UZBEKISTAN PROGRAM-FOR-RESULTS (PforR) ELECTRICITY DISTRIBUTION IMPROVEMENT AND STRENGTHENING THROUGH COMMERCIALIZATION AND TRANSFORMATION (E-DISTINCT) (P504630) ENVIRONMENTAL AND SOCIAL SYSTEMS ASSESSMENT (ESSA) Final Draft World Bank January 2025 The Environmental and Social Systems Assessment (ESSA) of the Uzbekistan Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Program-for-Results (PforR) (P504630) was prepared by a Bank team composed of Aki Tsuda (Senior Social Development Specialist), Gaurav Joshi (Senior Environmental Specialist), Tolmasbek Boltayev (Social Development Specialist), Inobat Allobergenova (Natural Resources Management Specialist) and Vahob Khudoynazarov (Social Development Consultant) in close coordination with the Task Team Leaders, Koji Nishida (Senior Energy Specialist), Jianping Zhao (Senior Energy Specialist) and Bahodir Amonov (Energy Specialist). P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Contents EXECUTIVE SUMMARY ..............................................................................................................................................5 1 INTRODUCTION ............................................................................................................................................. 11 2 EXPECTED ENVIRONMENTAL AND SOCIAL EFFECTS...................................................................................... 15 3 LEGAL AND REGULATORY FRAMEWORK FOR MANAGING THE PROGRAM’S ENVIRONMENT AND SOCIAL IMPACTS ................................................................................................................................................................ 23 4 INSTITUTIONAL CAPACITY ASSESSMENT FOR MANAGING THE PROGRAM’S ENVIRONMENT AND SOCIAL EFFECTS.................................................................................................................................................................. 28 5 COMPARATIVE ANALYSIS OF BORROWER E&S SYSTEM AND WORLD BANK CORE PRINCIPLES ................... 36 6 STAKEHOLDER ENGAGEMENT ....................................................................................................................... 43 7 CONCLUSION AND RECOMMENDATIONS ..................................................................................................... 46 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Abbreviations TERM EXPANDED TERM/ DEFINITION ADB Asian Development Bank DLI Disbursement-Linked Indicator DLR Disbursement-Linked Result E&S Environmental & Social ECA Europe and Central Asia ECARES Renewable Energy Scale-Up in ECA Multiphase Programmatic Approach E-DISTINCT Electricity Distribution Improvement And Strengthening Through Commercialization And Transformation Program ESF Environmental and Social Framework ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan ESMS Environmental and Social Management Systems ESSA Environmental and Social Systems Assessment EU European Union GDP Gross Domestic Product GIIP Good International Industry Practice GoU Government of Uzbekistan GRM Grievance Redress Mechanism HVDC High-Voltage Direct Current HVEN High Voltage Electric Networks IBRD International Bank for Reconstruction and Development IFI International Financial Institution IPF Investment Project Financing ISO International Organization for Standardization JSC Joint Stock Company kV kilovolt M&E Monitoring & Evaluation MPA Multiphase Programmatic Approach MW Megawatt NEGU National Electric Grid of Uzbekistan, JSC NDC Nationally Determined Contribution NGO Non-Governmental Organization OHL Overhead Line OHS Occupational Health and Safety PCB Polychlorinated biphenyls PDO Program Development Objective PforR Program-for-Results PIU Project Implementation Unit RE Renewable Energy REPN Regional Electricity Network of Uzbekistan, JSC SCADA Supervisory Control and Data Acquisition SOE State-Owned Enterprise USD United States Dollar WBG World Bank Group P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) EXECUTIVE SUMMARY Program Description The distribution assets in Uzbekistan, particularly 10, 6, and 0.4kV networks, have been left for rehabilitation for many years and thus are aged and outdated, leading to high losses, over-loadings, and frequent disruptions of electricity supply caused by equipment failures and over-loadings. These aged distribution networks were not designed and constructed to account for the increased impacts of climate change and are most vulnerable to impacts of nature events like strong wind and flood which are becoming more frequent as a result of climate change. The distribution network is also not equipped with modern digitized control, protection and communication facilities which are essential to provide the needed flexibility and reliability for integrating large scale distributed renewable energy into the grid. As part of the ECARES MPA, the proposed PforR supports a comprehensive package of interventions focusing on rehabilitating REPN’s power distribution networks, improving REPN’s commercialization and financial performance. Approximately 6,000 km of medium voltage (10kV and 6kV) and low voltage (0.4kV) lines/cables and 2,000 distribution transformers (0.4-10 kv) are expected to be supported throughout the country. The total cost of the government program is estimated to be about US$3 billion, spanning the years 2023-2030. The proposed PforR would be implemented between 2024 and 2030 and would cost an estimated US$150 million, of which US$100 million would be covered by the IDA credit and the rest by REPN using its own resources (see Section 1). ESSA Methodology The ESSA was prepared by the World Bank’s E&S team through a combination of reviews of existing program materials and available technical literature as well as interviews with government staff, non-governmental organizations, community members and development partners. The ESSA (a) examines the scope, context, and potential impacts of the Program from an E&S perspective; (b) assesses in detail the different E&S effects under the Program activities, including indirect and cumulative effects, contextual and political risks related to the E&S issues; (c) assesses the capacity of national bodies in addressing related E&S risks and identify any complex risks in implementing E&S measures; (d) compares the borrower’s systems (laws, regulations, standards, procedures, and implementation performance) against the PforR’s E&S core principles; and (e) formulates recommended measures to address capacity for and performance on policy issues and specific operational aspects relevant to managing program risks. As part of the PforR appraisal process, inclusive consultations are conducted with key stakeholders. The findings, conclusions and opinions expressed in the ESSA document are those of the World Bank. The PforR’s six E&S core principles are summarized as follows: 1) promote environmental and social sustainability in the PforR Program design; avoid, minimize or mitigate adverse impacts, and promote informed decision-making relating to the PforR Program’s E&S impacts; 2) avoid, minimize or mitigate adverse impacts on natural habitats and physical cultural resources resulting from the PforR Program; 3) protect public and worker safety against the potential risks associated with: (i) construction and/or operations of facilities or other operational practices under the PforR Program; (ii) exposure to toxic chemicals, hazardous waste, and other dangerous materials under the PforR Program; and (iii) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards; 4) manage land acquisition and loss of access to natural resources in a way that avoids or minimizes displacement, and assist the affected people in improving, or at the minimum restoring, their livelihoods and living standards; 5) give due consideration to the cultural appropriateness of, and equitable access to, PforR Program benefits, giving special attention to the rights and interests of the Indigenous Peoples and to the needs or concerns of vulnerable groups; Page | 5 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 6) avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes. Anticipated E&S Benefit The Program is expected to generate substantial and long-term positive E&S benefits by improving the quality of electricity services to businesses and the general populations and reducing GHG emissions and air pollution. Potential E&S Risks and Impact and Risk Classification The adverse E&S risks and impacts to be generated during the rehabilitation, construction and O&M phases of medium voltage (10kV and 6kV) and low voltage (0.4kV) lines/cables with transformers and advanced meters are assessed to be moderate in intensity and reversible in nature. They are expected to be temporary, mitigable and with limited physical footprint. The overall E&S risks and impacts are considered “Moderate� as per the WB ESSA Guidance (with appropriate exclusions and mitigations presented in the ESSA) (See Section 2). The main potential environmental risks and impacts include: (i) Fragmented E&S management system in REPN where responsibilities for managing the E&S risks and impacts are spread across various departments/branches of the REPN. This will make it difficult to monitor and report on the effectiveness of the E&S mitigation measures/approaches to be adopted throughout its country-wide network in a timely manner (this is also relevant to social risks and impacts). (ii) Tree cutting for the safety of distribution network (iii) Labor and community health and safety risks, in particular electrocution, fire safety risks and work at height; and (iv) Air, soil, water and noise pollution during construction/installation and treatment of hazardous chemicals and wastes resulted from replacement of old transformers. The main potential social risks and impacts include (i) Limited resettlement risks where public/government lands are unavailable or land disputes pre-exist; (ii) Inadequate inclusion of vulnerable groups in program benefits and stakeholder engagement processes (such as female stakeholders, persons with disabilities, communities in remote areas); and (iii) Functionality of the case management/grievance redress system Legal and Regulatory Framework The GoU has developed national environmental legislation and adopted new laws and regulations together with a number of programs and action plans to address environmental issues and promoted sustainable use of natural resources. The country has adopted several subsidiary laws and legislation on environmental management and is a party to series of international and regional environmental agreements and conventions. The country also has the nature protection policy and the implementation of measures in the field of rational use of natural resources and environmental protection are ongoing. On the social side, the country has developed relevant legal and regulatory frameworks which cover key social issues, including land acquisition and resettlement, labor and working conditions and social inclusion and sustainability. The ESSA provides a concise assessment of the country’s E&S legal and regulatory framework on the six core principles under WB’s PforR Policy, which are deemed applicable to the proposed Program, including its strengths and challenges (see Section 3). Institutional Capacity Assessment REPN will be the implementing agency for the PforR and will have the overall responsibility for managing and implementing the program. A central Project Implementation Unit (PIU) located at REPN’s headquarters will coordinate and facilitate the implementation of the program, while physical implementation activities will be carried out by REPN’s technical departments and regional offices. The Program will use REPN’s internal systems Page | 6 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) for implementation, oversight, financial-management, procurement, E&S risk management, monitoring and evaluation, and reporting arrangements. Construction and installation works will largely be carried out by REPN’s own work force. The REPN has broadly reasonable and functional E&S systems to manage the proposed Program including a robust grievance/case management mechanism, while the E&S responsibilities are rather fragmented across different departments and regional branches. The lack of an integrated/dedicated E&S risk management unit with appropriate E&S expertise has been identified as one of the potential areas for improvement to the effective management of the Program by REPN. The internal processes for obtaining the environmental regulatory permissions, handling hazardous materials and managing stakeholder engagement for the network expansion activities would be also areas for improvement. The proposed Program will help the REPN address the identified E&S capacity gaps (See Section 4). Comparative Analysis of Borrower E&S System and World Bank Core Principles Key findings from the E&S systems assessment are summarized below, including on the strengths and weaknesses/areas for improvement of the current system, which will inform the proposed gap-filling/mitigation measures to ensure that the Program is managed in a manner consistent with the Core Principles of the Bank’s PforR Policy (See Section 5). 1. Core Principles 1 (Environmental and Social Sustainability and Risk Management) Strengths • While the proposed civil works will entail minor, site-specific adverse environmental risks and impacts, such risks and impacts can be addressed through the implementation of general mitigation measures covered in the REPN’s safety guidelines and national regulatory frameworks. • As per the national EIA law, the Regional Branch of REPN needs to submit the required project documentation (including the EIA) to the Regional Ecological Expertise Center prior to commencement of civil works for approval. Weaknesses/Areas for improvement • The REPN has currently no integrated/dedicated E&S unit which can cover the entire E&S risk management functions (such as pollution prevention, health and safety, hazardous materials, stakeholder engagement and GRM). Rather, the REPN’s E&S risk management system is fragmented not only inside the HQ across different units, but also among HQ, 14 Regional Branches and their District Branches. This may pose challenges to the monitoring and reporting on the implementation of relevant E&S measures under the Program. • Some units in REPN HQ and Regional Branches may not be aware of EIA requirements for this Program under the EIA law. 2. Core Principle 2 (Natural Habitats and Physical Cultura Resources) Strengths: • There is a system in the country and REPN to avoid and minimize the impact from electricity network on natural habitat and cultural heritage (through rerouting the network, use of underground lines and tree-cutting permissions). Weaknesses/Areas for improvement: • There are reported cases where fast-growing tree are planted within the buffer/protected zones of electricity lines, which lead to damage of lines and power outages. 3. Core Principle 3 (Public and Worker Safety) Strengths: • The country has the safety resolutions specific to electricity sector to ensure the safety of workers associated with electrical equipment, transmission line maintenance and repair activities. There are Page | 7 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) also specific regulations to prevent encroachments and mitigate risks to electrical network facilities and public safety. • The REPN has a dedicated safety unit and guidelines with systematic training and grading program. Weaknesses/Areas for improvement: • OHS and incidents/accidents: According to the recent statistics from REPN for 2022-2024, the electrocution is the most cause of the serious incidents reported in the REPN followed by fall from height. REPN’s analysis reveals that 90% of fatal incidents were caused when the workers were trying to rush the work quickly while other 10 % were over-confidence of workers where safety measures were not taken appropriately. • While most of the waste types, non-hazardous, are easily managed according to national and REPN’s waste management regulations, hazardous wastes including PCB will require stricter management and monitoring. 4. Core Principle 4 (Management of Land Acquisition and Involuntary Resettlement) Strengths: • The civil works will be within a small footprint area mostly along existing alignments of distribution lines. The proposed Program will not envisage any compulsory land acquisition and involuntary physical and economic displacement. REPN will only use public or government owned lands wherever possible. • Involuntary resettlement will be avoided, minimized and managed through alternative site/alignment selection, engineering design and provision of appropriate compensation (such as for damaged crops). • Where public land is not available, REPN is collaborating with the local community (Mahalla) to identify private landowners who will voluntarily agree to accept to place the electric pole/transformer on their land. Weaknesses/Areas for improvement: • While no grievance has been reported to date, this arrangement entails the potential risk of community coercion. 5. Core Principle 5 (Inclusion of Vulnerable Groups) Strengths • The proposed Program will be prepared and implemented in close collaboration with local community mechanism (such as Mahallas and Khokimiyats). • With support of ADB, REPN is implementing a Gender Action Plan (GAP). Weaknesses/Areas for improvement: • While no particular risk of exclusion has been identified through consultations with the representatives of potentially vulnerable groups, such groups could be excluded from community- based stakeholder engagement processes from a variety of reasons (such as cultural, physical and socio-economic constraints). • Stakeholder engagement of REPN is rather ad-hoc without clear guidelines. • While labor influx risks and GBV and SEA/SH risks are considered low as the civil work will be conducted by REPN’s own technicians and construction brigade based in the regional branches, the awareness on this issue could be strengthened. 6. Core Principle 6 (Avoidance of Social Conflict) Strengths Page | 8 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • The REPN and its regional branches have an established case management system supported by a specialized unit and case management procedures and tools (such as portal, email, toll free number, telegram messaging and chat groups). The country’s President Office has its own grievance system which covers all public institutions and oversees and monitors the case management and resolution by each institution with appeal process. Weaknesses/Areas for improvement: • While the number of cases is significant and the case management systems are not fully integrated, there is a risk that not all cases are addressed systematically and in a timely manner. Stakeholder Engagement • Consultation Event for Preparing the ESSA (May-July, 2024): For the preparation of this ESSA, the Bank task team undertook a series of meetings with different stakeholders, focusing on the program implementing institutions. The consultation meetings were organized with REPN HQ and relevant government institutions in Tashkent in May and with REPN’s regional branches and relevant public institutions in Namangan and Khorezm in July. Site visits were also conducted during these meetings. The outcomes of the consultations have informed the ESSA, including the assessment of the legal and regulatory framework and the institutional capacity of key stakeholders (the list of persons met is provided in Annex 1). • Public Consultations on the draft ESSA (November, 2024): Public consultations were undertaken in Khorezm and Tashkent Regions in an inclusive manner with key stakeholders, including local Mahallas, Khokimiyats, community members and NGOs. The inputs are considered and incorporated into the ESSA (See Section 6). • Document Dissemination and Public Disclosure: The summary draft ESSA is translated into the Uzbek language and shared with the stakeholders before the public consultation. The draft ESSA will be disclosed in-country and on the World Bank’s website before appraisal. The final ESSA will be disclosed before the board approval. Conclusion and Recommendations Based on the above assessment, a series of measures and actions are recommended for the proposed Program to address the identified gaps between the government E&S management system and the core principles of the Bank’s PforR Policy. These will ensure that the proposed program be managed in a manner consistent with the Core Principles. These recommendations shall be integrated in the following. They will be also embedded in the POM for operationalization, as appropriate. Their effectiveness will continue to be monitored and adjusted throughout the program life (See Section 7): (i) Excluded activities: Land acquisition and/or resettlement of a scale or nature that will have significant adverse impacts on affected people, or the use of forced evictions. This will include involuntary demolition of formal and informal structures. (ii) Relevant DLIs/verification protocol: DLIs #1,2 and 3 should obtaining E&S permits from the environmental regulator (Regional Ecological Expertise Center) prior to commencement of civil work; (iii) Actions in the Program Action Plans (PAPs), are directed to improve program processes and E&S performance by implementation of a number of institutional and process enhancements such as appropriate E&S staffing arrangement and institutional capacity development of REPN HQ and Regional branches; engagement of E&S consulting firm to support ISO14001 recognition; preparation, adoption and implementation of GIIP E&S guidelines such as WBG Guidelines for Page | 9 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Transmission and Distribution sector; inclusive community engagement program; improvement of functional case management/grievance mechanism; and regular and incident program reporting. Page | 10 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 1 INTRODUCTION Program Description 1. The proposed PforR supports a comprehensive package of interventions focusing on rehabilitating REPN’s power distribution networks, improving REPN’s commercialization and financial performance. It represents Phase V of the Renewable Energy (RE) Scale-Up in ECA under the Multiphase Programmatic Approach (ECARES MPA) Program, which was approved by the World Bank’s Executive Directors on March 28, 2024. The Table below shows how the interventions supported by PforR fit into the broader government program. The total cost of the government program is estimated to be about US$3 billion, spanning the years 2023-2030. The proposed PforR would be implemented between 2024 and 2030 and would cost an estimated US$150 million, of which US$100 million would be covered by the IDA credit and the rest by REPN using its own resources. The scope of the proposed PforR was selected based on the outcomes of extensive analytical work carried out in recent years by REPN, a technical assessment by an international consultant, various advisory support of the World Bank on tariff analyses, corporate governance assessments for SOEs, network planning and renewable energy integration studies. The distinction between the government’s program and the PforR is presented in the Table below. Table: Government Program and PforR Boundary Government program Program supported by the PforR Reasons for PforR Focus Objective Establish an adequate, reliable, To enable the integration of The government program has safe and financially viable increased renewable energy broader objectives and has its distribution system which capacity into the power own wording for the same supports expansion of distribution network and meaning environmentally friendly enhance the financial renewable energy, attracts sustainability of the power commercial and private distribution company financing, and provides high quality electricity to all consumers. Duration 2023-2030 2024-2029 Support could only commence after PCN of the proposed Bank operation Geographic All the country and all High priority regions. The voltage The PforR covers regions that coverage distribution voltage levels (110, coverage is 10, 6 and 0.4kV. are high priority for 35, 10, 6 and 0.4kV) investments. The lower voltage is selected due to the financing needs. Results areas A robust and reliable power Enabling the integration of Different wording, similar distribution system increased renewable energy into focuses Adequate and flexible to support the power distribution grid renewable energy Improved commercialization and Financially viable for non- financial viability government guaranteed financing Overall US$3 billion US$150 million The PforR program has a Financing smaller scope Page | 11 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 2. The distribution assets, particularly 10, 6, and 0.4kV networks, have been left for rehabilitation for many years and thus are aged and outdated, leading to high losses, over-loadings, and frequent disruptions of electricity supply caused by equipment failures and over-loadings. Moreover, the distribution networks particularly 0.4kV have been expanded in an unorganized manner and thus created many too long 0.4kV lines, resulting in poor reliability and high technical losses. These aged distribution networks were not designed and constructed to account for the increased impacts of climate change and are most vulnerable to impacts of nature events like strong wind and flood which are becoming more frequent as a result of climate change. The distribution network is also not equipped with modern digitized control, protection and communication facilities which are essential to provide the needed flexibility and reliability for integrating large scale distributed renewable energy into the grid. The proposed PforR would support the rehabilitation of aged distribution network to improve system reliability and supply quality. It would also take advantage of the latest modern digital solutions to support the sector’s enhanced automation and remote control so that the system is better adapted to load change on the demand side and the fluctuation on the supply side as a result of large-scale variable renewable energy. In addition, the PforR program will support corporate reform and institutional capacity building to put REPN on a solid financial footing. The following results areas will be supported under the Program (PforR) and the Disbursement Linked Indicators (DLIs) are distributed across two Results Areas. 3. Results Area 1: Enabling the integration of increased renewable energy into the power distribution grid: The PforR would support institutional capacity building and enabling investments in the rehabilitation and expansion of the low voltage distribution networks. The activities under the results area would support: (i) rehabilitation of long 0.4 kV lines with higher capacity lines as well as outdated 6 kV and 10 kV lines. The new lines are more climate resilient through insulation, flood and storm protection and modern digital solutions. Approximately 6,000 km of medium voltage (10kV and 6kV) and low voltage (0.4kV) lines/cables are expected to be rehabilitated and constructed throughout the country; (ii) installation of concentrators for future automated distribution grid operations; (iii) development and adoption of a distribution grid code as well as new distribution planning methodology; (iv) development of clear rules and procedures in reviewing and approving distributed solar connections to the distribution grid and their operations; and (v) acquisition of analytical tools and develop capacity for analyzing the system impacts of distributed solar PV. The objective of these investment activities and institutional building program would help increase distribution system capacity, resilience and flexibility to absorb increased distributed renewable energy while maintaining the security and reliability of supply. 