Initial Environmental Examination Project No. 46382-001 March 2015 PAL: North Pacific Regional Connectivity Investment Project This initial environmental examination (IEE) 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 information, including the draft and final IEE, will be made available for public review and comment as per ADB Public Communications Policy 2011. The IEE, or a summary of it, will be uploaded to ADB website and will be disclosed locally. ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank BMH Beach Manhole BMR Bureau of Marine Resources - Palau BU Branching Unit CA Conservation Area CBO Community Based Organisation CPP Community Participation Plan EA Environmental Assessment EIA Environmental impact assessment (under Palau legislation) EPA Environmental Protection Agency EQPB Environment Quality Protection Board ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FSM Federated States of Micronesia FSMTC Federated States of Micronesia Telecoms Corporation GDP gross domestic product IA Implementing Agency ICT Information and Communications Technology IPP Indigenous Peoples Plan IUCN International Union for the Conservation of Nature Km Kilometres MNRET Ministry of Natural Resources, Environment and Tourism MPA Marine Protected Area MoF Ministry of Finance NGO Non-Government Organisation OP Operational Policy (of World Bank) PAN Protected Area Network para. Abbreviation of paragraph as in para. 237 PIA Project Influence Area PNCC Palau National Communications Corporation PNG Papua New Guinea QMS Quality Management System RFP Request for Proposal RISLMA Rock Island Southern Lagoon Management Area RP Resettlement Plan SCS Submarine Cable System SPC Secretariat of the Pacific Community SPS Safeguard Policy Statement 2009 (of ADB) TA Technical Assistance WB World Bank TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS EXECUTIVE SUMMARY I. INTRODUCTION ..................................................................................................... 1 A. The proponent and Purpose of the IEE .................................................... 1 B. Project Status and Documentation ........................................................... 2 C. Extent and Boundaries of the IEE ............................................................ 2 1. The Project Influence Areas: Nearshore and Landing Sites ......... 2 2. Coastal and offshore Corridors ..................................................... 3 3. The IEE Methodology ................................................................... 3 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ....................................... 5 A. Biophysical Environment .......................................................................... 5 B. Socioeconomic Environment .................................................................... 6 C. Safeguard Policies of ADB and World Bank ............................................. 7 III. PROJECT DESCRIPTION ....................................................................................... 8 A. Project Need and Details ......................................................................... 8 1. Need for the Project ..................................................................... 8 2. Project Details .............................................................................. 8 3. Components of the Work .............................................................. 9 IV. ANALYSIS OF ALTERNATIVES ............................................................................ 11 A. Alternative Alignments ........................................................................... 11 B. Alternative Cable Placement .................................................................. 11 C. The Preferred Alternative ....................................................................... 11 V. BASELINE DATA ................................................................................................... 12 A. Physical Environment ............................................................................ 13 1. Climate ....................................................................................... 13 2. Air Quality and Noise .................................................................. 13 3. Topography, Geology, Soils and Hydrology ................................ 13 4. Tides and Deep Sea Bathymetry ................................................ 14 5. Hydrothermal Vents and Seamounts .......................................... 15 6. Earthquakes and Tsunamis ........................................................ 16 B. Ecological Environment.......................................................................... 16 1. Mangroves ................................................................................. 16 2. Marine Ecosystem ...................................................................... 16 3. Terrestrial Flora .......................................................................... 19 4. Terrestrial Fauna ........................................................................ 19 5. Marine Ecology of the Project Impact Area (Inside Barrier Reef) 20 C. Socio-Economic Environment ............................................................... 23 6. Commercial Fisheries ................................................................. 23 7. Coastal Industries ....................................................................... 24 8. Conservation Areas .................................................................... 24 9. Transportation and Infrastructure ............................................... 24 10. Relevant Tourism Industries ....................................................... 24 11. Socioeconomic Profile ................................................................ 25 12. Recreational Resources and Development ................................. 26 13. Cultural Values and Physical Cultural Resources ....................... 27 14. Human Settlement in the Shore-Based Project Sites .................. 27 VI. ANTICIPATED IMPACTS AND MITIGATIVE MEASURES .................................... 27 A. Preconstruction Period ........................................................................... 27 1. Physical Environment ................................................................. 28 2. Ecological Environment .............................................................. 29 3. Socio-Economic Environment ..................................................... 30 B. Construction Period ............................................................................... 31 1. Physical Environment ................................................................. 31 2. Ecological Environment .............................................................. 33 3. Socio-Economic Environment ..................................................... 34 C. Operating Period .................................................................................... 35 1. Physical and Ecological Environment ......................................... 35 2. Socio-Economic Environment ..................................................... 36 D. Cumulative Impacts and Mitigation Measures ........................................ 38 1. Environmental ............................................................................ 38 2. Socioeconomic ........................................................................... 39 E. Environmental and Social Enhancements/Benefits ................................ 39 VII. GRIEVANCE REDRESS MECHANISM ................................................................. 39 A. Proposed Grievance Redress Mechanism ............................................. 40 VIII. INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION ............ 41 A. Consultations ......................................................................................... 41 B. Workshops and Information Disclosure .................................................. 42 C. Summary of Comments by Participants ................................................. 42 D. Summary of the Consultations ............................................................... 43 IX. ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN (ESMP) ........................ 44 A. Preconstruction ...................................................................................... 44 1. Physical Environment ................................................................. 44 2. Ecological Environment .............................................................. 45 3. Socio-Economic Environment ..................................................... 47 B. Construction ........................................................................................... 48 1. Physical Environment ................................................................. 48 2. Ecological Environment .............................................................. 48 3. Socio-Economic Environment ..................................................... 49 C. Operating Period ...................................................................................