196991992

WORLDBANKINSTITUTE

Environmental Assessment ofInvestment Projects and ProgramsScope and Processes

J.A.N. Wallis

WBI WORKING PAPERS

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I I I

Environmental Assessment ofInvestment Projects and Programs

Scope and Processes

J.A.N. Wallis

This paper is designed to provide a framework for discussions and staff training on

environmental assessment.

World Bank Institute

Copyright C) 1992The International Bank for Reconstructionand DevelopmenVThe World Bank181 8 H Street, N.W.Washington, D.C. 20433, U.S.A.

The World Bank enjoys copyright under protocol 2 of the Universal Copyright Convention. Thismaterial may nonetheless be copied for research, educational, or scholarly purposes only in themember countries of The World Bank. Materal in this series is subject to revision. The findings,interpretations, and conclusions expressed in this document are entirely those of the author(s) andshould not be attributed in any manner to the World Bank, to its affiliated organizations, or themembers of its Board of Executive Directors or the countries they represent.

Stock Number: 37005

Table of Contents

pap

Introduction ........................................... vii

Purpose and Nature of an Environmental Assessment ................................. 1

Types of Environmental Assessment .................................................... 2

Environmental Screening .................................. 4

The Scope of an Environmental Assessment .............. .................... 6

Institutional Aspects .................................. 9

Annexes ................................... 15

List of References ................................... 19

Chart 1:Environmental Assessment and the Project Cycle ............................... viii

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I

Introduction

Environmental Assessment (EA) is a flexible procedure, which should vary in breadth,depth, and type of analysis depending on the project and its circumstances. It may be performedat one point in time, or preferably, in discrete stages during the life of the project. EA is carriedout during project preparation, before appraisal, and is closely linked to the feasibility study.It is also carried out during project construction, project operations (at monitoring), and at projectcompletion (as an audit).

An Environmental Assessment covers project-specific environmental and social impacts in thearea of influence of a project. EAs use the findings of country environmental studies and actionplans that cover nationwide issues, the overall policy framework, national legislation, andinstitutional capabilities in the country.

A number of agencies -- inside and outside the United Nations (UN) system - carry outscientific investigations on global environmental issues, atmospheric and ocean circulations(ozone depletion, global warming, sea level rise, ocean dumping, pollution of internationalwaters, transport of hazardous wastes, biodiversity, etc.). The World Bank is developingguidelines in these areas drawing upon prevailing views and its own experience withenvironmental, economic, sectoral, and investment policies and programs, with a view tominimizing possible adverse impacts of investment projects on global environmental quality.The World Bank encourages such issues to be considered in EAs where relevant and feasible.

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Chart 1: Environmental Assessment and the Project Cycle

Examine alternatives; assess possible

Conduct Scoping Studies impacts and mitigation measures

\ / Preparation of EA reports

Prepara n . / Economic Analysis; policy decisions

Environmental Screening (A-C); Incorporate improvements

identification of issues; scoping o and mitigation measures

plans; begin consultations withaffected groups; field Pre-Feasibility Studies Feasibility Studies

reconnaissance; Overview Sheet

Creative Design Phase Detailed Desg Review EA

procedures and

Ide fir catIon Cost-effective - findings; review

IdellwflCawOll gPrevention/ Mitigation Possible institutionalarrangements

Ex-Post Audit- - - - - - - - - - - - - - - - - - Appraisal

Preparation of Project Clearance by

Completion Report NW / 4. Environmental

Completion Implementation Phase Authority

Evaluation of treatment of \ .

anticipated/unanticipated Changes Increasigly Difficult/Costly Negotiation

environmental impacts - \PI, / Incorporate

Remediation of ~ environment

unforeseen effects covenants intoagreement

Monitoring and reporting on Supervision La A oval

compliance with environmentalconditions, and effectiveness ofmitigation measures Implementation Conditions of disbursement

Purpose and Nature of an Environmental Assessment

The purpose of an Environmental Assessment (EA) is to improve planning anddecision making in development and to ensure that the project options under considerationare environmentally and socially sound and sustainable. 4 All environmentalconsequences should be recognized early in the project cycle and taken into account inproject siting, planning, and design (Box 1). EAs identify ways of improving projectsenvironmentally and socially, by preventing, minimizing, mitigating, or compensatingfor adverse impacts. These steps help avoid costly remedial measures after projectimplementation.a

By calling early attention to environmental and social issues, EAs:

(a) allow project designers, and staff of financing and implementingagencies to address environmental and social issues in a timely andcost effective fashion;

(b) reduce the need for special project requirements because appropriatesteps can be taken in advance or incorporated into the project design,or alternatives to the proposed project can be considered; and

(c) help avoid costs and delays in implementation due to unanticipatedenvironmental and social problems.

EAs also provide a formal mechanism for interagency coordination on environmentaland social issues, and for addressing the concerns of affected groups, disadvantagedcommunities, and local nongovernmental organizations (NGOs). In addition, the EAprocess plays an important role in building national environmental management andplanning capability (Box 5).

Like economic, financial, institutional, and engineering analyses, EA is part of projectpreparation and is, therefore, the investor's responsibility. Close integration of EA withthese other aspects of project preparation ensures that environmental and socialconsiderations are given adequate weight in project selection, siting, and design decisions(Chart 1), while not delaying project processing.