4. Results Area 2: Improved commercialization and financial viability: Under this Results Area, the PforR would support actions to improve REPN’s commercialization and financial viability, in line with the priorities laid out by the GoU’s Decree. The activities under this results area would support: (i) Installation of new and replacement of existing distribution transformers with larger capacity and higher efficiency to reduce technical losses and thus to reduce revenue losses; (ii) installation of distribution transformer meters and consumer smarter meters to reduce commercial losses. It is expected to replace and add about 2,000 distribution transformers (0.4-10 kV) throughout the country; (ii) improvements in REPN’s corporate management systems and modernization of REPN’s corporate governance; (iv) development of clear baseline technical and financial data system and a solid monitoring framework for REPN’s performance; (v) development and proposal of multi-year tariff approach to achieve financial viability; and (vi) preparation of performance contract with shareholders and regulator to clearly define REPN’s rights, responsibilities and performance targets. The objective of these capacity building activities and corporate reforms would be to Page | 12 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) support REPN in operating on fully commercial principles, improving technical and financial performance, and preparing to access commercial financing as well as for private sector participation. ESSA Methodology 5. The ESSA was prepared by the World Bank’s E&S team through a combination of reviews of existing program materials and available technical literature as well as interviews with government staff, non-governmental organizations, community members and development partners. As part of the PforR appraisal process, public consultations are conducted with key stakeholders. The findings, conclusions and opinions expressed in the ESSA document are those of the World Bank. 6. The scope of the ESSA covers the activities and systems necessary to achieve the Program Development Objectives (PDO), the expenditure program and the defined Results Areas and the DLIs. The ESSA assesses the potential E&S effects of the Program and examines the client’s E&S system to determine the consistency with the following six (6) E&S Core Principles as described in the WB PforR Policy (Chapter 5 – Comparative Analysis of Borrow System and Bank Core Principles details the results of the coping analysis): 1) promote environmental and social sustainability in the PforR Program design; avoid, minimize or mitigate adverse impacts, and promote informed decision-making relating to the PforR Program’s environmental and social impacts; 2) avoid, minimize or mitigate adverse impacts on natural habitats and physical cultural resources resulting from the PforR Program; 3) protect public and worker safety against the potential risks associated with: (i) construction and/or operations of facilities or other operational practices under the PforR Program; (ii) exposure to toxic chemicals, hazardous waste, and other dangerous materials under the PforR Program; and (iii) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards; 4) manage land acquisition and loss of access to natural resources in a way that avoids or minimizes displacement, and assist the affected people in improving, or at the minimum restoring, their livelihoods and living standards; 5) give due consideration to the cultural appropriateness of, and equitable access to, PforR Program benefits, giving special attention to the rights and interests of the Indigenous Peoples and to the needs or concerns of vulnerable groups; 6) avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes. 7. The key steps of the ESSA are the following: • Review of the baseline environmental and social information to understand the context under which the Program activities are undertaken. • Analysis of environmental and social benefits and risks of the Program activities. • Assessment of the borrower’s systems for environmental and social management for planning and implementing the Program activities for consistency with the applicable Core Principles. • Identification of procedural and policy gaps with Bank Policy and Directive for Program-for-Results Financing (notably the six Core Principles) as well as performance constraints in carrying out environmental and social management processes. • Development of a set of viable actions to strengthen the systems and improve environmental and social performance outcomes of the Program. Page | 13 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 8. The methodology included three distinct elements: (i) the first consisted of interviews with concerned agencies and other key stakeholders, which was undertaken by the Bank task team in May/July, 2024; (ii) the second consisted of a review of documents, literature and data available at key agencies on the legal and regulatory frameworks related to environment and social risk management including grievance management systems; and (iii) the third consisted of inclusive public consultations with key stakeholders to assess possible E&S impacts on different categories of stakeholders. The stakeholder consultations took place in November 2024 and the outcomes of the consultations are incorporated in the analysis – the discussions are detailed below in Chapter 6– Stakeholder Consultation and a list of participants is attached as Annex 1. The draft ESSA was disclosed and shared with the stakeholders before the consultations and prior to appraisal. The final ESSA will be disclosed before the approval of the Program. Page | 14 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 2 EXPECTED ENVIRONMENTAL AND SOCIAL EFFECTS 9. Salient E&S characteristics of the proposed Program: The proposed Program aims to modernize about 6,000 km of medium voltage (10 and 6kV) and low voltage (0.4kV) lines/cables and replace and add about 2,000 distribution transformers (0.4-10 kV) (mostly mounted on electric poles with limited cases installed on the ground) throughout the country. These MV/LV infrastructures have been left for rehabilitation for many years and thus are aged and outdated, leading to high losses, over-loadings, and frequent disruptions of electricity supply caused by equipment failures and over-loadings. Relevant civil works supported by the Program will be nation-wide but small scale in each site, moderate in intensity, short duration, and mainly construction related and a few related to operation and maintenance. The proposed civil works will include replacing and modernizing electric poles, lines/cables, transformers, concentrators and advanced meters. While the proposed civil works will be conducted within a small footprint area mostly along existing alignments of distribution lines, there may be cases where new distribution lines will be constructed for newly developed residential or business areas. The work will be undertaken by REPN’s own specialized team without relying on contractors. Below diagram and photos indicate the scale and nature of work and potential sites. Low and medium voltage networks to serve residential Recently replaced poles and distribution lines in and business consumers Tashkent Region Grounded transformer in Tashkent Region Mounted transformer in Tashkent City Page | 15 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Replacement site of underground cable in REPN’s heavy machine at work site in Tashkent Urgench city city 10. Overall E&S benefit: Overall, the physical and non-physical interventions supported by the proposed Program are expected to generate substantial and long-term positive E&S benefits by improving the quality, safety and stability of electricity services to the general populations and businesses, while helping reduce GHG and air pollution. 11. Classification of key E&S risks and impacts: This section provides the summary of potential key E&S risks and impacts associated with (A) each DLI and (B) the expenditure program, which the Bank team has identified through feedback from key stakeholders, analysis of available information/statistics and site visits. Based on the assessment of (i) likely E&S effects, (ii) contextual risk factors, (iii) institutional capacity and complexity risks and (iv) political and reputational risks undertaken by the Bank team (which are presented in this ESSA and the PAD), the overall E&S risks are considered “Moderate� as per the WB ESSA Guidance1. The Bank team will continue to monitor and revisit this classification throughout the Program implementation. A. Potential E&S risks and impacts anticipated under each DLI 1 As per the E&S risk rating guide in the WB ESSA Guidance (Annex C), the definition of “Moderate� E&S risk is as follows: “There is a moderate likelihood that Program activities would lead to some E&S consequences. Program activities are not likely to require significant changes to the borrower’s overall management approaches, and it is also highly likely that the Program achieves its operational objectives and sustain the desired E&S outcomes because of lower context, institutional complexity/capacity, or political and reputational risks. These risks are well understood and are expected to be limited in impact. The borrower’s implementing agencies usually have a proven track record in managing identified risks and, while not perfect, they have more limited needs for capacity-building measures. The operation may have some adverse E&S impacts, but they would tend not to be in environmentally or socially sensitive areas. Program activities are small in scale and their impacts are well known and manageable with standard procedures; they do not require unproven mitigation or management measures. The operation is unlikely to have significant adverse impacts on GHG and would not be at risk of natural disasters such as flooding, earthquake, or severe weather events. The operation may also have limited likelihood for adverse effects on gender, vulnerable groups, poverty, and equity�. Page | 16 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Results Areas DLIs Key Environmental Key Social Risks and Impacts Risks and Impacts 1. Enabling the DLI 1: km of climate resilient low • Fragmented E&S • Limited Integration of voltage distribution lines built or management system resettlement risks increased rehabilitated for increased in REPN (Core where renewable energy renewable energy integration and Principle 1) public/government into the power electricity delivery lands are distribution grid • Tree cutting for the unavailable or land DLI 2: Distribution transformer safety of distribution disputes pre-exist capacity increased for expanded network (Core (Core Principle 4) integration of renewable energy in Principle 2) the distribution network • Inclusion of • OHS/Community vulnerable groups 2. Improved DLI 3: Number of smart meter health and safety in program benefit commercialization installed for distribution losses risks, in particular and stakeholder and financial reduction electrocution, fire engagement viability safety risks and work processes (Core at height (Core Principles 5) Principle 3) • Functionality of • Treatment of the case hazardous chemicals management in transformers (Core system (Core Principle 3) Principle 6) 1. Enabling the DLI 4.1: A new distribution grid code • Similar • Similar social risks Integration of has been approved by the Cabinet of environmental risks and impacts under increased Ministers, incorporating new and impacts under DLIs 1-3 are renewable energy minimum performance standards DLIs 1-3 are anticipated when into the power for variable renewable energy plants anticipated when the the plans, distribution grid connected to the distribution grid. plans, roadmaps and roadmaps and DLI 4.2: Guidelines to address guidelines under DLI guidelines under extreme weather, disaster and 4 are implemented in DLI 4 are climate risks in distribution network the future implemented in the infrastructure adopted by REPN future DLI 4.3: An updated master distribution plan is adopted by REPN DLI 4.4: Clear rules and procedures in reviewing and approving distributed solar connections and operations are developed and adopted by REPN DLI 4.5: Roadmap for future automation and digitalization of the distribution network is developed and adopted by REPN Page | 17 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Results Areas DLIs Key Environmental Key Social Risks and Impacts Risks and Impacts 2. Improved DLI 5.1: Financial • No considerable • No considerable commercialization projection developed by REPN for adverse adverse social risks and financial 2026-2028 environmental risks and impacts are viability DLI 5.2: Financial projection updated and impacts are anticipated under by REPN for 2027-2029 anticipated under DLIs DLIs 5 and 6. DLI 5.3: Full cost recovery tariff 5 and 6. projection developed by REPN DLI 5.4: Funds from Operations • DLI 6.4 will generate • DLI 6.4 will generate leverage ratio below 6.5 achieved positive positive social DLI 5.5: Funds from Operations environmental effects effects through ISO leverage ratio below 6 achieved through ISO 14001 14001 certification DLI 6.1: a) At least two independent certification (Environmental Supervisory Board members, one of (Environmental Management which shall be woman, appointed; Management System) System) b) Specialized committees under the Supervisory Board are formed and operational. The Audit committee is composed of financially literate board members and a majority of independent board members. DLI 6.2: a) REPN Corporate Strategy 2026 – 2030 with clear mission, vision, and strategic plan, including strategic KPIs and sustainability goals, is approved; b) Adoption of the management accounting, tax and financial accounting methodologies and manuals with time-bound implementation plan, including trainings, relevant professional certificates. c) Internal Audit Service of REPN functions (methodologies and reports) in accordance with the Global Internal Audit Standards issued by the Institute of Internal Auditors. DLI 6.3: Digitalization of REPN’s budgeting and planning process (software and hardware) with staff trainings is completed Page | 18 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Results Areas DLIs Key Environmental Key Social Risks and Impacts Risks and Impacts DLI 6.4: a) REPN obtained certificates on ISO 27001 Information Management Systems and ISO 14001 Environmental Management Systems. b) Risk management system in REPN is fully aligned with COSO 2004 Enterprise Risk Management— Integrated Framework. DLI 6.5: a) REPN Corporate Strategy 2031 – 2035 is approved; b) Performance contract between regulator and REPN shareholder is developed and adopted with clear baseline data and monitoring system. 12. Key Environmental Risks and Impacts: As summarized in the DLI table above, the key environmental risks and impacts of the proposed Program in relation to the Core E&S Principles of the PforR Policy are associated with the modernization (including construction, rehabilitation and operation) of medium voltage and low voltage lines/cables and distribution transformers throughout the country to be conducted by the REPN. While the proposed civil works will be conducted within a small footprint area mostly along existing alignments of distribution lines, there may be cases where new distribution lines will be constructed for newly developed residential or business areas. The key environmental risks and impacts include the following: 1) Fragmented E&S risk management system in REPN (Core Principles 1) While the proposed civil works will entail minor and site-specific adverse environmental risks and impacts, such as air, soil, water and noise pollution, waste generation, health and safety issues, hazardous waste and loss of natural vegetation, such risks and impacts can be addressed through the implementation of general mitigation measures covered in the REPN’s safety guidelines and national regulatory frameworks. However, the REPN has currently no integrated/dedicated E&S unit which can cover the entire E&S risk management functions (such as the E&S risk assessment, obtaining the environmental permit as per national regulations, protection of worker and community health and safety, management of hazardous materials, stakeholder engagement and GRM). Rather, the REPN’s E&S risk management system is fragmented not only across different units at the Head Office in Tashkent, but also among Head Office, 14 Regional Branches and their District Branches. This may pose implementation challenges to the systematic monitoring, reporting on the relevant E&S measures under the Program (more detailed institutional capacity assessment of REPN is provided in Section 4). The Program will support the REPN in establishing a more systematic E&S risk management structure through the DLI-6, beyond the program-specific implementation arrangement. 2) Tree cutting for the safety of distribution network (Core Principle 2): The adverse impact on natural/critical habitats is not anticipated under the proposed Program which will focus on areas with human settlements. However, stakeholders are concerned about the fast-growing trees that community members unknowingly plant within the safety zone of distribution network, which are causing safety risks to REPN workers and community members. While REPN cannot cut/prune such Page | 19 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) trees without authorization from ecological centers, the Bank team noted the importance of raising community awareness on the safety of distribution networks. 3) OHS/Community health and safety risks, in particular electrocution, fire safety risks and work at height (Core Principle 3) While the proposed Program only supports low-voltage distribution network up to 10kv, workers and community members may be exposed to occupational and community hazards when accidentally contacting with live power lines, when such lines causing fire safety risks and working at height on poles and structures during construction, maintenance, and operation activities. While the REPN has a dedicated safety unit and safety guidelines with systematic training and grading program, the electrocution is the most cause of the serious incidents reported in the REPN followed by fall from height. The site visits by the Bank team also identified some uncontrolled construction sites with inadequate fencing that could cause potential risks to the community (such as heavy machines operating without flagman and excavated trenches left without fencing, signage or lighting). Stakeholder responded that the community safety risks of SEA/SH are considered low, while the work will be conducted in populated areas by a small team of REPN’s own staff. The engagement of contractors with significant number of contracted workers will not be anticipated. 4) Treatment of hazardous chemicals in transformers (Core Principle 3) While Uzbekistan is a signatory of the Stockholm Convention on Persistent Organic Pollutants (POPs) since 2004, it is not anticipated that the new transformers supported by the proposed Program will contain PCB oil. Other Bank-funded projects in the same sector in the country have not identified any significant presence of PCB oils. However, there is potential that outdated old transformers to be replaced by the proposed Program could contain hazardous PCB oils. While the Bank team could not identify any established system in the REPN to handle such hazardous oils, REPN could benefit from strengthening its capacity through applying good international industry practice in this sector, such as WBG EHSG. 13. Potential Social Risks and Impacts: The key social risks and impacts of the proposed Program in relation to the Core E&S Principles of the PforR Policy are also associated with the modernization of medium voltage and low voltage lines/cables and distribution transformers throughout the country to be conducted by the REPN, which include the following: 1) Limited resettlement risks where public/government lands are unavailable or land disputes pre-exist (Core Principle 4) The civil works will be within a small footprint area mostly along existing alignments of distribution lines. The proposed Program will not envisage any compulsory land acquisition and involuntary physical and economic displacement. REPN will only use public or government owned lands wherever possible. The Bank team found that there are limited cases where public or government owned lands are not available and small private lands are necessary to place new electric poles/transformers. In such cases, REPN collaborates with the local community (Mahalla) to identify private landowners voluntarily agree to accept to place the electric pole/transformer on their land with documented evidence. While no grievance has been reported to date in such cases, the proposed Program will confirm the voluntary nature of such agreement to avoid potential community coercion. Also, there are some circumstances where local municipalities granted households land plots with cadastral documentation without adhering to the safety zones established for the distribution network as per national norms. This practice has led to the construction of formal and informal structures by community members within these safety zones, resulting in land disputes and increased safety risks. To avoid such risks, the Program will not support Page | 20 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) involuntary displacement (including demolition) of such formal or informal structures and avoid areas with land disputes, while it might entail partial re-routing of the network. 2) Inadequate inclusion of vulnerable groups in program benefit and stakeholder engagement processes (Core Principle 5) The proposed Program will be prepared and implemented in close collaboration with local community organisations (Mahallas) and Khokimiyats. While community members confirmed that they are well informed of REPN’s work and grievance channels through REPN’s district branches (through various communication channels including telegram app), the current community engagement seems to be rather ad-hoc without documented record. Stakeholder engagement is done through providing information, while receiving feedback from the community is limited. The REPN will benefit from strengthening its stakeholder engagement program which should include public hearing for the EIA and community awareness on network safety. No particular exclusion risks were identified during the mission, including for female stakeholders. The REPN is currently implementing a Gender Action Plan supported by the ADB, which promotes the gender inclusion and equality in the institution. 3) Functionality of the case management system (Core Principle 6) The REPN and its regional branches have an established and well-functioning case management system supported by a specialized unit with case management procedures and uptake channels (such as portal, email, toll free number, telegram messaging and chat groups) whereby they received and managed over 23,500 cases in the first five months of 2024 (key cases include disruption of services, request for replacing poles and transformers for safety and capacity). The country’s President Office has its own grievance system which covers all public institutions and oversees and monitors the case management and resolution by each institution with appeal process. While the number of cases are already significant and the case management systems are not fully integrated, there is a risk that not all cases are addressed and reported in a timely and integrated manner. B. Potential E&S risks and impacts under the Expenditure Program 14. The Program Expenditure Framework (PEF) will focus on budgeted expenditures that support REPN’s investment program (mainly for DLIs 1-4) and associated payroll costs. The Table below presents the REPN’s expenditure program and incremental expenditures by budgetary program. No additional E&S risks and impacts have been anticipated under the Expenditure Program beyond what has been assessed for DLIs/DLRs above. 2025 2026 2027 2028 2029 Total (i) Supply and installation of cables/conductors and 7 8 15 15 15 60 associated materials for 0.4kV network new construction and modernization including payroll costs (ii) Supply and installation of cables/conductors and 4 8 8 10 10 40 associated materials for 6-10kV network new construction and modernization including payroll costs (iii) Supply and installation of 10-6kV/0.4kV transformers 4 4 4 4 4 20 including payroll costs (iv) Supply and installation of smart meters including payroll 4 4 4 4 4 20 costs (v) Supply and installation of concentrators including payroll 1 1 2 2 2 8 costs Page | 21 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) (vi) Institutional reform and capacity building including 0.5 0.5 0.5 0.3 0.2 2 payroll costs Total 20.5 25.5 33.5 35.3 35.2 150 Page | 22 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 3 LEGAL AND REGULATORY FRAMEWORK FOR MANAGING THE PROGRAM’S ENVIRONMENT AND SOCIAL IMPACTS 15. Overview of the country’s E&S framework: Since the country's independence, the Republic of Uzbekistan has developed national environmental legislation, and adopted new laws and regulations together with a number of programs and action plans to address environmental issues and promoted sustainable use of natural resources. The country has adopted several subsidiary laws and legislation on environmental management and is a party to series of international and regional environmental agreements and conventions. The country also has the nature protection policy and the implementation of measures in the field of rational use of natural resources and environmental protection are ongoing. On the social side, the country has developed relevant legal and regulatory frameworks which cover key social issues, including land acquisition and resettlement, labor and working conditions and social inclusion and sustainability. Below is the concise assessment of the country’s E&S legal and regulatory framework on the six core principles under WB’s PforR Policy, which are deemed applicable to the proposed Program. Annex 3 provides the detailed analysis of these E&S frameworks, including its strengths and challenges, which was prepared in the context of an IPF project in the same energy sector of the country (Electricity Sector Transformation and Resilient Transmission (ESTART) Project (P171683) and other relevant assessments of the national E&S systems by the Bank. Management of E&S Sustainability, Risks and Impacts (relevant to Core Principle 1) 16. The Law on Environmental Protection No 754 (1992 and amended 2021) establishes the legal and organizational framework for environmental protection in Uzbekistan. It covers issues such as environmental impact assessments, waste management, and pollution control. Article 24 of this law states that the State Environmental Expertise (SEE) is a mandatory measure for environmental protection, preceded to decision making process. In addition, the law prohibits the implementation of any Project without approval from SEE. The national Environmental Impact Assessment (EIA) procedure is principally required and regulated by the Law on Environmental Expertise No.73-II of 2000 (as amended 2021). The Uzbekistan EIA requirements are set forth within the Resolution № 541 of the Cabinet of Ministers on Procedure of EIA Mechanism that function as regulations. The Resolution serves as the key regulation supporting the Law on Ecological Expertise that provides for mandatory expert assessment of impacts on the environment and human health, as well as a legal basis for conducting assessments. 17. Risk Categorization: According to the Resolution № 541, all environmental protection activities are divided into 4 categories with varying degrees of impact: • Category I – “high risk� of environmental impact (SEE is conducted by SUE "Center of State Environmental Expertise" within 20 days, all stages of EIA are required); • Category II - "average risk of environmental impact" (SEE is conducted by the Center of State Environmental Expertise within 15 days, all stages of the EIA are required); • Category III - "low risk of impact" (SEE is conducted by regional branches of SUE "Centre of State Environmental Expertise" within 10 days, all stages of EIA are required); • Category IV - "minor impact, local" (SEE is conducted by the regional branches within 5 days, only the first stage is required, Draft EIS). • Activities not explicitly included in the categorization list are still subject to SEE. The specific category for such activities is determined by the Center of State Ecological Expertise, based on materials Page | 23 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) submitted by the project proponent or conclusions drawn from an on-site examination conducted by the relevant authority. • The regulation does not explicitly categorize transmission lines based on their voltage levels but instead considers the scale of the project (national, regional, or district level). Consequently, activities under this Program involving the construction and rehabilitation of medium voltage (10 and 6 kV) and low voltage (0.4 kV) power transmission lines are not explicitly listed in the categorization framework. To address this gap, additional clarification was sought from the Center of State Environmental Expertise. The Center has confirmed that the activities supported under this Program fall under Category III (“low risk�) and must comply with the corresponding requirements, including conducting all stages of the Environmental Impact Assessment (EIA). 18. SEE Conclusion: According to point 24 " SEE regulations ", the positive conclusion of SEE is a mandatory document for the opening of financing by banking and other credit institutions and the execution of legal entities and individuals of the implementation of the object of state environmental impact assessment. The SEE conclusion is valid for three years from the date of its issue. SEE conclusion is sent to the relevant district (city) inspectorates for ecological and environmental control during construction and operation. 19. Public participation in EA process. The Constitution of the Republic of Uzbekistan (arts. 50.55) lays the foundation for the participation of citizens and public associations in environmental management. The Law "On nature protection" in Articles 12-13 regulates the right of citizens to unite in public organizations for nature protection, to request and receive information about the state of the environment and measures taken for its protection, as well as the authority of NGOs established. Legislation in the field of ecology and environmental protection provides for public participation as a) an individual citizen or a group of citizens; b) through citizens' self-governance bodies and c) through non-governmental non-profit organizations. Also, Resolution № 541 includes requirements for organizing public hearings, which are mandatory for Category I and II activities. The resolution outlines the procedure for conducting public hearings on national EIA results to discuss and address the negative environmental impacts of intended, planned, or implemented activities. Although conducting public hearings for Category III and IV activities is not mandatory, the Center of State Environmental Expertise has strongly recommended that public hearings be conducted for this Program. This recommendation aims to ensure transparency, stakeholder engagement, and the integration of public concerns into the decision-making process. Natural Habitats and Physical Cultural Resources (relevant to Core Principle 2) 20. The Law "On Protected Natural Areas" (2004): The purpose of this Law is to regulate relations in the field of organization, protection and use of protected natural areas. The main objectives of this Law are preservation of typical, unique, valuable natural objects and complexes, plant and animal genetic fund, prevention of negative impact of human activities on nature, study of natural processes, monitoring of natural environment, improvement of environmental education and upbringing. 