The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 06/08/2021 | Report No: ESRSC02039 Jun 08, 2021 Page 1 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Vanuatu EAST ASIA AND PACIFIC P173278 Project Name Vanuatu Affordable and Resilient Settlements Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Urban, Resilience and Investment Project 9/21/2021 12/23/2021 Land Financing Borrower(s) Implementing Agency(ies) Ministry of Finance and Ministry of Lands and Economic Management Natural Resources Proposed Development Objective The proposed PDO is to: (i) improve access to and resilience of infrastructure and services in selected settlements, and Public Disclosure (ii) strengthen relevant public institutions’ systems to manage human settlement. Financing (in USD Million) Amount Total Project Cost 25.00 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] Component 1: Affordable and Resilient New Settlement Development The component will finance the planning and survey, design and construction of basic infrastructure, and development of plot leases for a pilot affordable ‘sites-and-services’ (new greenfield) settlement on state land, integrating measures to reduce disaster risk and lower per-plot development costs. This component will also support the responsible agencies to develop disaster risk-informed, sustainable approaches to accommodate future urban expansion and climate change adaptation in well-located, moderate-risk areas of Greater Port Vila. This will be achieved through three sub-components: 1.1 Resilient New Settlement Development Jun 08, 2021 Page 2 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) 1.2 Sustainable Urban Drainage for settlements 1.3 Institutional and Systems Strengthening for future settlement planning and development Component 2: Affordable and Resilient Settlement Upgrading The MoLNR has identified 23 existing unplanned settlements in the Greater Port Vila area, on registered and unregistered lands. Household surveys have found that the majority of residents in the settlements do not have access to basic services and infrastructure (improved water supply, sanitation, roads & drainage, solid waste collection), leading to public health issues and increasing risk to residents from flooding and other natural disasters, as the unplanned settlements continue to expand onto hazardous land. The component will finance in situ upgrading and regularization of four existing settlements, based on the following selection criteria: (i) the majority of the residents have lived in the area for several years and local leaders have expressed interest in regularization to MoLNR (in writing); (ii) that each settlement has a different underlying tenure arrangement, allowing for a range of secure tenure options to be practically demonstrated; (iii) the settlement is located relatively close to employment centers, existing main roads and trunk water and power supplies; and (iv) that the settlement is comparatively less exposed to natural hazards, where risk reduction measures would be feasible and affordable. The tenure registration options, and the way each of the selected settlements is upgraded will provide innovative approaches and practical lessons for upgrading and regularizing unplanned settlements in Greater Port Vila in the future. This will be achieved through two sub-components: 2.1 Resilient Settlement Upgrading 2.2 Institutional and Systems Strengthening for upgrading unplanned settlements Public Disclosure Component 3: Strengthening Institutional Capacity for Implementation and Sustainability The National Land Subdivision Policy provides a framework for risk-informed land subdivision for urban residential land development. It is founded on a set of general principles and minimum standards for infrastructure and service provision, amenity and accessibility, affordability, disaster risk reduction, and climate change adaptation. This component will support the relevant authorities to develop fundamental systems to implement the Subdivision Policy and its associated regulations and guidelines, thereby contributing to efficient, consistent, and transparent land administration more generally. The component will also support project management for Components 1 and 2. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Vanuatu is a small island nation located in the South Pacific approximately 2,000 kilometers to the east of Australia. The population is 300,000 residents and the country is administratively divided into six provinces – Malampa, Penama, Sanma, Shefa, Tafea, and Torba. Shefa Province includes Efate Island in which the capital -- Port Vila – is located. The archipelago of 83 volcanic islands (72 of them inhabited) with approximately 12,200 square kilometers land area, is dispersed over an exclusive economic zone of about 827,000 square kilometers. The economy is characterized by a formal sector driven by tourism and agriculture, and informal subsistence activity outside the main urban centers of Port Vila and Luganville. The country’s poverty rate, based on the national basic needs poverty line, is estimated to be 12.7 percent of the population in 2010. A large proportion of the population (20-50 percent) is concentrated marginally above the poverty line and is highly vulnerable to falling back into poverty. Jun 08, 2021 Page 3 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) The country ranks 140th out of 189 on the 2019 United Nations Human Development Index, placing it in the ‘medium human development’ category. A significant development challenge facing Vanuatu is high exposure to hydrometeorological hazards (tropical cyclones, floods, and droughts) and geophysical disasters (volcanic hazards, earthquake-related hazards, and tsunamis). In addition, concentration of people and settlements in hazardous areas is significantly increasing the country’s risk profile. Port Vila's municipal boundaries enclose a population of approximately 66,000 (extrapolated from the 2009 Census), but Greater Port Vila – as a functional