The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 03/04/2021 | Report No: ESRSC01889 Mar 04, 2021 Page 1 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Serbia EUROPE AND CENTRAL ASIA P174251 Project Name Serbia Local Infrastructure and Institutional Development Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Transport Investment Project 9/1/2021 12/16/2021 Financing Borrower(s) Implementing Agency(ies) Republic of Serbia Ministry of Construction, Transport, and Infrastructure Proposed Development Objective Public Disclosure The Project Development Objective is to increase efficiency, inclusiveness, and sustainability of LSG infrastructure service delivery Financing (in USD Million) Amount Total Project Cost 100.00 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 Project will be a mixture of investment and technical assistance to boost green and inclusive infrastructure development and infrastructure service provision at the local level, including the implementation of the relevant chapters of SUDS. The project will focus on strengthening existing regulatory and legal framework of the country rather than on developing new set of rules and regulations. The first component of the project will finance local infrastructure with a clear focus on greening infrastructure investments and service provision at the local level. The second component will focus on enhancing systems and strategic planning that should lead to improved local public financial management and infrastructure investment management including service provision. Early discussions with Mar 04, 2021 Page 2 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) authorities suggest that the technical assistance and capacity building efforts may focus on the planning and budgeting phase, asset management, service delivery, and procurement. The project will be highly decentralized, aiming at a sustainable increase of LSG capacities in procurement and financial management. The project envisions, for example, that procurement will be conducted by the LSGs under close support and guidance by the PIU and CFU. The third component will finance project management and strong capacity building in support of decentralization of functions. To incentivize a change, the LSGs will receive grant transfers from the central level for infrastructure investments, and will sign an MoU with the central government, which will include a set of commitments to improve public financial and asset management at the local level. The mechanism to ensure that the financing provided by the project is additional and does not substitute for current LSG investments in infrastructure is still being discussed with the client. The project goal of supporting sustainable local infrastructure and enhanced capacities for local infrastructure investments will be achieved through implementation of the following three components: (i) Rebuilding better; (ii) Strengthening PFM and asset management systems; and (iii) Project management and capacity building. Components: Component 1. Rebuilding Better (USD 85 million). The objective of this component is to promote infrastructure investment paradigm shift toward greening of infrastructure and improved infrastructure service delivery. This will be achieved by financing targeted infrastructure investments and modernization of service delivery. Each LSG will be eligible for grants for infrastructure investments up to a value determined per predefined formula, but the award of a grant will be subject to compliance with agreed eligibility criteria. The eligibility criteria will be penciled during the Public Disclosure project preparation, but it is envisaged that only those interventions that are increasing resilience and safety and/or reducing environmental footprint will be eligible. In addition to grant transfers, this component will finance technical assistance and selected pilots in the field of smart and efficient service delivery. Under the component the following will be financed: (i) Greening of Infrastructure; and (ii) Improved service delivery. Component 2. Strengthening PFM and Asset Management Systems at the LSG level (USD 10 million). The objective of this component is to improve the effectiveness and sustainability of infrastructure investments at the local level through strengthening LSGs’ capacity for management of public finances and assets. The component will finance a mixture of technical assistance and development of tools to strengthen and equip LSGs with objective infrastructure investments planning and decision-making frameworks, with the focus on infrastructure maintenance and rehabilitation. In addition, the component will finance technical assistance to enhance the policy framework for financing infrastructure at the LSG level, with a focus on the fiscal decentralization framework and the ability of LSGs to raise commercial financing for infrastructure. To this end, the component will finance activities to: (i) enhance the policy framework for financing infrastructure at the LSG level; and (ii) strengthen public financial and asset management at the LSG level. Component 3: Project implementation support and capacity building (USD 5 million). The objective of this component is to establish institutional set up that will enable successful implementation of the project and equipping LSGs with capacities to perform their infrastructure