21. The Law "On the Protection and Use of Wildlife" (1997): The law regulates relations in the field of protection, use, restoration and reproduction of wildlife in order to ensure the conditions for its existence, the conservation of species diversity, the integrity of natural communities and habitats. 22. The Law No. 269-II of 2001 on protection and use of the objects of cultural heritage: The purpose of this Law is to regulate the relations in the field of protection and use of the objects of cultural heritage that are the national property of the people of Uzbekistan. Page | 24 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Public and Worker Safety (Relevant to Core Principle 3) 23. Legislation related to Labor, Working Conditions, and Occupational Health and Safety exists in Uzbekistan, including core legislative acts such as the Constitution of the Republic of Uzbekistan, Labor Code, Law on Occupation Safety. Uzbekistan is also a signatory to several international treaties and has ratified various International Labor Organisation (ILO) conventions including the Convention on Forced Labor, Freedom of Associations and Protection of the Right to Organize, Collective Bargaining, Equal Pay, Discrimination, Minimum Working Age and Child Labor. In recent years, Uzbekistan has undertaken regulatory labor and occupational health and safety reforms, including introduction of amendments to the Labor Code of Uzbekistan. 24. The Constitution (1992, latest amendment in 2023) of Uzbekistan stipulates basic principles of employment. Everyone has a right to decent work, freedom of choice of their occupation, fair working conditions in terms of safety and hygiene, fair remuneration not below the established minimum wage and without discrimination. (Article 42) Women are expressly protected from refusal of being hired or paid less due to their gender, pregnancy or the fact of having a child (Article 42). The Constitution also sets out the requirement for the workers to have rest time during the working hours as well as paid annual leave. (Article 45) Forced labor is prohibited, except for instances when it is part of the punishment as per the court decisions or other instances specified by the law. (Article 44) It also stipulates that trade unions express and protect the social and economic rights and interests of workers. Membership in trade unions is voluntary. (Article 73). Labor Code (1995, latest amendments in 2022) of Uzbekistan sets out the core principles regulating individual labor relations and labor rights. The Labor Code covers basic labor standards by setting requirements to have written contracts in place, regulation of normal working hours, defining overtime and its respective remuneration, establishing a minimum wage and equal payment without discrimination. It also provides for the annual leave, daily and weekly rest for workers as well as prohibition against forced labor, including forced child labor, by setting a minimum age for employment. 25. Labor Inspectorate: In Uzbekistan, the agency tasked with ensuring compliance with labor regulations and standards is the Labor Inspectorate, which is part of the Ministry of Employment and Poverty Reduction. Presently, this agency faces considerable challenges due to its limited operational scope and the constrained human and financial resources available to it. These limitations hinder its ability to enforce labor laws effectively, often possibly leading to inadequate adherence to regulations that are crucial for maintaining safe and fair working conditions. 26. Safety regulations specific to electricity sector: The Resolution No. 638 (2020) “On the Approval of Technical Safety Rules in the Operation of Electrical Devices� and the Resolution No. 712 (2020) “On the approval of the rules for the technical operation of consumer electrical devices and the rules of safety techniques for the operation of consumer electrical devices� establish comprehensive work safety measures for personnel performing operations on transmission lines. These resolutions outline protocols to ensure the safety of workers, including specific measures to mitigate risks associated with electrical equipment, transmission line maintenance, and repair activities. The Resolution No. 1050 (2018) “On Approving the Rules for the Protection of Electrical Network Facilities� sets forth safety provisions concerning the establishment of protected/buffer zones around transmission lines. These provisions are designed to prevent encroachments and mitigate risks to infrastructure and public safety. Additionally, the Sanitary Norms SanPiN No. 0236-07 “On Ensuring the Safety of the Population Living Near High Voltage Overhead Power Transmission Lines� specifies requirements for Page | 25 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) sanitary-buffer zones. These norms aim to safeguard public health by defining minimum distances that must be maintained between transmission lines and residential areas, ensuring safety from electromagnetic fields and other potential hazards. Management of Land Acquisition and Involuntary Resettlement (relevant to Core Principle 4) 27. As per the Land Code, land in Uzbekistan is categorised into 8 different types 1) land for agriculture, 2) land for urban and rural settlements, 3) land for industry, and other purposes, 4) land for nature protection 5) land with cultural/historical importance 6) land of forest fund, 7) land of water fund, and 8) land of reserve fund. Depending on the land category, different set of public institutions are responsible for their governance and management as well as for inter- agency coordination when more than one land type is involved. Most land categories remain under state ownership. Agriculture land is state-owned and allocated only based on non- transferable lease rights, while efforts are on towards a phased privatization of non-agricultural land. In recent years, the Government of Uzbekistan has been working on various land reforms and attempts have been made to transfer ownership of certain land categories to individuals and legal entities; these reforms are underway to recalibrate land governance and use it as a key driver of growth for the country. 28. Owing to high state ownership and low awareness about tenurial rights, especially in the rural areas and among rural communities, apprehensions about tax liabilities related to property registration, only three-fourth of the public lands and only two-thirds of urban properties have formal registration, leading to high informal ownership and use of such properties. In addition, the procedure for legalisation of such properties is non- standardized and cumbersome, which makes the owners/ users of such properties even more vulnerable to state action and alienation. Inclusion of Vulnerable Groups (relevant to Core Principle 5) 29. Gender gaps: In the last few years, Uzbekistan has managed to close some gender gaps in social and political participation, but several significant gaps still persist. The gender gap in labor force participation is still about 33 percent (WDI, 2022); participation of women in employment and their achievement on human development indicators still lags behind comparable middle-income countries. The existing definition of sexual exploitation and abuse and sexual harassment (SEA/SH) at workplace and does not provide for prohibition of discrimination based on sexual orientation or gender identity, which leads to poor identification of such risks and their prevention. Sexual harassment at a workplace is also not covered by the existing Labor Code. While various laws prohibit sexual harassment against women, there is no uniform prohibition on sexual harassment against women and men, and legal or other remedies are not easily accessible to the victims. Lack of state-sponsored skilling support to women also denies them access to livelihood earning opportunities and skills relevant to the markets. Recognition of women as a distinct constituency, with their own unique needs is absent from most national policies and hence remains invisible within the operating policy environment. Women also face obstacles in accessing justice, particularly in cases of gender-based discrimination. Barriers such as lack of legal awareness, limited access to legal aid, and societal stigma hinder women from seeking redress through the legal system. 30. Persons with disabilities experience challenges in accessing employment due to stigma, lack of accessibility, and possible discriminatory attitudes among employers. While there are specific policies in place to ensure inclusive employment especially with regards to women and persons with disabilities (PwDs), the enforcement and its monitoring is weak. The use of informal workers, especially in the agriculture and private Page | 26 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) sector, is very widespread. Most informal workers belong to the poor and vulnerable groups (often rural communities) and due to weak regulatory mechanisms to secure compliance with labor laws their use is rampant. The use of forced and child labor has traditionally been high in the country, although in recent years the country has done commendable work to eliminate such labor from the cotton sector where their use was rampant. However, there are other sectors and industries where child labor persists even though legally prohibited. There is lack of orientation on the social-legal aspects related to use of forced and child labor among the enforcement agencies and their capacities to identify their deployment is weak; this combined with the lack of real powers to take disciplinary action against such employers means that their use goes unchecked. Avoidance of exacerbating social conflict (relevant to Core Principle 6) 31. Uzbekistan’s navigation from its post-Soviet trajectory has been eventful, particularly in terms of community engagement and governance. The gradual transition from a centrally planned system to one that emphasizes transparency and community involvement is significant. Efforts to empower local institutions like Mahalla Committees are crucial for fostering community-driven development initiatives. While Uzbekistan may still need to take steps to fully embracing proactive engagement with public stakeholders, the recent initiatives aimed at enhancing governance and accountability are promising steps forward. Since 2017, there has been a perceptible change in the legal environment related to public participation and citizen engagement through the introduction of several laws and resolutions that mandate public participation, make provisions for the conduct of open meetings and public hearings in matters related to the roll-out of development projects that have beneficial or adversarial impact on local communities to inform the community about the proposed projects and seek their feedback and suggestions. People’s Reception Offices of the President of Uzbekistan have been opened at various tiers of the government as well as Virtual Reception to receive appeals and grievances from the citizens and to ensure their consideration by various state bodies and organisations. 32. However, despite all these steps, most laws and policies do not provide for full participation and seek meaningful and effective engagement. As a result, stakeholder engagement, in most cases, remains limited to an exercise of token presence of community representatives in meetings/ hearings, and their feedback is not necessarily considered during project design or site selection, and the impacts are not adequately scoped during the identification of mitigation measures. Page | 27 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 4 INSTITUTIONAL CAPACITY ASSESSMENT FOR MANAGING THE PROGRAM’S ENVIRONMENT AND SOCIAL EFFECTS Implementing Agency 33. Regional Electrical Power Networks JSC (REPN): The government of Uzbekistan has been undertaking major reforms in the power sector. Industry oversight functions have been consolidated into the Ministry of Energy (MoE), that was established in February 2019. In March 2019, a resolution of the President of the Republic of Uzbekistan was adopted on the creation of three separate companies on the basis of the abolished «Uzbekenergo» JSC for Generation («Thermal Power Plants» JSC), Transmission («NGU» JSC) and Distribution («Regional electrical power networks» JSC (REPN)). REPN was established with responsibilities to distribute and sell electricity to end users. REPN holds 14 provincial electricity distribution subsidiaries (“Regional Branches�), which are supported by in total 210 District Branches. The main key tasks assigned to REPN are: (a) management of enterprises of territorial electrical networks that distribute and sell electrical energy to end consumers; (b) ensuring safe and reliable operation of distribution networks and meeting consumer needs in ensuring uninterrupted supply of electricity; and (c) implementation of measures for the reconstruction, modernization and development of electrical distribution networks. 34. REPN’s experience with international development projects: ADB has supported REPN in implementing a series of institutional reform actions since its foundation. These actions include high-level policy dialogue, the development of a corporate operational efficiency improvement plan, a long-term investment master plan, and a strategy for public–private partnership. REPN is the executing agency of the ADB-funded Uzbekistan Distribution Network Digital Transformation and Resiliency Project. With experience in implementing and completing the ADB-funded Advanced Electricity Metering Project, REPN is experienced with ADB policies and regulations, while the proposed Program is the REPN’s first experience with the WB. 35. REPN’s E&S Capacity: While REPN has currently no integrated/dedicated E&S unit which would cover the entire E&S risk management functions, there are several key units in HQ and Regional/District Branches which are responsible for managing relevant E&S issues, such as worker and community health and safety, hazardous materials, stakeholder engagement and GRM. The following units of REPN have relevant E&S risk management responsibilities: 1) Project Implementation Unit (PIU): A project implementation unit (PIU) has been established within REPN and staffed with eight officers (REPN’s own staff and consultants), including project coordinator, an environmental specialist (part-time), FM, procurement and other relevant specialists who are tasked to support ADB’s project implementation. 2) Reliability and Safety Unit: The Safety unit has four staff in REPN HQ, which is responsible for both work safety as well as reliability of electricity equipment (such as disruption monitoring, analysis and investigation). Each Regional Branch has 4-8 staff in their safety units, under which each District branch has one person in charge of managing safety issues. In total, REPN has 280 safety staff. Safety staff team is using their own Telegram messaging app for information sharing and awareness raising (such as sharing reports, photos and case management). The safety unit is closely working with HR unit to provide safety training to staff. Pursuant to Cabinet Minister Resolution 608, energy sector is mandated to provide safety training of 68 hours per year (8 hours per month). They conduct annual OHS exams for workers to grade them into five grades from apprentice level of 1 to managerial level of 5. There are 500 staff with grade 5 (not all is assigned as “safety staff�). Safety unit heads are Page | 28 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Grade 5 and managerial level who can assign safety staff to work. The treatment of hazardous transformer oil (PCB oil) is not covered by this Unit. The table below indicates the total number of recent accidents (including fatality) that reported in REPN from 2022-2024 (including all Regional Branches). According to the Safety Unit, accidents with medium/low voltage networks are very limited (note: REPN’s work includes higher voltage networks and substations that would entail higher safety risks). According to REPN, 70% of the fatal incidents were electrocution, while other 30% include fall from height and traffic incidents. According to the analysis of the Safety Unit, 90% of fatal incidents were caused when the workers were trying to rush the work quickly while other 10 % were over-confidence of workers. The safety unit also meets with the family of staff members to raise awareness that stress at home can cause incidents at work. Year Total number of accidents fatality reported in REPN 2024 22 18 2023 21 14 2022 15 10 3) Capital Construction Unit: Capital Construction Unit has six staff in REPN HQ. REPN has about 1,000 staff in Regional and District branches for construction work. They have necessary equipment, machinery and capacity to undertake construction tasks. The Safety Unit provides necessary safety training and instructions for the construction staff. The anticipated labor use for the Program depends on the type of work. For example, replacing a transformer will require two staff at site for half a day, while replacement of a pole will need 7-8 staff and special machinery at site. The labor use of replacing cables depends on the length, etc. While the REPN already has necessary staff and machinery for the civil work, the Program will only help procure materials such as cables, poles and transformers. They don’t anticipate any considerable challenges and risks in civil works for low- voltage distribution network. Mitigation measures for electrocution and work at height are well managed. Community safety measures are also implemented, such as fencing and use of sign board. Training programs address various HSE issues, including safety measures, newly adopted legislation, and project-specific safety aspects. Training is conducted regularly, with Tashkent office employees visiting regional offices to provide targeted training sessions. These programs ensure compliance with HSE standards and enhance workers’ safety knowledge, positively impacting their salary upon successful completion of training and testing. Staff is regularly tested and graded on safety expertise in five grades. Staff are incentivized to obtain higher grade with substantial salary increase. 4) Project and Construction Expertise Unit: Responsible for designing and preparing the construction work (such as site selection, scope of works, obtaining necessary permits and coordination with host communities). According to this Unit, no EIA has been required so far as per the prevailing decrees and regulations. Regarding resettlement, public lands are used for distribution lines. While economic impacts such as crop losses on agricultural lands are carefully avoided, any damages are compensated by the REPN (or construction contractors if they are mobilized). 5) Production and Technical Service Unit: Responsible for technical services. There is no dedicated training and safety measures for handling potentially hazardous chemicals like SF6, PCB oils. Each regional branch has designated storage facility. Page | 29 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 6) Case Management Unit: Case Management Unit has five staff in REPN HQ (including two female staff); 4-5 staff each in 14 Regional Branches; one staff each in 210 District Branches. REPN received 79,304 cases from January to September in 2024. The following table indicates the type of cases, appeals and grievances that REPN received from individuals and legal entities in the months of January-September 2024. Many cases are related to community requests to replace outdated poor quality electric poles and transformers installed 20-30 years ago, which are REPN’s current significant workload. For example, old poles are causing safety issues for the communities, or outdated transformers do not have adequate capacity to serve new buildings. Other types of cases include complaints about electric bills and connection issues. Previously, the electricity meters were the main cause of complaints. Based on the Resolution Nr. 341 of Cabinet Minister, REPN has established case management system with multiple uptake channels, such as Portal, email address, hotline number and telegram messaging app. Anonymous complaints can be submitted to email and website. According to REPN, telegram channel is particularly useful for the communities. Anyone can join the chat group and can directly communicate with the Admin who is the REPN staff. REPN’s management is also included (such as chairperson and head of branches). Each regional and district branch are using such telegram chat group to engage stakeholders, including for announcement of REPN works, awareness raising and grievance redress. Type of cases/appeals/grievances received by REPN Number (Jan-Sep 2024) 1. Poor quality supply of electricity (shutdown) 35,224 2. Construction, connection and installation of electrical network 15,442 3. Moving and repairing poles and electric wires near the yard 10,086 4. Inquiries on documents and debt 7,403 5. Electric meter installation 5,271 6. Dissatisfaction with employee behaviour 1,315 7. Employment and requesting information 374 8. Salary and financial aid (financial problems) 113 9. Other appeals 4,076 TOTAL 79,304 (100%) Resolved appeals 76,894 (97%) In process 2,410 (3%) 7) Press Secretary: Press secretary and media/community engagement officers in Regional and District branches engage with their consumers and community members through various social media channels such as Telegram app, TikTok, Instagram and Facebook and website (het.uz). The Media Unit in REPN HQ has two media officer while each Region has one media officer. While REPN does not conduct formal two-way consultations with the community, the capacity of REPN’s media officers can be strengthened to manage community engagement activities for the Program. 8) REPN’s Regional and District Branches: REPN has 14 Regional Branches which are responsible for the construction and O&M works of the distribution network. As with the Head Quarters in Tashkent, there are dedicated staff for Capital Construction, and separate team for Safety and Reliability in the regional offices. Below is the summary of key feedback from Namangan and Khorezm Regional Branches as well as the Regional State Ecological Expertise Centers which the Bank team visited in July 9-12 2024. Page | 30 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Key Feedback from Namangan and Khorezm Regional Branches of REPN Capital and current repairs • REPN’s Multi-year plan from which an annual plan is derived. Based on the annual plan, a monthly plan is created. Typically current repairs are conducted every 6 months, and capital repairs every 3 years. • No contractor will be required for the Program. • Contractors are selected through transparent tender processes if the internal workforce is insufficient. Local enterprises are primarily engaged as contractors. This process ensures that the best-qualified contractors are chosen, promoting fairness and quality in project execution. Contractors are closely monitored by technical supervision teams and acceptance commissions to ensure compliance with safety and quality standards. These teams conduct regular inspections and audits to maintain high standards. Energy Sector Inspection “O’zenergoinspeksiya� • O'zenergoinspeksiya, under the Ministry of Energy, inspects and provides conclusions after project completion. They may conduct inspections based on raids and can involve the prosecutor's office. Safety compliance is checked and reported legally. HSE system (Based on Cabinet of Ministers Resolution No 608 from 2022) Namangan Regional Branch • According to the Labor Code, there must be one labor protection employee for every 50 workers. Namangan region has 75 crews, each with 5-6 workers. • Annual needs for protective equipment goods and materials are determined, including a 5% reserve for the autumn and winter seasons. Requests from all city/district levels are consolidated and sent to the Republic's regional electric networks. • OHS Management System: The central office maintains an Occupational Health and Safety (OHS) Management System, which forms the basis for internal regulations. Work permits are obtained for task execution, and the permit system has been further improved. The work permit system for work execution has been enhanced to ensure all safety protocols are followed rigorously. Each working group has a master who is responsible for organizing the work and ensuring safety on-site. • Construction Safety: Eight responsible persons are assigned during construction. Work plans are created daily and approved by the chief engineer. Health checks for hazardous job workers occur every 2 years, and for crane operators, annually. Electrical safety is divided into five groups based on qualifications, with Group 1 being the least qualified and Group 5 the most. Annual knowledge checks are conducted in accordance with Resolution No. 608. Contractors appoint safety responsible persons. • The Reliability and Safety Service is responsible for HSE management during the renovation of existing transmission lines and the construction of new ones. This includes ensuring all safety measures and regulations are strictly adhered to, with a particular focus on coordinating closely with on-site masters and safety engineers. Each of the 14 districts has a safety engineer, responsible for fire safety, technical safety, fire safety equipment, and labor protection. Weekly technical safety training is conducted based on central office instructions. This department coordinates with on-site masters and safety engineers to organize works and enforce safety measures. Each workgroup has a designated master responsible for organizing the work and ensuring safety on-site. Khorezm Regional Branch • Project Development: Technical task of a project is developed and handed over by the technical specification department to the project department. The projected electricity line corridor is approved in collaboration with district and city architecture offices. The transformer area is coordinated with relevant organizations, such as gas, electricity, and water authorities, and finally approved by the architecture office. Page | 31 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • Safety measures are integral to the production project creation process. These measures are outlined in the project documentation and include protocols for handling hazardous materials, ensuring worker safety, and protecting the environment. • Work Permits are issued for each job, and a supervisor is appointed. The supervisor is responsible for ensuring safety. Depending on the scope of work, two or more individuals work in a group. • Specific safety measures during construction and renovation works include double-checking the absence of voltage before starting work, organizing work permits, and ensuring that dispatchers shut down the objects for work. Workers are provided with appropriate PPE, and safety instructions are documented in log books. Safety engineers at district offices and the Tashkent office conduct regular training and safety checks to enforce these measures. • Employees undergo annual exams to ensure they are qualified and capable of performing their duties safely. Personal protective equipment (PPE) is ordered and distributed centrally to ensure all workers are properly equipped. Centralized orders for PPE and other safety equipment ensure consistency and compliance with safety standards. This process is overseen by the safety department. • A state working commission is established to launch and use state electricity facilities. This commission oversees the entire process from project initiation to completion, ensuring all environmental and safety regulations are adhered to. • Job descriptions within the organization include HSE responsibilities. For example, masters within each workgroup are responsible for organizing work and ensuring safety measures are followed. Safety engineers at district offices conduct regular safety trainings and inspections, and the reliability and safety service oversees the overall HSE management. • The budget for HSE support is allocated based on requests from regional offices and is managed by the procurement team. Safety departments oversee PPE requests, and funds are utilized to purchase necessary safety equipment. The budget planning and management process involves coordination with the safety department to ensure all safety needs are met. • Training programs address various HSE issues, including safety measures, newly adopted legislation, and project-specific safety aspects. Training is conducted regularly, with Tashkent office employees visiting regional offices to provide targeted training sessions. These programs ensure compliance with HSE standards and enhance workers' safety knowledge, positively impacting their salary upon successful completion of training and testing. EIA process • Process: The Environmental Impact Assessment (EIA) process involves a thorough evaluation of the environmental impacts of high-voltage line construction projects. Technical documentation for high- voltage lines undergoes EIA before construction, while low-voltage lines typically do not require this process (within their past experience). Project environmental experts are selected based on advertisements, and they prepare environmental projects and obtain ecological conclusions. • Project