Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 03/14/2008 Report No.: AC3482 1. Basic Project Data Country: Brazil Project ID: P106765 Project Name: BR Ceara "Inclusive Growth" SWAp 2 Task Team Leader: Jose Guilherme Reis Estimated Appraisal Date: March 31, 2008 Estimated Board Date: July 1, 2008 Managing Unit: LCSPF Lending Instrument: Specific Investment Loan Sector: General public administration sector (20%);General education sector (20%);Health (20%);General water, sanitation and flood protection sector (20%);General industry and trade sector (20%) Theme: Public expenditure, financial management and procurement (P);Managing for development results (S);Regulation and competition policy (S);Education for the knowledge economy (S);Environmental policies and institutions (S) IBRD Amount (US$m.): 240.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 0.00 0.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Yes [ ] No [ ] 2. Project Objectives The higher-level objective of the Ceara SWAp II project is to contribute to expand and consolidate the social advances and institutional modernization of the State of Ceara. The project will achieve this by supporting nine key government investment programs in five sectors, selected to optimize development impact. A series of disbursement-linked indicators (14) are mapped to the five sectors -- public sector management, education, health, WRM/WSS, and business environment & innovation -- to strengthen the incentives to achieve results. Specifically, the project development objectives are to: • help the Government of Ceara to improve its fiscal situation; • strengthen the state’s system of results-based management; • promote better service quality in education (particularly childhood literacy)and health; Page 2 • improve access to WSS, increase cost recovery in the water sector, and improve the efficiency of the two government autarchies with responsibility for water supply and management; and • reduce barriers to business investment. 3. Project Description The proposed project is a US$240 million Investment Loan using the SWAP modality to support implementation of the Government's program. This is the second SWAp loan of an APL. The SWAp I closed in December 2007, fully disbursing the $150 million loan amount. Most of the triggers for APL 2 were met in full or in part, and the overall results achieved were substantial. These accomplishments have laid an excellent foundation for continued progress, and provide confidence to continue the partnership between the State of Ceara and the World Bank. Consequently, the Bank is satisfied that the Government of Ceara has met the requirements for undertaking a second APL operation. The SWAp II is comprised of a $235.7m SWAp component and a $3.7m TA Component. The SWAp component supports the Government’s development program expenditures in: a) public sector management; b) education; c) health; d) water resources management & water supply and sanitation; and d) business environment and innovation. The TA component provides analysis and institutional strengthening to support reforms in these sectors in furtherance of the development objectives. 4. Project Location and salient physical characteristics relevant to the safeguard analysis Ninety-three percent of Ceara's territory is semi-arid, with irregular rainfall and prolonged droughts. The area around the capital city, Fortaleza, is the one with highest rainfall averages. Because of the dry conditions, most of the population is concentrated in two regions: the coast (besides Fortaleza the other major city is Sobral) and the southeast (around Juazeiro do Norte and Crato). Urbanization reached 76% in 2006 and is increasing rapidly. The other characteristic of the state’s urban network is dispersion: 117 out of 184 municipalities in the state have a total population below 30,000, with an urbanization ratio under 50%. The central area of Ceara is flat, with low altitudes; near the Atlantic Ocean in the north the terrain consists of mountain chains and Chapadas. More than 90% of Ceara was once covered by caatingas, the kind of vegetation associated with this semi-arid climate. The caataingas have been adversely affected by human interventions. The most important river in Ceara is the Jaguaribe; nearly all the rivers in Ceará are intermittent (dry during periods of drought). Artificial lakes are builtall around the State to trap water from rivers. 5. Environmental and Social Safeguards Specialists Ms Dorte Verner (LCSSO) Mr Paul Procee (LCSEN) Page 3 Ms Pilar Larreamendy (LCSSO) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The Ceara SWAp II will support broad state programs to strengthen public sector policies and improve service quality in education, healthcare, WRM/WSS, and business environment. The potential safeguard impacts associated with this project are linked to hospital certification (hospital waste disposal) and investments in WSS connections. Overall, the project is expected to have a positive environmental impact given the improvements in basic sanitation and Health Waste Management, especially the final disposal of hazardous medical waste. In addition, the SWAp II will assist in developing better environmental management and licensing systems, working with SEMACE and other state environmental agencies. Some specific investments for WSS may result in site-specific, reversible impacts that will be mitigated. Involuntary resettlements, if any, associated with these programs will be localized. They will not interfere with indigenous peoples territories. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: No potential large scale, significant and/or irreversible impacts are anticipated due to the activities of the project. As described above the works related to water and sanitation will be localized and site-specific. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A Page 4 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The measures taken by the Borrower to address safeguard policy issues include: (1) an involuntary resettlement framework was prepared; (2) an indigenous peoples framework was prepared; and (3) an overall EIA was prepared for the "Projeto Sanear II". The Prosanear Project already has an ESMF that was recently reviewed and found adequate to address potential issues. The ESMF for Prosanear includes: (i) criteria and procedures for environmental assessment for regional and urban infrastructure subprojects (environmental assessment framework); (ii) resettlement policy framework; (iii) environmental construction manual; (iv) mitigating actions for the envisioned impacts; and (v) strengthening of environmental management by the Government of Ceara. The Prosanear Operational Manual includes environmental screening procedures, assessment requirements and procedures for different types of basic infrastructure investments. For a project with no or only minor impacts, the actual environmental screening form will be used. For projects with moderate impacts a simplified environmental report will be prepared; and for projects with significant impacts, an EIA will be required. The procedures for preparing the environmental reports and EIAs are presented in the Operational Manual, which includes Terms of Reference for compensation of affected populations and resettlement of families. The Operational Manual describes public consultation requirements and how issues discussed are being addressed or incorporated in project. The aforementioned assessments and frameworks were reviewed and were considered acceptable to the Bank. These documents include provisions for institutional strengthening the social and environmental risk management. The Borrower's capacity to address safeguards policy is considered satisfactory, and the project is considered an opportunity to improve the quality of service provision to the poor and most vulnerable. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The sectors and programs supported by the SWAp II have been prioritized by the State through a consultative process, including consultations and formal discussions with civil society, organized by the GoC for issuing the Plurianual Plan. The GoC has carried out specific consultations for the elaboration of the State Plan for Health (by FUNASA). In accordance with the Bank's Information Disclosure Policy (BP 17.50) the Health Waste Management Strategy was disclosed during a meeting with key stakeholders in early December 2007. The project will continue to organize Public Consultations to address specific impacts with key stakeholders and affected communities. Additionally, the Indigenous Peoples Plan and Resettlement Plan will be consulted in a participatory manner following the Principles and Guidelines elaborated by the Borrower. The consultations procedures are part of the Operations Manual, ensuring budget sources Page 5 from the project. All safeguard-related documents will be disclosed in accordance to Bank policy principles. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 02/29/2008 Date of "in-country" disclosure 03/20/2008 Date of submission to InfoShop 03/24/2008 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 02/29/2008 Date of "in-country" disclosure 03/20/2008 Date of submission to InfoShop 03/24/2008 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 03/06/2008 Date of "in-country" disclosure 03/20/2008 Date of submission to InfoShop 03/24/2008 Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? N/A Are the cost and the accountabilities for the EMP incorporated in the credit/loan? N/A OP/BP 4.10 - Indigenous Peoples Page 6 Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with affected Indigenous Peoples? Yes If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? Yes If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social Development Unit or Sector Manager? N/A OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? Yes If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? Yes The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? No D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Jose Guilherme Reis Environmental Specialist: Mr Paul Procee Social Development Specialist Ms Pilar Larreamendy Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Reidar Kvam Comments: Sector Manager: Ms Lily L. Chu Comments: