EMERGING LESSONS SERIES NO. 3 THE INSPECTION PANEL Environmental Assessment EMERGING LESSONS SERIES NO. 3 | The Inspection Panel Environmental Assessment April 2017 © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank Inspection Panel with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denomina- tions, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Contents Executive Summary iv Abbreviations vi Introduction 1 Methods 3 Results 4 Project Preparation 5 LESSON 1: Adequate Screening and Scoping Provide the Foundation for a Robust Environmental Assessment Process 5 LESSON 2: Consideration of Both Social and Natural Impacts Should Inform Project Design 10 LESSON 3: Distinct Adverse Impacts Require Special Attention 13 LESSON 4: Impacts Can Materialize Under Different Financial Instruments 16 LESSON 5: Ensuring Borrower Capacity is Crucial for Effective Project Implementation 17 Project Implementation 21 LESSON 6: Effective Monitoring, Supervision, and Continuous Environmental Assessment Require Appropriate Expertise and Resources 21 Long-Term Impacts 25 LESSON 7: Ensuring Strong Protection for People and their Environment is Key for Sustainable Project Development Outcomes 25 Conclusions 27 Appendix A  Summary of the World Bank Policy on Environmental Assessment 30 Appendix B   List of Panel Cases Analyzed 34 Appendix C  Summary of the Main Cases Studied 35 Appendix D  Summary of the Discussion at the Release of Emerging Lessons Series No. 3: Environmental Assessment 49 Notes 51 Bibliography 52 Figure Figure 1 Frequency of Issues Identified in EA Cases 4 Table Table 1 Summary of Emerging Lessons from EA Cases 28 Emerging Lessons Series: Environmental Assessment iii Executive Summary This report on environmental assessment (EA) is the third in a series to be pub- lished by the World Bank’s Inspection Panel drawing on the main lessons that have emerged from its caseload over 23 years. With these reports, the Panel aims to contribute to institutional learning at the World Bank and in the larger development community by highlighting areas where improvements can enhance the social, environmental, and overall sustainability of Bank-funded operations, further development effectiveness, and enhance transparency. The Inspection Panel was created in 1993 by the World Bank’s Board of Executive Directors to receive and investigate complaints submitted by peo- ple actually or potentially suffering harm allegedly caused by Bank projects. Since then, the Panel has received 118 Requests for Inspection. Of those, 87 have been registered and 34 investigated. Of the 34 cases investigated, 29 have involved issues related to environmental assessment, defined as the process of identifying, predicting, evaluating, and mitigating the natural, social, and other relevant impacts (both positive and neg- ative) of development proposals prior to making major decisions and commit- ments. Two of the Panel’s eligibility reports were also considered for this publication to illustrate additional important lessons. These 31 cases covered 27 countries in six regions. Most of the issues represented in these cases involved adequate screening and scoping, and the consideration of both social and natu- ral impacts. While all relevant Panel cases were studied as part of this report, a special emphasis was put on drawing lessons from cases within the past decade. This report draws the following main conclusions from the cases: •• Panel cases show the importance of a continuous environmental assess- ment process throughout the project cycle. This includes conducting quality impact assessments during project preparation as well as adequate follow-up on issues arising during implementation. Thorough assess- ments that integrate natural and social impacts are both required and essential to anticipate issues, plan proper mitigation measures, deal with problems that arise in an effective and timely manner, and ensure project sustainability in the long term. •• Strong supervision is crucial. This includes on-site verification when problems are identified, multidisciplinary expertise that goes beyond engineering to environmental and social issues, and continuous dialogue to close potential gaps between the reality on the ground and perspectives of the project team. •• Many of the issues found in Panel cases relate to the importance of con- sidering the social dimensions of a project, and the Panel’s experience suggests that lapses in analyzing social risks and impacts can create or exacerbate already complex situations. •• Not only high-risk (Environmental Category A) projects have the poten- tial to cause significant harm. The Panel has received Requests related to iv Emerging Lessons Series: Environmental Assessment projects in all environmental categories and has investigated projects with Category A (18) and B (9) designations. Panel cases show that it is critical to identify, mitigate, and monitor all project risks, regardless of the project’s environmental categorization. •• Panel cases have positively influenced World Bank practices related to environmental assessment. In response to Panel investigations, the Bank has provided clarifications related to the application of the Bank’s Policy on Environmental Assessment and issued guidelines to staff on how to address relevant policy issues. Some recent examples include the issuance of a guidance note on managing labor influx risks in World Bank projects, as well as the creation of a Gender-Based Violence (GBV) Task Force to develop recommendations for the institution on how to prevent and respond to GBV in Bank projects. Finally, and as stated in previous Emerging Lessons Series reports, Panel cases tend to highlight challenging projects where things went wrong. Therefore, these 31 cases are not necessarily reflective of the Bank’s entire portfolio. Nevertheless, the lessons are important. This exercise is intended to help build the institutional knowledge base, enhance accountability, foster better project results and, ultimately, contribute to more effective develop- ment with shared prosperity for all. Emerging Lessons Series: Environmental Assessment v Abbreviations BP Bank Procedures BRT Bus-Rapid Transit System DPL Development Policy Lending DRC Democratic Republic of Congo EA Environmental Assessment EESRSP Emergency Economic and Social Reunification Support Project EMP Environmental Management Plan ELPS Escravos-Lagos Pipeline System ESMP Environmental and Social Management Plan ESF Environmental and Social Framework GBV Gender-Based Violence GHG Greenhouse Gas ESIA Environmental and Social Impact Assessment LIL Learning and Innovation Loan HPP Hydropower Plant NEA Nepal Electricity Authority NGO(s) Non-Governmental Organization(s) NDP National Drainage Program Project NSDS National Surface Drainage System OP Operational Policy PAD Project Appraisal Document PAPs Project-Affected People PBS Promoting Basic Services PforR Program-for-Results Financing SDR Safeguards Diagnostic Review STIs Sexually Transmitted Infections TA Technical Assistance TOR Terms of Reference TSERO Transitional Support for Economic Recovery Operation UNRA Uganda National Roads Authority WAGP West African Gas Pipeline Project vi Emerging Lessons Series: Environmental Assessment Introduction The Inspection Panel was created in 1993 by the World Bank’s Board of Executive Directors to receive and investigate complaints submitted by peo- ple actually or potentially suffering harm allegedly caused by Bank projects. As of March 2017, the Panel had received 118 Requests for Inspection.1 Of those, 87 had been registered and 34 investigated. Twenty-nine Panel investi- gations have involved the Bank’s Environmental Assessment Policy.2 This report on environmental assessment is the third in a series of Panel publications drawing on the main lessons that have emerged from its caseload over 23 years. The first report, published in April 2016, focused on involun- tary resettlement, while the second, published in October 2016, analyzed indigenous peoples’ issues. While Panel cases tend to highlight challenging projects where things went wrong and therefore are not necessarily reflective of the Bank’s entire portfolio, the lessons nonetheless are important. Environmental assessment is the process of identifying, predicting, evalu- ating, and mitigating the natural, social, and other relevant impacts (both positive and negative) of development proposals prior to making major proj- ect-funding decisions and commitments. This assessment is both a technical tool for analysis, and a legal and institutional procedure in the decision-mak- ing process. Its purpose is to provide information for decision making; pro- mote transparency and participation; identify procedures and methods for follow-up in policy, planning, and project cycles; and contribute to environ- mentally sound and sustainable development.3 According to the Bank’s Operational Policy/Bank Procedure 4.01 on Environmental Assessment (OP/BP 4.01; see Appendix A), the EA takes into account the natural environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and physical cultural resources); and transboundary and global environ- mental aspects. EA considers natural and social aspects in an integrated way. In line with the policy, this publication uses the term environmental impacts to encompass both natural and social impacts. Since the EA Policy is considered the umbrella policy for all the other safeguard policies at the Bank, it is also therefore inevitable that there is a degree of overlap between the emerging lessons attributable to environmental assessment and the les- sons from other environmental safeguard policies. On August 4, 2016, the Board of Executive Directors approved a new Environmental and Social Framework (ESF), which includes Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts. The ESF also introduces protections related to labor and working conditions; community health and safety, including road safety; stakeholder engagement throughout the project cycle; and a stron- ger focus on using the borrowers’ framework for environmental and social Emerging Lessons Series: Environmental Assessment 1 assessment. Since the ESF is not expected to take effect until 2018, the proj- ects included in this report are based on lessons from the application of the previous policies. 2 Emerging Lessons Series: Environmental Assessment Methods Emerging lessons were drawn by analyzing Panel cases involving environ- mental assessment. 1. A complete review of the Panel’s database led to the initial identification of the main issues arising in projects involving environmental assess- ment. Of the Panel’s 34 investigated cases, 29 have involved environmen- tal assessment (see Appendix B). While all of these cases were studied for the purposes of this report, emphasis was placed on the lessons from cases within the past 10 years. In addition to investigated cases, two eli- gibility reports were included to illustrate additional important lessons within the Panel’s casework, putting the total number of cases analyzed at 31.4 2. A systematic identification and classification of issues was undertaken, based on common themes and similarities among the cases. (The main cases studied are summarized in Appendix C.) Although each case is unique, an attempt was made to group findings into general clusters fol- lowing the principal features of the Environmental Assessment Policy. 3. Literature review was conducted and discussions were held with internal and external stakeholders and experts. 4. Two internationally renowned experts on environmental assessment and World Bank safeguard policies provided peer review for this publication. Emerging Lessons Series: Environmental Assessment 3 Results The subset of 31 cases provides a wide sample, spanning more than 23 years and covering 27 countries in six regions. The issue most frequently identified by the Panel is inadequate screening and scoping (24 cases), followed by the necessity of considering both social and natural impacts (23 cases). Figure 1 shows the frequency of the issues identified in the 29 Panel inves- tigations and two additional relevant cases analyzing particular EA issues, and forms the basis of the emerging lessons presented in this report. The results of the Panel’s analysis are presented in the following sections, which include examples from Panel cases. They are presented in a sequence that follows the project cycle and the main steps required to plan and imple- ment projects. FIGURE 1  Frequency of Issues Identified in Environmental Assessment Cases 30 25 24 23 Frequency of identification 20 19 18 18 16 15 10 5 3 0 Screening Consideration Distinct Borrower Monitoring Non-IPF* Sustainability and Scoping of Both Social Impacts Capacity and Financial and Natural Supervision Instruments Impacts Note: 29 investigations and 2 eligibility reports. *Non-Investment Project Financing. 4 Emerging Lessons Series: Environmental Assessment © World Bank/Inspection Panel. Further permission required for reuse. Project Preparation LESSON 1: Adequate Screening and Scoping Provide the Foundation for a Robust Environmental Assessment Process Screening and scoping are key steps that are completed in the early stages of the EA process. Screening determines the categorization of the project which, in turn, defines if the proposed project should be subjected to the preparation of an EA report, as well as the extent and the type of environmental work required. Scoping, on the other hand, is the process of identifying the most critical issues and impacts to be analyzed under the EA. The findings of this process inform the preparation of the terms of reference (TOR) for the EA. Panel cases have highlighted the importance of properly identifying critical potential impacts early in the process, notably during the screening and scoping stages. Environmental Categorization Reflecting Social Risks While Panel cases illustrate that generally projects are assigned the correct envi- ronmental category, there are still weaknesses in adequately considering a proj- ect’s social risks and impacts during project screening and categorization. Social risks refer to the social context in which the project operates and includes issues related to social safeguards on involuntary resettlement and indigenous peoples, Emerging Lessons Series: Environmental Assessment 5 and also issues related to gender and disadvantaged groups, ethnic tensions, and cultural heritage. According to Bank procedures, during the environmental screening process the project is assigned a categorization (Category A, Category B, Category C or Category FI), which determines the breadth, depth, and type of EA work required.5 Panel cases showed that project categorization often fell short of due consideration of important social impacts and their associated risks. Examples. The Panel’s investigation of the Emergency Economic and Social Reunification Support Project (EESRSP) in the Democratic Republic of Congo (DRC) serves as an example of the importance of assessing social risks in the proper determination of environmental categorization. One project compo- nent involved the review of logging concessions, an activity that carries signif- icant environmental and social implications. The existing logging concessions covered vast stretches of forest, including many areas that are home to Pygmies, a vulnerable indigenous group whose associated risks were not adequately considered during project categorization.6 During its investigation, the Panel found that an environmental assessment corresponding to the project’s Category B rating was prepared, but it only covered road elements financed under another component of the project and did not extend to the respective component involving logging. The Panel found that the potential impacts of land-use planning in DRC, including the risks to the Pygmy people and their livelihood, should have been analyzed as part of a Category A environmental assessment. As a direct consequence of this misclassification, the project lacked an environmental and social assessment to address these issues. Similar shortcomings were found in the Panel’s investigation of the Cambodia Forest Concession Management and Control Pilot Project. Following these investiga- tions, the Bank reviewed and updated the Guidelines for Environmental Screening and Classification. These guidelines provided guidance to Bank staff on both classification and methods to undertake environmental and social safeguard–related actions in Technical Assistance projects, and the proposed wider use of strategic environmental assessments to support the preparation and implementation of natural resource management projects. Analysis of Alternatives for Project Selection, Location, and Design The analysis of alternatives is a key step in project preparation. The Bank’s Policy on Environmental Assessment requires the examination of realistic project alternatives, including the “without project” scenario, and a systematic comparison of their respective positive and negative impacts. The alternatives analysis should include a broad range of factors, and consider the resource requirements and benefits for each alternative. The quality of the analysis of alternatives will directly affect the environmental and social indicators for tracking project impacts; it is a holistic process that considers more than min- imizing adverse impacts of a potential project. Panel cases have shown a need for a comprehensive and rigorous analysis of alternatives to inform the selection of a technically feasible, economically sound, and socially appropriate project. The analysis should include 6 Emerging Lessons Series: Environmental Assessment consideration of not only alternative locations, but also alternative designs. The Panel’s findings have shown the need for ensuring identification of alter- natives prior to site selection—in particular for industrial, infrastructure and energy projects—in order to minimize issues during the design process. The Panel’s experience based on its caseload shows that the depth of the analysis is as important as its breadth, and that the benefits of undertaking an alterna- tives analysis are questionable if completed only to validate a preselected technology, siting, or project design. Consideration of a sectoral or regional EA prior to the preparation of a project-level EA can effectively filter out unsuitable alternatives in the early project stages. Example. The Panel found that in the case of the Uganda Private Power Generation Project, which consisted of the construction of the Bujagali hydropower plant to provide an increase of power-generation capacity to the national grid, project preparation did not adequately consider cultural and spiritual matters of high significance at Bujagali Falls, and when comparing the Bujagali and Karuma alternatives. Alternative project configurations were unduly narrowed on the basis of a-priori judgments rather than exploring all technically feasible options. The Panel noted that the Bank’s Policy on Environmental Assessment required alternatives to be laid out in a systematic way, along with their economic, social, and environmental benefits and costs, so that judgments on optimal alternatives could be made with a full under- standing of the trade-offs involved. Delineating the Project’s Area of Influence and Considering Associated Facilities The policy requires the EA to evaluate the project’s potential environmental impacts in its area of influence. It defines area of influence as the area to be likely affected by the project, including its ancillary aspects, as well as unplanned development induced by the project. Panel cases have shown that there are challenges in accurately delineating the area of influence. The area of influence may be defined too narrowly, and, as a result, important impacts are not properly analyzed and mitigated, indirect and induced impacts are not properly assessed, and important project-affected people (PAPs) are left out of the consultations and project benefits. The Panel has encountered cases where the delineation of the area of influ- ence was inadequate. In some cases, the area of influence was based solely on the project’s geographical footprint and as a consequence important impacts situ- ated away from the construction site were not assessed and mitigated. The delin- eation of the area of influence should be context-specific and take into account indirect and induced development impacts resulting from the project. Examples. In the case of the Lima Urban Transport Project that supported the establishment of a mass transit system, limited attention was paid to assessing the impacts that would take place beyond construction and oper- ation of the bus corridor. There was no assessment of the impacts associated with changes in traffic patterns, rerouting, and impacts on the socio-cultural dynamics of the historic Barranco neighborhood. As a consequence of this Emerging Lessons Series: Environmental Assessment 7 narrow approach, some residents of Barranco were not included in the con- sultations and the project generated tension and conflict. The Panel investi- gation report, however, noted that subsequently the project created a dialogue roundtable to discuss the complainants’ concerns, and that the project had made important contributions to address the high traffic vol- ume in the city. The Panel has also investigated many cases in which the determination of the area of influence did not take into account the impacts associated with important facilities and activities linked to the projects. These were conse- quently not adequately assessed or included in the scope of the project’s appraisal. Panel cases have also shown that Bank policies lack a clear defini- tion of what constitutes associated activities and facilities. The project and its associated facilities and supply areas need to be viewed as an inter-connected system for the purposes of environmental assessments. In the case of the India Vishnugad Pipalkoti Hydro Electric Project that financed a run-of-the river hydro generation project on the Alaknanda River, the activities associated with constructing multiple dams along the river were not properly evaluated during the environmental assessment. Further, neither the impacts from the proposed 30-kilometer (km) line that would evacuate power from the project, nor those of the proposed wider transmission net- work, were analyzed as associated activities despite being integral to the suc- cess of the project. Specifically, the EA lacked an assessment of the impacts related to the potential loss of farm land and forest resources due to transmis- sion-line construction. During its investigation into the West African Gas Pipeline Project (WAGP), which financed the construction of a new pipeline system to transport natural gas from Nigeria to Ghana, Togo, and Benin, the Panel found that its “upstream” project influences needed to be evaluated. The Panel noted that the project and associated facilities and supply areas, although several hun- dred kilometers away from the project itself, should have been viewed as an inter-connected system for purposes of environmental assessment, and should have considered both potential benefits and adverse impacts. Determining the Scope of Cumulative Impacts Panel cases have uncovered weaknesses in the preparation of cumulative impact assessments. In some cases, the Panel found that cumulative assess- ments were not done, and in other cases they did not properly take into account the long-term impacts associated with future potential projects in the project’s area of influence. To be effective, a cumulative impact assessment needs to evaluate the additive effects of existing, planned, and probable future projects in the area of influence. Examples. The Panel’s investigation into the Chad-Cameroon Petroleum Development and Pipeline Project found that the project should have con- ducted a cumulative impact assessment during the early scoping of the proj- ect’s environmental effects to analyze the impacts associated with future upstream oil developments in northern Cameroon, new oil/gas fields off the 8 Emerging Lessons Series: Environmental Assessment Cameroon coast, and large-scale regional oil and gas developments planned for Equatorial Guinea, Gabon, and Nigeria. Despite the wide extent of the pipeline spanning 1,100 km and multiple regions in two countries, project documentation included no discussion of how the boundary of the study area was determined, nor any mention of the potential area that could be affected by the project. Additional projects in the vicinity of the pipeline project, such as the Lom Pangar Dam and the European Union-funded highway linking southern Chad to northern Cameroon, should also have been incorporated into a cumulative impact assessment as part of the EA. In the South Africa Eskom Investment Support Project, which financed the 4,800-megawatt (MW) Medupi coal-fired power plant and associated infra- structure, the Panel found inadequate analysis of the cumulative effects on air quality from the Grootegeluk coal mine and the Medupi and Matimba power stations. It found that although air quality in the local air shed had been assessed as part of the EA—consistent with OP/BP 4.01—due consideration should have been given to probable future projects in the area (e.g. additional coal mines and coal-fired power stations) to determine the appropriate level of mitigation measures for the project. Early Involvement of Internationally Recognized Expertise The role of internationally recognized expertise is very important for Bank projects, as it complements Bank advice to the borrower on the terms of ref- erence for the EA, methods for its preparation, implementation of its recom- mendations, and the development of environmental management capacity. The Bank’s EA Policy specifically requires that the borrower retain indepen- dent experts to carry out the EA for Category A projects. Early involvement of internationally recognized expertise in the context of high-risk or large infra- structure projects enhances capacity and improves the quality of preparation. This expertise is often used to fill gaps in the borrower’s capacity. It plays the important role of transfer of expertise for design and implementation of proj- ects, especially when early identification of issues is necessary. Examples. The Panel noted that in the case of the Pakistan National Drainage Program Project (NDP), an environmental advisory panel composed of interna- tionally recognized expertise should have been in place from the start of the project. This would have ensured the timely integration of social and environ- mental issues in a key drainage assessment. The Panel found the extended delay in establishing an advisory panel contributed to the failure to identify the short- comings in project design, which consequently affected large parts of Sindh province and the population living at the tail end of the drainage system. Similarly, the Panel noted that in the case of WAGP, the failure to establish an independent advisory panel during the planning and design stages of the project and the delay in its establishment during project implementation led to inadequate attention to several aspects of safeguard policies. Specifically, there was a lack of ability to interpret and adequately follow up on the warn- ing signs relating to social aspects that the monitoring reports had raised and discussed. Emerging Lessons Series: Environmental Assessment 9 LESSON 2: Consideration of Both Social and Natural Impacts Should Inform Project Design The EA Policy explicitly states that environmental assessment needs to con- sider social and natural impacts in an integrated manner. Panel cases indicate that in practice, the EA process often focuses on impacts to the natural envi- ronment, and key social impacts are in many cases overlooked. Important social impacts often not considered during the EA process include those asso- ciated with changes in land use, control over resources and livelihood systems, influx of workers and population growth, public health, impacts on vulnerable and disadvantaged groups, and labor and induced development issues. The Panel often finds weak understanding of the broader social context in which the project operates: e.g. ethnic tensions, political economy, labor influx, socio-cultural and historical factors, and post-conflict environments. Assessing Social Impacts and Designing Related Mitigation Measures It is important to treat natural and social issues in an integrated manner, and to consider social impacts beyond those covered in the application of Bank’s safeguard policies on involuntary resettlement and indigenous peoples. Panel cases have shown that many environmental assessments contain either no or weak analyses of potential social impacts. These cases illustrate the need to ensure that environmental assessment documents properly analyze key social impacts and their associated risks, and propose commensurate mitigation measures to not only avoid harm to all project-affected people, but also to identify opportunities to maximize benefits for affected communities. The new Environmental and Social Framework demonstrates the evolution of the Bank’s approach to this topic since the prior policy update. The ESF broadens the scope of the assessment by adding more explicit requirements covering social impacts and taking into account other social risks, including those related to vulnerable and disadvantaged groups. Examples. The Uzbekistan Second Rural Enterprise Support Project sup- ported the rehabilitation of irrigation and drainage infrastructure and pro- vided financial and capacity-building support to farmers and agribusinesses. While the project’s social assessment mentioned child labor in cotton farms supported by the project as a risk, the analysis and mitigation measures were not sufficiently robust. In addition, the social assessment lacked an analysis of issues related to forced labor in the sector, despite the fact that these prac- tices were widespread in the country. In response to the Panel case, the Bank signed a memorandum of understanding with the International Labour Organization to carry out third-party monitoring of child and forced labor in cotton fields in Bank-financed projects. All relevant project documents were amended to require compliance with the applicable national and inter- national laws and regulations against forced and child labor. Farming train- ing modules under the project were also expanded to include prohibition of 10 Emerging Lessons Series: Environmental Assessment forced and child labor. Finally, new efforts were introduced to support diversification and mechanization of the cotton sector to reduce reliance on manual labor. In the case of the Cambodia Forest Concession Management and Control Pilot Project, the Panel found the lack of a social assessment specific to this project had consequences on the ability of the Bank to comply with its operational policies, from the design through the implementation phases. For example, the project failed to consider or investigate complaints about illegal logging of resin trees on the part of concessionaries covered by the project, and the associated harm to the local people. Also, as a result of the lack of a social assessment, there was no early consultation with project-af- fected people and the project design was not informed by critical concerns relating to indigenous peoples, resin tapping, community ownership of trees, community forestry initiatives, and other matters of central impor- tance to the affected communities. These failures caused the illegal logging of resin trees to have negative consequences on the Requesters and the local communities. Meaningful Consultations Improve the Quality of Impact Assessment Meaningful and timely consultations with the relevant stakeholders are key to identification and mitigation of potential impacts and their associated risks. The Panel’s experience from its caseload shows the importance of rec- ognizing and valuing local stakeholders’ perspectives and their often deep understanding of the local environmental and social context. The long-range experience of local populations and their specific expertise can complement shorter-term assessments. The timing of such consultation is also critical, as it opens up, or conversely closes, opportunities to integrate the feedback from the consulted parties into project design or implementation activities. Modalities are equally critical, since language or conceptualization barriers can jeopardize the required two-way communication. When relevant stake- holders are not adequately consulted about potential impacts, risks, and mit- igation measures, the project can face unexpected obstacles, thus limiting its effectiveness. Example. In the case of the Argentina Santa Fe Road Infrastructure Project and Provincial Road Infrastructure Project, which provided for upgrading 136 km of road between the cities of Santo Tomé and San Francisco, the Panel found that project-affected people were given the opportunity to meet project officials to express concerns and make suggestions for design changes, and many concerns were addressed. However, concerns about negative impacts of the project on the hydrology of the area were dismissed; PAPs were viewed as non-experts with insufficient competence to discuss complex hydrological issues. The Requesters were not initially provided with all relevant informa- tion to support the assertion that the project would not worsen flood risks. This created tensions between the Requesters and the project that were not addressed until after the Panel became involved. Emerging Lessons Series: Environmental Assessment 11 Mitigation through the Environmental Management Plan Bank policy identifies an Environmental Management Plan (EMP) as an essential feature of Category A projects and the Panel’s experience from its caseload has shown that preparing an EMP is critical for the successful avoid- ance, mitigation, or compensation of potential environmental and social impacts throughout the project cycle. The EMP is a key step in project plan- ning to operationalize mitigation measures specified within an EA report. While there is no standard format for an EMP, Panel cases have shown the importance of preparing an EMP prior to project implementation, with detailed timelines, budgets, a division of responsibilities that reflects the avail- able institutional capacity, and a monitoring program. When used appropri- ately, the EMP provides a link between the assessment reports and operational activities, and its content can be adequately translated into the loan agree- ment and bidding documents to guide borrower and contractor responsibili- ties during implementation and monitoring. The EMP should be a “living document” that is adapted to new and changing circumstances. Examples. During the investigation into the Uganda Transport Sector Development Project, which had the objectives of financing the upgrading and rehabilitation of 66 km of road and supporting technical assistance to strengthen the internal audit functions of the Uganda National Roads Authority (UNRA), the Panel found that the contractor submitted a draft Environmental and Social Management Plan (ESMP) to the supervising engineer nearly one year after construction had started, and the Bank only received it after two years. The Panel found that even when impacts were predicted in the Environmental and Social Impact Assessment (ESIA), there were no corresponding mitigation mea- sures in the ESMP to address these impacts. For example, the ESIA had identi- fied some potential adverse social impacts from the expected influx of labor into the project area during implementation and required a strict no-fraternization rule be applied between the workers’ camp and the surrounding community. Despite these observations in the ESIA, the ESMP did not state whether the camp should accommodate only foreign workers or also house Ugandan work- ers. In addition, the ESMP lacked adequate mitigation measures to address the risks related to the spread of sexually transmitted infections (STIs) identified in the ESIA or to minimize the negative gender impacts of the project. Unfortunately, serious instances of sexual abuse by workers materialized. The Panel’s investigation into the Chad-Cameroon Pipeline Project found that a comprehensive EMP had been prepared to address the challenges associ- ated with environmental management of a complex project in a demanding physical and political environment. The Panel also noted that when compared to similar oil and gas programs, this project’s EMP reflected a practical, “hands-on” approach to environmental management. Despite these positive aspects, the Panel found issues with how the thoroughness of the EMP was translated into action. For example, although a regional development plan was a requirement of the project EMP documentation, the lack of borrower capacity to prepare this document was evident. The project did not ensure that the bor- rower had adequate capacity to implement the important measures prescribed 12 Emerging Lessons Series: Environmental Assessment by the EMP, and that resulted in concerns about the local monitoring capabili- ties to effectively safeguard the long-term sustainability of the project. LESSON 3: Distinct Adverse Impacts Require Special Attention Impacts on Forests and Water Sources Forests and water are examples of important natural resources that can be affected during the lifecycle of a project. These resources often provide crucial natural habitats for flora and fauna, as well as benefits to local human populations, when managed sustainably. The Panel’s caseload has shown the importance for projects to be mindful of the relationship between PAPs, forests, and water systems, par- ticularly in relation to livelihoods. It is essential to identify and analyze early in the project cycle “no go” and “caution” areas that could be affected by project-re- lated activities. It is also important to emphasize that special attention needs to be paid when there are likely impacts on the forest and water resources of projects in all sectors, and not only those in the forest and water sectors. Examples. The Panel’s investigation into the South Africa Eskom Investment Support Project found that its direct, indirect, and cumulative impacts on avail- ability and quality of surface and groundwater resources to communities were not adequately considered. The focus on water resources in project documents appeared to be on ensuring that the Medupi power plant would have a reliable source of water supply, rather than on the potential impacts this new water usage would have on existing users, especially given the scarcity of water resources in the region. The Panel also noted that associated activities, such as the expansion of a nearby mine to supply coal to Medupi and the additional river-bed sand excavation, would result in further demand on river systems and water quality. The Panel found that these instances of non-compliance likely weakened the ability of the project to take effective steps to minimize or avoid these impacts. In the case of the Argentina Santa Fe Road Infrastructure Project and the Provincial Road Infrastructure Project, the Requesters claimed that the proj- ect would increase the risk of flooding in the area surrounding Road 19, which was being converted into a four-lane highway with a new elevated car- riageway. According to the Requesters, the new road was incompatible with the area’s hydrological situation, given the flat land and insufficient rain absorption that could create a “dam effect” in case of heavy rain and cause harm to nearby fields and crops. The Panel found that the project design was considerably more concerned with the impact of environmental conditions on the road rather than the impact of the road on the environment. Although the ESMP contained an assessment of the social and bio-physical aspects of the project, it lacked a proper description and analysis of the project’s poten- tial impacts on flooding risks upstream and downstream of Road 19. Steps were taken in the Uganda Private Power Generation Project to offset the loss of Bujagali Falls and other natural habitats that would be inundated by dam- ming of the Nile, but these steps were found to be insufficient. Although the Emerging Lessons Series: Environmental Assessment 13 project had created the Kalagala Offset Area to preserve the Kalagala Falls, the Panel found that the offset was not being subjected to appropriate conservation and mitigation measures in conformity with sound environmental and social standards. Transboundary and Global Environmental Externalities The World Bank EA Policy requires the environmental assessment to take into account the transboundary and global environmental impacts of a proj- ect, including climate change, the use of ozone-depleting substances, pollu- tion of international waters, and adverse effects on biodiversity. Panel cases have shown the challenges of identifying and addressing potential trans- boundary and global impacts. Examples. In the South Africa Eskom Power Project, the Requesters claimed that the Medupi power plant financed by the project would make it more dif- ficult for South Africa to meet its greenhouse gas (GHG) reduction commit- ments, and that the climate-change impacts of the project had not been adequately considered and addressed as required by Bank policy. The Panel examined whether the project’s environmental assessment adequately consid- ered and adopted technology and policy measures to control and mitigate GHG emissions in line with Bank policy. The Panel found that steps had been taken to adhere to this policy framework but that the magnitude of emissions from Medupi far outweighed emissions avoided through project mitigation measures. In addition, the Panel found that the description of the net results of the project’s mitigation efforts failed to adequately demonstrate that the project was directly addressing its own externalities. In the case of the Tajikistan Energy Loss Reduction Project, which was financ- ing assessment studies of the proposed Rogun Hydropower Plant (HPP), the Requesters represented non-governmental organizations (NGOs) in Uzbekistan as downstream-affected people of a transboundary project. They claimed that the feasibility studies of the Rogun HPP financed under the project were “one- sided” and did not take into account the concerns of all parties affected by the project. They also feared that a potential failure of the dam would destroy six hydroelectric power stations downstream and more than 700 settlements in Tajikistan, Afghanistan, Uzbekistan, and Turkmenistan. In its eligibility report, the Panel noted that carrying out assessment studies on a transboundary project through an agreement with an upstream country could indeed raise fears among downstream stakeholders about their ability to participate on an equitable basis and ensure that their concerns were appropriately considered and addressed. At the same time, the Panel noted that the project had conducted extensive consul- tations with the governments of riparian countries, including Uzbekistan, and had included their concerns in the terms of reference of the studies. In addition, the Bank had agreed to separately finance and manage additional components to address the concerns of downstream riparians, including the establishment of two panels of experts, a study of alternatives, and a structured program of ripar- ian consultations. As a result of the Bank’s efforts to address these concerns, the Panel did not recommend an investigation into the project. 14 Emerging Lessons Series: Environmental Assessment Impacts on Cultural Resources The World Bank defines physical cultural resources as movable or immovable objects, sites, structures, groups of structures, and natural features and land- scapes that have archaeological, paleontological, historical, architectural, reli- gious, aesthetic, or other cultural significance. They can be located in urban or rural settings, above or below ground, or under water. Since a physical cultural resource may not be visible or known to a project team from the outset, a proj- ect’s potential impacts on physical cultural resources need to be considered early in the project cycle. Through its Policy on Physical Cultural Resources (OP/BP 4.11), the Bank assists countries in avoiding or mitigating adverse impacts on cultural resources as an integral part of the environmental assessment process. These impacts should be taken into account during project screening, included in the TOR for EA, and identified and evaluated in the feasibility studies and EA of the proposed project. The Panel has experienced several cases where this early identification of the impacts on physical cultural resources at the environ- mental assessment stage was insufficient. Examples. The Cambodia Forest Concession Management and Control Pilot Project did not conduct a careful assessment or inventory to record and quan- tify resin trees, and other timber and non-timber forest products traditionally used by indigenous peoples and rural local communities. The Panel found that such a study should have been part of a proper environmental assessment, and should have been the subject of a participatory survey and inventory at an early stage of the project. It also found documented cases of “spirit forests” (critical natural habitats) being logged and destroyed without any consideration of their spiritual or cultural values. The project also made no allowance for chance finds of archeological sites within the vast areas of forest concessions being consid- ered for logging. In addition, the Panel found that the identification of “spirit forests” and surveys for archeological sites were in the hands of the concession- aires, instead of being carried out as part of the project preparation. In the Private Power Generation Project, the Panel found the Bujagali Falls were an integral part of the Busoga people’s cultural heritage and that the project had not properly considered cultural and spiritual matters when alter- native sites for the hydropower plant were analyzed. The Panel also found the project had failed to adequately consult with the Busoga spiritual clan leaders about the significant cultural patrimony of the Bujagali Falls. Health and Safety Issues Since 2013, the World Bank Environmental Assessment Policy explicitly requires the Bank to assess human health and safety issues under the EA pro- cess. According to the policy, the Bank has to follow the Environmental Health and Safety Guidelines. This is a technical reference document that pro- vides examples of good international industry practice and measures gener- ally considered achievable by existing technology at reasonable cost. The guidelines cover impacts such as noise, hazardous materials, air emissions, and wastewater quality, as well as occupational and community health and Emerging Lessons Series: Environmental Assessment 15 safety during construction and decommissioning of a project. However, Panel cases have shown that these impacts have been analyzed to a limited extent and that there is a corresponding lack of mitigation measures. Examples. In the case of the Uganda Transport Sector Development Project, the Panel found that poor safety measures had led to more than 25 occupa- tional or road accidents, resulting in at least seven fatalities and many perma- nent injuries. The Panel also determined that the EA lacked the required analysis of the risks to women and children caused by labor influx, in partic- ular the impacts related to sex with minors, teenage pregnancy, sexual harass- ment, child labor, and school dropouts. The Panel found that the project did not properly assess the risks and had inadequately appraised human health and safety and social impacts, specifically gender-based violence and exploita- tion of children. In addition, the mitigation measures proposed in the EA mainly focused on HIV/AIDS prevention and were inadequate to respond to the multidimensional problems of gender-based violence and the need for child protection. These shortcomings in the project’s mitigation measures resulted in serious and long-lasting harm to the community. As a result of the Panel’s investigation, the Bank issued a guidance note to staff on how to man- age labor influx risks in World Bank projects and created a Gender-Based Violence Taskforce with experts in this field to develop recommendations on how to prevent and respond to GBV in Bank projects. LESSON 4: Impacts Can Materialize Under Different Financial Instruments Over the years, the Panel has considered the assessment of environmental and social impacts and resulting mitigation measures in the context of dif- ferent financial instruments, including block grants in a basic services proj- ect in Ethiopia, a Development Policy Lending (DPL) project in DRC’s forest sector, a Learning and Innovation Loan (LIL) in Cambodia’s forest sector, as well as Technical Assistance operations. It should be noted that the safeguard policies do not apply to DPLs and Program-for-Results (PforR) financing and that these instruments have their own policies with requirements for assessing and mitigating environmental and social impacts (OP/BP 8.60 for DPLs and OP/BP 9.00 for PforRs). The Panel in these cases emphasized the importance of the Bank’s assessment of poten- tial serious impacts and corresponding mitigation measures, independent of the financing instrument used. Examples. In the Panel’s investigation of the Ethiopia Promoting Basic Services (PBS) Phase III Project, the Requesters claimed that the Anuak Indigenous Peoples were harmed as a result of the Bank’s non-compliance with its policies and procedures. They argued that PBS was contributing directly to the Ethiopian government’s villagization program and that the Anuaks were being forced to leave their ancestral land under this program. The Panel observed that the Project Appraisal Document (PAD) noted that 16 Emerging Lessons Series: Environmental Assessment safeguards were not triggered as project financing was limited to recurrent expenditures for basic services. The Panel found that when one or more safe- guard policies are relevant to the proposed investment lending operation, the project should apply them. The Panel’s investigation also found that even though the evictions were not caused by the project, there were major short- comings in the risk assessments during project appraisal and implementation and the mitigation measures were not adequate to manage the concurrent roll-out of the government’s villagization program in PBS project regions. The Panel did not question the use of this “quasi-Program-for-Results” modality in this project, but noted that the system of delivery needs to be robust and meet accepted environmental and social safeguard principles. In its investigation of the DRC Emergency Economic and Social Reunification Support Project and the Transitional Support for Economic Recovery Operation (TSERO), the Panel responded to a complaint alleging that the Bank’s use of certain lending instruments led to the circumvention of its safeguard policies. The Panel noted that the TSERO was not subject to safeguard policies because it was a DPL project. The Panel found that the project’s determination that there were no significant environmental and social effects of the forest component of the TSERO was not consistent with the objectives of Bank policies, especially as TSERO carried forward the ear- lier EESRSP, which was subject to Bank safeguard policies and should have been qualified as a Category A project for its component financing the Logging-Concession Review Process. The Panel, in its investigation of the Cambodia Forest Concession Management and Control Pilot Project, assessed the use of a LIL, which was established in part to pilot concession management operations in untested areas before scaling up such operations. The Panel observed that the main aim of the loan was to support a legal and regulatory program to establish the basis on which long-term concessions were to be granted, an exercise that cannot be regarded as “learning and hypothesis-testing.” The Panel found that the LIL was not designed for the kind of forestry project for which it was used in Cambodia. The use of the LIL, while enabling the funds to be disbursed quickly, facilitated project classification as Category B, lead- ing to less attention to Bank safeguard policies and procedures, which in the long run proved costly. LESSON 5: Ensuring Borrower Capacity is Crucial for Effective Project Implementation Successful implementation of the mitigation measures outlined in the EA depends on the capacity of the institutions involved in environmental man- agement. Assessing borrower capacity is important for understanding the risk profile of the project, the identification of mitigation measures, and the enhancement of capacity to ensure successful project implementation. Such capacity, as well as the capacity of the Bank to monitor implementation, will determine whether the project is implemented as designed and will Emerging Lessons Series: Environmental Assessment 17 adequately prevent adverse social and environmental impacts. As the new ESF will rely heavily on the borrower’s environmental and social framework, adequately addressing borrower capacity will only gain in importance for ensuring effective project implementation. Addressing Capacity Gaps Among Relevant Stakeholders While a careful assessment of the borrower’s capacity to implement the proj- ect and the agreed mitigation measures is crucial for successful implemen- tation