Categorization: Current projects affecting the population are given a Category 3 environmental impact rating. For hospitals and categorized objects, it is Category 2. Organizations obtain technical specifications from regional electric networks, including UPS and diesel generators. Also, current capital construction projects do not include inter-district lines but focus on district and city scales, which is categorized as Category III of environmental impact. • Impact Mitigation: Routes passing through residential areas are changed or rerouted to minimize impacts. Consultations with businesses are held to discuss working hours, pedestrian flow, and temporary pathways. Measures are taken to minimize the impact to business processes. Projects are coordinated with local authorities, sewerage, gas, and other infrastructure services before construction. • No projects did go through the state environmental expertise process in the past five years. Tree cutting Page | 32 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • During construction and reconstruction activities, tree cutting is avoided wherever possible. The planning phase involves developing multiple route options to select the most convenient and least environmentally impactful route. • If tree cutting is necessary, appropriate permissions are obtained. The process includes adherence to regulations aimed at minimizing environmental impact. If trees need pruning, it is done according to ecological procedures, with prior notification. Written information is provided to regional landscaping departments. Regional electric networks also announce it on social networks. Protected Areas and Cultural Heritage • Projects involving protected areas are managed with careful planning to avoid any harm. If the project requires crossing protected areas, strict compliance with environmental regulations is ensured. Past experiences have shown that transmission lines are often laid underground, and transformers are placed in non-visible locations to preserve the visual integrity of cultural objects and protected areas. • There are no internal procedures on chance finds. So far, no cases of chance finds have been registered. Hazardous materials • Namangan: Transformer oil usage regulations are based on local legislation and standards. A yearly schedule is made based on capacity. Transformers with 6-10 kilowatt capacity are tested every 6 years. Sampling and testing are conducted by responsible teams and laboratory chemists. If oil quality does not meet standards, it is regenerated within oil regeneration stations. Old oil which cannot be regenerated is collected and sent to the To'raqorgon oil base for disposal under contract and payment. • Khorezm: Samples of transformer and oil and circuit breaker oils are periodically taken for laboratory analysis. If the oil does not meet standards, it is replaced by the responsible entity. Replaced oils are regenerated in Shovot district branch of REN using mobile equipment. Used oil is collected centrally within the underground tank and sent to the Regional oil base for disposal under contract and payment. Emergency preparedness • A special section forms volunteer teams for emergency management, with technical training conducted twice a month. • Emergency situation management is integrated into the design and construction process through emergency and natural disaster management plans developed by the Project Development Unit. Areas for Improvement (as suggested by Regional Branches) Namangan Regional Branch • There is a shortage of equipment for working on pole transformers (TP). Due to weather conditions (rain, snow), mast TPs may quickly fail. Issues with grounding due to children playing can increase accidents, leading to more incidents in residential areas. Older TPs are more convenient and advantageous in terms of service and operation. • Protected/Buffer Zones Requirements: To enhance the standards for protected zones around electrical lines, including guidelines for tree planting, and increase accountability for non-compliance with the Resolution of Cabinet of Ministers No. 1050 (2018). Consider imposing taxes if fast-growing trees are planted outside cadastral boundaries. Currently, there is a problem where individuals or governmental authorities may plant trees, especially fast-growing ones, within the protected zones of electricity lines. This can lead to damage of electricity lines and potential electricity shortages. More frequent pruning requires additional financial and technical resources and workforce, which are not always available. Khorezm Regional Branch • The submission to the O'zEnergoinspeksiya is made through a formal letter. The possibility of sending it in electronic form should be considered. Recommendations from Namangan and Khorezm Regional State Ecological Expertise Centers • Submitting project documents to the state environmental expertise for approval , adhering to tree- cutting moratoriums, and considering green economy requirements. Page | 33 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • Projects should include waste management plans and engage in public hearings to prevent misunderstandings and conflicts. Other institutions relevant to E&S risk management 35. Ministry of Energy: The Ministry of Energy regulates the production, transmission, distribution and consumption of electric and thermal energy, coal, as well as extraction, processing, transportation, distribution, sale and use of oil, gas and their products. The Ministry of Energy has a number of objectives, including: (i) Regulation of the energy sector; (ii) Implementation of production sharing agreements and supervision of their execution; (iii) Development of PPP (public-private partnership) arrangements; (iv) Improving the tariff policy to facilitate the formation of a competitive business environment, increasing and diversifying energy production; (v) Implementation of modern corporate governance in the energy sector, including taking into account the World Bank's proposal to optimize production processes. REPN is under the general supervision of the Ministry of Energy. 36. Ministry of Ecology/State Ecological Expertise Center: The national EIA procedure is regulated by the Law "On the Environmental Examination" and the Regulations "On the State Environmental Expertise" (SEE). The Resolution specifies the legal requirements for EIA in Uzbekistan. The special authorized state body is the State Ecological Expertise Center under Ministry of Ecology. The State Ecological Expertise Center confirmed that this Program will fall under Category III as per the national EIA law where the Regional Branch of REPN shall submit the required project documentation (including the EIA) to the Regional Ecological Expertise Center prior to civil works for approval. REN needs to submit the relevant information including EIA to the Center for review and decision in advance of commencement of activities for each scheme. Monitoring of implementation is undertaken by field offices based on Uzbek legislation on environmental monitoring. Regions have expertise officials, and each district has monitoring inspectors that undertake site visits, and report back regarding the implementation of EIA clearance conditions. The regional office consolidates the reports from such visits, and the consolidated report is available in the Central office. 37. Ministry of Labor/State Labor Inspection: State Labor Inspection has in total 366 labor inspectors (17 inspectors in HQ; 10 each in 14 Regional offices; and one each in 209 District office). In case of labor inspection of civil work sites, the inspector goes to the site when the civil work has been completed. The inspectors also conduct planned inspections and organize seminars for training and knowledge sharing purposes. In the case of worker incidents in REPN, “Uzenergonadzor� which is the higher regulatory authority of the sector, will chair the incident investigation commission. Uzenergonadzor will analyze the technical aspect, while the labor inspector will review the organizational side, such as safety measures (including use of PPEs), safety instructions and trainings to workers, and worker contracts. Resolution #60 of Cabinet Ministers provides for remedial measures for incidents, such as payment of one year wage and medical/prosthetic support for disability, payment of six- year wage for fatality. There is also provision for workers under 18 years old. The labor inspector reviews the compliance of these measures by the employer, including labor conditions (such as rest). State labor inspection has different uptake channels, including verbal, written, electronic. They have a call center, platform and telegram channel. We work together with other authorities including law enforcement. They monitor the announcement or news and respond to them on these media tools. Typical complaints include no provision of days off, illegal termination of work. 38. Cadaster Agency: The Land Code established principles for land use in Uzbekistan. Article 12 of Land Code prescribes that the Ministry of Agriculture and Cadastre Agency are responsible for land management. The key functions of the Cadastre Agency include implementation of the policy related to state registration of property Page | 34 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) rights; maintenance of cadastral data on land and buildings; land supervision to prevent unauthorized land grabbing; maintenance of the state cartographic and geodetic cadastre, as well as unified system of state cadastres; implementation of cadastral supervision, compliance checks and acceptance of buildings/structures and formation of a unified address registry. In total, the Land Administration system of Uzbekistan employs 8,000 people. The Cadastre Agency has limited capacity to meet the heavy demand for cadastral services, including nationwide registration. While the proposed Program does not anticipate and land acquisition and physical and economic displacement, Cadaster Agency will not have a direct role in the proposed Program. 39. President Office: President’s office runs a nation-wide grievance management system. REPN is also receiving cases via this system. They monitor the handling and resolution of cases. Unsatisfied grievance at agency level can appeal to the President’s office. The case management systems in President’s office, REPN HQ and Regional branches are not fully integrated and partly duplicated. But we are collaborating with each other. 40. Mahallas and Khokimiyat: Mahallas are community-level network, while Khokimiyats are district and regional level government entities. REPN’s regional and district branches seek input from Mahallas and Khokimiyats to design the local-level distribution network projects. Mahallas and Khokimiyat play the key role in engaging local communities throughout the entire process of the Program. Page | 35 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 5 COMPARATIVE ANALYSIS OF BORROWER E&S SYSTEM AND WORLD BANK CORE PRINCIPLES 41. Based on the key findings of the borrower’s E&S systems assessment highlighted in the previous sections, this section presents the comparative analysis organized by each of the six Core Principles outlined in Bank Policy and Directive for Program-for-Results Financing. More specifically, this section: (i) examines the relevance of each Core Principle to the proposed Program; (ii) highlights key findings from the E&S systems assessment (including legal/regulatory framework and institutional capacity) presented in the previous sections, including on the strengths and weaknesses of the current system; and (iii) proposes gap-filling/mitigation measures to ensure that the Program is managed in a manner consistent with the Core Principles of the Bank’s PforR Policy. Core Principle 1: General Principle of Environmental and Social Management Bank Policy for Program-for-Results Financing: Environmental and social management procedures and processes are designed to (a) promote environmental and social sustainability in Program design; (b) avoid, minimize or mitigate against adverse impacts; and (c) promote informed decision- making relating to a program’s environmental and social effects. Bank Directive for Program-for-Results Financing: Program procedures will: ▪ Operate within an adequate legal and regulatory framework to guide environmental and social impact assessments at the program level. ▪ Incorporate recognized elements of environmental and social assessment good practice, including (a) early screening of potential effects; (b) consideration of strategic, technical, and site alternatives (including the “no action� alternative); (c) explicit assessment of potential induced, cumulative, and trans-boundary impacts; (d) identification of measures to mitigate adverse environmental or social impacts that cannot be otherwise avoided or minimized; (e) clear articulation of institutional responsibilities and resources to support implementation of plans; and (f) responsiveness and accountability through stakeholder consultation, timely dissemination of program information, and responsive grievance redress measures. Relevance to the proposed Program: Relevant The modernization of distribution networks at the voltage of up to 10kV, transformers and advanced meters supported under the proposed Program will potentially have localized adverse E&S risks and impacts during civil work and O&M, which will require appropriate E&S management system as described in Core Principle 1. Page | 36 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths: • At REPN’s HQ level, a program • REPN’s Existing E&S capacity: While the implementation unit (PIU) should be proposed civil works will entail minor, site- established with appropriate E&S specific adverse environmental risks and expertise, which will work with all relevant impacts, such risks and impacts can be units in REPN which cover different E&S risk addressed through the implementation of management functions. The PIU established general mitigation measures covered in the for the ADB’s ongoing project in electricity REPN’s safety guidelines and national distribution sector (substations) in REPN regulatory frameworks. • The State Ecological Expertise Center could be expanded to support the proposed confirmed that this program will fall under Program, including the E&S risk Category III as per the national EIA law where management function (there is currently the Regional Branch of REPN shall submit the one part-time environmental specialist). required project documentation (including • At REPN’s Regional Territorial Branch level, the EIA) to the Regional Ecological Expertise a E&S focal point should be assigned in Center prior to commencement of civil works each Branch who will work with the REPN for approval. HQ’s E&S specialist and relevant units in the Weaknesses/Areas for improvement: Branch to manage the E&S risks and impacts • Fragmented E&S responsibilities: The REPN in their territories. has currently no integrated/dedicated E&S • Submit the required project unit which can cover the entire E&S risk documentation (including the EIA) to the management functions (such as pollution Regional Ecological Expertise Center prior prevention, health and safety, hazardous materials, stakeholder engagement and to civil works for approval (The State GRM). Rather, the REPN’s E&S risk Ecological Expertise Center confirmed that management system is fragmented not only this program will fall under Category III as inside the HQ across different units, but also per the national EIA law). among HQ, 14 Regional Branches and their District Branches. This may pose challenges to the monitoring and reporting on the implementation of relevant E&S measures under the Program. • Some units in REPN HQ and Regional Branches may not be aware of the project categorization and corresponding EIA requirements for this Program under the EIA law. Page | 37 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Core Principle 2: Natural Habitats and Physical Cultural Resources Bank Policy for Program-for-Results Financing: Environmental and social management procedures and processes are designed to avoid, minimize and mitigate against adverse effects on natural habitats and physical cultural resources resulting from program. Bank Directive for Program-for-Results Financing: As relevant, the program to be supported: ▪ Includes appropriate measures for early identification and screening of potentially important biodiversity and cultural resource areas. ▪ Supports and promotes the conservation, maintenance, and rehabilitation of natural habitats; avoids the significant conversion or degradation of critical natural habitats, and if avoiding the significant conversion of natural habitats is not technically feasible, includes measures to mitigate or offset impacts or program activities. ▪ Takes into account potential adverse effects on physical cultural property and, as warranted, provides adequate measures to avoid, minimize, or mitigate such effects. Relevance to the proposed Program: Relevant • While the support of the proposed Program is limited to the modernization of medium/low voltage distribution networks in/around human settlements, it is unlikely that the Program have adverse impacts on natural habitats beyond minor losses of surrounding vegetation. Nevertheless, any adverse impacts on natural habitats will be avoided during civil work. • To ensure that no adverse impacts are caused on physical cultural resources, civil work will avoid cultural heritage sites. Chance find procedures will be followed in the event of the discovery of socio- cultural artifacts during the civil work. Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths: • More frequent tree pruning, which will • There is a system in the country and REPN to require additional financial and technical avoid and minimize the impact from resources and workforce. electricity network on natural habitat and • Community awareness raising on cultural heritage (through rerouting the distribution network safety zones. network, use of underground lines and tree- cutting permissions). Weaknesses/Areas for improvement: • There are reported cases where fast-growing tree are planted within the buffer/protected zones of electricity lines, which lead to damage of lines and power outages. Page | 38 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Core Principle 3: Public and Worker Safety Bank Policy for Program-for-Results Financing: Environmental and social management procedures and processes are designed to protect public and worker safety against the potential risks associated with (a) construction and/or operations of facilities or other operational practices developed or promoted under the program; (b) exposure to toxic chemicals, hazardous wastes, and otherwise dangerous materials; and (c) reconstruction or rehabilitation of infrastructure located in areas prone to natural hazards. Bank Directive for Program-for-Results Financing: ▪ Promotes community, individual, and worker safety through the safe design, construction, operation, and maintenance of physical infrastructure, or in carrying out activities that may be dependent on such infrastructure with safety measures, inspections, or remedial works incorporated as needed. ▪ Promotes use of recognized good practice in the production, management, storage, transport, and disposal of hazardous materials generated through program construction or operations; and promotes use of integrated pest management practices to manage or reduce pests or disease vectors; and provides training for workers involved in the production, procurement, storage, transport, use, and disposal of hazardous chemicals in accordance with international guidelines and conventions. ▪ Includes measures to avoid, minimize, or mitigate community, individual, and worker risks when program activities are located within areas prone to natural hazards such as floods, hurricanes, earthquakes, or other severe weather or climate events. Relevance to the proposed Program: Relevant While the proposed Program only supports low-voltage distribution network up to 10kv, workers and community members may be exposed to occupational and community hazards when accidentally contacting with live power lines, when such lines causing fire safety risks, and working at height on poles and structures and handling hazardous chemicals in transformers during construction, maintenance, and operation activities. Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths: • Strengthening REPN’s existing safety guidelines • The country has the safety resolutions specific to through adoption of WB EHSG in electricity electricity sector to ensure the safety of workers transmission/distribution sector with associated with electrical equipment, transmission strengthening REPN’s training program would line maintenance and repair activities. There are also help reduce the number of serious incidents. specific regulations to prevent encroachments and • Use of licensed hazardous waste management mitigate risks to electrical network facilities and public agent in disposal of hazardous chemicals in safety. transformers. • The REPN has a dedicated safety unit and safety guidelines with systematic training and grading program. Weaknesses/Areas for improvement: • OHS and incidents/accidents: According to the recent statistics from REPN for 2023 and 2024, the electrocution is the most cause of the serious incidents reported in the REPN followed by fall from height. REPN’s analysis reveals that 90% of fatal incidents were caused when the workers were trying to rush the work quickly while other 10 % were over- confidence of workers where safety measures were not taken appropriately. • Hazardous chemicals: While most of the waste types, non-hazardous, are easily managed according to national and REPN’s waste management regulations, hazardous wastes including PCB will require stricter management and monitoring. Page | 39 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Core Principle 4: Land Acquisition Bank Policy for Program-for-Results Financing: Land acquisition and loss of access to natural resources are managed in a way that avoids or minimizes displacement, and affected people are assisted in improving, or at least restoring, their livelihoods and living standards. Bank Directive for Program-for-Results Financing: As relevant, the program to be supported: ▪ Avoids or minimizes land acquisition and related adverse impacts; ▪ Identifies and addresses economic and social impacts caused by land acquisition or loss of access to natural resources, including those affecting people who may lack full legal rights to assets or resources they use or occupy; ▪ Provides compensation sufficient to purchase replacement assets of equivalent value and to meet any necessary transitional expenses, paid prior to taking of land or restricting access; ▪ Provides supplemental livelihood improvement or restoration measures if taking of land causes loss of income-generating opportunity (e.g., loss of crop production or employment); and ▪ Restores or replaces public infrastructure and community services that may be adversely affected. Relevance to the proposed Program: Relevant • The civil works will be within a small area mostly along existing alignments of distribution lines. The proposed Program will not envisage any compulsory land acquisition and involuntary physical and economic displacement. REPN will only use public or government owned lands to the extent possible. However, there are some limited circumstances where public or government owned lands are not available and private lands are necessary to place new electric poles/transformers. While no grievance has been reported so far, there is a risk of community coercion unless properly managed. Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths: • Enforce resettlement guidelines that newly placed • The civil works will be within a small footprint electric poles and transformers shall be placed area mostly along existing alignments of on public land wherever possible. The distribution lines. The proposed Program will not work/activities that will cause physical or envisage any compulsory land acquisition and economic displacement (including eviction of involuntary physical and economic displacement. informal land users) is not eligible for financing by REPN will only use public or government owned the proposed Program. Voluntary easement (to lands wherever possible. place new poles) shall be appropriately managed • Involuntary resettlement will be avoided, as per relevant WB guidelines (including minimized and managed through alternative transparency, documentation, no coercion and site/alignment selection, engineering design, and access to grievance redress). provision of appropriate compensation (including for damaged crops). • Where public land is not available, REPN is collaborating with the local community (Mahalla) to identify private landowners who will voluntarily agrees to accept to place the electric pole/transformer on their land. Weaknesses/Areas for improvement: • While no grievance has been reported to date, this arrangement entails the potential risk of community coercion. Page | 40 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Core Principle 5: Indigenous Peoples and Vulnerable Groups Bank Policy for Program-for-Results Financing: Due consideration is given to cultural appropriateness of, and equitable access to, program benefits giving special attention to rights and interests of Indigenous Peoples and to the needs or concerns of vulnerable groups. Bank Directive for Program-for-Results Financing: • Undertakes free, prior, and informed consultations if Indigenous Peoples are potentially affected (positively or negatively) to determine whether there is broad community support for the program. • Ensures that Indigenous Peoples can participate in devising opportunities to benefit from exploitation of customary resources or indigenous knowledge, the latter (indigenous knowledge) to include the consent of the Indigenous Peoples. • Gives attention to groups vulnerable to hardship or disadvantage, including as relevant the poor, the disabled, women and children, the elderly, or marginalized ethnic groups. If necessary, special measures are taken to promote equitable access to program benefits. Relevance to the proposed Program: Relevant Inclusion of vulnerable groups (such as female stakeholders, persons with disabilities, persons/REPN staff in remote regions) in program benefit and stakeholder engagement processes is relevant for the proposed Program (the presence of Indigenous Peoples were not identified under the Program). Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths • Require REPN and its regional branches to • Coordination with mahallas: The proposed ensure that the stakeholder engagement Program will be prepared and implemented in program is conducted in an inclusive close collaboration with local community manner through involvement of mechanism (such as Mahallas and representatives of the communities and Khokimiyats). vulnerable groups in partnership with • REPN Gender Action plan: With support of Mahallas and Khokimiyats with functional ADB, REPN is implementing a GAP. and responsive GRM. Weaknesses/Areas for improvement: • Raise awareness on GBV and SEA/SH issues • While no particular risk of exclusion has been to mitigate the relevant risks during the identified through consultations with the program activities. representatives of potentially vulnerable groups, such groups could be excluded from community-based stakeholder engagement processes from a variety of reasons (such as cultural, physical and socio-economic constraints). • REPN’s stakeholder engagement is rather ad-hoc without clear guidelines. • While labor influx risks and GBV and SEA/SH risks are considered low as the civil work will be conducted by REPN’s own technicians and construction brigade based in the regional branches, the awareness on this issue could be strengthened. Page | 41 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Core Principle 6: Social Conflict Bank Policy for Program-for-Results Financing: Avoid exacerbating social conflict, especially in fragile states, post-conflict areas, or areas subject to territorial disputes. Bank Directive for Program-for-Results Financing: Considers conflict risks, including distributional equity and cultural sensitivities. Relevance to the proposed Program: Relevant While there are a variety of stakeholders who will benefit from or potentially adversely affected by the proposed Program, the timely and satisfactory management of social conflicts/tensions is key for the success of the proposed Program. Functionality of the case management system which could cause social tension (Core Principle 6) Findings from E&S Systems Assessment Proposed Gap-filing/Mitigation Measures Strengths: • The PIU to be established for the proposed • The REPN and its regional branches have an Program and E&S focal points in each established case management system regional branch will monitor and report on supported by a specialized unit and case the grievance management for the management procedures and tools (such as modernization of distribution network and portal, email, toll free number, telegram provide necessary support to the case messaging and chat groups) whereby they management unit and the aggrieved received and managed over 79,304 cases in persons. the months of January-September 2024 (key cases include disruption of services, request for updating poles and transformers for safety and capacity). The country’s President Office has its own grievance system which covers all public institutions and oversees and monitors the case management and resolution by each institution with appeal process. Weaknesses/Areas for improvement: • While the number of cases is significant and the case management systems are not fully integrated, there is a risk that not all cases are addressed systematically and in a timely manner. Page | 42 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 6 STAKEHOLDER ENGAGEMENT 42. Consultation Events for Preparing the ESSA (May/July 2024): For the preparation of this ESSA, the E&S specialists of the Bank task team undertook site visits and a series of meetings with different stakeholders, including relevant units in REPN HQ (Safety Unit, Construction Unit, Case Management Unit and the PIU established in REPN for the ADB distribution network project and other IFI projects), Ministry of Environment, Ministry of Labor, State Labor Inspectors, Cadaster Agency. The consultation meetings were organized in May 20-29, 2024 in Tashkent. Follow-up meetings were held with REPN’s Regional/District Branches and relevant institutions in Namangan and Khorezm Regions in July. The outcomes of the consultations have been incorporated into the ESSA. Main issues discussed in the consultations and incorporated into the ESSA include the following (List of persons met are provided in Annex 1): 1) Stakeholders are of the view that the proposed Program will have only limited, site- specific moderate E&S risks and impacts. Key areas for attention will include worker safety, treatment of hazardous chemicals in transformer, grievance redress (case management) and community engagement. 