The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 10/25/2022 | Report No: ESRSC02885 Oct 25, 2022 Page 1 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Nepal SOUTH ASIA P174496 Project Name Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Agriculture and Food Investment Project 12/30/2022 Financing Borrower(s) Implementing Agency(ies) Chaudhary Group Chaudhary Foundation Foundation Proposed Development Objective Public Disclosure 18. To support inclusive and economically sustainable value chain development at the grassroots and community levels for 6,500 women from Province 1 and Gandaki Province. This will be achieved by ensuring: (a) economic empowerment training for at least 6,500 women; (b) establishment/strengthening of at least eight community-level, inclusive platforms to support market access, marketing of products and higher price realization; and (c) graduation support to individual entrepreneurs to be able to independently reach markets and earn steady incomes. 19. Achievement of the proposed PDO would allow for government and non-government channels to promote testing and use of women-friendly technologies that will automate manual processes improving worker efficiency and quality of the final product, thereby reducing the drudgery with which women currently undertake such tasks. It would also allow for the identification and promotion of institutional and other arrangements to scale-up promising technologies. Finally, investments in establishing and strengthening women’s collectives, work groups and their federations as an effective means for building capacity to support product aggregation, product quality enhancement, and the associated increase in overall returns to the value chain would serve to promote women’s collectives. Financing (in USD Million) Amount Total Project Cost 2.75 Oct 25, 2022 Page 2 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) B. Is the project 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 [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The proposed Grant will support approximately 6,500 rural, poor women, including home-based workers, small scale unorganized producers and community-based entrepreneurs, to work as a collective in the non-farm sector. The grant will provide basic skills and organization to create the ecosystem for business in the rural economy. Multiple innovative women’s economic empowerment models will be pilot-tested through value chain development (e.g. cardamom and spice; handicrafts; food processing and related services). This will be implemented through the formation of producer groups that will be provided with skill upgrading, marketing, prototype development, basic financial literacy and accounting. The project will support the establishment/strengthening of community facilitation centers (CFCs) at community level, which will train community professionals to manage the CFCs and support producer groups beyond pilot implementation. It will also support capable group members demonstrating business growth, consistently increased profitability and product diversification based on market demands to further improve their individual businesses. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Public Disclosure The project will take place in Province 1, mainly Taplejung and Sankhuwasabha districts for cardamom and allo value chain development, and Province 4 (handicrafts). Geographically Taplejung is a mountainous district located near to the world's third highest peak Kanchenjunga (8586 m). It is situated at elevations ranging from 670 meters (2,200 ft) to 8,586 metres (28,169 ft) from sea level. A road connects the district headquarters with the Tarai plains. Most of the population are involved in agriculture, and the vegetation zones range from sub-tropical to temperate forests, alpine meadows, and snow, and ice. The Arun River enters the Sankhuwasabha district from Tibet at an elevation of about 3,500 meters (11,500 feet) and flows south across the district, forming one of the world's deepest valleys relative to 8,481 meters Makalu to the west and 8,586 meters Kangchenjunga to the east. Gandaki Province is spread over the Himalayan, Hilly and Terai region of Nepal. The Annapurna Conservation Area (ACA), located in Gandaki Province, is the largest protected area in Nepal, with more than 100,000 habitants comprising 23,202 households (2018) and 28 ethnic groups. The ACA covers an area of 7,629 km2 (5.18 % of the country’s surface area and 22.16 % of total Protected Area). Together with 376,000 tourists visiting the capital, Pokhara, the ACA accounts for more than 40 % of Nepal’s tourist arrivals. D. 2. Borrower’s Institutional Capacity The Chaudhary Foundation, the corporate social responsibility arm of the Chaudhary Group, will be directly responsible for overall program implementation and coordination, including annual data collection, as well as development and maintenance of an M&E system. The Foundation has been operational since 1995 and has two international arms, one in India and the other in Moldova. The Foundation’s 25-year report informs that since the launch of its interventions in enterprise development, the Foundation has benefited over 13,000 microentrepreneurs. Oct 25, 2022 Page 3 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) The other sectors in which Chaudhary Foundation undertakes community development work also include health and education. Currently the Chaudhary Foundation has multiple initiatives related to enterprise development and livelihoods in five out of seven provinces and envisions expansion of its outreach to all districts across all seven provinces. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Low Environmental Risk Rating Low The environmental risk rating is low. The project will support small-scale farm and non-farm activities such as cardamom and spice farming, handicraft, food processing and related services to scale up women’s economic empowerment through value chain development. The small-scale farm works will take place in previously developed land parcels and the project simply brings together the smallholders already involved in the activities. The project does not involve any activities involving land clearing, land conversion or encroaching forested lands for raw material for handicrafts. That said, some of the activities under the project may involve the use of non-timber forest products as primary raw materials, but the ESMF and subproject specific ESMP will include clear provisions to ensure that such products are sourced under the existing regulatory framework of the country. The main associated environmental risks will be related to the generation of solid waste, potential generation of limited quantities of wastewater, potential use of limited quantities of hazardous materials, occupational health and safety, hygiene and sanitation issue through improper food processing and preservation techniques, and inappropriate handling and use of Public Disclosure pesticides in farm and non-farm activities. These risks are predictable, low in magnitude, mostly temporary, site specific and reversible. Mitigation measures can be administered in a straight forward manner through the implementation of an Environmental and Social framework (ESMF) and site-specific ESMPs. Social Risk Rating Low Considering the type and nature of project and its related activities, the social risk rating is considered low. The most prominent risk is related to exclusion of women of poor, remote indigenous communities or Dalits, vulnerable, landless and other marginalized groups in project activities and opportunities if their participation in project design and implemented is not secured. There is also an additional risk of elite capture by influential farmers of marginalized small and landless women farmers, and laborers. However, given that the project is focused to poor and marginalized women, the above potential risks seem not likely to occur. Capacity limitations of the borrower to effectively identify beneficiaries, carry out consultations, selection of appropriate WEE models, application of training packages and engage with stakeholders may have negative impacts on stakeholders. To mitigate, the ESMF, site-specific ESMPs and Stakeholder Engagement Plan (SEP) will include provisions to ensure that the relevant groups are identified and involved in the project related opportunities. With the ESMF, ESMPs and SEP’s inputs, project design will determine clear eligibility criteria to reach main target groups. Moreover, the SEP will also set up a Grievance Redressal Mechanism (GRM) to address and manage possible complaints and grievance of potential beneficiaries and will lay out a clear mechanism for periodic consultation with project stakeholders and information disclosure. The SEA/SH risk is considered low but opportunities to prevent and mitigate risks will be sought through awareness and referral mechanisms. Oct 25, 2022 Page 4 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: This standard is relevant as the project includes support to economic growth of women’s groups through the value chain development of farm and non-farm activities. These activities may cause environmental and social risks and impacts. It is expected that the activities result in the generation of limited quantities of solid waste and wastewater and potential use of limited quantities of hazardous materials. Some of the activities may require the use of pesticides and other hazardous chemicals thus creating associated pollution and adverse impact to human health. Activities are also likely to require limited sources of energy for processing which will be primarily from electricity, LPG and solar. The project will consider and apply technically and financially feasible resource efficiency and pollution prevention measures to minimize potential adverse impacts on human health, which will be clearly stated in the ESMF along with concrete mitigation measures that would be mentioned in the project specific ESMP. The project aims to implement multiple innovative women empowerment models and intends to test those models through value chain development activities, such as cardamom, spice, and food processing as well as making handicrafts. Considering the scale of activities, impacts on the Community Health and Safety is expected to be minimal. The ESMF will assess the possible impacts on the community from these activities and pollution and mitigation measures will be described in the ESMF and integrated into specific ESMPs as applicable. As the proposed project’s core intervention involves primary production and harvesting of living natural resources Public Disclosure (farming and cultivation of plants and supports for small-scale producers). This requires sustainable management of living natural resources through the application of good management practices and available technology as prescribed in the ESMF. All project activities are expected to take place within the existing footprint of previously developed land parcels and the project will not entail any land conversion or land clearing. Also, most activities are expected to be developed in degraded and heavily modified habitats. The screening list of the ESMF will ensure exclusion of any sites within or in close proximity to protected areas or critical habitats. However, if, some activities require use of non-timber forest products and wood as raw materials, clearance/approval from conservation areas will be taken before the implementation of activities during the preparation of ESMPs. The ESMF will explicitly provide guidance for the procedures for sourcing raw materials under the existing regulatory framework of the country. The other issues relate to the possible exclusion of women from poor, remote locations, disadvantaged or otherwise vulnerable groups, such as IPs, Dalits or from female-headed households, from receiving benefits from the project due to poor communication, information disclosure, inadequate outreach resulting to being left out from becoming a member in producer groups and thus affiliations with CFCs, incubators, or other support organizations for their business growth and marketing. The project aims to address this through a targeting mechanism to identify women entrepreneurs and micro enterprises who are vulnerable, landless, limited in scope of livelihood and lower caste, but already have basic productive and artisan skills and are yet to be integrated into value chains. The extensive rural network of Unnati will be used to reach these rural entrepreneurs through communications campaign. The pilot will be demand-driven by self-selected rural entrepreneurs, particularly women, to ensure ownership and empowerment of beneficiaries. The ESMF will include IPF to enhance opportunities for IP women to participate in and benefit from project activities. Oct 25, 2022 Page 5 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) The project will conduct an Environmental and Social Assessment (ESA) and will develop an Environment and Social Management Framework (ESMF), given that the geographic location and exact nature of the activities are not yet determined. The ESMF will cover potential impacts and risks related to ESS2 (Labor and Working Conditions); ESS3 (pollution prevention and control), ESS4 (community health and safety and security), ESS6 (impacts on Natural or Critical Habitats or Key Ecosystem Services), ESS7 (Indigenous Population). Additional assessments and/or plans required under the ESF or other World Bank requirements, including the environmental and social capacity assessment at community level, the Stakeholder Engagement Plan (SEP), SEA/SH Action Plan will also be prepared. Based on the findings of all these assessments, the Environmental and Social Commitment Plan (ESCP) will be prepared. All potential environmental risks and impacts are predictable, site-specific and expected to be temporary and reversible, low in magnitude and can be managed through known and readily available mitigation and management measures. As additional information are available during preparation of project sites the relevancy of ESS standards will be reassessed and updated during appraisal. Areas where “Use of Borrower Framework” is being considered: No ESS10 Stakeholder Engagement and Information Disclosure This standard is relevant for this project. Project will require an extensive and comprehensive plan for stakeholder engagement, to adequately identify all stakeholders and to develop plans to appropriately engage with these Public Disclosure stakeholders. A Stakeholder Engagement Plan (SEP) will be developed by the borrower/ implementing agency and disclosed as early as possible before the appraisal which will be proportional to the nature and scale of the project and associated risks and impacts identified. As the project has poor, vulnerable, landless and lower caste as the targeted beneficiaries, the project will develop an effective community engagement framework and the Grievance Redressal Mechanism (GRM) to address and manage possible complaints and grievance pf potential beneficiaries, and be included in the SEP. The SEP will also include interested parties, target beneficiaries, and those directly impacted project affected persons, including vulnerable rural women and indigenous groups. The SEP will include alternative methods and options for undertaking consultations where social distancing and other relevant precautions need to be followed in the context of COVID-19. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions This ESS 2 is relevant. The project involves multiple innovative women empowerment models to be tested through value chain development, such as cardamom and spice processing and related services as well as making handicrafts, along with skill upgrading, marketing, prototype development, basic financial literacy, and accounting trainings. Hence labor issues at the beneficiary level is not anticipated. On the IA, Chaudhary Foundation's side there could be labor issues related to the direct and contracted workers/employees for the operation of the project. It is anticipated that the risk associated with IAs employee mobilization will be limited and will be managed through development of Oct 25, 2022 Page 6 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) a simple labor Management procedure proportional to the risk and development of code of conduct as part of the ESMF. In addition, the financing of these activities may also lead to OHS risks from handling of pesticides, dyes, breathing toxic chemicals, smoke, ergonomics / back pains to the beneficiary women / entrepreneurs who are expected to engage in project activities. ESS3 Resource Efficiency and Pollution Prevention and Management This standard is not relevant. Depending on further information available during project preparation the application of this standard will be reassessed. ESS4 Community Health and Safety This standard is not relevant. Depending on further information available during project preparation the application of this standard will be reassessed. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement ESS5 is not relevant to this project since no activities involving land acquisition are planned under the JSDF support. Given the fact that the pilot design of the project avoids all types of construction activities and land acquisition and is limited to support the development of value chain development at the grassroot levels to promote economic Public Disclosure empowerment of women by promoting entrepreneurship, enterprise and market linkages.Moreover, agriculture related activities under Activity 1, is envisioned to take place in previously developed land parcels and aims to bring together the smallholders already involved in the activities. Under Activity 2 the project will support the establishment of Community Facilitation Centers (CFCs) at community level, and train community professionals to manage the CFCs and support producer groups beyond pilot implementation. If no CFC exists, the recipient may work with local governments or other partners to secure the necessary infrastructure including land, building and in some cases, technical equipment. Innovative approaches will be employed for rural, poor women to access and participate in the value chain and strengthen their entrepreneurial capacities. Market-adaptable innovations in product design to diversify the portfolio will be considered and launched through the CFCs. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources This standard is not relevant. Depending on further information available during project preparation the application of this standard will be reassessed. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities ESS7 is relevant for this project given that the targeted, beneficiary women from rural, remote areas may belong to indigenous communities. However, as the information on the exact subproject locations is unknown at this stage, the specific information to assess project related impact on the indigenous population cannot be ascertained now. Further assessment will be made during the appraisal stage to identify indigenous population and communities that Oct 25, 2022 Page 7 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) maybe impacted by the project and suggest mitigation measures to enhance opportunities for IP women to participate in and benefit from project activities. IPF will be proposed to be incorporated in the ESMF as an annex. ESS8 Cultural Heritage ESS8 is not relevant as the project activities will not open up new agricultural areas, but focus on existing farms and, which are unlikely to affect the tangible and intangible cultural heritage and/or access to known physical cultural resources such as structures of spiritual value to communities, objects and structures having high landscape value etc. ESS9 Financial Intermediaries The project does not involve Financial Intermediaries. Hence ESS9 is not relevant to this project. B.3 Other Relevant Project Risks Other relevant risks are related to evolving federal structure, political instability and the vulnerability due to COVID 19. C. Legal Operational Policies that Apply Public Disclosure OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners None B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: Environment and Social Management Framework, Environment and Social Commitment Plan, Stakeholder Engagement Plan, SEA/SH Action Plan - Disclosure of the documents. Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): Oct 25, 2022 Page 8 of 9 The World Bank Women’s Economic Empowerment through Value Chain Development of Small-Scale Farm and Non-Farm Activities (P174496) Organizational structure with qualified staff - consisting of environmental and social staff to be set up, regular reporting of ESHS, ESMP, ESMF compliance, incident and accident reporting, labor management procedure, effective and functional GRM mechanism, and implementation of capacity building program of the client. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 14-Oct-2022 IV. CONTACT POINTS World Bank Contact: Bremala Malli Title: Sr Agricultural Spec. Telephone No: +1-202-458-9752 Email: bnathan@worldbank.org Contact: Kamran Akbar Title: Senior Social Development Specialist Telephone No: 5716+6263 / 97-7-9863602298 Email: kakbar1@worldbank.org Borrower/Client/Recipient Borrower: Chaudhary Group Foundation Public Disclosure Implementing Agency(ies) Implementing Agency: Chaudhary Foundation V. 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 VI. APPROVAL Task Team Leader(s): Bremala Malli, Kamran Akbar Practice Manager (ENR/Social) Robin Mearns Recommended on 30-Jun-2022 at 08:37:1 GMT-04:00 Oct 25, 2022 Page 9 of 9