of a project, Panel cases have illustrated instances in which environmental assessments lack an evaluation of institutional capacity or do not analyze capacity gaps in depth. In these cases, EAs do not review the implementing agency’s environmental management system and deci- sion-making processes, and do not examine available human resources and the agency’s past track record. As a result, projects can lack the appropriate measures, resources, and capacity to ensure that key EA-related functions are carried out, as mandated by the policy. Environmental management is also invariably inter-sectoral, with respon- sibility spread across a number of specialized and non-specialized agencies. A good quality assessment should analyze not only the capacity of the imple- menting agency to carry out the measures outlined under the environmental assessment, but also the capacity of all relevant government agencies and other stakeholders to manage their responsibilities. Therefore, it is critical that not only local communities but also other relevant government agencies and local administration are consulted in a systematic manner to ensure con- sistency among the project’s EA, EMP, and local/sectoral development plans, and to obtain information on system-wide gaps. Consideration must be given to the responsibilities and coordination mechanisms needed to ensure good collection and transfer of information, appropriate and timely checking of documents and reports, issuance of licenses and permits, and project monitoring. Examples. In the case of the Nepal Power Development Project, the Panel found that the EA did not include an institutional analysis and did not assess the capacity of the implementation agency, the Nepal Electricity Authority (NEA), to oversee the environmental and social assessments or to implement remedial and mitigation measures. Although the Bank was aware that the borrower’s pub- lic-sector capacity had weakened over the years, it did not ensure that this was reflected in either the environmental assessment or other project documents. Despite some attempts at rectifying these weakness, very little was done to pro- vide more comprehensive support for capacity building at NEA, thus contribut- ing to the problems the project faced during implementation. Poor project governance was a critical aspect contributing to harm in the Uganda Transport Sector Development Project. The Panel found that the main actors (the Uganda National Roads Authority, the contractor, and the supervising engineer) did not proceed with a common purpose to address problems. In addition, during the project’s implementation all three entities experienced management turnover and suffered from a lack of capacity, 18 Emerging Lessons Series: Environmental Assessment especially the needed social expertise. They were thus unable to respond ade- quately to environmental and social issues occurring in the project. These three factors (lack of collaboration, high turnover, and weak capacity) led to frequent dereliction of responsibilities. In parallel, the Bank’s response was insufficient, and although supervision missions took place, they neither built the required capacity nor resulted in effective problem solving. Assessing a Borrower’s Legal Framework and International Obligations Understanding the borrower’s legal framework in which the project will be implemented is important, especially when a project is operating under the use of country systems. It is essential to analyze existing national laws as well as their application. In accordance with the Bank’s OP 4.01, a project’s EA should also take into account the country’s obligations pertaining to project activities under relevant international environmental treaties and agreements. Examples. The Panel’s investigation of the South Africa Eskom Investment Support Project was its first investigation into a project imple- mented under the Bank’s Policy on Piloting the Use of Borrower/Country Systems. The Bank conducted a Safeguards Diagnostic Review (SDR) to determine whether the applicable legal and institutional framework was designed to achieve the objectives and adhere to the applicable operational principles of Bank policy. The Panel noted that the Bank generally did good quality work in developing the SDR, especially given the challenging and complex nature of this task, and that the analysis contained a detailed review of the implementing agency’s framework and practices. Nevertheless, the Panel found that the SDR did not adequately address certain gaps in the legal framework pertaining to the analysis of cumulative impacts, the capacity of key local government institutions responsible for environmen- tal regulatory oversight, and environmental management planning. The SDR also failed to adequately address the lack of provisions in South African law to use an independent advisory panel for an environmental impact assessment for a project of this scale. The Panel noted that the exis- tence of adequate capacity to identify and address and regulate the impacts from a project of this size and scale was a crucial factor to ensure the proj- ect’s overall health, environmental and development outcomes, and com- pliance with Bank policies. During the investigation of the Pakistan National Drainage Program Project, the Panel found little attention given to address or mitigate impacts on the dhands, a series of wetlands and interconnected lakes that were a source of livelihood for 40 villages. Some of these areas are included in the Ramsar Convention’s List of Wetlands of International Importance, which provides an internationally agreed upon framework for the conservation and wise use of wetlands and their flora and fauna. The Panel noted that by not meeting its international environmental obligations, the project contributed to the degradation of these internationally recognized sites. Emerging Lessons Series: Environmental Assessment 19 In conjunction with the Panel’s investigation into the Albania Power Sector Generation and Restructuring Project, which included the construction of a combined-cycle thermal power station and connection to the power transmis- sion network, the Requesters submitted a complaint to the Aarhus Convention Compliance Committee regarding Albania’s compliance with its laws on the environment, public participation and cultural heritage. The committee found that the government of Albania had failed to comply with the public participa- tion legal requirements during the siting process, and thus did not fulfill its obligations under the Aarhus Convention. Subsequently, the Panel found that PAPs and local NGOs had not been meaningfully consulted throughout proj- ect preparation and implementation on environmental, social, cultural, tour- ism and health issues that affected them. The Panel also found that the Bank did not ensure that project preparation activities complied with the consulta- tion and participation requirements of the Aarhus Convention, as an interna- tional environmental agreement to which Albania is a party. 20 Emerging Lessons Series: Environmental Assessment © World Bank/Inspection Panel. Further permission required for reuse. Project Implementation LESSON 6: Effective Monitoring, Supervision, and Continuous Environmental Assessment Require Appropriate Expertise and Resources Although proper supervision is critical to all Bank projects, Panel cases have shown the importance of initiating strong supervision practices early in the project lifecycle. A thorough supervision plan and mobilization of appropri- ate expertise early in the lifecycle can improve a project’s environmental man- agement and help to identify and mitigate issues effectively. Engaging Bank Multidisciplinary Expertise Depending on the project and the extent of risks and impacts, effective super- vision requires the proper allocation of multidisciplinary expertise. The Panel’s experience from its cases has shown that in infrastructure projects more emphasis is usually given to engineering aspects of supervision than to environmental and social issues. It is important to note that the inclusion of other expertise in supervisory missions can provide valuable insights. Examples. In the case of the Uganda Transport Sector Development Project, while the Bank undertook numerous supervision missions, the composition of the supervision teams lacked the requisite expertise to address the impacts Emerging Lessons Series: Environmental Assessment 21 related to gender-based violence and child protection. As a consequence, the Bank missed important warning signs identified in an HIV/AIDS baseline report and was unable to detect cases of GBV even after the complaint was brought to the Panel. Attempts to raise sensitive issues related to child sexual abuse in large public meetings hampered identification and discussion of the problem. As a result of this inappropriate expertise, many cases of gen- der-based violence continued for more than a year after the first complaint was received by the Panel. In the Peru Lima Urban Transport Project case, the Panel noted that for long periods during project implementation, the team did not benefit from the consistent presence of a social expert. When problems started to emerge in Barranco as the construction of the Metropolitano progressed, project offi- cials did not initially recognize flaws in the consultation process, which did not include the residents of Barranco. Subsequently, a social specialist joined the project team and became more active in trying to address the issues raised. Such supervision efforts led to the creation of a dialogue roundtable with the participation of Barranco residents and the opening of a grievance office. Identifying Warning Signs and Proposing Solutions through Continuous and Proactive Supervision Effective supervision requires continuous dialogue to identify warning signs and propose solutions to problems that develop during project implementa- tion. Panel cases have shown that it is essential to have systems in place to address problems as they arise. Such systems require coordination between project management and supervision efforts to “close the loop” when problems are identified. The lack of field verification when problems are reported has repeatedly led to weak supervision that has failed to address instances of harm. Examples. In the case of the WAGP, the Panel found that an important rea- son for the shortcomings in supervision was an apparent lack of available resources to monitor and oversee the project’s social and environmental impacts. The Panel noted during its investigation that senior Bank safeguard specialists exercised project oversight; however, they were all based in Washington, D.C. The Panel noted the challenges of overseeing safeguard pol- icies and ensuring the borrower’s adherence to environmental and social requirements “from a distance,” without adequate support from field staff. The Panel on several occasions has noted the need for Bank staff to exer- cise greater long-term field, or on-site, supervision of projects and to rely less on quick supervision missions. In its report following its investigation into the Yacyretá Hydroelectric Project, the Panel recorded that a larg- er-than-average number of supervision missions took place, including three high-level supervision meetings. However, the missions were not an ade- quate response to alleviate the perceptions and suspicions of PAPs due to the fact that project staff did not meet directly with affected people in appropri- ate settings and did not focus on social safeguard issues. Inadequate on-site reconnaissance and supervision were one of the biggest problems of this project. 22 Emerging Lessons Series: Environmental Assessment Effective Monitoring and Follow-up The Panel’s caseload has shown that a well-designed monitoring system to measure project impacts is a fundamental requirement for economic, social, and environmental sustainability of Bank projects. This system can track immediate project outcomes and longer-term impacts that may require mitigation measures. Specifically, environmental-performance-monitoring programs must be designed and implemented by the borrower, with over- sight from the Bank, to ensure mitigation measures are effective in the long term. The design of such systems should be based on a thorough under- standing of baseline conditions, both environmental and social. Panel cases have shown that it is crucial that monitoring is mainstreamed into the proj- ects and the information from the monitoring reports is used to inform project implementation. In addition, the Panel’s caseload has shown that it is important to address capacity issues during the implementation of mon- itoring systems to effectively track project impacts. Maintaining strong communication strategies between the Bank and the borrower in a trans- parent manner is an important component of environmental-monitoring activities to not only address issues of capacity, but also to ensure the miti- gation measures are implemented at appropriate times throughout the project lifecycle. Examples. Although the EA for the Pakistan National Drainage Program Project had expressed concern over the lack of a complete baseline study and of a continuing systematic, scientific, and well-coordinated monitoring pro- gram, the Panel found that these remained critical issues that had not been addressed as recommended. While the Panel commended the Bank for sup- porting the subsequent creation of the monitoring program, it also found that its data interpretation and analysis practices had not been successfully imple- mented. The consequence of the shortcomings in the EA (lack of baseline data and of a monitoring program), led to decision making on environmen- tally crucial elements under the project becoming less systematic, less informed and more ad hoc. The Panel noted in the Uganda Private Power Generation Project case that the need to strengthen the borrower’s capacity to perform environmen- tal-monitoring activities and implement-mitigation measures had been rec- ognized in initial project documents. However, the Panel found that the needed capacity-building measures had not been implemented, resulting in complaints that the Kalagala environmental offset area was not being man- aged appropriately. Additionally, the Environmental Mitigation and Monitor- ing Plan lacked a strategy for monitoring the enhancements and offset plantings required as a part of the project’s mitigation measures. In the case of the Uganda Transport Sector Development Project, although Bank missions noted shortcomings related to health and safety measures, the project’s attempts to improve performance did not rely on a combination of ongoing monitoring and effective accountability. The Panel found that no serious assessment had been made of the capacity of the implementing agency, UNRA, to undertake the required environmental Emerging Lessons Series: Environmental Assessment 23 and social monitoring or evaluation of the effectiveness of the mitigation measures outlined in the ESIA. In addition, attempts to improve project monitoring and implementation of mitigation measures were hampered by a lack of collaboration among the entities responsible for project imple- mentation, namely UNRA, the supervising engineer, and the contractor. As a result, poor safety measures led to many accidents, resulting in both per- manent injuries and fatalities. 24 Emerging Lessons Series: Environmental Assessment © World Bank/Inspection Panel. Further permission required for reuse. Long-Term Impacts LESSON 7: Ensuring Strong Protection for People and their Environment is Key for Sustainable Project Development Outcomes Implementation of the Bank’s Policy on Environmental Assessment, which aims to ensure identification and management of natural and social impacts, is essen- tial for sustainable development outcomes of projects. In several of its cases, the Panel observed that a lack of attention to the natural and social dimensions during design and implementation limited the project’s long-term sustainability. Moreover, the Panel’s cases have shown that a community’s proper understand- ing of a project and buy-in are necessary for ensuring sustainability. Examples. The Yacyretá Hydroelectric Project was supported by several World Bank loans and its implementation spanned more than 20 years. The project’s execution of the environmental and social activities constantly suf- fered from a lack of funds and the implementing agency’s weak managerial capacity. Although most of the execution of the civil works of the dam had been completed at the time of the Panel’s investigation, there were serious delays in implementing the resettlement programs, and the social and envi- ronmental problems associated with resettlement became a “liability” with mounting financial costs. Among the problems with the resettlement pro- gram, there was a failure to ensure sound technical aspects in the design, Emerging Lessons Series: Environmental Assessment 25 construction and implementation of the resettlement program, leading to poorly constructed houses, drainage systems and roads. In addition, inade- quate environmental assessment of the resettlement programs, including a failure to identify and mitigate the impacts caused by population influx, resulted in adverse effects on the host community of Encarnación. The absence of a communication strategy also significantly damaged the relation- ship between those implementing the project and the affected people. Long delays in implementing the resettlement and environmental mitigation activ- ities brought substantial costs and hardships to the affected people, and ulti- mately threatened the completion of the project and delivery of long-term benefits to those affected. In its investigation of the Nepal Power Development Project, the Panel found that the project did not pay sufficient attention to its social dimensions, as it did not ensure adequate, timely and meaningful consultations with affected parties both during preparation and implementation. While the Panel acknowledged the precarious security situation in the project area during preparation and implementation, which placed travel restrictions on the Bank staff, the Panel noted that the lack of sustained communication and consulta- tion with the affected community members led to the spread of misinforma- tion about the transmission line, especially with regard to its perceived health impacts. In the Panel’s view, this contributed to the community’s growing opposition to the project, causing serious delays, jeopardizing the completion of the project and thereby impacting its long-term sustainability and effectiveness. 26 Emerging Lessons Series: Environmental Assessment © World Bank/Inspection Panel. Further permission required for reuse. Conclusions The Inspection Panel’s cases over the past 23 years cover a broad range of envi- ronmental assessment issues from which important lessons emerge that can be useful for World Bank staff and development practitioners more broadly. Among Panel cases, the EA Policy has been raised most frequently to date, demonstrating the importance of improving the understanding of the policy and its application. Given the Panel’s mandate to respond to complaints from communities adversely affected by World Bank-financed projects, the sample of cases analyzed for this report may not be representative of the Bank’s overall performance in the area of environmental assessment. Nevertheless, these les- sons are important. The Panel’s emerging lessons from environmental assessment cases are summarized in Table 1 on the following page. These emerging lessons provide the foundation for this report’s main conclusions. First, Panel cases show the importance of a continuous environmental assessment process throughout the project cycle. This includes conducting quality impact assessments during project preparation as well as adequate fol- low-up to issues arising during implementation. Comprehensive assessments that integrate natural and social impacts are essential to anticipate issues, plan proper mitigation measures, deal with problems that arise in an effective and timely manner, and ensure project sustainability in the long term. Emerging Lessons Series: Environmental Assessment 27 TABLE 1  Summary of Emerging Lessons from Environmental Assessment Cases Stage in the Emerging Lessons Specific Issues Project Cycle Project Lesson 1: Adequate screening and Environmental categorization reflecting social risks Preparation scoping provide the foundation for Analysis of alternatives for project selection, location, a robust environmental assessment and design process Delineating the project’s area of influence and considering associated facilities Determining the scope of cumulative impact Early involvement of internationally recognized expertise Lesson 2: Consideration of both Assessing social impacts and designing related social and natural impacts should mitigation measures inform project design Meaningful consultations improve the quality of impact assessment Mitigation through the environmental management plan Lesson 3: Distinct adverse impacts Impacts on forests and water sources require special attention Transboundary and global environmental externalities Impacts on cultural resources Health and safety issues Lesson 4: Impacts can materialize under different financial instruments Lesson 5: Ensuring borrower Addressing capacity gaps among relevant capacity is crucial for effective stakeholders project implementation Assessing a borrower’s legal framework and its international obligations Project Lesson 6: Effective monitoring, Engaging bank multidisciplinary expertise Implementation supervision, and continuous Identifying warning signs and proposing solutions environmental assessment require through continuous and proactive supervision appropriate expertise and resources Effective monitoring and follow-up Long-Term Lesson 7: Ensuring strong protection Impacts for people and their environment is key for sustainable project development outcomes Second, the Panel’s experience from its cases shows the need for strong supervision. This includes on-site verification when problems are identified, multidisciplinary expertise that goes beyond engineering to environmental and social issues, and continuous dialogue to close potential gaps between the reality on the ground and the perspectives of project teams. Third, many of the issues found in Panel cases relate to the importance of considering the social dimensions of projects, and the Panel’s experience sug- gests that lapses in understanding social risks and impacts in the environ- mental assessment can create or exacerbate complex social situations. Fourth, the Panel’s case portfolio shows that it is not only high-risk (Category A) projects that can cause significant harm. The Panel has received Requests regarding projects with all environmental categories and has conducted 28 Emerging Lessons Series: Environmental Assessment investigations of projects with Category A (18) and B (9) designations. This shows that it is critical to identify, mitigate, and monitor all project risks, regardless of the project’s environmental categorization. Finally, Panel cases have positively influenced World Bank practices related to environmental assessment. In response to Panel investigations, the Bank has provided clarifications related to the application of Bank’s Policy on Environmental Assessment and issued guidelines to staff on how to address relevant policy issues. Some examples include the issuance of a guidance note on managing labor influx risks in World Bank projects, as well as the creation of a Gender-Based Violence Task Force to develop recommendations for the institution on how to prevent and respond to GBV in Bank projects. The Panel notes that the Bank’s ESF, which was adopted by the World Bank’s Board of Executive Directors in August 2016, requires environmental and social assessments to be conducted in a comprehensive and integrated man- ner. The ESF is in accordance with the emerging lessons from Panel investiga- tions: Environmental and social assessment of projects proposed for Bank financing needs to be conducted in an integrated manner to ensure they are environmentally and socially sound and sustainable. Emerging Lessons Series: Environmental Assessment 29 Appendix A Summary of the World Bank Policy on Environmental Assessment Background Environmental concerns first became an explicit part of World Bank activ- ities around 1970. The Bank played an active role in this area by becoming the first multilateral development bank to screen projects for their environ- mental consequences and to adopt environmental guidelines for the evalu- ation of future lending operations. By the mid-1980s, the Bank was financing projects containing environmental components, including sev- eral freestanding environmental projects, which had specific environmen- tal objectives, such as reforestation, pollution control, and water resource management. One of the first significant policy statements issued by the Bank in May 1984—Operational Manual Statement 2.36: Environmental Aspects of Bank Work—required that environmental considerations be introduced at the time of project identification and preparation, and recognized that modifica- tion could occur at the time of appraisal, negotiations, and implementation of the project. In 1989, the Bank introduced formal environmental procedures with the adoption of Operational Directive (OD) 4.00. The directive described envi- ronmental assessment as a flexible procedure whose depth and breadth depended on the type of project being planned. An updated directive, OD 4.01, issued in 1991, identified three categories of projects, each with different requirements for environmental impact assessment: Category A, requiring full EA; Category B, requiring environmental analysis; and Category C, requiring neither EA nor environmental analysis. In 1999, OP/BP 4.01 replaced OD 4.01 on Environmental Assessment. OP 4.01 is considered to be the umbrella policy for the Bank’s other safeguard policies, including Natural Habitats (OP 4.04), Forests (OP 4.36), Pest Management (OP 4.09), Physical Cultural Resources (OP 4.11), and Safety of Dams (OP 4.37). In 2010, a milestone study of safeguards at the World Bank conducted by the Independent Evaluation Group, which evaluates the Bank’s development effectiveness and reports directly to the Board of Executive Directors, ana- lyzed the impact that EA and other safeguard policies had had on Bank oper- ations, in particular by spelling out the expected benefits from an appropriate and proportional application of these safeguards. In February 2011, the policy was updated to clarify the use of framework instruments and to add the 30 Emerging Lessons Series: Environmental Assessment strategic environmental and social assessment to the list of available instru- ments. OP/BP 4.01 was revised again in April 2013 to reflect the recommen- dations of the Investment Lending Reform, as a result of which OP/BP 10.00 on Investment Project Financing was adopted. Policy Objectives The goal of OP/BP 4.01 is to evaluate potential environmental impacts asso- ciated with Bank lending operations and identify ways to prevent, minimize, mitigate or compensate for these impacts. To that end, the policy defines EA as the process of examining the potential environmental risks and benefits of projects under consideration for Bank financing to ensure that they are envi- ronmentally sound and sustainable, and that potentially affected people have been properly consulted. Underlying that definition is the Bank’s acknowledgement of the impor- tance of considering natural and social aspects of investments in an integrated way during the decision-making process. The Bank also recognizes that the earlier an EA is undertaken for a proposed project and findings are integrated into project design, the better the overall project result, including the envi- ronmental result. Therefore, EA is to be synchronized with the project cycle, from identification to implementation and evaluation. The EA Process in Relation to the Project Cycle Environmental Screening To decide the nature and extent of the EA to be carried out, the Bank under- takes an environmental screening of each proposed project. Taking into account the type, location, sensitivity, and scale of the proposed project, as well as the nature and magnitude of its potential environmental and social impacts, the Bank assigns one of four categories to the project. Category A projects are those expected to have significant environmental impacts, and a full EA is required. Category B projects are those with impacts that are site-specific and in most cases reversible, and only a partial EA is required. Category C projects have minimal or no anticipated adverse impacts, and no EA or other environmental analysis is required. Projects with multiple com- ponents are classified according to the component with the most significant adverse impacts; if there is a Category A component, the full project is classi- fied as A. A proposed project is classified as Category FI if it involves invest- ment of Bank funds through a financial intermediary in sub-projects that may result in adverse environmental impacts. An EA is also required for spe- cial project types—including projects involving multiple sub-projects, finan- cial intermediaries and guarantees—and generally for projects in situations of urgent need of assistance and capacity constraints. Emerging Lessons Series: Environmental Assessment 31 Preparing the EA Report OP 4.01 provides that the borrower is responsible for carrying out the EA and the Bank is responsible for advising the borrower on the Bank’s EA require- ments. In order to identify more precisely the likely environmental impacts, the borrower i) retains independent EA experts in the case of Category A projects; and ii) consults project-affected groups and local NGOs for Category A and B projects. The main purpose of these consultations is to focus the EA on issues of concern at the local level. EA Review and Project Appraisal Once the draft EA report is complete, the borrower submits it to the Bank for review. If found satisfactory, the Bank team is authorized to proceed to appraisal of the project. On the appraisal mission, Bank staff review the EA’s procedural and substantive elements with the borrower, resolve any outstand- ing issues, assess the adequacy of the institutions responsible for environmen- tal management in light of the EA’s findings, ensure that the mitigation plan is adequately budgeted, and determine if the EA’s recommendations are prop- erly addressed in project design and economic analysis. Disclosure of Information For meaningful consultations between the borrower and project-affected groups and local NGOs on all Category A and B projects proposed for Bank financing, the borrower provides relevant material in a timely manner prior to consultation and in a form and language that are understandable and accessible to the groups being consulted. In addition, the borrower makes the EA report available at a public place accessible to project-affected groups and local NGOs. Institutional Capacity When the borrower has inadequate legal or technical capacity to conduct key EA-related functions (such as review of EA, environmental monitoring, or management of mitigation measures) for a proposed project, the project should include components to strengthen that capacity. Project Implementation and Supervision The borrower is responsible for implementing the project according to agree- ments derived from the EA process. The borrower reports on i) compliance with measures agreed with the Bank on the basis of the findings of the EA as set out in the project documents; ii) the status of mitigation measures; and iii) the findings of monitoring progress. The Bank supervises the implemen- tation of the project’s environmental aspects, including measures set out in the legal agreement and the Environmental Management Plan. 32 Emerging Lessons Series: Environmental Assessment Instruments OP 4.01 identifies a range of instruments that can be used to satisfy the Bank’s EA requirement. The definition of such instruments is included in OP 4.01, Annex A. The instruments most used at the Bank are defined below: Regional EA examines environmental issues and impacts associated with a particular strategy, policy, plan, or program, or with a series of projects for a particular region (e.g., an urban area, a watershed, or a coastal zone). Sectoral EA examines environmental issues and impacts associated with a particular strategy, policy, plan, or program, or with a series of projects for a particular sector (e.g., power, transport, or agriculture). Strategic Environmental and Social Assessment describes an analytical and participatory approach that aims to integrate environmental and social con- siderations into policies, plans, and programs and evaluates their linkages with economic considerations. Environmental Impact Assessment identifies and assesses the potential envi- ronmental impacts of a proposed project, evaluates alternatives, and designs appropriate mitigation, management, and monitoring measures. Projects and sub-projects need an EIA to address important issues not covered by any applicable regional or sectoral EA. Environmental Management Plan details i) the measures to be taken during the implementation and operation of a project to eliminate or offset adverse environmental impacts, or to reduce them to acceptable levels; and ii) the actions needed to implement these measures. Environmental and Social Management Framework (ESMF) is an instru- ment that examines the impact of projects consisting in a program and/or series of sub-projects. The ESMF contains measures and plans to reduce, mit- igate, and/or offset adverse impacts and enhance positive impacts; provisions for estimating and budgeting the costs of such measures; and information on the agency or agencies responsible for addressing project impacts. Looking Forward In August 2016, the Bank approved the Environmental and Social Framework to respond to new and varied development demands and challenges that have arisen over time. The framework’s goals are to boost protections for people and the environment, drive sustainable development through capacity- and insti- tution-building and country ownership, and enhance efficiency for both the borrower and the Bank. The ESF is not applicable yet. Hence, the Panel’s lessons are drawn solely based on projects where OP/BP 4.01 and, in older cases, OD 4.01 were applicable. Emerging Lessons Series: Environmental Assessment 33 Appendix B List of Panel Cases Analyzed Case Request Country Case No. Year 1 Nepal Arun III Hydroelectric Project 1994 10 India NTPC I Power Generation Project 1997 16 China Western Poverty Reduction Project 1999 19 Kenya Lake Victoria Environmental Management Project 1999 20 Ecuador Mining Development and Environmental Control Assist. Project 1999 22 Chad Petroleum Development and Pipeline Project 2001 23 India Coal Sector Mitigation and Rehabilitation Project 2001 24 Uganda Bujugali Hydropower Project 2001 26 Argentina/Paraguay Yacyretá Hydroelectric Project 2002 27 Cameroon Petroleum Development and Pipeline Project 2002 31 Colombia Cartagena Water Supply Project 2004 32 India* Mumbai Urban Transport (First Request) Project 2004 34 Pakistan National Drainage Program Project 2004 36 Cambodia Forest Concession Management and Control Pilot Project 2005 37 DRC Transitional Support for Economic Recovery Operation and 2005 Emergency Economic and Social Reunification Support Project 38 Honduras Land Administration Project 2006 40 Nigeria/Ghana West African Gas Pipeline Project 2006 44 Uganda Private Power Generation Project 2007 46 Albania Power Sector Generation and Restructuring Project 2007 49 Ghana Second Urban Environment Sanitation Project 2007 51 Argentina* Santa Fe Road Infrastructure Project and Provincial Road 2007 Infrastructure Project (Third Request) 61 Peru Lima Urban Transport Project 2009 62 Papua New Guinea Smallholder Agriculture Development Project 2009 65 South Africa Eskom Investment Support Project 2010 70 Tajikistan Energy Loss Reduction Project 2010 81 India Vishnugad Pipalkoti Hydro Electric Project 2012 82 Ethiopia Protection of Basic Services Program Phase III Project 2012 84 Kenya Natural Resource Management Project 2013 87 Nepal Power Development Project 2013 89 Uzbekistan Second Rural Enterprise Project 2013 98 Uganda Transport Sector Development Project 2014 * Projects with multiple Requests 34 Emerging Lessons Series: Environmental Assessment Appendix C Summary of the Main Cases Studied Chad/Cameroon Petroleum and Pipeline Project At the time of the Panel’s investigation, this project was the largest energy infrastructure development on the African continent and involved drilling 300 oil wells in southern Chad and the construction of a 1,100-km export pipeline through Cameroon to an offshore loading facility. The Request for Inspection was submitted by a Chadian member of Parliament, on behalf of himself and more than 100 residents, and cited concerns that their cultural property, the environment, and the people of the oil field region would be harmed because of inadequate environmental assessment and compensation. The Request also alleged that proper consultation with disclosure of information to the local communities had not taken place. When considering the Requesters’ claims about flaws in the environmental assessment, the Panel’s investigation found evidence of shortcomings in the alternatives analysis and collection of baseline data. The lack of baseline data on community health meant the project had no metrics against which to compare changes in community health, such as the number of HIV cases and sexually transmitted diseases resulting from the project. The EA also did not clearly identify mitigation measures to address the increase in health problems resulting from or influenced by the project. Furthermore, the Panel’s investigation noted the exceptional operational and managerial demands in implementing the expansive EMP in a challenging physical and political climate. However, the Panel found that the Bank did not explicitly consider the spatio-temporal context of the project, including how the boundary of the study area was defined, nor the potential area that could be affected by the project. In its review of the EMP, the Panel could not find evidence that a cumulative impact assessment had been completed despite the fact that one of the project objectives of the ancillary Petroleum Sector Capacity Management Project was to assist the government of Chad with environmen- tally and socially sound resource development, including the need for cumu- lative/regional/sectoral environmental assessments. Argentina/Paraguay Yacyretá Hydroelectric Project The project is a joint venture between Argentina and Paraguay consisting of two 40-meter-high, five-km-long concrete dams and 65 km of embankment dam. Additional civil works financed by the project included a powerhouse containing turbines, spillways, and a navigation lock. The project extended more than two decades and involved several sources of Bank financing. In the Emerging Lessons Series: Environmental Assessment 35 Request for Inspection, the complainants claimed that the raising of the Yacyretá power plant’s reservoir to 76 meters above sea level had severe envi- ronmental impacts, such as constant flooding of urban creeks, a higher water table, and the spreading of disease, which forced them to live in unbearable conditions. They alleged that the wastewater treatment financed by the proj- ect would further pollute the environment because of its location and defec- tive environmental assessment. The Requesters brought forward additional concerns regarding the resettlement, compensation and livelihood resto- ration measures under the project. In its investigation, the Panel found that the environmental screening for the current phase of the project was appro- priate, but that the environmental assessments for the resettlement activities were inadequate, covered few mitigation measures, and did not reflect con- sultation with affected parties. The Panel also noted that the environmental assessment did not consider the effects of population growth on Encarnación, or the effects of the resettlement developments on the city’s infrastructure. It bypassed consideration of the project’s implication on water supply, sewers, urban drainage, and the impact of the resettlement sites on the overall urban system. Furthermore, the Panel recorded that while a larger-than-average number of supervision missions took place, including three high-level super- vision meetings, these were not an adequate response to alleviate the percep- tions and suspicions of project-affected people. The Panel noted concerns about the long-term sustainability and that both the natural environment and PAPs would suffer additional harm if the project’s environmental manage- ment practices deteriorated. Pakistan National Drainage Program Project The project originally was aimed at implementing the first phase of the bor- rower’s and four provinces’ 25-year NDP Framework Project through a com- bination of infrastructure investment, institutional reform, research, and sector planning. The project was designed to address the problems of water- logging and salinity in the Indus Basin that were identified as principal threats to the sustainability of irrigated agriculture in Pakistan. The project’s planned investment actions were scaled back significantly during implementation, and the infrastructure associated with the originally envisaged National Surface Drainage System (NSDS) was not implemented. Instead, the project supported the development of a new Drainage Master Plan that contained significant new proposals and approaches for drainage and drainage management. The Request was submitted by residents of the Indus River Basin and raised issues related to the disposal of saline effluent and the proposed construction of the NSDS under the original project design. The Requesters alleged that the design of the NDP was faulty and unsustainable because it did not take into account the social and environmental difficulties inherent in the existing disposal route and that alternative routes were not explored. The Request included additional claims regarding harm related to indigenous peoples, natural habitats, loss of livelihood, involuntary resettlement, loss of cultural property, community 36 Emerging Lessons Series: Environmental Assessment participation, and information disclosure. The Panel’s investigation found multiple shortcomings related to the project’s EA process. The Bank’s response to the Request acknowledged that it would have been more appropriate to assign the project a Category A rating, as opposed to the Category B rating it had received during screening. This finding was confirmed during the Panel’s investigation. Additional issues were found with the analysis of alternatives, which appeared to be out of touch with the situation on the ground by under- estimating the potential negative environmental impacts from the expansion of infrastructure works. Furthermore, the Panel found that the project paid little attention to impacts on, or means to rehabilitate, the dhands—a series of wetlands and interconnected lakes that were the source of livelihood for 40 villages. Additional actions to conserve or rehabilitate these areas were also not taken, which was inconsistent with Bank policy. When considering the project’s monitoring and supervision systems, the Panel noted that the envi- ronmental advisory panel composed of internationally recognized experts was not in place at the beginning the project, resulting in the failure to identify early on the shortcomings in project design. Although the EA had expressed concern over the lack of a complete baseline study and of a continuing system- atic, scientific, and well-coordinated monitoring program, the Panel found that these remained critical issues that had not been addressed as recom- mended. While the Panel praised the Bank for supporting the subsequent cre- ation of a monitoring program, it found that its data interpretation and analysis practices had not been successfully implemented. Cambodia Forest Concessions Management and Control Pilot Project The project was a technical assistance operation aimed at demonstrating and improving the effectiveness of a comprehensive set of forest management and operational guidelines and control procedures in forest concession areas. It also aimed to establish an effective forest-crime monitoring and prevention capability. The Requesters, who depend on the forests for their livelihoods, tapping resin and collecting forest products to sell, claimed among other things that the project was supporting the interests of logging concessionaries with track records of illegal logging and human rights abuses. A core concern related to serious depletion caused by intensified logging of resin-producing trees from which indigenous peoples and local communities derive a major source of income. They also claimed that an environmental assessment ahead of the project might have identified forests of high ecological value. The Panel’s investigation found that the illegal logging of resin trees had had major nega- tive consequences on the Requesters and the local people, and that the Bank’s decision to postpone a consultation procedure until the preparation of the ESIAs by concessionaires was not consistent with the early consultation requirements under Bank policy. The Panel’s report stated that the Bank chose to give primary emphasis in the project’s design to the technical and financial aspects of concession reform, at the expense of environmental and social Emerging Lessons Series: Environmental Assessment 37 aspects, which subsequently led to inadequate levels of local involvement, community consultations, and social and environmental assessments. This resulted in a lost opportunity to lead the debate on forest-sector reform, so that forests could be sustainably managed for all Cambodians. The Panel also found that the Prey Long Forest, a relatively undisturbed forest with signifi- cant spiritual and cultural value to indigenous peoples in the area, was not explicitly identified as an area of potential high ecological value. The project also did not adequately recognize the existence of natural habitats, which caused their protection to be omitted from the concession planning and approval process. Given its serious potential impacts, the Panel found that the project should have been assigned a Category A, and prepared a full environ- mental assessment. The Panel concluded that the studies required for a Category A project could have helped avoid serious errors in the design and implementation of the project. DRC Transitional Support for Economic Recovery Credit and Emergency Economic and Social Reunification Support Project These operations contained components designed to address the problem of illegal logging and improve governance in the natural resources sector of the DRC. The Requesters were concerned with the implementation of a new commercial forest concession system and the preparation of a forest zoning plan for the forests of the Equateur and Orientale Provinces, where the Pygmies, a vulnerable indigenous group, have lived for generations. The for- est also provides spiritual purpose and a foundation of the cultural identity of the Pygmy people. They claimed that if the projects and these activities were implemented without consulting the indigenous peoples and consider- ing their interests, the projects may cause irreversible harm. In its investiga- tion report, the Panel found that despite EESRSP’s involvement in the review of logging concessions, an activity that carries significant environmental and social implications, this project was assigned a Category B. Additionally, no EA was prepared for the respective project component on logging conces- sions. As a direct consequence of this misclassification, EESRSP lacked an environmental and social assessment to address its impacts on land, forests, and people. Furthermore, the Panel observed that financing of policy and institutional reforms, such as the review of the logging concessions, can lead to significant environmental and social impacts. The Panel also noted that the 2002 moratorium on allocation of new forest concessions had been “bypassed” and areas canceled in 2002 (estimated at 15 million hectares), where vulnerable people including Pygmies live, re-emerged as concession areas under consideration for validation. The Panel found that no timely fol- low-up efforts at a sufficiently high level were made to ensure necessary action in response to the moratorium violations, and also identified a num- ber of significant concerns relating to the implementation of the “Concession Conversion Process.” The Panel noted the importance of developing a 38 Emerging Lessons Series: Environmental Assessment balanced approach by emphasizing appropriate models of community for- ests as well as their actions to support community participation, land tenure, and forest-use rights. Nigeria/Ghana West African Gas Pipeline Project The WAGP aimed to improve the competitiveness of the energy sectors in Ghana, Benin, and Togo by promoting use of less expensive, environmentally cleaner gas from Nigeria. Most of the infrastructure works took place in Nigeria. The pipeline’s right of way and ancillary facilities involved the acqui- sition of 144 hectares traversing 23 communities in western Nigeria. The Requesters were composed of both Nigerian and Ghanaian citizens and they alleged that the project would cause irreparable damage to their land and destroy the livelihoods of their communities. The Requesters asserted that the project’s EA should have included the impacts to the existing Escravos-Lagos Pipeline System (ELPS) to which the WAGP would be linked. They believed this existing pipeline was unsafe because of its history of poor maintenance and accidents. The fishermen among the Requesters believed the construc- tion of the pipeline polluted the water and damaged their nets, preventing them from catching fish and negatively impacting their livelihoods. Additional concerns regarding disclosure of information, consultation, involuntary resettlement, compensation, gas flaring, and the project’s economic evalua- tion were also included in the complaint. The Requesters claimed that many of these shortcomings stemmed from the Bank’s failure to adequately super- vise the project. The Panel’s investigation into the project’s compliance on environmental issues found flaws in the EA process and the supervision of subsequent miti- gation measures. The Panel saw no evidence that an independent advisory panel of internationally recognized environmental experts was constituted during the planning and design phases of the project, despite its Category A rating. Moreover, the establishment of such a panel during implementation was also significantly delayed. Regarding the Requesters’ concerns about the integrity of the ELPS, the Panel found that this gas supply upstream of WAGP was within the project’s area of influence and that the project, its associated facilities, and supply areas should be viewed as an inter-connected system for the purposes of the EA. The expert employed by the Panel during its investi- gation additionally concluded that linking the WAGP and ELPS had the over- all effect of improving the safety of the existing Escravos-Lagos pipeline. When investigating the Request’s claims regarding inadequate supervision, the Panel found that despite the early warning signs that appeared during the design phase, the project lacked necessary resources including funding and safeguard expertise. Safeguard staff mainly concerned themselves with proj- ect preparation activities and were far less involved in the construction phase. This lack of involvement was further complicated by long gaps between supervision missions, highlighting the difficulties of supervising from a dis- tance without adequate field staff. Emerging Lessons Series: Environmental Assessment 39 Uganda Private Power Generation Project The project consisted of the construction of the Bujagali hydropower plant on the Nile River near the Bujagali Falls. It was designed to provide an increase of 250 megawatts of power-generation capacity to the national grid. The proj- ect was going to inundate the Bujagali Falls and other natural habitats, which were sites of cultural and religious significance to a large community of peo- ple, and involved displacement and resettlement of people from their lands. The Requesters claimed that the project Social and Environmental Assessment (SEA) did not properly address hydrological changes and their effect on power production, nor the potential impacts of climate change. They also raised concerns about the economic impacts of the plant, including the affordability of energy it produces, as well as issues of disclosure and consul- tation, use of data, dam safety, and the cultural and spiritual significance of the project area. In the context of the Bank’s Policy on Environmental Assessment, the Panel examined a range of issues, including the impact of hydrologic risk on energy output, the potential impact of the project on the levels of Lake Victoria, and the risks from climate change. The Panel found areas of compliance, including that the project had been appropriately classified as Category A and that the Kalagala Falls had been established as an offset for the natural habitats to be inundated by the project. However, there were several important areas of non-compliance with Bank policies. The project did not appoint an indepen- dent panel of environmental experts, as required under Bank policy for this type of complex project, nor did it support needed capacity building for implementation of social and environmental aspects of the project. The proj- ect SEA did not adequately make reference to the Strategic/Sectoral Social Environmental Assessment (SSEA) of the separate Nile Basin Initiative, which analyzed issues such as climate change and cumulative effects. As a result, important information required under Bank policy was not disclosed in a timely manner as an integral part of the project’s documentation. In addition, neither the SSEA nor the SEA addressed the cumulative effects of the existing and planned projects in a meaningful way. And while the Kalagala Falls had been established as an offset, in light of institutional weaknesses there is no evidence that this offset site will be maintained in accordance with appropri- ate conservation and mitigation measures in conformity with sound social and environmental standards. The Panel also found that project preparation activities did not adequately consider cultural and spiritual matters of high significance at Bujagali Falls, and when comparing the Bujagali and Karuma alternatives. Albania Power Sector Generation Project The project’s objective was “to achieve significant improvement in power sys- tem performance” through, among other things, the construction of a com- bined-cycle thermal power station in Vlora. The Panel conducted an 40 Emerging Lessons Series: Environmental Assessment investigation of the project in response to a Request for Inspection submitted by the Civic Alliance for the Protection of the Bay of Vlora on behalf of resi- dents living in Vlora. The Request raised a number of environmental, social, cultural, and economic concerns related to the project as designed. It con- tended that a failure of the Bank to follow its own operational policies and procedures in the design and appraisal of the project would have resulted in serious long-term risks and harm to the people living in the Vlora area and to the environment. In particular, the Requesters expressed concern that air and water emissions from the thermal power plant as well as the oil terminal located in the Bay’s waters and its potential oil spills, would have negative polluting impacts on the tourism industry in the Vlora area, the employment of the local population, and the fishing industry. They also asserted that the EA misrepresented the physical characteristics of the project site and noted the proximity of the project site to the Narta Lagoon, which is a protected area and a sanctuary to important animals and plants that might be significantly harmed by the project. The Requesters complained that the Bank had failed to take into account the future cumulative environmental impact of additional generating units as well as the other industrial investments already approved by the government in the vicinity of the project. In response to the Request, the Panel assessed the issues related to the environmental compliance, includ- ing the characterization of the project site, the adequacy of the project’s EA, the applicability of the Bank Policy on Natural Habitats to the Narta Lagoon, the project’s impact on air and water quality, and the potential cumulative risks and impacts related to the project. The Panel concluded that a large array of social issues and potential economic risks to the population in the area— resulting from design, siting, and impacts—were not considered in the proj- ect’s preparation and EA. In particular, since there was prima facie evidence that more than one energy-related project was being undertaken in Vlora, the Panel noted that the Bank should have insisted on a sectoral EA and the asso- ciated cumulative effects analysis in addition to the project-specific EA. The Panel also found that PAPs and local NGOs had not been meaningfully con- sulted throughout project preparation and implementation on environmen- tal, social, cultural, tourism and health issues that affected them. Argentina Santa Fe Road Infrastructure Project and Provincial Road Infrastructure Project The project aimed at improving transport conditions, including road safety, of a segment of National Route 19 between the province of Santa Fe (PSF) and the province of Cordoba, along a strategic road corridor linking the PSF with regional and international markets. The Panel’s investigation occurred during the construction phase. The Requesters claimed that the elevated carriageway to be constructed as a part of the new four-lane highway was incompatible with the area’s hydrological situation because the land is flat and has insuffi- cient absorption and retention of rainwater. They believed that water drainage in the project’s design was insufficient and would increase the risk of flooding. Emerging Lessons Series: Environmental Assessment 41 They also claimed that information disclosure and consultation of project-af- fected people were inadequate, and alleged discrimination and intimidation during the project’s land-acquisition process. The Panel’s investigation noted that the road-upgrading project took place within a complex and highly dynamic local rural development context in which agricultural and livestock production issues are closely intertwined with water and environmental man- agement concerns. The Panel found that the project’s ESMP had an important shortcoming in that it did not include a proper analysis of the potential hydro- logical impacts both upstream and downstream of Road 19, particularly changes in area that would be flooded downstream under very different rain- fall scenarios. Although the ESMP concluded that the road would not worsen existing flood conditions, information to back up this conclusion was not provided. Regarding consultation with affected people, the Panel found that the Requesters were given the opportunity to meet project officials to express their concerns and to make suggestions for project design modifications, and that, in general, many of these concerns were responded to and acted on. Nevertheless, the Requesters’ concerns about the negative impacts of the road on the hydrology of the area were mostly dismissed as PAPs were seen as non-experts in this field. The consultation issues for the project were also affected by the delay in hiring a communications expert, which was discussed on a number of occasions during project implementation. Peru Lima Urban Transport Project The objective of this project was to assist in enhancing economic produc- tivity and the quality of life by improving mobility and accessibility for its population through the establishment of an efficient, reliable, and safer mass transit system. Specifically, the project supported the construction of a bus rapid-transit system (BRT) through the city of Lima, including a bus corridor in the coastal district of Barranco, which was designated a historic district by the National Institute of Culture in 1972. Through much of its route, the bus corridor ran through the middle of a major highway. However, in Barranco the bus corridor ran through Avenida Bolognesi, a former four-lane avenue that connects Barranco with the center of Lima. The implementation of this project made critical contributions to addressing the high traffic volume and long commuting times existing throughout the city. In their complaint, the Requesters alleged that citizen consultations were not carried out, and that the EA was neither rigorously conducted nor approved by the Ministry of Transportation. They also expressed concerns about the direct and indirect impacts of the project on the lifestyle of Barranco residents, the area’s socio-cultural dynamics, and its architectural patrimony as longer-term adverse impacts that would remain after the BRT became operational. During its investigation, the Panel found evidence of the Requesters’ claims regarding the limited assessment of impacts on the community beyond the immediate impacts of construction and operation of the transit system. Notably, the impacts on traffic patterns and the 42 Emerging Lessons Series: Environmental Assessment socio-cultural dynamics of the historical Barranco neighborhood were not adequately considered during the environmental assessment. Furthermore, the project generated tension and conflict by omitting the residents of Barranco from initial project consultations. For multiple years during proj- ect implementation, the project team did not benefit from the consistent presence of a social expert, which caused the project-affected people to be inadequately informed and consulted on the project and its potential impacts. The project began to address these issues by creating an active, steady role for the social specialist on the project team. These supervision efforts led to the creation of a dialogue roundtable and the opening of a grievance office for Barranco residents. South Africa Eskom Investment Support Project The project’s objective was to support South Africa in enhancing its power supply and energy security in a sustainable and efficient manner for both its economic growth objectives and long-term carbon mitigation strategy. The project included the 4,800-MW Medupi coal-fired power plant at Lephalale and associated infrastructure and investments. It also contained a compo- nent for the development of renewable energy generation sources, the Majuba Rail Project, and energy efficiency sector investments and technical assistance. The Request was submitted by two NGOs on behalf of commu- nity members located near Lephalale who had concerns about direct impacts of the project and its associated facilities, as well as its broader social impacts. They alleged harm related to increased health problems, decreased water availability, exacerbation of the effects of climate change, and cultural and livelihoods changes. This was the Panel’s first investigation into a project under the Bank’s Policy on Piloting the Use of Borrower/Country Systems, which relies on the coun- try’s and borrower’s legal and institutional frameworks. As a result, the Panel analyzed compliance at two levels—the “system level,” which relates to man- agement’s assessments of the “equivalence” and “acceptability” under coun- try’s applicable Bank policy and the borrower’s environmental and social safeguard systems; and the “project level,” relating to management’s compli- ance with relevant provisions of applicable Bank operational policies. At the project level, the Panel found that insufficient attention was given in project documents to the potential impacts that the use of water by the Medupi plant might have on other users, particularly considering the area already suffered from water scarcity strains. These shortcomings on water resources included the improper assessment of the cumulative impacts of the water requirements for operation of Grootegeluk Mine, which supplies Medupi with coal. The Panel noted that Bank management’s focus related to water resources appeared to be on ensuring that Medupi had a reliable water supply, and that this was not based on a risk-averse approach, as required by both Bank policy and South Africa’s national environmental management principles. The Panel’s investigation also considered the project’s relationship to climate change more Emerging Lessons Series: Environmental Assessment 43 broadly through its contributions to global greenhouse gas emissions. When examining whether the project’s environmental assessment adequately addressed measures to control and mitigate GHG emissions in line with Bank policy, the Panel found that steps had been taken to adhere to this policy framework but that the magnitude of emissions from Medupi far outweighed emissions avoided through project-mitigation measures. In addition, the Panel found that the description of the net results of the project’s mitigation efforts failed to adequately demonstrate that the project was directly address- ing its own externalities. Tajikistan Energy Loss Reduction Project The project financed assessment studies and technical assistance to examine the technical, economic, environmental, and social viability of the Rogun Hydropower Plant in Tajikistan. The objectives were to assist in the reduction of commercial losses in the electricity and gas systems, to lay the foundation for the improvement of the financial viability of Tajikistan’s electricity and gas utilities in a socially responsible manner, and assist in the viability assessment of the Rogun HPP. The Requesters stated that they were likely to suffer harm because of flaws in the consultation process and the ecological impacts of the proposed project’s location. Because Rogun would be constructed on a fault line where seismic activities were possible, they feared that a failure of the dam could create waves that could destroy downstream power systems and over 700 settlements in Tajikistan, Afghanistan, Uzbekistan, and Turkmenistan. In its eligibility report, the Panel noted that projects on international waterways may affect relations between the Bank and its borrowers, and in this context the Bank had made efforts to ensure that potential riparian issues were exam- ined in the context of these studies. The Panel also noted that the Bank had gone beyond the requirements of the Environmental Assessment Policy by financing a panel of experts, which is typically done by the beneficiary or bor- rowing country. In light of management’s actions and the purpose of the study to ensure that a fact-based decision was taken on this complex and sensitive project, the Panel did not recommend an investigation in this case. India Vishnugad Pipalkoti Hydro Electric Project The Panel received a complaint concerning this project, which was being con- structed on the Alaknanda River, a tributary of the Ganges in Northern India. Through the construction of the run-of-the-river hydropower generation sys- tems, the project aimed to increase the supply of electricity to the national grid and strengthen the institutional capacity of the borrower to prepare and implement such projects. In their complaint to the Panel, the Requesters stated that they did not want the river to be diverted or controlled in any way since they believe that the free flow of the Alaknanda River holds immense spiritual and aesthetic value for them, which, in their view, had not been 44 Emerging Lessons Series: Environmental Assessment estimated by the project authorities. Additionally, the complaint expressed concerns about the impacts of the project on local water sources and water quality, loss of biodiversity and other environmental harm, impact on liveli- hoods and health, economic issues, and gender issues. The Panel found that the project had conducted a solid cumulative impact assessment that incor- porated the recommended increased minimum environmental flow (e-flow), which is a measure to describe the quantity, timing, and quality of water flows below a dam necessary to sustain river ecosystems and the human livelihoods that depend on them. By increasing the minimum e-flow for the Alaknanda River, the project was able to mitigate cultural, religious, and biodiversity impacts. Despite the thorough cumulative impact assessment, the Panel’s investigation also found that EA did not include adequate consideration of the project’s associated facilities. In addition to the construction of multiple dams, the proposed project included the installation of a 30-km line to evac- uate power from the project. Neither this line nor the larger transmission network were considered as associated activities under the project’s EA. This exclusion caused potential impacts such as the loss of farm land and forest resources from transmission-line construction to be omitted from the EA. The project also involved significant social risks, including gender issues. The Panel’s investigation found evidence that the project lacked attention to the issue of women’s security as a result of labor influx into the project area. Consequently, the project caused conflict between the laborers and local vil- lagers that was not appropriately addressed through mitigation measures. Ethiopia Promoting Basic Services Phase III Project The objective of the project was to contribute to the higher-level objective of expanding access and improving the quality of basic services by funding block grants that ensure adequate staffing and operations, and by strengthen- ing the capacity, transparency, accountability, and financial management of governments at the regional and local authority levels. The Requesters stated that the Anuak Indigenous Peoples had been harmed, claiming that the Bank project contributed directly to the government’s villagization program in the Gambella Region, which, according to the Request, forced the Anuak people to leave their ancestral lands under the pretext of providing better services and improving the livelihoods of communities. In its investigation of the PBS Phase III project, the Panel observed that the project’s PAD noted that safe- guards were not triggered as project financing was limited to recurrent expen- ditures for basic services. Previously, PBS I and II had triggered the Policy on Environmental Assessment because of small infrastructure works through a pilot Local Investment Grant, a specific-purpose grant for capital investments at the district level. Regarding PBS III, the Panel found that the project should have applied safeguard policies to the extent that one or more of them are found to be relevant to the area of the proposed investment lending opera- tion. Additionally, the Panel found during its investigation that the Bank did not fully assess and mitigate the risks arising from the government’s Emerging Lessons Series: Environmental Assessment 45 implementation of villagization, but also