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US Agency for International Development (USAID) Sri Lanka & Maldives

Initial Environmental Examination (IEE)

Program/Project/Activity Data

Activity/Project Name: Private Sector Development (PSD) Assistance Objective: Sustained and inclusive economic growth Program Area: Country: Sri Lanka Originating Office: Economic Growth Date: 02/08/2020 PAD Level IEE: Yes☐ No☒ Supplemental IEE: Yes☐ No☒RCE/IEE Amendment: Yes☐ No☒

DCN of Original RCE/IEE: N/A

DCN of Amendment(s): N/A

If Yes, Purpose of Amendment (AMD): New award IEE prepared by DCN(s) of All Related EA/IEE/RCE/ER(s): N/A

Implementation Start/End: September 2020 – September 2024 LOP: 4 years

Funding Amount: LOP Amount: $19,000,000 AMD Amount: N/A

Contract/Award Number (if known): N/A IEE Expiration Date (if any): 2024 Reporting due dates (if any): Quarterly / Annually Recommended Environmental Determination: Categorical Exclusion: ☒ Positive Determination: ☐ Negative Determination with Conditions ☒ Deferral: ☐

Additional Elements: Conditions: ☐ Local Procurement: ☐ Government to Government: ☐ Donor Co-Funded: ☐

Sustainability Analysis (included): ☐

Climate Change Vulnerability Analysis (included): ☒ Adaptation/Mitigation Measures: project technical assistance activities are of no or low risk, no further environmental screening is required.1 See Annex 3 _

1 1 Sri Lanka Climate Risk Profile: https://www.climatelinks.org/sites/default/files/asset/document/Sri%20Lanka_CRP_Final.pdf and the Sri Lanka Tropical Forest and Biodiversity Analysis (2016 FAA 118/119):

Asia 20-027

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1. Background and Project Description 1.1. Purpose and Scope of IEE

The Private Sector Development (PSD) activity is designed to increase and diversify the Sri Lankan private sector’s revenue growth and contribution to Gross Domestic Product (GDP), especially in target sectors including tourism; and to increase women’s labor force participation in those sectors. USAID/Sri Lanka & Maldives anticipates $19 million in funding for this activity. PSD’s objective is to increase private sector growth. This will be done by 1) increasing SME competitiveness and 2) improving women’s labor force participation. The purpose of this document, in accordance with Title 22, Code of Federal Regulations, Part 216 (22CFR216), is to provide a preliminary review of the reasonably foreseeable effects on the environment of the USAID intervention described herein and recommend determinations and, as appropriate, conditions, for these activities. Upon approval, these determinations become affirmed, per 22CFR216 and specified conditions become mandatory obligations of implementation.

This IEE also documents the results of the project/activity level Climate Risk Management process in accordance with USAID policy (specifically, ADS 201mal).

This IEE is a critical element of USAID’s mandatory environmental review and compliance process meant to achieve environmentally sound activity design and implementation. Potential environmental impacts should be addressed through formal environmental mitigation and monitoring plans (EMMPs) and/or Environmental Assessments (EAs), if needed. 1.2 Project Background

Ten years since the end of Sri Lanka’s civil war, the country’s economy has struggled to keep pace with its neighbors, growing at 3.2 percent in 2018 compared to the South Asia average of 6.7 percent. While the private sector is the engine of economic growth and prosperity in any country, local and international organizations have identified a number of firm-level issues that

https://www.usaidgems.org/Documents/FAA&Regs/FAA118119Asia/Sri%20Lanka%20FAA%20118- 119%20Analysis%20March%202016.pdf CDCS: https://www.usaid.gov/sites/default/files/documents/1861/CDCS_Sri_Lanka_December_2019.pdf Global Climate Risk 2019: https://www.germanwatch.org/sites/germanwatch.org/files/Global%20Climate%20Risk%20Index%202019_2.pdf

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are inhibiting private sector growth in Sri Lanka. Small and medium enterprises (SMEs), in particular, have weak capacity for marketing, especially for ecommerce and export, product innovation, efficient financial management, awareness of government policies and regulations, and use of information and communications technology. Stakeholders have highlighted that unsophisticated, family-owned businesses are also unsustainable, as owners often shut down the business rather than sell it or hire professional managers if there is no heir within the family. Many stakeholders pointed out that lending to SMEs is limited, expensive, and collateral-based, and that what venture capital exists focuses almost exclusively on technology firms in Colombo. At the same time, some stakeholders have also observed that outside of a select few star firms, Sri Lankan SMEs lack capacity to absorb capital. In other words, SME capacity as well as other factors likely explain the lack of finance for SMEs. Sri Lanka’s production basket is unusually concentrated in services (61.2 percent of Gross Value Added in 2018) for its income level, with tourism taking up a significant portion. While Sri Lanka has many sources of comparative advantage in tourism, this concentration also exposes its economy to risks such as the April 2019 bombings. The two months following the bombing saw tourist arrivals fall by 57 to 70 percent year-on-year. While tourist activity is picking up again, diversification of Sri Lankan products and services will be an important source of future growth and resilience for the Sri Lankan private sector. Sri Lanka has an impressive track record of delivering educational and health services to women and has almost closed the gender gap in these spheres. Girls outperform boys in both educational attainment and educational achievement. Enrollment at the secondary level is 90.43 percent for girls and 87.66 percent for boys. The gap is even wider at the tertiary level, with 23.44 percent enrollment for female students and 15.80 percent for male students. In contrast, improving women’s economic participation has remained a challenge for Sri Lanka. Even though Sri Lanka achieved significant economic growth by increasing the gross domestic product (GDP) purchasing power parity per capita from 5,543 in 2000 to 11,956 USD in 2018;female labour force participation has dropped from 37.3% to 34.8%. Therefore, improving women’s participation in the economy remains prerequisite to accelerate economic growth. There is a large discrepancy, however, in their subject-choices. Women make up over 70 percent of enrollment in the arts, education, and law, but males dominate in engineering and computer science (78 percent and 66 percent respectively). In addition, care responsibilities, social norms, inflexible work arrangements, discrimination and harassment, and transportation are among the most significant constraints to women’s economic participation. 1.3 Project Overview

At the Agency level, Private Sector Development aligns with the following USAID policies and USG initiative: Private Sector Engagement (PSE) Policy

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PSE is a strategic approach to planning and programming through which USAID consults, strategizes, aligns, collaborates, and implements with the private sector for greater scale, sustainability, and effectiveness of development or humanitarian outcomes. In accordance with the Agency’s PSE policy, USAID/Sri Lanka issued a Mission-level Private Sector Engagement Plan in December 2019 that explicitly includes this PSE activity as part of the Mission’. Journey to Self Reliance This activity supports USAID’s Journey to Self Reliance (J2SR) which seeks to “end the need for foreign assistance.” J2SR priorities emphasized in this activity include “Invest for Impact” and “Sustain Results.” Both financial and human resources require prudent utilization, and interventions must be tailored to achieve lasting results. USAID prioritizes diversified and creative new partnership models (e.g., with the private sector) that engender measurable outcomes, as well as the taking of balanced risks. As a result of this approach, activity outcomes should become self-sustaining and scalable long-term without the need for continuous donor assistance. Indo-Pacific Vision Together with our U.S. Government partners, and in coordination with like-minded donor partners including India, Australia, Japan, and the Republic of Korea, USAID supports key bilateral and regional efforts focused in three primary areas: strengthening democratic systems, unlocking private enterprise-led economic growth, and improving natural resource management. This activity falls under Indo-Pacific Vision Objective 2: Foster Economic Growth. Women’s Global Development and Prosperity (W-GDP) The W-GDP Initiative was launched by the White House in February 2019 as the first whole-of-government effort to advance global women’s economic empowerment focused on three pillars: women prospering in the workforce, women succeeding as entrepreneurs, and women enabled in the economy. Each of the three sub-objectives of Objective 2 of this activity corresponds to one of the three pillars of W-GDP. W-GDP seeks to reach 50 million women in the developing world by 2025 through U.S. Government activities, public-private partnerships, and a new, innovative Fund, housed and managed by USAID. Country Development Cooperation Strategy This activity supports Development Objective 2 in USAID’s Country Development Cooperation Strategy: “Sustained and inclusive economic growth.” Under this objective, the program supports Intermediate Result 2.2: “Strengthened enterprise competitiveness, especially in rural areas and secondary cities.” U.S. Government Integrated Country Strategy This strategy is coordinated across the U.S. Embassy through the Integrated Country Strategy, “Mission Goal #3: “Sri Lanka’s economy strengthens and grows through good governance, responsible and inclusive economic action and policy, accountability, and rule of law.” Under

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this goal, USAID is contributing to Mission Objective 3.1: “Foster sustainable and inclusive economic growth in Sri Lanka.”

1.4 Project Description

Based on the most recent global evidence on growing SMEs and USAID’s assessment of our comparative advantage in the Sri Lankan development context, USAID/Sri Lanka and Maldives seeks creative approaches to achieve the following objectives:

Objective 1. Increased SME competitiveness Objective 2. Improved women’s labor force participation

Objective 1: Increased SME competitiveness This objective aims to increase Sri Lankan SMEs’ competitiveness in national, regional, and global markets in terms of product quality standards, price, volume, just-in-time delivery, and other market requirements. Improving on these fronts will allow Sri Lankan SMEs to compete with other firms, expand market share and increase sales revenues. Firms on a growth path are more likely to formalize and pay taxes in order to gain more financing, supply to larger corporations and the government, and export. Sub-objective 1.1: Increased Capacity and Technology Adoption This sub-objective will improve SME capacity in ecommerce, understanding of regulations and procedures (such as for paying taxes), and technology transfer by facilitating a commercially sustainable business service marketplace. The ideal end-state includes a commercially self-sustaining market of professional consulting, accounting, management, and other business development services crucial to firm growth in the target sectors, where high-potential SMEs and entrepreneurs have full information on the potential benefits and quality of service providers, and pay for their services in order to grow. Illustrative activities:

● Support to SMEs on tailored marketing services ● Provide customized training to SMEs to improve financial and operating efficiencies ● Support customized training to SMEs on e-commerce opportunities and risks, and/or

other information and communications technology applications for businesses ● Provide technical assistance to SMEs for product and process innovation to meet quality

standards or obtain international certifications ● Facilitate information to the private sector on relevant policies and regulations on

registration, paying taxes, trade, or others Sub-objective 1.2: Improved Market Linkages and Information This sub-objective involves strengthened and expanded channels through which Sri Lankan SMEs receive information about existing and potential markets in the target sectors. It also includes strengthened and deepened market linkages via integration into global value chains,

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such that beneficiary SMEs fulfill larger value orders in a larger number of value chains serving a greater diversity of geographic markets. Illustrative activities:

● Facilitate commercial providers of market information including prices, consumer demand, and other trends to scale, e.g. through linkage to industry associations and media outlets, especially for diversifying markets

● Improve SME integration into global value chains through partnering with lead, buyer firms for repeat business and long-term relationships

● Support SMEs in trade shows and other platforms for long-term business relationships Sub-objective 1.3: Increased Innovation This sub-objectives seeks to increase innovation to improve product and market diversification, so that Sri Lankan SMEs can export a wider range of products to a wider range of geographical markets. This may involve horizontal upgrading to produce the same product but with higher-value characteristics; or vertical upgrading to add more value to inputs, and thus capture more of the end-market value for beneficiary SMEs as suppliers. Illustrative activities:

● Partnering with higher education institutions to spur scientific and technological research that diversifies the Sri Lankan products/service basket, potentially including facilitation of commercialization of research

● Assist in licensing to support application of international research in Sri Lanka Objective 2: Improved Women’s Labor Force Participation This objective aims to contribute to improve women’s participation in the labor force, both as employees and entrepreneurs with specific focus on key economic growth sectors that provide gainful opportunities for women including tourism and ICT. The activities under this objective would aim to mitigate constraints that inhibit women’s participation in the economy, increase the competitiveness of women owned enterprises and thereby expedite their growth and create and strengthen pathways to professional progress for women. Sub-objective 2.1: Improved Care Economy

A consistent theme throughout the literature on women’s economic participation in Sri Lanka is that household and care responsibilities are the primary drivers behind low labor force participation. This is reinforced by the traditional preference for a more household centric role for women.

A 2017 time-use survey conducted by the Department of Census and Statistics found that women (age 15 and above) spend 6.8 hours per day on unpaid housework and care work, compared to 2.7 hours for men. These figures drop slightly for the working population: employed women spend 5.7 hours on unpaid work, compared to 2.5 hours for employed men..

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Commercial child and elderly care industry is still at a very nascent stage and it is too expensive for most families, urban centric and lacks credible quality assurances and oversight. Therefore, this sub objective focuses on improving the care industry both as an enabler to increase women’s labour force participation in general and also as an employment and business opportunity.

Illustrative activities:

● Provide technical assistance increase private sector participation in the commercial care industry

● Support the provision of affordable and quality child care at communities or on-site at companies

● Strengthen quality assurance and self-regulation of the care industry by introducing quality certification systems and professional qualifications

● Support the development of women-owned care based businesses

Sub-objective 2.2: Improved professional development for women

Once women leave the workforce, they rarely re-enter the workforce, even after their children no longer need supervision. Several KIs noted that as Sri Lankans are living longer, care needs shift from children to aging parents, and sometimes these care needs overlap.

Illustrative activities:

● Provide technical assistance to encourage increased women’s participation in key economic growth sectors.

● Support potential employers to better understand the economic benefits of attracting more women to their workforce, and enforce a more supportive work environment for women free of discrimination and harassment.

● Facilitate commercially sustainable, women-friendly transport solutions. ● Facilitate mentorship programs for women to receive professional advice to plan, develop

and progress in their careers or re-enter the workforce after a period of absence. Sub-objective 2.3: Increased growth of women-owned enterprises Many constraints affecting the competitiveness of all SMEs often disproportionately affect women. Most constraints that inhibit the growth of SMEs including ina Illustrative activities:

● Facilitate commercially sustainable technical and capacity building for women-owned SMEs to improve managerial capacity, market linkages and bankability

● Facilitate technology transfer to women-owned SMEs for product upgrading

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● Facilitate networking and professional mentoring opportunities for women entrepreneurs, including with men

● Provide technical support to improve women-owned businesses’ utilization of ICT to improve efficiency and market linkages

2. Baseline Environmental, Climate and Socio-economic Information

Sri Lanka is a Upper Middle-Income country with a GDP per capita of USD 4,073 (2017) and a total population of 21.4 million people. Following 30 years of civil war that ended in 2009, Sri Lanka’s economy grew at an average 5.8 percent during the period of 2010-2017, reflecting a peace dividend and a determined policy thrust towards reconstruction and growth; although there were some signs of a slowdown in the last few years. The economy is transitioning from a predominantly rural-based economy towards a more urbanized economy oriented around manufacturing and services. Economic growth has contributed to the decline in the national poverty headcount ratio from 15.3 percent in 2006/07 to 4.1 percent in 2016. Extreme poverty is rare and concentrated in some geographical pockets.

Following the end of the civil war in 2009, investment in reconstruction and new infrastructure, including with World Bank support, and increased consumption have delivered a strong economic peace dividend. The non-tradable sectors and public sector investments have been the main drivers of this growth that has led to higher labor demand and employment. Sri Lanka is also undergoing a structural transformation away from agriculture, which now accounts for 10 percent of GDP towards industry (32.5 percent) and services (57.5 percent) with associated productivity growth and accelerating urbanization. However, this transformation is progressing relatively slowly with 30 percent of the labor force remaining in agriculture. More recently, Sri Lanka has undertaken renewed efforts in governance reforms and political reconciliation to secure long-term peace. Notwithstanding the post-conflict environment, Sri Lanka’s economic policies over last ten years have been inward-looking with an increasing degree of protectionism and anti-export bias. This has prevented the country from: capitalizing on comparative advantage and exports; attracting domestic and foreign investments to foster technology transfer; and generating new sources of innovation driven growth and employment.

