Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 06/18/2009 Report No.: 49094 1. Basic Project Data Country: Honduras Project ID: P106680 Project Name: Land Administration Program Task Team Leader: Enrique Pantoja Estimated Appraisal Date: May 4, 2009 Estimated Board Date: July 21, 2009 Managing Unit: LCSAR Lending Instrument: Adaptable Program Loan Sector: General agriculture, fishing and forestry sector (55%);Sub-national government administration (25%);Central government administration (20%) Theme: Land administration and management (25%);Personal and property rights (25%);Decentralization (24%);Other rural development (13%);Other urban development (13%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 30.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 0.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Yes [ ] No [X] 2. Project Objectives The objective of the broader, long-term program (APL) is to strengthen property rights in Honduras through modernization of the legal framework, institutional strengthening and development of a fully integrated and decentralized National System for Property Administration (SINAP). The Project Development Objective (PDO) for Phase II of the Land Administration Program (PATH) is to provide the population in the Project area with improved, decentralized land administration services, including better access to and more accurate information on property records and transactions. To achieve this objective, PATH will continue to promote the streamlining of the systematic cadastral surveying, titling and registration process and the improvement of land administration services in terms of access and transparency. Page 2 3. Project Description The second phase of PATH (IDA Credit of US$30 million equivalent), will be implemented over a period of five years, and will include five components: (i) Policy and institutional strengthening; (ii) Cadastral surveying and land regularization; (iii) Demarcation of protected areas; (iv) Strengthening of Miskito people#s land rights; and (v) Project management and Monitoring & Evaluation (M&E). These components are discussed below. Component 1. Policy and Institutional Strengthening (US$8.35 million) Component 1 will promote critical policy development (Sub-component 1, US$ 0.17 million) and institutional strengthening (Sub-component 2, US$ 8.18 million). Under the first sub-component, the Project will support (a) development of land policy and strategy on issues related to the link between land access/land regularization and agricultural productivity/rural development, and the preparation of a policy and master plan for the development of the national cadastral system; (b) improvement of the overall governance of land administration and transparency of PATH implementation, including making the National Commission for Land Policies and Standards (Comisión Nacional de Política y Normativa de la Propiedad or CONAPON) operational, and implementing social audits of relevant project activities; (c) development of the normative and procedural framework for municipalities to become associated centers of IP for cadastre, registry and property regularization; and (d) development of standard documents for notary protocols related to property registry procedures, and of a proposal to increase access to notary services. Under the second sub-component, the Project will support the strengthening of key institutions, specifically: (a) IP will be strengthened through the implementation of an Organizational Development Plan (ODP), establishment of an information technology unit to operate SURE and its interaction with other SINAP subsystems, continuation of the modernization of property registries including implementation of SURE in at least five new registries and carrying out of small rehabilitation works, strengthening of two of its critical operational units: the General Directorate of Cadastre and Geography (Dirección General de Catastro y Geografía or DGCG) and the General Directorate for Parcel Regularization (Dirección General de Regularización Predial or DGRP), and carrying out of capacity building for alternative conflict resolution mechanisms for cadastral surveying and establishing inter-municipal limits. Simultaneously, (b) selected municipalities will be strengthened to allow them to function effectively as associated centers of IP and to implement urban titling activities and territorial planning; (c) INA will be supported in improving its agrarian registry and its capacity for rural titling and collective titling of indigenous peoples# lands, including support to the Inter-Sectoral Commission for Protecting Land Rights of Garífuna and Miskito Communities, and building INA#s capacity for alternative conflict resolution; (d) Co-executing agencies (ICF, IHT and IHAH) will receive technical assistance and technology transfer to ensure that they play an active role in SINAP implementation; and (e) the General Directorate of Territorial Planning (Dirección General de Ordenamiento Territorial or DGOT) under SGJ, the Honduran Association of Municipalities (Asociación de Municipios de Honduras or AMHON) and municipalities will be strengthened to promote the gradual Page 3 incorporation of territorial planning norms into RENOT, including the establishment of two de partmental councils of territorial planning in Comayagua and Cortés. Regarding technology transfer more specifically, during Phase II, (f) SINAP, including its three modules, will be implemented to reach its full potential as a tool for land administration and territorial planning. Simultaneously, (g) the wireless network (Red Metropolitana Inalámbrica or RMI) developed during Phase I will be extended from Tegucigalpa towards the Sula Valley to facilitate data transmission and inter-agency communications and to ensure connectivity of SINAP. Component 2. Cadastral Surveying and Land Regularization (US$15.85 million) This