noted the difficult context in which PBS III was prepared and the importance of implementing a robust system of delivery that meets accepted environmental and social safeguard principles. Nepal Power Development Project The project objective was to develop Nepal’s hydropower potential to help meet electricity demand, improve access to electricity services in rural areas and promote private participation in the power sector. The Request stated that this project was designed without informing or consulting with local commu- nities and that it would likely result in involuntary displacement and damage to cultural property. The Requesters also alleged that the project works would make them more vulnerable by harming agriculture production and physi- cally dividing communities. The Panel investigation identified several issues in the project contributing to the Requesters’ concerns. When assessing alter- native routes for a disputed 3.85-km section of the transmission line, the tech- nical committee conducted limited and restrictive assessment of alternatives. More broadly, the Panel found that although the project’s policy framework highlighted in adequate detail the studies that were needed to assess environ- mental and social impacts of the sub-projects, it did not discuss whether the capacity existing at the implementing agency was sufficient to undertake the studies or implement their recommendations. As a result of not considering the borrower’s capacity in the EA or other project documents, little was done to strengthen the capacity of the implementing agency, thus contributing to the problems the project faced during implementation. Issues faced by the project team during preparation and implementation were further compli- cated by a lack of adequate, timely, and meaningful consultations during this period, in part due to the security situation and travel restrictions placed on Bank staff. In its response to the Request, the Bank acknowledged that the safeguard policies governing information disclosure had not been fully observed and said the situation was being rectified. Uzbekistan Second Rural Enterprise Support Project The Panel received a Request for Inspection of the project and its additional financing from three human rights organizations. The project’s goals were to increase the productivity, financial, and environmental sustainability of agri- culture, and the profitability of agribusinesses in the project area through the provision of financial and capacity-building support to farmers and agribusi- nesses. The central claim of the Requesters was that due to lack of adequate measures to prevent Bank funding from being used for agricultural lands in which forced and child labor is practiced, the project contributed to “the gov- ernment’s policy of organized forced and child labor.” The Requesters further stated that the social assessment carried out for the project failed to adequately 46 Emerging Lessons Series: Environmental Assessment identify the problem of forced and child labor, adding that no serious consid- eration or analysis was undertaken to assess if and how the project would contribute to this problem. The Panel noted that a plausible link existed between the project and the alleged harm. The Panel also noted that the claims in the Request raised significant issues of policy compliance, including, among others, in relation to environmental assessment, which requires the assess- ment of potential significant social impacts and risks associated with a project and inclusion of actions to avoid or mitigate such risks. The Panel observed that in the early years of the project there may have been insufficient due dil- igence in addressing the concerns about harm and related issues of Bank pol- icy compliance raised in the Request, including at the time of project approval. The Panel, however, recognized and appreciated i) management’s commit- ment to include labor issues in the Bank’s dialogue with the government of Uzbekistan on agricultural sector reforms; ii) the Bank’s increased dialogue with the government and its development partners on the eradication of child and forced labor in the country’s cotton sector; and iii) management’s com- mitment to report to the Board of Executive Directors on these matters. On that basis, the Panel did not recommend an investigation. Uganda Transport Sector Development Project The project’s additional financing supported upgrading and rehabilitation of the 66-km Kamwenge-Fort Portal road and technical assistance for strength- ening the internal audit functions of the Uganda National Roads Authority. The Requesters, community members from the towns along the road, alleged adverse impacts from the road construction, including sex with minors and teenage pregnancy by road workers, the spread of STIs, sexual harassment of female employees, child labor, inadequate compensation, lack of participa- tion, poor labor practices, and lack of adequate road and workplace health and safety measures. In its investigation, the Panel found that an adequate assessment of UNRA’s capacity regarding environmental and social aspects was not conducted and there was a lack of effective institutional strengthening measures for UNRA’s weak capacity. The Panel also detected poor project governance, including ten- sion and lack of collaboration among UNRA, the supervising engineer, and the contractor. The Panel also found that poor safety measures had led to more than 25 occupational or road accidents, resulting in at least seven fatalities and many permanent injuries. The Bank had not ensured the design or implemen- tation of appropriate mitigation measures to protect the community and workers against construction impacts, thus seriously jeopardizing human health and safety. The Panel also determined that the EA lacked the required analysis of the risks to women and children caused by labor influx, in particu- lar the impacts related to sex with minors, teenage pregnancy, sexual harass- ment, child labor, and school dropout. In addition, the mitigation measures proposed in the EA mainly focused on HIV/AIDS prevention and were inad- equate to respond to the multi-dimensional problems of gender-based Emerging Lessons Series: Environmental Assessment 47 violence and the need for child protection. These shortcomings in the project’s mitigation measures resulted in serious and long-lasting harm to the commu- nity. The Panel found that the contractor submitted a draft ESMP to the super- vising engineer nearly one year after construction had started, and the Bank only received it after two years. The Panel also found that even when impacts were predicted in the environmental and social assessment, there were no cor- responding mitigation measures in the ESMP to address these impacts. For example, the ESIA had identified some potential adverse social impacts from the expected influx of labor into the project area during implementation and required that a strict no-fraternization rule be applied between the workers’ camp and the surrounding community. Despite these observations in the ESIA, the ESMP did not state whether the camp should accommodate only foreign workers or also house Ugandan workers. As a result of the Panel’s investigation, the Bank issued a guidance note to staff on how to manage labor influx risks in World Bank projects and created a Gender-Based Violence Task Force with experts in this field to develop recommendations on how to pre- vent and respond to GBV in Bank projects. 48 Emerging Lessons Series: Environmental Assessment Appendix D Summary of the Discussion at the Release of Emerging Lessons Series No. 3: Environmental Assessment The Inspection Panel released “Emerging Lessons Series No. 3: Environmental Assessment” on April 18, 2017, during the Spring Meetings of the International Monetary Fund and the World Bank Group. Otaviano Canuto, an Executive Director on the Board of the World Bank Group and Chairman of the Committee on Development Effectiveness, mod- erated a panel discussion about the report at the event. The panel included Inspection Panel Member Zeinab Elbakri; Julia Bucknall, Director for Environment and Natural Resources at the World Bank; Medha Patkar, founder of Narmada Bachao Andolan and the National Alliance of People’ Movements in India; and Richard Fuggle, Emeritus Professor of Environmental Studies at the University of Cape Town, who has served as an expert consul- tant on several Panel investigations. Mr. Canuto opened the event by providing introductory remarks on the publication and stated the Emerging Lesson Series is an example of the important role the Inspection Panel plays in institutional learning at the World Bank. Ms. Elbakri’s presentation followed these remarks and summarized the les- sons and conclusions of the report, and provided examples from Panel cases to bolster the report’s findings. Ms. Bucknall continued the panel discussion and said the World Bank rec- ognizes environmental assessment is an issue that “runs throughout every- thing that we do.” She said, “It’s not an issue of ticking boxes and then being done. It’s a management issue that goes throughout the project cycle.” Ms. Bucknall also stated building borrower capacity within a country’s environment ministry—and the supporting agency’s units—is critical, and that the Bank has learned to be on guard for the “hidden risks” of a project. “When we’re financing a dam, we know that’s a big risk. We put our best people and we put lots of attention on to it,” she said. “But there are ones where we think there is not going to be a big risk, and there can be just as many problems that come from those. I think that’s a lesson that we have taken and we’re paying serious attention to.” She said the findings in Panel investigations and the Emerging Lessons Series reports are extremely important, adding: “It really has helped us a lot and I think our systems are a lot better because of it now.” During the panel discussion Ms. Patkar commented on the sequencing of screening and scoping activities done in project preparation. Emerging Lessons Series: Environmental Assessment 49 “How can one decide the (environmental risk) category—A, B or C—with- out really drawing the full scope of impacts and also the feasibility of solu- tions at least at the primary level?” she asked. Speaking of the community consultation process, she asked it is necessary to “democratize the development planning process, which only would lead to a serious consideration of environmental and social impacts, and take up ‘options assessment’ so as to choose the appropriate technology and even reject the wrong destructive projects.” Mr. Fuggle rounded out the panel’s comments by stressing the importance of the “continuous, proactive, field-based” supervision of projects. “It is very important for the Bank staff, the implementing agencies and the supervising engineers to get out of their offices, away from their computer screens and get their boots muddy to supervise their projects effectively to come to grips with what is happening on the ground,” he said. Like Ms. Bucknall, Mr. Fuggle emphasized the importance of capacity— both the capacity of the teams that conduct the environmental assessment as well as the capacity the borrower and the Bank teams throughout project implementation. He said the capacity of Bank teams was “much improved,” adding, “Certainly, over the nearly 20 years I’ve been working with the Panel, there is a very differ- ent approach now from task team leaders towards environmental matters.” The opening comments from the panel were followed by questions and comments from the audience, and then Mr. Canuto provided his closing thoughts to wrap up the 90-minute session. Picking up on the issue of capacity-building, he said that the World Bank can no longer focus on specific projects but rather needs to “work with capac- ity-building in the countries so they can manage lines of projects.” Mr. Canuto applauded the lessons the World Bank has learned and the adaptations it has made regarding environmental assessment, but he stressed nothing can replace “passion, commitment and purpose” in helping the Bank meet the environmental and social challenges posed by projects. A video of the entire session can be found on the Inspection Panel website at: https://www.youtube.com/watch?v=L_E9tbv1pRc. 50 Emerging Lessons Series: Environmental Assessment Notes 1. The Inspection Panel serves as an independent forum to provide accountability and recourse for people affected by IBRD- and IDA-financed projects. They can bring their concerns to the Panel in the form of a written complaint. A complaint is referred to as a “Request for Inspection” and those who submit a Request are referred to as “Requesters.” When it carries out an investigation, the Panel reports to the Board on whether the harm, as alleged by the Requesters, has totally or par- tially resulted from failure of the Bank to comply with its policies and procedures, including social and environmental safeguard policies, during design, appraisal, and implementation of Bank-financed projects. 2. While all of these cases were studied for the purposes of this report, emphasis was placed on the lessons from cases occurring within the past 10 years. This report also includes two relevant eligibility reports that include important issues and illustrate the breadth of the Panel’s casework. Screening and scoping, assess- ment of social and natural impacts, borrower capacity, supervision, and impact monitoring and project sustainability were the key themes in these investigations. 3. This definition of environmental impact assessment is adopted by the International Association of Impact Assessment (IAIA). Available at: http://www.iaia.org/ uploads/pdf/What_is_IA_web.pdf 4. Even though the Panel did not conduct a compliance review in these two cases, the dialogue between Bank management and the Panel provided important les- sons that are noteworthy for this publication. 5. As per OP/BP 4.01, projects with potential significant and irreversible adverse impacts are assigned an Environmental Category A, while projects with less adverse and site-specific impacts are categorized as B, and those with minimal or no impact are categorized as C. A proposed project is classified as Category FI if it involves investment of Bank funds through a financial intermediary in sub-proj- ects that may result in adverse environmental impacts. 6. The name “Pygmy” derives from a Greek word meaning the measure of length from elbow to the fist, and is used to refer to people of short stature, encompass- ing different indigenous peoples groups such as the Baka, Bakola, Effe, Aka, and others. Because of its pejorative connotation, both anthropologists and the indig- enous themselves avoided the term. However, it has recently been used again by indigenous peoples, particularly in the context of establishing their identity. Emerging Lessons Series: Environmental Assessment 51 Bibliography Food and Agriculture Organization of the United Nations. 2010. Policy on Indigenous and Tribal Peoples. Rome: United Nations. Inspection Panel. 2003. Chad-Cameroon Petroleum and Pipeline Project; Petroleum Sector Management Capacity Building Project; and Management of the Petroleum Economy Investigation Report. Washington, DC: World Bank. ____. 2004. Paraguay Reform Project for the Water and Telecommunications Sector; Argentina SEGBA V Power Distribution Project Investigation Report. Washington, DC: World Bank. ____. 2006a. Pakistan National Drainage Program Project Investigation Report. Washington, DC: World Bank. ____. 2006b. Cambodia Forest Concession Management and Control Pilot Investigation Report. Washington, DC: World Bank. ____. 2007. Democratic Republic of Congo Transitional Support for Economic Recovery Operation and Emergency Economic and Social Reunification Support Project Investigation Report. Washington, DC: World Bank. ____. 2008a. Ghana West African Gas Pipeline Project Investigation Report. Washington, DC: World Bank. ____. 2008b. Uganda: Private Power Generation (Bujagali) Project Investigation Report. Washington, DC: World Bank. ____. 2009a. Albania Power Sector Generation and Restructuring Project Investigation Report. Washington, DC: World Bank. ____. 2009b. Argentina Santa Fe Road Infrastructure Project Investigation Report. Washington, DC: World Bank. ____. 2010. Tajikistan Energy Loss Reduction Project (Rogun HPP) Report and Recommendation on Request for Inspection. Washington, DC: World Bank. ____. 2011a. Peru Lima Urban Transport Investigation Report. Washington, DC: World Bank. ____. 2011b. South Africa Eskom Investment Support Project Investigation Report. Washington, DC: World Bank. ____. 2014a. India Vishnugad Pipalkoti Hydro Electric Project Investigation Report. Washington, DC: World Bank. ____. 2014b. Republic of Uzbekistan Second Rural Enterprise Support Project and Additional Financing for the Second Rural Enterprise Support Project Final Eligibility Report and Recommendation. Washington, DC: World Bank. ____. 2015a. Nepal Power Development Project Investigation Report. Washington, DC: World Bank. ____. 2015b. Ethiopia Protection of Basic Services Program Phase II Additional Financing and Promoting Basic Services Phase III Project Investigation Report. Washington, DC: World Bank. 52 Emerging Lessons Series: Environmental Assessment ____. 2016. Uganda Transport Sector Development Project – Additional Financing Investigation Report. Washington, DC: World Bank. International Association of Impact Assessment. 2009. What is Impact Assessment? Fargo: IAIA. World Bank. 1991. Operational Directive 4.0.1. Washington, DC: World Bank. ____. 2014. Operational Policy and Bank Procedure 4.01. Washington, DC: World Bank. ____. 2016b. Environmental and Social Framework Setting Environmental and Social Standards for Investment Project Financing. Washington, DC: World Bank. Emerging Lessons Series: Environmental Assessment 53