city with economic and social connectivity – is home to closer to 114,000 people. Informal settlements are an important gateway to urban opportunities and services for low- and middle- income people alike, providing “access to the city” for a wide range of socioeconomic groups. The majority of population growth in Vanuatu (74 percent) currently occurs outside the Port Vila municipal boundary, in unplanned, un-serviced settlements in hazardous areas. As informal settlements continue to expand in an unplanned manner, it increases the exposure to hydrometeorological and geophysical hazards. There are significant demands on land to absorb growth, but there is also an available supply of underutilized land in Greater Port Vila. The impediments to accessing available land include slow and inconsistent planning regulations and approval procedures as well as weak land administration and management processes, including the numerous and lengthy processes for registering a lease (estimated at 632 days). Second, restrictive conditions on housing loans and the cost of housing in Vanuatu mean that a family on the minimum wage cannot realistically afford a small house on Public Disclosure the private market . Due to high demand and limited accessibility or affordable supply, people have crowded into the city’s existing housing stock or accessed land through unrecorded, informal occupancy arrangements or kastom (custom) tenure arrangements. The project will develop a 10-ha site identified by MoLNR based on the following criteria: (i) land is held by the state under a long-lease, (ii) well located on a transport corridor, (iii) on relatively less hazardous land, and (iv) suitable for mixed land use and lower middle-income residential purposes. MoLNR has identified 4 from the 23 existing unplanned settlements in the Greater Port Vila area, on registered and unregistered land where for upgrading and regularization to complete affordable and resilient settlement upgrading. The four settlements are Ohlen Mataso, Tokyo, Seaside, and a portion of Anamburu. D. 2. Borrower’s Institutional Capacity The project will be implemented by the Ministry of Lands and Natural Resources. MoLNR manages all land-related issues in Vanuatu. The MoLNR will be supported by, and chair, the project Steering Committee (SC). The SC will provide strategic oversight and coordination of the project and comprise representatives from relevant line ministries, including the Ministry of Finance and Economic Management, Ministry of Climate Change Adaptation, Meteorology & Geohazards, Ministry of Infrastructure & Public Utilities, Ministry of Internal Affairs. Local authorities including the Port Vila City Council and Shefa Provincial Council will also sit on the SC. A Technical Working Group will be established under the SC, with designated officers from participating Ministries and local authorities to coordinate and guide project implementation and provide quality reviews. The MoLNR will establish a Project Management Unit (PMU) tasked with managing the day-to-day project activities. The PMU will have an assigned Project Manager and designated staff to oversee key functions including planning, coordination, financial management, procurement, environmental and social safeguards implementation, and Jun 08, 2021 Page 4 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) monitoring throughout the project implementation period. The MoLNR will recruit three environment and social risk management staff. One Environment and Social Specialist, one Social Risk Management Officer and Environmental Risk Management Officer to complete all required documentation and plans, oversee coordination, training, updating and implementation of environmental and social commitments as per the Environment and Social Commitment Plan (ESCP) and the Project’s ESF instruments. The MoLNR is new to World Bank IPF projects and not familiar with the World Bank project policies and procedures including the Environment and Social Framework (ESF). In view of the unknown technical and implementation capacity of the implementation partner, the risk of project implementation is considered substantial. The PMU will help mitigate the risk by securing key positions and allocating adequate time on project management. The SC will oversee the project implementation and address bottleneck issues. The World Bank Task Team will provide implementation support to the PMU, MoLNR and the SC. Capacity building for PMU staff will be carried out throughout the project implementation. The incumbent E&S staff/contractors will likely be unfamiliar with the ESF as this is the first project in Vanuatu that will apply the ESF. The World Bank Task Team will provide the PMU and E&S specialist and Officers with training on the ESF and its implementation in the project as per the ESCP. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial Environmental Risk Rating Substantial Public Disclosure The Environmental Risk Classification of the project has been assessed to be Substantial, due to a) Capacity Risk noting the Borrower’s track record and capacity limitation as this will be Vanuatu’s MoLNR first WB IPF Project with little or no experience working with Bank E&S systems and procedures, b) Contextual risk in which Vanuatu is prone to hydrometeorological and geophysical disasters as explained in D1 section, c) potential environmental risks related to the proposed activities, including direct risks associated with civil works and indirect risks (downstream) related to the TA activities. This environmental risk rating will be revisited during project preparation when there will be a better understanding of the borrower’s capacity and commitment (e.g. addressing capacity constraint and track record) and magnitude of the project activities. The civil works associated with the greenfield new settlement development (roads and services mainly), upgrading of services (roads, foot paths, lighting) and drainage in a selection of existing settlements and the sustainable urban