component will directly contribute to improving legal security of tenure in Honduras. The cadastral surveying and legalization, titling and registration activities initiated under Phase I will be continued, with a focus on selected municipalities and direct benefits to rural and urban populations and areas critical for agricultural productivity. A list of pre-selected municipalities has been prepared based on an agreed methodology included in the Operational Manual. This component includes the carrying out of a complete cadastral surveying process in selected municipalities (Sub-component 2.1, US$ 10.7 million), including (a) preparatory activities such as declaration of zone under cadastral process by the DGCG, taking of aerial photography and preparation of digital ortho-photos; (b) surveying, validation of results (vistas públicas) and incorporation in SURE of at least 390,000 urban and rural parcels in the Project area; and (c) geo-referenced surveying of the administrative limits of five selected municipalities. The Project will also finance regularization activities (sub-component 2.2, US$ 5.15 million), covering legalization, titling and registration under folio real (parcel-based property registry) of at least 90,000 parcels, including (a) the provision of new titles for approximately 50,000 families through the various options provided under Honduran legislation; and (b) the legalization of 40,000 parcels with an existing property registry to transfer them into folio real. Implementation of the Project#s Communication Strategy will be a central element of this component#s implementation. Component 3. Demarcation of Protected Areas (US$ 1.0 million) This component, which will require the active participation of the Institute for Forest Conservation (Instituto de Conservación Forestal or ICF), will focus on (a) the delimitation and demarcation of the Core Conservation Zones (CCZs) of at least eight selected National Parks (NPs), including the incorporation of their geographical and legal information into SURE and RENOT; (b) the regularization process of Las Salinas, a settlement occupied by nearly 115 families along the perimeter of the San Fernando de Omoa Fortress National Monument, which was demarcated during Phase I. More precisely, the Project will finance a census of the area#s current residents and the preparation of legal documents that will allow IP to title the potential beneficiaries once Congress approves the partition of the settlement#s area from the Monument#s perimeter; and (c) the implementation of the Project#s Environmental Management Plan (EMP), and if necessary, the implementation of the Process Framework. To support this Page 4 component#s implementation, the Project#s Communication Strategy will include specific activities and instruments such as community outreach, radio announcements and pamphlets. Component 4. Strengthening of Miskito People#s Land Rights (US$1.80 million) This component will be implemented in close coordination with INA and ICF, adopting a broader approach to promoting the land rights of indigenous peoples and ensuring respect for their collective tenure traditions and worldview (cosmovision). Accordingly, the Project will support in the departamento of Gracias a Dios (also known as La Moskitia), (a) the necessary free, prior and informed consultation, selection and participatory delimitation and collective titling of the lands of at least 25 pilot Miskito communities. The participating communities belong to FINZMOS and BAKINASTA, two of the 11 Miskito federations making up the broadly representative Miskito confederation Mosquitia Asla Takanka or MASTA. In addition, the Project will continue to support the participating communities from the first phase, which belong to KATAINASTA. In parallel, the communities will receive capacity building and organizational support to establish alternative conflict resolution mechanisms integral to the process; (b) technical assistance and capacity building in territorial planning and natural resources management to the participating Miskito communities, and education to increase legal awareness and help organizational capacity in relation to land tenure. In parallel, the Project will support the preparation of a comprehensive Program for Collective Land Titling in the departamento of Gracias a Dios. Moreover, (c) the Project will promote community development through community- driven sub-projects and microenterprise development for participating Miskito communities. Criteria for eligibility of beneficiaries and for the selection of sub-projects will be included in a specific Manual. The selection criteria will consider the technical, economic, and environmental feasibility of a community#s proposal. Below some examples of the types of possible sub-projects are presented. Category I - Sustainable Economic Development Examples: - The development of management plans for Indigenous lands. - Delimitation of Indigenous communal lands. - Reforestation of watersheds in communal lands. - Establishing forests for energy production. - Land Conservation - Prevention and control of forest fires. Requirements: - Community projects or demarcated areas should have access to finance. - In case a community or other group#s application concerns a protected area, the approval of ICF will be sought and the Environmental Analysis (including the Management Plan), the Process Framework and the IPP will apply. Page 5 Category II - Human Development Examples: - Use of Forests with Forest Management Plans. - Ecotourism. - Sustainable use of non-wood forest products. - Development and commercialization of crafts. - Sustainable harvesting of marine fauna. Requirements: - Subprojects will only be financed in communities or areas that have a land-use plan. - In case the application is from a community or area that is within a protected area, the approval of ICF will be sought and the Environmental Analysis (including the Management Plan), the Process Framework and the IPP will apply. The following types of subprojects will not be financed: 1. Land acquisition. 