Regional EAs compare alternative development approaches and recommendenvironmentally sustainable development and land use patterns and policies. Impactsmay sometimes extend across national boundaries. However, regional EAs with aninstitutional focus might follow administrative boundaries. They are particularly usefulwhen they precede the first of a series of projects or development interventions in anundeveloped region, where a region is scheduled for major developments, wherecumulative impacts are anticipated, or for regional planning or agro-ecological zoning.

Although in some cases sectoral or regional EAs cover some of the requirements ofproject-specific EAs, the latter are still needed for major investments. Nevertheless, theregional or sectoral EAs will have identified relevant issues, collected much of the data,and, in general, greatly reduced the work needed in subsequent project-specific EAs. Insuch cases, regional EAs are generally more efficient than a series of project-specific EAs.

Note: Numbers in the text refer to the references cited at the end of this paper.

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Alternatives to Environmental Assessments

Many specific investment projects do not need a full EA. Typically, these projects aresmaller, are not in environmentally sensitive areas, and present issues that are narrowin scope, well-defined, and well-understood. Alternative approaches may, therefore, bemore effective in integrating environmental concerns into the planning process, and infocusing on the environmental work needed. Such alternative approaches will include,for example:

(a) specific environmental design criteria and pollution standards forsmall-scale industrial plants;

(b) specific environmental design criteria and construction supervisionprograms for small-scale rural works projects; and

(c) specific environmental siting criteria, construction standards, andinspection procedures for housing projects.

Sector and Financial Intermediary Lending

For sector investment loans and loans from the World Bank through financialintermediaries, for which subproject details are not known at the time of project appraisal,the investor may not be able to prepare an EA as part of project preparation. Further, suchprojects usually consist of many small investments, each of which seldom require fullEAs. In each of such cases, the project implementing institutions need to screen proposedsubprojects and carry out appropriate environmental analyses prior to subloan approval.

To ensure that this can be done, the World Bank will appraise and strengthen, wherenecessary, the implementing agency's environmental (planning and management)capabilities to:

(a) screen subprojects along the lines described in Box 2;

(b) obtain the necessary expertise for EA preparation;

(c) review EA reports (Annex 1);

(d) implement mitigation plans (Annex 2); and

(e) monitor environmental conditions during project implementation.

The aim should be to help establish satisfactory environmental review systems in theappropriate agencies, rather than to focus only on those investments against which theexternal financier plans to disburse.

Types of Environmental Assesment

Project-Specific Environmental Assessrents

Project-specific EAs or other analyses are used to examine specific investment projects(e.g., dams, factories, irrigation systems). The scope, detail, and sophistication of an

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analysis should be commensurate with the expected impacts. Project-specific EAs shouldnormally cover:

(a) existing environmental baseline conditions, including zones ofecological and socio-economic relevance (e.g. watersheds);

(b) potential environmental impacts, direct and indirect, includingopportunities for environmental enhancement;

(c) systematic and iterative environmental comparison of alternativeinvestments, sites, technologies, and designs;

(d) preventive, mitigatory, and compensatory measures, generally in theform of an environmental mitigation or management plan;

(e) environmental management and training; and

(f) environmental monitoring.

To the extent possible, the following items are quantified: capital and recurrent costs,environmental staffing, training, monitoring requirements, and benefits of proposedalternatives and mitigation measures. Annex 1 provides the outline of a project-specificEA report. Annex 2 describes the set of measures that should be included in anenvironmental mitigation or environmental management plan.

Sectorr and Regional Environnental Ase8sments

Sectoral EAs may be used where a number of similar but significant developmentactivities with potentially cumulative impacts are planned for a reasonably localizedarea. EA for a region of a country may be used where a number of dissimilar butsignificant development projects with potentially dispersed impacts are planned for areasonably localized area (e.g. watersheds). They may identify issues that the latter mightoverlook (e.g., interaction among effluents or competition for natural resources).

Sectoral EAs are used for the design of sector investment programs. They areparticularly suitable for reviewing:

(a) sector investment alternatives;

(b) the effect of sector policy changes;

(c) institutional capacities and requirements for environmental review,implementation, and monitoring at the sectoral level; and

(d) the cumulative impacts of many relatively small, similarinvestments that do not merit individual project-specific EAs.

Sectoral EAs should also have the objective of strengthening the environmentalmanagement capability of the sectoral or other relevant agencies. Sectoral EAs mayoverlap with regional EAs.

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Box 1. Environmental Assessment Procedures: Scoping and Screening

Screening: Process to determine if EA is needed

Scoping: Process of identifying priority issues, to be addressed in EA

Objectives of Scoping:

* Identifying environmental effects;

* Inform affected people;

* Evaluate concerns, and seek agreement on course of action; and

* Select methods/techniques to be used.

Related Concepts:

. Screening's aim: to focus EA work on impacts of significance;

* Allows EA procedure early on in the project cycle;

* Enhances cost effectiveness;

* Includes central/local govemment agencies and affected communities;

* Public involvement central to success; and

* Steps for organizing a public forum.