drainage works covering the larger catchment areas surrounding settlements all have the potential to generate environmental impacts, which are likely to be temporary, reversible, and manageable using standard good practice mitigation measures. Impacts during the construction phase may include temporary erosion and soil slips, floods, polluted storm water entering water bodies (streams or sea), sedimentation of water bodies, dust, pollution from inappropriate construction materials use or waste management, noise, ground instability, waste disposal, community and workers’ health and safety. The upgrading of services meaning construction of new roads and improving its standards, construction of footpaths and lamp post for lighting which the final designs will be finalized after the ESIA study. Most of the existing informal settlements include wooden and corrugated iron roofing homes. There will be little or no demolition waste. The technical assistance activities largely deal with technical support and capacity building related to the implementation of the various aspects of the Land Development Policy, and include design of settlements and associated infrastructure, design of sustainable urban drainage solutions and preparation of guidelines, advisory services on plot sales, land tenure and land registration system, guidelines for improving disaster resilience of settlements and individual Jun 08, 2021 Page 5 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) houses. The TA activities themselves are expected to result in minimal direct environmental risks. However, in preparing guidelines for sustainable urban drainage solutions and disaster resilience / climate adaptation of settlements and houses, consideration will need to be given to a number of downstream environmental risks in accordance with the requirements of the ESF, including resource efficiency (water, energy), pollution (drainage, stormwater, sewerage, solid waste), climate change adaptation and natural disaster resilience (ESS3), natural habitat conservation (ESS6), cultural heritage conservation (ESS8), as the adoption of the guidelines in the planning and development of new settlements and urban drainage systems may lead to potential moderate to substantial downstream impacts as listed above, if not executed well. Overall, however, the TA activities aim to contribute to positive environmental outcomes for future residential developments, the improved management and regularization of existing settlements and urban drainage systems. In addition, the TA will lead to strengthening institutions in overseeing activities that have environmental implications. The construction environmental risks and potential downstream risks from the TA activities in combination with an inexperienced implementing agency, raise the risk level to substantial. Social Risk Rating Substantial The Project Social Risk Classification is Substantial as a result of capacity, contextual and project risks. The classification will be revisited during project preparation when there will be a better understanding of the borrower’s capacity, commitment and magnitude of the project activities. 1) Capacity Risk. The Borrower capacity for planning and implementation is unknown. MoLNRhas limited experience working with World Bank E&S systems and procedures. Lack of capacity and experience may lead to social risks where poor planning and stakeholder engagement exclude vulnerable people (seniors, disabled, youths, women, economically poor, informal workers) in project design and in the implementation. During project preparation, poor stakeholder mapping may overlook user Public Disclosure needs in (i) the design of a new settlement layout (for example for disability access or safe recreational spaces for youths and mothers with infants); (ii) approaches to settlement and drainage upgrading and; (iii) land administration during the project life cycle and beyond (downstream impacts). Poor stakeholder mapping may exacerbate or perpetrate inequality where benefits accrue to some individuals, households or communities over others. Poor information sharing about the timing of service connections, upgrading activities, land sub-division and formalization implications and key implementation millstones could lead to mismanaged stakeholder expectations and expose the project to reputational risk. The capacity risk associated with this project gives rise to direct and indirect risks relating to the vulnerability and exclusion of marginalized people in the land sub-division and regularization policies, guidelines and activities. 2) Contextual risks. About 98% of land in Vanuatu is under customary landholding, only 2% of landholdings are in possession of government . The Project will support implementation of Vanuatu’s Subdivision Policy, which provides the regulatory framework for the development of land. In Vanuatu, land disputes are commonplace, in part because land is intrinsically tied to identity and livelihoods. Customary land users and owners can be reluctant to engage in government land formalization processes, preferring to manage land through the Kastom (informal) governance structure which keeps ownership claims and user rights fluid and open to ongoing negotiation. Ni-van customary land owners are cautious of government land formalization processes given a widespread perception that this could enable outsiders, such as developers or foreigners, to access and claim land use rights. The project will promote land formalization processes, potentially leading to social tension if land users and owners are not convinced of the benefits, or do not want to formalize land tenure arrangements. The risk of social tension and reputational harm to the project must be addressed as part of the stakeholder engagement activities. (3) Risks associated with labor and working conditions . Components 1 and 2 of the proposed project are labor-intensive, and will be carefully designed to involve the community and village laborers in delivery as contracted labor. Civil works contracts will emphasize the extensive use of local labor, alongside training and Jun 08, 2021 Page 6 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) capacity building for unskilled or semi-skilled laborers. The risks associated with labor-intensive approaches include the risk of child labor, GBV and SEAH incidents between construction workers or by workers against settlement residents, lack of transparency in local hiring processes and exclusion or discrimination against vulnerable or marginalized workers who seek job opportunity (such as women, disabled and others), health and safety risks leading to injury, loss of life and lost livelihood income. These risks mostly respond to construction activities associated with the greenfield residential development and settlement upgrading as local people will potentially be living and working nearby construction activities. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: The project will finance physical investments and TA activities associated with implementation of the National Subdivision Policy, including advisory services, preparation of designs and guidelines and capacity building. The Project will lead to E&S benefits by increasing affordable housing, improving tenure security for informal settlements and increasing resilience of new and existing settlements to climate change and natural disasters. TA activities will improve management and regularization of existing and future settlements and strengthen institutions in overseeing activities that have E&S inclusion implications. Public Disclosure Environmental risks associated with the construction of the proposed infrastructure (roads, drainage, services, etc.) may include temporary erosion and soil slips, floods, polluted storm water entering water bodies (streams or sea), sedimentation of water bodies, dust, pollution from inappropriate construction materials use or waste management, noise, ground instability, waste disposal, community and workers’ health and safety. Greenfield works may involve vegetation clearing causing habitat loss and fragmentation. Poor infrastructure design or construction may cause damage to natural drainage channels, floods and soil erosion. During operation, new and existing settlements may cause pollution impacts from inappropriate solid waste and sewerage storage, collection and treatment or disposal. Unless appropriate wastewater treatment infrastructure engineered landfills for solid waste disposal and / or recycling facilities are present in Port Vila, the infrastructure upgrades will not provide intended environmental benefits. The proposed stormwater drainage systems may become a conduit for litter and sediment transport downstream, ultimately ending up in streams or the sea. Social risks relate to the lack of Borrower capacity and experience with the ESF. This raises the risk that project preparation and implementation will not comprehensively map and address stakeholder needs, nor manage stakeholder expectations. Poorly conceived design activities could inadvertently exacerbate or generate inequalities where project benefits – such as settlement design or upgrades - disregard, overlook or privilege some groups over others. Poorly communicated and ill conceived land formalization activities may lead to reputational harm for the project, cause social tension, enable elite capture of newly developed plots and marginalize rightful land users and rights holders. While the use of labor-intensive approaches will generate employment opportunity for local laborers, opportunities must ensure social inclusivity, provide a safe work environment and address the risk of non-transparent application processes, as well as, mitigate the GBV and SEAH incidents between construction workers or by workers against settlement residents. Jun 08, 2021 Page 7 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) The TA activities largely support capacity building and implementation of the Land Development Policy. Implementation activities include: design of settlements and associated infrastructure, design of sustainable urban drainage solutions and preparation of guidelines, advisory services on plot sales, land tenure and land registration system, guidelines for improving disaster resilience of settlements and individual houses. The TA activities present minimal direct environmental and social risks. However, implementation of the National Subdivision Policy will have downstream environmental and social (E&S) impacts which will be addressed and mitigated through the Project. From the environmental risk perspective, the sustainable urban drainage solutions and disaster resilience/climate adaptation of settlements guidelines must consider the following downstream environmental risks; resource efficiency (water, energy), pollution (drainage, stormwater, sewerage, solid waste), climate change adaptation and natural disaster resilience (ESS3), natural habitat conservation (ESS6), cultural heritage conservation (ESS8). From the social risk perspective, TA activities will address and mitigate the downstream risks associated with; social conflicts over competing land claims, affordability of land registration and associated costs for poor and extreme poor, the potential for elite capture, land grabbing, exclusion of the vulnerable in land tenure, affordability of tenure and housing arrangements, inclusion of women and seniors as right holders of land and assets (ESS5); ensuring informed participation and meaningful engagement of vulnerable and marginalized people in planning and design activities, including space and facility allocation for disabled people, creation or protection of cultural sites, play areas for children among other aspects (ESS8, ESS10), and maximizing opportunity for safe and inclusive employment opportunity in construction (ESS2, ESS4). These E&S impacts and risks, as well as benefits, will be assessed and mitigated / optimized as appropriate through the ESF instruments. During project preparation, an Environmental and Social Management Framework (ESMF) will Public Disclosure be prepared to cover components 1 and 2. Site designs for both components, including details of the works and locations for the urban drainage systems will be drafted during the implementation stage. The terms of reference for the various TA activities have not been prepared. The ESMF will provide guidance on the E&S screening of sub- projects and TA activities and the subsequent assessment of risks and impacts and mitigation measures through the appropriate instrument(s). Where sub-project locations are known, e.g. the four settlements that will be recipients for the proposed infrastructure upgrades, baseline information will be collected to the extent possible and included within the ESMF. The ESMF will also provide guidance on the assessment requirements for associated facilities, including any government funded construction or provisions linked to the project funded activities. These may include any provision of communal facilities (community center, childcare facility or school, WASH facilities, etc.) or access roads servicing the World Bank funded settlements and drainage systems. The ESMF will include a Code of Environmental Practice (CoEP) for minor works associated with road upgrades, foot paths and minor road drains, installation of lighting, and utility connections, a generic Construction Waste Management Plan, Labor Management Procedures (LMP) for PMU, contracted and community workers to ensure proper working conditions and management of worker relationships, a project Grievance Mechanism (GM), occupational health and safety (including COVID19), and to prevent GBV/SEAH. The Construction Waste Management Plan will include demarcation of areas for construction of new roads, drainage system and lightning structures on the existing settlements and management of hazardous waste. The ESMF will be prepared to a standard acceptable to the Bank and disclosed on the MoLNR website prior to appraisal. Further study requirements and actions emanating from the ESMF will be captured in the ESCP. For the TA activities, the ESMF will summarize the screening process for the proposed activity (design, advisory service, guideline development), and the process for providing inputs on relevant ESSs requirements to the activity- Jun 08, 2021 Page 8 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) specific TOR, as well as the review of the TA output for compliance with the ESS requirements. This process will also be captured in the ESCP. As land is fundamental to the Project, MoLNR will produce a due diligence on the Vanuatu land law and administration to ensure that all land administration activities prompted through the project meet ESF requirements. A Project Stakeholder Engagement Framework (SEF) will be developed as part of the ESMF and captured in the ESCP. Areas where “Use of Borrower Framework” is being considered: The Borrower Framework will not be used in this Project. ESS10 Stakeholder Engagement and Information Disclosure The Project will develop a Stakeholder Engagement Framework that covers all project activities, identifies and analyses key stakeholders and describes the process and modalities for sharing information on the project activities (such as community awareness tools), incorporating stakeholder feedback into the Project and reporting and disclosure of project documents. The SEF will outline the project’s Grievance Mechanism which will enable stakeholders to raise project related enquiries, concerns and grievances. The SEF will include grievance lodgment tools, and investigation and feedback processes. The project will be required to develop component specific Stakeholder Engagement Plan(s) (SEP) for components 1 and 2 during the implementation phase and as part of the ESMPs. Component specific SEPs will include tailored activities and a time bound action plan for implementation, monitoring and reporting on stakeholder engagement activities at the greenfield residential development and settlement upgrading. Where as the SEF will address stakeholder engagement activities that account for all components, including TA activities focused on land administration. The two SEP’s will be tailored to address specific Public Disclosure stakeholder engagement activity relating to infrastructure construction at the (i) new settlement development and within the (ii) settlement upgrades. The SEF will be prepared by the MoLNR Environment Social Specialist during project preparation. The MoLNR will update the SEF as needed during project implementation, and component SEPs will be developed once feasability designs are available. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions ESS2 is relevant to the project. Project activities are expected to involve direct workers (including government civil servants and consultants to work in the PMU) and contracted workers (including community and village laborers) who will undertake TA activities, greenfield residential site construction, settlement upgrading and urban drainage construction. To elaborate on contracted workers: components 1 and 2 of the proposed project are labor-intensive, and will be carefully designed to involve the community and village laborers in delivery. Civil works contracts will emphasize the extensive use of local labor, alongside training and capacity building for unskilled or semi-skilled laborers. In addition Jun 08, 2021 Page 9 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) to the benefits of creating employment opportunities to contribute to post-COVID livelihoods and economic recovery, this approach can also build ownership and be expanded to other operations in Vanuatu. Identified environmental and social risks associated with labor and working conditions include the risk of child labor, GBV and SEAH incidents between construction workers or by workers against settlement residents, lack of transparency in local hiring processes and exclusion or discrimination against vulnerable or marginalized workers who seek job opportunity (such as women, disabled and others), health and safety risks leading to injury and lost livelihood income, and that workers become infected and spread COVID-19. These risks mostly respond to construction activities associated with the greenfield residential development and settlement upgrading as local people will potentially be living and working nearby construction activities. To mitigate and prevent these risks, the Project will prepare and implement a Labor Management Procedure (LMP). The LMP will identify key aspects of labor planning and management including how the project will protect and support i) working conditions and management of worker relationships, ii) protecting the workforce, iii) a worker grievance mechanism, iv) an occupation health and safety protocol and code of conduct that addresses GBV, SAEH, incident reporting and v) COVID-19 pandemic control and management procedures. In preparing and updating the LMP, MoLNR will refer to the requirements of national law and ESS2 and the Guidance Note to ESS2. LMP development and implementation will form part of the ESCP commitments, and will be developed as part of the ESMF. The Project will also include the requirement that Contractors adopt labor intensive approaches and employs local Public Disclosure residents (including men, women and those with disability, depending on the type of work anticipated from each) as part of the contractor bidding documents. Local laborers will also be given capacity building and training, and public participation exercises focusing on OHS. This will be included as a requirement in the contractor bidding document and form part of the ESCP. ESS3 Resource Efficiency and Pollution Prevention and Management This ESS is considered relevant. In terms of the proposed construction activities, the following pollution and resource efficiency/sustainability risks may be incurred: General construction activities have the potential to create pollution risks from spills of hazardous materials, inappropriate waste management processes and erosion control measures, etc. The existing informal settlements mostly consist of temporary home and make-shift homes, wooden homes and old and recycled corrugated iron roofing. An asbestos assessment will be conducted during ESMF preparation. In addition, the new and existing settlements have the potential to pollute soil and groundwater if domestic waste and sewerage is not appropriately stored, collected and disposed of or treated. Although the project aims to look at domestic waste and wastewater collection, it is not clear at this stage whether there are existing facilities that these services can tap into, be it engineered landfills, sewerage networks and treatment plants, or septage treatment plants. The presence and performance of these facilities needs to be confirmed during project preparation. The extraction and sourcing of building materials such as sand, gravels, timbers, cement and water needs to practice a sustainable process permitted by relevant authorities in accordance with National legislation and good Jun 08, 2021 Page 10 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) international industry practice to avoid risks of overexploitation and soil, surface water and groundwater contamination and the depletion of non-renewable resources. The project includes infrastructure construction namely roading, footpaths, drainage, water and power supply, street and security lightning in which the efficient use of building resources, energy and water is important. There are licensed extracting companies, an example is Dinh Van Tu Limited that can supply large volumes of sand and gravel for the project and avoid significant competition with communities on the resources. The project is introducing measures for improved climate and natural disaster resilience of urban settlements,greenhouse gases and its estimation, which will lead to environmental benefits. The TA activities will similarly be focused on increasing climate and natural disaster resilience and consequently, have limited downstream environmental impacts whilst promoting environmental benefits. These risks and impacts, as well as environmental benefits and their respective management and optimization will be included in the ESIA and ESMF and addressed in any subproject instrument. This will include the review of the subdivision policy for downstream Environmental and Social risks, the inclusion of relevant ESS3 risks or benefits in TA TORs and compliance with ESS3 of the TA outputs. ESS4 Community Health and Safety ESS4 is relevant as the construction activities in and in close proximity of existing settlements , can pose potential safety concerns for the communities within the vicinity of works. Risks related to community health and safety Public Disclosure include, but are not limited to; -community safety risks from accessing work sites during construction works as the result of inadequate site security and fencing -community exposure to health issues such as water-borne and vector-borne diseases through inadequate implementation of wastewater and solid waste management practices -community exposure to project-related traffic or road safety risks due to truck movements carrying construction materials, and hazardous materials such as fuels, oils, gas -public potential exposure to operational accidents or natural hazards especially during extreme weather events - extreme weather poses risk of structural elements failure and threatens the safety of the communities, e.g. flood water retention basin breach or overtopping -community and public exposure to COVID19 due to lack of saftey measures. In addition, the project will use contracted local (community) labor in the implementation of existing settlement upgrade works, as well as resilience measures for individual homes. Not only will these workers potentially injure themselves in executing the works, they may also cause safety risks to their family and nearby community members, in the absence of