related functions in a sustainable manner. The PIU will be responsible for overall project implementation. Beside regular tasks, they will have a strong focus on providing a close support to LSGs during projects prioritization, preparation, procurement, and supervision, to ensure the project yields long term results. The component will also finance relevant capacity building activities and knowledge exchanges. To this end, the component will finance (i) project management and (ii) capacity building. Mar 04, 2021 Page 3 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) While a new Country Partnership Framework (CPF) is planned for next year, the current CPF identifies infrastructure as one of the top priority areas. The proposed project is aligned with CPF objective 2d -P5 enhanced infrastructure networks. According to the CPF, improved efficiency in spending and better-quality maintenance of infrastructure will be pursued, as well as improved prioritization of public investments and facilitation of private sector investment. The CPF consultation process brought out the criticality of the connection to infrastructure networks for the development of small cities, rural areas and communities. It showed the direct impact of infrastructure connections on rural economic development, as municipalities that lack access to infrastructure have experienced a much deeper economic decline accompanied with a greater number of people falling back into poverty . Enhancing the quality of public infrastructure to better support international, regional and domestic connectivity would have a medium-high impact on the Twin Goals. Although the WBG has been heavily engaged in infrastructure development, both through investment support to transport (roads and railways) and energy sectors, further support to planning and management infrastructure is needed. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Serbia's terrain ranges from fertile plains of northern Vojvodina to limestone ranges and basins in the east and ancient mountains and hills in the southeast. The north is dominated by the Danube River. The Morava River, a tributary of the Danube, flows through the more mountainous southern regions of Serbia. The terrain of central Serbia consists chiefly of hills and low to medium-high mountains, interspersed with numerous rivers and creeks. The Public Disclosure main communication line stretches south of Belgrade towards Niš and Skopje, along the valley formed by the Great and South Morava rivers. Major cities and the main railroad and highway, are located on this line. To the east of this line, in an area that is relatively sparsely populated, the terrain rises to the limestone ranges of Stara Planina and the Serbian Carpathians. To the west, mountains rise towards the southwest but do not form real ridges. Zlatibor and Kopaonik are the highest mountains in this area. Practically the entire territory (92%) of Serbia belongs to the Danube drainage basin. Other main rivers in Serbia are tributaries of the Danube including the Sava (flowing from the west), Tisa (flowing from the north), Drina (flowing from the south), and Morava. The nature of Serbia is characterized by a high diversity of flora and fauna and represents a significant part of the richness and diversity of Europe's natural heritage. Five of 12 world biomes and of six Europe's biomes are represented in Serbia. Its territory also represents a significant center of diversity of endemic flora of the Balkan Peninsula. The total protected area in Serbia currently stands at 677.950 ha or 7.66% of the territory of Serbia. There are 469 protected areas: 5 national parks, 18 nature parks, 21 outstanding natural landscapes, 69 nature reserves, 6 protected habitats, 314 monuments of nature, 36 sites of cultural and historical importance. The project will avoid protected or sensitive areas. Serbia's legislation is mostly harmonized with the EU. The waste management is based on a major shift from the model of regional sanitary landfills to regional waste management centers, which include waste sorting, separation, and recycling, as well as non-recyclable waste treatment. At this time, there are 11 regional sanitary landfills; 11 transfer stations, in 5 of which the separation of individual fractions of municipal waste is performed; 36 recycling centers, but only 27 of which are functional. The project will finance local government-related infrastructure in a range between 80,000 to 500,0000 Euro per municipality and will be made available to all Serbian municipalities. The project will finance green infrastructure through defined types of activities prior to announcing the grant call and will be part of the POM. Mar 04, 2021 Page 4 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) Based on initial screening, vulnerable groups include: retired, elderly, and people with disabilities and chronic diseases; single-parent headed households, male and female; people with low literacy and ICT knowledge; economically marginalized and disadvantaged groups; persons living below the poverty line; Roma people; Ethnic minorities (e.g. Hungarians) and women. Since the Project is being implemented across the country the exact number of people within detected vulnerable groups is not known at this stage. However, the project is not expected to have a major negative impact on vulnerable or excluded groups and will arrange for proactive engagement with vulnerable groups in order to ensure as much as possible that their needs are met. Marginalized and poorest will be targeted and outreached within each local government. In urban areas usually poorest segments of the population are concentrated spatially, usually, they live in the areas underserved with infrastructure service. Thus, targeting the poorest within a local government would be done through efforts to outreach underserved areas within local governments. D. 2. Borrower’s Institutional Capacity The main state body for environmentally-related issues is the Ministry of Environmental Protection (MEP). MEP has a clearly defined scope of work distributed across several areas, such as but not limited to - inspection supervision in the field of environmental protection; implementation of the Convention on Public Participation, Access to Information and the Right to Environmental Protection; determining the conditions for environmental protection in spatial planning and construction; waste management. MEP is divided into several sectors: financial management and control; environmental management; climate protection and climate change; strategic planning and projects; waste and wastewater; precaution and environmental monitoring; international cooperation and European integration. Under the Sector for precaution and environmental, monitoring and control work are being conducted by Environmental Protection Inspectorate. Besides MEP, the very significant role has The Environmental Protection Public Disclosure Agency (EPA), as a body within the Ministry of Environmental Protection, in charge of the monitoring of the state of environmental factors and Implementation of state monitoring of air and water quality, including implementation of prescribed and harmonized programs for control of air, surface water, and groundwater quality. In January 2020, after years of preparation, Serbia has submitted a negotiating position to European Commission for Chapter 27 - Environment and Climate Change in EU Accession Negotiations. So in the area of horizontal legislation, Serbia has a high level of alignment with the EU acquis. The ban on employment in the public sector has generally been the policy for years, and during 2020 this decision was lifted, so capacity building is expected in all areas, including the environment. The Project will be implemented by the Ministry of Construction, Transport, and Infrastructure (MCTI) through an existing PIU, supported by the CFU in the Ministry of Finance (MoF) and supplemented by employees in the municipalities officially assigned to the project. Although some of the anticipated project activities related to municipal infrastructure may be beyond the scope of the (MCTI) the PIU will ensure that all of the proposed activities will be discussed and cleared by the appropriate authorities and ministries and that all relevant permits will be obtained prior to the start of any works. The MCTI’s PIU has already been established to manage the Serbian part of the WB Trade and Transport Facilitation Project and Railway Modernization Project MPA, and the same PIU will manage the Serbia LIID Project. The already existent PIU in the MCTI will be extended with the team to implement the project, and project and strengthened with the appropriate managerial and technical capacity to enable it to carry out Project implementation. The PIU will be supported by one environmental specialist and one social specialist, either full-time or part-time staff of consultants during project implementation, and depending on the scope of works additional hires may be required which at this time cannot be determined. All additional staffing would be agreed upon by the PIU and the Bank team and supported by the Project. The obligations of the specialists will include oversight of environmental and social issues within the Project. Mar 04, 2021 Page 5 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate Environmental Risk Rating Moderate The project will have long-term positive impacts, given its aimed green and sustainable footprint, but there is a number of potential short-term risks and potential adverse impacts that need to be considered, mostly related to infrastructure investments under Component 1. The eligible sub-projects will have to be classified as green per the definition included in the POM and the type of projects anticipated to be financed are: local roads rehabilitation and upgrade to incorporate bike paths, closure of the local roads, and transformation to pedestrian zones and green public spaces, shifting from diesel-run public transport to natural gas or electric, the substitution of old public lighting with EE bulbs, etc. There will be no water supply and waste water-related projects neither sub-projects related to solid waste disposal. The scope and exact locations of these interventions are yet to be determined, but all works are envisaged to be carried out within the scope of existing infrastructural facilities. In this regard, the potential environmental risks and adverse impacts that could be identified are (i) impacts on ground and surface water, soil and air contamination (dust and noise); (ii) occupational health and safety (OHS) issues and access to work sites; (iii) improper waste management. To mitigate these risks and adverse impacts, an Environmental and Social