Environmental Screening

Determination of Environmental Assessnent Category

The purpose of screening is to decide the nature and extent of the EA or environmentalanalysis to be carried out. The classification of each proposed project depends on the type,location, sensitivity, and scale of the proposed project, as well as the nature and magnitudeof its potential impacts (Box 2). At identification, projects should be screened forenvironmental issues and assigned to one of three categories: A, B, or C. The selection ofthe category should be based upon the expected environmental impacts. The bestprofessional judgment is essential throughout this procedure.

Category A: A full EA is required.

Category B: Although a full EA is not required,environmental analysis is required.

Category C: No EA or environmental analysis isrequired.

An EA normally deals with the whole project, but it focuses most time and attention onthe components with the potentially greatest adverse impacts and their links with the rest ofthe project. Any project may contain environmentally benign components; however, inprojects with several components, those components with the most serious environmental

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Box 2: Environmental Screening

Ilustratiue List*

International experience shows that projects in certain sector of certain types are normally best classified as illustrated below. These examples are only illustrative;

they are by no means exhaustive. 3

Cakegaor A wriecttlConmonenthA full EA is required if a project is likely to have significant adverse impacts that may be sensitive, irreversible, and diverse. The impacts are likely to be

comprehensive, broad, sectorwide, or precedent-setting. Impacts generally result from a major component of the project and affect the area as a whole or an entire

sector:

(a) Dams and reservoirs (g) Port and harbor development

(b) Forestry production projects (h) Reclamation and new land development

(c) Industrial plants (large-scale) and industrial estates (i) Resettlement and all projects with potentially major impacts on people

(d) Irrigation, drainage, and flood control (large-scale) (j) River basis development

CA (e) Land clearance and leveling (k) Thermal and hydropower development

(f) Mineral development (including oil and gas) (I) Manufacture, transportation, and use of pesticides or other hazerdous

and/or toxic materials

Catefory B Pfiect#/ComponentsThe project may have adverse environmental impacts that are less significant than category A impacts. Few if any of these impacts are irreversible. The impactsare not as sensitive, numerous, major, or diverse as category A impacts; remedial measures can be more easily designed. Preparation of a mitigation plan (see

Annex 2) suffices for many category B projects. Few category B projects would have a separate environmental report; most may be discussed in a separatechapter of the project preparation or feasibility study.

(a) Agro-industries (small-scale) (f) Rural electrification(b) Electrical transmission (g) Tourism(c) Aquaculture and mariculture (h) Rural water supply and sanitation(d) Irrigation and drainage (small.scale) (i) Watershed projects (management or rehabilitation)(e) Renewable energy (j) Rehabilitation, maintenance, and upgrading projects (small scale)

Categorv C Proiect#[ComnponentsAn EA or environmental analysis is normally not required in this category because the project is unlikely to have adverse impacts. Professional judgmnent finds

these sorts of project to have negligible, insignificant, or minimal environmental impacts.

(a) Education (e) Institutional development(b) Family Planning (f) Technical assistance(c) Health (g) Most human resource projects(d) Nutrition

issues should receive the principal focus. Projects should be categorized according to thecomponents with the potentially most serious adverse impact. Dual categories (e.g., A/C)should not be used. For instance, a relatively benign project with a single category Acomponent is a category A project.

Revision of Environmental Assessment Categories

The EA category assigned to the project as part of the screening is based on the bestjudgement and information available at that early stage. If the project is modified or newinformation becomes available reclassification may be required.

Emergency Recoery Projects

Because emergency recovery projects need to be processed rapidly, and seek mainly torestore existing facilities, they would not normally require a full EA. However, the extentto which an emergency was precipitated or exacerbated by inappropriate environmentalpractices should be determined. Based on this finding, corrective measures should be builtinto either the emergency project or future lending operation. 11

The Scope of an Environmental Assessment

An Environmental Assessment normally covers the following (see Annex 1 for asample outline of an environmental assessment report):

(a) existing environmental (baseline) conditions;

(b) potential environmental impacts, positive and negative, direct andindirect, immediate, time-delayed, and cumulative;a

(c) alternative investments, sites, and designs;

(d) possible measures to prevent, mitigate, and/or compensate fornegative environmental consequences;

(e) monitoring and management programs; and

(f) opportunities for environmental enhancement.

Analysts should also quantify, as fully as possible and at least in physical units, theassociated capital and recurrent costs of items (b) to (e), of institutional development, andof training; and should justify their recommendations in economic as well as inenvironmental terms. However, they should limit their analysis to those projectcomponents that may have an impact on the environment.

Screening for potential environmental impacts should take place early in the projectcycle (Box 3). It will reveal whether or not an EA is necessary, and if so, what type ofanalysis is appropriate. An EA for a major development project takes some 6 to 18 monthsto prepare and review. EA reports, draft and final, must be available at key stages in the

a A project has an indirect impact if it has an effect that occurs at a different point in time or space orin another part of the environment, for example, channeling or damming a river may threaten itscapacity to assimilate degradable wastes and thereby damage its ecosystem.

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project cycle (Chart 1). Having the final EA available prior to the formal appraisal of theproposal is desirable, but not always possible. Some analysts carry out EAs in severalphases, such as at the time of site selection and then as part of the preparation of the finalproject.

