REPUBLIC OF THE PHILIPPINES

ENVIRONMENT AND SOCIAL SAFEGUARDS FRAMEWORK

(ESSF)

(February 7, 2012)

FOR THE

METRO MANILA WASTEWATER MANAGEMENT PROJECT

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FOREWORD

This Environment and Sodal Safeguards framework (ESSF) has been prepared for the Bank's Metro

Manila Wastewater Management Project. The team that worked on the preparation of the document

comprised of staff from land Bank of the PhiUppinesj Manna Water Company, \nc" and MaynUad Water

Services, Inc. Consultations took place with re.levant authorities from the Philippines for the preparation of the document. An earlier draft version of the document was discussed in a meeting at the premises

of Department of Environment and Natural Resources on October 5, 2010. The earlier version of the

ESSf was also publidy disclosed by lBP, Manila Water, and Maynilad in their web~sitest and also placed

in the Bank's tnfoshop in February 4,2011.

The Borrower of the proposed Bank loan would be l8P which will on-lend the Bank loan proceeds to Manila Water (MWCI) and Maynilad (MWSI). As a Borrower, lBP wi.U ensure that Bank's polides on environmental and safeguards are followed and to this end it would work with the Manila Water and

Maynilad. The Bank's environmental category of financial Intermediary is appHcabte for the project and

the ESSF has been prepared accordingly.

Throughout the document Manna Water and Maynilad have been also referred to Concessionair. QI\"

Sub-Borrowers. Further, lBP has also been referred to as a Borrower in different parts of the document.

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TABLE OF CONTENTS

LIST OFABBREVIATtONS AND ACRONYMS ........,......................................................................................4

I. Background..., .......................... 60 .............................................. 'H.................................................

A. Project Overview .........................................................................................................................6

B. Project Description .." ........... , ............................................. ' ................... "'... , .... , ............................ 7

C. Project Cost and Finandng ....... " ................................................................................................. 9

D. Areas of Jni1uence .......................................................................................................................9

E. Scope and Objectives of the ESSf ......... n ......... " .....................................~.................................. 10

F. Retroactive Financing ..................................."'...... , n .... Of 10........................................................ n

II. Environmental and Social Safeguards Issues..............................................................................11

A. Environment Safeguards Issues .................................".n........................................................... 11

B. Social Safeguards Issues ..........,,,....................u 12................................................................" .......

e. World Bank Safeguards Policies Triggered in the Project ...........................................................12

III. Project Process Guideline................................................... " ..................................................... 14

A. Environmental Safeguards.........................................................................................................16

B. Social Safeguards ......................................................................................................................19

C. Retroactive Fj,nanclng ..................... , ...................................... , ...................... " ..................... , ...... 29

IV. Subproject Monitoring and Audit .............................................................................................3,1

V. Public Consultation. Partidpation and Oisdosure .............................n 33...n ........n ........................

A. Introduction .................... " ............................................................... ' ........ " ............................... 33

B. Public Consultation Requirements for Environmental Safeguards..............................................33

C. Public Consuftation and Participation in Social Safeguards m ..... ................................................33

O. Disclosure ................................................................. ' ................................................................ 34

VI. Institutionai Arrangements ...............................................................................................ro 35

A. Land Bank of the Philippines {LBP)..................... , ............................. " ............ ", .................. " .. " .. 36

B. Manila Water CompanV,lnc. (Mantia Water) .............................................................................38

C. MaynUad Water Services, fnc. (Maynifad) ..................................................................................39

D. Department of Environment and Natura} Resources (DENR) and laguna lake Development

Authority (LLDA) ......................................................................... , ........................ "'., .......................... 39

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E. Local Government Units (LGUs)"........................................................."'" ....................................40

VII. Capacity Building.................................................................................................................... , .. 41

VIII. Grievance Redress Mec:hanis,m.............................."' .................. H .......... " ......... " .......................

Annex 1: Initial Screening Form for Potential Environmentar 8t Social Safeguards Issues .......... .,,, ........ .46

Annex 2: EA Requirements for Sanitation and Sewerage Projects..........................................................48

Annex 3: Sample Terms of Reference (TOR) for an EA for Wastewater Collection, Treatment, Reuse and

Disposal Systems (Construction and RehabiUtation) ...............................................................................50

Annex 4: Template for an Environmental Management Plan.............................. " ................................. S6

Annex 5: Cultural Property and Protection Measures................. " ..............................."." .." ................ 63

Annex 6: Safeguards Procedures for Indusion in the Technical Specifications for Contracts ..................65

Annex 7: Summary of'Public Consultation Meeting Proceedings on the MWMP 'ESSMf ....................... 69

Annex 8: Terms of Reference (TOR) .................... " .................................................................................74

Third Party Environmental Audit for MWMP ......... " ............................................................................... 74

Annex 9: Environmental requirements of Sub~pToje.cts, Supervision and Institutional responsibilities ....78

Annex 10= Resettiement Policy Framework ....................... " ................................................................... 79

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UST OF ABBREVIATIONS AND ACRONYMS

ARAP BP CBOwl CNC DAO DENR OP EA ECC feR EOO EIA EIS EMA EMS EMM EMoP EMP EPMAR EPMO ESSF FI F$

lEE ISO ESSF LBP lGU lLDA MWCI MWSI MWMP MWSS NIMBY NOL

OP peo peR PO PENRO PMD-Il PMO

RAP RCR ROW

Abbreviated Resettlement Action Ptan (World) Bank Procedures Corporate Banking Department I Certrficate of Non-coverage DENR Administrative Order Department of Environment 8. Natural Resources Displaced Person Environmental Assessment Environmental CompUante Certificate Environmental Compliance Report Environmental Due Diligence Environmental Impact Assessment Environmental Impact Statement External Monftoring Agency Environmental Management Bureau Environmental Mitigation Measures Environmental Monitoring Plan Environmenta! Management Plan Environmental Performance Monitoring and Audit Report Erwironmenta\ Program and Management Department

Environment and Sodal Safeguard Framework Financiallntermedrary Feasibility Study Initial Environmental Examination Jnternational Standards Organization Environmental and Social Safeguards Framework Land Bank of the Philippines local Government Unit laguna Lake Development Authority ManHa Water Company, Inc. Maynilad Water Services# Inc. Metro Manila Wastewater Management Project Metropolitan Waterworks and Sewerage System Not In My Back Yard No Objection Letter Operational Pottey Poll ution Control Officer Physical Cultural Resources Presidential Decree Provindaf Environment &Natural Resource Office Programs Management Department H Project: Management Offlce ResettJement Action Plan Resettlement Completion Report Right of Way

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SA Social Assessment SEeR Social & Environmental Compliance Report SMR Self Monitoring Report SSLDIP Support for Strategic Local Development and Investment

Project STP Sewerage Treatment Plant

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r.Sackground

A. Project Overview

1. The Philippines has been maintaining stroog economic growth due to activities in urban

areas, especially around Metro Manila. As the urban areas continue to grow, the challenge of

providing sustainable urban services arises, especially relating to sanitation and water. Stnce

1997, water supply, sewerage, and sanitation services in Metro Manila have been assigned by

the Metropolitan Waterworks and Sewerage System (MWSS) to be managed by the two private Concessionaires: Manila WatE!r Company Inc. (MWCt) for the east zone and Ma.ynilad Water

Services Inc. (MWSt) for the west zone. However, sewerage coverage remains very Jow at 16

percent in the east zone and 8 percent in the west zone.

2. The need to increase the sewerage coverage in Metro Manila is particularly important in

achieving the timeUnes set in the Clean Water Act and the Supreme Court mandamus deCision

to realize an improved water quality in Manila Bay- MWCI p~ans to increase coverage in the east lone to 30 percent in ZOlO and 100 percent by 2037. In the west zone, MWSI also plans to

expand its wastewater collection and treatment services to 14 percent by 2012 and to 100

percent by 2037.

3. In order to meet the objectives of increasing the coverage and effectiveness of

wastewater collection and treatment as welJas septage management in Metro Manila and its'

suburbs, the Government of the Philippines is preparing the Metro Manila Wastewater

Management Project (MWMP) through the Land Sank of the Philippines (lBP)1 which will act as

the Financial Intermediary (FI) and Borrower for the project and through the two

Concessionaires: MWCI and MWSt, which will be the Sub-Borrowers. Specific development objective of the MWMP is to improve wastewater services tn selected sutrcatchments of Metro Mantia and surrounding areas. This will be achieved by supporting Manila Water and MaynUad

to increase their coverage of wastewater coflection and treatment and septage management

which win contribute towards improving the environment in Metro Manila.