The country’s fiscal landscape is challenging. In 2014, a widened deficit and a slowdown in growth increased the fiscal deficit to 5.7 percent and the public debt to 71.8 percent, as a share of GDP, marking a slight reversal of the fiscal consolidation path of the post-conflict period. The fiscal budget for 2016 presented to Parliament projected a deficit of 6.0 percent of GDP for the years 2015 and 2016. The Government presented its economic policy in November 2015 that includes as priorities the generation of one million job opportunities, enhancing income levels, developing the rural economy, and creating a wide and a strong middle class. It proposed fiscal consolidation through increasing revenue collection, reforms of state owned enterprises, and enhanced trade and foreign investment.

Sri Lanka exhibits a wide array of ecosystems with a diversity of species considered to be the richest per unit area in the Asian region. The country is ranked as a global biodiversity hot spot.

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Natural forests occupy about 30 percent of the total land area. Sri Lanka has several distinct climatic zones, each with characteristic forests, wildlife and wetlands associated with 103 major rivers and over 10,000 irrigation tanks. The country has rich marine and coastal ecosystems along its 1,620 km coastline. Biodiversity has been shaped by a complex geological history, altitudinal variation, and a monsoonal climate regime determined by the spatial and seasonal distribution of rainfall. Sri Lanka has an exceptional degree of endemism, including a large number of geographic relics and many point endemics that are restricted to extremely small areas.

About 14 percent of Sri Lanka’s land area is under legal protection. Despite conservation efforts, deforestation, forest degradation and biodiversity loss continue. About 30 percent of the Dry Zone forests is degraded, while highly fragmented small forest patches dominate in the Wet Zone. The average annual rate of deforestation has been 7,147 ha/year during 1992-2010. While logging in natural forests was banned in Sri Lanka in 1990, forest clearance for infrastructure development, human settlements, agriculture as well as encroachment, illegal timber felling, forest fires, spread of invasive species, clearing of mangrove forests for prawn farming, and destructive mining practices are contributing to deforestation and forest degradation. Sri Lanka’s National Red List of 2012 and the International Union for Conservation of Nature Global Red List of 2013 assessed a significant number of fauna and flora in Sri Lanka as threatened with extinction.

The HEC is a noteworthy issue in the context of Sri Lanka’s development. Sri Lanka has the highest density of elephants among the Asian elephant range states. Estimates of the number of elephants in Sri Lanka vary from about 3,000 to 5,000. However, protected areas (PAs) under the Department of Wildlife Conservation (DWC) are insufficient in size and quality to sustain the country’s elephant population. Over two-thirds of the wild elephant population can be found outside PA system. This is because the elephant is an edge species that prefers open forest habitat to dense primary forests. PAs, on the other hand, are generally primary or mature forests and provide only sub-optimal habitat for elephants. As a result, elephants graze on other forest and agricultural lands to survive, causing conflicts with farmers, including deaths of humans and elephants, and crop and property damage. Around 70 humans and over 200 elephants are killed annually. Crop and property damage is approximately US$10 million annually. With accelerating development and fragmentation of habitats, innovative landscape management approaches are needed to address the HEC. Such approaches would balance competing objectives of creating new opportunities for rural poverty reduction and employment and sustaining Sri Lanka’s unique elephant population over much of the Dry Zone.

Sri Lanka’s biodiversity and natural resources endowments are important assets for future sustainable development. Many communities living in the vicinity of natural forests are directly and indirectly dependent on the natural ecosystems. The collection of Non-Timber Forest Products including medicinal plants and food items – yams, mushrooms, honey and wild fruits –, as well as the extraction of fuel wood and fodder for livestock from forests are important sources of livelihood in addition to farming; while the demand for wood and wood products is now mainly met from home gardens, state-owned or privately held woodlots and plantations.

Nature-based tourism is a fast growing segment of the global tourism industry creating opportunities for growth and to develop a successful rural development growth strategy. Due to the ease of wildlife sighting, Sri Lanka has the potential of being the best nature-based tourism destination outside Africa. Yet nature-based tourism remains underexploited. Less than 30 percent of foreign tourists visit the country’s national parks due to poor visitor experience as a result of

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inadequate management. Much of the sector operates as an enclave industry, generating little employment and growth benefits. Only limited portion of the monetary benefits from nature-based tourism flow to local communities. Efforts made for joint management of visitor facilities within PAs of the Forest Department (FD) have not yet been successful due to lack of quality and consistent service. The development of home stays, village trails, agriculture trails, wildlife viewing outside PAs, and others are known to have potential to succeed.

The GoSL’s development framework commits Sri Lanka to a path of sustainable development and identifies the country’s biodiversity as part of its natural heritage and a high conservation priority. The value of the natural resources has been recognized recently and the GoSL has enacted various laws aimed at the protection of natural resources with an understanding of its importance for sustained growth and poverty reduction. Sri Lanka was the first country in Asia to prepare a National Environmental Action Plan in 1992. A number of natural resources management strategies were developed subsequently, including the Biodiversity Conservation Action Plan of 1998 (and addendum of 2006), Protected Area Gap Analysis of 2006, Haritha Lanka of 2009, and Drivers of Deforestation and Forest Degradation of Sri Lanka of 2015. These strategies identify critical areas that require strategic conservation efforts. One of the first policy documents prepared by the new Government elected in 2015 was a National Environmental Conservation Program where conservation and management of forests and wildlife feature prominently in four of the six priority areas.

Climate-related hazards pose a significant threat to economic and social development in Sri Lanka. Extreme variability of rainfall is a defining feature of the country’s climate, and its geography creates an uneven spatial and temporal distribution of rainfall which exposes a significant portion of the island to flood and drought risk. Weather patterns are driven by the monsoon, with the southwest monsoon causing severe flooding in the Western and Southern and Sabaragamuwa provinces, and the northeast monsoon causing flooding in the Eastern, Northern and North-Central provinces. The monsoon also exposes the country to drought risk, particularly in the southeastern, northern, north central and northwestern regions. Originating from the Bay of Bengal, mostly during northeast monsoon, the northern and eastern seaboards are exposed to cyclone risk. Sri Lanka is also exposed to landslides in the hilly central highlands.

Annual average fiscal loss associated with disasters in Sri Lanka is estimated to be already in excess of US$380 million2, but disaster losses can significantly exceed this amount in a given year. Flooding is the most frequent natural disaster, with an estimated annual loss of US$ 240 million, representing almost two thirds of total disaster losses in any given year on average. In 2011, floods affected more than a million people in the Northern, North Central and Eastern provinces and caused more than US$ 600 million in direct damages. Floods in 2012 and 2014 affected nearly a half a million and 1.2 million people, respectively, whilst, most recently, in May 2016, extreme rainfall led to floods and landslides that affected 425,000 people and destroyed 500 houses, with another 3,995 houses being partially damaged. Each of these events severely impacted the agriculture sector by destroying crops, livestock and agricultural infrastructure, as well as critical road infrastructure.

2 https://projects.worldbank.org/en/projects-operations/document-detail/P160005

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Tourism a key contributor to Sri Lanka’s economy. In 2018, earnings from tourism were $4.4 billion (or 4.9% of gross domestic product), representing average annual growth of 28.9% from $575.9 million in 2010.3 Tourist arrivals increased from 0.6 million in 2010 to 2.3 million in 2018. Tourism was the country’s third-largest foreign exchange earner behind remittances ($7.0 billion) and garment exports ($5.3 billion) in 2018. In 2017, Sri Lanka received 11% of tourist arrivals in South Asia, the second highest rate behind India.4 Direct jobs generated in the industry increased from 55,000 in 2010 to 169,003 in 2018 (or 2.1% of the country’s total employment in 2018). Tourism supported 388,487 direct and indirect jobs in 2018, or 4.8% of total employment. The large number of indirect jobs is an indicator of the multiplier effect of this growing industry.