For most projects, at least 18 months of baseline data are necessary for analysts tocapture fully the seasonal effects of certain environmental and social phenomena;however, this could seriously delay critical project decisions if not planned for in advance.The time lag in such cases may be even longer than 18 months, since consultants arenormally used for this kind of work. Thus, extra time may be needed to award a contract,import equipment, and prepare on-site facilities to house the equipment.

In most cases, the EA should be an element of the normal feasibility study so that theassessment's findings are incorporated into the design of the project. However, for majorprojects, especially dams,1 0 those involving large-scale resettlement, 14 or those with asignificant impact on wildlands, 6 independent analysis may be desirable.

In the case of projects being prepared for World Bank financing, the institutionconcemed may request World Bank assistance to finance EAs as an advance from the

Project Preparation Facility 17 or, if the anticipated costs are greater than US$100,000, fromthe Technical Assistance Grant Program for the Environment. On average, an EAaccounts for 5 to 10 percent of the cost of project preparation.

Those responsible for the project should review and submit the EA, with their comments,to the financier and other interested parties prior to project appraisal. The financiershould appraise the implementing agency's capabilities for EA and strengthen them wherenecessary. The financier's appraisal team should review the EA with the projectauthorities, resolve any problems identified, assess the adequacy of the institutionsresponsible for environmental planning and management, and determine if the project'sdesign, economic analysis, and legal documents properl.y address the EA'srecommendations.

Box 3: Checklist of Potential Issues for an Environmental Assessment

Where applicable, Environmental Assessments should address the following issues [World Bankpolicies and guidelines referred to are in the List of References at the end of this paper]:

(a) Natural Hazards. Is the proposed project likely to be affected by natural hazards, such asearthquakes, floods, or volcanic activity? If so, what specific measures will be taken to address thisconccern? (Box 8)11

(b) Biological Diversity. Will the project further threaten endangered plant and animal species, criticalhabitats and ecosystem types, or protected areas? (Box 6)6

(c) Tropical Forests. Will the project have a negative impact on tropical forests?6'16

(d) Wildlands. Will the project design include arrangements to protect and manage wildlands that theproject might affect adversely or make arrangements for compensatory measures?6

(e) Wetlands. Will the project have an impact on wetlands including estuaries, lakes, mangrove andother swamps, or marshes?6

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(f) Coastal and Marine Resources Management. Has the project design included the planning andmanagement of coastal and marine resources, including coral reefs, mangroves, and wetlands?

(g) Watersheds. If the project involves dams, reservoirs, or irrigation systems, does it promote theprotection and management of watersheds?1 0

(h) Dams and Reservoirs. Has the project addressed the specific environmental and social issuesinvolved in planning, implementing, and operating dam and reservoir projects?1 0

(i) Ports and Harbors. Did the project address all environmental concerns associated with ports andharbors development?

(j) Involuntary Resettlement. Has the project made adequate and suitable provisioins if it results ininvoluntary resettlement? 1 '1 4

(k) Land Settlement. Have analysts reviewed the complex physical, biological, socioeconomic, andcultural aspects involved in land settlement?

(I) Agrochemicals. Has the project adequately addressed the selection and use of agrochemicals(fertilizers, herbicides, insecticides, fungicides, and nematicides), as well as application and disposalprocedures and effects on surface and groundwater? 5

(m) Occupational Health and Safety. Could the project present special health or safety hazards,especially if an industry or energy project?8

(n) Industrial Hazards. Does the project design include guidelines on the prevention and managementof industrial hazards? All energy and industrial projects should include a formal plan to addressthis issue.3

(o) Hazardous and Toxic Materials. Does the project propose to treat the manufacture, use, transport,storage, and disposal of hazardous and toxic materials in a safe manner? 3

(p) Cultural Properties. Is the project committed to protecting archaeological sites and historicmonuments and settlements? 7

(q) Indigenous Peoples. Does the project affect the rights of indigenous peoples, including traditionalland and water rights? If so, does the project address carefullly these issues? (Box 7)18

(r) Induced Development and Other Sociocultural Aspects. Will the project result in induceddevelopment (secondary growth of settlements and increased demand for infrastructure), thuscausing boomtown effects that are often a major indirect environmental impact of developmentprojects?

(s) Transboundary Impacts. Does the project have any potential transboundary impacts, for example,on clean air and water legislation? In some cases, the country in which the project is located mayhave signed international agreements, and is therefore subject to established procedures.

(t) International Treaties and Agreements on the Environment and Natural Resources. Will theproject be subject to current and pending treaties and agreements on the environment and naturalresources? Are the notification requirements met?