4. The overall environment and social benefits to be generated by the project will contribute to an improvement in the general state of the environment in Laguna lake-Pasig River-Manila Bay ~ watershedt leading to better health and wen-being due to improved living

conditions for the people. This promises a better quality of life and economic competitiveness

for Metro Manila and its suburbs. Additional project details are available in the Project

Appraisal Document.

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The Concessionaires wit! pay for any land acquisition and resettlement costs which will not be financed with Bank funds.

7. COmponent 1: Investments In Wostewtlter Services by Nlanikl WGfer ($1.93.4 million} This component supports technical assistance and investments by the Concessionaire in wastewater coUectlon and treatmentl and septage management in the east Concession zone of

Metro Manila. Only one investment has been foreseen for Manila Water which is the North and

South Pastg Sewerage System. It will indude the construction of a wastewater treatment plant

(capacity of 165,000 m 3/day) and associated sewerage tines. The pre~qualiftcation process to select a contractor that wilt construct the treatment plant on a Design Build basis is underway. Separate contracts for instaUation of sewers win also be prepared and for which preparation for designs is underway. Environmental and social safeguard instruments have already been

prepared for the treatment plant. However, the designs and location for the sewer systems

have not yet been completed. Permanent impacts due to sewer network and laying' of wastewater mains are expected to be limited as it is expected that new sewer lines would be laid rn public spaces and mostlv in the mfddle of the existing roads. These works would however,

cause temporary impacts on roadSide commerdalestablishment and residential buildings In terms of temporary restriction of access. Where waste water mains and sewer lines traverse private properties/housing association areast easement rights for laying of such pipelines, and

their periodic repairs/maintenancel would be obtained in consultation with respective owners and associations. Therefore, no land acquisition for such areas would be necessary. However, in case of any need for land acquisition) the provisions of tneESSF will apply.

8. Component 2: Investments in Wastewctter Servk:es by Moynilad {$220.7 million} - This component supports te

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including the sewer lines; and Maynilad/s rehabilitation work in Ayala Alabang 5TP, Talayan STP and Pasay STP. It Is expected that the sewer lines investment would not require land acquisition

as the lines would be laid under existing public roads. The finat designs for the sewer lines win be carried out during project implementation and in case the final designs require land to be

acquired, the procedures outHned in the ES5F would be followed. SimilarlY1- pump stations may

require land acquisition in case they are installed in areas which are not public land. In case land acquisition is neededf the provision of the ESSF would be followed. About 74 percent of the Bank loan will be committed through the Phase I ;nvestments.

Phase 2 investments ate the indicative investments for Maynilad where construction will start after March 31, 2013. These potential investments are for the South Septage Treatment plant, Valenzuela STP, and Muntinlupa STP. Mayniiad is in the process of acquiring land for these sites.

Once the land is acquired, site specific conditions wouJd be known and Maynilad wouJd be abJe

to prepare the. necessary safeguard instruments during project implementation. The project is

classified as an FI loan for environmental purposes and r~lated Bank procedures would be

followed. The safeguard documents would be prepared under phase 2 as per the procedures

outlined in the EnvirOnment and Social safeguard Framework (ESSF). Maynilad will hire consultants to carry out detailed designs for the sewer networks. Thereafter contractors would be hired for the instaflation of the network. Maynilad will also hire a contractor to construct the

STPs and the septage treatment plant through a Design Build contract.

C. Project Cost and Financing

10. The total cost of the proposed project is US$ 414.1 milUon with a Bank finanCing of US$

275 minion and US$ 139.1 million in equity investments provided by the Concessionaires. The

total investment cost may change and it would depend on the actual investments that are

carried out. The Bank toan of US$ 137.5 miHion would be made available to each Concessionaire for the investments and the rest of the investments would have. to be borne by the Concessionaires. The front end fee of US$ 687.5 thousand will be paid by the Concessionaires

outside of the Bank loan and the investment cost includes price and physical contingencies. For Component 11 the investment cost is US$ 193.4 million of which US$ 55.9 m~Uion wUl be financed by ManUa Water and the rest bv the Bank. For COmponent 2, the investment cost is US$ 22.0.7 million of which US$ 83.2 million is expected to be financed bV MaynHad and rest by the Bank.

o. Areas of Influence

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11. In a sub~catchmene where there is Bank financing, all activities - Bank financed or non

Bank financed - necessary to achieve the stated development objective will follow Bank safeguard procedures. for the proposed septage treatment plant by Maynilad.. the Sank's

safeguard policies wiH apply to the construction and operation of the plant, including the associated septage coIIection t treatment and disposal activities. For this project, the

environment and social safeguards policies will be applicable for the construction/ rehabilitation

of the sewage/septage treatment faCilities, main sewer trunk lines} pumping stations, sewer

manholes, interceptor canals and sludge management

E. Scope and Obiectives of the ESSf

12. Preliminary investigations carried out by the Concessionaires suggest that environment

and SOcial impacts will occur both dUring construction and operational phases of the project,

The scope of the impacts will vary from sub-project to sub-project. This Environment and Social Safeguards Framework (ESSf) w;U guide the project to adequately address and mitigate adverse

environmental and sodal impacts that will be potentiaUy generated bV the project.

13. The ESSF establishes the objectiveSI procedures, institutional framework, and

implementation arrangements for identifying.. managing and monitoring potential

environm~mta' and social impacts of the project activities. The ESSf wm address mechanisms for public consultation and disclosure of project documents as well as redress of possible

grievances. The scope and key objectives of the ESSF incfude:

To establish dear procedures and methodologie.s for the environmental and social

screening} review; approval and implementation of sub-projects to be financed under

the Project; and

To specify appropriate roles and responsibilities, and outline the necessary reporting

procedures, for managing and monitoring environmental and social concerns related to suO-projects.

f. Retroactive Financing

14. Retroactive financing, as defined in the loan Agreement between the Sank and LBP is possible under the project. For a project to be considered for retroactive financing, the sub

project financing criteria.. induding those related to environment and sodal safeguards have to be met. The procedures laid out in this ESSF will apply for sub-projects to be conSidered for retroactive financing as described in Section lIIe Retroactive Financing,

2 Under this project, a sutJ..catchment comprises of a wastewater treatment plant. sewerage hnes to convey WflStewater and pipelines for conveying and d~ng treated wastewater. and systems for sludge management and transportation.

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JI. Environmental and Sodal Safeguards Issues

15. The ESSF is responsive to the relevant national and local Jaws and regulations and the

World Bank Safeguards Policies. The safeguards requirements for the project wilt build upon national guidelines and requirements in order to streamline the documents required for each sub-project without compromising in any manner the safeguard requirements of either the

government or the World Bank.

A. Environment Safeguards Issues

16, This project \s the fourth of a series of i~vestment pro}ects assisted by the we to expand the effective de(fvery of services for sanitation and sewerage sector in Metro Manila. The WB

has assisted the financing of eight sewage treatment plants, two septage treatment plants and

seven communal septiC tanks that are operating in Metro Manila. These plants are operating

satisfactorily and the lessons learned have been incorporated in the project design. Key lessons learned are applying open market purchase for land acqutsiti

treatment facility. These issues have to be addressed. Based on experienceJ It is best practice

to iniUate an early engagement with the stakeholders and a public disdosure of project

documents to end usersl iocal communitfes1 government regulators, Local Government Units,

service providers in planning and designing sanitation and sewerage projects to ensure project

sLJstainabifity and soda' acceptability.

B. Sodaf Safeguards Issues

20. Land will be required for the physicaJ components of the project (Sewerage Treatment

Plant, wastewater treatment plants, interceptor boxes} pump stations., etc.}. For STPs,

depending upon the capacity, the fand requirement may vary (expected to be between 1~3

hectares). For pump stations and interceptor boxes, the land requirement will be much smaller. During identification of potentiat sites} both the Concessionaires will as much as possible avoid

'and parcels with multip~e owners and encumbrances. Permanent impacts due to sewer

network and laying of wastewater mains are expected to be limited as it is expected that new sewer lines would be laid within public roads. These works would however, cause temporary impacts on roadside commercial establishment and residential buildings in terms of restriction

of access. Where wastewater mains and sewer lines traverse private properties/housing

association areas, easement rights for laying of such Pipelines, and their periodic

repairs/maintenance, would be obtained jn consultation with respective owners and

associations. Therefore. no land acquisition for such areas would be necessary.

C. World Bank Safeguards Policies Triggered in the Project

21. Following Bank safeguard procedures will be triggered~

OP/BP 4.01 EA: Environmental category of Financial Intermediary (FI} will apply. Individual sub-projects wiU be screened and aSSigned the appropriate environmental categorization and environmental due diligence (EOD) will be conducted in accordance

with OP 4.01.