2. Repayment of debts. 3. The creation of new highways and trunk roads. 4. Activities that require resettlement or the relocation of individuals or families. 5. Activities that involve negative impacts on archeological or religious sites. 6. Activities that could threaten the environment including any agricultural or livestock production as well as any other use of agrochemicals (especially pesticides). 7. Infrastructure construction that is not absolutely necessary for the execution of the sub-project (only construction necessary for the execution of a subproject can be justified). 8. Social, economic or environmental studies not essential to the implementation of a sub-project. 9. Conferences, workshops and training that is not part of implementation of a sub- project. 10. The acquisition of vehicles, machinery and construction equipment unrelated to any sub-project. 11. Activities with political or religious content. Component 5. Project Management and Monitoring and Evaluation (M&E) (US$3.0 million) This component includes the costs associated with Project management and monitoring and evaluation (M&E) that will be carried out by the IP through the Project Coordination Unit (PCU). Among other things, this component will finance implementation and operation of the integrated financial and administration system (SIAF), the establishment of the Project Steering Committee and Technical Committees, independent evaluations and audits, inter-institutional coordination activities, training and workshops, and oversight of the communication and gender strategies for Phase II. Page 6 4. Project Location and salient physical characteristics relevant to the safeguard analysis The second phase will include various activities affecting lands in the Project Area, which includes the departments of Choluteca, Colón, Comayagua, Copán, Cortés, El Paraíso, Francisco Morazán, Gracias a Dios, Olancho, and Yoro. The Project will support the delimitation and demarcation of Core Conservation Zones (CCZ) within eight National Parks, (NPs). It will also finance land regularization activities in the area of Las Salinas (San Fernando de Omoa Fortress National Monument), including the re- delimitation of this area#s legal boundaries where necessary, in order to regularize the tenure of its occupants. Finally, the Project will finance the participatory, collective titling of pilot Miskito communities in Gracias a Dios, as well as legal support and capacity building activities for these communities, including productive sub-projects. 5. Environmental and Social Safeguards Specialists Mr Juan Pablo Ruiz (LCSEN) Mr Kennan W. Rapp (LCSDE) Mr Marquez Martinez (LCSAR) Ms Nicole Andrea Maywah (LCSAR) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Environmental Safeguard Issues: All of the direct and indirect environmental impacts originally detected as part of the Environmental Assessment (EA) carried out in mid-2003, prior to the approval of Phase I, are still relevant. An analysis of Phase I#s environmental performance was carried out as part of an Independent Evaluation of the first phase of PATH. The Project Coordination Unit (PCU) was found to be implementing the Environmental Management Plan satisfactorily and no large-scale, significant or irreversible environmental impacts were observed. This is to be expected since the physical impacts of demarcation (the physical marking of boundaries) are minor. Phase I#s Environmental Management Plan Page 7 activities served three projects, PATH, the Forests and Rural Productivity and the Natural Disaster Risk Mitigation Project. Some of the main findings of the evaluation were (1) Protected area co-management institutions (including NGOs, Municipalities and ICF) were supported in making field visits to document the boundaries of the Core Conservation Zones (CCZ), (2) Various workshops, open fora (cabildos abiertos), and other activities were conducted with patronatos, private companies and as part of a community education campaign to inform local people of Project activities including the importance of protected areas, their benefits, delimitation, demarcation and applicable sanctions for any tampering with boundary markers (hitos and mojones), (3) Demarcated protected areas were incorporated into the Territorial Planning Norms Registry (RENOT) under the National Property Administration System (SINAP) so that they can be placed in the Catalog of Inalienable Public Forestry Heritage, (4) No resettlement actions took place. The Process Framework ensured that there were no restrictions on already-existing access to resources in the protected areas. The Independent Evaluation found that the Phase I Process Framework was also satisfactorily implemented and there were no resettlement actions during Phase I. Four main lessons were learned from the evaluation of Phase I#s environmental performance: 1. Phase I did not follow-up on the implementation of the EMP as much as it could have. As a result Phase II will include measures to ensure greater attention to monitoring progress of the EMP which will include the hiring, as needed, of an environmental specialist for that purpose as well as institutional strengthening activities such as workshops on EMPs and safeguards. 2. The only real issue detected through Bank supervision had to do with the improper disposal of the byproducts of boundary marker construction in the course of demarcating a protected area. This impact has since been addressed, with no long-term negative consequences. The EMP for Phase II incorporates these and other lessons learned from Phase I. 3. The NGO co-managers of protected areas do not have the financial resources necessary to effectively implement management plans; in this respect, the Project will support the GOH in working with the relevant stakeholders to inform local communities on the importance of the protected areas and the consequences of the CCZ demarcations. 