traditional models is the incorporation of financial intermediaries (FI). Through screening intermediary banks with the required qualifications, about 90% of project loan proceeds is on-lent to the FIs. Through close cooperation between the government and FIs, the FIs via market operation will use project resources to support local featured agriculture and the development of new rural financial institutions. In this process, the government fully plays the role of macro regulation and capacity building at all levels while the banks put their advantages in fund management and operation into full play to enable recycled use of limited funds serving the development of featured agriculture maximize its effects. Meanwhile, the project is meant to explore a sustainable model for financing in support of agriculture. The project also attaches great attention to capacity building of FIs as well as support to new rural financial service providers including rural banks, micro credit companies and mutual cooperatives to enhance