2) Applicability and scope of national environmental regulations to require permits for medium/low-voltage lines (under 10kV) needs further clarification. 3) The REPN’s serious incidents are occurring mostly with high voltage networks and disrupted lines. 4) The program activities will be conducted only on public lands. Private lands should be avoided. 5) REPN is of the view that REPN has robust E&S capacity, while the Bank noted the relevant functions are fragmented across different units and regional branches. 6) Regional and District Branches have EHS management system in place, which could be further strengthened. (See Section 4 for details) 43. Public Consultations on the ESSA (November 22 and 25, 2024): Public consultations with key stakeholders are undertaken in Khorezm Region (November 22) and Tashkent Region (November 25) in an inclusive manner, including government institutions, Mahallas and Khokimiyats, community members and CSO groups (List of persons attended in public consultations in Annex 1). The inputs are considered and incorporated into the ESSA. Main issues discussed and Bank responses are summarized below: Issues raised Bank staff responses E&S Staffing arrangement of REPN: The Bank team recommended that appropriate E&S Stakeholders stated that the E&S responsibilities are specialist(s) be engaged in the PIU team, who will fragmented across different units in REPN’s Head support the E&S responsibilities of this Program. The Office and Regional Branches without any Bank team also recommended that REPN’s Regional dedicated/integrated “E&S unit.� branches assign E&S focal points (new or existing personnel) who will work with the E&S specialist(s) in the PIU to support the Program. Further, the Bank team recommended that a consultancy firm with E&S expertise be engaged which will support the program in strengthening the REPN’s E&S risk management system during the first two years of the Program (which will also support REPN in achieving the DLI 6 with “ISO14001� with ESMS). Page | 43 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) National EIA requirement (ESSA Core Principle 1): While the civil work for the Program (modernization of The State Ecological Expertise Center confirmed that low and medium voltage distribution networks and this program will fall under Category III as per the transformers) is prepared at district level, the EIA shall national EIA law where the Regional Branch of REPN be prepared and approved at district level before civil shall submit the required project documentation works commence. The Regional Branches of REPN the (including the EIA) to the Regional Ecological Bank team visited do not have in-house expertise on Expertise Center prior to civil works for approval. the EIA and that they are currently relying on external firms and individual consultants specialized in the EIA. Tree cutting for the safety of distribution network While REPN cannot cut/prune such trees without (Core Principle 2): authorization from the ecological centers, it is REPN raised concerns over the fast-growing trees important to raise community awareness on the safety that community members unknowingly plant within of distribution networks. the safety zone of distribution network, which are causing safety risks to REPN workers and community members. Hazardous PCB oils in transformers (Core Principle While REPN has currently no established safety system 3): to manage PCB oils, Bank team recommended REPN to Uzbekistan is a signatory of the Stockholm apply the WBG EHSG for electricity Convention on Persistent Organic Pollutants (POPs) transmission/distribution sector to avoid potential since 2004. While it is not anticipated that the new safety risks to workers and the community. transformers contain Polychlorinated Biphenyl (PCB) Procedures for handling hazardous chemicals would oil (some Regional Branches will only use “dry� need to be integrated into the guidelines for regular transformers which do not require hazardous oils), operations that will be certified to be conforming to old transformers could contain hazardous PCB oils. ISO 14001. Other safety issues the Bank team identified include the need for better fencing around transformers and access control at civil work site (for trenches and heavy machines). Involuntary resettlement (Core Principle 4): The Bank team clarified that the Program will not Given the limited physical footprint of the civil work support involuntary displacement (including (reconstruction/replacement of electric poles, demolition) of such formal or informal structures and distribution networks and transformers), the that the Program shall avoid areas with land disputes, proposed Program will not require any compulsory while it might entail partial re-routing of the network land acquisition and involuntary physical and with cost implications. Also, there are limited economic displacement. There are limited cases circumstances where public or government owned where local municipalities granted households land lands are not available and small private lands are plots with cadastral documentation without adhering necessary to place new electric poles/transformers. In to the safety zones established for the distribution such cases, REPN collaborates with the local network as per national norms. This practice has led community (Mahalla) to identify private landowners to the construction of formal and informal structures voluntarily agree to accept to place the electric by community members within these safety zones, pole/transformer on their land with documented resulting in land disputes and increased safety risks. evidence. The Bank team noted that such agreement is formalised through concluding servitude contracts for the public needs. The Bank team found that no grievance has been reported to date in such cases. Stakeholder engagement (Core Principle 5): As recommended by the regional ecological expertise centers, the Bank team also recommended that REPN Page | 44 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) While community members told the Bank team that strengthen its stakeholder engagement program they are well informed of REPN’s work and grievance which should include public hearing for the EIA and channels through REPN’s district branches (through community awareness on network safety. During the various channels including telegram app), the current public meetings, the REPN shall also include community engagement seems to be rather ad-hoc information on the rights of community members to without documented record. Stakeholder get compensation in cases of damage to their assets. engagement is done through providing information No particular exclusion risks were identified during the while receiving feedback from the community is mission, including for female stakeholders (including limited. GBV and SEA/SH risks). Grievance mechanism in REPN (Core Principle 6): The Bank team noted that the case management unit REPN and its regional branches have a centrally would be able to disaggregate the cases that would be managed case management system supported by raised for the Program. specialized unit and case management systems (such as portal, email, toll free number, telegram messaging app). However, there is no integration of those uptake channels resulting duplication of reviewing of the grievances. Key cases include disruption of services, request for replacing poles and transformers for safety and capacity. The country’s President Office also has its own grievance system which covers all public institutions and oversees and monitors the case management and resolution by each institution with appeal process. 44. Document Dissemination and Public Disclosure: The Executive summary of the draft ESSA was translated into the Uzbek language and shared with the stakeholders before the public consultation. The draft ESSA will be disclosed in-country and on the World Bank’s website before appraisal. The final ESSA will be disclosed before the board approval. Page | 45 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 7 CONCLUSION AND RECOMMENDATIONS 45. Based on the above assessment, a series of measures and actions are recommended for the proposed Program to address the identified gaps between the government E&S management system and the core principles of the Bank’s PforR Policy. These which would ensure that the proposed program be managed in a manner consistent with the Core Principles. Subject to adjustment through negotiations with the client, these recommendations shall be integrated in (i) exclusion criteria; (ii) relevant DLIs/verification protocol and (iii) the Program Action Plans (PAPs), as specified below (some key actions are intentionally overlapping for better follow- through). They will be also embedded in the POM for operationalization, as appropriate. Their effectiveness will continue to be monitored and adjusted throughout the program life. (i) Exclusion criteria 46. The Program will exclude activities that do not meet the World Bank’s Policy and the ESSA Guidance (September 2020) on eligibility for PforR financing. REPN shall ensure that the Program excludes any activities which, in the opinion of the World Bank, are likely to have significant adverse impacts that are sensitive, diverse or unprecedented on the environment and/or affected people. More specifically, the following exclusion that is not eligible for program financing will be included in the legal agreements as well as the POM. • Land acquisition and/or resettlement of a scale or nature that will have significant adverse impacts on affected people, or the use of forced evictions. This will include involuntary demolition of formal and informal structures. (ii) DLIs and verification protocol: 47. While the State Ecological Expertise Center confirmed that this program will fall under Category III as per the national EIA law, the Regional Branch of REPN shall submit the required project documentation (including the EIA) to the Regional Ecological Expertise Center prior to civil works for approval. Considering this, the verification protocols for the relevant DLIs with civil work (DLIs #1,2 and 3) should include the confirmation of the E&S permit obtained for such civil work, so that the Program is implemented in a manner consistent with national E&S requirements. The same verification will be required for “prior actions� (for advance payment) that will entail civil work. • Verification protocol proposed for DLIs #1,2 and 3 (below): Obtaining E&S permits from the environmental regulator (Regional Ecological Expertise Center) prior to civil work DLI#1 km of climate resilient low voltage distribution lines built or rehabilitated for increased renewable energy integration and electricity delivery DLI#2 Distribution transformer capacity increased for expanded integration of renewable energy in the distribution network DLI#3 Number of smartmeter installed for distribution losses reduction (iii) Program Action Plans: Page | 46 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 48. Based on the assessment and to strengthen the existing system and processes, the following actions will be included as part of Program Action Plans (PAP) along with key due dates, responsibilities and indicators for its completion measurement. Action Description Responsibility Timing Completion Measurement REPN PIU and Within two months of (i) Engagement of one full- 1. E&S Staffing Regional Branches Program Effectiveness time enviromental specialst arrangement for (i), (ii) and (iii) and one full-time social specialist in the PIU in REPN Continuous for (iv) HQ; (ii) Assignment of one E&S focal point (existing or new officer) in each Regional Branch of REPN; (iii) Setting up effective communication/coordination mechanism among them; (iv) Conducting capacity building program for them 2. Engaging an E&S REPN PIU First two years Establishing the REPN’s consulting firm insitutional E&S system and obtaining ISO14001 recognition 3. Preparation and REPN PIU, Adoption/inclusion as Preparation and implementation of part of the POM to be implementation of POM. POM with relevant E&S Safety Unit (safety in developed for the entire guidelines, including: general) Program (which will be Conducting capacity buidling (i) E&S permits; finalized within three program for relevant REPN Capital Construction months after program staff (ii) application of the Unit (construction OHS effectiveness) WBG sector specific in general), guidelines for Implementation Transmission and Project and throughout the life of Distribution sector Construction Expertise the Program (including handling of Unit (E&S permit) hazardous chemicals such as PCB oils); and Production and technical Service Unit (iii) management of (PCB oil) resettlement Regional Branches (overall implementation) Page | 47 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) REPN PIU Adoption/inclusion as Inclusive community 4. Inclusive community part of POM engagement program engagement program Press Secretary operationalized by REPN. Implementation Regional Branches throughout the life of Local community and the Program vulnerable groups are to be involved in program design and implementation. REPN PIU Semi-Annually for regulr (i) conduct regular site visits 5. Semi-annual regular reporting and seek stakeholder reporting on E&S Regional Branches feedback: aspects and incident Within 48 hours for reporting serious incidents (ii) Sem-annual for regular reporting; (iii) Within 48 hours for incident reporting in serious incidents occurred under the program. REPN PIU Adoption as part of 6. Case management POM Enhancement of existing and grievance Case Management Unit case management/ mechanism (GM) GM operational grievance mechanism (GM) Regional Branches throughout the life of the Program Page | 48 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Annex 1. List of Stakeholders Met The ESSA preparation (May-July 2024) Name Title and Organization REPN HQ Tursunov Jamshid Environmental Specialist, Project Implementation Unit (PIU) Albaev Khurshid Construction/Procurement Specialist, PIU Husanov Sayfullo Head of Case Management Unit Bakhrom Todjibaev Head of Safety and Reliability Unit Olim Eshqulov Deputy Head of Capital Construction Unit Ministry of Ecology State Ecological Expertise Center Vyacheslay Shi Syan Deputy director of The State Ecological Expertise Center Azizbek Matrasulov Head of the Department on Development and Management of Investment Projects Makhmud Khaydarov Specialist of the Department of International Cooperation and Grant Attraction Ministry of Labor State Labor Inspection Dilmurod Khusanov Chief Labor Inspector Shukurullo Marlabov Deputy Head Cadaster Agency Mirmaksudov Mirsaid Deputy Director and two representatives (methodology and legal units) Sodiqovich Zilola Abdugafurova Head of International Relations and Rating Department Namangan Regional Branch of REPN Tulkin Mullajonov Chief Engineer Utkirjon Yusupjanov Deputy Chief Engineer Kamoliddin Ziyovuddinov Head of Reliability and Safety Service Erkin Nigmatullayev Head of Production and Technical Service Uktam Olimov Head of Capital Construction Department Bakhtiyor Jurayev Engineer of Human Resources Department Shukhrat Khamraev Head of Methodology and Standardization Department Hikmatulla Fayzullaev Lead Designer of the Project and Construction Expertise Department Nozimjon Azizov Chemical Engineer of Overvoltage Protection and Insulation Testing Service Namangan Regional State Ecological Expertise Center Akmal Khajdarov Head of the Namangan Regional State Ecological Expertise Center Khorezm Regional Branch of REPN Sherzod Allazarov Sherzod Allazarov – Deputy Director for Capital Construction Sokhiba Gaiypova Deputy Director for General Issues Utkir Kalanderov Deputy Chief Engineer Kudrat Khadjiev Head of Electro Laboratory Farhod Matkarimov Head of Reliability and Safety Service Page | 49 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Ikhtiyor Yakubov Head of Capital Construction Department Davlat Radjabov Head of Production and Technical Service Sardor Yusupov Head of Construction and Development of Electric Networks Department Dilshod Ruzmetov Head of the Project and Construction Expertise Department Ruslan Polvonov Engineer of Technical Development Service Khorezm Regional State Ecological Expertise Center Dilnoza Hajieva Head of the Analytical Information Collecting Department, Khorezm Region Department of Ecology, Environmental Protection and Climate Change Maqsud Khudaybergenov Head of the Khorezm Regional State Ecological Expertise Center Pre-appraisal mission on ESSA (November 18-21, 2024) Name Title and Organization REPN HQ Jauinger Shamuratov Chief Specialist, PIU Jamshid Tursunov Environmental Specialist, PIU Bakhrom Todjibaev Head of Safety and Reliability Unit Sherzod Safarov Deputy Head of Safety and Reliability Unit Azizbek Khaydarkhodjayev Head of Project and Construction Expertise Unit (on call on EIA) Fozil Jumakulov Head of Production and Technical Service Unit (on PCB oil) Sherzod Normatov Chief Engineer, Capital Construction Unit Husanov Sayfullo Head of Case Management Unit Mr. Nuraliev Press Secretary State Ecological Expertise Center Aytmuratov Timurlan First Deputy General Director Parakhatovich Farmonov Durbek Head of Methodology Department Rakhmatulloyevich Saidmurodzoda Mamurjon Head of the Department for Work with International Conventions Muzafar Zhdanov Andrey Vladimirovich Chief Expert Malyshev Maksim Chief Expert Svyatoslavovich Public Consultations in Khorezm Region (November 22, 2024) Name Title and Organization Public institutions Ms. Sokhiba Gayipova Deputy Director, REPN, Khorezm Regional Branch Mr. Islom Botirov Deputy Chief Engineer, REPN, Khorezm Regional Branch Mr. Ergash Allaberganov Head of Production and Technical Service unit, REPN, Khorezm Regional Branch Page | 50 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Mr. Dilshod Ruzmetov Head of the Project and Construction Expertise Department, REPN, Khorezm Branch Mr. Alisher Ruzmetov Lead specialist of Reliability and Safety unit, REPN, Khorezm Regional Branch Mr. Bakhrom Matyazov Lead specialist of High voltage protection and isolation testing unit, REPN, Khorezm Regional Branch Mr. Sherzod Qadirov Lead specialist, REPN, Khorezm Regional Branch Mr.Elyor Yusupov Representative of Kokimiyat of Khorezm Region, Head of the Subdivision for Coordination of Land Acquisition and Compensation Activities Mr. Sherzod Hayitboyev Expert of the Khorezm Regional Ecological Expertise Center Mr. Nodirbek Qazaqov Specialist, Khorezm Regional Cadaster Agency Mr. Izzatbek Kalandarov Specialist, Khorezm Regional Cadaster Agency Community Representatives (including female stakeholders) Ms. Salomat Erjanova NGO “Center for Support of Citizens’ Initiatives� Ms. Sohiba Gayipova Urgench city, makhalla “Yogdu� Ms. Mukhabbat Ibadullaeva Urgench city, Yukoribog makhalla, Ms. Nargiza Qalandarova Urgench city, 28th makhalla, Ms. Manzura Ibadullaeva Urgench city, 28th makhalla, Ms. Leninza Ruzmetova Urgench district, Assalchi makhalla Ms. Gulirano Sharipova Urgench city, Shodlik makhalla, Ms. Kamila Ishnazarova Urgench city, Avesto makhalla, Ms. Yulduz Bekchanova Urgench city, Marifat makhalla Ms. Madina Vaisova Urgench city, Bobur makhalla Ms. Nazira Ruzmetova Urgench city, Elektroapparat makhalla Ms. Saida Abdurasulova Urgench city, Temir Yo'lchi makhalla Ms. Manzura Matnazarova Urgench district, Yukorikirmiz makhalla Ms. Mukhabat Abdurasulova Urgench district, Yangiqishloq makhalla Ms. Fotima Adamova Urgench city, Istiklol makhalla, Ms. Dildor Khaidarova Urgench district, Boqoylar makhalla Ms. Gulasal Urgench city, Marifatchilar makhalla Khudayberganova Ms. Dilfuza Davlatyorova Urgench district, Zargarlar makhalla Ms. Bogdagul Ruzmetova Urgench city, Mash'al makhalla Ms. Muqaddas Sapaeva Urgench city, Avesto makhalla Ms. Zaynab Rajabbayeva Urgench district, Kumriobod makhalla Ms. Gulsara Ruzmetova Urgench city, Islomobod makhalla Ms. Gulshan Eshchanova Khonka district, Paxtagul makhalla Ms. Nargiza Jumaniyazova Urgench district, Yukorijirmiz makhalla Ms. Nodira Mamatova Urgench city, N. Kubro street Ms. Sevinchoy Ruziboeva Urgench district, Khilol MFI, Ustachilar street, Ms. Shokhida Adomboyeva Urgench city, Shoddik makhalla, Sohil street, Page | 51 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Ms. Markhabo Urgench district, Arboblar makhalla, Qaravul village Qutlimurodova Ms. Nasiba Ruzmetova Urgench city, Mustakillik makhalla, A. Bahodir street Ms. Iroda Bekiyeva Urgench city, Temir Yo'lchilar makhalla Public Consultations in Tashkent Region (November 25, 2024) Name Title and Organization Public Institutions Mr. Murod Shoumarov Chief Engineer, REPN, Tashkent Regional Branch Mr. Furqat Odilov Specialist, Tashkent Regional Cadaster Agency Mr. Iskandar Akaev Head of Case Management and Performance Control Unit, REPN, Tashkent Regional Branch Mr. Abdugani Vakilov Deputy chief engineer, REPN Tashkent Regional Branch Mr. Rakhat Genjemuratov Head of Special maintenance and operation Unit, REPN Tashkent Regional Branch Mr. Lutfulla Abduazimov Head of Production and Technical Service Unit, REPN Tashkent Regional Branch Mr. Zukhriddin Ismailov Expert of the Tashkent Regional Ecological Expertise Center Mr J. Abdusoliyev Engineer, Capital Contruction Unit, REPN Tashkent Regional Branch Mr. J. Rakhimov Engineer, Capital Contruction Unit, REPN Tashkent Regional Branch Community Representatives Mr. Murod Shoumarov Chief Engineer, REPN, Tashkent Regional Branch Mr. Zoir Kambarov Head of “Urta Chirchik� district Electricity Supply Unit Mr. Sarvar Tojiev Assistant to Hokim at “Kuchlik� makhalla administration office Mr. Sobir Alijonov Citizen Mr. Mirzakhakim Yusupov Citizen Mr. Khamidjon Bostonboyev Citizen Mr. Akhmadbek Davlatov Citizen Mr. Ibrokhim Sulaymanov Citizen Mr. Muminjon Yuldoshev Citizen Page | 52 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Annex 2: Photos of public consultations Consultations with public institutions in Khorezm Consultations with community and female Region stakeholders in Khorezm Region Consultations with public institutions in Tashkent Consultations with community members in Region Kuchlik Mahalla (Tashkent Region) Page | 53 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Annex 3: Relevant E&S legal and regulatory framework in Uzbekistan (excerpt from the ESMF prepared for “E- START� Project and the draft “ESF Gap Assessment for Strengthening Country Systems on Social Risk Management In Uzbekistan�) Management of E&S risks and Impacts (Core Principle 1) & Natural Habitats and Physical Cultural Resources (Core Principle 2) 1.1 Legal, regulatory and policy framework 1. Since the country's independence, the Republic of Uzbekistan has developed, revised and improved national environmental legislation, adopted new laws and regulations, developed programmes and action plans to address environmental issues and promoted sustainable use of natural resources. The country has adopted several subsidiary laws and legislation on environmental management and is a party to series of international and regional environmental agreements and conventions. The nature protection policy and the implementation of measures in the field of rational use of natural resources and environmental protection are based on the following basic principles: • Integration of economic and environmental policies aimed at preserving and restoring the environment as a prerequisite for improving the living standards of the population; • Transition from the protection of individual natural elements to the general and comprehensive protection of ecosystems; • Responsibility of all members of society for environmental protection and biodiversity conservation. 2.1. Uzbekistan National Environmental Legislation and Procedures 2. Legal Framework in the field of Nature Protection and Management established in Republic of Uzbekistan, provides to the citizens the rights and duties specified in the country’s Constitution. 3. Specific articles that address environment protection issues within the Constitution are: • Article 50. All citizens shall protect the environment. • Article 51. All citizens shall be obliged to pay taxes and local fees established by law • Article 54. Any property shall not inflict harm to the environment • Article 55. Land, subsoil, flora, fauna, and other natural resources are protected by the state and considered as resources of national wealth subject to sustainable use. 4. Uzbekistan has enacted several supporting laws and statutes for environmental management and is party to several international and regional environmental agreements and conventions. The key national environmental law is the Law on Nature Protection (1992). A brief description of this law and the other supporting laws related to environmental protection is presented below. 5. The Law "On Nature Protection" of December 9, 1992 (as amended on 18.04.2018) establishes the legal, economic and organizational framework for environmental protection, ensures sustainable development and certain principles, including the State Environmental Expertise (SEE). Article 12 of the Law "On Nature Protection" states: Residents of the Republic of Uzbekistan are obliged to use natural resources rationally, treat natural resources with care, and comply with environmental requirements. As stated in the law, in order to protect the climate from global changes, a business entity must comply with the restrictions on greenhouse gas emissions, as well as take measures to mitigate these emissions. 6. The Law "On Protection of the Atmospheric Air" of December 27, 1996 (as amended on September 14, 2017) defines the issues of preservation of the natural state of the atmospheric air; legal Page | 54 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) regulation of the activity of state bodies, enterprises, institutions, organizations, public associations and citizens in the field of protection of the atmospheric air. 7. The Law “On Water and Water Use� of 6 May 1993 (as amended on 23 July 2018) provides for the rational use of water resources, protection of water resources, prevention and mitigation of negative impacts and compliance with national legislation; the Law provides for the responsibility of all natural and legal persons for the prevention of pollution of watersheds, reservoirs, snow and ice cover, glaciers, permanent snow cover with industrial, domestic and other wastes and emissions that may lead to the deterioration of ecological balance of the environment. State management of water protection and use is carried out through accounting, monitoring, licensing, control and supervision; 8. Land Code of the Republic of Uzbekistan (1998) - The main objectives of land legislation are to regulate land relations with a view to ensuring, in the interests of present and future generations, scientificallysound, rational use and protection of land, reproduction and improvement of soil fertility, conservation and improvement of the natural environment, creating conditions for the equitable development of all forms of economic activity, protection of the land rights of legal and natural persons, and strengthening legality in this area, including by preventing corruption offenses. 9. The Law "On Environmental Expertise" (2001) (as amended on 14.09.2018) provides for mandatory expertise on environmental and human health impacts, and serves as the legal basis for expertise; 10. The Law "On Waste" (2002,( as amended on 10.10.2018) - deals with waste management, excluding emissions and air and water pollution, and gives the State Committee for Ecology and Environmental Protection the power to inspect, coordinate, environmental expertise and set certain parameters for waste treatment. Enterprises are responsible for their waste but, in the case of recycling, the state may provide assistance from its budget, the National Environmental Protection Fund or voluntary payments. The main purpose of this law is to prevent the negative impact of solid waste on human life and health and on the environment, to reduce the amount of waste and to encourage the use of rational household waste reduction methods. 11. The Law "On Protected Natural Areas" (2004) - The purpose of this Law is to regulate relations in the field of organization, protection and use of protected natural areas. The main objectives of this Law are preservation of typical, unique, valuable natural objects and complexes, plant and animal genetic fund, prevention of negative impact of human activities on nature, study of natural processes, monitoring of natural environment, improvement of environmental education and upbringing. 