Management Framework (ESMF) will be prepared, as the guiding instrument in addressing and mitigating community, environmental adverse impacts, and OHS risks in Project implementation, but also to set the criteria in adequate project selection, implementation, and monitoring. The ESMF will also set forth a screening mechanism to ensure no Public Disclosure substantial or high-risk activities are financed under the Project. As mentioned, at this stage all works will be undertaken within the existing infrastructural footprint (with the possibility of minor expansion that can result in land acquisition), thus the environmental impacts are expected to be low in magnitude, predictable, and temporary if identified, mitigated, and dealt properly. Site-specific Environmental and Social Management Plans (ESMPs) will be prepared and will include site-specific impacts and mitigation measures. The ESMPs provisions will be incorporated into the bidding documents and the contractor's contract for each sub-project. Components 2 and 3 should have no significant environmental impacts as they are focusing on strengthening policies and practices and project management and capacity building. The project will be implemented through the existing PIU in the Ministry of Construction, Transport, and Infrastructure (MCTI), with the obligation to hire additional environmental and social staff before the start of any works. Social Risk Rating Moderate Considering the nature of the Project, strong citizen and stakeholder engagement (CE/SE) for the proposed activities are the key to Project success and, hence, must remain in focus during the entire project implementation period, and especially preparation. Although exact Project activities are not defined at this time, it can be presumed that the interventions will not involve large land acquisition. Mostly small-scale impacts due to spot widening and/or minor impacts on livelihoods (e.g. relocation of formal or informal kiosks or stands) in urban areas are expected. Furthermore, resettlement resulting from Project activities is not anticipated. Mar 04, 2021 Page 6 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) ESS2 will apply to direct workers (PIU) and to (ii) contracted workers. The employment will most probably be generated at the local level, considering the small scope of civil works under component 1, thus minimizing the risk of labor influx and Sexual Exploitation and Abuse (SEA)/Sexual Harassment (SH), SH, in particular, can be a risk during project construction and operation and therefore the project will include measures to address it. Acknowledging the urban character of expected sub-projects under Component 1, risks under ESS4 are mainly in relation to the inability for full partition or fencing off construction sites. Moreover, Traffic/Road Safety could be impacted through Project activities. This will be mitigated through community-level awareness efforts. Key vulnerable groups include retired, elderly, and people with disabilities and chronic disease; single-parent-headed households, male and female; people with low literacy and ICT knowledge; economically marginalized and disadvantaged groups; persons living below the poverty line; and women. These groups are not likely to be negatively affected by the Project. However, engagement of the poorest, who are usually concentrated in the least served urban areas will be a vital and integral part of the stakeholder engagement approach. Considering the aforementioned, the project social risk is rated as moderate. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment Public Disclosure 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. The eligible sub-projects expected to be financed, or at least the types of activities, will be defined by Appraisal and will be part of the screening criteria in the Environmental and Social Management Framework (ESMF) and Project Operation Manual (POM). The preliminary guidance is that the investments are meant to build back better and support the greening of select public infrastructure in selected municipalities. The initial criteria, at this stage, is that the activities proposed would result in energy, water, or raw material savings, pollution prevention, an increase of green areas, and an overall decrease of GHG emissions along with climate-resilient local transport. The actual definition of the types of projects or their decrease of the environmental footprint will be defined following further discussions with the Borrower and development of the project itself. Based on initial screening, vulnerable groups could include: retired persons, elderly, and people with disabilities and chronic diseases; single-parent headed households, both male and female; people with low literacy and ICT knowledge; economically marginalized and disadvantaged groups; persons living below the poverty line; Roma people; Ethnic minorities (e.g. Hungarians) and women. Since the Project is being implemented across the country the exact number of people within vulnerable groups is not known with certainty at this stage. However, the project is not expected to have a negative impact on vulnerable or excluded groups. In order to minimize and mitigate any potential negative impacts on such groups, the Project will facilitate a proactive engagement with vulnerable individuals or groups to ensure, as much as possible, that their needs are