The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) Concept Environmental and Social Review Summary Concept Stage ( ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 09/24/2023 | Report No: ESRSC03795 Sep 27, 2023 Page 1 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P500431 Investment Project Financing (IPF) ASRD - PE 2025 Operation Name Agroecology and Sustainable Rural Development in Pernambuco Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Brazil Brazil LATIN AMERICA AND Agriculture and Food CARIBBEAN Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Government of SEMAS - Secretariat of Environment, 29-Apr-2024 05-Sep-2024 Pernambuco SDA - Secretariat of Agrarian Development , SEPLAG - Secretariat of Planning Public Disclosure Estimated Concept Total Project Cost Review Date 20-Sep-2023 62,500,000.00 Proposed Development Objective The proposed Project Development Objectives (PDOs) are to increase the adoption of Agroecological and Climate-Smart Agriculture (CSA) practices by the targeted family farmers, and the restoration of natural resources in selected rural areas of the State of Pernambuco; and, in case of an Eligible Crisis or Emergency, to respond promptly and effectively to it. B. Is the operation being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project Activities The Project will seek transformation of climate-resilient agroecological and organic production, with a focus on gender empowerment, improve their market access, promote greater nutrition and food security, strengthen technical and operational capacity of producer organizations, associations and rural extension services in the State of Pernambuco. Sep 27, 2023 Page 2 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) The project has four components: Component 1 –Strengthening agroecological and organic family farming. It will seek to support the sustainable productive development of family farming by promoting more sustainable agro-food systems, based on agroecological and organic principles, through the implementation of Investment Plans and the provision of the necessary Technical Assistance. This component includes four subcomponents covering: (1.1) Fostering agroecological/organic family farming production - ; (1.2) Strengthening marketing and processing initiatives; (1.3) Support for farmers' organizations; and (1.4) Capacity building for agroecological and organic production (Technical Assistance TA). Component 2 – Environmental management. This component will guide public actions aimed at preserving and recovering environmental resources, with the objective of maintaining and recovering natural areas and guarantee the provision of important environmental services for populations and for economic activities in Pernambuco. This component includes four subcomponents covering: (2.1) Environmental protection and restoration. (2.2) The Capabilities Development for Environmental Management. (2.3) Institutional Strengthening. Component 3 – Institutional Strengthening. This Component will aim to strengthen the institutional capacity (in the technical, organizational, and operational spheres) of public and private organizations capable of offering services of crucial importance to the environment and environmentally appropriate agricultural production. Component 4 - Component 4 – Project Management . This Component will support Project coordination and management, including: (i) Project management and administration; (ii) financial management (FM); (iii) procurement; (iv) monitoring and evaluation (M&E) of Project performance and impact; (v) environmental and social risks management and grievance redress mechanism (GRM); (vi) communication and outreach, and (vii) a Contingency Emergency Response Component (CERC). D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings Public Disclosure This project will be located at Pernambuco State, which is part of the Northeast region and considered the poorest region in Brazil. The project is designed to support small scale, family based agriculture production in the rural areas of the State (185 municipalities, including the District of the Archipelago of Fernando de Noronha). The rural areas are predominantly within the semi-arid region (Caatinga Biome), although a corridor of fragments of Atlantic Forest (Mata Atlantica Biome) still can be found along the Eastern portion of the state close to the coast line. The Atlantic Forest original coverage has been historically converted and by 2020 87% has been lost in the State of Pernambuco originally 17% of its territory was covered by the Atlantic Forest and according to a recent inventory (2020) 12.3% is still preserved. The Semi-Arid Vegetation (Caatinga), however, is considered naturally more vulnerable due to harsh natural conditions and has been degraded due to poor agriculture practices and over exploitation. Pernambuco is the fourth state with the most indigenous people in Brazil, according to data from the 2022 Census. There are currently eight indigenous ethnic groups registered, distributed in 15 municipalities, and there are 196 Quilombolas territories in 47 municipalities. Indigenous Peoples, Quilombolas and Traditional Communities (IPQTCs) are disproportionately represented among the extremely poor population. In 2023, there were 47 thousand IPQTCs families beneficiaries of social programs who are living in poverty and extreme poverty. The geographical scope of the Project includes the rural areas across the entire state of Pernambuco. During the project design process, Territories with a higher concentration of Family Farming, IPQTCs may be mapped. In parallel, areas with higher levels of environmental degradation will also be mapped. These tools could aid in establishing territorial prioritization for the Project's interventions. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The Project Management Unit (PMU) will be located in the Secretariat for Planning and Management of the State of Pernambuco (SEPLAG), responsible for planning, developing, and monitoring actions aimed at the territorial, economic, and social development of the State and coordinating the government budget process, and the strategic management. Sep 27, 2023 Page 3 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) Given the Project's agroecological characteristics, the Secretariat for Agricultural Development, Agriculture, Livestock and Fisheries (SDA), its Institute of Agricultural Research (IPA) and, the Secretariat of Environment and Sustainability (SEMAS) will be co-executors. In this context, the management of the Project's socio-environmental impacts and risks will be carried out by one of the secretariats directly involved in its implementation, SEMAS. For the preparation stage, in order to act as E&S counterparts of the Bank and also to support the development of the E&S instruments, the borrower has assigned a part-time dedicated E&S team comprised of 4 professionals (2 for environment, 2 for social). Although the 4-person team has experience on the E&S-related areas, three of them have not previously worked in development Banks’ projects, nor are they particularly familiar with the E&S requirements of the WB’s ESF or previous safeguard policies. One of the assigned social specialists has indeed worked in a previous project with the Bank which applied the safeguards Policies. During preparation, the Bank team will closely support SEMAS team and follow-up on the development of the E&S instruments and will also provide capacity building and training activities on the ESF. As part of the commitments defined in the ESCP for the implementation of the Project is the establishment and/or confirm of a PMU, including the designation of a socio-environmental risk management team composed, at least, of: 1 ( one) environmental specialist, one (1) social development and one (1) communication and stakeholder engagement specialist. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate A.1 Environmental Risk Rating Moderate Public Disclosure This Project supports small scale and family based agriculture production through the adoption of enhanced and more sustainable farming practices. Nevertheless moderate risks and impacts are expected from small scale farming such as small consumption of water for artisanal irrigation, use of fertilizers and living natural resources. This Project will also support the improvement of small food trading and processing facilities such as honey packing, artisanal shellfish processing, farmer’s markets, and small agriculture trading warehouses. It is expected that the construction and operation of these activities will generate small to moderate amount of wastes and impacts that can be mitigated with the adoption of ESF standards and Good International Industry Practices as defined in the WB EHSGs. Although some subprojects are expected to support beneficiaries located inside protected areas (small farming or artisanal shellfish harvesting), as the Project is by design meant to promote sustainable practices, these subprojects are not expected to generate new adverse impacts to the protected areas, and loss or degradation of habitats. The use of large dams is not anticipated at this stage, nor the use of pesticides. Whilst component 3 is not expected to result in significant negative environmental risks or impacts, component 4 includes a Contingency Emergency Response Component (CRERC), which may result in adverse impacts. A.2 Social Risk Rating Moderate The Project is designed to mitigate and minimize the effects of some contextual drivers of social exclusion and rural poverty through agroecological actions such as food insecurity and the valuation of forest and natural resources are designed to favor the most disadvantaged and vulnerable social groups among family farmers, paying special attention to IPQTCs - including fishermen and women who collect shellfish by hand. There may be some concerns about the access of these potential beneficiaries to Project-related information and benefits. This risk can be mitigated in predictable manners and particularly through the stakeholder engagement process. The project will support small-scale and family-based agricultural production subprojects that may include small and site-specific civil Sep 27, 2023 Page 4 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) works, which do not have the potential for harming people and adverse impacts related to the influx of workers are not expected. The potential adverse impacts from disturbances on the daily life of local populations are not likely to be significant and can be mitigated in a predictable manner and through routine safety precautions. There are not risks related to physical or economic displacement, as defined under ESS5. Any actions or subprojects that result in involuntary resettlement or land acquisition would not be eligible for support from the Project. Adverse impacts related to restriction of traditional land and natural resource uses are not envisaged. Risks related to the protection of the labor force in rural areas, especially regarding of child labor in the in family farming are considered and will be assessed in the ESMF and in the Project’s Labor Management Procedures, which will require that the Project beneficiaries and contractors to comply with Brazilian legislation on OHS, child and forced labor. There is a risk associated with the lack of experience of the implementing agencies with the ESF which can be addressed through capacity building activities. B. Relevance of Standards and Policies at Concept Stage B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant Project interventions are expected to result in more sustainable and resilient farming production among beneficiaries, generating positive social and environmental co-benefits. Nevertheless, the project includes a number of subprojects that are yet unknown at this stage, which may generate a variety of site specific and reversible impacts. Therefore, the borrower is expected to complete an Environmental and Social Management Framework, in line with World Bank’s Public Disclosure ESF and applicable EHSGs requirements, defining how proposed subprojects will be selected (or excluded), how the impacts will be assessed, mitigated, and monitored over the lifetime of the project. The ESMF must also include a specific section defining the procedures and measures to use Project’s resources under Contingency Emergency Response situation. No cumulative impacts are foreseen at this stage. The draft ESMF including E&S risk assessment will be prepared before appraisal, and final ESMF will be disclosed by 60 days. ESS10 - Stakeholder Engagement and Information Disclosure Relevant A draft of the SEP will be prepared and disclosed prior to appraisal. The Project will use different strategies to incorporating feedback from relevant stakeholders, including IPQTCs and vulnerable groups. A focus group consultation for women will be held before the appraisal- especially women's group who collect shellfish by hand. These early consultations and their outcomes will be fully considered in Project design and in the preparation of the SEP. During preparation, existing engagement structures and the GRM will be assessed for their key features and functionalities and the need to adopt additional project-specific provisions to ensure cultural appropriateness and mechanisms to deal with SE/SH and GBV cases. Specific GRMs relevant to ESS2 will be set up. The final version of the SEP – updated with the feedback collected through the consultation process – will be publicly disclosed in a dedicated Project website within 30 days of Project effectiveness. ESS2 - Labor and Working Conditions Relevant It is expected that Project-supported activities will employ or engage people: directly hired; hired through third parties; primary supply workers. During preparation an LMP will be developed that will assess whether the project will Sep 27, 2023 Page 5 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) engage community workers and how the requirements of ESS 2 will be appropriately applied. The LMP will pay particular attention on the prevalence of child labor and/or forced labor. The LMP would state the need to establish a standalone GRM. As subprojects from Component 1 may involve small civil works to improve food processing plants or storage capacity, contracted workers may be exposed to common construction hazards such as falls, machinery parts, welding, paint and solvents etc. However these hazard and risks can be prevented through the application of National OHS standards, which must be covered by the LMP and the ESMF. A draft LMP will be prepared prior to board approval and the final version LMP will be disclosed by 60 days after Effectiveness. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant As this Project is designed to support higher environmental standards for farming and low impact small scale agriculture production, it is not expected to generate significant environmental impacts. Use of water for irrigation, even if in small scale, must be managed in a sustainable and efficient fashion following GIIP. Small to moderate amounts of solid wastes and wastewater may result from activities under component 1.2 (food processing and trading), which can be readily mitigated by the adoption of Good International Industry Practices GIIP. Given that the Project will support Agroecological/Organic farming, the use of pesticides are not expected. At this stage GHG emissions are expected to be from diverse and small sources only, therefore not likely to be significant and GHG estimations are not expected to be required. ESS4 - Community Health and Safety Relevant As the Project will involve civil works, the community health and safety issues related to this project could potentially Public Disclosure include traffic risks, transport of hazardous materials, storage and disposal of construction works’ waste. The Project’s activities are not expected to increase community exposure to health issues, i.e., exposure to water-borne, waterbased, water-related, and vector-borne diseases. These activities are not likely to entail high influx of temporary or permanent workers that could lead to increase of transmission of communicable diseases in Project areas, instead local labor will most likely be used. However, specific control and monitoring measures shall be included in the ESMF. Dam Safety – Although the project includes small scale irrigation of crops, the water is not expected to be supplied from large dams, but from rainwater storage, small ponds, wells, or from the existing federal water supply canal diverted from São Francisco River (aka “Canal do Sertão”). ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant This standard is currently not relevant. Any actions or subprojects that result in involuntary resettlement, acquisition would not be eligible for support from the Project. Adverse impacts related to restriction of traditional land and natural resource uses are not envisage. Actions that result in any impacts covered by ESS 5 will be on the exclusion or ineligibility list of the Project. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Although the beneficiaries of this Project (small farmers or artisanal shellfish harvesters) may be located inside existing Protected Areas (PA) within the State of Pernambuco, this project is by design meant to improve environmental practices and reduce beneficiaries’ environmental footprint, resulting in positive environmental outcomes either inside or outside protected areas. Nevertheless, any intervention inside protected areas must be in Sep 27, 2023 Page 6 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) accordance with PA management plans and the requirements of ESS6, and it should not result in loss or degradation of habitats. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Relevant Local Communities This standard is relevant. Indigenous Peoples (IPs) are expected to benefit from project-supported activities, but they are not the sole or the majority of direct project beneficiaries. The project will not involve any activities that result in circumstances requiring FPIC, as defined in ESS 7. During preparation the Borrower will contact the IPs Organizations or representatives that may be further identified in the stakeholder engagement process to provide feedback on the scope of the Project and its potential environmental and social risks, impacts and benefits for IPs. Based on this early consultation process and for guiding Project implementation, As the exact type, nature and location of subprojects to be financed would not be known prior to project appraisal, an Indigenous Peoples Planning Framework (IPPF) will be prepared by the client in compliance with the ESS7, before Appraisal (draft version) and final IPPF within 60 days of project effectiveness. ESS8 - Cultural Heritage Relevant Although the project will involve only a small number of small-scale and site-specific works and the Borrowers commitment to adopt measures to avoid impacts on known cultural heritage, these works will involve excavations, demolition, and movement of earth in sites where previously unknown cultural heritage may be encountered. Hence a chance finds procedure, as well as procedures relating to the assessment and mitigation (as necessary) of Public Disclosure “intangible” cultural heritage, as these may have a direct or indirect impact on activities supported by the project will be defined as part of the Project’s ESMF and incorporated in all bidding documents for hiring such construction works. ESS9 - Financial Intermediaries Not Currently Relevant This standard is not currently relevant. B.2 Legal Operational Policies that Apply OP 7.50 Operations on International Waterways No OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework TBD The Borrower will need to comply with all national and state regulatory framework, especially with regard to environmental aspects. The COA (Country Overview Assessment) carried out in the country indicated alignment of ESF`s principles, especially in the national regulatory framework. However, implementation is quite varied across states, due to differences in institutional capabilities, and not all findings from COA are automatically translated to this project, specially those related to implementing capacity.Regarding social aspects, the COA identified important alignments with ESS 2, 7 and 10. The team should work with the borrower to further strengthen its applicable legal framework and especially on proper implementation and supervision. It is not yet decided if this project will follow Sep 27, 2023 Page 7 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) country systems, and therefore, if there is a need for an assessment for this alignment. Should we decide to follow country systems for one particular ESS, we will provide this assessment. Use of Common Approach No C. Overview of Required Environmental and Social Risk Management Activities C.1 What Borrower environmental and social analyses, instruments, plans and/or frameworks are planned or required by Appraisal? Considering the nature of the proposed project activities, the team recommends the following actions:- - The Borrower will develop and disclose a draft Environmental and Social Management Framework (ESMF),draft Stakeholder Engagement Plan (SEP) and a draft Indigenous Peoples Planning Framework (IPPF) during the project preparation prior to Appraisal. - A draft version of an Environmental and Social Commitment Plan (ESCP) will be agreed between the Bank and the Borrower and disclosed prior to Appraisal. The ESCP shall incorporate the Borrower’s following commitments: -The establishment of a Project Management Unit (PMU), including the designation of an E&S risk management team comprised, at minimum, of: 1 (one) environmental specialist, 1 (one) social development specialist, and 1 (one) communication and stakeholder engagement specialist. The PMU will be established within the Effectiveness Deadline Public Disclosure and the staff will be appointed within 30 days after the Effective Date as set out in the Loan Agreement and thereafter maintain the PMU throughout Project implementation. - The final version of the SEP will be presented within 30 days after Project Effectiveness. - The review of the ESMF based on the feedback gathered through the consultation process and the final disclosure of its final version 60 days after Project Effectiveness. -The final version of the IPPF will be disclosure within 60 days after Project Effectiveness. -The LMP -shall be presented 60 days after Project Effectiveness or before the contracting project workers, whichever comes first. - The submission to the Bank of regular monitoring reports on the environmental, social, health and safety (ESHS) performance of the Project. III. CONTACT POINT World Bank Task Team Leader: Leonardo Bichara Rocha Title: Senior Agriculture Economist Sep 27, 2023 Page 8 of 9 The World Bank Agroecology And Sustainable Rural Development In Pernambuco (P500431) Email: lbichararocha@worldbank.org TTL Contact: Maria Bernadete Ribas Lange Job Title: Senior Environmental Specialist Email: blange@worldbank.org IV. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects V. APPROVAL Task Team Leader(s): Leonardo Bichara Rocha, Maria Bernadete Ribas Lange Practice Manager (ENR/Social) Maria Gonzalez de Asis Recommended on 24-Sep-2023 at 22:22:0 EDT ADM Environmental Specialist: Eric Shayer ADM Social Specialist: Juliana Medeiros Paiva Public Disclosure Sep 27, 2023 Page 9 of 9