3. Regulatory and Organizational Framework Sri Lankan Environmental Management Policy originates from the Constitution. There are two major provisions in the Sri Lankan Constitution related to the environment: Article 27 which makes it the duty of the State to ―protect, preserve and improve the environment for the benefit of the community; and Article 28 which enshrines the ―fundamental duty of every person to ―protect nature and conserve its riches. The Constitution also enshrines the general right to information. In Sri Lanka EIA was first introduced by the Coast Conservation (Amendment) Act No. 57 of 1981. This applies to projects that come within the "Coastal Zone".4 The "Coastal Zone" comprises of the area lying within a limit of 300 meters land ward of the mean highwater line and a limit of 2 kilometers seawards of the mean low water line. Under the Act, identification of projects that require EIA is left to the discretion of the Director, Coast Conservation Department. The National Environmental (Amendment) Act No. 56 of 1988 introduced EIA, as a part of the strategy to achieve sustainable development for the entire country and the Central Environmental Authority was assigned regulatory functions.

Part IV C of the amendment act mandated that all "prescribed" development projects are required to be subjected to Environmental Impact Assessment. Only large scale development projects that are likely to have significant impacts on environment are listed as prescribed projects. In addition "prescribed projects" if located in "environmental sensitive areas" are required to undergo EIA irrespective of their magnitude.

The prescribed projects are listed in the gazette No 772/ 22 of 24th June 1993, 859/ 14 of 23rd February 1995, 110 4/ 22 of 5th November 1999 and 110 8/ 1 of 29th November 1999.

The National Environmental Act stipulates that approval for all prescribed projects must be granted by a Project Approving Agency (PAA). At present, 23 Government Agencies have been designated as PAAs. A single Project Approving Agency is established as responsible for administrating the EIA process for a project. W hen there is more than one PAA is involved the appropriate PAA is decided by the CEA. It is important to note that a state agency which is a project proponent can not function as a PAA for that project. Project Approving Agencies are listed in the Gazette Extra Ordinary No. 859/ 14 of 23rd February 1995 and Gazette Extra Ordinary ,No. 1373/ 6 of 29th December 20 0 4. The National Environmental Act has identified two levels in the EIA process. If the environmental impacts of the project are not very significant then the project proponent may be asked to do an Initial Environmental

3 https://www.adb.org/sites/default/files/project-documents/53293/53293-001-tar-en.pdf 4 http://www.cea.lk/web/en/acts-regulations & https://www.ecolex.org/result/?q=Sri+Lanka&type=legislation&xdate_min=&xdate_max=

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Examination (IEE), which is a relatively short and simple study. However, if the potential impacts appear to be more significant, the project proponent may be asked to do an Environmental Impact Assessment (EIA) which is a more detailed and comprehensive study of environmental impacts.

EIA reports must be kept open for public comments for 30 working days. IEE reports have been exempted from this requirement. However, an Initial Environmental Examination report shall be deemed to be a public document for the purposes of sections 74 and 76 of the Evidence Ordinance (Chapter 21) and shall be open for inspection by the public.

EIA provisions are also included in the Fauna and Flora (Amended) Act No. 49 of 1993. According to this Act, any development activity of any description what so ever proposed to be established within one mile from the boundary of any National Reserve, is required to be subject to EIA, and written approval should be obtained from the Director General, Department of W ild Life Conservation prior to implementation of such projects.

Sri Lanka is a signatory to a myriad of multilateral international agreements relatied to the environment, some thirty-one are cited in the relevant chapter, e.g. The Convention on International Trade in Endangered Species of Fauna and Flora; RAMSAR Convention, Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal; Montreal Protocol on Substances that Deplete the Ozone Layer; Biodiversity Convention and the Framework Convention on Climate Change..

Five dedicated government agencies have been set up for environment and natural resources management. This includes the: FD, Central Environmental Authority, Coast Conservation Department, Geological Survey and Mines Bureau, State Timber Corporation and Marine Environment Protection Agency under the Ministry of Mahaweli Development and Environment (MoMDE), and the DWC under the Ministry of Sustainable Development and Wildlife (MoSDW). There are about 20 government agencies and over 70 legal instruments regulating environmental, water, biodiversity, forestry, etc. natural resources, but lack of proper coordination and enforcement weakens the effective and efficient implementation. The Central Environmental Authority (CEA) was established on 12th August 1981, under the provision of the National Environmental Act No:47 of 1980. The Ministry of Environment which was established in December 2001 has the overall responsibility in the affairs of the CEA with the objective of integrating environmental considerations into the development process of the country. The CEA was given wider regulatory powers under the National Environment (Amendment) Acts No:56 of 1988 and No:53 of 2000.

4. Analysis of Potential Environmental and Social Impacts The PSD seeks to increase and diversify the Sri Lankan private sector’s revenue growth and contribution to the GDP, especially in target sectors, including tourism, and to increase women’s labor force participation in those sectors. This will be achieved by 1) increasing SME competitiveness and 2) improving women’s labor force participation.

Defined/Illustrative Activities Potential Impacts

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Objective 1: Increased SME competitiveness

● Support to SMEs on tailored marketing services

● Customized training to SMEs to improve financial and operating efficiencies

● Customized training to SMEs on e-commerce opportunities and risks, and/or other information and communications technology applications for businesses

● Technical assistance to SMEs for product and process innovation to meet quality standards or obtain international certifications

● Facilitate information to the private sector on relevant policies and regulations on registration, paying taxes, trade, or others

● Facilitate commercial providers of market information including prices, consumer demand, and other trends to scale, e.g. through linkage to industry associations and media outlets, especially for diversifying markets

● Improve SME integration into global value chains through partnering with lead, buyer firms for repeat business and long-term relationships

● Support SMEs in trade shows and other platforms for long-term business relationships

● Partnering with higher education institutions to spur scientific and technological research that diversifies the Sri Lankan products/service basket, potentially including facilitation of commercialization of research

● Assist in licensing to support application of international research in Sri Lanka

● Facilitate networking and professional mentoring

These activities will not have effect on the natural or physical environment and can be considered for a Categorical Exclusion Determination under §216.2(c)(2)(i,)(ii,)(v) and (xiv.) Recommended Environmental Action

● MEO/CIL reviews and concurs to individual tasks’ SOWs to ensure that these fully capture environmental and climate aspects

● MEO/CIL advises COR on relevant environmental and social international standards, certification processes and best practice

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opportunities for women entrepreneurs, including with men

● Provide technical support to improve women-owned businesses’ utilization of ICT to improve efficiency and market linkages

Objective 2: Improved women’s labor force participation

● Provide technical assistance increase private sector participation in the commercial care industry

● Support the provision of affordable and quality child care at communities or on-site at companies

● Strengthen quality assurance and self-regulation of the care industry by introducing quality certification systems and professional qualifications

● Support the development of women-owned care-based businesses

● Provide technical assistance to encourage increased women’s participation in key economic growth sectors.

● Support potential employers to better understand the economic benefits of attracting more women to their workforce, and enforce a more supportive work environment for women free of discrimination and harassment.

● Facilitate commercially sustainable, women-friendly transport solutions.

● Facilitate mentorship programs for women to receive professional advice to plan, develop and progress in their careers or re-enter

These activities will not have effect on the natural or physical environment and can be considered for a Categorical Exclusion Determination under §216.2(c)(2)(i,)(ii,)(v) and (xiv.)

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the workforce after a period of absence.