met. Expected social impacts under component 1 include OHS risks in relation to civil works; Community health and safety risks including trespassing of the construction site, traffic, generation by the project, traffic interruptions and risk of Mar 04, 2021 Page 7 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) inadequate waste management; and land loss due to minor land acquisition activities. As the sub-projects which potentially envisage land acquisition activities are not known, ESS5 is applicable on a precautionary basis. Social risks under components 2 and 3 are not anticipated at this stage. There will be community-level engagement and awareness-raising to counter impacts like traffic interruptions etc. Combination of country-level of SEA/SH risk and the concrete proposed project SEA/SH risk is low, mostly because the sub-projects to be financed will be implemented with domestic companies and the labor used from the local areas. There will be no camps and a big number of workers per site. The Project is expected to have overall positive environmental impacts as it should contribute to higher and more sustainable growth as well as improved services delivery by supporting local governments' capacity to build and maintain local infrastructure. Detailed eligibility criteria will be defined at a later stage, but It is expected they will include aspects like importance for the local community, connectivity to jobs and business, the inclusion of vulnerable and poor, resilience and safety, and environmental footprint, plus will also support environmentally friendly programs/projects, which could aim to protect resources as well as energy efficiency. The envisaged eligible sectors are transport, energy, solid waste, and public space. Therefore, some environmental adverse impacts and risks may occur in Component 1, within physical works on rehabilitation and reconstruction of infrastructure facilities, but the project will not include works outside the already existing parameters. If the potential risks and adverse impacts are identified timely and all mitigation measures are Public Disclosure applied adequately these should be small in magnitude and temporary. Thus impacts from these activities should be typical for construction works, and as such, predictable localized and, easily manageable. Some impacts for the communities living around the construction sites, that could be identified are noise emission, dust emission, wastewater, construction waste, risks to workers (OHS issues). Due to the scale of the proposed works and all mitigation measures proposed, no major potential risks are anticipated for the communities living in the vicinities of the future work sites. These environmental risks and adverse impacts will need to be assessed and managed through a risk-based approach. In order to identify these adverse impacts and risks and manage them properly, and ESMF will be prepared and implemented, and based on this, other required management plans and communications strategies will be prepared, primarily site-specific ESMPs (with clearly defined procedures for screening, preparation, review, and consultation and addressed responsibility roles). The ESMF will include, but not limited to, gaps and responsibilities for ESF implementation and mitigation measures, a methodology for environmental and social risks and adverse impacts screening, as well as a list of non-eligible activities. The ESMF will also set forth a screening mechanism to ensure no substantial or high-risk activities (as mentioned above and further to be defined within the meaning of green infrastructure) are financed under the Project. Due to the decentralized nature of the project, the ESMF will need to include very clear and concrete eligibility criteria, screening procedures, and monitoring provisions. The ESMF will also include provisions for the avoidance of any sensitive environments or protected areas, guidance for pollution prevention and environmentally sound resource use under ESS3, and any guidance on cultural heritage or chance finds as stipulated under ESS8. Mar 04, 2021 Page 8 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) Furthermore, a Grant Operation Manual (GOM) will be prepared in order to provide in a more detailed manner a list of eligible activities, selection process, and tools for environmental screening in line with the provisions of the ESMF. The ESMF sets out environmental and social (E&S) risk assessment requirements for each activity, rehabilitation, and reconstruction. It provides guidance on the preparation of site-specific Environmental and Social Management Plans (ESMPs). The ESMF will also consider national legal requirements for Environmental Impact Assessment (EIA) and Strategic Environmental Impact Assessment (SEIA) if occurs that certain project activities fall into the category of projects/plans/strategies for which an impact assessment is required. This area is defined by the Law on EIA (OG 135/2002, 36/2009) and the Law on SEIA (135/2004, 88/2010). As a legal provision, this measure is necessary in order to protect the environment, based on the preparation of studies and consultations with public participation and analysis of alternative measures, in order to predict the harmful effects of certain projects environment, as well as identify and propose measures by which harmful effects can be prevented, reduced