12. The Law "On Environmental Control" (2013) - The purpose of this Law is to regulate relations in the field of environmental control. The main objectives of environmental control are: (i) to prevent, detect and suppress violations of legal requirements in the field of environmental protection and rational use of natural resources; (ii) to monitor the state of the environment, identify situations that may lead to environmental pollution, irrational use of natural resources, endanger the life and health of citizens; (iii) to determine whether planned or ongoing economic and other activities comply with environmental requirements; (iv) to ensure the observance of the rights and legitimate interests of legal and natural persons and the fulfilment of their obligations in the field of environmental protection and the rational use of natural resources. 13. The Law "On the Protection and Use of Vegetation" of December 26, 1997 (as amended on September 21, 2016) regulates relations in the field of protection and use of vegetation (plants) growing in natural conditions, as well as wild plants grown for their restoration and genetic conservation. 14. The Law "On the Protection and Use of Wildlife" (1997) regulates relations in the field of protection, use, restoration and reproduction of wildlife in order to ensure the conditions for its existence, the conservation of species diversity, the integrity of natural communities and habitats. Page | 55 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 15. The Law "On Electricity" (2009) establishes clear rules for the regulation of legal relations in the production, transmission, distribution, sale and consumption of electricity. It specifies the system of regulating relations in the electricity sector, the rules that define the rights, obligations and responsibilities of each participant from generation to consumption of electricity, ensuring electricity security of the Republic of Uzbekistan, the reliable functioning of the unified electricity system of the country, and meeting the needs of consumers. 2.2. Legislation related to nature protection 16. Most important nature protection normative documents issued by government include: • "Procedure for the development and execution of draft standards for maximum permissible discharges of pollutants discharged into water bodies, including sewage" (RD 118.0027719.5-91); • State Standard - Water quality. O’z DST 951:2011 – Sources of centralized household water supply. Hygienic, technical requirements and classification code; • "Temporary recommendations on control over groundwater protection in the Republic of Uzbekistan". State Committee on Nature Protection and Uzbekhydrogeology of the Republic of Uzbekistan, Tashkent, 1991 • Resolution of the Cabinet of Ministers "On Approval of the Regulation on State Environmental Control" (№ 49, 3.04.2002); • SanPiN RUz № 0179-04 Hygiene standards. List of Maximum Permissible Concentrations (MPCs) of Pollutants in the Air of Residential Areas in the Republic of Uzbekistan, including Annex 1; • SanPiN № 0120-01 "Sanitary standards of permissible noise levels at workplaces"; • SanPiN RUz № 0088-99 Sanitary requirements for the development and approval of projects of Maximum Permissible Discharges (MPD) of substances entering water bodies with waste water; • SanPiN RUz № 0321-15 Hygienic classification of toxicity and hazard; • Regulation on the procedure of burial of toxic chemicals and other toxic substances, as well as protection and maintenance of special grounds" (registered with the Ministry of Justice under №2438 of 20.03.2013); • Rules for the reception of industrial wastewater and the procedure for the calculation of compensation payments for supernormal discharges of pollutants into the municipal sewerage networks of cities and other localities of the Republic of Uzbekistan (Annex 1 to RCM № 11 of 2010); • GOST-23941-79 "Noise. Measurement methods"; • Methodical guidelines for measuring and hygienic assessment of noise at workplaces" № 1844-78; • SanPiN № 0046-95 "Maximum permissible concentrations (MPC) of harmful substances in the air of the working zone"; • Instruction on determining the damage caused to the national economy by groundwater pollution". (PP 118.0027719.5-91) (PARAS. 118.0027714.47-95); • Sanitary Regulations № 0289-10. Sanitary rules and hygienic requirements in the organization of construction and construction; • Sanitary rules and standards for the maintenance and improvement of residential areas in the conditions of the Republic of Uzbekistan (Sanitary Rules and Regulations No. 0329-16) Page | 56 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • Temporary Recommendations on Groundwater Protection Control in the Republic of Uzbekistan". State Committee on Natural Resources and Uzbek Hydrogeology of the Republic of Uzbekistan, Tashkent, 1991. • State standard O’z DSt 1057:2004 “Vehicles. Safety requirements for technical conditions� and O’z DSt 1058:2004 “Vehicles. Technical inspection. Methods of control�; • SanPiN RUz № 0122-01 Sanitary Regulations on whole-body and local vibration in the workplace; • The Order of the Ministry of Health of the Republic of Uzbekistan №300 dated 06.06.2000 "On carrying out the mandatory pre-employment and periodic medical examinations of workers exposed to harmful and adverse working conditions". 2.3. National Requirements for Environmental Assessment 17. The national ESA procedure is regulated by the Law "on Environmental Expertise "(2000), updated on 14.09.2017, and Cabinet of Ministers Resolution № 541 of 07.09.2020: "On Approval of the Regulation on State Environmental Expertise". In accordance with Article 3 of the aforementioned law, an environmental impact assessment shall be carried out to identify:: - Compliance of the planned economic and other activities with environmental requirements at the stages preceding the decision to implement them; - The level of environmental hazard from planned or existing economic and other activities which may have or have had a negative impact on the environment and public health; - Adequacy and validity of the measures envisaged for environmental protection and rational use of natural resources. 18. The special authorized state body in the field of state environmental expertise is the State Committee on Ecology and Environmental Protection (Goskomekologiya / or SCEEP). The organizational structure of the State Committee on Ecology and Environmental Protection of the Republic of Uzbekistan is discussed in detail in 3.2 Section. 19. The main organization responsible for the state environmental expertise is the Glavgosexpertiza SCEEP (Main state expertise) (Figure 20). 20. SUE “Center of State Environmental Expertise" carries out state eco-expertise of EIA of the objects of economic activity belonging to I and II categories of environmental impact (high and medium risk). 21. The State Unitary Enterprise "Center of State Environmental Expertise" of the Republic of Karakalpakstan and regions carry out environmental impact assessment of economic activity objects belonging to III and IV categories of environmental impact (low risk and local impact). 22. The Regulation on the Main state expertise describes in detail the procedure for organizing and conducting the SEE (Annex 2). 23. Environmental impact assessment is a procedure that includes three stages of the EIA: 24. Step 1: The Draft Environmental Impact Statement (DEIS / PZVOS) should be conducted at the planning stage of the proposed project prior to the allocation of development funds and contain the following sections: - environmental conditions prior to the beginning of the planned activity, population of the territory, land development, analysis of environmental characteristics; Page | 57 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) - a situational plan indicating the existing recreational zones, settlements, irrigation, reclamation facilities, farmlands, power lines, transportation, water supply, gas pipelines and other information about the area; - proposed (planned) main and auxiliary facilities, used machinery, technology, natural resources, materials, raw materials, fuel, analysis of their environmental impacts, environmental hazards of the products; - expected emissions, discharges, wastes, their negative impact on the environment and methods of neutralization; - warehousing, storage and utilization of wastes; - the analysis of alternatives to planned or ongoing activities and technological solutions from the perspective of nature protection, taking into account the achievements of science, technology and best practices; - organizational, technical, technological solutions and measures that exclude negative environmental consequences and reduce the environmental impact of the facility; - analysis of emergency situations (with an assessment of their probability and a scenario to prevent their negative consequences); - forecast of changes in the environment and environmental consequences as a result of the implementation of the object under the expertise. 25. Step 2: Preparing the Environmental Impact Statement (EIS / ZVOS) - the need for such step is decided at Stage 1 and Glavgosexpertiza shall indicate that additional researches or analyses are needed. The EIS shall be submitted to the Glavgosexpertiza prior to approval of the Project Feasibility Study, prior construction activities. The application shall contain the following: - assessment of ecological problems of the selected site based on the results of engineering and geological surveys, model and other necessary studies; - ecological analysis of the technology in relation to the identified problems of the site; - results of public hearings (if necessary); - reasoned studies of environment protection measures that prevent negative consequences of implementation of the object of expertise. 26. Step 3: Preparing the Statement of Environmental Effects (SEE / ZEP) is the final step in the SEE process and should be made prior to project implementation. Such documents are necessary only for projects with significant environmental and social impacts. Main sections of the SEE are the following: - adjustment of design decisions and other measures taken following the review of the draft SCEEP conclusion on the environmental impact, as well as proposals made during the public hearings; - environmental standards regulating the activities of the object of expertise; - requirements to the organization of works and implementation of measures for - environmental support of the facility operation; - main conclusions on the possibility of conducting business activities. Page | 58 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 27. Project Categories. According to the Resolution of the Cabinet of Ministers of Uzbekistan № 541 of 07.09.2020: "On Approval of the Regulation on State Environmental Expertise". All environmental protection activities are divided into 4 categories with varying degrees of impact: - Category I – “high risk� of environmental impact (SEE is conducted by SUE "Center of State Environmental Expertise" within 20 days, all stages of EIA are required); - Category II - "average risk of environmental impact" (SEE is conducted by the Center of State Environmental Expertise within 15 days, all stages of the EIA are required); - Category III - "low risk of impact" (SEE is conducted by regional branches of SUE "Centre of State Environmental Expertise" within 10 days, all stages of EIA are required); - Category IV - "minor impact, local" (SEE is conducted by the regional branches within 5 days, only the first stage is required, Draft EIS). 28. All other projects that do not fall into the various categories are treated as projects with no environmental impact and do not require a state environmental expertise. 29. According to point 24 " SEE regulations ", the positive conclusion of SEE is a mandatory document for the opening of financing by banking and other credit institutions and the execution of legal entities and individuals of the implementation of the object of state environmental impact assessment. The SEE conclusion is valid for three years from the date of its issue. SEE conclusion is sent to the relevant district (city) inspectorates for ecological and environmental control. The EIA procedure for this project is described in more detail in Section 6 of this document. 30. Public participation in EA process. The Constitution of the Republic of Uzbekistan (arts. 50.55) lays the foundation for the participation of citizens and public associations in environmental management. Law of the Republic of Uzbekistan of 09.12.1992. (updated on 18.04.2018) "On nature protection" in Articles 12-13 regulates the right of citizens to unite in public organizations for nature protection, to request and receive information about the state of the environment and measures taken for its protection, as well as the authority of NGOs established. Legislation in the field of ecology and environmental protection provides for public participation as a) an individual citizen or a group of citizens; b) through citizens' self-governance bodies and c) through non-governmental non-profit organizations. Page | 59 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 7.1.1 Figure 21: EIA procedure in Uzbekistan Yes No 31. Direct participation of non-commercial environmental protection organizations is envisaged in the course of EE of documentation for construction of new and reconstruction of existing facilities for management purposes. In particular, Article 27 of the Law of the Republic of Uzbekistan "On Nature Protection", as well as Article 23 of the Law of the Republic of Uzbekistan of 2018. " The SEE law enables NGOs and citizens to carry out public EE in any area of activity that needs to be justified by independent groups of specialists at the initiative of the NGOs themselves and at their own expense or on a voluntary basis. The public expertise may be carried out independently of the state ecological expertise. It is prohibited to hinder the implementation of public EE. It is established that the conclusion of the public EE is of a recommendatory nature. 32. In addition, during the SEE of the organization-customers of its implementation are obliged to publish Page | 60 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) an announcement of the environmental impact assessment and information on its results in the media, in cases where the authorized bodies include the object of construction in the list of important objects. Protection of public and worker safety (Core Principle 3) 2.4. Legislation of the Republic of Uzbekistan in the field of labor, health and safety 2.4.1. Labor legislation 33. The Constitution of the Republic of Uzbekistan (adopted on December 8, 1992) includes a chapter on Economic and Social rights of the citizens. According to it everyone is entitled to: • “Have the right to work, free choice of work, fair conditions of labor and protection against unemployment in the procedure specified by law. Any forced labor shall be prohibited except for punishment under the sentence of a court or some other instances stipulated by law� (Chapter IX, Article 37); • The right to rest is included in the Article 38: “Citizens, working on hire, shall be entitled to a paid rest. The number of working hours and paid labor leave shall be specified by law; • Social security in old age in the event of disease, disability, loss of breadwinner and in other cases stipulated under the law (Article 39); • Have the right to skilled medical care (Article 40); and • Equal rights of men and women is guaranteed by the law (Article 46). • “Have the right, both individually and collectively, to submit applications and proposals, and to lodge complaints with competent state bodies, institutions or public representatives. Applications, proposals and complaints shall be considered in the procedure and within the time- limit specified by law� (Chapter VIII, Article 35). 34. The Labor Code of the Republic of Uzbekistan introduced on April 1, 1996 incorporates the interests of the employees, employers and the state and fair and safe labor conditions and the protection of the labor rights and health of the workers. This Code governs employment relationships and other relations, directly related, directed to protection of the rights and freedoms of the parties of employment relationships, establishment of the minimum guarantees of the rights and freedoms in the sphere of work. Article 6 of the Labor Code prohibits discrimination and guarantees that all citizens have equal rights to work; discrimination in labor relations is prohibited. Any differences, non-admission or preference, denial of employment, regardless of nationality, race, gender, language, religion, political beliefs, social status, education, property, leading to a violation of equality of opportunities in the field of labor, are prohibited. A person who considers that he/she has been subjected to discrimination at work may apply to the court for the elimination of discrimination and compensation for material and moral damage caused to him. 35. According to Labor Code, labor-management relations should be formalized in a fixed-term or temporary employment contract. The maximum length of a single fixed-term contract is 5 years (with the exception of few specific positions). 36. The Ministry of Employment and Labor Relations of the Republic of Uzbekistan is the main state institution responsible for labor, employment, and social protection policy making. The ministry is tasked with the development and regulation of labor market and ensuring employment of population, regulation of labor relations and labor protection, provision of social services for population and medical-social rehabilitation of persons with disabilities. Page | 61 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 37. The supervision and monitoring of compliance with Labor Code requirements and protection of labor rights of citizens is implemented by the State Labor Inspection under the Ministry of Employment and Labor Relations, and its territorial subordinate structures according to the Statement on the State Labor Inspection, Appendix 3, Resolution of the Cabinet of Ministers №1066 of 31.12.2018 “On measures to improve the performance of the Ministry of Employment and Labor Relations of Uzbekistan�. 38. Forced labor and child labor. Article 7 of the Labor Code states that Forced labor, i.e., forced to perform work under the threat of any punishment (including as a means of labor discipline) is prohibited. The right to work is permitted for persons aged 16 and older. However, for internship, it is allowed to hire students from secondary schools, secondary special, professional educational institutions to perform light work that does not harm their health and moral development, and does not interfere with the learning process, in their free time, when they reach the age of 15 with written consent of one of the parents or their legal guardians (Article 77). No one under the age of 15 is allowed to work under the Labor Code. 39. Young people aged between 15 and 18 years old have the right to work based on the local legislation, and have the same rights as adult workers with some benefits due to their age (Labor Code, Article 240). People under age of 18 can be employed only after medical examination and further until reaching the age of eighteen are subject to mandatory annual medical examination. People under age of 18 can be employed only for works which have no risk to their health, safety and moral, they are not allowed to lift and move heavy objects (Labor Code Article 241). 40. Employees aged 15-16 are allowed to work no more than 24 hours a week, and employees aged 16-18 are allowed to work no more than 36 hours a week. Students can be employed only when they are free of study, and their working time may not exceed half of the maximum working time set for the respective age groups, i.e. students aged 15-16 can work only 12 hours a week and students aged 16-18 allowed to work no more than 17.5 hours a week (Article 242). 41. Articles 49 and 51 of Administrative Code of Uzbekistan impose fines for violation of above- mentioned regulations on forced and child labor. The amended law on 23.08.2019 significantly increases fines for using administrative measures to attract employees to forced labor, which has been practiced previously in the country involving public workers, mostly teachers, health workers and students. The new law imposes fines ranging from 10 to 30 times the minimum wage for using such practices. If the same offence is committed repeatedly, responsible persons will face fines from 30 to 100 times the minimum wage, according to the ministry. 42. Wages and deductions. Contracts and collective agreements establish the form and amount of compensation for work performed. It is forbidden to pay in kind, except in cases established by the Government of the Republic of Uzbekistan (Labor Code Article 153). The Government establishes a minimum wage (Article 155). From September 2019, minimum wage payment was introduced, hence being the lowest national wage for a full-time position, cannot be less than 634,880 UZS (or $67,40 per month). In areas with adverse climatic and living conditions, district coefficients and allowances for wages are established. There is no established minimum wage for seasonal and daily workers (minimum payment for hour of work). 43. Employers are obligated to pay workers at least once per half-month (Article 161). Compensations for the payment delays can be included in the collective agreement. Employers also must pay for work- related damage to health or property and families are compensated in case of death. Deductions are allowed mainly for taxes and other obligatory payments set by the Government of Uzbekistan, as well as for specific reasons, but may not exceed 50 percent of the amount owed to the employee, and payment after deductions may not be less than the minimum rate determined by the government (Article 164). 44. Women. Night time work, overtime work, work on weekends and business trips for pregnant women and women with children under the age of 14 (with disabled children up to 16 years old), are allowed Page | 62 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) only on voluntary basis.. Herewith, recruitment of pregnant women and women with children under 3 years of age for night works is allowed only if there is a medical certificate confirming that such work does not threaten the health of the mother and child (Article 228). 45. Pursuant to the Presidential Decree № PP - 4235 of March 7, 2019 , men have received the same package of rights related to the childcare since 1 May 2019, only one of the parents (male or female) can decide to take maternity leave. Additionally, the President ordered to revoke the prohibitions on the use of female workers. As a corollary, the list of the professions that excluded the females’ presence has been given recommendatory status only (amendment to Article 225). 46. Working hours. The standard work week is 40 hours, with less allowed for those under 18 and for women who have children up to 3 years old. The number of hours per day, and days per week, is established in the contract/agreement between the employer and employee. Employers must provide time off each workday for “rest and food�, and also paid time off in case time is needed to cool off, to warm up, or to breastfeed children. Details of time off are established in contracts/agreements. 47. Leave. In addition to national holidays, employees have to receive at least 15 working days of paid leave per year, with workers under 18 years of age receiving at least 30 calendar days and disabled employees receiving 30 calendar days (Article 134-135). In addition, those who work in unhealthy and unfavorable working conditions receive an additional seven days and those who work in unfavorable climate conditions receive an additional eight days. The list of jobs, professions and positions at enterprises that give the right to additional leave, the duration of vacations, the procedure and conditions for their provision are determined by sectoral agreements, a collective agreement (and if it is not concluded by the employer in agreement with the trade union committee or other representative body of workers) on the basis of methodology for assessing working conditions, approved by the Ministry of Employment and Labor Relations of the Republic of Uzbekistan and the Ministry of Health of the Republic of Uzbekistan. Leave without pay may also be taken by certain groups of people and may also be covered in contracts. At termination of employment, employees are paid for unused leave, or they may use the leave as their last days of employment. 48. Women are provided maternity leave for up to 70 calendar days, and then are provided 56 days leave after giving birth, in case of complications or giving birth to 2 or more children up to 70 days, with benefits paid from the state social insurance (Article 233). Maternity leave is calculated in total and is paid in a lump sum, regardless of the actual number of days off before giving birth. After giving birth, a mother may take additional leave until the child is six months old, again paid by social insurance. She may take unpaid leave until the child is three years of age. Her position is guaranteed upon her return from all these types of leave. 49. Overtime work. Overtime compensation as specified in employment contracts or agreed to with an employee’s trade union, which can be implemented in the form of additional pay or leave. The law states that overtime compensation should not be less than 200 percent of the employee’s average monthly salary rate (broken down by hours worked). Additional leave time should not be less than the length of actual overtime work (Article 157). 50. Layoffs and staff reductions. The Labor Code and subordinate labor legislation differentiate between layoffs and firing. Employees can terminate their employment by filing two-week prior written notice, or apply for leave without pay. Layoff or temporary leaves without pay can be initiated by an employer due to worsening of the economic situation as below. For firing (severance), the employer should personally give two months’ advance notice in the case of corporate liquidation or optimization, two weeks’ advance notice in the case of an employee’s incompetence, and three days’ advance notice in the case of an employee’s malpractice or unacceptable violations. In case of severance caused by corporate liquidation or optimization, Page | 63 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) an employee should receive compensation, which should not be less than two average monthly salaries paid during their employment plus payment for unused leave (if another form of compensation was not agreed to in the employment contract). 51. Labor disputes. The general court system, where civil and criminal cases are tried, is responsible for resolving labor-related disputes. This can be done on a regional or city level. Formally, workers can file their complaints through the Prosecutor General’s Office. The Ministry of Employment and Labor Relations should provide legal support to employees in their labor disputes. 52. Disputes may be adjudicated by commissions that are created “on a par with employer and agencies representing the interests of employees...� (that is, with equal representation of employee/employees and employer), if such commissions are provided for in labor agreements/contracts (Article 262). Commissions must consider issues within 10 days. If the employer, employee, or their representatives disagree with decisions by a commission, or if the commission does not consider applications within 10 days, any of the parties may appeal to the courts, but that must be within 10 days of the decision (or no decision). 53. Enforcement of Labor Code is implemented by the State Labor Inspection under the Ministry of Employment and Labor Relations, and its territorial subordinate structures according to the Statement on the State Labor Inspection, Appendix №3, Resolution of the Cabinet of Ministers №1066 of 31.12.2018 “On measures to improve the performance of the Ministry of Employment and Labor Relations of Uzbekistan. 2.4.2. Occupational Health and Safety 54. Occupational Health and Safety (OHS) legislation comprises the Labor Code, the Law on Occupational Health and Safety, the decrees of the President of the Republic of Uzbekistan, Occupational Health and Safety standards, decisions of executive government agencies taken within their competence in the form of decrees, executive orders, regulations, directives, rules, etc. 55. More than 30 articles of the Labor Code are directly linked with issues of occupational health and safety. They include: • Occupational safety and health requirements (Article 211);Compliance with occupational health and safety regulations, rules and instructions (Article 212); • Provision of instruction and training to workers in labor protection (Article 215); • Regulation of working hours in hazardous industries for workers performing special work and workers under the age of 18 (Articles 116, 117 and 118); • Conditions for the employment of disabled persons in various jobs (Article 220); • Provision of milk, therapeutic and prophylactic food and personal protective and hygiene equipment to workers (Article 217); • Provision of first aid to workers and their transportation to medical and preventive treatment facilities (Article 221); and • Registration and investigation of accidents at work (Article 222) etc. 56. The Law “On Labor Protection� in the new edition was signed by the President of Uzbekistan on September 22, 2016. The law is aimed at further improvement of labor protection system, strengthening responsibility of employer and workers to execute requirements in this area, defining public authorities’ powers to ensure proper monitoring of working conditions and safety, increasing efficiency of public control in this field, bringing certain provisions of the current law in accordance with the requirements of the newly Page | 64 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) adopted legislative acts in modern market economy. 57. The Law introduces new concepts, regulates clearly issues of certification of workplaces on working conditions, audit of the OHS management system, investigation and registration of accidents at work and occupational diseases. It establishes specific mechanisms for public and trade unions participation in implementation of public control in this field, secures their rights related directly to OHS activities. 58. The Law “On Occupational Safety in Hazardous Production Facilities� passed on August 25, 2006 sets down the legal, economic and social terms of ensuring safe exploitation of hazardous production facilities and is aimed at preventing accidents and building the capacity of enterprises to liquidate their aftermath. 59. Under the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan № 60 of February 11, 2005 Rules of Compensation by the Employer of the Damage Caused to Employees by Injury, Occupational Disease or other Work-Related Impairment of Health were introduced. Under the law “On Occupational Safety and Health� a worker who has been fully or partially disabled through the fault of the management as a result of an occupational accident or professional disease is entitled to a lump sum allowance and compensation of damage to health paid by the enterprise. The lump sum allowance is determined by the collective contract (agreement) and may not be less than the annual wages of the victim. 60. The enterprise is obliged to compensate the victim for the cost of treatment, prosthetic work and other types of medical and social assistance and ensure retraining and reemployment of the victim in accordance with the medical report or pay the cost of the same. In the event of the death of a worker the enterprise pays material damage to the persons entitled to it as well as a lump sum in the amount of not less than six average annual wages of the deceased. 61. In addition to the main legislation the Republic has national normative documents addressing the issues of occupational health and safety. They include the Sanitary Rules and Norms (SanPiN), State Occupational Safety Standards (GOST, SSBT), Construction Norms and Rules (SNiPs), standards of the content of harmful substances (maximum allowable concentrations and levels), normative methodological documents on individual issues setting forth concrete requirements to occupational safety in hazardous facilities, when manufacturing or applying various products, etc. In addition to state normative documents various sectors of industry enforce departmental and interdepartmental norms, requirements and rules of occupational safety and health. 62. Enforcement of OHS legislation. The main state bodies responsible for the implementation of OHS policy are: • the Ministry of Employment and Labor Relations, including the State Labor Inspection under the Ministry with territorial branches distributed all over the Republic; • the State Inspection for Safety in Industry, Mining and Housing and Utilities Sector; • the Department of State Sanitary Epidemiological Supervision under the Ministry of Health of the Republic of Uzbekistan. 63. The Ministry of Employment and Labor Relations has an OHS directorate and the State Labor Inspection and its regional branches in the Republic of Karakalpakstan, Viloyats (regions), the Tashkent city and district directorates and branches on labor, employment and social security. They constitute a single system of supervision and monitoring compliance with OHS requirements at the ministries and agencies, institutions, organizations, industrial and agricultural enterprises, with the exception of hazardous facilities that are under the jurisdiction of the State Inspection on Safety in Industry, Mining and the Housing and Utilities Sector. Page | 65 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 64. The structural units of the State Inspection for Safety in Industry, Mining and the Housing and Utilities Sector are sectoral inspections: • for supervision of the coal and mining industries; • for supervision of the oil and gas industry; • for supervision in the chemical, metallurgical and oil and gas processing industry; • for gas supervision; • for boiler and underground structures supervision; • for geological prospecting supervision; • for nuclear industry supervision; • for transport and storage of petroleum products supervision; • for supervision of the carriage of hazardous cargoes; • for supervision of subsoil resources, processing of mineral raw materials and geological and surveying control; • for supervision of compliance with the technological rules of grain storage and processing; • for supervision of the work of power stations, substations and networks; and • for supervision of the housing and utilities sector. 65. Sanitary supervision is carried out in the name of the state by the agencies of the Ministry of Health in accordance with the basic laws of the Republic of Uzbekistan: The Constitution, the Laws on Protecting the Health of Citizens and On State Sanitary Supervision (Gossannadzor) and other regulations. 66. According to the Statement on the Procedure for the Creation and Organization of Labor Protection Services in organizations, Appendix №5, Resolution of the Cabinet of Ministers №1066 of 31.12.2018 “On measures to improve the performance of the Ministry of Employment and Labor Relations of Uzbekistan� each organization must have Labor Protection personnel which is responsible for: i) organization of work to ensure that employees comply with labor protection requirements; ii) monitoring compliance by employees with laws and other regulatory legal acts on labor protection, regulatory documents in the field of technical regulation on labor protection, the collective agreement, labor protection agreements, and other local regulatory acts of the organization; iii) the organization of preventive work to prevent occupational injuries, occupational diseases and diseases caused by occupational factors, as well as work to improve working conditions; iv) informing and advising the employer and employees of the organization on labor protection issues, introducing best practices and scientific developments on labor protection, promoting labor protection issues; v) implementation of measures for the organization of induction trainings, trainings, retraining and advanced training of employees of the organization on labor protection issues. 67. And if organization have employees less than 50 people, this organization should have at least on labor protection specialist or one of the managers combine work of the labor specialist, and for organizations with employees more than 50 people, labor protection service needs to be created within the organization. 68. The Law of Uzbekistan №210 of 16.04.2009 “About mandatory insurance of civil liability of employer� obliges employers, under the conditions and in the manner established by the Law, to insure its civil liability for compensation for harm caused to the life or health of the employee in connection with work injury, occupational disease or other health damage associated with the performance of his/her labor duties. Page | 66 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Land Acquisition and Physical and Economic Displacement (Core Principle 4) 2.5. Legal Framework for Land Acquisition and Resettlement 2.5.1. Applicable legislation of Uzbekistan on Land Acquisition and Involuntary Resettlement. 69. In Uzbekistan, land expropriation is provided for the public needs under the Land Code (LC) and Law # 781 of the Republic of Uzbekistan on “Procedures of land acquisition with compensation for the public needs�. Expropriation in this context refers to the taking away of private land for a public purpose by the government with or without the owner’s consent subject to laws of eminent domain, which stipulates prompt and adequate compensation. In Uzbekistan, Law # 781 of the Republic of Uzbekistan regulates land acquisition and resettlement for the public needs along with different Resolutions, Acts and Codes as described below. 2.5.2. Civil Code (29 August 1996) 70. The Civil Code (CC) defines the legal status of participants of civic relations, the grounds, and procedure of implementation of property rights and other proprietary rights, rights on the intellectual property, regulates the contractual and other obligations, as well as other property and related personal non-property relations. The CC defines general rules of property seizure, determination of property cost and rights for compensation, terms of rights termination. 71. The CC provides that: a person whose right has been violated may demand full compensation for damages unless the law or the contract provides compensation for losses in a smaller size (Article 14, Clause 1). The Civil Code (Article 14, Clause 2) also specifies that losses are understood as: • expenses that the person whose right is violated, made or must make to restore the violated right; • the loss of or damage to property (real damage); • the revenues that this person would have received under normal conditions of civil turnover if his right had not been violated (lost profits) 72. According to article 14, Clause 3 “If the person has violated the law, revenues received as a result of this, the person whose rights were violated, has the right to demand compensation along with other losses, lost profits in the amount not less than such profits�. 73. According to article 7 “If an international treaty or agreement stipulates other rules than those stipulated by civil legislation, rules of the international treaty or agreement.� This rule is a common rule for all of Uzbekistan’s laws. 74. According to Article 8, Clause 3, the rights to the property which are subject to state registration shall arise upon the registration of the relevant rights to it, unless otherwise provided by law. Article 84, Clause 1 provides that the right of ownership and other real property rights, creation, transfer, restriction, and termination of these rights are subject to state registration. This means that without registration the right to real estate property does not enter into the force. This statement is very important for the further understanding of LAR processes related to land acquisition and building’s demolition. 2.5.3. Land Code (30 April 1998) 75. The Land Code (LC) is the main regulatory framework for land-related matters in Uzbekistan. The LC regulates allocation, transfer, and sale of land plots, defines ownership and rights on the land. It describes responsibilities of different state authorities (Cabinet of Ministers, regional, district and city khokimiyats) in land management; rights and obligations of the land possessor, user, tenant, and owner; land category Page | 67 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) types, land acquisition, and compensation issues, resolution of land disputes and land protection. The LC also defines the terms of rights termination on land plot, seizure and land acquisition of land plot for state and public needs, and terms of seizure of land plot in violation of land legislation. The LC provides that: • Withdrawal of the land or part thereof for state and public needs is made by agreement with the land user and tenant with decision respectively by khokim of district, city, region or by the decision of the Cabinet of Ministers (Article 37, Clause 1). In case of disagreement by the land user or tenant of the land with a decision bydistrict (city, region) khokim, or the decision of the Cabinet of Ministers to withdraw the land, this decision may be appealed in court (Article 37, Clause 2); • Losses caused by violation of the rights of land users, tenants and landowners (including lost profits), shall be reimbursed in full (Article 41, Clause 3); • The withdrawal of the land for state or public needs may be produced after allocation to a land user or tenant an equivalent land plot and the compensation of all losses including lost profits (Article 41, Clause 4); • The LC (Article 36, Clause 1) specifies instances when the right to the land can be terminated. Termination of the right of possession and the right of permanent or temporary use of land is made by decisions, respectively, bykhokims of districts, cities, regions or by the decision of the Cabinet of Ministers regarding the proposal by the bodies exercising state control over the use and protection of land, on the basis of supporting documents justifying the termination of the rights. In case of disagreement with the decisions of the Cabinet of Ministers and the officials of the termination of the right of possession, the right of permanent or temporary land use, the natural and legal persons may appeal to the court (Article 36, Clause 4). 76. According to Article 39, Clause 1 land user, tenant, and landowner have besides others the right to reimbursement of losses (including lost profits), in case of withdrawal of land or compensation costs for voluntary renunciation of land (Article 39, Clause 1, sub-Clause 7). 77. The LC (Article 86, Clause 1) specifies the cases where losses of land users must be compensated in full including lost profits: • seizure, redemption or temporary occupation of land; • the restriction of their rights in connection with the establishment of water protection zones, coastal strips, sanitary protection zones of water bodies, zones of formation of surface and underground water, zones of resort areas, public areas of biosphere reserves, protected zones around national parks, game reserves, national nature monuments, sites of cultural heritage, discharges, roads, pipelines, communication and power lines. 78. According to the Article 87, Clause 1 losses of agricultural and forestry production, caused by the withdrawal of agricultural and forest land, including agricultural land, owned and used by individuals to use them for purposes not related to agriculture and forestry, restrictions on the rights of land users and tenants or deterioration land due to the impact caused by the activity of enterprises, institutions and organizations, shall be reimbursed in addition to the indemnity provided for in Article 86. Losses of agricultural and forestry production are compensated by legal and natural persons: • which removes withdrawn agricultural and forest lands for purposes not related to agriculture and forestry; • around objects for which protection sanitary and protection zones are established with the Page | 68 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) exclusion of agricultural and forest lands from the turnover or through transferring them into less valuable lands’ category. 2.5.4. Law No. ZRU-781 79. Law No. ZRU – 781 “On Procedures of Land Acquisition for Public Needs with Payment of Compensations� is a progressive legislation that deals with withdrawal of land plots for public needs (on the basis of right to lifetime inheritable possession, permanent possession, permanent and temporary use or lease). It recognizes principles of LA based-on principles of (i) legality; (ii) priority to ownership rights; (iii) openness and transparency; and (iv) guarantee of compensation. It provisions compensation as per market value for immovable property (whether registered or unauthorized) and their right to the withdrawn land, value of perennial plantations and seasonal crops, moving expenses including temporary renting of another property, loss of lease rent and lost profit for the period between vacating and restoration of activity and a one-time payment (5 percent of market value) as compensation for the inconvenience caused (Article 23). Persons occupying a premises for 15 years with no title documents, but who have been paying related taxes are also made eligible for compensation, provided it is located on permissible land categories. For increased transparency, ZRU 781 provides fresh land allotments through electronic auctions and public disclosure of land acquisition notifications by local hokimiyats. 2.5.5. Resolution of Cabinet of Ministers № 146 (25 May 2011) with amendments based on Resolution of Cabinet of Ministers №1024 (20 December 2019) 80. This Resolution previously named “About the Measures of Improvement the Order of Provision of Land Plots for the Implementation of Urban Development Activity and for Other Non-Agricultural Needs� and renamed in late 2019 into the “Regulation on the procedure for compensation for losses of owners, users, tenants and possessors of land, as well as losses of agricultural and forestry production� is aimed to improve the procedure for granting land plots, protecting the rights of legal entities and individuals on land and improving the architecture of settlements and the efficient use of their (settlements) land for construction by the Land Code and the Town Planning Code. This resolution has approved two Regulations: (i) Regulation on the procedure for granting land for urban development and other non-agricultural purposes, (ii) Regulation on the procedure of compensation for land possessors, users, tenants, and owners, as well as losses of agriculture and forestry. The Regulation on the procedure for granting land for urban development and other non-agricultural purposes contains the following provisions: • Order of land plot location, preparation and approval of site selection and land allocation documents without approved planning documentation; • Order of placement, selection and land allocation with approved planning documentation, • Order for rejection in the selection and land allocation for construction; • Provision (sale) of land plots for individual housing construction; • Elements of urban planning documents and development regulation lines. • Based on Regulation №498 (14 June 2019) point №19. In the resolution of the Cabinet of Ministers of May 25, 2011 No. 146 "On measures to improve the procedure for the provision of land plots for urban planning and other non-agricultural needs" (SP of the Republic of Uzbekistan, 2011, No. 5, art. 40):losses of possessors, users, tenants and owners of land, as well as losses of agricultural and forestry production are to be determined by the UzDavYerLoyiha Institute, or by cadaster bodies or by departments of the Ministry of Construction with the involvement of the evaluating agency. The defined sizes of losses are to be considered, Page | 69 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) respectively, by the commissions under the Cabinet of Ministers or khokimiyats and subject of the approval by public authorities along with materials for the selection and allocation of land plot(s). 81. The Regulation on the procedure of compensation for possessors, users, tenants and land owners, as well as losses of agriculture and forestry includes the following: • Compensation for losses of owners, users, tenants and landowners located on the agricultural lands; • Compensation for losses of agriculture and forestry; • Cost of irrigation and developing the equal new land plot in return for seized irrigated agricultural land; • Cost of fundamental improvement of grassland and pasture; • Scheme for determination of losses of land possessors, users, tenants, and owners, as well as losses of agriculture and forestry; • Coefficients on the location of seized land plots (Not active since January 1, 2020). 82. The losses of land possessors, users, tenants, and owners, as well as losses of agriculture and forestry, should be compensated before granting of documents certifying rights on land plot. The regulation also orders that demolition of the house or building shall be done only after agreeing on compensation and providing replacement premises — the regulation orders that compensation has to be paid before starting any construction work. The land possessors, users, tenants and owners, whose land plots are seized and to whom land plots are granted, can in case of disagreement with a defined amount of losses, appeal to the court. In case of acquisition and temporary occupation of land plot or part thereof, the following would be subject to compensation: • Cost of the land plot, owned by individuals and legal entities; • Cost of residential houses, constructions, and installations, including incomplete constructions, and also located outside of the allocated plot, if its further utilization is impossible due to seizing of the land plot. • Cost of fruits and berries, protection and other perennial plants; • Cost of incomplete agricultural production; • Lost income. 83. Above described Laws and Regulations mention that non-titled and squatters on land and building/structures are ineligible for any compensation. 84. Collectively, these regulations provide a sound basis for acquiring land for public purposes and for compensating land users according to the registered user of the land in Uzbekistan. 2.5.6. Resolution of Cabinet Ministers №317 (21 September 2016) 85. The resolution “On amending and adding to some decrees of the Republic of Uzbekistan, aimed the further improvement of registration of cadastral document on real property� defines responsible design institution which calculates the agricultural and forest-related losses belonging to legal land users, tenants. This institute is “UzDavYerLoyiha� and its branches in the regions. 86. It defines that in case of the following type of construction works, compensation for agricultural and forest-related losses will not be compensated: Page | 70 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) • individual housing construction and maintenance of a residential house; • the construction of pre-school, general secondary, secondary special, professional educational and medical institutions; • construction of water management facilities, land reclamation facilities and hydraulic structures; • the formation of protected natural areas. 87. By this resolution, the Government defined the procedure of legalization of cadastral document of titled and not titled (illegal) land users. The main requirements for the legalization of non-titled land users are to provide i) explanation of circumstances of iinformal use of land, ii) certificate from local self-governed bodies on possession of last 15 years, iii) payment of land tax for the last five years. 88. Compensation mechanism of agricultural and forest-related losses is updated by this resolution. 2.5.7. Resolution of Cabinet Ministers №3857 (16 July 2018) 89. The resolution “On measures to improve the effectiveness of preparation and realization of projects with participation of international financial institutions and foreign government financial organizations� partly provides that payment of compensation for the land acquisition, demolition of houses, other structures, plantings within the framework of projects with the participation of International Financial Institutions (IFIs), if it is agreed and stated in agreements, then will be carried out by authorized bodies in accordance with the requirements of IFIs or Foreign Governmental Finance Organizations (FGFOs). 2.5.8. Decree of the President of the Republic of Uzbekistan №5490 (27 July 2018) 90. The Decree “On measures to further improvement of the system for protecting the rights and legitimate interests of business entities� has established a Centralized Fund under the Cabinet of Ministers of the Republic of Uzbekistan for compensation of losses to citizens and business entities in connection with the seizure land plots for state and public needs, as well as the procedure for mandatory coordination with this fund of land acquisition for state and public s needs. 2.5.9. Decree of the President of the Republic of Uzbekistan №5495 (1 August 2018) 91. Decree “On measures on cardinal improvement of investment climate in the Republic of Uzbekistan" partly provides that the adoption of decisions on the seizure of land for state and public needs is allowed only after an open discussion with interested parties whose land plots are planned to be seized, as well as assessing the benefits and costs; demolition of residential, industrial premises, other structures, and structures belonging to individuals and legal entities, with the withdrawal of land plots is allowed after the full compensation of the market value of immovable property and losses caused to owners in connection with such withdrawal. 2.5.10. The Law of the RoU “On Privatization of Non-agricultural Land� №552, August 13, 2019 92. This normative document regulates the procedures, rules and mechanism of privatization of non- agricultural land. According to the Law, the following land plots are subject for privatization: (i) land plots on which the buildings and structures belonging to legal entities, industrial infrastructure facilities are located, as well as the land adjacent to them in the extent necessary for the conduct of production activities; (ii) land plots provided to Uzbekistan citizens for individual housing construction and its upkeep; (iii) free land plots; (iv) land plots that are provided to the Urban Development Fund under the Ministry of Economy and Industry of the Republic of Uzbekistan. 93. The Law forbids privatization of land plots that are: (i) located in territories that do not have approved and published layout plans; (ii) that are part of the lands of environmental, recreational, recreational and Page | 71 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) historical-cultural purposes, as well as lands of forest and water funds, general use of cities and towns (squares, streets, driveways, roads, embankments, squares, boulevards); (iii) infected with hazardous substances and susceptible to biogenic infection; (iv) provided to residents of free economic and small industrial zones. 94. Within implementation of this project the order of compensations payment to these persons in case of loss of property and other objects of property is also governed by the following standard and legal documents: a. Law of the Republic of Uzbekistan "On Evaluation Activity" as for 19.08.1999. № 811-I; b. Decree of the President of the Republic of Uzbekistan "On further improvement of activity of evaluation companies and increases of their responsibility for the quality of rendered services" (№ UP-843 as for 24.04.2008). 2.5.11. Resolution of Cabinet of Ministers № 1047 (26 December 2018) 95. This resolution “On the procedure for the formation and use of centralized funds for the compensation to affected individuals and legal entities for the expropriation of land for the state and public needs� appoints Republican Centralized Fund (RCF) under the Cabinet of Ministers for land acquisition compensation payments to affected households and affected entities in course of the projects to be implemented for the needs of the state and society. RCF will be established for the projects that are accepted on the Governmental level. This resolution establishes the procedure of compensation payments to affected physical and legal entities. The Supervisory Board is established under RCF, and its decisions are compulsory to execute. The Board will also monitor the allocation of funds to AHs during the resettlement implementation period. Local managing bodies (khokimiyats) should start the process by application to RCF on the allocation of necessary funds for LAR. This application will be reviewed by the Board, and the necessary decisions will be accepted. The Decree on the allocation of compensation is issued by regional khokimiyats based on the decision of RCF. The Decree serves legal instrument to pay compensation to affected physical and legal entities. 2.5.12. Decree of the President of the Republic of Uzbekistan №-5491 (August 5, 2019) 96. The Decree “On Additional Measures to Unconditionally Guarantee the Right of Ownership of Citizens and Business Entities� governs the procedures, mechanism of making decisions on the seizure of land for state and public needs which is (i) allowed only after an open discussion with interested parties whose land is planned to be withdrawn, as well as assessing the benefits and costs; (ii) the demolition of residential, industrial premises, other buildings and structures belonging to citizens and business entities upon the seizure of land is permitted after full compensation of the market value of real estate and losses incurred by the owners in connection with such seizure; (iii) Losses caused to citizens and business entities as a result of the unlawful administrative act of a state body (official) are subject to compensation by the state, primarily at the expense of extra budgetary funds of the relevant bodies, followed by recovery from the guilty person in recourse. According to this Decree, from August 5, 2019, the seizure of land and the demolition of real estate owned by citizens and businesses for state and public needs, as well as for other purposes, is carried out in the order consisting of the following steps: (i) at the first stage, a collection of materials on the territory planned for demolition is submitted to the Cabinet of Ministers of the Republic of Uzbekistan by the chairman of the Council of Ministers of the Republic of Karakalpakstan, khokims of the regions and the city of Tashkent; (ii) at the second stage - in the Cabinet of Ministers of the Republic of Uzbekistan, an opinion is prepared on urban planning requirements and for financial calculations; (iii) at the third stage - the prepared opinion is submitted to the Prime Minister of the Republic of Uzbekistan for consideration and decision. Page | 72 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 97. There is the personal responsibility of local authorities for full compliance with legislative acts when seizing land, in particular for: (i) notification of owners in the prescribed manner and terms of the relevant decision on the seizure of the land and the demolition of residential, industrial and other buildings, structures and plantings located on the land; (ii) prevention of demolition of houses, other buildings and structures on confiscated land plots before preliminary and full compensation of losses at market value; (iii) the provision in the prescribed manner of temporary housing for the period of development of the land provided as compensation to displaced citizens for up to two years, as well as for compliance with other requirements. 2.5.13. Resolution of Cabinet of Ministers № 911 (16 November 2019) 98. On November 16, 2019, the Cabinet of Ministers approved the “Regulation on the procedure for seizure of land plots and providing compensation to the owners of real estate objects located on the seized land plot�. This Regulation determines the procedure for the seizure of a land plot for the State and public needs. The Regulation shall apply if the land plot is in possession, use or temporary use of individuals or legal entities (individual entrepreneurs, citizens of Uzbekistan, foreign citizens, business entities, NGOs) and does not apply to land plots owned (private property right) by individuals and legal entities. In this regard it is not clear whether this regulation is not applicable only to lands, that will be privatized in accordance with the Law “On Privatization of Non-agricultural Land� №552 (August 13, 2019). 99. This key LAR related document envisages the introduction of new regulations pertaining to the compensation procedure for land seizure for public needs and replaces Resolution of Cabinet of Ministers № 97. To date, the process has not been transparent and lacked adequate protection for property owners. This regulation applies to cases where land occupied by real property is owned based on the rights of permanent or temporary use. 100. The document clearly defines the term "State and public needs", which, among others, includes implementation of investment projects aimed at improving infrastructure facilities, including the construction and rehabilitation of energy systems and power transmission lines. 101. As per the procedure introduced by the document, land seizure is allowed given that both of the following conditions are met: a. the owner/user/leaseholder explicitly provides his/her consent and; b. the project is approved by the local Kengash (Council) of Peoples’ Deputies, or an investment project is specially mentioned in the Presidential Decree or by a Resolution of the Cabinet of Ministers. According to this resolution: (i) both local municipalities (khokimiyats) and investors may initiate land seizure following the procedures provided in the regulations; (ii) if there is a need to withdraw the land plot, an open discussion is to be held with the participation of the khokimiyat representatives and investors and owners; (iii) preliminary valuation of losses will be carried out by the khokimiyat or by cadastral bodies. The Regulation mentions that “the full list of immovable property objects, located on the plot is to be prepared as well as other information is to be provided in regards of the immovable property�. Trees and standing crops are not mentioned as a subject of valuation and further compensation, thus, the Resolution of the Cabinet of Ministers №146 (25/05/2011) will be applied for the compensation of these assets); (iv) the Kengashes of people’s deputies will consider the benefits and costs of the seizure of land, Page | 73 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) and, if there are sufficient resources, as well as in case of excess of benefits and costs, a decision will be made on the seizure of land. (v) evaluation of the property that is going to be seized is done at the expenses of the initiator. When 75% of property owners provide their consent to land seizure, the initiator has the right to apply to court in order to get a compulsory sale order for the rest 25% of the owners. In such cases, the compensation is to be determined in a court ruling rather than by a compensation agreement. This procedure, anyhow, guarantees a full replacement cost. (vi) new objects being part of a compensation for seizure must be provided within 2 years, otherwise fines are applied for each day of delay. (vii) demolition of real estate objects is permitted only after their owner is compensated in full as provided in a compensation agreement (or a court decision in case of a dispute). Khokimiyats are not authorized to make decisions on the seizure of land; (viii) the khokimiyat or the investor and the owners, and this agreement is notarized; (ix) an initiator and an owner of a property must conclude the relevant compensation agreement subject to notarization. The agreement must include the type of compensation(s), its amount and terms of payment and/or provision of other compensatory measures; (x) The demolition of real estate objects without the agreed compensation is not allowed. After providing agreed compensation to the owners: (i) real estate/property is released by the owner (ii) the draft resolution on the demolition is sent by the khokimiyats to the justice bodies for the issuance of a conclusion. The resolution on demolition of real estate is accepted only in the presence of the positive conclusion of justice departments (iii) Transfer of the real estate objects located on the withdrawn land plot to another person is allowed only if there is a written consent of the initiator after signing of the Agreement, or in case of termination of the Agreement (in the order provided by the Agreement, with the consent of the parties or in court). (iv) The owner who has acquired the object of real estate subject to demolition is the legal successor of the rights and obligations of the previous owner arising from the Agreement concluded in accordance with this Provision. (v) Control over execution of requirements of the legislation at withdrawal of the land plots, demolition of objects of real estate, resettlement of citizens, and also granting of compensations is carried out by bodies of Prosecutor’s office. (vi) The owner, based on agreement with the initiator/investor, now has the right to carry out at his own expense the demolition of the property/structures with the further removal of all materials (salvages) and construction waste and with the proper cleaning of the territory for construction needs. 102. This procedure come into force on January 1, 2020. It is important to mention also that in case of untimely or incomplete provision of compensation by the project initiator, khokimiyat must provide compensation with a subsequent appeal to the court to recover compensation from the guilty persons. 103. A possibility to keep salvage materials is a very important issue for relocated households (because they can use salvages for the construction of new houses). The previous Resolution №97 (25 May 2006) Page | 74 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) defined that all the salvages are the property of the investor (after the compensation is provided in full to relocated AH). However, even with this strong requirement, the vast majority of the projects supported by IFIs in Uzbekistan (including WB financed projects) allowed relocated Affected Peoples to keep salvages as an additional protection measure. 104. 2.5.14. Resolution of Cabinet of Ministers № 44 (15 February 2013) with amendments based on Resolution of Cabinet of Ministers №1046 (28 December 2019) 105. This resolution determines the procedure for the appointment and payment of Makhalla allowances for: а) low-income families with children under the age of 14 years, b) allowances for low-income parents for child care until the age of two years and c) allowance for low-income families. According to this resolution the following types of families are entitled to allowances: • families where the average monthly income does not exceed 52,7% of minimum wage per person during the last three months. Along with incomes household members gain officially, additional factors are also to be considered by makhalla committee members, including the availability of land, employment status of family members, and presence of persons in need of care; 106. The preferential rights for makhalla allowances have families: • who have lost both parents and children are in care of relatives; • families where one or both parents are disabled; • widow(er), raising two or more children under the age of 14, living separately from other relatives; • family with disabled children; • mothers or fathers who are bringing up the children in a single-parent family. In this case the fact of child rearing mother (father) in an incomplete family established by makhalla; • families in which one or both parents are unemployed who have been registered at state employment bodies (regional and city departments of the Ministry of Employment and Labor Relations) as job-seekers; • single retired persons. 2.5.15. Resolution of Cabinet of Ministers №165 (30 March 2017) 107. Uzbekistan’s legislation does not define compensation as targeting the rehabilitation of APs’ livelihood. They focus on paying compensation for measurable physical impacts or incomes. The Presidential Resolution №3857 of 2018 (described above) requires that the donor-funded projects follow the specific safeguards requirements of the donor. This resolution theoretically removes any disparity between the country’s legislation on LAR issues and WB’s requirements under ESS5. However, there are still questions to EAs from state budget controlling authorities that are related to the amount of the rehabilitation allowances provision. 108. This Regulation №165 determines the procedure for the allocation of a one-time financial allowance to needy families in the Republic of Karakalpakstan and the Khorezm region, primarily, single retirees, families with a disabled breadwinner and other low-income groups and families. This allowance to needy families can be appointed by a special decision of makhalla Social Protection Commissions to families (citizens) who find themselves in difficult life situations. The definition of a difficult life situation includes among others the damage to property as a result of emergency circumstances or force majeure. The specific amount of this one-time financial assistance is determined by the Commission for each case individually, taking into account the complexity of the “difficult life situation�. According to regulation №UP-4086 since Page | 75 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) 28 December 2018, the minimum and maximum amount of this allowance are annually regulated by a special Decree of the President of Uzbekistan. For the year 2020, this amount was determined in the Decree of President №UP-4555, Annex 2 (December 30, 2019) and vary from 434,000 UZS and up to 1,085,000 UZS. 109. Considering that a) there are no other norm to compensate the loss of livelihood and b) absence of the specialized social protection body in the country, it is suggested in this project, based on Resolution №165 (on analogy), to allocate a one-time allowance amounting of maximum value of the allowance envisaged by the Deree of President №UP-4555 to all the displaced AHs as severe impact relocation allowance. 2.5.16. Tax code 110. The Tax Code (TC) is a regulatory framework for taxation related matters of individuals and legal entities. This law regulates compensation for a vulnerable group of people regarding applying for discounts or exemption from property taxes, land tax, income tax and other taxes stipulated in this TC. 111. The national legislation of Uzbekistan, instead, limits the matter to the payment as mandated by the Labor Code of fixed employment termination indemnities due by an employer to his employees and to the obligation of the project proponent to reimburse the employer of the cost of those indemnities mandate by the Civil Code. Such an approach excludes informal employees without a declared salary (and confirmed payments of taxes) from job loss compensation, applies only to permanently affected jobs and does not automatically guarantee that the APs receive their job termination dues. Inclusion of Vulnerable Groups (Core Principle 5) In the last few years, Uzbekistan has managed to close some gender gaps in social and political participation, but several significant gaps still persist. The gender gap in labor force participation is still about 33 percent (WDI, 2022); participation of women in employment and their achievement on human development indicators still lags behind comparable middle-income countries. This gap in key attainments not only leads to a high degree of exclusion, but also contributes to slow growth of the economy, with a significant population not being able to participate in its economic development. The existing definition of sexual exploitation and abuse and sexual harassment (SEA/ SH) at workplace and does not provide for prohibition of discrimination based on sexual orientation or gender identity, which leads to poor identification of such risks and their prevention. Sexual harassment at a workplace is also not covered by the existing Labor Code. While various laws prohibit sexual harassment against women, there is no uniform prohibition on sexual harassment against women and men, and legal or other remedies are not easily accessible to the victims. This poses a higher risk for women at workplace, since legal provisions related to gender-based discrimination in employment have only recently been introduced and awareness related to them is still quite low. As a result, the country experiences high incidences of Gender Based Violence (GBV) due to inadequate enforcement and also owing to existing social norms due to which much of this is accepted, goes unreported and uncontested. Women also face many barriers to accessing economic opportunities- both in the form of paid employment and as entrepreneurs. Lack of state-sponsored skilling support to women also denies them access to livelihood earning opportunities and skills relevant to the markets. Recognition of women as a distinct constituency, with their own unique needs Page | 76 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) is absent from most national policies and hence remains invisible within the operating policy environment. As a result, whether it is public consultations to plan resettlement for those impacted by physical or economic displacement or ensuring grievance redress systems responsive to their needs, in most policies, women are not acknowledged as important stakeholders. Women also face obstacles in accessing justice, particularly in cases of gender-based discrimination. Barriers such as lack of legal awareness, limited access to legal aid, and societal stigma hinder women from seeking redress through the legal system. The land acquisition procedures of the state do not mandate the presence of women, and other marginalised groups from the project affected households, to participate in resettlement-related consultations nor are separate, dedicated consultations to understand their distinct needs provisioned in policy. Similarly, affirmative measures to address the added vulnerabilities that women and other marginalised groups face are not covered through any additional resettlement assistance. Owing to low awareness about procedures and the importance of registration, many informal property users/owners and those with partial ownership/lease titles are women. Combined with this, the barriers they face in accessing public services, prevent them from taking the benefit of periodic amnesties or fulfilling the requirements to formalize their ownership. Citizens’ engagement in development projects tends to be low, and wherever such public engagement is required by procedures, women’s needs are not sufficiently analysed or addressed. For example, the national Environmental Impact Assessment policy does not require consultations with women at the time of the SEE. The Public Environmental Expertise, while provisioned and allowed, is rarely used, and the extent of women’s involvement in it depends on the orientation of the civil society organisation leading it. Similarly, appeals/grievance redress systems – both national and sector specific – do not create procedures for handling GBV-related grievances, creating referral pathways, and ensuring anonymity of the complaints. The capacity of the staff managing to identify and address various forms of vulnerabilities and their inter-sectionality in specific contexts, and adopting inclusive and participatory processes, is quite limited. Persons with disabilities experience challenges in accessing employment due to stigma, lack of accessibility, and possible discriminatory attitudes among employers. While there are specific policies in place to ensure inclusive employment especially with regards to women and persons with disabilities (PwDs), the enforcement and its monitoring is weak. The use of informal workers, especially in the agriculture and private sector, is very widespread. Most informal workers belong to the poor and vulnerable groups (often rural communities) and due to weak regulatory mechanisms to secure compliance with labor laws their use is rampant. This includes sectors and industries considered hazardous and with high OHS risks where use of informal workers is high. Job insecurity, lack of awareness and effective provisions to safeguard workers from exploitation and abuse tends to push them towards informal labor markets. The use of forced and child labor has traditionally been high in the country, although in recent years the country has done commendable work to eliminate such labor from the cotton sector where their use was rampant. However, there are other sectors and industries where child labor their engagement persists even though legally prohibited. There is lack of orientation on the social-legal aspects related to use of forced and child labor among the enforcement agencies and their capacities to identify their deployment is weak; this combined with the lack of real powers to take disciplinary action against such employers means that their use goes unchecked. Page | 77 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) Avoidance of Exacerbating Social Tension (Core Principle 6) Overview Uzbekistan’s navigation from its post-Soviet trajectory has been eventful, particularly in terms of community engagement and governance. The gradual transition from a centrally planned system to one that emphasizes transparency and community involvement is significant. The acknowledgment of the importance of involving communities in development planning and implementation reflects a broader global trend towards participatory governance. Efforts to empower local institutions like Mahalla Committees are crucial for fostering community-driven development initiatives. By providing these institutions with resources and authority, the government can better address the diverse needs of its citizens and ensure that development projects are more responsive to local realities. While Uzbekistan may still need to take steps to fully embracing proactive engagement with public stakeholders, the recent initiatives aimed at enhancing governance and accountability are promising steps forward. Building trust between the government and its citizens is essential for fostering a more inclusive and responsive society. Since 2017, there has been a perceptible change in the legal environment related to public participation and citizen engagement through the introduction of several laws and resolutions that mandate public participation, make provisions for the conduct of open meetings and public hearings in matters related to the roll-out of development projects that have beneficial or adversarial impact on local communities to inform the community about the proposed projects and seek their feedback and suggestions. People’s Reception Offices of the President of Uzbekistan have been opened at various tiers of the government as well as Virtual Reception to receive appeals and grievances from the citizens and to ensure their consideration by various state bodies and organisations. However, despite all these steps, most laws and policies do not provide for full participation and seek meaningful and effective engagement. As a result, stakeholder engagement, in most cases, remains limited to an exercise of token presence of community representatives in meetings/ hearings, and their feedback is not necessarily considered during project design or site selection, and the impacts are not adequately scoped during the identification of mitigation measures. PEOPLE’S PARTICIPATION AND CONSULTATION a) Constitutional Provisions – The Constitution of the Republic of Uzbekistan through Chapter VII on Personal Rights and Freedoms protects the right of freedom and inviolability (Article 27) and under Chapter VIII on Political Rights provides all citizens the right to participate in the management and administration of public affairs directly, through representation, referendums or other democratic formations (Article 36). Under Chapter X on Guarantees of Human and Civil Rights and Freedoms it protects the rights of people with disabilities and elderly and other socially vulnerable categories and promises to improve their quality of life and enable them to fully participate in social and public life, have full access to services and obtain information without hinderance (Article 57). Article 58 goes on to declare equal rights for women and men and provide equal rights and opportunities for them in administration of public and state affairs and in other spheres of social and state life. b) Civil Code – The code is based on recognition of the inviolability of ownership, freedom of contract, impermissibility of arbitrary interference by anyone in one’s private affairs and guarantees restoration of any Page | 78 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) violated rights and their judicial protection and allows citizens and legal entities to exercise their civil rights as per their will, in their interest (Article 1). c) Law No. ZRU 781: In the context of land acquisition ‘Procedures for Withdrawal of Land Plots for Public Needs with Compensation’ mandate that preliminary review meetings of Kengash on decision to withdraw a land plot be held openly with participation of media and public representatives (Article 17). Open discussions are to be organized by the initiator with participation of two-thirds of right holders, or their representatives. The initiator is responsible for familiarizing them about the purpose of land withdrawal, listen to their opinion and document the list of participants and opinions expressed (Article 20). ZRU 781 says that while considering the draft decision on land withdrawal, participation of representatives of the initiator and right holders, should be ensured. The right holders shall have the right to express their opinions, raise objections and receive appropriate explanation (Article 21). It also provides that meetings of the Compensation Commission allow participation of right holders and the general public (Article 27). INFORMATION DISCLOSURE a) Constitutional Provisions – Article 33 guarantees freedom of thought, speech, and convictions and recognises their right to seek, obtain and disseminate any information. It restricts citizens right to seek, obtain and disseminate information, if it comes in the way of public safety and public order. It also provides that state entities and self-governing bodies allow everyone access to documents, resolutions, and other materials, relating to their rights and legitimate interests (Article 34). b) Law on Guarantees and freedom of access to information (April 1997 amended in April 2021) – This law regulates a person’s constitutional right to freely seek, receive, study, pass on and disseminate information and guarantees access to information (Article 3, 5) which can be done both in writing and orally. The written enquiry needs to be duly registered and responded to within 15 days (subject to its permissibility) from its receipt, while oral requests need to be answered without delay. In case the organization does not deal with the subject they are obliged to share name of the organization or official dealing with the subject matter with the applicant within 7 days (Article 6). All State and self-government bodies, public establishments are obliged to ensure that everybody has an opportunity to familiarise themselves with documents and information related to their rightful interests and access to this information shall be provided through publication and dissemination of materials (Article 7). In case of its violation, or inaction by state agencies/ bodies, citizens have the right to appeal in court (Article 12). c) Presidential Decree on� Additional Measures to Ensure Transparency of State Bodies and Organisations and Effective Implementation of Public Oversight� (June 2021, as amended June 2022) – Through this decree, the President has approved a� List of Socially Significant Information� to be posted on portals and websites as open data by all state authorities and is a move towards improved transparency. The decree brings banks, courts, and organisations with public participation under its purview and specifies which data is to be subject to proactive disclosure. GRIEVANCE REDRESSAL a) Constitutional Provisions – Chapter VIII of the Constitution on Political rights provides that everyone shall have the right, both individually and collectively, to submit applications, proposals, and to lodge complaints Page | 79 P504630 - Electricity Distribution Improvement and Strengthening Through Commercialization and Transformation (E-DISTINCT) Environment and Social Systems Assessment (ESSA) with competent state bodies and organizations, citizens’ self-governing bodies, officials and public representatives and they shall be considered by the latter in accordance with the procedure and within the time-limit prescribed by law (Article 40). b) Law No. ZRU-445 On Appeals of Individuals and Legal Entities (August 2017) – This extensive legislation covers conditions under which citizens can file appeals for redressal of grievances and seek public accountability based on principles of legality, timeliness, uniformity of consideration, recognition of the rights and interests of individuals, and transparency by state bodies (Article 4). The head of each institution has to organise systems for receipt (reception) of such appeals and designate officials for it (Article 9). It also provides for the creation of People's Reception offices of the President for effective consideration of such appeals in President’s Office, Karakalpakstan, regions, Tashkent city, districts, and cities as well as a Virtual Reception at the President’s Office to receive, systematize appeals and monitor their timely and satisfactory consideration (Article 10). The Reception Offices are expected to a) organize full, objective, and timely consideration of appeals, b) ensure systematic monitoring (Article 34). It guarantees citizens a right to appeal to state bodies, individually or collectively and covers non-citizens, stateless persons, minors, people with disabilities (PwDs), and prevents discrimination on the basis of gender, race, nationality, language, location, religion, social origin, beliefs or social status (Article 15,16) and puts the onus of officials of state bodies to restore the violated rights and mandatorily accept appeals (Article 18). Additional clarification from the petitioner can be sought within 5 days or be asked to physically present their position/ opinion on the appeal in the presence of specialists and representatives of concerned organizations (Article 25, 26). Such appeals are to be considered within 15 days, and when additional information/ investigation is required, up to 30 days (Article 28). Any additional clarification on the response sought by petitioner needs to be provided within 10 days of its receipt. In case of unlawful refusal to consider the petition, an individual can appeal to their higher authority or go to court (Article 32). State entities can also seek court intervention for recovery of expenses incurred on verification of an appeal containing false information (Article 33), while the individual impacted by unlawful decisions are to be compensated for damages and costs incurred related to the complaint or seek compensation for moral damages in court (Article 37). c) Miscellaneous laws related to Environmental Assessment and Nature Protection related to participation and information access – The Law “On nature protection" (2018) regulates the right of citizens to unite for nature protection, to request and receive information about the status of environment and measures taken for its protection. It provides for environmental protection as a right for citizens, self-governing bodies and through Non-Governmental Organizations (NGOs). The Law on Environmental Expertise requires developers to publish details of the project after the environmental assessment and allow for its public review, directly, or through NGOs (Article 23). It also provides for public hearings and needs to document in the Environmental Impact Statement how people’s suggestions and objections were addressed. In case of Category I and II projects, as per Environmental screening, Law “On State Environmental Expertise� (2001) makes public consultation mandatory. It also allows for Public Environmental Expertise to be carried out by civil society at their own cost and provide recommendations for the consideration of State Expertise. Page | 80