4. Many municipalities do not have a stable set of trained personnel which means that they have to spend resources on constantly training staff. The Project will keep this in mind in all dealings with municipalities taking care to provide any necessary training and to minimize any unnecessary demands which would require use of limited municipal counterpart funds. Some very minor environmental impacts could result from the small-scale rehabilitation works in the selected registries under Component 1.2. These small works include, inter alia, painting, minor remodeling, roof rehabilitation, wiring, and installation of air conditioning systems. No new construction or additions to existing structures will be financed by the Project. The EMP and Operations Manual both provide contractually- Page 8 binding guidance to contractors on environmentally-friendly and worker safety practices to be observed during these minor works. OP 4.36 on Forests is triggered since many of the protected areas are also forested. The second phase would affect 1,836.000 ha of forests in the municipalities prioritized within the Project area. This represents about 16.32 percent of the total surface area of Honduras. The Independent Evaluation of Phase I found that in compliance with the Forests safeguard, under the regularization of forested land activities co-execution agreements were reached, an Environmental Management Unit within IP was formed, a consulted Manual for the Regularization of Forested Areas was adopted and various training/institutional strengthening of project beneficiaries took place. OP 4.09 on Pest Management is not triggered because Component 4 will not finance any agricultural or livestock sub-projects or microenterprise development requiring procurement or use of pesticides. The Project will not finance the elaboration of Management Plans for the NPs because such work is beyond the Project#s scope and its resources to ensure enforcement. However, communities in and around protected areas will receive ample information about what the demarcation will mean for them and their activities. If it turns out that any delimitation or demarcation activities are likely to lead to the restriction of community access to natural resources in protected areas, the Process Framework that was prepared for the project under OP/BP 4.12 will be applied. Social Safeguard Issues: Several of the indigenous peoples and resettlement issues that were present in Phase I of the Project will remain relevant in Phase II. Because the second phase of PATH includes activities that will directly impact the lands of indigenous peoples, the Indigenous Peoples safeguard policy applies. Carefully implementing the policy#s provisions will be a top priority for all those involved in Phase II, given the socio-economic and political vulnerability of indigenous peoples on the Atlantic Coast (where Component 4 activities will be carried out), the land tenure insecurity that many of them face, and the pressure that these lands are currently under. An Inspection Panel Investigation was undertaken between 2006 and 2007 during the Phase I of PATH. The investigation was related to the small pilot effort to delimit and title the lands of selected Garífuna communities. Specifically, in January 2006 a request for an Inspection Panel Investigation was filed by the Honduran Black Fraternal Organization (Organización Fraternal Negra Hondureña or OFRANEH). OFRANEH claimed that the Bank had violated OD 4.20 on Indigenous Peoples, OP/BP 4.01 on Environmental Assessment, OP/BP 4.04 on Natural Habitats and OP/BP 13.05 on Project Supervision. Its main allegation was that the Bank had not taken into consideration the rights and interests of the Garífuna people in the design, appraisal and implementation of the Project, and that as a result their land rights and collective tenure traditions were under threat. Page 9 Most of the Panel's findings related to OD 4.20 (OP/BP 4.10 for the purposes of Phase II). In response to the Inspection Panel Investigation, Regional Management implemented an Action Plan. The Progress Report on the Plan#s implementation, sent to the Board in March 2009, indicated that all agreed activities were completed and that the Program was broadly in compliance with the Indigenous Peoples policy. However, concerns remain among some indigenous and Afro-Honduran organizations, including OFRANEH, with respect to the legal framework for the titling of indigenous peoples' lands, particularly Chapter 3 of Title IV of the Property Law. Responding to a request from the pilot Garífuna communities, a diagnostic of their current tenure situation is being carried out under Phase I. However, no titling of Garífuna lands will take under Phase I. The second phase will focus on promoting the land rights of Miskito communities, none of which has thus far managed to obtain titles to their lands. The Government has confirmed its interest in pursuing the recognition of the property rights of Miskito communities, and these communities and their organizations have also confirmed their interest in continuing to participate in the Program. Reflecting lessons from Phase I, during the second phase, special attention will be paid to implementing a culturally sensitive Communication Strategy, strengthening INA#s capacity for carrying out titling activities in La Moskitia and elsewhere, and developing locally acceptable alternative conflict resolution mechanisms. As required, an updated Social Assessment has been conducted and an Indigenous Peoples Plan (IPP) prepared to reflect the results of consultations with indigenous stakeholders. PATH will continue to exclude any physical displacement or resettlement of population. The Involuntary Resettlement policy remains triggered, however, because of the potential restriction of access to natural resources that may occur as a result of the demarcation and stricter enforcement of CCZs, a restriction that would affect neighboring communities that more or less rely on these resources. In national parks (NPs), the Project will only finance the delimitation and demarcation of their respective CCZs. It will not support other processes such as the internal zoning, the elaboration and implementation of management plans, or the regularization of land within NPs. The experience of the first phase shows that the demarcation of CCZs effectively contributes to conservation. It has given visibility to their boundaries, which as a result have been more explicitly acknowledged by the communities living near them, cutting down on the potential for encroaching. No conflicts, either related to land tenure or natural resource use, have emerged in these areas throughout the implementation of Phase I. This is in part due to the existence a legal requirement that an occupation census must be completed before the ICF proceeds with the delimitation and regulation of a CCZ. Page 10 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: All of the significant environmental and social impacts of land administration projects in general, and Phases I and II of PATH in particular, are inherently indirect (induced). For example, the production of cadastral maps or issuance of land titles do not have environmental or social impacts per se; rather, the impacts derive from the changes in human behavior related to land use, which come in response to increased land tenure security. PATH#s environmental impacts should generally be positive and environmentally sustainable in the long term. However, it is always possible that adverse environmental impacts could ensue, such as the following: 1) Landholders could accelerate land clearing activity in advance of the arrival of the project field teams who would measure, map, and register a land parcel, in order to demonstrate the largest possible area under #productive use.# 2) Upon receiving secure land titles, many landowners would enjoy increased access to capital, resulting from improved access to credit. This means that some might opt to use part of their increased access to capital to clear the remaining forests on their property to expand their area of pasture or cropland. 3) There could be increased migration to forest frontier areas. Some rural landowners might be inclined to sell their fully-titled land and use the proceeds to migrate and clear more land at the forest frontier; however, this concern seems unlikely to occur as it goes against recently observed migration trends in Honduras. 4) Protected area limits might not be respected if land regularization activities were to take place prior to demarcation activities of the core conservation zones. 5) There is a risk that lands having, or suspected to have, culturally valuable resources could be titled to private owners before the appropriate government agencies (such as IHAH) have a chance to get involved in the identification and protection of such resources. In relation to indigenous peoples# development, one indirect impact that could result from the titling of indigenous lands in Gracias a Dios is that, unless it is done in a comprehensive fashion, it could bring those Miskito communities that are not slated for collective land titling right away under even greater pressure from logging and agribusiness interests in the medium term. Given the legal and logistical challenged involved, the Project has little choice but to carry out such titling sequentially. At least 45 communities are expected to benefit from titling actions after Phases I and II; it is certainly possible that more communities could be added if the actions proceed more quickly than expected. Moreover, the Project will support a process for preparing a titling program for La Moskitia, which will help mitigate some of the above risks. Yet it is more likely that the protection of Miskito lands proposed for titling at a later point will come through internal capacity building, legal education (which are programmed into the proposed Phase II as well) and organizational strengthening for territorial defense actions, such as the clearer marking and patrolling of boundaries (which will have to be included in a future phase of PATH, or in other Government programs). Page 11 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. On the environmental side, the initial plan was to complement the demarcation of CCZs with the elaboration of NP management plans providing for the internal regularization of such parks (involving demarcation and, when legally allowed, titling inside the NNP). Ultimately, considering the lack of financial and institutional capacity to implement management plans, along with the potential conflicts that could arise during regularization, it was agreed that the second phase will concentrate only on the demarcation of CCZs, which are in general very well conserved and less the object of property claims or social conflicts. By supporting the surveying and demarcation of CCZs, Component 3 itself will help protect them against potential impacts from Phase II and other non-Project activities. The titling activities included in Component 4 (Strengthening of Miskito People#s Land Rights) will also help to minimize adverse impacts, by preventing or at least discouraging the appropriation of lands and resources upon which Miskito families, among the poorest in the country, depend. Partly in response to experiences during Phase I, for Phase II the decision was taken to move away from a narrow consideration of technical issues in land tenure in this component, and toward a more integrated, culturally appropriate combination of studies, land titling, capacity building, and productive sub-projects. Such an alternative will help those Miskito communities receiving a title to position themselves to make the best of use of land as a productive asset, while at the same time preserving their culturally determined idea of land as a collective resource having intrinsic value. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. a) The following measures have been taken by the borrower to address safeguard policy issues: Environmental Assessment OP/BP 4.01. Even though Phase I Environmental Analysis (EA, including the Environmental Management Plan, EMP) is considered adequate, the Borrower has prepared a new EA that takes into account the new geographic areas to be covered under the second phase including some urban areas, as well as the key lessons learned during the implementation of the first phase. Additionally the EMP and Operations Manual both provide contractually-binding guidance to contractors on environmentally-friendly and worker safety practices to be observed during the small-scale rehabilitation works in selected registries under Component 1.2 of the Project, including inter alia, painting, minor remodeling, roof rehabilitation, wiring, and installation of air conditioning systems. No new construction or additions to existing structures will be financed by the Project. The EMP will provide guidance on any permits that may be necessary for these small works. The EA indicates that (i) the net environmental impacts observed under the first phase have been highly positive, particularly in view of the demarcation and consolidation of CCZ in the National Parks (ii) highly positive environmental impacts are also expected to occur in the new geographic areas to be covered under Phase II; (iii) various specific Page 12 lessons learned on how to improve cadastre and demarcation practices will be reflected in forthcoming modifications to the Project's Operational Manual, particularly in procedures related to Protected Areas. The new EA report has been publicly disclosed at the World Bank#s InfoShop in Washington, as well as in Honduras prior to appraisal. In addition to addressing and helping improve environmental concerns, Phase II will support the surveying and demarcation of selected CCZs inside NPs and will incorporate lessons learned from Phase I within the updated EMP. Natural Habitats OP/BP 4.04. As was the case with Phase I, the impacts on Honduras#s forests, wetlands, and other natural habitats are expected to be on balance very positive, particularly as a result of CCZs demarcation and consolidation activities under Component 3. In addition, any forested lands outside protected areas will be reviewed by ICF and the PCU prior to being eligible for individual land titling, as is already being done under Phase I. Forests OP/BP 4.36. Phase II will not finance forestry activities but since many of the protected areas and natural habitats are forested, this safeguard was triggered. The requirements for compliance under the revised Forests OP 4.36 (which took effect in 2002, after the first phase was approved) are identical to those set out in OP 4.04. Pest Management OP 4.09. The Project will not finance any activities or sub-projects that will require the procurement or use of pesticides, including any agricultural or livestock activities. Accordingly, this Safeguard is not triggered. The Manual for Productive Sub-Projects in Gracias a Dios will include provisions to ensure compliance with this safeguard in terms of screening out agricultural, livestock and other prohibited activities. Indigenous Peoples OP/BP 4.10. To address the requirements of the Indigenous Peoples policy, the Strengthening of Miskito People's Land Rights was added to the Project as a free-standing component. This component will provide for the demarcation and titling of indigenous peoples# lands in a participatory and culturally acceptable manner, so it can be consistent with the communities' views with respect to the communal use of land and natural resources. An Indigenous Peoples Plan (IPP), based on a fully updated Social Assessment, has been prepared. This Plan incorporates the results of recent consultations with MASTA, which is recognized throughout La Moskitia as the main organization representing Miskito interests and aspirations with regards to land rights, as well as with FINZMOS and BAKINASTA, the Miskito federations representing the communities that will be titled under component 4. As such, it confirms that the titling activities proposed enjoy the broad support of the communities involved. The Plan also outlines mechanisms for an ongoing process of free, prior, and informed consultation, meaningful stakeholder participation, and land-related conflict resolution. Physical Cultural Resources OP/BP 4.11. Page 13 According to the Independent Evaluation of Phase I, the policy on Physical Cultural Resources is being satisfactorily complied with. Standing chance-find procedures require that the Honduras National Institute of Anthropology and History (IHAH) be immediately notified in case any archaeological or historical relic is discovered during cadastral or other Project activities. In compliance with the Physical Cultural Resources Safeguard, under Phase I, IHAH and the Salinas patronato reached an agreement to legalize the tenancy of residents living in the boundaries of Las Salinas Fortaleza de Omoa de San Fernando National Monument (a protected area). A decree was formulated authorizing the partition of the already-inhabited zones from the protected area # an activity that only requires the redrawing of boundaries. Component 3 of Phase II will support efforts to re-draw the boundaries of the National Monument in order to recognize and regularize the community currently within its boundaries. This activity only consists of changing the records in SINAP, the National Property Administration System. There are no physical activities as part of this component on-the-ground and so there is no need to develop any