The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) Concept Environmental and Social Review Summary Concept Stage ( ESRS Concept Stage) For Official Use Only Date Prepared/Updated: 12/21/2023 | Report No: ESRSC04027 Dec 22, 2023 Page 1 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P502837 Investment Project Financing (IPF) Turkiye SIE 2024 Operation Name Türkiye: Small Industrial Estates Reconstruction and Regional Economic Recovery Project Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Turkiye Turkiye EUROPE AND CENTRAL Finance, Competitiveness ASIA and Innovation Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Ministry of Treasury Ministry of Industry and Technology 14-Mar-2024 27-Jun-2024 and Finance (MoTF) (MoIT), Directorate General of Industrial Zones For Official Use Only Estimated Concept Total Project Cost Review Date 13-Dec-2023 500,000,000.00 Proposed Development Objective The PDO is to support the restoration and improvement of MSME operations in the earthquake-affected provinces through building new or rebuilding damaged or destroyed small industrial estates. 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 [Description imported from the Concept Data Sheet in the Portal providing information about the key aspects and components/sub-components of the project] The proposed operation will support the rebuilding of damaged or destroyed small industrial estates in the 11 earthquake-affected provinces of Türkiye. There are 28 small industrial estates in these 11 provinces that have either been damaged severely, or completely destroyed. The project will focus on rebuilding these and building new estates for the enterprises (mostly micro and small firms, individual entrepreneurs and craftsmen). The project will be Dec 22, 2023 Page 2 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) implemented by the Ministry of Industry and Technology and will involve reconstruction of damaged workshops within industrial estates or construction of new industrial estates on public land that has already been designated for this purpose. It is expected that a small type of different size prefabricated workshops will be constructed and firms or individual entrepreneurs would be offered to select the type of workshop most suitable to their business needs and, if in agreement, sign a long-term contract to repay the cost of the building over a reasonable time period on favorable terms. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings [Description of key features relevant to the operation’s environmental and social risks and opportunities (e.g., whether the project is nationwide or regional in scope, urban/rural, in an FCV context, presence of Indigenous Peoples or other minorities, involves associated facilities, high-biodiversity settings, etc.) – Max. character limit 2,000] The project will cover the 11 earthquake affected provinces in Türkiye. The earthquakes have caused major damages to the industrial sector. Micro, Small and Medium Enterprises (MSMEs) account for 99 percent of total registered businesses in Turkiye and make an important contribution to the economy. About 15% of MSMEs in Turkiye are located in the 11 earthquake affected provinces (473,354 MSMEs), including 35,674 manufacturing MSMEs that employ 133,024 workers. Many manufacturing MSMEs are based in Small Industrial Estates (SIEs), which are registered as cooperatives at the Ministry of Environment, Urbanization and Climate Change (MoEUCC). MoEUCC records show that 248 SIEs (14.6% of total registered SIEs) have been registered in earthquake-affected provinces and have been impacted by the earthquakes to a varying degree, resulting in interruption in economic activity and labor migration. For Official Use Only SIEs have played an important role in the Turkish economy since their introduction in 1963 and designed to provide a suitable environment for MSMEs to operate. These estates are usually located in the outskirts of cities and offer a range of facilities and central services to support MSMEs, such as affordable workspaces, shared resources, access to infrastructure, utilities, and transportation as well access to credit facilities (since 1970s). Most SIEs are established and operate as building/management cooperatives, bringing together small entrepreneurs, such as craftspeople, tradespeople, small manufacturers and service providers. According to MoEUCC, 1,698 SIEs have been registered across Türkiye to date, housing 179,000 workshops for MSMEs. The establishment of new SIEs, and rebuilding the damaged or destroyed industrial estates using disaster-resilient materials and greener technologies can ensure that MSMEs and wider communities in the earthquake-affected areas are more resilient and sustainable, also to the adverse impacts of climate change. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts [Description of Borrower’s capacity (i.e., prior performance under the Safeguard Policies or ESF, experience applying E&S policies of IFIs, Environmental and social unit/staff already in place) and willingness to manage risks and impacts and of provisions planned or required to have capabilities in place, along with the needs for enhanced support to the Borrower – Max. character limit 2,000] The Ministry of Industry and Technology (MoIT) will implement the Project. The MoIT/ DG Industrial Zones offers a credit scheme to SIEs (and Organized Industrial Zones (OIZs)) for their establishment and development of infrastructure and workspace buildings (superstructures). To implement credit schemes to SIEs and OIZs, the MoIT Directorate General of Industrial Zones employs approximately 160 staff across 21 units. Personnel are responsible for supervision and monitoring of infrastructure projects, construction works, environmental management and waste &wastewater treatment projects, topography and geographical information systems, tendering, zoning, financial affairs, industrial zones establishment and monitoring, utilities, site selection, national plan and strategies, and investment programs. Dec 22, 2023 Page 3 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) MoIT / DG Industrial Zones (IZ) has a good track record in implementing an active World Bank project: Türkiye Green Organized Industrial Zone Project (P171645). The project has established and maintained a robust Project Implementation Unit (PIU) that has already acquired strong knowledge in World Bank’s environmental and social safeguards. To ensure efficiency, the same team will dedicate several of their staff and hire additional staff to prepare all the feasibility studies, environmental and social risk assessments and management plans and tender documents for the new project. The proposed project will incorporate suitable environmental and social specialists, along with a comprehensive framework and capacity for monitoring and evaluation. The Project will also include activities to develop a dedicated environmental and social unit at MoIT with its own E&S policies and standard operating procedure aligned with the relevant country laws and the World Bank’s ESF. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate A.1 Environmental Risk Rating Moderate [Summary of key factors contributing to risk rating, in accordance with the ES Directive and the Technical Note on Screening and Risk Classification under the ESF – Max. character limit 2,000] The environmental risk is assessed as “Moderate”. The proposed project aims to support recovery and rebuilding efforts in the small-scale industry sector following the earthquakes in SE Türkiye in February 2023. The environmental impacts from the project are expected to be positive given that the seismic resilience of the buildings will be For Official Use Only increased and new, more environmentally friendly processes introduced during project implementation. However, renovation and construction activities may bring adverse environmental impacts due to dust and noise generation, vehicle and machines emissions, generation of construction waste, hazardous material and waste management etc. as well as OHS issues. The sub-projects are expected to be implemented in urban and peri-urban areas. If culturally important buildings will be renovated or reconstructed, those will have permits from the relevant authorities, and the renovation activities will be implemented accordingly. The environmental impacts related to the project are expected to be spatially limited to the project footprint, temporary, reversible and easily manageable through application of good engineering practice, national laws as well as use of the World Bank Environmental, Health and Safety Guidelines. During operation phase, the related risks will be managed through use of Good International Industrial Practices (GIIP). An Environmental and Social Management Framework (ESMF) will be prepared, which will include procedures for identifying and mitigating associated risks/impacts, monitoring and reporting, and implementation arrangements. The scale and extent of the renovation/construction activities and the location settings may require, in addition to ESMPs, the preparation of site-specific Environmental and Social Impact Assessment (ESIAs). The provisions of the above mentioned ESIAs/ESMPs will be incorporated into the bidding documents and resulting contracts. A.2 Social Risk Rating Moderate [Summary of key factors contributing to risk rating, in accordance with the ES Directive and the Technical Note on Screening and Risk Classification under the ESF – Max. character limit 2,000] The social risk is assessed as “Moderate” as the potential adverse social risks and impacts are not likely to be significant (due to the types of planned activities and infrastructure) and can be mitigated in a predictable manner through assessments, plans and/or management of impacts. The key social risks and impacts are as follows. First, new Industrial Sites