(u) International Waterways. Will the project affect the quality or quantity of water flows?13

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Institutional Aspects

Strengthening Enuironewntal Capabiiti es

The ultimate success of an EA depends upon the capability and understanding ofenvironmental and social matters by the government agencies concerned. Therefore, aspart of the EA process, it is necessary to identify relevant environmental agencies andtheir capability for carrying out required EA activities. Projects with potentially majorimpacts normally require the strengthening of several environmental functions (e.g.,environmental monitoring, inspection, management of mitigatory measures, EAscientific and technical review, and cross-sectoral coordination). In addition, policystrengthening is often needed through the development of legal or regulatory measures(including incentives) that ensure adequate environmental performance standards. Thecost of such capacity building as may be needed for EAs, should be fully accounted for in thetotal project costs. These functions may be located in one or more units and at one or moreadministrative levels, depending on the country and project. Early focus on institutionalinvolvement in the EA process:

(a) helps ensure that the executing agency's and central policy entity'sknowledge and perspectives are taken into account;

(b) provides on-the-job training for staff; and

(c) provides continuity for implementing the EA's recommendations.

In addition, to help develop EA capability in the country, the World Bank encourages theuse of local expertise and promotes EA training for local staff and consultants. 14

Environmental Adviwsory Panels

For major, highly risky, and contentious projects with serious and multi-dimensionalenvironmental concerns, the investor should normally engage an advisory panel ofindependent, internationally recognized, environmental specialists to advise on:

(a) the terms of reference (TORs) for the EA,

(b) key issues and methods for preparing the EA,

(c) recommendations and findings of the EA,

(d) implementation of the EA's recommendations, and

(e) development of environmental management capacity in theimplementing agency.

Interagency Coordination

Because environmental issues generally involve national, provincial, and localgovernment agencies and cover a broad range of responsibilities (wildlife, health, waterand land use, tourism, etc.), coordination among government agencies is crucial.Coordination is best achieved through interagency meetings convened by the proponentagency at key points of time, namely, once the decision has been reached to carry out a full

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EA, and once the draft EA report has been completed (Box 4). The meetings provide anopportunity to identify the issues, types of analyses required, sources of relevant expertise,responsibilities and schedule for the EA, mitigatory measures to be considered, and otherrecommendations.

Box 4: Planning and Conducting a Forun Meeting

The organizers of a Forum meeting should bear the following points in mind when planning andconducting the meeting

1. Meeting sites should be convenient for all participants. In some cases, the meeting may have to berepeated in several locations.

2. A senior government official should chair the meeting, and appropriate environmental officialsshould attend.

3. The meeting should not last longer than one day.

4. The agency implementing the project, in consultation with appropriate environmental officials,should develop the list of organizationsAindividuals to be invited to attend. The list should includeorganizations that will be responsible for finance, construction, operations, and maintenance ofproposed facilities; organizations that might suffer environmental impacts as a result of theproject; and local entities that might be adversely affected.

5. The format of a typical forum meeting is as follows:

- presentation of the proposed project and its schedule;

- presentation of the purpose and objective of an environmental assessment;

-presentation of the possible environmental impacts of the proposed project;

- overview of the possible preventative, mitigating, or compensatory measures;

-question and answer session;

- comments from participants;

- summary.

6. The organizers prepare a five to ten page document outlining the proposed project and associatedenvironemental issues and distribute it to participants prior to or during the meeting.

7. A careful, accurate record of the meeting should be included as an annex to the environmentalassessment. It should include a list of all organizations and individuals invited and those whoactually attended.

Source: Reference 4

Involvement ofAffected Groups and Nonovwnental Oiranzation

The World Bank expects its borrowers to take the views of all "stakeholders" in theproject, such as affected groups and local NGOs1 2 , fully into account in project design andimplementation, and in particular in the preparation of EAs. This process is important inorder to understand both the nature and extent of any social or environmental impact andthe acceptability of proposed mitigatory measures, particularly to affected groups.

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Consultations also are a valuable way to improve decision making, to obtain feedback onthe EA process and draft report, and to increase community cooperation in implementingthe recommendations of the EA.

Such consultations should occur at least at the following two stages of the EA process:

(a) shortly after the EA category has been assigned, and

(b) once a draft EA has been prepared.

In projects with major social components, the consultations on social issues and on EAmay be linked.14'1 8

Discoure of Information

In order for meaningful consultations to take place between the investor and affectedgroups and local NGOs, it is necessary that the investor provide relevant information priorto consultations. The information should be provided in a timely manner and in a formthat is meaningful for, and accessible to, the groups being consulted. Such informationnormally should include:

(a) for the initial consultation, a summary of the project description andobjectives, and potential adverse effects of the proposed project; and

(b) once the EA report has been prepared, a summary of its conclusions ina form and language meaningful to the groups being consulted.

Any consultation should pay particular attention to those issues most likely to affect thepeople being consulted. In addition, the proponent should make the EA report available atsome public place accessible to affected groups and local NGOs for their review andcomment.

The policy of the World Bank is to request advance permission from the governmentconcerned, to release the EA report to the Executive Directors (EDs) of its Board ofManagement, because the report is the government's property. If the project proponentindicates at any time that it is not in a position to release such a report to the EDs, the WorldBank will not normally proceed with further work on the project.

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Box 5: Planning Environmentally

The World Bank has initiated and participated in studies to introduce explicit environmental considerations intodevelopment planning and activities. These studies are means to an end: building developing countries' capacity to protectthe environment.

The first class of studies, prepared for internal World Bank use, are descriptions of the environmental problems, as wellas constraints - legal, institutional, managerial, and technical - that hamper solutions. Environmnental issues papers, as theyare called, have been prepared for more than seventy borrowing countries. Issues papers for the remainder of the WorldBank's borrowers will be completed by 1990. The papers help World Bank staff to take the environment into account indeveloping country programs.

In the second class of studies, the World Bank helps countries create national strategies to protect their own naturalendowments. These enuironmentol action plans provide the framework for integrating environmental considerations into anation's economic and social development planning. The plans are less a document than a process. They grow out of thecountry's own thinking and planning, and they draw on a range of views, including those from local and international non-governmental organizations, as well as other international donors. In identiffing and analyzing a country's environmentalproblems, the action plans can address the entire range of critical environmental concerns a country faces or concentrate ona narrower set of issues. One study for Indonesia focuses on four of the most important environmental problems facing thecountry: loss of forests, land degradation, water shortages, and water pollution. The World Bank plans to help thirtycountries complete environmental action plans by the end of 1992.

Where environmental problems spread across national boundaries, the World Bank is beginning to prepare andparticipate in regional studies. For major Asian cities facing rapid urbanization, industrial pollution, and generalenvironmental neglect, the World Bank is helping to prepare the Capital Cities Clean-up Assessment, leading to action-oriented clean-up programs. The World Bank and the European Investment Bank have joined forces in studies leading tothe Environmental Program for the Mediterranean, which will promote environmentally sound policies and investments inthe region. this complements the scientific studies and public awareness activities of the United Nations EnvironmentProgramme (UNEP) in the Mediterranean. The 'Queen of SeasX, as the Greek poet Homer called the Mediterranean, isseriously polluted; wildlife habitats, forests, and cultural sites along its rim are in jeopardy. The program could set anexample for the whole world on the role of development banks in protecting the environment of an entire region.

Source: Reference 9

Box 6. Biological Diversity

The profusion of plant and animal species that inspired Darwin cannot be taken for granted. Millions of species maydisappear if extinction proceeds at the present all too rapid rate, particularly in the developing world. The World ResourcesInstitute has estimated that one hundred species will be lost a day over the next twenty-five years.

Such a die-off may have serious and as yet unknown consequences for the future of humanity. The natural lands andwaterways that are home to most species are storehouses of medicines and other useful materials. In addition, well-functioning ecosystems prevent floods and droughts, control soil erosion, recycle wastes, filter pollutants, and regulateclimate.

Most of the remaining pristine ecosystems, which harbor the widest array of flora and fauna, are found in the developingworld. Much of that rich natural stock is threatened-by rapid population growth, poorly planned economic development,and changes in technology, which make possible large-scale alterations of the environment.

The World Bank is devoting more attention to this critical issue. The center-piece of this work consists of actions toprotect wildlands-the forests and prairies, deserts and shrublands, marshes and coral reefs, and other natural areasrelatively untouched by human activities. Wildland management is the least costly and, in many cases, the only meansavailable for maintaining biological diversity.

The World Bank's approach to wildlands conservation has grown in scope and complexity. Its wildlands policy, adoptedin 1986, helps conserve biological diversity by preventing, minimizing, or compensating for any change in wildlands thatmay accompany Bank-backed actions. The new environment assessment guidelines will ensure that biodiversity isroutinely addressed when developing projects.

Source: Reference 9

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Box 7: Protecting Indigenous Peoples

When the World Bank began to work more often in remote rural areas of Brazil, Indonesia, and other countries in thelate 1970s and early 1980a, it encountered human problems - those of isolated indigenous peoples - that matched anychallenges posed by nature.

Projects to build roads and dams can displace or at least disrupt tribal peoples living in time-honored ways. Recognizingthis, the World Bank established guidelines in 1982 for protecting tribal peoples, many of whom had much to teach theworld about coexisting with fragile ecosystems.

The World Bank's policy steers a middle course between rapid acculturation on the one hand, and stagnation in livingmuseums,' on the other. It intends to ensure that projects do not destroy the traditional way of life of people who have hadlittle contact with outsiders. In the case of tribes that have sought greater interaction with outsiders, World Bank policy isaimned at facilitating their development while preserving their identity and protecting their individual and collective rightsto ancestral lands and the natural resources upon which they depend.

The guidelines direct the staff to ascertain whether tribal agencies or other responsible groups in developing countriesare able to protect indigenous peoples as projects proceed. If not, the Bank must provide support to that end or forgo theproject.

The World Bank continues to explore ways of implementing the guidelines effectively and adapting them tocircumstances beyond those of people living in remote tropical forests. As part of the continuing effort to refine theguidelines, the Bank's African region is preparing special guidelines on the identification and treatment of tribal peopleaffected by Bank projects in Sub-Saharan Africa. The Bank has added staff with anthropological and sociological skills toeach region to help cope with these issues

Son References 9 and 18

Box & Dealing With Disasters

In May 1987 fire broke out in the Black Dragon Forest, a magnificent expanse of larch and white pine in remotenorthwest China. The fire raged for a month. When finally quenched, it had burned almost 1 million hectares of forest.Nearly 200 people had died. Some 56,000 had lost their homes.

The World Bank is not a disaster relief agency. But as a development bank, it has learned the value of mitigatingenvironmental calamities that threaten long-term development. The Black Dragon fire was such a case.

Within a year of the fire, the World Bank had approved a project to help the Chinese in the remote affected provincerejuvenate the forest and, equaly important, establish a fire protection system to avert such disasters in the future. Theproject also supported recovery of timber from trees kiDed but not destroyed in the fire. The salvageable timber wasestimated to equal three years of softwood imports for China.

Another typical World Bank emergency loan came after the 1983 earthquake in Popayan, Colombia. The loan gave thegovernment a quick infusion of money, so that rehabilitation could start right away.

In another instance, working with NGOs and other development agencies, the World Bank coordinated reconstruction inthe wake of Sudan's 1988 flood.

The Bank's ultimate goal in dealing with natural disasters is to prepare for calamities before they occur and therebyreduce their effecta. 'Here in the Environment Department,' says Alcira Kreimer, an urban environmental specialist incharge of the World Bank's program on natural disasters, "we're working on ways to make countries more resistant tonatural disaster.t

One example is in Mexico. As a follow-up to a reconstruction project after the 1985 earthquake, a nationwide preventionproject wil structurally reinforce existing hospitals and schools and will promote safer, low-cost construction techniques.The project will also promote the use of prevention and mitigation technologies and provide training for inspectors andbuilders.

Ssrce: Reference 9

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Annex 1

Outline of a Proiect-Specific Environmental Assessment Report

1. A full EA report should be concise and should focus on the significant environmentalissues. The report's level of detail and sophistication should be commensurate with thepotential impacts. The target audience should be project designers, implementingagencies, and staff of other official and financing agencies.

2. The EA report should include the following items:

(a) Executive Summary. Concise discussion of significant findings andrecommended actions;

(b) Policy, Legal, and Administrative Framework. Discussion of thepolicy, legal, and administrative framework within which the EA isprepared. The environmental requirements of any cofinanciersshould be explained;

(c) Project Description. Concise description of the project's geographic,ecological, social, and temporal context, including any off-siteinvestments that may be required by the project (e.g., dedicatedpipelines, access roads, power plants, water supply, housing, and rawmaterial and product storage facilities);

(d) Baseline Data. Assessment of the dimensions of the study area anddescription of relevant physical, biological, and socioeconomicconditions, including any changes anticipated before the projectcommences. Current and proposed development activities within theproject area (but not directly connected to the project) should also betaken into account;

(e) Environmental Impacts. Identification and assessment of thepositive and negative impacts likely to result from any proposedproject. Mitigation measures, and any residual negative impacts thatcannot be mitigated, should be identified. Opportunities forenvironmental enhancement should be explored. The extent andquality of available data, key data gaps, and uncertainties associatedwith predictions should be identified and estimated. Topics that do notrequire further attention should be specified;

(f) Analysis of Alternatives. Systematic comparison of the proposedinvestment design, site, technology, and operational alternatives interms of their potential environmental impacts; capital and recurrentcosts; suitability under local conditions; and institutional, training,and monitoring requirements. For each of the alternatives, theenvironmental costs and benefits should be quantified to the extentpossible, and economic values should be attached where feasible. Thebasis for the selection of the alternative proposed for the project designmust be stated;

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(g) Mitigation Plan. Identification of feasible and cost-effectivemeasures that may reduce potentially significant adverseenvironmental impacts to acceptable levels, and estimation of thepotential environmental impacts; capital and recurrent costs; andinstitutional, training, and monitoring requirements of thosemeasures. The plan (sometimes known as "action plan," or"environmental mitigation or management plan," outlined inAnnex 2) should provide details on proposed work programs andschedules. Such details help ensure that the proposed environmentalactions are in phase with engineering and other project activitiesthroughout implementation. The plan should consider compensatorymeasures if mitigation measures are not feasible or cost-effective;

(h) Environmental Management and Training. Assessment of theexistence, role, and capability of environmental units on-site, or atthe agency and ministry level. Based on these findings,recommendations should be made concerning the establishmentand/or expansion of such units, and the training of staff, to the pointthat EA recommendations can be implemented;

(i) Environmental Monitoring Plan. Specification of the type ofmonitoring, who would do it, how much it would cost, and what otherinputs (e.g., training) are necessary; and

(j) Appendices

(i) List of EA Preparers -- individuals and organizations,

(ii) References -- written material used in study preparation. Thislist is especially important, given the large amount ofunpublished documentation often used, and

(iii) Record of Interagency/ForumIConsultation Meetings --including lists of both invitees and attendees. The record ofconsultations for obtaining the informed views of the affectedpeople and local NGOs should be included. The record shouldspecify any means, other than consultations, that were used toobtain the views of affected groups and local NGOs.

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Annex 2

Environmental Mitigation or Environmental Management Plan

1. A project's mitigation or environmental management plan consists of the set ofmeasures to be taken during implementation and operation to eliminate, offset, orreduce adverse environmental impacts to acceptable levels. Also included in the planare the actions needed to implement them. Mitigation plans are essential elements ofcategory A projects. Mitigation plans alone suffice for many category B projects.During the preparation of a mitigation plan, the responsibilities of the project sponsorsand their EA design team see to:

(a) identify the set of responses to potentially adverse impacts;

(b) determine requirements for ensuring that those responses are madeeffectively and in a timely manner; and

(c) describe the means for meeting those requirements.