proper training and protective equipment. The ESMF will evaluate the risks and impacts to community health and safety during the project life-cycle and will establish preventive and control measures, including to contain and prevent the spread of COVID19. Where relevant to TA activities, compliance with the requirements of ESS4 will be included in the TOR and the outputs will be reviewed. Jun 08, 2021 Page 11 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement ESS5 is deemed relevant to the Project. While the Project in not anticipated to involve involuntary land acquisition, involuntary restrictions on land use or involuntary resettlement; land is fundamental to the Project and all components will be screened and assessed for relevance of the ESS5 as part of project preparation due diligence and ESMF. For Component 1 and 2, screening for involuntary land acquisition, physical and economic displacement and or restrictions to land will be covered within the ESMF to determine whether any land aqcuistion, restriction to land or resettlement would be required for the upgrading. For example, the site loactions for drainage upgrading as part of Component 2 are currently unknown and will be determined and screened during project preparation. During project implementation, the ESMF will inform Component 1 (greenfield residential development) screening and assessment as part of the ESIA to verify that ESS5 is not relevant. The selection criteria utilized for the greenfeild settlement site selection will be investigated further through the completion of the ESIA report which will be completed during implementation. During project preparation, the MoLNR will prepare an assessment on Vanuatu’s land law and administration (including the Land Act and National Subdivision Policy) as the project intends to support land development activities. Due to the complexity of tenure issues and the importance of secure tenure for livelihoods, careful assessment is required of the land development activities associated with the greenfield residential development, settlement upgrading and downstream impacts of the TA outputs. The Assessment aims to ensure the Project does not inadvertently compromise existing legitimate rights (including collective rights, subsidiary rights and the rights of Public Disclosure women) or have other unintended consequences, such as enabling elite capture, land grabbing, and exclusion or forced eviction of people who refuse formalization processes. The affordability of land registration, including consideration of plus ongoing taxes and municipality fees, as well as power asymmetries between men, women and seniors must be explicitly addressed to safeguard vulnerable and marginalized people and future generations. The Vanuatu land Law and Administration Assessment will demonstrate to the Bank’s satisfaction that relevant project outputs (a) provide clear and adequate rules for the recognition of relevant land tenure rights; (b) establish fair criteria and functioning, transparent and participatory processes for resolving competing tenure claims; and (c) include genuine efforts to inform affected people about their rights and provide access to impartial advice. This due diligence exercise will assess whether land development and regularization activities under the project are compliant with the ESS requirements. The Assessment will explicitly refer to ESS1 (para 28.b) and ESS5 (para 7) requirements (see below) for a ‘social, legal and institutional assessment’. In addition to the Process, the Assessment will also be reflected as a commitment in the ESCP. ESS1, para 28 b states: Social risks and impacts, including: (i) threats to human security through the escalation of personal, communal or inter-state conflict, crime or violence; (ii) risks that project impacts fall disproportionately on individuals and groups who, because of their particular circumstances, may be disadvantaged or vulnerable;28 (iii) any prejudice or discrimination toward individuals or groups in providing access to development resources and project benefits, particularly in the case of those who may be disadvantaged or vulnerable; (iv) negative economic and social impacts relating to the involuntary taking of land or restrictions on land use; (v) risks or impacts associated with land. Jun 08, 2021 Page 12 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) ESS5, para 7 states: Where a project supports land titling or other activities intended to confirm, regularize or determine land rights, a social, legal and institutional assessment will be required under ESS1.12. The assessment aims to identify potential risks and impacts, as well as appropriate design measures to minimize and mitigate adverse economic and social impacts, especially those that affect poor and vulnerable groups.13. This ESS does not apply to disputes between private parties in land titling or related contexts. However, where persons are required to vacate land as a direct result of a project-supported determination that the land in question is state land, this ESS will apply (in addition to the relevant provisions of ESS1 mentioned above). The ESMF will confirm the relevance of ESS5 at the greenfield residential development, settlement upgrading sites and urban drainage sites. Every TA activity will be screened for potential downstream and indirect impacts consistent with the ESS5 scope and where likely, input will be provided to the TOR to ensure the outputs are in compliance with the requirements of ESS5. TA outputs will be reviewed for compliance once completed. These commitments will be reflected in the project’s ESCP. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources The project is likely to generate both negative and positive environmental impacts. The clearing of vegetation on the identified 10-ha state land for the development of the greenfield new settlement may cause risks associated with habitat loss, degradation or fragmentation and introduction of invasive alien species. The details of the biological and physical environment of the selected 10-ha state land will be highlighted in the ESIA study. The TOR for the ESIA Public Disclosure provided by Government of Vanuatu will be reviewed by the World bank prior to the commencemnt if the ESIA study. The construction of urban drainage will cause hydrological changes which may have impacts on habitats within and downstream of the catchment area. The construction of proposed basic infrastructure such as access roads and improved footpaths, drainage, individual water supply, sanitation, street and security lighting, and improved drainage could lead to negative environmental impacts through noise pollution, sedimentation, inappropriate disposal of oil and fuel, leading to soil and water contamination, which all have the potential to impact existing biodiversity values on the site and surrounding area. Positive impacts will be incurred by promoting sustainable domestic solid waste and effluent management, urban drainage, resilient new settlements and upgrading of existing unplanned settlements. These measures in turn will indirectly have positive impacts on natural habitats and biodiversity by reducing the frequency and/or the magnitude of pollution, erosion and landslides as the result of inclement weather and other natural disasters. Habitat Assessments will be undertaken as part of the scope of the ESIA for the new settlement and the ESMF for the upgrades to existing settlements, construction of improved urban drainage and TA activities. The assessments will identify and confirm the biodiversity, flora and fauna on the 10-ha land (already identified) and the other four existing informal settlements which will be identified by the project. The completed ESIA will confirm that the site is suitable and also will look into alternative site. This will include the existing weather patterns, geology, topography, fauna and flora, and any existing waterways – rivers and streams. The ESMF/ESIA will also confirm the presence of threatened/ endangered species according to the IUCN Classification and the sensitivity of the project site(s). Every TA activity will be screened for potential indirect impacts on natural resources and biodiversity values and where likely, input will be provided to the TOR to ensure the outputs are in compliance with the requirements of ESS6. TA outputs will be reviewed for compliance once completed. Jun 08, 2021 Page 13 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities ESS7 is not currently relevant to the Project. The project is not expected to impact any distinct and vulnerable group of indigenous peoples as defined under paragraph 8 of ESS7. About 97% of the population in Vanuatu is Melanesian and nearly 98% identify themselves as Ni Vanuatu. ESS8 Cultural Heritage ESS8 is considered relevant to the Project. The TA component of the project will support implementation of the National Subdivision Policy, involving: design of settlements and associated infrastructure, design of sustainable urban drainage solutions and preparation of guidelines, advisory services on plot sales, land tenure and land registration system, guidelines for improving disaster resilience of settlements and individual houses. While the TA activities present minimal direct environmental and social risks, downstream impacts might involve the destruction of tangible and or intangible cultural heritage where heritage sites and objects are not explicitly screened, assessed or considered. The ESMF/ESIA will confirm the presence of cultural heritage at the greenfield residential development and settlement upgrading sites. Every TA activity will be screened for potential indirect impacts on cultural heritage and Public Disclosure where likely, input will be provided to the TOR to ensure the outputs are in compliance with the requirements of ESS8. TA outputs will be reviewed for compliance once completed. ESS9 Financial Intermediaries The project does not involve financial intermediaries. C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners There are no other financing partners associated with the project. Jun 08, 2021 Page 14 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: ESCP ESMF covering the (i) greenfield development, (ii) infrastructure works in existing settlements, (iii) urban drainage works and (iv) TA activities. LMP SEF covering all project components and including the Project Grievance Mechanism. Vanuatu Land Law and Administration Assessment Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): Implementation of ESMF, including sub-project specific E&S assessments ESIA/ESMP for the greenfield development following effective date ESMP for infrastructure works in existing settlements and urban drainage works Component specific SEP(s): draft and implementation Project Grievance Mechanism Labor management in accordance with the LMP OHS, GBV and SEAH training for community workers prior to works commencing Screening of TA activities for downstream E&S risks, input to TORs and review of outputs Contractor TORs to reflect socially inclusive approach to local hire Public Disclosure C. Timing Tentative target date for preparing the Appraisal Stage ESRS 30-Jul-2021 IV. CONTACT POINTS World Bank Contact: Artessa Saldivar-Sali Title: Senior Municipal Engineer Telephone No: 5740+6582 Email: asaldivarsali@worldbank.org Contact: Tevi Maltali Obed Title: Disaster Risk Management Specialist Telephone No: 5793+1007 Email: tobed@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance and Economic Management Implementing Agency(ies) Implementing Agency: Ministry of Lands and Natural Resources Jun 08, 2021 Page 15 of 16 The World Bank Vanuatu Affordable and Resilient Settlements Project (P173278) V. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Artessa Saldivar-Sali, Tevi Maltali Obed Practice Manager (ENR/Social) Susan S. Shen Recommended on 05-Jun-2021 at 16:44:6 GMT-04:00 Safeguards Advisor ESSA Nina Chee (SAESSA) Cleared on 08-Jun-2021 at 12:53:7 GMT-04:00 Public Disclosure Jun 08, 2021 Page 16 of 16