will be constructed that may require acquisition of land causing physical and economic displacement Dec 22, 2023 Page 4 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) of people. Second, the project will support in-situ reconstruction of damaged MSMEs. Without clear eligibility criteria and selection process of beneficiaries, the project benefits may be captured by elites instead of people most in need including vulnerable groups (e.g. women and SuTPs owned MSMEs). The same risk may apply to MSMEs accessing newly built infrastructure in SIEs. Thus, risk of social exclusion may be significant. Thirdly, given the post-earthquake contexts, inadequate stakeholder engagement may lead to lack of access to project services and benefits by many eligible beneficiaries. Fourthly, construction activities may cause occupational health and safety (OHS) and road safety-related risks (due to increased traffic volume and movement). Fifthly, risks related to management of labor (non-compliance with laws, exploitation of labor, health and safety risks, labor influx etc.) as well as construction- induced adverse impacts on the neighboring community at the sites of the proposed SIEs may occur. Finally, the risks of adverse impacts on land and social exclusion in the post-earthquake context may cause social tension and conflicts in the area. This may be a significant risk given growing sentiments among host communities regarding Syrians under temporary protection (SuTP). During the project preparation phase, environmental and social assessments and adequate stakeholder engagement activities will need to be conducted to avoid, minimize and mitigate these risks. [Summary of key factors contributing to risk rating. This attribute is only for the internal version of the download document and not a part of the disclosable version – Max. character limit 2,000] B. Relevance of Standards and Policies at Concept Stage B.1 Relevance of Environmental and Social Standards For Official Use Only ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant [Optional Explanation - Max. character limit 1,000] An ESMF will be prepared to guide the assessment and management of E&S risks and impacts. The ESMF will include a comprehensive environmental and social screening template and a template project specific ESMP, as well as exclusion list. All activities proposed under this project will be screened for E&S risks. For low or moderate risk activities, the project level ESMP will be customized and implemented and if required, site-specific ESIAs and other E&S instruments prepared. Substantial and high risk activities will not be eligible for financing under the Project, unless the project risks rating is revised. A Stakeholder Engagement Plan (SEP) will be prepared to ensure that all relevant stakeholders are engaged in a structured and planned fashion. The relevant requirements will be reflected in the Environmental and Social Commitment Plan (ESCP). ESS10 - Stakeholder Engagement and Information Disclosure Relevant [Optional Explanation - Max. character limit 1,000] The key stakeholders for this project include the affected MSME owners and the communities in the vicinity of the proposed SIEs. Consultations and engagement with these stakeholders during project preparation and implementation will be crucial for the project. Thus, it will be important to ensure that the project design and proposed interventions are prepared and implemented, taking into consideration stakeholders’ feedback. To this end, a Stakeholder Engagement Plan (SEP) will be prepared. The SEP will lay out a strategy to identify and map key stakeholders, including vulnerable and disadvantaged groups. The SEP will be disclosed prior to the appraisal, Dec 22, 2023 Page 5 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) consistent with the requirements of ESS10, and will be updated, as necessary. An grievance redress mechanism (GRM) will be updated and operationalized for the project to allow for feedback and complaints from the time of project preparation throughout implementation ESS2 - Labor and Working Conditions Relevant [Optional Explanation - Max. character limit 1,000] Labor will be employed by contractors for the construction activities. Compliance with applicable laws, Occupational Health and Safety (OHS) guidelines as well as guidelines for the prevention of sexual harassment at the workplace will apply to these workers. Labor Management Procedures (LMP) will also be prepared to include a Code of Conduct, establishing mechanisms to manage risks related to sexual abuse and exploitation / sexual harassment (SEA/SH); provisions to address infectious diseases concerns, and a separate GRM to redress grievances for these workers including for SEA/SH incidents. All relevant requirements will be integrated into the Environment and Social Commitment Plan (ESCP) for the project. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant [Optional Explanation - Max. character limit 1,000] Potential impacts associated with activities of Component 1 could be attributed to dust and noise, generation of construction waste, wastewater, hazardous materials/ waste (oil, grease, hydrocarbons, old fluorescent bulbs, old For Official Use Only appliances, asbestos, lead-based paint). The ESMF and sub-project ESIAs/ESMPs will address (i) establishing and adhering to general good housekeeping rules and procedures, (ii) monitoring and reducing emissions (incl. dust, noise, etc.), and (iii) waste management incl. hazardous, solid and construction waste. Project will mandate use of construction materials (sand, gravel, stone, cement etc.) from local certified sources. Measures to ensure resource efficiency (water, energy, construction material) will be also included in the ESMF. Site operation and risk management plans will detail the measures and procedures to ensure that resource efficiency measures and processes are applied during the operational phase of the industrial sites/zones. ESS4 - Community Health and Safety Relevant [Optional Explanation - Max. character limit 1,000] There may be construction induced adverse impacts on the communities in the vicinity of the proposed SIE sites. Further, there may be SEA/SH risks arising out of labor influx. These will be managed through comprehensive LMP containing provisions for management of migrant labor, a Code of Conduct, as well as GRMs which include channels for handling SEA/SH incidents. Community health and safety risks are based on construction phase impacts of sub- projects, such as noise and air quality, traffic management and temporary road closures and construction waste management. Site-specific as well as Project based ESMPs will include measures to address these impacts and disturbances. During the small industrial site/zone operation, the standard health and safety measures relevant to respective production sector, in line with the national legislation and standards, will apply. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant Dec 22, 2023 Page 6 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) [Optional Explanation - Max. character limit 1,000] Establishment of new SIEs may affect private land (involving both physical and economic displacement). At this stage, the information regarding land acquisition requirements for SIEs are limited. A Resettlement Framework (RF) will be prepared by project appraisal and site specific Resettlement Plans (RPs) will be prepared as and when needed. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources [Optional Explanation - Max. character limit 1,000] This ESS is relevant as the proposed new construction activities under Component 1 may be located adjacent or in the vicinity of protected natural habitats. To avoid the potential negative impacts during the civil works, any activities and sites situated in or near critical or natural habitats, or those that will be assessed to have potential substantial or high biodiversity impacts, will be excluded from Project funding. In this regard, the ESMF document will establish criteria for such exclusion and will contain an exclusion list. Additionally, all site-specific ESIA/ESMPs for small industrial zones/sites near the protected natural areas will incorporate site-specific biodiversity assessment and, when necessary, will include relevant mitigation and monitoring measures. In these cases, Biodiversity Managements Plans may be prepared and implemented under the Project, in line with ESF and national procedures. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities For Official Use Only [Optional Explanation - Max. character limit 1,000] NA ESS8 - Cultural Heritage Relevant [Optional Explanation - Max. character limit 1,000] Some of the buildings selected for renovation under the project may be registered as cultural heritage/cultural assets in the provincial or national property inventory. In such cases, MoIT will obtain the relevant permits from related institutions and/or the Ministry of Culture and Tourism before any civil works start. The relevant permits and the processes to obtain these will be outlined in the ESMF and site-specific Cultural Heritage Plans may be required as part of ESIA/ ESMPs. Additionally, all construction contracts will include a “Chance Find” clause which will mandate contractors to stop construction and inform the relevant authority in the event that cultural property sites or finds are encountered during construction. In the unlikely case of of work within the culture heritage protected areas, a Cultural Heritage Management Plan will be prepared before start of design activities, to guide the overall Project activities within the culture protected area. ESS9 - Financial Intermediaries Not Currently Relevant [Optional Explanation - Max. character limit 1,000] NA Dec 22, 2023 Page 7 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) 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 No [Optional explanation – Max. character limit 1,000] Use of Borrower Framework is not being considered. Project will use the World Bank’s Environmental and Social Framework. Use of Common Approach No [Optional Explanation including list of possible financing partners – Max. character limit 1,000] NA For Official Use Only B.4 Summary of Assessment of Environmental and Social Risks and Impacts [Description provided will not be disclosed but will flow as a one time flow to the Concept Stage PID – Max. character limit 5,000] Both the environmental and social risks are assessed as “Moderate” at the concept stage. The key environmental risks at construction stage include adverse environmental impacts due to dust and noise generation, vehicle and machines emissions, generation of construction waste, hazardous material and waste including oil, grease, hydrocarbons, old electrical appliances, asbestos-containing materials (in recovery/reconstruction sites), lead-based paints, etc. as well as OHS issues. The key social risks include land use related impacts, management of labor (non-compliance with laws, exploitation of labor, health and safety risks, labor influx etc.) social exclusion (of targeted beneficiaries, especially the vulnerable groups), social tensions, community health and safety and SEA/SH risks. Since the sub-projects' locations and the specific nature of works in the workshops sites will not be known before the appraisal stage, an Environmental and Social Management Framework (ESMF) will be prepared. The ESMF will include guidance and procedures for identifying and mitigating associated risks/adverse impacts, as well as monitoring and reporting and implementation arrangements that will ensure adequate implementation of the ESF requirements. The scale and extent of the renovation/construction activities and the location settings may require, in addition to ESMPs, the preparation of site-specific Environmental and Social Impact Assessment (ESIAs) to ensure proper identification of site-specific risks and impacts. 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? Dec 22, 2023 Page 8 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) [Description of expectations in terms of documents to be prepared to assess and manage the project’s environmental and social risks and by when (i.e., prior to Effectiveness, or during implementation), highlighted features of ESA documents, other project documents where environmental and social measures are to be included, and the related due diligence process planned to be carried out by the World Bank, including sources of information for the due diligence - Max. character limit 3,000] The Stakeholder Engagement Plan (SEP), Labor Management Procedures (LMP), Resettlement Framework (RF) and Environmental and Social Management Framework (ESMF) will be required by Appraisal. · ESMF will be prepared, acceptable to the Bank that includes relevant Environment and Social Standards requirements, along with the potential project impacts, as well as rules and procedures for site specific project activities, ESIA and ESMPs. The document will be disclosed, consulted and cleared by the WB prior to Appraisal. · ESCP: The WB and MoIT will agree on an Environmental and Social Commitment Plan (ESCP), which will set out the material measures and actions required for the project to meet the ESSs over a specified timeframe. The ESCP will be prepared, disclosed and cleared by WB prior to appraisal and will form part of the legal agreement. · SEP will be prepared, disclosed and consulted. · RF will be prepared, disclosed and consulted. · LMP will be prepared and disclosed. · Development, disclosure and consultation on other sub-project specific Bank approved ESA instruments (ESIAs, ESMPs, Resettlement Plans and, where relevant, cultural heritage plans) before any bidding documents are published · Inclusion of relevant environmental and social provisions in bidding documents and ensuring contractors’ For Official Use Only adherence to the environmental and social instruments · Monitoring and reporting, including incidents and accidents and contractors’ monthly reports · Implementation of SEP, with attendant financial and human resources · Capacity building to enhance the environmental and social performance of the implementing agency on ESF application and ESS compliance III. CONTACT POINT Contact Point Task Team Leader: Stefka Slavova Title: Lead Economist Email: sslavova@worldbank.org TTL Contact: Ali H. Abukumail Job Title: Senior Private Sector Specialist Email: aabukumail@worldbank.org IV. FOR MORE INFORMATION CONTACT Dec 22, 2023 Page 9 of 10 The World Bank Türkiye: Small Industrial Estates Reconstruction And Regional Economic Recovery Project (P502837) 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): Stefka Slavova, Ali H. Abukumail ADM Environmental Specialist: Nikola Ille ADM Social Specialist: Ferdous Jahan For Official Use Only Dec 22, 2023 Page 10 of 10