2. A mitigation or management plan should include the following items:

(a) Identification and summary of all the significant adverseenvironmental impacts that are anticipated;

(b) Description and technical details for each mitigation measure,including the type of impact to which it relates and the conditionsunder which it is required (e.g., continuously or in the event ofcontingencies), together with designs, equipment descriptions, andoperating procedures, as appropriate;

(c) Institutional arrangements -- the assignment of the variousresponsibilities for carrying out the mitigatory measures (e.g.,responsibilities which involve operation, supervision, enforcement,monitoring of implementation, remedial action, financing,reporting, and staff training);

(d) Implementation schedule for measures that must be carried out aspart of the project, showing phasing and coordination with overallproject implementation plans;

(e) Monitoring and reporting procedures to:

(i) Ensure early detection of conditions that necessitate particularmitigation measures, and

(ii) Provide information on the progress and results of mitigation;and

(f) Integration into the total project cost tables of the cost estimates andsources of funds for both the initial investment and the recurringexpenses for implementing the mitigation plan.

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3. To strengthen environmental management capability in the agencies responsible forimplementation, most mitigation plans cover one or more of the additional topicsidentified below:

(a) Technical assistance programs;

(b) Staff development;

(c) Procurement of equipment and supplies; and

(d) Organizational changes.

4. The investor's decision to proceed with a project, and the financier's decision to supportit will be in part predicated on the expectation that the mitigation plan will be executedeffectively. Consequently, it is important to integrate the plan into the project's overallplanning, design, budget, and implementation. Such integration should be achievedby establishing the mitigation plan as a component of the project. This precautionensures that the plan will receive funding and supervision along with the otherinvestment components.

5. Specific links should exist for:

(a) funding;

(b) management and training (strengthening national capabilities);and

(c) monitoring.

The purpose of the first link is to ensure that the proposed actions are adequatelyfinanced. The second link helps establish within the overall management plan thetraining, technical assistance, staffing, and other institutional strengthening neededto implement the mitigatory measures. The third link is necessary to provide acritical path for implementation and to enable the investors and the financiers toevaluate the success of mitigation as a part of project supervision and as a means forimproving future projects.

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List of References

1. Cernea, Michael. 1988. Involuntary Resettlement in Development Projects --Policy Guidelines in World Bank-Financed Projects. World Bank TechnicalPaper No. 80. World Bank, Washington, D.C.

2. Davis, John, Scott Mackright, and International Maritime Organization. 1990.Environmental Considerations for Port and Harbor Developments. World BankTechnical Paper No. 126. World Bank, Washington, D.C.

3. Technica Ltd. and World Bank. 1988. Techniques for Assessing IndustrialHazards - A Manual. World Bank Technical Paper No. 55. World Bank,Washington, D.C.

4. World Bank. 1984. Environmental Aspects of Bank Work. OMS 2-26.will be released asWorld Bank. Environmental Policies. OD 4-00. Washington, D.C.

5. . 1985. Guidelines for the Selection and Use of Pesticides in Bank-Financed Projects, and their Procurement when Financed by the Bank, andaddendum, September 1987, Guidelines for the Use, Selection and Specification ofPesticides in Public Health Programs. OPN 11-01.will be released asWorld Bank. Agricultural Pest Management, and the Selection and Use ofPesticides. OD 4-03. Washington, D.C.

6. . 1986. Wildlands: Their Protection and Management in EconomicDevelopment. OPN 11-02. Washington, D.C.will be released asWorld Bank. Wildlands: Their Protection and Management in EconomicDevelopment. OD 4-04. Washington D.C.

7. . 1986. Management of Cultural Property in Bank-FinancedProjects. OPN 11-03.will be released asWorld Bank. Cultural Property. OD 4-25. Washington, D.C.

8. . 1988. Occupational Health and Safety Guidelines. Washington,D.C.

9. . 1989. Striking a Balance: The Environmental Challenge ofDevelopment. Washington, D.C.

10. . 1989. Environmental Policy for Dam and Reservoir Projects. OD4-00, Annex B.will be released asWorld Bank. Environmental Policy for Dam and Reservior Projects. OD 4-05.Washington, D.C.

11. ____D. . 1989. Emergency Recovery Assistance. OD 8-50. Washington,D.C.

12. . 1989. Involving Nongovernmental Organizations in Bank-Supported Activities. OD 14-70. Washington, D.C.

13. . 1990. Projects on International Waterways. OD 7-50. Washington,D.C.

14. . 1990. Involuntary Resettlement. OD 4-30. Washington, D.C.

15. . 1991. Environmental Assessment Sourcebook. Volumes I, II, andIII. Washington, D.C.

16. 1991. The Forest Sector. A World Bank Policy Paper. Washington,D.C.

17. . 1991. Project Preparation Facility. OD 8-00. Washington, D.C.

18. . 1991. Indigenous People. OD 4-20. Washington, D.C.

19. .. 1991. Environmental Assessment. OD 4-01. Washington, D.C.

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