or eliminated. Areas where “Use of Borrower Framework” is being considered: The borrower framework will not be used in part or as a whole for this Project. Public Disclosure ESS10 Stakeholder Engagement and Information Disclosure This standard is relevant. Considering the nature of the Project, strong community, and stakeholder engagement (CE/SE) for the proposed activities are the key to Project success. Given the nationwide scope and multisectoral character of the Project, the community engagement process will be two dimensional: (I) Presentation of Project and sector and sub-project selection and (ii) sub-project-specific community engagement. The first dimension of community engagement will focus on informing the public about the Project, Project objectives, eligibility criteria for grants, etc. Once the sub-project is selected, the second dimension of engagement will focus on site-specific impacts, opportunities, and challenges of the sub-projects. In order to ensure timely and precise stakeholder identification a Project level Stakeholder Engagement Plan (SEP), acceptable to the Bank will be developed, disclosed, and consulted by the Borrower prior to Project Appraisal. The Project level SEP shall identify Project Affected Parties (PAP) and Other Interested Parties (OIP), as well as vulnerable groups, and ensure that planning, implementation, and monitoring of CE activities are adequately coordinated across key stakeholders. Furthermore, the project level Grievance Redress Mechanism (GRM) shall be presented as a part of the Project level SEP. For each project activity and subproject, under all three components, a sub-project level Stakeholder Engagement Plan will be developed according to the Project level SEP. The sub-project level SEP will identify all interested and affected parties and propose concrete action plans for engaging different stakeholders. Mar 04, 2021 Page 9 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) The project’s CE activity will mainstream the engagement of vulnerable groups, and ensure that they benefit from the project. The stakeholder engagement activities will start during the early preparation of the Project and continue throughout the Project’s lifecycle. The project will be used to strengthen the capacity of the local government in the dialogue with the communities in local road network maintenance. Due to the COVID 19 pandemic outbreak, during the course of project implementation, limitations to traditional stakeholder engagement activities may be imposed (i.e. exercising social distancing and avoiding public gatherings) to prevent and reduce the risk of the virus transmission. In such circumstances, citizen and stakeholder engagement will be performed as per specifications listed in the World Bank’s Technical Note: Public Consultations and Stakeholder Engagement in WB-supported operations when there are constraints on conducting public meetings 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 The standard is relevant. The standard will apply to (i) direct workers hired to implement the project (PIU) and to (ii) contracted workers engaged by the contractors and sub-contractors. The project will not engage community workers. OHS procedures in Serbia are in line with ILO conventions, with clearly defined procedures and responsibilities as well as implementation control. It will be assessed during project preparation if primary supply workers, as per ESS2 definition, would be engaged. The ESMF will include Labor-Management Procedures (LMP) and sections on Public Disclosure Environment Health and Safety (EHS) which will set out the way OHS issues will be managed in accordance with the requirements of national law and ESS2. Direct workers will be hired on a consultancy basis whereby no objection from the Bank team will be obtained for each position. The most important aspect of the implementation of the ESS2 will be ensuring contracted companies apply the respective provisions determined in the Labor-Management Procedures (LMP). Given the expected small- scale nature of the works, the employment will most probably be generated at the local level, thus minimizing the risk of labor influx and the expectancy of workers from outside of the region. The project is unlikely to encounter SEA issues, but SH is possible during construction and operation and thus the LMP will include measures to address such risks. Since labor-related laws in Serbia comply with ILO conventions and are most regularly enforced, the LMP, acceptable to the Bank, will be prepared, reviewed, approved, and disclosed prior to the appraisal. The procedures will propose how to overcome gaps between the legal framework of Serbia and the ESS2 requirements based on specific works that will be conducted under the Project. The LMP will be a part of tendering documents making them binding for the contractor. Provisions for establishing a GRM for the employees will be a part of the LMP. ESS3 Resource Efficiency and Pollution Prevention and Management This Standard is relevant, as it is expected that a certain amount of waste will be generated as a result of the reconstruction and rehabilitation works under Component 1. If it is estimated that hazardous waste could occur during these works, this needs to be addressed in a manner prescribed for the management of this type of waste. Mar 04, 2021 Page 10 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) Prior to the start of works, Waste Management Plan needs to be prepared as part of site-specific ESMPs, to determine the quantities of waste, their categorization, and the proposed handling, storage, transport, and disposal measures. Site-specific ESMPs will be prepared and implemented in order to address procedures related to waste management, wastewater, communal, hazardous waste, if relevant. The specifics of this standard will be incorporated into the ESMF and more detailed within each site-specific ESIA/ESMP. All waste management activities need to also include adequate mitigation and rehabilitation practices, as appropriate. Overall, due to the project’s green and sustainable nature, significant use of natural resources is not expected. On the other side, what could be expected is reduced use of energy and natural resources as project grants will be available for these kinds of projects. Grants will be provided for each LSG (value will be determined per predefined formula), but eligible infrastructure investment will have to be green, to improve resilience, safety, and/or environmental footprint and will focus on transport, energy, solid waste, and public space. Prior to Appraisal the team will work with the Client to determine the actual scope of the anticipated projects, whether they will be new greening developments, retrofitting of the existing infrastructure, and if interventions that do not include greening aspects would be financed. This will be further defined in the project documents inclusive of the ESMF. At this stage, some of the anticipated projects include activities that decrease amounts of waste being deposited to landfills, promote recycling, promote sound construction with limited use of new construction materials, water-saving measures where possible, and use of renewable energy where needed ESS4 Community Health and Safety Public Disclosure The Standard is relevant to the project, as some of the interventions on existing infrastructures could impact the overall community, where at this stage traffic management and traffic safety are identified as one of the main impacts. Given the urban character of expected sub-projects under Component 1, full partition or fencing off construction sites might not be possible, therefore, signaling will be installed and mitigation measures to control trespasses, excessive noise, and dust levels will be ensured through a robust mitigation and management plan in the Environmental and Social Assessments (ESA) for each sub-project. Risks to the community stemming from unauthorized access to working sites will be prevented through a set of measures specified in ESAs such as allowing access only to authorized persons with informational and warning signs and fences. Traffic/Road Safety Management Plans with measures to ensure the safety and well being of nearby communities and road users during construction and for the operation phase will be prepared together with the Emergency Response Plans with procedures to respond to accidental leaks, spills, emissions, fires, and other unforeseen crisis events. General guidelines for traffic management plans will be included in the ESMF to guide contractors to prepare site-specific plans. Special guidelines will be given for sensitive sites like those near schools, hospitals, religious places, etc. At this stage, security forces are not foreseen to be utilized within the Project but during preparation when environmental and social risks are better assessed in the ESMF, usage of security forces will be reassessed. The project will include measures to address SH risks. The principle of universal access will be incorporated into all relevant sub-projects Mar 04, 2021 Page 11 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The standard is relevant to the Project. The envisaged eligible sectors for Investments under Component 1 are transport, energy, solid waste separation, and public spaces. Although project activities will be implemented countrywide, neither the exact location nor specific interventions to be supported are specified at this time. Considering the nature of the project, it can be presumed that the interventions will not cause large land take impacts. Mostly, small-scale impacts for spot widening in urban areas are expected. Furthermore, minor impacts on livelihood are possible (e.g. relocation of formal and informal kiosks or stands). Resettlement resulting from Project activities is not expected. In order to address the aforementioned risks, the borrower will prepare a Resettlement Policy Framework (RPF) to establish resettlement principles, organizational arrangements, and design criteria to be applied to subprojects, and to mitigate potential resettlement impacts. The RPF shall set out guidance for a detailed socio-economic baseline and a screening procedure to assess the potential scale and scope of the loss of private assets and determine the potential relevance of the ESS5 for each selected sub-project. If the screening procedure determines the ESS5 as relevant, a site-specific Resettlement Action Plan (RAP) will be developed for each respective sub-project. The RPF will provide specific guidance for the preparation of site-specific RAPs. The RFP will be prepared, disclosed, consulted, and cleared by the Bank prior to Project Appraisal. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources This Standard is not currently relevant. The Project is not expected to support any significant construction activities that might have negative impacts on biodiversity or living natural resources. In addition, activities are going to be implemented in inhabited areas where biodiversity is anticipated to not be present. However, some areas that are Public Disclosure inhabited by humans can also contain biodiversity that is of significant value in particular in peri-urban areas. As such, the ESMF will set forth detailed guidance on how to best assess the potential impacts to natural and sensitive areas, even if those are not under some sort of formal protection. Furthermore, the ESMF will include provisions on excluding infrastructure that may be located in such environments or that may have impacts on such areas. Depending on further assessment of the activities supported, the applicability of this standard will be reviewed prior to project Appraisal. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities This standard is not currently relevant. ESS8 Cultural Heritage This Standard is relevant. The project will entail construction and reconstruction works along with excavations, demolition, and movement of the earth. The expected civil works, however, will be limited to rehabilitation of infrastructure within its existing footprint (with the possibility of minor expansion that can result in land acquisition). Due to civil works, Chance Find's procedures will be included in the ESMF and should be in line with national legal requirements and good international practice. Prior to Appraisal the team will further review and assess if any of the possibly proposed infrastructure works could have an impact on cultural heritage. If so, adequate provisions of this ESS will be integrated into the ESMF and site-specific Cultural Heritage plans may be required as part of ESMPs. Otherwise, the ESMF will include provisions on ensuring no cultural heritage is impacted during works. Mar 04, 2021 Page 12 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) ESS9 Financial Intermediaries This standard is not relevant. No financial intermediaries will be used. B.3 Other Relevant Project Risks None identified at this stage. C. Legal Operational Policies that Apply 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 There are no financing partners identified at this stage. Public Disclosure B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: Development and disclosure of Environmental and Social Management Framework (ESMF) document that includes relevant ESF Standards – before the appraisal Preparation of Labor Management Procedure for project and contracted workers – before the appraisal Preparation and consultation of Stakeholder Engagement Plan (SEP) – before the appraisal Preparation of the Resettlement Policy Framework (RPF) – before the appraisal Establishing Grievance Redress Mechanism at Project Level and/or Grievance Mechanism for all Direct and Contracted Workers. Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): The measures and actions to be outlined in the ESCP will include the preparation and implementation of:- i. Environmental and Social Management Plans or Environmental and Social Management Checklists for all relevant sub-project investments to be developed and integrated into bidding documents as per ESMF. The ESMPs will set out comprehensive guidance and provision for Traffic Management Plan and Emergency Plan / measures that may need to prepared and implemented by contractors and provide detailed institutional arrangements, monitoring and Mar 04, 2021 Page 13 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) evaluation processes, as well as a budgeted capacity building strategy to strengthen the overall capacity of the borrower to oversee the implementation of the ESMP by contractors, subcontractors etc.; ii. Resettlement Plans for all relevant sub-projects that entail land acquisition and the involuntary taking of land or restrictions on access; iii. The operationalization of a project level grievance mechanism as outlined in the Stakeholder Engagement Plan; iv. ESS capacity building plan for the MoCTI and municipalities, in particular for environmental and social management. v. Guidelines on environmental best practices for road maintenance activities; vi. Hiring of environmental and social specialist prior to start of works. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 01-Aug-2021 IV. CONTACT POINTS Public Disclosure World Bank Contact: Svetlana Vukanovic Title: Senior Transport Specialist Telephone No: 5265+3708 / 381-11-3023708 Email: svukanovic@worldbank.org Contact: Enrique Blanco Armas Title: Lead Economist Telephone No: +1-202-473-7125 Email: eblancoarmas@worldbank.org Borrower/Client/Recipient Borrower: Republic of Serbia Implementing Agency(ies) Implementing Agency: Ministry of Construction, Transport, and Infrastructure V. FOR MORE INFORMATION CONTACT Mar 04, 2021 Page 14 of 15 The World Bank Serbia Local Infrastructure and Institutional Development Project (P174251) 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): Svetlana Vukanovic, Enrique Blanco Armas Practice Manager (ENR/Social) Anne Olufunke Asaolu Recommended on 02-Mar-2021 at 16:00:45 GMT-05:00 Safeguards Advisor ESSA Agnes I. Kiss (SAESSA) Cleared on 04-Mar-2021 at 13:24:51 GMT-05:00 Public Disclosure Mar 04, 2021 Page 15 of 15