OP/B., 4.04 Natural Habitat$: The policy is triggered in case a subllfoject affects natural

habitats. This wiH be determined during the preparation of the environmental instruments. However, It should be also noted that site vtsits for the known sttes in

Phase 1 have indicated that the project is not expected to cause significant conversion

or degradation of natural habitats. All sub-project proposals will be screened for potential adverse impacts on criti cal and non-critical natural habitats and neatssary mitigation measures will be prepared as part of the sub-project speCific EA and EMf>.

OP/BP 4.12 Involuntary Resettlement: land acquisition and involuntary resettlement

are anticipated under the project, particulariy for sub~Pfojects involving service

expansion or reconstruction at new sites. Sub-projects will be scteened for land~related

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impacts, and appropriate resettlement instruments. if needed will be developed and implemented.

22. Provisions for chance finds will be included In the project: AU construction activities will

I include mechanisms to address chance finds to avoid or mitigate adverse impacts on Physical :.:J2.:y;..

Cultural Resources (PCR) in ManHa. Further" the environmental assessments to be carried out

will confirm whether peR are affected. In case the environmental assessment identifies that

peR will be affectedl the Bank's policy on Physical Cultural Resources (OP 4.11) wHi be triggered and appropriate measures will be taken as per the policy. Ways to address chance finds are elaborated more in the ESSF (Annex 51 Cultural Property and Protection Measures}.

I 23. Indigenous Peoples policy (01' 4.10) is not triggered. No indigenous people that

correspond to the Bankls definition of Indigenous Peoples are residing within project influence area. There are no ancestral domains ;n Metro ManHa and indigenous peoples found there are

dispersed and do not form distinct cultural communities. Many are temporary visitors seeking

seasonal economic opportunities. Further, no forced severance from ancestral territories has

occurred. This has been confirmed in a discussion held with National Commission on Indigenous People (NC1P) in August 2010 as well as a review of the database in the NCIP website

http:U202S7.46.78/adis/Public/defaufta$Q.~.

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http:U202S7.46.78/adis/Public/defaufta$Q

Ill. Project Process Guideline

24. As sl)b-projects win be prepared for financing in a continuous manner during the proj~ct

implementation period, screening for potential environmental and social impacts wiU be conducted and mitigation and managemen~ measures will be developed in line with the agreed ESSF. Environmental and social impact screening, mitigation and management measures development and implementation will foJlow these steps. The two Sub-Borrowers will carry out the work related to the steps mentioned below. LBP will review the process and the documents

prepared to ensure that Bank procedures were followed, prior to requesting financing from the Bank for the sub-projects. The Bank will also review prior to providing financing to ensure that the process has been adequately followed.

Step l .. ldentification of Subwptojects According to Selection Criteria.

The selection criteria are known to the Sub Borrowers who will identify the subprojects, including the possible land where the investments are expected to be carried out. MWCI plans to acquire the land through a willing-buyer-wilting seifer method and

the tocation of site would be known once the contract to sen (s\gned between MWCI and the Jand owner) is signed.

Step 2 Screening

Screening for potential environmental and sodat safeguard impacts and determination of safeguards documents required according to national regulations and World Bank policies. Screening will determine 0) whether the project Is environmental category A, B or C (H) the national applicable requirements and Bank poliCies to be triggered and (iii)

the choice of safeguard instruments. The social screening will include in particular determination on whether the Bank's policy on Involuntary Resettlement wiff apply and in case where the land is acquired through open market purchase on a Willing BuverWilling SeHer baSis, the process and procedures to do so.

The Sub..Borrowers will ensure that the sub-projects are aligned with the screening process outlined in the eSSF.8ecause the evaluation of the expected environmental and sodal impacts requires speciatiled technical skins} the Sub-Borrower may employ qualified environmental and social speciafists as well as consultants to assist them in this

task. The Sub-Borrower will submit the results of the screening to lBP.

Step 3 ~ Project Preparation and Documentation

Once the screening and dOQ.lmentat;on f~qU\rements are acceptable to LSI' ~ it win

submit the results of the screening to the Bank. After the Bank provides its comments,

the Sub Borrower will provide TORs that determine the scope of the environment

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I lnstruments to be prepared. In particular for Category A projects, the Bank will review

the TORs. Then the Sub-Borrowers will develop detailed safeguard documents and

impact mitigation measures

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AU corresponding safeguards instruments shaU be prepared by the Sub-Borrower.

Likewise, It 'is the responsibility of the Sub-Borrowers to carry out the necessary permit applications as required by the ESSF, and to obtain the necessary clearances for each

sub~project before starting the construction. Sound safeguards practices have to be

incorporated into the sub-project design and implementatiQn~ and potential negative

impacts will have to be mitigated to acceptable levels / stanth.;rds. The Sub,Borrowers

are responsible for the quality and accuraCy of the information in the safeguards

document, as weU as the transmission of these documents to Department of Naturat Resources {DENR} or other government agency.

Safeguard documents will be subject to consultation and disclosure in an accessible

placel in a timely manner, in a form and language understandable to key stakeholders,

prior to the finalization of the documents. Particular attentioo will be given to ensure

project-affected persons have adequate time and ready access to draft documents

before consultation takes place.

Step 4 .. Review and clearance of environmental safeguards documents

The environmental and social safeguards documents prepared by each of the

Concessionaries wm be reviewed by LBP which may consult other related agencies, After the documents are satisfactory to lBP. it win submit the documents to the Bank for review and approval with its assessment on how the ESSf conditions hav~ been met,

The safeguard documents for all sub-projects are subject to Bank's review.

Step 5 -Implementation .. SUpervision, Monitoring and Evaluation

Implementation of the safeguards measures during sub~project implementation is the

responsibility of the Sub-Borrowers. Any costs associated with the government process

and cost of monitoring shaH be shouldered by the Sub-Borrower. The primary purpose of complian~ monitoring is to ensure the jmplementatlon of sound and standard environmental procedures as defined during the project preparation. Specifically, it aims

to: (i) monitor project compliance with the conditions set in the safeguards instruments

and appticable laws1 rules and regulations; and (ii) provJde a basis for timely dedsion

rnaJdog and effective planning and management of the mitigating measures through the

monitoring of actual project impacts vis~a~vis the predicted project impacts.

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A. EnvironmentaJ Safeguards

Applicable Policies

25. As per Bank's dasstficatior"l, this project has been (;ategorized as a financial Intermediary (FI) and LBP as a Borrower will ensure that the Bank's policies and national regulations on the environment are followed, and appropriate instruments prepared. Under the FI category, it is

possible to have subprojects belonging to environmental categories AI B~ and C as per Bank's

classification. The procedures outlined for each of these types of environmental categories wiU be followed by the Concessionaires and lBP.

26, The following national laws and regulations relevant to the environmental safeguards

and the protection of water bodies from pollution provide the basis for the overall framework of

the ESSF:

Presidential Oecree (PD) No. 1586, 1978 on the EfS System;

Republic Act No. 9275, 2004 on the Philippine ctean Water Act;

Presidential Proclamation No. 2146, 1981 on EnvironmentaJly Critical Projects I Areas; Administrative Order No. 42 by the Office of the President 2002, describing categories

of projects and areas subject to the EIS System;

DENR Administrative Order No. 2003-30; the Implementing RuJes and R~ulations (lRR)

for the Philippines EtS System (2003), and its Revised Procedural Manual issued August

2007;

Memorandum Oreular No.: 2010-14 Standardization of Requirements ~nd Enhancement

of Public Participation in the Streamlined Implementation of the Philippine ElS System;

and

Republic Act 9003,2000, Ecological Solid Wastes Management Act.

KeySttps

{IJ Identification of Subw-projects According to Selection Criteria

27. In identifying the sub~PfOjectSf including the iO(atlon of the site, the Concessionaires will take into account relevant environmental and social considerations. This will indude assessment of the various sewage treatment options, locations to minimize potential environmental risks (noise, odor, pomping, discharge ftom STP, e-tc), avaHability of land, as we" as suitability of the

project in a given neighborhood that lead to the selection of these investments.

(m Environmental Screening 28. The environmental screening that would be carried out would identify key potential

environmental issues that coufd arise from the proposed project. The screening process wilt

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arso be used to determine the environmental category of the project (AI BJ C) as per BankJ s requirements. The success of an environmental screening is dependent on adequate baseline

environmental data, technkal expertisel good planning, management support, and coordination

with key players and decision makers.