● Facilitate commercially sustainable technical and capacity building for women-owned SMEs to improve managerial capacity, market linkages and bankability

● Facilitate technology transfer to women-owned SMEs for product upgrading

Increased growth of women-owned enterprises in tourism and related sectors

● Facilitate commercially sustainable technical and capacity building for women-owned SMEs to improve managerial capacity, market linkages and bankability

● Facilitate technology transfer to women-owned SMEs for product upgrading

● Facilitate networking and professional mentoring opportunities for women entrepreneurs, including with men

● Provide technical support to improve women-owned businesses’ utilization of ICT to improve efficiency and market linkages

Negative Determination with Conditions Support for small-scale SME activities may result in: Increased land acquisition in or buffer zones of protected areas, sensitive lands, coastal areas, etc. Increased use of pesticides for fumigation of tourist facilities and water purification - incorrectly applied, these inputs can migrate to local water sources, adversely affecting water quality, human health, land and marine ecosystems. Habitat damage due to increase and un-controlled tourist flows and access A set of adverse environmental impacts may result from small-scale fisheries activities, particularly as the collective scale of smallholder activity grows: Over-harvesting, unsustainable fishing practices are may result in over-capacity of the fishing fleet and cause over-harvesting of the target or protected species and by-catch (see below). This has the tendency to lead to a cycle of fishing down the food web to lower-value species and continued over-harvesting By-catch, the use of some types of fishing equipment and practices (e.g., purse seine fishing nets, other fishing nets with small mesh size, and drift netting) can result in capture of non-target species or size groups (the by-catch). By-catch can cause population depletion of the non-target species or of the target species if too many juveniles are caught. This could lead to the decline of both the targeted fisheries and other fish species.

162

Use of poisons, dynamites, and toxic substances, such as cyanide, and techniques like dynamiting and electrocution are used to more easily harvest fish. Dynamite fishing, which is known to occur in parts of Sri Lanka, damages habitats, especially coral reefs, and has caused fisheries to decline in some areas. This activity is intended to facilitate and promote adoption of small-scale livelihood alternatives by promoting traditional and natural resource-based livelihood activities. However, in some cases livelihood and/or market development can benefit non-sustainable as well as sustainable processers. Small-scale production techniques can become intensive and lead to impacts that could become adverse rather than beneficial

4.2 Recommended Environmental Determinations: Categorical Exclusion and Negative Determination with Conditions

Categorical Exclusions ($ 95 % of total funding): A Categorical Exclusion is recommended for all activities under Objective 1 and 2 under §216.2(c)(2)(i,)(ii,)(v) and (xiv.) except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.). Recommended Environmental Action

● MEO/CIL together with COR reviews and concurs to individual tasks’ SOWs to ensure that these fully capture environmental and climate aspects

● MEO/CIL advises COR on relevant environmental and social international standards, certification processes and best practice

Negative Determination with Conditions ($ 5 % of total funding): A Negative Determination with Conditions is recommended for activities under objective 2. Specific terms and conditions for these activities are presented below in Section 4.3.

4.3 Terms and Conditions The IP shall: ● Ensure that all activities seek to raise environmental awareness, promote national

environmentally and socially sustainable development, biodiversity conservation, mitigation of and adaptation to climate change, foster the culture of environmental compliance and governance

● Include environment compliance considerations into all aspects of the project’s activities implementation and shall promote and train local counterparts on environmental and social requirements and standards across all project’s activities. Such proposed activities shall be included into annual work plans, and results shall be reported in annual reports.

● Consider direct and indirect threats to biodiversity and recommendations for biodiversity conservation established in the Sri Lanka 2016 FAA 118/119 report (currently FAA 118/119 report is being updated for a new USAID Sri Lanka CDCS)

● Ensure that each activity is conducted in a manner consistent with good design and implementation practices described in USAID Environmental Guidelines for Small-Scale Activities at: http://www.usaidgems.org; IFC Environmental, Health and Safety Guidelines at: https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ehs-guidelines

● In accordance with ADS 201mal [https://www.usaid.gov/sites/default/files/documents/1868/201mal_042817.pdf ] conduct

climate risk screening (CRS) for all activities with the approved NDC prior to commencement. CRS shall be presented in an Environmental Review Checklist (ERC) and appropriate commensurate mitigation, adaptation, monitoring and reporting measures shall be developed and presented in activity-specific Environmental Mitigation and Monitoring Plan (EMMP) and these shall be reviewed and approved by the MEO/CIL and COR; (sub-) sectoral activities, which are similar in scope and nature can be “bundled” for the purpose of environmental and climate risk analysis

● Ensure that each construction, rehabilitation and renovation NDC activity, including pilots, shall be conducted in a manner compliant with ADS 201maw and ADS 303maw [https://www.usaid.gov/sites/default/files/documents/1865/201maw.pdf and https://www.usaid.gov/sites/default/files/documents/1868/303maw.pdf]

● Use the Environmental Review and Assessment Checklist (ER Checklist) (Annex 2) as a main reporting document for each activity having moderate and high adverse environmental and social impact.

● Ensure that prior to the launch of each activity (including grants) having a potential for moderate and high adverse environmental and social impact, the Implementer conducts an Environmental Due Diligence (EDD) review as an inherent part of the ER Checklist to document existing environmental concerns and foreseeable environmental effects.

● If the EDD results in a finding of potential significant environmental and social impacts, an IEE shall be amended to reflect on a Positive Threshold Decision, and a Scoping Statement (SS) and Environmental Assessment (EA) shall be prepared by the implementer prior to the start of activities. Terms of Reference (TOR) for Scoping, Scoping Statement and EA Report must be and approved by Asia BEO.

● That based on EDD results, relevant best from Environmental Guidelines for Small-scale Activities, IFC EHS Guidelines, as referenced above, an EMMP be developed, and/or shall develop an Environmental Manual (EM) and Framework Environmental Mitigation and Monitoring Plan (FEMMP) to establish criteria for eligibility, selection and screening against potential environmental risk (low, moderate, and high). EM and FEMMP shall be approved by the COR and MEO/CIL

● Procurement of electronic and other equipment shall be in accordance with ADS 312; electronic equipment shall be procured from certified dealers/retailers, used in environmentally sound manner in accordance with manufacturer’s manuals, and after useful life returned to the original dealer/retailer for the safe and environmentally sound disposal, and/or if when transferred to a beneficiary shall have a written document stipulating equipment’s use in safe and environmentally sound manner and compliant disposal at the end of its useful life in accordance with the GOSL regulations

● Have a qualified, COR and MEO/CIL-approved environmental impact professional(s) (EIP) who will assess and recommend environmental actions to be taken by the program and will coordinate implementation of mitigation measures, monitoring, and reporting.

● Ensure that EIP conducts environmental reviews and will identify: 1) activity category in consultation with the COR and MEO/CIL; 2) potential environmental and social impacts (based on his/her technical knowledge of the Sri Lankan, U.S.,

and international environmental standards, guidelines, requirements, and practices; and 3) mitigation and monitoring measures needed. Should EIP lack any special technical knowledge to identify any special environmental impact, the Implementer will consult with a specialist in the relevant area.

● Ensure that Sri Lankan Environmental, Occupational Health and Safety (OHS,) labor and other relevant laws and regulations, standards, norms and best practices for environmental protection and management are followed in implementing the activities. Implementer will ensure compliance by its staff, subcontractors, and sub-grantees with USAID regulations, policies, procedures and acceptable best practice as well as compliance with applicable international environmental obligations of Sri Lanka, including those of ILO, FAO and WHO

● Ensure that for activities categorized as “potential risks”' or “definite risks” of adverse environmental and social impact a letter is obtained from the local or regional office for environmental protection, and other offices as warranted, stating that the office: a) has been contacted by the Implementer concerning the project activities; b) will maintain contact with the project; and c) will be aware of the potential environmental impacts of the project to help ensure that no detrimental impact will result from this project

● Ensure that for such activities prior to their implementation meaningful public consultations are conducted and that concurrence from the national duly authorized environmental agency on FEMMP is obtained

● That commensurate monitoring is conducted during the project (beginning with baseline conditions) to determine the environmental and social impact (positive and/or negative) of project activities

● Use only qualified staff for overseeing the mitigation and monitoring work; monitoring shall occur on an as-needed basis

● Ensure that the environmental procedures are implemented, potential impacts mitigated, and indirect, cumulative and induced effects are considered for each activity. If potentially significant un-anticipated negative environmental and social impacts are discovered through regular monitoring and evaluation of project activities, immediate actions, in consultation with COR and MEO/CIL shall be taken to rectify the situation.

Resource Allocation, Training and Reporting requirements: The award with the Implementing Partner shall include a requirement to follow all conditions approved in this IEE. The Implementer shall be responsible for training his staff, grantees, subcontractors, and counterparts on the contract’s environmental and social requirements and for ensuring their compliance with these requirements. The Implementer shall have the following documentation and reporting requirements associated with the environmental compliance:

● Annual Work Plans shall have a section on the planned activities related to environmental compliance.

● EM and FEMMP, ER Checklists, EDD reports and EMMPs as described above shall be developed or adapted by the Implementer, and approved by USAID prior to the launch of each activity, including grants, having an adverse impact on physical and natural environment

● CRM for all activities under NDC in accordance with a format provided in Annex__ to be reviewed and approved by COR and MEO/CIL

● Progress Reports shall have a section on the status of activities related to environmental and social compliance and results, with documented/photographic evidence, including project summaries along with environmental and social impacts, success or failure of mitigation measures being implemented, results of environmental monitoring, and any major modifications/revisions to the project. If the activities implemented do not have any negative impact on the environment, this should be documented as well.

● Implementer’s annual report shall include an annex containing a table indicating the title, date of award, and category of each grant activity, and status of mitigation measures and monitoring results, when applicable.

● Final Report shall have a section that will summarize program activities related to environmental compliance and will describe results, including information on any positive or negative environmental effects of program activities.

● Site specific ER Checklists will be submitted to USAID at the completion of each relevant activity at every affected project site, and not on an annual basis. Reporting will include photographic documentation and site visit reports which fully document that all proposed mitigation procedures were followed throughout implementation of the subject work including quantification of mitigation. All such reports and documentation will be submitted to the COR and MEO/CIL.

USAID Responsibilities:

● MEO/CIL and COR shall review and concur to any SOW for specific tasks/activities so that it’s consistent with USG and Sri Lankan requirements

● All approved Threshold Decisions, conditions and stipulation for revisions shall be fully transposed into procurement instruments.

● At the post-award conference, the COR together with the MEO/CIL shall explain to the implementing partner the approved Threshold Decisions and conditions

● Mission will provide for environmental training to the IP the prior to the start of the project’s implementation.

5. Limitations of the IEE:

● Assistance for the procurement (including payment in kind, donations, guarantees of credit) or use (including handling, transport, fuel for transport, storage, mixing, loading, application, clean-up of spray equipment, and disposal) of pesticides or activities involving procurement, transport, use, storage, or disposal of toxic materials cannot go forward until Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP) is prepared by the IP, reviewed and approved by BEO/Asia. Pesticides cover all insecticides, fungicides, rodenticides, etc. covered under FIFRA - ‘Federal Insecticide, Fungicide, and Rodenticide Act’.

● Activities involving support to wood processing, agro-processing, industrial enterprises, and regulatory permitting.

● Non-native, potentially invasive species of flora and fauna ● Scoping Statement and Environmental Assessment (EA) to be conducted, in the

event the screening process indicates that USAID activity may have potentially significant negative environmental and social impacts. The SOW for and Scoping Statement and EA Report shall be approved by the Asia Bureau Environmental Officer prior to start of activities.

● Assistance, procurement or use of genetically engineered organisms (GEOs) shall be in accordance with ADS 211 and derived conditions to be approved in an amendment to the IEE approved by Agency Biosafety Officer with concurrence by Asia BEO and BEO/BFS.

● No DCA or GDA programs until an amendment to this IEE is approved by the BEO/Asia.

● Procurement or use of Asbestos, Lead, Mercury Containing Materials (ALMCM) (i.e. piping, roofing, etc), Polychlorinated Biphenyl’s (PCB) or other toxic/hazardous materials prohibited by US EPA as provided at: http://www.epa.gov/asbestos and/or under international environmental agreements and conventions, e.g. Stockholm Convention on Persistent Organic Pollutants as provided at: http://chm.pops.int.

Any of these actions would require an amendment to the IEE duly approved by the Asia BEO.

6. Revisions Pursuant to 22 CFR 216.3(a)(9), if new information becomes available which indicates that activities to be funded by the Project might be "major" and the Program’s effect "significant", this determination will be reviewed and revised by the originator of the project and submitted to the Asia Bureau Environmental Officer for approval and, if appropriate, an environmental assessment will be prepared. It is the responsibility of the COR to timely inform the MEO/CIL and BEO/Asia of any changes in the scope and nature of the approved activities, which may warrant the revision of the approved Threshold Decisions.

ANNEX 1

ENVIRONMENTAL REVIEW CHECKLIST FOR IDENTIFYING POTENTIAL ENVIRONMENTAL IMPACTS OF PROJECT ACTIVITIES AND PROCESSES

for [Activity Name]

Implemented under: [Project Name] DCN: [of Parent IEE] Prepared by: [Implementer]

ENVIRONMENTAL REVIEW CHECKLIST FOR IDENTIFYING POTENTIAL ENVIRONMENTAL IMPACTS OF PROJECT ACTIVITIES AND PROCESSES

The Environmental Review Checklist for Identifying Potential Environmental Impacts of Project Activities and Processes (ERC) is intended for use mainly by implementing partners to: assess activity-specific baseline conditions, including applicable environmental requirements; identify potential adverse environmental effects associated with planned activity(s) and processes; and develop environmental mitigation and monitoring plans (EMMPs) that can effectively avoid or adequately minimize the identified effects. This ERC can also be substituted for other ERC versions that may have been attached to project initial environmental examinations (IEE). If implementing partners are in doubt about whether a planned activity requires preparation of an ERC, they should contact their Contracting Officer’s Representative (COR)/Agreement Officer’s Representative (AOR) for clarification. (When preparing the checklist, please indicate “not applicable” for items that have no bearing on the activity.)

A. Activity and Site Information

Project Name: (as stated in the triggering IEE)

Mission/Country:

DCN of Triggering IEE:

Activity/Site Name:

Type of Activity:

Name of Reviewer and Summary of Professional Qualifications:

Date of Review:

B. Activity Description

1. Activity purpose and need

2. Location of activity

3. Beneficiaries, e.g., size of community, number of school children, etc.

4. Number of employees and annual revenue, if this is a business

5. Implementation timeframe and schedule

6. Detailed description of activity and site, e.g., size of the facility or hectares of land; steps that will be taken to accomplish the activity

7. Existing or planned certifications, e.g., ISO 14001 EMS, ISO 9000, HCCP, SA 8000, Global Gap, Environmental Product Declarations, Eco Flower, EcoLogo, Cradle to Cradle, UL Environment, GREENGUARD, Fair Trade, Green Seal, LEED, or various Forest Certifications

8. Site map, e.g., provide an image from Google Earth of the location

9. Photos of site (when available)

C. Activity-Specific Baseline Environmental Conditions

1. Population characteristics

2. Geography

3. Natural resources, e.g., nearby forest/protected areas, ground and surface water resources

4. Current land use

5. Proximity to public facilities, e.g. schools, hospitals, etc.

6. Other relevant description of current environmental conditions in proximity to the activity

D. Legal, Regulatory, and Permitting Requirements

1. National environmental impact assessment requirements for this activity

2. Applicable National or local permits for this activity, responsible party, and schedule for obtaining them:

Permit Type Responsible party Schedule Zoning Building/Construction Source Material Extraction Waste Disposal Wastewater Storm Water Management Air Quality Water Use Historical or Cultural Preservation Wetlands or Water bodies Threatened or Endangered Species Other

3. Additional national or other international environmental laws, conventions, standards with which the activity might be required to comply

a. Air emission standards

b. Water discharge standards

c. Solid waste disposal or storage regulations

d. Hazardous waste storage and disposal

e. Historical or cultural preservation

f. Other

E. Engineering Safety and Integrity (for Sections E. and F., provide a discussion for any of the listed issues that are likely to have bearing on this activity)

1. Will the activity be required to adhere to formal engineering designs/plans? Have these been or will they be developed by a qualified engineer?