specific procedures to protect the cultural and historic integrity of this particular sub-component. Involuntary Resettlement OP/BP 4.12. As the demarcation and better enforcement of CCZ boundaries may potentially lead to restrictions of access to natural resources, a Process Framework is needed to outline the participatory process for the identification, monitoring, and mitigation of such restrictions. The Process Framework that was prepared under Phase I has been updated to ensure compatibility with activities proposed under component 3 of Phase II. This Framework will be implemented as needed in the forthcoming phase, although one of its aims is to refer to the multiple ways by which such restrictions might actually be avoided, and it stresses the desirability of doing so. Additionally, the process of regularization based on public need (Regularización por Necesidad Pública) is being closely monitored to ensure that the informal, largely poor households benefiting from it do not suffer from undue economic displacement. This process falls under the exception set forth in footnote 8 of OP 4.12, specifically the second part that states that #the policy does not apply to disputes between private parties in land titling projects.# The monitoring that will take place (similar to the one implemented under Phase I) applies the good practice recommended therein. b) Capacity to plan and implement the measures: During Phase I of PATH, capacity for implementing safeguards among the various implementing bodies varied. Following the Inspection Panel investigation carried out during 2006 and 2007, a concerted effort was made to improve in-country understanding of and capacity to deal with the applicable safeguard policies, a process that coincided with enhanced, integrated supervision by the Bank in general, and with more active oversight by social and environmental safeguards specialists in particular. The participation of numerous PCU technical staff in the preparation and updating of safeguards-related manuals and instruments, such as the Protected Areas Regularization Manual on the environment side, and the Indigenous Peoples Plan on the social side, has led to greatly strengthened capacity for safeguards management centrally. During Phase Page 14 II, these improvements will be built upon and extended to key entities such as the IP and INA. For example, staff in INA will receive training not only in areas that are directly related to its responsibilities under the Program (e.g. in the titling of lands for Miskito communities), but also in associated areas with which they have less experience (e.g. the promotion of alternative conflict resolution mechanisms). Such activities will be provided for under Component 1. An additional environment specialist will be contracted, as needed, for Phase II to follow up on the implementation of the EMP. Thus specialist would join the current Environmental Management Unit consisting of a Coordinator and an assistant. Based on Phase I's experience, Phase II will include measures to ensure greater attention to monitoring progress of the EMP. With the additional specialist to be hired as needed and planned institutional strengthening in environmental management and Bank safeguards, this Unit should have the capacity to manage Phase II environmental activities. On the social side, the PCU's Community Participation and Ethnic Affairs Unit will continue to oversee activities related to engagement with indigenous communities and their representatives, gender equity, and stakeholder communications. For Phase II, this Unit will consist of a Coordinator, a Gender Specialist, a Communications Specialist, a Miskito Community Relations Associate, and an Assistant. The communications and community relations specialists will be posted in Gracias a Dios in order to ensure close coordination with INA staff and indigenous federations and communities participating in the titling process. The Community Participation and Ethnic Affairs Unit will also contract technicians to undertake specific tasks related to the implementation of component 4. The existing capability of the Unit to carry out its responsibilities is expected to be enhanced through the application of training in relevant Bank safeguards during the early stages of Phase II. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The delimitation and demarcation of CCZs will require the carrying out of workshops with relevant stakeholders. These will include Protected Areas' occupants and people living outside the Protected Areas, as well as the relevant municipalities and patronatos. As was successfully implemented in Phase I, people living in or around CCZs to be demarcated will be informed of the demarcation and educated about what it means for them and their activities. Phase II will include revamped consultation mechanisms as means of soliciting stakeholder views more directly and consistently, thereby diminishing the possibility of conflicts in the Project. Two of the proposed mechanisms will be formal. The first is the Inter- Sectoral Commission for the Protection of the Land Rights of Garífuna and Miskito Communities, a multi-stakeholder, central decision-making body that has proven to be effective during Phase I, which will remain active. Through their organizations OFRANEH, ODECO and MASTA, Garífuna and Miskito stakeholders will continue to have a say in the way the land rights of indigenous and afro-Honduran peoples are strengthened, and how land policy and programs that may affect them are being Page 15 implemented. Moreover, by inviting a representative from CONPAH to participate, the Inter-Sectoral Commission has effectively opened up its membership to all of Honduras#s indigenous federations. The second formal mechanism, the National Commission of Land-Related Policies and Standards (Comisión Nacional de Política y Normativa de la Propiedad or CONAPON), is proposed for activation