29. With respect to environmentaJ screentng of sub-projects, the national regulations and

World Bank policies are considered together since both are impact..t>ased and wifr require the Sub~Borrower to identify and assess potential impacts to enVifOnm@4lta\ components such as

water, air, land and natural habitats and biodiversity. The screening results wnt be cross~ checked with national regulations, in order to dete.Nnine the applicable fA documentation

requirements. Three safeguards instruments are spedfied in the regulations: (al EIA report; (b) Initial Environmental Examination (tEE); and (c) Project description.

30. Annex 1 provides an Initial Screening Form for potential environmental and social

safeguards issues. This form facilitates the determination of applicable World Sank safeguards

policies as well C:lS those relevant to national legislations. It provides the checkHst for screeningl classifies environmental category and identifies the safeguards instruments required.

(iii) Project Preparation and Documentation

31. The environmental safeguards instruments for each sub-project will be determined based on the screening procedure$, as follows. All documents win be prepared by the Sub

Borrowers and submitted to lBP for review. After the documents are acceptab~e to lBPI it will send the documents to the Bank for review and dearance for the Bank to conform financing of

the sub-project. AU safeguard documents will be subject to prior review by the Bank:

Category A: Subprojects will require an EtA that indudes an Environmental Contingency Plan and an EMP prepared in accordance with Sank requirementsl the terms of

reference for which can be found in Annex A of the Ban.k Policy OP/BP 4 ..01. Moreover,

aU bidding documents wiU lndude a standard contract dause for implementing and

reporting compliance to the EM?, occupational health and safety protection measures and chance finds of physical cultural resources~ The Sub~80rrower will consult with the

Borrower during preparation of aU safeguards documents for Category A projects. The Sub-Borrower win set up an Environmental G\larantee Fund {EGf) in agreement with

DENR for this project. The EGF is money reserved by the Sub..Bofrowers in an escrow

bank account that will be used to rehabilitate Or restore destroyed habitats or degraded

ecosystems or compensate any project affected individual caused by any environmental negligence of the project. An EGF committee shall be formed to manage the Fund and

shall be composed of representathres of DENR, affected communities} concerned lGUs

and relevant government agencies identified by DENR.

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Category B: Sub-projects will require an EtA or simplified EIA (i.e., IEEt as required under the national laws and regulations) and an EMP (as per the Bank policy). The sub-project specific EMP and standard environmental codes of practices, indudin8 coverage of how to handle chance-finds of physical cultural resources, will be included in all construction contracts/bidding documents.

Category C: Sub-projects that are rated Category C require a Project description and an EMP depending on the size and nature of their activities and wilt need to comply with the regulatory requtrement for reg;slration. Investments that wUl have minimal impact

on the environment will be classified under Category C.

(tv) Review and dearance of environmental safeguards documents

32. Approved Environmental Compliance Certificate (ECC) and other relevant government permits and clearances will be transmitted by the Sub-Borrower to the Borrower. The Borrower will exercise environmental due diligence (EDD) by keeping records of sub-project EA reports, feedback I technical informationl and fces I Cert,ncates of Non-Coverage (CNCs).

33. The requirements for review and clearance of the environmental documents bV the WB are as follows:

Category A: The EtAjEM9 and other relevant documents for aU Category A sub-projects will be subject to we standard prior review and dearance procedures prior to approval of the sub-prOject.

Category B~ The Simplified EIA (or lEE) and EMP for Category 8 sub-projects 'NUl be

subject to W6 prior review and dearance before approval of the sub-project.

Category C: If an EMf' is necessaryt the we wilt conduct a review of the document prior to confirming financing for the sub-project.

34. Safeguard documents wift b~ subject to consultation and disctosure in an accessible place, in a timely manner, in a form and language understandable to key stakeholders, prior to the f\naHzation of the documents. Particular attent,on will be given to ensure project-affected

persons have adequate time and ready access to draft documents before consultation takes place.

(v) Implementation - Supervisionj Monitoring and EvaluatIon

Supervision

35. The SubSorrowers will be responsible for the implementation of the EMP. Annex 6

contains Safeguards Procedures for tnelusion in the Technical Specifications of Contracts for the Sub-Borrowers' Contractors. The Borrower wiH visit the sub-project areas as needed throughout

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project implementation in order to supervise the implementation of the safeguards instruments

to ensure they are implemented in compliance with the Bank policy requirerMnts. Roles and

responsibilities of each institution involved are described jn detail in Section Vi Institutional

Arrangements.

Monitoring and Evaluation

36. The primary purpose of compliance monitoring is to ensure the implementation of

sound and standard env1fonmentaf procedures as defined during the project preparation,

Specifically, it aims to:

monitor project compliance with the conditions set in the ECC;

monitor compliance with the EMP andappficable laws, rules and regulations;

provide a basis for timely decision-making and effective planning and management of

environmental measures through the monitorfng of actual project impacts vis~avis the

predicted impacts in the EA tEMP as well as corrective measures to be taken tn cases of non-compliance to the EMP.

DENR Procedures

37. In addition to the monitoring and evaluation conducted by the Sub-Borrower and r~v\ewed by the: Borrower and the Bank, an projects covered by the PhlHppine El~ System which have been issued an Environment CompJiance Certificate shall be. subject.ed to periodiC monitoring by the DENR (i.e., compliance and impact monitoring in accordance with estabHshed

procedures and protocols). Within the framework of the Philippine EIS System1 the

responsibilities of monitoring projects are lodged with the EMS regional offices and the Laguna lake Development Authority(llDA}~ As a minimum requirement in compliance monitoring,

DENR-EMB and lLDA shall focus on the foUowing:

status of Sub~Borrower's delivery of commitment made in its EMP (0(1 in the case of lEE

Report, the Summary Matrix of Impacts); effectiveness of the comm;tted MP;n mitigating PfO}ect'S environmental impacts; and

meeting the terms and conditions of the ECC.

B. Social Safeguards

Applicable PoJidss

38. In terms of national legislations in the PhUippinesl the key legal and administrative

policies relevant to involuntary resettlement are:

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The Bilfs of Rights of the Constitution of the R.epublic of the Phmppjnes states: In Artide

ut, Section 1, "No person shall be deprived of Hfe, Uberty, or property without due process of law, nor shaH any person be denied the equal protection of the laws." In

Article til, Section 9, I1Private property shan not be taken for public use without just

compensation.H

Executive Order 1035 (1985) requires conducting of Feasibility Studies, Public

Information campaign, ParceUary survey and assets inventory. It also provides for compensation for acquiredfand at fair market value based on negotiations between owner and appraiser; relocation assistance to tenants# farmers and other occupants;

financial assistance to farmers and agricultural tenants equiva'~nt to the average

harvest for the last three years but not less than P lS/000/ha; Disturbance

compensation to agricultural lessees equivalent to 5 times the average gross harvest during the last 5 years; and compensation f.or improvement on land acquired under

Commonwealth Act (CA) 141.

CA 141, Public Land Act (1936) institutes dassificatlon and means of administration,

expropriation and disposition of alienable lands of the public domain.

Supreme Court Ruling (1987) defines just compensation as fair and full eq.olvalent to the

toss sustained to enable affected household to replace affected assets at current market prices.

Republic Act 6389 provides for dlsturbance compensation to agricultural leases

equivalent to 4 times the average gross harvest in the last 5 years.

Republic Act 8974 (2000) which facilitates the a1:quis;t\on of ROW, site or location for

National Government Jnfrastrutture Projects arid for other Purposes. Implementing

Rules and Regulations of RA 8974 was also issued. This mandates the use of replacement value of land and structures (without depredation).

RepubHc Act 7279 (1992) "Urban Devetopment and Housing Act" mandates the provision of a resettlement 5;te~ basic services and safeguards far the homeless and

underprivileged citizens.

Republic Act 7160 (1991) "local Government Code" which allows the lGUs to exercise

the power of eminent domain for public use.

39. in addition to the prior national requirements" World Bank's Policy on tnvofuntary Resettlement (OP 4.12) is applicable. The objectives and main prindples of the Policy can be summarized as follows:

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Involuntary resettlement should be avoided where feasible, or minimized, exploring all

viable alternative project designs.

Where it is not feasible to avoid resettlement, 'resettlement activities should be conceived and e)(.ecuted as sustainable development programs/ , providing sufficient

investment resources to ~nabJe the persons displaced by the project to share in project

benefits.

Displaced Persons should be meaningfully consulted and should have opportunities to

participate in planning and implementJng resettJement programs.

Displaced Persons should be assisted in their efforts to improve their livelihoods and standards of living or at least to restore them, tn real terms, to pr~isptacement levels

or to levels prevailing prior to the beginning of project implementation, whichever \s

higher.

40. The key gaps between the local lawS' and regulations and provisions of the World Bank's

Policy on Involuntary Resettlement (OP 4.12) inchide:

Philippine Constitution t Article XJlI, section 10: Urban or run~f poor dweUers shall not be evicted nor their dwellings demolished, except in accordance with the law and in a just

humane manner. Focus is Biven on urban poor as per UDHA. limited assistance or

protection is given to the rural poor unless they are tenured agricultural tenant~

R.A. No. 8974, Sections 8, 91 10 and 13 provides compensation of affected properties

based on fair market value. However! 1and donation is the first approach to the acquisition of private rand.

Notwithstanding the ruling by the Supreme CotJrt, nanff of the laws and regulations dearly provide for com pensation at replacement cost

Income restorationl rehabilitation assistance is avarlabte only for resettled beneficiarie.s

of the government's socialized housing.

There is no policy for displaced vendors and employees of micro/small enterprises that have to shut down their business / to be relocated.

41. The Resettlement Policy Framework {RPF} for the project has been prepared to address any involuntary land acquisition or resettiement. The RPfl provided in Annex 10, includes

spedfic provisions to ensure that compensation for affea.ed lands and other assets \s provided

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at replacement value to aU the Displaced Persons (OPS) induding those who may lose access to

livelihood due to the project. The RPF is consistent with the provisions of the World Bank's OP 4,12 and national laws and regulations;n the Philippines." addresses namely gaps between the

provisions of the World Bank's Policy on rnvoluntary Resettlement (OP 4.12) and focal laws and regulations.

42. Entitlements and compensation for the types of losses and DP categories shall be guided

by the Resettlement Entitlement Matrix shown in the RPF in Annex 10.

43. In general, the provisions of the ESSF, and RPF, would be applicable in all the sub

projects that result in adverse sodal impactsl permanent and temporary, due to the acquisition of land and oth@r assets or causing toss of incomes and livelihood. However, the requirements

for surveys and documentation would vary depending upon the mode of acquisl.tion of land by the Concessionaires. Where the land is obtained through direct negotiations between the

ConceSSionaires and the land owners and the responsibility to relocate any occupants on the land rests with the land owners, the Concessionaires should ensure that the compensation and other assistance provided to affected households is adequate to enable affected households to

restore their livelihoOd and income levels to prEHiisplacement lev~ts. tn this respect, Concessionaires should provide a RCR to lBP to demonstrate that the procedures carried out fOl' the land acquisition and the compensation provided are in line with the ESSF and that the

process to acquire land through open market purchase is in accordance with the proposed protocol specified in the ESSF.

KeySteQi

44. The Sub-Borrowers win be responsible for providing resources for aU activities related to the resettlement planning and implementation. Where In a subproject OP 4.12 is triggered, the

Concessionafres wilt carry out necessary studies {census" inventory of assets, etc.} and pr&pare

necessary documents (ResettJement Action Plan (RAP) or an Abbreviated Resettlement Action

Plans {ARAP}. The scope and contents of the RAP or an ARAP will follow the provisions of the World Bank/s OP 4.12 Annex A. Each RAP, AMP and RCR wilt include detailed cost estimates for compensation and relocation of OPs dJ5aggregated by category of DPs and types of impacts and assets lost. Cost estimates wiH make adequate provisions for contingencies. In case of any cost

over-runs, concerned Concessi.onaire wilt provide additional funds In a timely manner to ensure that the implementation of involuntary resettlement activities is completed according to the schedule. All costs in regards to the acquisition of land and other assets, compensation and financial assistance to affected households would be included towards cost of the sub-projects. The procedures that would be followed to meet the safeguard requirements are outlined bElow.

ti) Identification of subi'lrojeCts actOrdinJ to selection criteria

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45. Potential sub-projects are identified by the respective Concessionaires based on the

overall project objectives and needs assessment. First step in this respect would be on selection

of sites and getting generaf agreement from the communities in the adjoining areas before the site is considered as final. In the past~ many neighborhoods resisted construction of STPs in their

immediate vidnjty. Together with the Not in My Backyard (NIMBY) syndrome, many have expressed concerns on possible foul odor and noise. To mitigate these fears, the subproject

proponents have incorporated community tours to operating STPs as part of the community awareness programs. One of the sub proponents has also incorporated community facilities in

their design. In consideration of safety and health, basketball courtsl playgrounds and similar

structures have been made for receiving community acceptance of the project. At this stage, the Concessionaires are aiso required to identify the typeSI degree and scale of potential social

impacts of the sub'project. To correctly identify the relevant social issues and to assess the type and te.vel of information required during subsequ~nt fie\d \ovestigations, partkuhu attention win be paid to adverse Impacts to the affected community~ such as toss of land and other fixed assets and the number of persons marginally or severely affected and the types of vulnerable groups affected. Preliminary social and land acquisition assessment wUl also help in identification of risks and in deciding whether or not to proceed with th~ project or to consider alternatives to ensure that the adverSf! impacts are avoided, or minimized \f cannot be avoided.

During this stage, the sub-project proponent should identify key stakeholders, locaf NGOs and

OPs. They should then undertake public consultation to: (a) provide information on the project,

its benefits and impacts; (oJ obtain feedback from the public; and (c) discuss the pJan for theparticipation process and the rofes of the community, NGOs and other key stakeholders.

(li) Social Safeguards Screening

46. The Concessionaires are required to carry out screening of the project to determine

scale of impacts: marginal or severe and the consequent need for further field investigations,

surveys and documentation necessary in order to meet the requirements specified in the ESSF.

'n cases where SQcia\ screening results to significant socia' impact, a socia' assessment win ~

undertaken as part of the Environment Assessment (EA)f as specified in para 3 of OP 4.01, by the

Sub"Borrower irrespective of whether there is land acquisition or involuntary settlement.

AdditionaUy, the Concessionaires wilt also screen the sub-projects for national/provindal laws and regulations regarding land acquisition and involuntary resettiement.

(no Project Preparation and Documentation

Procedures for land Acquisition

47. land acquiSltion for subprojects will be carried out mainly through two modes depending upon the ownership of potential sites for sub"projects.

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o tnvoluntary Resettlement (l.and ACQuisition invoking OP 4.12)

48. Following modes of land acquisition will trigger weJs OP 4.12 and the Concessionaires would be required to conduct necessary field investigations/surveys in accordance with the provisions of the RPF for resettlement plan preparation and implementation:

Grant of Right-of-Way (ROW): Where sewer/wastewater mains/distributary lines pass through any private properties, the sub~project proponent may seek the Imposition of an Easement of Right-of-Way (ROW) provided for under the Philippine Civil Code. In such cases, a ROW easement agreement witt be executed by the property owner and the sub-project proponent, whereby the former wilt grant the latter the right to use the

affected portion of the loti as ROW1 but the owner retains ownership of the said portion of the lot. tn these cases and depending upon the agreement between the sub-project proponent and the owner/s of the property, either the easement rights are given free of any charges or on some payment by the sub-project proponent to the owner. The payment can be based on the value of the affected portion of the lot determined by an independent appraiser according to internationaHy accepted norms. In addition, the

sub-prOject proponent is required to compensate the owner for any improvements

and/or structures on the land affected by the ROW at replacement cost. The sub~project

proponent will enter the easement area after the provision of the run payment for the easement to the property owner. The ROW easement agreement win be immediately registered with the Registry of Deeds.

usufruct: The Sub-project Proponent may also acquire a property through usufruct. The

property owner retains the ownership of the landl while the sub-project proponent

enjoys the benefit of the use of land. The sub-project proponent and the property

owner will execute a usufruct agreement. The agreement wiU cover the rights and

responsibilities of the two parties, including the duration of the usufruct which should

not be lower than the project fife.

Lease Agreement: The sub~project proponent may also acquire lands through lease

agreements with the rightful property owner. The sub-project proponent and the

property owner will execute a Lease Contract. The contract win cover the rights and responstbiHties of the two parties} incfudins the duration of the lease which should not

be lower than the project Ufe. Under this agreement, the land owners continue retain legal ownership of the land parcel. AU fand transaction should be registered with the

Registry of Deeds fOf annotation in the title of subject property_

o Expropriation. Although both the MWCl and MWSl are private corporationsl they are Concessionaires under the MWSS, which is a public enterprise. Both

the Concessionaires have the option to acquire private properties for their sub

projects. USing the legal process, eminent domain through MWSS, However I

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none of the Concessionaires have ever used eminent domain to acquire p(ivate

properties,

o Open Market Purchase - OP 4.12 is not triggered in this case.

49. Open Market Purcbase. Under the ongoing Manila Third Sewerage Project (MTSP) the

project proponent# ManUa Water was completety dependent on the respective locaJ

Government Units (LGUs) to acquire and make the required land avai.lab'e for the project. Howeverl the LGUs failed to acquire land for the project causing severe delays in project

implementation. Similar experience in other projects caused severe delay.s and even cancellation of SUb~PfOjects. Learning from the past experiences and to avoid recurrence of similar problems for this project, the two Concessionaires have decided to acquire the landI

I themselves. Current procedures consisting of 'open market purchasel from the land owners,

either through the brokers or in direct negotiations based on open market purchase basis t are borne out of experiences from previous projects. However, where open market purchase fail,

other forms of land acquisition will be considered. The processes and procedures to be followed for voluntary or involuntary land acquiSltion are presented here in this same Section (Ill B Social Safeguards).

50. Therefore, negotiated purchase of private assets is the most preferred mode of land

acquisition by both the Concessionaires. Once a potentiaf land parcel is identifiedi both the Concessionaires contract professionaJ appraisers to obtain information on the legal and tenure

status of the land in question, its market value and other issues that may be of relevance. Based

00 the findings of the appraisal reports1 the Concessionaires enter into negotiations with the land owner, Since both the Concessionaires are private corporations, they enter into

n~otiations with the land'owners either indirectly through a reat estate agent (as in the case of

Manila Water) or directly (as in the case of MaynUad through their ROW unitt, Once the

agreement is reachedJ the property owner issues a written permit to the sub-project proponent

to enter the property and a contract of sale is su~uently executed between the property

owner and the sub-project proponent. Since the Concessionaires plan to follow the open

market purchase Using direct negotiations with land owners for aU future land requirements, a protocol is proposed with the key objectives as below:

to ensure a transparent and consultative process;

) en Ma~'1lilad's case. ~ process is fdlowed through tMse steps: 1) IMg list ofsites identified based 00 Optioos Anaiysii):, 2) (Tioritization of candidate sites l'msed oncost, land availability. and e.'\1ent orresettlement tequired~ 3) initiaf community consultations to detenuine the NIMBY syndrome;, 4) o\\ner's offer to sell wtlinmg the {riooand other conditions; 5) buyer's decision to proceed with contract to sdl; 6) ~tion ofthe safeguards ~1ltner}ts; 7) O\\1lef'S actions prior to sa1e; 8) deed ofabsolute sale~ 9) land at:quired (title tIaruifer) ~ and 10) constroction ofSlP tQ start (after Design Build Contractor is sdected),.

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to ensure that compensation paid is at or above prevalent market prices to enable all

affected land owners to replace their affected assets;

to ensure that aU the affected land owners are better-off due to the project; and

to document public consultation and negotiation proceedings.

51. The protocol, presented below, will be foUowed by both the Concessionaires for the Bank funded projects.

Key provisions of the Protocol include:

Inventories of affected land and other fixed assets would be prepared,n consultation with affected land owners and submit the same to the Borrower and the Bank;

All land would be free from any disputes on ownership and encumbrances;

Concessionaires to ensure that the subprojects will in no way cause adverse impacts on

sources of incomes and liveUhood of adjoining communities;

Negotiations: for direct purchase would be carri~d out in a transparent manner;

All negotiation proceedings wilt be documented and the final agreement would be signed by the negotiating parties;

The negotiat.ed amount will be fully paid after the submission of the required documents; and

Concessionaires will submit completed documents tnduding maps together with the

subproject proposals to lBP and the World Sank to show the process used for obtaining

the required land.

52. The types of surveys and field investigations required and social safeguards documents that would need to be prepared for a sub-project will depend upon the degree and scale of the

impacts and the method adopted for acquisition of private assets for the sub~proJect.

Depending upon the degree and scale of impacts and based on the data coUected through the field investigations, a full RAP or ARAP will be prepared. The scope and contents of the RAP or an ARAP wifl be conSistent with the provisions of the World Bank's OP 4.121 Annex A. In cases where the sub~project affects and/or displaces more than 200 persons a time-bound RAP wUl be prepared in accordance with the prOVisions of the RPf (Annex 10). In cases where the jmpacts of

the sub-project are marginal such that less than 200 persons are affected and/or displaced, or where the impacts are minor,an ARAP should be prepared. In cases where land has already been acquired, or is to be acquired voluntarilYJ a due diUgence report or its equivalent will be

prepared.

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53. Where the land is to be acquired using the power of eminent domainJlnvoluntary land acquisition), the Sub-Borrower is required to conduct surveys to coUect information on census of affected households, inventory Qf Josses andsodo-economic characteristics as spe.cified during the screening. Prior to undertaking the survey the project proponent should implement a public

information campaign to describe the project components" types of impacts, content and schedule for the census and inventory or other background surveys.

54. Where in a subproject required fand is obtained under open market purchase through

direct negotiations with the fand owner) as is the current practice by the MWCI and MWSIJ the SubBorrower wHI hire a professional appraiser to conduct appraisal, induding valuation, of the

potential site before any decisjon is taken to proceed with the negotiations with the land

owner/s, The Sub-Borrower is also required to conduct detailed survey of the occupants and improvements on the land parcel to record aU types of potential losses, if any~ due to the

acquisition of the land. As per the agreement between the SutrBorrower and the land owner, if the occupants on the land and their affected assets are to be re~ocated, the Sub-Borrower should ensure that the affected households are provided sufficient support and financial assistance to enable them to improve, Of' at least restore their IIveHhood to pre-displacement

level.

55. When negotiations for acquisition of private assets are carried out 00 a Open market purchase basis, cases wilt be carefully documented so as to ensure they meet the policy requirements to be conSidered, such as land free of encumbrances, no coercion, and ability of

the land owner to say no to any sales without the threat of eminent domain land acquisition. ESSF provides a protocol to define objectives, and procedures para 49-51 in this section on

Open Market Purchase).

56. In cases where the sub-project proponent has already acquired the land needed for the

project and that the occupants of the land acquired have been relocated as an agreement

between the landowner and the reaJ estate agent of the Sub-project Proponent, as in the case of The North and South Pasig Sewerage System STP of Manila Water, a RCR will be prepared.

The content of the Completion Report are: project descriptionl description/census of the

occupants/project-affected-persons and inventory of thek affected assets and properties

including crops and trees (if any), compensatlon and other assistance provided to them, possible

location where the occupants/DPs will be relocated and a detailed description of how the ~and

was acquired. Documents required are Minutes of the consultation meetings with the

occupants, Property (tand) Appraisal Report Based on the RCR. the Borrower wilt conduct Due Diligence (Resettlement Audit) which will be reviewed by the Bank to check whether the

acquisition of land and other assets is consistent with the requirements of the ESSF, and will

develop a plan to fill any gaps.

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Method of Valuation of Affected Assets

57. The ESSF {and the RPf) provides for compensation for tand and other affected assets at

replacement cost. To meet the above objectives, the Concessionaires wilt fOllow the valuation procedures for different types of affected assets as below:

Land: The Concessionaires will contract professional appraisers for valuation of affected land to determine preva.lent market prices. tn case of topen market purchase' of land for subprojects, the negotiations for the .Iand would be based on the market prices

d~termined by the appraisers. Where land is acquired under eminent domain, the final prices of affected land wUl be at least equal to or higher than the prevalent market prices to ensure that the DPs are able to replace affected land at current market prices.

Structures. The Concessionaires wilt ensure that the compensation for affected structures is paid at replacement cost based on current market prices for material and labor. The compensation for affected structures win be paid without any depreciation and deductions for salvaged material by the DPs. For the purpose, the Concessionaires will contract professional appraisers to conduct market surveys to determine prevalent market prices for material and labor to arrive at rates for different types of structures.

Trees and craps. Compensation rates for affected trees provided by OENR and for affected crops by Department of Agriculture.

Review and dearance of sodal safeguards documents

58. The sub-project proponent wilt submit aU social safeguards documents (AMP and/or RAPt RCR) to the Borrower, who will review these documents for compliance with the Social Safeguards Framework. The Borrower wm approve, refuseapprovat or request revisions/reformulation of these documents after review and dearance by the Bank. The

Borrower will submit to the World Bank aU RAPs, ARAPs and RCRs after it has ens.ured that the

documents meet the requirements of the ESSF before the subproject is approved for implementation.

tmpJementation - Supervision, Monitoring and Evaluation 59. The Sub-project proponents wHi supervise and monitor the implementation of the sodal safeguards in each sub-project to ensure that they are implemented in accordance with the approved documents and are in compliance with the ESSF. Periodic progress reports wifl be prepared and submitted to the Borrower and to the Wor'd Bank on a regufar basis. The

Borrower, through its Programs Management Department U (PMD-II) will carry out regular monitoring of safeguards implementation of the two Concessionaires and consolidates for

submission to the World Bank. In case of non-compUance with the provisions of the ESSF, the

LBP, in consultation with .the respective subproject proponent discuss appropriate measures or

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regulations land whether there are any pending claims and legal issues; and ti) for land

acquisition from the date of the first identification mission by the Bank or where land acquisition activities are currently undergoing or recently been comp~eted, the

provisions of the Sank's OP 4,12, and the ESSF will be applicable.

62. The Social and Environmental CompHance Report (SEeR) will be prepared by the Sub

Borrower to briefly describe the safeguards aspects of each retroactively financed sub-project. The .post-review reports and necessary mitigation measures will be reviewed by the Borrower and the World Bank. Compliance with the ESSF requirements is a condition for retroactive financing under the project. For Maynilad"s investments, resettlement and land acquisition are not required for Ayata-Alabang STP Rehabilitation because it is an existing facUity. Retroactive financing is being considered for this plant where the contract for rehabilitation has already been awarded (PhP 51.6 million). At appraisal, the Bank will also confirm its financing for the Plant.

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IV. Sub-project Monitoring and Audit

63. The implementation of the sub-projects would be carried out by the Concessionaires,

induding actions related to safeguards. LSI> will monitor the project implementation and submit to the Bank a SEeR on a semjannual bas.is that will state how the Bank~s policies are being met and what corrective actions, if any, are being taken. The SECR woufd be prepared by the Borrower, based on inputs provided by the Concessionaires. lBP as a Borrower of the Bank toan will oversee safeguard operations and ensure that the Sub-Borrowers are tn compliance with the procedures outlined in this ESSf.. In case of non~comp4iance with the provisions of the ESSF, the LBPI in consultation with the respective subproject proponent discuss appropriate measures or remedial actions and implementation schedule for such measures/actions. Subproject

proponent will be required to implement such measures within the agreed time~frame at its own cost, failing which LBP would take additional measures, which could include suspending further disbursement, untfl the remedial measures are implemented to the satisfaction of the Borrower.

64. Each Concessionaire will monitor comptiance with the conditions of the ECC and the EMP and carry out the requisite data collection during both the pre-construction and

construction phases. The Concessionaires must satisfy this requirement by submitting a SubBorrowers SEeR, which wit( include an Environmental Monitoring Plan {EMoP)" and a Self~

Monitoring Report (SMR) on a semi-annuaf frequency ( i.e., within January and July of each year). Copies of the submitted Sub-8orrowers SECRana SMR must be provided in two sets to

LBP for reference and review purposes. lap will be responsible for monitoring and evaluating the SEeRs and SMRs submitted by the SutrBorrowers. one set of the SEeR received by the Borrower win be transmitted to the Bank for further review. The Sub-Borrower's SEeR win

indude the following: information on the data collection; discussion on the compliance or non

compliance to the RAP, EMP and ECC; corrective actions, if any; condusions and recommendations; and photographs, as needed.

65. External Monitoring. In sub-projects w,th significant (200 persons or more} resettlement, including phvsical and economic displacement of large number of households, the

Sub~Borrower will, in consultation with the Borrower and the Bank, contract an external monitoring agency Jconsultant group, with adequate experience in involuntary resetttement to conduct periodk independent monitoring of resettlement implementation by the

-4 EMoP defines selt.'ded indicators for ensuring that mitigation l~ are being impl~ and are effective (e.g.? if there is a mitigati.ng ~ to control noise durirtg OOllSbliCtioo., the monitoring plan should include l'IOise ~.. during construction). It ensures tbe project is oomplying with MtionaI regulations and WB sar~r~ addresses concerns which may rise during the public consultation. and identifies flUtllaities respotllribie tor monitoo.ng including estimated related costs.

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Concessionaires in thesub-project/s. The external monitors wiU submit their periodic monitoring reports to the Borrowers and a copy ofits monitoring report to the Bank directly.

66. During the sub~project developmental phase} the Sub-Borrower shall furnish the SEeR to

lBP for the pre~constructjon and construction stages of the sub-project. Once construction works are completed, the Sub-Borrower shall submit a statement of environmental closure for

the construction phase to the LBP and DENR Environment Management Bureau.

67. During the sub-project operational phase, the Sub-Borrower shall continue the submission of SEeRs and start the submission of the SMR to lBP~ DENR-EMB on a quarterly

basis. The Sub-Borrower wiU also conduct an Annual Third Party Environmental Performance

Audit and submit the Audit report to the lBP and DENR. The Sub~Borrowers will pay for the audit report from their own resources~ The terms of reference for the Audit is provided in Annex

8. If any irregularities are observed in the third party audit} the lSP will report its findings to the Sub-Borrower and discuss measures to be taken,

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V. Public Consultation, Participation and Disclosure

A. JntroductJon

68. lnformation disclosure and public consultation are important and necessary in sub..

project preparation and implementation. These enable sub-project affected people and other

stakeholders to partidpate in and contribute to the sub..project planning and implementation) and thereby help minimize adverse impacts and maximize subllroject benefits. The t4:vel of pubUc consultation and the scope of information dissemination win be commensurate with the environmental category of the sub-project and the slgnificance of the soda' impacts.

69. The draft ESSF was an object of the public consultation with key institutional stakeholders on October 51 2010. The ESSf was presented and discussed in detail during the

consultation} which was attended by stakehofders with representations from various national and local government agenties and select non-government institutions. The summary of the

proceedings is presented in Annex 7. Furthermore, copies were made accessible to the public

through the Department of Environmental and Naturaf Resources, the Borrower and the Sub

Borrowers through their website. Comments received have been incorporated.

B. Public Consultation Requirements for Environmental Safeguards

70. During the EA process for Category A and B sub-projects, as earfv as possible, the Sub

Borrower. wit! consult with project-affected groups and locaJ nongovernmental organizations (NGOs) about the project's environmental aspects and takes their views into account. For

Category A proiects, the Sub~Borrower consu'ts these groups at least twice: {a) shortly after

environmental screening and before the terms of reference for the EA are finalized: and (b) after the draft EA report is prepared. In addition, the Sub-Borrower consults with such groups

throughout project implementation as necessary to address EA~related issues that affect them.

These groups may be represented ;n the Multipartite Monitoring Team that the OENR may

organize to serve as the monitoring arm of the project.

c. Public Consultation and Participation in Social Safeguards

71. Public consultation and partidpation ensures project acceptability and fosters good

community relationship between the community, community leaders and the Sub-project

proponents. MWC' and MWSJ have Zone Managers and Business Centers to work c10selV with

communities to ensure better reception of their projects. The two Concessionaires wiU consult and provide relevant information to the community as early as possible. Information provided

will include: the purpose, nature and scale of the project; and the duration of the proposed

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activities and of any risks to and potential impacts on the community. Documentation is the

responsibility of the Concessionaries which wiH provide updates and feedbacks to the

commuOity, as needed, on the project activity. Publi

VI. lnstitutionai Arrangements

75. The key institutions having accountability for the \m~lementat\on of this Framework are:

(I) LBP, as the Borrower; and Ii) MWCI and MWSl as the SufrSorrowersl who are the sub-project proponents and implementers. The following GOP institutJons - DENR, LlDA and lGUs * have regulatory oversight to ensure that the project is compliant with relevant national laws and

regulations. A brief description of these institutions together with their roles and

responsibilities tn planning and implementation of sub-projects is presented in Table 1.

76. 1t is the responsibility of the Sub-Borrowers to carry out the necessary EA required by

the ESSFJ and to obtain the environmental dearances for each sub-project before starting the construction, Sound environmental practices have to be incorporated into the sub..project design and implementation, and potential negative impacts wm have to be mttigated to acceptable levels I standards. The Sub*Borrowers are responsible for the qoafity and accuracy of the information in the EA document, as weUas the transmtssion of the EA documents to DENR. Annex 2 provides a list of the environmental safeguards documents for a typical sanitation and sewerage project, Annex 3 provides a typical Tenns of Reference for the conduct of an EtA also for a typical sanitation and sewerage project.

I Table 1. 'nstituttonal Rotes and Responsibilities

SlJb..Projed EA

processIdentlflcatJon/ ~: Screens and scopes sub-projectS In coordnation Confirms the category (env); informs Screening with refevant agencies. Determines category of sub* , tht)'Sank.

projects as A. 8 or C.

~: Determines level of impact and mode of land acqu~itlon; Identifies key stakeholders; unoortakes public consultations.

Project preparationj PrePares and submits to BorrOWer for revlew the ! ReViews documents for acceptability documentatIon follOWing documents. j to the Sank

! E,nv:

Cat A:. EtA that lndudes Contingency Plan and EMF>, Cat 8; EIA arlEE andEMP Cat C: p~ dMa1ptkm and EMP dePfinding on

slle and nature of actMties

.~; AAAJ) and ~rRAP, RCR r-R-e-v-iew-a-nd~de-a-ra-n-ce--t~:E!1Y:;:::;.:;lt;'Transmft.$ approved Eees and other rel-fWant Exerdses envlronmentel due diligence

of documentation government permits and clearances to tile Borrower. prior to appraisal by Reviews documents acooptable to the BanI

I

III

Implementation ~ Monitors project implementation and SU pervislon, Monitors project compliance as per fCC and EMP/ ciS, submits SECR ta the Bank OOIl semIMonitoring and lEE annual basis Evaluation Submits SCR including EMoP iJnd SMR Reviews nv1ronment Audit Report,

Conducts Annual Third Party Environl'l'lte-ntal performance Conducts regular monitoring of Audit and EnVironmental Audtt Report s.afeguards implementation for

submission to the World Bank. Sor;.: Provides msoorces for all actMties related to the resettlement plaMfng and impl-ementatkm I Ensures projects are in compliance with the ESSF / ProvkSes periodic Progress reports. incorporatlng monitoring results. to the Borrower.

A. Land Bank of the Philippines (LBP)

77, lBP is the Borrower under the MWMP and wUJ act as the servicing agent of the

Government LSP has demonstrated through its involvement in past Bank projectss that it has

the capacity to review, monitor and supervise project activities induding safeguards. lBP will on

lend the loan funds to the two Sub-Borrowers, namely: MWCl and MWSL As the Borrower, It shall perform oversight function to ensure that environmental and social safeguards covenants

are complied with, MWCI and MWSJ wIll submit environmental and social safeguards

documents (te., EA, ECCs, CNes, EMPs, land titlest RAPs, etc.) to the tBP/s Corporate Banking Department (CBD)-f. CSD"I will handle the financial management of the project. lSP will make the funds available for the project.

78, A Project Management Office (PMO) has been created for MWMP, The PMO will be

responsible for supervising project implementation and complying wlth the reportorial

requirements of the project. The PMO draws on C8D-11 PMD-U, and Environmental Program and Management Department (EPMO) staff as wen as the services of a consulting firm that wm b~ hired by LaP if needed (to be funded by its own internal funds) to assist the PMO with: (i) Sub~ project review, evaluation and advisory services; and (il) Sub-project impfementation management monitoring. The c:onsultant shail ensure compliance of the Sub-projects with applicable Phmppine laws and regulations, the Project Operations Manual and the World Bank

policies.

79. lBP will provide the necessary resources and staff to meet the environmentar requirements of the framework that will include tapping the personnel of the EPMD to handle the environmental compliance concerns of the project and the PMO-II for the social safeguards

compliance. PMD-H is the Program .Manager for MWMP and wiJI also be responsible for the

supervision of the Sub-Borrowers1 compliance with the agreed framework on procurement,

:'> WorJd Bank projt."l.1s being implemented by LBP include Manila Third Se~e Project and SuppJrt tOr Strdt~~ I.-ocal Oeve}opn:~lt and Investment Prqjat. Past prQjects include Water Districts Development Project. Rural f'mnnce Project 1mtul

~:. ' .;.1'

technical and sodal aspects of the project. The sodal safegu.ards counterpart staff of the lBP is now actively involved in the MWMP preparation. One of the functions of the PMQ..II is managing Official Development Assistance (ODAs) funds. tt is involved in the safeguards monitoring of the

SSLDIP, where the expertise of LBP on social safeguards operations was developed and continues to be demonstrated. They wiH be assisted by a Consultant to fulfitt their monitoring and reportjng requirements. Trainings will be conducted) with the asslstance of WB, to further enhance the capacity of lBP to process the safeguards requirements of the project.

80. The EPMO will review and validate the suffidencv of thf! submitted environmental safeguards documents in a.ccordance with the ESSf. The PMO has three units - one of which is the Environmenta~ Review and Assessment Unit (ERAU), which has enough personnel that win provide the needed support to meet the requirements of the World Bank regarding the environmental aspects of MWMP. The EPMD has the environmental expertise to oversee the

Sub-Borrower in carrying out the EA and attaining environmentaf compliance to the conditions and statement of the ECC/EMP. The Borrower, through the PMD-It as the Program Manager,

submits the environmental documents to World Sank for concurrenc.e.

81. The social safeguard documents wHf be reviewed by PMD-ff and ensure comptrance to the conditions and provisions of the ESSF. Similarly, the Sub-Borrower through the PMO-ll wilt submit the social safeguard documents to World Bank for review and approval.

82. As the loans for investment financing are channeled to the Sub-Borrowers through the LBP, lBP shall require sub-projects to comply with existing national environmental lawst regulations and with applicable Bank policies and ENS Guidelines for Sanitation. The LBP's EPMO

has the environmental expertise to oversee the Sub-Borrower in carrying out the EA and

attaining environmental compliance to the conditions an~ statement of the ECC/EMP.

Enviro11l'nental safeguards documents may undergo substantive assessment by the Borrower,

particularly if preSSing environmentally critical issues exist. The Borrower shall conduct EDD for MWMP sub-projects, as follows:

Description of both the positive and negative impacts to provide a balanced risk

assessment it wiH also recognize the DENR as the so1e governmentaJ organization that is mandated to issue Eees based on the Philippine EIS law (PO No. 1586). Sub-Borrowers are required to coordinate with the OENR-Envjronmental Management Bureau (EMS) to certify through the issuance of an E.CC that the proposed sub-project/s underwent EA

prior to finalization and implementation of plans.

EA. EMP implementation, monitoring and reporting .shall be conducted until project completion. Thereafterl the Borrower wifl continue monitoring of environmental

compliance of the sub..projects consistent with its environmental policy on credit

delivery, until the toan is fully paid.

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LBP-EPMD is the unit assigned to conduct assessment! monitoring on the environmental compUance of approved sulrprojects.

B. Manila Water Company, Inc. (Manila Water)

83. The Program Management Department is the overall in-artment ensures that an facilities and

38

projects comply with existing environmental regulations, and also implements (beyond

compliance' environmental initiatives in support of the sustainabflity viston of Manila Water.

C. Maynilad Water Services, Inc. (Maynilad)

88. The Environment Management Department {EMO}I h~aded by Senior Assistant Vice

President, wiU take charge of EAJ monitoring. and compliance with aU the environmental

requirements of the project assisted by the manager and five Environmental SpeciaUsts, peos prepare Self Monitoring Reports (SMRs) and submit these to the EMD where the document is

reviewed and slgned by the Corporate PCO~ the EMD Head. The document is sent to OENR or

llDA.

89. The EMD consolidates these quarterly SMRs for' submission, and as an attachment for

the renewal of the discharge permit. It also audits the peos as part of the surveillance audit in its ISO 9000, ISO 14000, and OSHAS 1800 Certification. The department ensures that peos are regularly informed on the latest environmental requirements, and that they undergo training, as

needed. The EMO conducts EIA and EISwrelated studiesl seoping studies, and pub/lc

consultations. It a1soappUes for the ECC and secures its issuance, conducts regu~ar inspections for issuance of all ECCs, and secures other permits relative to environmental requirements.

90. The socia' safeguard issues win be handled by the EMD unit. The Right of Way (ROW) Unit is responsible in locatingJidenttfying laod needed for the Construction of project structures

and facilities. Once a potentia' land area has been located, the Wastewater Management Division team conducts community consultation to introduce the project to the community and

gather their reactions. If the community accepts the concept of the project, the potential land

area is Usted and the ROW unit undertakes further investigation of the potentjalland and its

landowner. Land purchase negotiations is also undertaken by the ROW unit.

91. MWSI wHt make funds available to implement the ESSF for the duration of the project for the fof lowing 3 activities: preparation of EIA, EMP and necessary instruments related to Land

Acquisition and Resettlement of Displaced persons; conduct of public consultation; and securing

necessary permits; trainIng; EM? imptementat\oo and monitoring, and securing an

Environmental Management System; and Environmental Hea~th and Safety Certification.

O. Department of Environment and Natural Resources (DENR) and laguna Lake Development Authority (LlDA)

92. The DENR is the primary national government agency tasked to protect, conserve and manage the country's environment and natura! resources. It is responsible for setting policies,

plans and programs and regulating the development and use of the countr(s natural resources

to ensure compliance to national and international environmental rules, regulations, and

guidelines. It enforces various environmental rules and regulations relevant to the construction

39

and operation of various development projects induding sanitation and