2. Do designs/plans effectively and comprehensively address:

a. Management of storm water runoff and its effects?

b. Reuse, recycling, and disposal of construction debris and by-products?

c. Energy efficiency and/or preference for renewable energy sources?

d. Pollution prevention and cleaner production measures?

e. Maximum reliance on green building or green land-use approaches?

f. Emergency response planning?

g. Mitigation or avoidance of occupational safety and health hazards?

h. Environmental management of mobilization and de-mobilization?

i. Capacity of the host country recipient organization to sustain the environmental management aspects of the activity after closure and handover?

3. Are there known geological hazards, e.g., faults, landslides, or unstable soil structure, which could affect the activity? If so, how will the project ensure structural integrity?

4. Will the site require grading, trenching, or excavation? Will the activity generate borrow pits? If so, how will these be managed during implementation and closure?

5. Will the activity cause interference with the current drainage systems or conditions? Will it increase the risk of flooding?

6. Will the activity interfere with above- or below-ground utility transmission lines, e.g., communications, water, sewer, or natural gas?

7. Will the activity potentially interfere with vehicle or pedestrian traffic?

8. Does the activity increase the risk of fire, explosion, or hazardous chemical releases?

9. Does the activity require disposal or retrofitting of polychlorinated biphenyl-containing equipment, e.g., transformers or florescent light ballasts?

F. Environment, Health, and Safety Consequences

1. Potential impacts to public health and well-being

a. Will the activity require temporary or permanent property land taking?

b. Will activities require temporary or permanent human resettlement?

c. Will area residents and/or workers be exposed to pesticides, fertilizer, or other toxic substances, e.g., as a result of farming or manufacturing? If so, how will the project:

i. Ensure that these chemicals do not contaminate ground or surface water?

ii. Ensure that workers use protective clothing and equipment to prevent exposure?

iii. Control releases of these substances to air, water, and land?

iv. Restrict access to the site to reduce the potential for human exposure?

d. Will the activity generate pesticide, chemical, or industrial wastes? Could these wastes potentially contaminate soil, groundwater or surface water?

e. Will chemical containers be stored at the site?

f. Does the activity remove asbestos-containing materials or use of building materials that may contain asbestos, formaldehyde, or other toxic materials? Can the project certify that building materials are non-toxic? If so, how will these wastes be disposed of?

g. Will the activity generate other solid or hazardous wastes such as construction debris, dry or wet cell batteries, florescent tubes, aerosol cans, paint, solvents, etc.? If so, how will this waste be disposed of?

h. Will the activity generate nontoxic, nonhazardous solid wastes (subsequently requiring land resources for disposal)?

i. Will the activity pose the need to handle and dispose of medical wastes? If so, describe measures of ensuring occupational and public health and safety, both onsite and offsite.

j. Does the activity provide a new source of drinking water for a community? If so, how will the project monitor water quality in accordance with health standards?

k. Will the activity potentially disturb soil contaminated with toxic or hazardous materials?

l. Will activities, e.g., construction, refurbishment, demolition, or blasting, result in increased noise or light pollution, which could adversely affect the natural or human environment?

2. Atmospheric and air quality impacts

a. Will the activity result in increased emission of air pollutants from a vent or as fugitive releases, e.g., soot, sulfur dioxide, oxides of nitrogen, volatile organic compounds, methane.

b. Will the activity involve burning of wood or biomass?

c. Will the activity install, operate, maintain, or decommission systems containing ozone depleting substances, e.g., freon or other refrigerants?

d. Will the activity generate an increase in carbon emissions?

e. Will the activity increase odor and/or noise?

3. Water quality changes and impacts

a. How far is the site located from the nearest river, stream, or lake?

b. Will the activity disturb wetland, lacustrine, or riparian areas?

c. What is the depth to groundwater at the site?

d. Will the activity result in increased ground or surface water extraction? If so, what are the volumes? Permit requirements?

e. Will the activity discharge domestic or industrial sewage to surface, ground water, or publicly-owned treatment facility?

f. Does the activity result in increased volumes of storm water run-off and/or is there potential for discharges of potentially contaminated (including suspended solids) storm water?

g. Will the activity result in the runoff of pesticides, fertilizers, or toxic chemicals into surface water or groundwater?

h. Will the activity result in discharge of livestock wastes such as manure or blood into surface water?

i. Does the site require excavation, placing of fill, or substrate removal (e.g., gravel) from a river, stream or lake?

4. Land use changes and impacts

a. Will the activity convert fallow land to agricultural land?

b. Will the activity convert forest land to agricultural land?

c. Will the activity convert agricultural land to commercial, industrial, or residential uses?

d. Will the activity require onsite storage of liquid fuels or hazardous materials in bulk quantities?

e. Will the activity result in natural resource extraction, e.g., granite, limestone, coal, lignite, oil, or gas?

f. Will the activity alter the viewshed of area residents or others?

5. Impacts to forestry, biodiversity, protected areas and endangered species

a. Is the site located adjacent to a protected area, national park, nature preserve, or wildlife refuge?

b. Is the site located in or near threatened or endangered (T&E) species habitat? Is there a plan for identifying T&E species during activity implementation? If T&E species are identified during implementation, is there a formal process for halting work, avoiding impacts, and notifying authorities?

c. Is the site located in a migratory bird flight or other animal migratory pathway?

d. Will the activity involve harvesting of non-timber forest products, e.g., mushrooms, medicinal and aromatic plants (MAPs), herbs, or woody debris?

e. Will the activity involve tree removal or logging? If so, please describe.

6. Historic or cultural resources

a. Are there cultural or historic sites located at or near the site? If so, what is the distance from these? What is the plan for avoiding disturbance or notifying authorities?

b. Are there unique ethnic or traditional cultures or values present in the site? If so, what is the applicable preservation plan?

G. Further Analysis of Recommended Actions (if the applicable IEE requires the use of ERCs to perform further analysis of recommended actions, then check the appropriate box below. If this analysis is not required, then skip this and proceed with Section H. If required by the IEE, the ERC shall be copied to the Bureau Environmental Officer (BEO)).

☐ 1. Categorical Exclusion: The activity is not likely to have an effect on the natural or physical environment. No further environmental review is required.* ☐ 2. Negative Determination with Conditions: The activity does not have potentially significant adverse environmental, health, or safety effects, but may contribute to minor impacts that can be eliminated or adequately minimized by appropriate mitigation measures. EMMPs shall be developed, approved by the Mission Environmental Officer (MEO) (and the BEO if required by the IEE) prior to beginning the activity, incorporated into workplans, and then implemented. See Sections H and I below.* ☐ 3. Positive Determination: The activity has potentially significant adverse environmental effects and requires further analysis of alternatives, solicitation of stakeholder input, and incorporation of environmental considerations into activity design. A Scoping Statement must be prepared and be submitted to the BEO for approval. Following BEO approval an Environmental Assessment (EA) will be conducted. The activity may not be implemented until the BEO clears the final EA. For activities related to the procurement, use, or training related to pesticides, a PERUSAP will be prepared for BEO approval. ☐ 4. Activity Cancellation: The activity poses significant and unmitigable adverse environmental effects. Adequate EMMPs cannot be developed to eliminate these effects and alternatives are not feasible. The project is not recommended for funding.

*Note regarding applicability related to Pesticides (216.2(e): The exemptions of §216.2(b)(l) and the categorical exclusions of §216.2(c)(2) such as technical assistance, education, and training are not applicable to assistance for the procurement or use of pesticides.

H. EMMPs (Using the format provided below, or its equivalent, list the processes that comprise the activity, then for each, identify impacts requiring further consideration, and for each impact describe the mitigation and monitoring measures that will be implemented to avoid or adequately minimize the impacts. All environment, health, and safety impacts requiring further consideration, which were identified in Section F., should be addressed)

1. Activity-specific environmental mitigation plan (Upon request, the MEO may be able to provide your project with example EMMPs that are specific to your activity.)

Processes Identified Environmental Impacts

Do the Impacts Require Further Consideration?

Mitigation Measures

Monitoring Indicators

List all the processes that comprise the activity(s)(e.g. asbestos roof removal, installation of toilets, remove and replace flooring) A line should be included for each process.

A single process may have several potential impacts—provide a separate line for each.

For each impact, indícate Yes or No; if No, provide justification, e.g.,: (1) There are no applicable legal requirements including permits or reporting and (2) There is no relevant community concern and (3) Pollution prevention is not feasible or practical and (4) Does not pose a risk because of low severity, frequency, or duration

For each impact requiring further consideration, describe the mitigation measures that will avoid or adequately minimize the impact. (If mitigation measures are well-specified in the IEE, quote directly from IEE.)

Specify indicators to (1) determine if mitigation is in place and (2) successful. For example, visual inspections for seepage around pit latrine; sedimentation at stream crossings, etc.)

2. Activity-specific monitoring plan

Monitoring Indicators Monitoring and Reporting Frequency

Responsible Parties

Records Generated

Specify indicators to (1) determine if mitigation is in place and (2) successful (for example, visual inspections for seepage around pit latrine; sedimentation at stream crossings, etc.)

For example: “Monitor weekly, and report in quarterly reports. If XXX occurs, immediately inform USAID COR/AOR.”

Separate parties responsible for mitigation from those responsible for reporting, whenever appropriate,

If appropriate, describe types of records generated by the mitigation, monitoring, and reporting process.

I. Certification of No Adverse or Significant Effects on the Environment

I, the undersigned, certify that activity-specific baseline conditions and applicable environmental requirements have been properly assessed; environment, health, and safety impacts requiring further consideration have been comprehensively identified; and that adverse impacts will be effectively avoided or sufficiently minimized by proper implementation of the EMMP(s) in Section G. If new impacts requiring further consideration are identified or new mitigation measures are needed, I will be responsible for notifying the USAID COR/AOR, as soon as practicable. Upon completion of activities, I will submit a Record of Compliance with Activity-Specific EMMPs using the format provided in ERC Annex 1 or its equivalent.

_________________________________________ Implementer Project Director/COP Name Implementer EIP

_____________________________ Date

J. Approvals:

_________________________________________ USAID COR/AOR Name

_______________________________ Date

_________________________________________ Mission Environmental Officer/CIL Name

_______________________________ Date

Distribution:

● Project Files

ANNEX 2 RECORD OF COMPLIANCE WITH ACTIVITY-SPECIFIC ENVIRONMENTAL MITIGATION AND MONITORING PLANS (EMMPs)

Subject: Site or Activity Name/Primary Project Name/IEE DCN Number

To: COR/AOR/Activity Manager Name Copy: Mission Environmental Officer Name Date:

The [name of the implementing organization] has finalized its activities at the [site name] to [describe activities and processes that were undertaken]. This memorandum is to certify that our organization has met all conditions of the EMMPs for this activity. A summary of the how mitigation and monitoring requirements were met is provided below.

1. Mobilization and Site Preparation

2. Activity Implementation Phase

3. Site Closure Phase

4. Activity Handover

Sincerely,

_________________________________________ Implementer Project Director/COP Name

____________________________ Date

Implementer EIP Approved:

_____________________________________ USAID/COR/AOR/Activity Manager Name MEO/CIL

____________________________ Date

Distribution:

● Project Files

● MEO

Annex _______

ANNEX 3 Climate Change Risk Screening Matrix: Sri Lanka – Private Sector Development February 2020

Planned Areas of Emphasis

Decision Timeframe

Geography

Temperature Precipitation/ Flooding

Drought SLR/Storm Surge

Winds/ Other Storms

Overall Impact on Mission Activities

Adapt Capac

DO2: Sustained and Inclusive Economic Growth. I.R. Improved Policy and Regulatory Environment for Trade and Investment

● Research ● Market access

Medium – 5-30 years

● National

Increase ● Intensifies ● Damage to infrastructure

● Intensifies ● Damage to

ural resources, diversity, ocean

● Damage to infrastructure

● Damage to infrastructure

Physical infrastructure may be damaged if not properly sited and designed

Mediu Lack o informon to info financ sector and market

Activity-Level Climate Risk Management Summary Table Tasks / Defined or Illustrative Interventions

Climate Risks List key risks related to the defined / illustrative interventions identified in the screening and additional assessment.

Risk Rating Low / Moderate / High

How Risks are Addressed Describe how risks have been addressed in activity design and/or additional steps that will be taken in implementation. If you chose to accept the risk, briefly explain why.

Opportun Strengthe Resilienc Describe an achieve mul objectives by resilience or

. .

ANNEX 4 Green Meeting Planning Checklist:

Setting Environmental Priorities

In this checklist, environmentally aware meetings and events are those planned in such a way as to eliminate, reduce, or recycle waste. While focusing on municipal solid waste, this checklist also touches on other environmental concerns. It is intended to heighten the environmental consciousness of event planners and demonstrate the advantages of conducting environmentally aware events. Consider the following as you select your environmental priorities: Preventing and Reducing Waste

◻ Focus on reducing waste, given limited in-country recycling facilities ◻ Use double-sided printing, recycled content -where available- for promotional materials and handouts. ◻ Avoid mass distribution of handouts. Allow attendees to request copies or provide digital copies via CD, thumb drive,

or website. ◻ Provide reusable name badges. ◻ Purchase large volume plastic bottles of water to dispense into glasses at each table, instead of individual sized plastic

bottles ◻ Other actions: _________________________________________

Recycling and Managing Waste

◻ Where facilities exist, collect paper and recyclable beverage containers in meeting areas. ◻ Collect cardboard and paper in exhibit areas. ◻ Collect cardboard, beverage containers, steel cans, and plastics in food vending areas. ◻ Separate out organic waste for composting, Provide composting guidelines for conference venues ◻ If reusables are not used, encourage use of recyclable beverage containers. ◻ Other actions: _________________________________________

Conserving Energy and Reducing Traffic

◻ Seek naturally lighted meeting and exhibit spaces. ◻ Provide shuttle service from hotels to the event site. ◻ Choose meeting sites that have on-site housing ◻ Other actions: _________________________________________

Contracting Food Service and Lodging

◻ Plan food service needs carefully to avoid unnecessary waste. ◻ Consider use of durable food service items instead of disposables. ◻ Donate excess food to charitable organizations, including planning ahead via SOW/contract with the conference venue

to ensure this happens. ◻ Work with hotel on non-replacement of linens, soaps, etc. ◻ Other actions: _________________________________________

Buying Environmentally Aware Products

◻ Use recycled paper for promotional materials and handouts, where available. ◻ Consider selling or providing refillable containers for beverages. ◻ Provide reusable containers for handouts or samples (pocket or file folders, cloth bags). ◻ Where reusable items are not feasible, select products that are made from recovered materials and that also can be

recycled. ◻ Other actions: _________________________________________

Educating Participants and Exhibitors

◻ Request the use of recycled and recyclable handouts or giveaways. ◻ Request that unused items be collected for use at another event. ◻ Encourage participants to recycle materials at the event. ◻ Reward participation by communicating environmental savings achieved. ◻ Other actions: __________________________________________

(Checklist adopted from the US EPA guidance “It’s Easy Being Green! A Guide To Planning And Conducting Environmentally Aware Meetings And Events”, EPA530-K-96-002, September 1996