during Phase II. This body, whose constitution is provided in the Property Law, will serve as a means by which its members can monitor the operations of the Property Institute, and provide feedback and advice to IP management on the same. CONAPON#s membership base will be considerably wider than that of the Inter-Sectoral Commission, incorporating not just representatives from key institutions involved in land administration at the country level (such as INA, ICF, and SGJ), but also those from civil society, municipalities (via AMHON), and indigenous and afro-Honduran communities. The PCU will also work to convene regular community meetings and fora designed to serve as an open platform for consultation and participation of indigenous communities and their representatives. These meetings will not be designed to produce statements or decisions, but will rather provide a means for PATH and other government institutions to bring indigenous participants up to date on Project activities, and to solicit feedback on the course of Project implementation. The regional committees (Mesas Regionales), which were set up under Phase I to serve this purpose, will no longer remain active under Phase II. A special meeting will be organized on an annual basis specifically to identify lessons learned, address any implementation issues and reconfirm broad support for the Project from MASTA and participating communities. Procedure-specific consultation mechanisms, such as the Vistas Públicas Administrativas that are an important feedback mechanism for validating cadastral information during the public-need regularization process (under Component 2), will continue to be employed. Such mechanisms are spelled out in the relevant annexes of the Operational Manual. IP, through the PCU, has held consultations with various stakeholders and concerned groups on the project and its environmental and social aspects including indigenous groups, environmental NGOs, government agencies, municipalities and civil society. These include, among others, the Zamarano Panamerican School of Agriculture, MASTA, Lempira Indigenous Council, National Coordinator of Honduran Communal Organizations, the National Council of Patronatos, the Fonseca Gulf Committee for the Defense and Development of the Flora and Fauna, and the Friends of the Tiger. As part of a continuous consultation process during the preparation of this Phase II, a series of site-specific consultations have been held with a range of interested stakeholders. Additionally, in workshops conducted during the second half of 2008, the activities planned for each Project component were shared with potential beneficiaries. The overall process has been complemented and enriched by the findings of related studies and diagnostics. Among others, the following specific consultations have been held: Page 16 1. A Roundtable Discussion and Workshop with PATH Co-executors for the Mid-term Evaluation and Phase II on April 25, 2008 in Tegucigalpa. The following institutions participated: ICF, IP, GTZ- Río Plátano Biosphere Project, SEFIN, Ministerio de la Presidencia, World Bank Resident Mission, AMHON, INA and SGJ. 2. The Development of the Logical Framework for Phase II held May 29-30, 2008 in Tegucigalpa. In addition to the other institutions that participated in the April Roundtable Workshop, SERNA participated. 3. A consultation on the Project's EA and EMP was conducted March 11, 2009. The ICF and IHAH participated in this consultation which defined which CCZs will be demarcated under Phase II. 4. Consultations with representatives of Miskito indigenous federation, local churches, the Puerto Lempira mayor#s office, and the Miskito Consejo de Ancianos in Gracias a Dios on April 16-17, 2009. Among other things, this most recent of recurring consultations with indigenous leaders and other key stakeholders in La Moskitia resulted in a statement reaffirming their broad support for proposed component 4 activities. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/02/2009 Date of "in-country" disclosure 04/15/2009 Date of submission to InfoShop 04/27/2009 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/02/2009 Date of "in-country" disclosure 05/01/2009 Date of submission to InfoShop 05/01/2009 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/15/2009 Date of "in-country" disclosure 05/01/2009 Date of submission to InfoShop 05/01/2009 Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Page 17 * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Yes Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes OP/BP 4.04 - Natural Habitats Would the project result in any significant conversion or degradation of critical natural habitats? No If the project would result in significant conversion or degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? N/A OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? Yes OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with affected Indigenous Peoples? Yes If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? Yes If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social Development Unit or Sector Manager? N/A OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? Yes If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? Yes OP/BP 4.36 - Forests Has the sector-wide analysis of policy and institutional issues and constraints been carried out? N/A Does the project design include satisfactory measures to overcome these constraints? N/A Does the project finance commercial harvesting, and if so, does it include provisions for certification system? No Page 18 The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Enrique Pantoja 06/08/2009 Environmental Specialist: Mr Juan Pablo Ruiz 06/08/2009 Social Development Specialist Mr Kennan W. Rapp 06/08/2009 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Reidar Kvam 06/17/2009 Comments: Sector Manager: Ms Ethel Sennhauser 06/18/2009 Comments: