The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) Appraisal Environmental and Social Review Summary Appraisal Stage (ESRS Appraisal Stage) For Official Use Only Date Prepared/Updated: 10/31/2023 | Report No: ESRSA03100 Nov 01, 2023 Page 1 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P180430 Investment Project Financing (IPF) Pernambuco Rural Water 2024 and Sanitation Operation Name Brazil: Pernambuco Rural Water and Sanitation Project (PROSAR) Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Brazil Brazil LATIN AMERICA AND Water CARIBBEAN Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Government of the Secretariat of Water Resources and 01-Nov-2023 28-Mar-2024 State of Pernambuco WSS (Secretaria de Recursos Hídricos e Saneamento) , Pernambuco For Official Use Only Water and Climate Agency (Agência Pernambucana de Águas e Clima - APAC) , Pernambuco Water and Sanitation Company (Companhia Pernambucana de Saneamento - COMPESA) Estimated Decision Total Project Cost Review Date 23-Oct-2023 113,000,000.00 Proposed Development Objective To increase access to sustainable, safely managed drinking water supply and improved sanitation in selected rural communities in the state of Pernambuco and to build State’s capacity for reaching universal RWSS services. B. Is the operation being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No Nov 01, 2023 Page 2 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) C. Summary Description of Proposed Project Activities [Description imported from the PAD Data Sheet in the Portal providing information about the key aspects and components/sub-components of the project] The proposed Project is a US$113 million Investment Project Financing (IPF) operation, financed by a US$90 million IBRD loan and US$23 million in State counterpart funds. The Project will support the State’s higher-level goals of reaching universal WSS access; achieving the SDG reducing the public service and development gaps between urban and rural areas; slowing-down rural migration to urban areas and other states; improving the quality of life and health of rural population and their resilience to climate change risks. It will comprise three components: Component 1 – Increase access to climate-resilient, safely-managed RWS and improved sanitation (US$91.27 million of which US$68.27 million IBRD financing and US$23 million counterpart funds). This component aims at increasing rural population’s access to climate-resilient, safely-managed drinking water supply and improved on-site sanitation solutions, thereby contributing to the State universal WSS access goal. Subcomponent 1.1 –Increase access to safely-managed RWS and improved on- site sanitation solutions with climate-resilient designs. This subcomponent finances the feasibility studies, engineering designs, works and supervision of works of climate resilient, safely-managed RWS systems and improved sanitation solutions in selected rural communities, including where required, the community health centers and schools. It will also finance feasibility studies and engineering designs of RWSS systems that will be implemented in subsequent projects in the series. RWSS systems will have climate-resilient designs considering flood and drought risks, and will be accessible, ethnicity, race and gender sensitive. As a result, the activities are expected to support closing the gender gap by reducing the disproportionate burden of time spent by women beneficiaries on WSS related tasks in the Project area. Subcomponent 1.2 – Improve climate-resilience of water sources. The subcomponent will increase water source For Official Use Only resilience to climate and respond to IBRD’s ESF requirements on dam safety for RWSS subprojects financed under component 1.1. The subcomponent will finance: (a) works and their supervision to implement the Arataca II water conveyance system to increase the drought and water scarcity resilience of the Botafogo water system , by providing an alternative water source in case its current ones fail. This is fully financed with counterpart funds; and (b) instrumentation and basic maintenance identified in the safety action plans of the dams on which RWS financed under component 1.1. rely upon. No rehabilitation of existing dams nor construction of new dams will be eligible for financing. Subcomponent 1.3 – Innovate with climate-resilient RWSS pilot solutions. The subcomponent will pilot water, sanitation and low cost energy solutions, climate-resilient, aiming at improving service provision or identifying scalable solutions for reaching universal access. Financed activities would include: development of studies and designs, implementation of pilots, monitoring of results and evaluation for replicability and scalability, dissemination of results. Examples of pilots may include wastewater treatment technologies; bank filtration, solar-powered desal units, etc. Component 2 – Build State capacity for reaching universal and climate resilient rural WSS access and sustainably managed RWS systems and their water sources (US$15.75 million, fully IBDR financed). This component aims at building the capacity of the public and private, not-for-profit, entities (State, SISAR, community’s associations) that have a key role in delivering sustainable, safely managed RWS and improved sanitation solutions to reach universal access. Subcomponent 2.1 – Build State capacity for reaching universal RWSS access and sustainably managed RWS systems. This subcomponent will finance: (i) SISARs’ implementation in six regions , including, inter alia, SISARs capacity building plans and their implementation, SISARs business plans and their implementation, and the refurbishment, equipment and vehicles for SISARs office buildings; (ii) improvement and expansion of the State’s RWSS information system through, including, collection of in-situ data; (iii) development and initial implementation of the State’s climate-resilient universal RWSS access strategy and regional WSS plans for universalization ; (iv) sludge management study of alternatives; (iv) strengthening of the State dedicated RWSS unit’s (currently, UGSR) for delivering technical assistance to the SISARs and rural communities through training, equipment and consultant services; (v) monitoring and evaluating SISARs’ Nov 01, 2023 Page 3 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) performance through consulting services; and (vi) communities capacity building to promote hygiene, the rationale use of water and of the sanitary kits. Women's groups will be prioritized for training at community level; and participation in management and decision-making will be promoted to close gender gaps in access to paid work opportunities and voice. Subcomponent 2.2 – Strengthen capacity to manage rural water sources sustainably. This subcomponent, in complement to the system-specific activities supported under subcomponent 1.2, aims at strengthening the resilience of the State’s RWS system’s water sources against climate risks. More specifically, it will: a. Increase APAC’s capacity to carry out its water resources management (WRM) and São Francisco inter-basin transfer (PISF) O&M and regulation functions where they will contribute to secure rural water sources. This includes, inter alia: (i) the construction/renovation/equipment of APAC’s headquarters and two regional offices (engineering designs, civil works and equipment) to increase its presence in the field and its working environment; (ii) public awareness campaign to increase water users registration and water rights emission; (iii) carry out hydrogeological studies of sedimentary aquifers; (iv) strengthen hydromet monitoring through the acquisition of equipment to better manage rural water sources, improve drought and flood forecasting and climate monitoring; (v) develop a state-wide drought preparedness plan, (vi) feasibility studies for urban riverfront park to improve riverfront public access and recreational use as well as improve river and banks ecological state; and, in coordination from SEIH (vii) design and implement a hydraulic infrastructure planning platform. b. Increase SESAN’s and APAC’s capacity on dam safety, by financing, inter alia, the preparation/update of dam O&M, safety and emergency preparedness plans; evaluation of dam safety status; State inventory of dams; the adoption of risk management approaches and tools; as well as staff training. Component 3 - Support Project management (total of US$5.75 million, fully IBRD financed). This component supports the State institutions to deliver the Project results. Activities include consultant and non-consultant services, good, equipment to For Official Use Only set-up and run the Project Management Unit (PMU) , including capacity building and training, the hiring of consulting firms and/or individual consultants to support the PMU in carrying its functions and supervise works; technical and financial audits; including those necessary to comply with the management of the Project, including of the social, environmental and dam aspects of the Project; monitoring and evaluation; citizen and gender engagement; communication and outreach; strengthening of the internal controls of the PMU and the State through the State’s Internal Control Agency (CGE). D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings [Description of key features relevant to the operation’s environmental and social risks and opportunities (e.g., whether the project is nationwide or regional in scope, urban/rural, in an FCV context, presence of Indigenous Peoples or other minorities, involves associated facilities, high-biodiversity settings, etc.) – Max. character limit 10,000] The State of Pernambuco, located in the Northeast Region, is one of the poorest in Brazil, with a Human Development Index (HDI) of 0.673 ranking the State 19th among the country’s 27 states. Pernambuco is the third highest GDP per capita in the Northeast Region, it has a population of 9,674,793 inhabitants , 4.4 percent of the country’s population, with 17.6 percent living in rural areas. 48.0 percent of the population of the state live under poverty (US$6.85/day, 2017 PPP) and 12.4 percent under extreme poverty (US$2.15/day, 2017 PPP). Among the extreme poor, 32.1 percent reside in rural areas. According to current IBGE data, the average monthly nominal household income per capita (BRL 1,010.00) in Pernambuco is among the lowest in the country. In the state, there are 10 different indigenous ethnic groups, which represents about 2% of the rural population and 0.5% of the total population. They occupy a territory of approximately 179,263 hectares located in 16 municipalities. (see ESS7) Nov 01, 2023 Page 4 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) Pernambuco is located in the semi-arid region, with a large part of its territory in the "Drought Polygon", an area characterized by a negative water balance, resulting from average annual precipitation of less than 800 mm, average annual temperatures of 23o to 29o C, evaporation of 2,000 mm/year and an average relative humidity of around 50% (Lins & Burgos, 1985). The spatial and temporal irregularity in the State's rainfall regime is noteworthy, with annual values of around 2,200 and 1,000 mm in the Litoral and Zona da Mata, around 800 mm in the Agreste and between 600 and 400 mm in the Sertão, except in regions with specific microclimates. There are 19 land use and occupation classes in the state, grouped based on the Technical Manual of Land Use (IBGE, 2013) into five major groups. There is a predominance of Natural Vegetation Areas (especially the areas covered by savannah formations, occupying approx. 42% of the total area), followed by Anthropic Agricultural Areas (mainly the pasture areas, occupying with approx. 28% coverage). As for the state’s hydrography, the basins that flow towards the São Francisco river form interior rivers, the main ones being: Pontal, Garças, Brígida, Terra Nova, Pajeú, Moxotó, Ipanema. The basins that drain to the Atlantic Ocean constitute the coastal rivers, and the main ones are: Goiana, Capibaribe, Ipojuca, Sirinhaém, Una and Mundaú. Currently, Pernambuco has 90 State Conservation Units (43 Full Protection - FP and 47 Sustainable Use - SU). Among the FP Units there are 3 Ecological Stations, 5 State Parks and 34 Wildlife Refuges and 1 Natural Monument. Among the SU Units there are 21 Environmental Protection Areas, 8 Urban Forest Reserves and 17 Private Natural Heritage Reserves and 1 Area of Relevant Ecological Interest. There are 15 Key Biodiversity Areas (KBA) mapped for Pernambuco, For Official Use Only which are mainly concentrated in the center-eastern portion of the state. Overall 82% of Pernambuco’s population has access to water supply systems and 31% to sewerage networks. In rural areas, access to water supply is lower at 63%. Moreover, many water supply systems are not functioning at any given time, because of inadequate O&M or because the water sources dry-up. Villages without a WS system or with a non- functioning one rely on water tankers, which is estimated to amount to about 400,000 people, with significant fiscal costs for municipalities and the army. The quality of drinking water is also a concern: based on a field survey in selected rural communities, 59% of the systems did not treat water and none monitored its quality. Moreover, water provided by water trucks is usually not treated. As for rural sanitation, little is known. According to the Pernambuco RWSS platform, 99% of the families use some sort of individual solutions they maintain themselves, but in many cases, the structures are in disrepair, causing health and environmental risks, especially for children. In Pernambuco, APAC is responsible for the supervision of the multiple use dams of the state domain. As for the waters of the federal domain, the supervisory body is the national water agency ANA. According to information from December 2021, available in the National Dam Safety Information System (SNISB), the state of Pernambuco has a total of 470 dams, 407 of which are under the responsibility of APAC to inspect. The main dams’ owners of the state are: Compesa (128), the Development Company of the São Francisco and Parnaíba River Basins - CODEVASF (87), the Secretariat of Water Resources and Sanitation - SRHS (74), and the National Department of Drought Control - DNOCS (36). Currently the SNISB presents an analysis for 407 dams, including those to be inspected by APAC. 3 are considered under emergency; 53 under alert; 78 under attention; only 10 are rated as normal, the rest have no assessment. Only 53 dams have a Safety Plan. Also, 204 dams are of high risk and 223 have equally high potential damage. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts Nov 01, 2023 Page 5 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) [Description of Borrower’s capacity (i.e., prior performance under the Safeguard Policies or ESF, experience applying E&S policies of IFIs, Environmental and social unit/staff already in place) and willingness to manage risks and impacts and of provisions planned or required to have capabilities in place, along with the needs for enhanced support to the Borrower – Max. character limit 10,000] The Secretariat of Water Resources and Sanitation (SRHS) is composed of 3 Executive Secretariats: i) Water Supply and Sanitation (SESAN) – which will house the Project Management Unit (PMU); ii) Water Infrastructure (SEIH), and iii) Management. SRHS has been created in early 2023 with the incoming of the new State government administration. Secretariat’s managers have had previous experience with Bank Projects. SRHS is still being staffed mainly with professionals from other institutions, i.e., Compesa and APAC, and from Academia. As a new Secretariat, the SRHS organizational structure is still being developed. E&S management staff are assigned to the Project as detailed below. Staff’s previous experience with internationally financed projects varies. The PMU’s responsibilities will include: articulation with the other participating institutions, elaboration/finalization of ToRs, contract management, M&E, acquisitions and financial management, E&S management. An external consulting firm or individual consultants will be hired to support the PMU carrying out Project management activities, including E&S management, if necessary. The PMU will adopt an hybrid model and will be composed of technicians from SRHS, Compesa and APAC, and also individual consultants. SRHS, through SEIH, will also participate in the technical elaboration of few specific activities, i.e., the water infrastructure platform. APAC will participate as cooperating entity in its roles related to Subcomponent 2.2, by preparing ToRs/technical For Official Use Only specifications, designs, studies, contracts supervision and management. In addition, APAC’s technical support on dam safety and PISF use aspects will be needed. Compesa will participate in the Project as cooperating entity of the Project, bringing in the WSS expertise to deliver technical assistance to the SISAR and rural communities, prepare ToRs/technical specifications, designs, studies, contracts supervision and management; and manage the RWSS platform. In addition, it is responsible for the implementation and supervision of the Arataca works and Botafogo system operation. Both APAC and Compesa have participated in previously Bank-financed projects. Moreover, as per the state's legal framework (Law No. 18.139/23), both entities are under the institutional umbrella of the SRSH, which will facilitate the coordination and implementation arrangements of the activities under their responsibility, under the general management of the PMU - hosted by the SRHS. Under Subcomp. 2.1, SISAR will receive support to fulfill its tasks for 2-6 regional units. It would be expected to provide technical assistance for financed water systems and onsite sanitation infrastructure; and capacity building for supported associations in management of the systems. For the preparation stage, in order to act as E&S counterparts of the Bank and also to support the development of the E&S instruments, the borrower has assigned a part-time dedicated E&S team comprised of 4 professionals from the SRHS staff (2 for environment, 2 for social). Although the team has experience on the E&S-related areas, they have not previously worked in development Banks’ projects, nor are they particularly familiar with the E&S requirements of the WB’s ESF. There is an exception which is one of the assigned social specialists who has indeed worked in a previous project with the Bank (Pernambuco Rural Economic Inclusion – P120139), however, for which the E&S safeguards of the Operational Policies were applied. Even though the Bank’s E&S requirements have expanded with the ESF roll out, this previous experience is a good indicator, and something that the team can use and build from. E&S consultancy is also included in Component 3 to support capacity building, technical advisory, and supervision of E&S-related issues, Nov 01, 2023 Page 6 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) including dam safety. The afore-mentioned project closed with MS rating for social safeguards, which also underlines the need to undertake borrower capacity building and technical support, as part of Component 3. After proper assessment, if the dam interventions are considered of high risk, the dam safety panel shall also be retained under the Project. On the Bank's side, a dam safety specialist is part of the TT to provide duly support and advisory. The Bank team has been providing close support and follow-up on the development of the E&S instruments. Specific workshops on the ESF for capacity building have also been provided during preparation missions. Formal Cooperation Agreements will be signed to set implementation arrangements. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial A.1 Environmental Risk Rating Substantial [Summary of key factors contributing to risk rating, in accordance with the ES Directive and the Technical Note on Screening and Risk Classification under the ESF – Max. character limit 4,000] The Project is expected to generate a positive E&S impact in improving the quality of life of the benefited families, giving them access to drinking water/sanitation. As well as a broad environmental gain from the increase in the state's general capacity to manage and monitor water resources. Although the exact location of the Project’s main interventions is yet to be defined, the typology and scale of such interventions are relatively well-known. So far, it is known that the Rural WSS systems will be designed and implemented for communities with a population between For Official Use Only 500-1000 inhabitants, in rural areas. The WSS civil works do not entail higher-levels of complexity and will be located in rural areas with some level of anthropic activity (crops, pastures, etc.). Environmentally sensitive areas are not likely to be affected and, furthermore, the selection criteria for benefited rural communities – to be defined during implementation – will consider environmental-sound criteria to avoid any kind of significant impacts to environmentally sensitive and/or native forested areas. Other civil works include the renovation of APAC’s headquarters and implementation of 2 regional units (in areas still to be defined). These interventions will be located in urban consolidated zones and/or areas already changed by anthropic interventions. Environmental impacts will potentially be linked to waste and wastewater generation, dust and noise emissions, vibration, traffic disturbances, erosion and soil carryover, handling of fuel/chemicals for heavy machinery. Overall, the potential adverse risks and impacts of actitivities under Comp. 1 and 2 on human populations and/or the environment are not likely to be significant. These interventions are not complex and/or large, do not involve activities that have a high potential for harming people or the environment, and will be located away from environmentally or socially sensitive areas. As such, the potential risks and impacts are likely to be: i) predictable and expected to be temporary and/or reversible; ii) low in magnitude; iii) site-specific, without likelihood of impacts beyond the actual Project footprint; and iv) low probability of serious adverse effects to human health and/or the environment. Risks and impacts can be easily mitigated in a predictable manner, with well-known E&S control and mitigation measures. Thus, these activities are considered of Moderate risk. Although the Project will not include the construction of new dams, it will most likely rely on the performance of existing large dams, as water sources for the Rural WSS to be implemented. In this sense, the Project will fund measures necessary to upgrade the existing dams to an acceptable safety standard. Given the still-to-understand safety conditions of potential relevant dams, and as a precautionary approach, the risk is considered Substantial. Aiming to limit the Environmental Risk at a Substantial level, the Project will not fund WSS relying on existing dams with indications of serious safety issues or demanding complex rehabilitation works. The Nov 01, 2023 Page 7 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) Arataca II System (counterpart) is concluded and currently under commissioning. The works were duly licensed according to the local environmental requirements. No environmental liabilities have been reported. A draft E&S report has been provided by the Borrower attesting compliance with applicable E&S requirements. Other soft activities of Comp. 1, 2 & 3, i.e., preparation of feasibility studies, engineering designs, training and capacity building, acquisitions, etc. are considered Moderate risk, based on the screening carried out as part of the ESMF development, due to potential downstream effects, mainly the ones resulting from technical studies and engineering designs which could entail civil works. Project activities are also not expected to generate significant cumulative impacts. A.2 Social Risk Rating Moderate [Summary of key factors contributing to risk rating, in accordance with the ES Directive and the Technical Note on Screening and Risk Classification under the ESF – Max. character limit 4,000] The project has a Moderate Social Risk rating, primarily associated with activities under Component 1. These activities involve financing small to moderate scale civil works. During the preparation phase, identified social risks include the acquisition of land on small scale under Component 1. However, this acquisition should not result in physical displacement or major disruption of community health and safety. The project does not anticipate a significant influx of workers, as priority will be given to hiring local labor. The risk of Gender-Based Violence (GBV), Sexual Exploitation and Abuse (SEA)/Sexual Harassment (SH), and Violence Against Children (VAC) during the construction of water and sanitation infrastructure in rural areas is considered low. However, these risks will not be neglected, especially for activities in rural areas where supervision can be challenging. Another risk is related to project selection criteria and beneficiaries, which may lead to the capture of project benefits by the elite. To mitigate such risks, vulnerability, inclusion (gender, disability), and poverty aspects will be incorporated into the technical criteria for selecting For Official Use Only communities under Component 1. Social risks associated with cultural and social practices that discourage adherence to safe sanitation and water services will be addressed through robust support for the communities served under Component 2 - subcomponent 2.1. Additionally, community engagement work will be included in the scope of Component 1 activities. The risk about the ability of the service to address the demand for small communities, including indigenous people and other traditional groups, has also been identified. To mitigate these risks, the project is engaging these groups during the preparation phase to analyze alternatives and appropriate selection criteria. The risk classification also considers the capacity of implementing agencies to manage social risks and impacts. Despite limited experience in implementing ESF projects, both Component 2 and Component 3 include institutional strengthening actions to improve the Borrower's capacity. Women are disproportionately affected with lack of access to water and sanitation. Therefore the project will address the gender gaps and will include among the indicators and targets to reduce the identified gaps. Improving access to water with adequate frequency, quantity and quality will improve the health quality of children, women and students in associated institutions (schools and health centers) in the intervention area that can benefit from the Project. The main positive social impacts of the project are associated with: (i) gender (impact on women's health and reduction of time spent on domestic work); (ii) inclusion (meeting the needs of women, the elderly, people with disabilities, indigenous and traditional, marginalized and vulnerable communities, sensitized design, facilitating access to information and support to strengthen community organizations for management and repairs and systems maintenance); (iii) use of local labor. The actions to improve the capacity to manage water resources will increase transparency and water security for families and communities. The Project also foresees pilot investments for innovations to promote resilience to climate change in selected communities. If these impacts are managed well, the project is expected to result in better environmental and social outcomes through improved access to “safely managed” sanitation facilities, leading to better health. Nov 01, 2023 Page 8 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) [Summary of key factors contributing to risk rating. This attribute is only for the internal version of the download document and not a part of the disclosable version – Max. character limit 8,000] B. Environment and Social Standards (ESS) that Apply to the Activities Being Considered B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant [Explanation - Max. character limit 10,000] The Borrower will be required to assess, manage and monitor environmental and social risks and impacts associated with each stage of the Project, in order to achieve environmental and social outcomes consistent with the Environmental and Social Standards (ESSs). The Project will majorly involve civil works in locations yet to be defined. Thus, a draft Environmental and Social Management Framework (ESMF) has been prepared by the Borrower including the following aspects: • Assessment of potential environmental and social risks and impacts, including OHS hazards and community health and safety risks; • Social analysis of vulnerable groups, including gender gap (as explained under the social risks). • Guidelines for the E&S management and screening procedures for the Project interventions, taking into consideration the national and state environmental legislation, including the need for environmental licenses and permits, as applicable. These guidelines also observed the national OHS regulations, the ESF requirements For Official Use Only and the World Bank Group General EHS Guidelines, including Life and Fire Safety (L&FS) measures for buildings and compliance with the legislation on data privacy. • Guidelines and templates for the preparation of specific E&S instruments for the Project interventions, as deemed necessary, such as, E&S impact assessments, E&S management plans, etc. • Dam safety requirements and assessment procedures for the dams included as part of the Project. • E&S eligibility criteria for feasibility studies aimed at identifying rural communities to benefit from the Project, including a Project’s exclusion list – The interventions with high E&S risk will be excluded from the Project, as well as the ones that could potentially increase the overall risk profile of the Project. • An E&S monitoring and reporting arrangements. • Institutional strengthening activities, including capacity building for E&S risks and impacts management; • An assessment of the technical assistance activities from the TORs to the outputs, taking into consideration the requirements set out in ESS1, including guidance for the preparation of terms of reference, work plans or other outputs of technical assistance activities, in line with the applicable ESSs. • A tentative budget for carrying out the E&S activities defined in the ESMF, including the budget for the SEP. The risk of potential exclusion of persons with disabilities is also be assessed as part of the ESMF, both from the aspects of infrastructure design as well as education/awareness services, cultural context, as per the concept of universal access. The works of the Arataca II pipeline (counterpart funds), part of Botafogo system, are already concluded and a draft E&S compliance report the project has already been submitted by the borrower. The report provides evidence of the compliance with key E&S requirements, i.e., environmental licenses, water permits, expropriation decrees, terms of donation of areas, etc. The Project’s counterpart funds will finance the entire value of contracts for ongoing works that contribute to the Project results: there will not be contracts co-financed by the IBRD loan and the counterpart funds. It is noteworthy that Arataca II pipeline and Botafogo system are not considered associated facilities of the Project as they do not meet all three criteria described in the ESF. They are existing, under commissioning/operation urban water systems which the Project will not rely on, that would have been implemented in spite of the Bank’s operation. The previous assessment of the Borrower’s dam safety management system and capacity identified a dam safety pending issue in the post- Nov 01, 2023 Page 9 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) closing action plan (PCAP) of the Pernambuco Sustainable Water Project PSHPE – P108654. The borrower is yet to conduct the rehabilitation of the Pirapama Dam (it supplies water to the metropolitan region of Recife), as agreed in 2020, per the requirements of the PCAP, as an obligation from Compesa as the dam owner. The issue has been discussed during preparation missions and followed up by email and exchange of letters. SESAN Secretary has sent a formal letter n.069/2023 dated September 1, 2023 to IBRD informing that the State has secured resources from Caixa – FINISA funding (Federal Government) to start Pirapama Dam rehabilitation works in 2024. The current Project includes actions to strengthen the state’s capacity on dam safety, as part of the Project desgin and the ESMF, and will use supervision activities and the team to closely monitor the progress of dam rehabilitation. Pirapama Dam rehabilitation works are not envisioned under the current Project. It is noteworthy that no actitivity of the current project (P180430) resides in the area of influence of the Pirapama Dam, nor will rely at any level on the dam’s operation and its anticipated rehabilitaion works. Specific ESIAs will not be required for the rural WSS and other civil works. E&S risks and impacts associated with these interventions were preliminarily assessed within the ESMF and will be further detailed – once location is defined – in the E&S assessment form (ESMF Annex 05) and also, for moderate- risk projects (civil works), specific ESMPs will need to be developed by the contractors, as per the template/guidelines provided in the E&S Construction Manual (ESMF Annex 02). Also, per Brazilian regulation, these projects will most likely fit under a simplified environmental licensing process, which would demand the development of a specific E&S assessment report, proportionate to the level of risk of the interventions. A draft ESMF was prepared by the borrower and will be disclosed on the borrower’s website (https://www.apac.pe.gov.br/) before Appraisal. The draft will be discussed with stakeholders as part of the Project consultation process. The final version of the ESMF will include the results and feedback from stakeholders, as applicable and will be disclosed and adopted within 30 days after Project For Official Use Only Effectiveness. ESS10 - Stakeholder Engagement and Information Disclosure Relevant [Explanation - Max. character limit 10,000] Water and sanitation service projects require a systematic and intensive engagement of stakeholders at an early stage of the project and through its implementation guided by the World Bank’s Directive on Addressing Risks and Impacts on Disadvantaged or Vulnerable Individuals or Groups. Since the site and project selection will play a major role in ensuring equitable access and avoiding elite capture, the stakeholder mapping and outreach has been included from the earliest stages of the Project and in the design of SEP, to ensure the project is designed and implemented effectively and successfully. A draft Stakeholder Engagement Plan (SEP) has been prepared and will be disclosed prior to appraisal on the website (https://www.apac.pe.gov.br) and also discussed through focus group meetings during preparation. The SEP includes details of types, frequency and approach to consultations, information sharing and Grievance Redress Mechanism (GRM) related procedures. The SEP will be updated throughout the lifetime of the project as a result of ongoing consultations, which will be key to achieve objectives of the project. The SEP mapped out the various stakeholders and defined a strategy on how they will be engaged throughout the life cycle of the project; how and what project information will be shared at the different levels; how stakeholder concerns and feedback will be considered during the project design and implementation phases and how the project intends managing grievances through the implementation of a project Grievance Readiness Mechanism (GRM). The SEP also allows for meaningful consultation in a participatory manner and was tailored to ensure involvement of disadvantaged and vulnerable groups in the communities, including specific provisions and information methods and communication techniques appropriate to the level of literacy of the stakeholders (particularly beneficiaries) and take advantage of focus groups consultation with women, youth and indigenous people. The stakeholder mapping, included in the SEP Nov 01, 2023 Page 10 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) indicated that the principal stakeholders are: Secretariat of Water Resources and Sanitation (Secretaria de Recursos Hídricos e Saneamento), Pernambuco Sanitation Company (Companhia Pernambucana de Saneamento - COMPESA), Pernambuco Water and Climate Agency (Agência Pernambucana de Águas e Clima - APAC); SISAR - Integrated Rural Sanitation System - Municipal Water and Sanitation Management Units, Councils (state and municipal) of water resources, NGOs, organizations and leaders representing indigenous and quilombola communities, and mainly the communities where construction activities will occur and who must join the SISAR (new or existing), and families (individual level) served directly by the Project. In order to incorporate stakeholders' opinions and concerns about the Project, several meetings were held with focus groups especially operators and managers of the SISARes rural water supply system in which they shared their experiences of engagement with stakeholders, as follows : - Existence of a community engagement process that involves community leaders, local government leaders, focal point at COMPESA - responsible for water and sanitation infrastructure services in municipalities. - Existence of management councils with the participation of representation from communities, government and SISAR where issues of shared management are discussed, as well as satisfaction and compliance of beneficiaries with water supply services. The summary of these meetings was included in the SEP. The Project carried out specific consultation with entities representing indigenous peoples before the Appraisal, virtual public consultation of the prepared instruments (ESMF, RPF, IPPF) and virtual webinar on the project will be held for the official launch, when the project is approved. The engagement strategy at the community level involves robust work to be carried out in each community served, which includes a series of actions initiated with meetings at the community level to seek adhesion to the Project. These activities will be carried out. during the preparation of the desings in each community, to allow the design of the subproject to incorporate the inputs from the stakeholders. The final version of the SEP – updated with the feedback For Official Use Only collected through the consultation process – would be publicly disclosed on a dedicated Project website within 30 days of Project effectiveness. ESS2 - Labor and Working Conditions Relevant [Explanation - Max. character limit 10,000] This standard is relevant. The Project will involve physical works related to water supply and sanitation facilities, in addition, to support for improving the state's technical capacity, with most of the works expected to take place only in rural areas. Due to the nature of the activities, these works may pose a (low and manageable) safety risk to workers. Furthermore, issues such as child labor in the supply chain, forced labor, gender discrimination, GBV, occupational health and safety are addressed in the Project’s ESMF. The nature of the civil work is manageable through the usage of localized labor, which expands the possibilities of engagement, income improvement, and appropriation of the works in the communities served. The contractors in charge of Project implementation will receive training (covering all above topics) prior to starting the civil works to ensure proper understanding of applicable requirements under the ESS2. Given the activities of sanitation and water schemes under the Project, the number of workers is expected to be low in size mostly supplied by local labor from the community who will be Contracted Workers (as per ESS2 definition). Required construction materials for the civil works will be sourced from legal business entities with permits. Community workers might be contracted as part of the Project, basically to perform actitvities related to the RWSS operation/maintenance. The LMP will assess the OHS risks of such activities and will provide for adequate measures to mitigate and control risks and potential hazards, including proper training and capacity building and measures to ascertain that such labor will be conducted on a voluntary basis. The guidelines and requirements of a Labor Management Procedures (LMP) are included as part of the ESMF, in a manner consistent with the ESS2. The LMP will be issued by the Borrower no later than 30 days after Project Effectiveness. It will include the assessment and Nov 01, 2023 Page 11 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) required mitigation measures to ensure health and safety of the workers (Occupational Safety and Health or OHS measures) and of the relevant stakeholders that may be exposed to health and other associated risks. The latter will cover ESF requirements pertinent to direct, contracted, community workers. Therefore, to ensure health and safety of the Project workers during construction and operation phases, contractors will need to prepare and implement their OHS Plans, as applicable, following the WBG EHS Guidelines. The LMP will include a Code of Conduct guidelines/template that will be used by the contractors during work execution, and also procedures on incident investigation and reporting, recording and reporting of non-conformances, emergency preparedness and response procedures and continuous training and awareness to workers. The Project will also include: (i) state government staff who are civil servants; (ii) PMU staff who are government employees and contracted workers (consultants); (iii) localized private firms hired by the Project for carrying out construction works, and other contracted works (consultants) - are expected to be covered under the LMP. Appropriate requirements are set in the ESCP such as the ones related to management of contractors, ESHS monitoring and reporting, and a dedicated workers’GRM for direct and contracted workers. Hired contractors will be subject to the requirements of ESS2 including occupational health and safety and grievance mechanisms. Should the Project require the employment of (skilled) workers from outside the local area, worker accommodation and influx will need to be managed in line with ESS2 (and ESS4). Likewise, any technical consultants contracted by the Project will also need to adhere to such standards. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant [Explanation - Max. character limit 10,000] For Official Use Only This standard is relevant. The Project will also finance the implementation of pilot-projects linked to energy efficiency tools, sludge treatment innovations, grey water reuse. All these initiatives, including the RWSS systems implementation themselves, will bring about overall positive impacts for the environment, potentially reducing pollution loads to the soil/waterbodies, landfill pressure and contributing to optimized energy use. The new buildings to be implemented under the Project (APAC’s units) will also consider the implementation of energy-efficient measures, to the extent technically and financially feasible. Although the water sources for the Rural WSS are yet to be defined, as per the technical and feasibility studies under Subcomponent 1.1, in order to achieve the objective of the Project – of increasing access to water supply and sanitation in rural areas of the state – water use will constitute one of the impacts of the Project. This impact, however, is not considered significant in the implementation phase, due to the scale of the Rural WSS that will be implemented. In the long run, it comprises an important action to decrease the water shortage risks of the rural areas of the state, majorly associated with recurring water scarcity and droughts. Because of this context, the feasibility assessment of the WSS systems’ implementation, from the perspective of water availability and its regional impacts, will also be key factors to be considered in the feasibility/technical studies of Subcomponent 1.1. The implementation of sanitation solutions in rural communities is also expected to bring about positive impacts as to prevent soil, ground and surface water pollution. The Rural WSS are not considered projects with a high-water demand that have potentially significant adverse impacts on communities, other users or the environment. The planned WSS will benefit communities/groups of communities of approx. 100 families. As per Compesa data on similar operating systems, average water consumption per community ranges from 1-2 l/s, and will (mainly) use water from existing water supply systems (i.e., PISF). Nevertheless, water consumption will be metered in every WSS, and awareness campaigns will be carried out in the beneficiary communities. All water withdrawal of the Project will also be subject to the legal requirements/grants of the comprehensive national/state water framework. The ESMF provides for the procedures and protocols to follow in order to comply with the applicable legal requirements of Project’s activities. Other risks and potential impacts of the Nov 01, 2023 Page 12 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) Project are commonly attributable to civil works of low to medium complexity, and are associated with, inter alia, waste and wastewater generation, dust and noise emissions, vibration, soil erosion and carryover, handling of chemicals and fuel for vehicles and machinery operation, fugitive emissions. Measures to avoid, reduce and mitigate these impacts are well-known and readily available. An E&S Construction Manual is provided within the ESMF to define the guidelines, requirements measures to be included in the C-ESMPs for Project’s civil works, as per the E&S risks and potential impacts preliminary assessed in the ESMF, including the ones related to downstream effects of the TA activities. Impacts related to the management of pesticides are not currently a significant risk for the Project’s interventions, neither in the rural areas (WSS), nor in the urban sites (APAC’s units). The Project GHG emissions are not likely to be significant, they are mainly linked to combustion engines’ emissions due to the use of machinery in the work fronts and vehicles for workers' transportation, and also to decentralized wastewater treatment solutions – from biological processes. GHG estimations will not be required. All raw materials to be used in the Project, such as sand, gravel, and wood, shall have the proper authorization for extraction and proof of origin. Service providers for waste and wastewater management and disposal shall also provide proof of compliance with the environmental legal framework. It is not foreseen the use of important quantities of hazardous materials, other than fuel for heavy equipment if any. ESS4 - Community Health and Safety Relevant [Explanation - Max. character limit 10,000] This standard is relevant. The civil works envisaged under the Project are likely to cause minor impacts related to For Official Use Only traffic and road safety in rural areas. Circulation of heavy equipment and vehicles tend to be small, considering the scale of the WSS systems to be implemented. Nevertheless, control measures shall be taken such as alert signaling and safety barriers, whenever applicable, in order to avoid any type of risks for nearby population. Due to the implementation of the Rural WSS, community exposure to health issues, i.e., exposure to water-borne, water-based, water-related, and vector-borne diseases are expected to be controlled/reduced as a direct result from proper sewerage collection, treatment and disposal. Project activities are not likely to entail higher influx of temporary or permanent workers that could lead to increase of transmission of communicable diseases in Project areas. During implementation, hazardous materials to be used for Project activities will most likely comprise fuel and lubricating oil for machinery, and paints for painting the finished structures. Neither are expected to pose any type of material risk to the community. On the other hand, for the operation of communities’ water treatment plants (part of the WSS systems) chemicals will be used for the treatment processes, in small quantities, through, vis-à-vis the small-scaled treatment units that are to be implemented/refurbished. Sludge is also expected to be generated as a result of the wastewater treatment. Measures for the proper management and disposal of the sludge are going to be further studied during Project implementation, as part of the sanitation solutions’ studies (Component 1). Where technically and financially feasible, the Borrower will also apply the concept of universal access and climate change considerations to the design of new buildings (e.g., APAC’s units). Security personnel are not expected to be used under the Project. The Project will not finance the construction of new dams, nor the rehabilitation of dams, but it will rely on the performance of existing dams which will be the water sources for some RWS systems financed by the Project. Most of the existing dams related to the Project will only be known during implementation as most of the RWS systems will be identified then. Given the still to understand safety conditions of potential relevant dams, and as a precautionary approach, the risk is rated substantial. So far two existing dams are confirmed: Moxotó and Campos Dams, both part of PISF East Canal infrastructure. The Borrower agreed to implement the dam safety requirements defined in IBRD Environmental and Social Standard 4 (Annex 1 – Safety of dams). The ESMP details the applicable dam Nov 01, 2023 Page 13 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) safety requirements, including RWSS project eligibility. RWS relying on existing dams with indication of serious dam safety issues or demanding complex rehabilitation works will not be eligible under the Project. The requirements for eligible dams are: (a) an inspection and evaluation of their safety status, (b) an evaluation and potential revision of the owners’ O&M procedures and Emergency Action Plans, and (c) an independent report with recommendations for any remedial work or safety related measures necessary to upgrade the existing dams to an acceptable standard of safety. The dam safety requirements are incorporated in the draft ESCP. Project preparation is following the Good Practice Note on Dam Safety (hereafter GPN) and quality control checklist for projects relying on existing dams. The Bank’s team inspected the existing dams identified so far, and is revising their documentation, including the Dam Safety Plans, the O&M Plans, the Emergency Action Plans and regular safety inspection reports. The dam safety action plan for the identified dams has been prepared, based onthe preliminary dam safety assessment, carried out by the Bank during preparation, and will be agreed upon with the borrower during Appraisal. According to the ongoing assessment, it is proposed to adopt the recommendations of the available periodic reviews of the Moxotó and Campos dams as the basis for the Project's dam safety action plan. It should be noted that the recommendations deal mainly with maintenance measures and regular operation of the dams, without indicating studies/investigations or rehabilitation works. It is noteworthy that the Project has a specific Subcomponent 1.2 – Improvements of selected water infrastructures for ensuring rural water supply – which will include studies, design and minor safety improvementsehabilitation of dams to guarantee human supply in the rural communities selected in the Project. The design of a specific subcomponent to deal with the dam safety aspects raised by the Project is part of the CMU’s lessons learned with previous engagement with the state, and also with other water supply projects of Brazil’s portfolio. During feasibility stage, water quality and quantity will be tested. After works implementation and during For Official Use Only service provision, regional SISARs will be responsible for collecting water samples which are to be tested by Compesa to check on water potability to follow Brazil's Health Ministry's norms. The draft ESMF will includes safety of services considerations, and also describes the aforementioned arrangements and the responsibilities of each implementing agency involved in the operation. The ESMF carries out an overall screening for any potential health and safety risks to the Project affected people due to construction activities, traffic and road safety, disruption to access to ecosystem services, and its associated risks including GBV, exposure to hazardous material or equipment, and potential emergency scenarios. Community Health and Safety measures are provided within the ESMF, as part of the proposed E&S Constrution Manual. Significant labor influx is not expected for this Project, instead, local labor will most likely be used. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant [Explanation - Max. character limit 10,000] This standard is relevant. No civil works activities under the Project are expected to have any impacts that result in involuntary resettlement, economic displacement, or impacts on livelihoods, however, it is possible that land acquisition (small scale) or land use restrictions (in water catchment areas) may be required. Whenever necessary, land acquisitions will be in unoccupied areas and preferably in non-productive use or established on land that either belongs to the local government or is voluntary community donation. Assessment of land ownership type, community engagement to disseminate information, establish a feedback loop, assess community willingness, participatory site selection and design will be conducted. As part of Project preparation, the Borrower was prepared and will disclose prior to Appraisal, a Draft Resettlement Framework (RF) following the requirements of this Standard. The final version of the RF is to be issued and disclosed within 60 days after Effectiveness. The requirements for preparing RAPs (if needed) will be described in the RF and ESCP, and cover measures also for economic displacement (if any). After the Nov 01, 2023 Page 14 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) proposed sites are identified and based on the screening and selection criteria of communities to be served by the project, a Resettlement Action Plan (RAP) or an abbreviated version of it will be prepared (if necessary) for those communities where land acquisition is required. Site-specific RAPs will address issues of inclusion, social vulnerability, GBV, consultation and communication strategy (developed in the SEP), and any other issues identified through the ESMF and stakeholder consultations. Site-specific RAPs shall be prepared and implemented prior to the execution of works in communities where land acquisition is required, following the requirements of this Standard. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources [Explanation - Max. character limit 10,000] This standard is relevant. The Project will not support activities that lead to the conversion or degradation of natural habitats. Even though the exact location of the WSS systems are yet to be defined, due to the scale and characteristics of the Project’s area of influence (mainly rural) – already subject to anthropic pressure and agribusiness activities – Project’s works are not likely to cause significant impacts on native flora and fauna. Mitigation hierarchy and precautionary approach will be considered during the design and implementation of Project, to ensure minimal risks and impacts to flora and fauna, precisely any environmentally sensitive area, i.e., native forest remnants, environmentally protected areas, conservation units, etc. Small water-abstraction works may be necessary in environmental protected areas (APP), if the water sources are rivers, streams, reservoirs, and other cases defined in the national legislation. However, the activities would be of punctual, low impact, and foreseen in the legislation, For Official Use Only since they would fall into the category of "public interest" (water supply). In these cases, as well as in other situations that may require the suppression of specific individuals, the Brazilian legislation has well-established requirements that adequately address these impacts, including demanding compensation actions, when applicable. The draft ESMF includes clear guidance regarding direct and indirect impacts on modified/natural habitats, including guidelines to be followed as forest clearing procedures, when necessary, as well as measures to be carried out if activities of fauna rescue and dispersing are required during Project works. Such provisions are included in the E&S Construcion Manual, that will be used as reference for the development of the Contractors ESMPs. As a preliminary assessment, cumulative impacts on biodiversity are not envisaged as a result of the Project’s activitities. During implementation, the team will keep close monitoring on such impacts and will propose specific assessments, as necessary, as a result of the Project’s adaptive management. The feasibility studies and eligibility criteria for selecting the communities to be covered by the Project will incorporate environmental-sound requirements that will allow for preventing and reducing any biodiversity-related impacts of the interventions. The Project exclusion list, part of the draft ESMF, addresses any activities that could adversely impact environmentally sensitive areas and, therefore, increase the environmental risk of the Project, as well as any intervention in areas that would adversely affect habitats with significant biodiversity values and could incentivize land use changes that could put pressure on, or directly threaten natural habitats and/or the sustainable management of natural living resources. The technical assistance activities of the Project will also incorporate the ESS6 requirements, as relevant, e.g., the preparation of feasibility/technical studies, regional water supply, and sanitation plans. As per Brazilian regulation, the water resources management plans and related documents already consider within their analysis the vegetation cover and other biodiversity-related aspects/inputs in an integrated manner, in order to preserve and increase water availability and achieve overall environmental benefits. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Relevant Local Communities Nov 01, 2023 Page 15 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) [Explanation - Max. character limit 10,000] This standard is relevant. At this stage, it is not known if the Project will work in areas where concentrations of IPs live since the specific sites are not expected to be defined by Project Appraisal. There are 10 Indigenous Peoples in the State of Pernambuco - Truká (municipality of Cabrobó); Atikum-Umã (municipality of Carnaubeira da Penha); Pankará (municipality of Carnaubeira da Penha); Pipipã (municipality of Floresta); Kambiwá (municipality of Ibimirim, Inajá and Floresta); Pankararu (municipality of Tacaratu and Petrolândia); Tuxá (municipality of Inajá); Kapinawá (municipality of Buíque, Tupanatinga and Ibimirim); Fulni-ô (municipality of Aguas Belas); Xukuru (municipality of Pesqueira). There are 12 Indigenous lands in the state territory in the Agreste and Sertão regions, historically arid areas, which will probably include them as potential beneficiaries of the Project. The Project is not expected to have any adverse impact on Indigenous Peoples. On the contrary, it aims to contribute to promoting water supply interventions that would benefit Indigenous Peoples in a manner that respects their aspirations, unique cultural identities, traditional knowledge, and natural resource-based livelihoods and is culturally appropriate and inclusive. As part of Project preparation, the Borrower was prepared and will disclose prior to Appraisal, a Draft Indigenous Peoples Planning Framework (IPPF) following the requirements of this Standard, which will define criteria for the selection of communities, technically feasible, for inclusion of indigenous peoples among the possible beneficiaries. The Borrower contacted IP organizations or representatives that were identified in the stakeholder engagement process to provide feedback on the scope of the Project and its potential environmental and social risks, impacts and benefits to Ips. The final version of the IPPF to be issued and disclosed within 60 days after Effectiveness. ESS8 - Cultural Heritage Relevant For Official Use Only [Explanation - Max. character limit 10,000] This standard is relevant. As the intervention sites are still unknown, the draft ESMF provides for an overall assessment and anticipates the potential risks and impacts of the proposed activities of the project on cultural heritage. Every effort will be taken to make sure that the physical works are not located near any heritage sites. Should the E&S risk assessment identifies potential risk to heritage sites, Chance Finds Procedures (CFP) and related measures will be carried out by the Borrower as defined in the ESMF and the E&S Construction Manual guidelines, considering the national/estate legal regulations and ESS8. If and whenever necessary, the requirement for CFP will be included in work contracts and bidding documents. The CPF sets the procedures for contractors to stop construction if cultural heritage is encountered during any work and to notify and closely coordinate with relevant mandated country/state authorities for the salvaging and restoration of such cultural heritage. As per the preliminary assessment carried out in the ESMF, Project’s activities are not likely to entail material impacts on intangible cultural heritage. Nevertheless, this aspect will be further analyzed during community consultations as part of the SEP and IPPF, and reflected in the instruments’ final versions, as necessary. ESS9 - Financial Intermediaries Not Currently Relevant [Explanation - Max. character limit 10,000] Not applicable. B.2 Legal Operational Policies that Apply Nov 01, 2023 Page 16 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) OP 7.50 Operations on International Waterways No OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework No [Explanation including areas where “Use of Borrower Framework” is being considered - Max. character limit 10,000] None. Use of Common Approach No [Explanation including list of possible financing partners – Max. character limit 4,000] None. B.4 Summary of Assessment of Environmental and Social Risks and Impacts [Description provided will not be disclosed but will flow as a one time flow to the Appraisal Stage PID and PAD – Max. character limit 10,000] For Official Use Only Environmental and Social risk rating is rated Substantial. The overall environmental risk of the Project is Substantial. The Project is expected to generate a positive E&S impact in improving the quality of life of the benefited families, giving them access to drinking water, sanitation, sanitary kits with solutions for the removal and treatment of sanitary effluents, hygiene, and environmental education actions. As well as a broad environmental gain is also expected, resulting from the increase in the State's general capacity to manage and monitor water resources. The civil works linked to the implementation of the WSS systems do not entail high levels of complexity and will be located in rural areas with some level of anthropic activity (crops, pastures, etc.). Other civil works of the Project include the implementation of APAC’s headquarters and regional units. These interventions will be in urban consolidated zones and/or areas already changed by anthropic interventions. Environmental impacts will potentially be linked to waste and wastewater generation, dust and noise emissions, vibration, traffic disturbances, erosion and soil carryover, handling of fuel/chemicals for heavy machinery. The potential adverse risks and impacts of these activities on human populations and/or the environment are not likely to be significant. These interventions are not complex and/or large, do not involve activities that have a high potential for harming people or the environment, and will be located away from environmentally or socially sensitive areas. As such, the potential risks, and impacts are likely to be: (i) predictable and expected to be temporary and/or reversible; (ii) low in magnitude; (iii) site-specific, without likelihood of impacts beyond the actual footprint of the Project; and (iv) low probability of serious adverse effects to human health and/or the environment. The risks and impacts can be easily mitigated in a predictable manner, with well-known E&S control and mitigation measures. Thus, the Project’s aforementioned activities are considered of Moderate risk. Although the Project will not include the construction of new dams, it will most likely rely on the performance of existing large dams, as water sources for the Rural WSS to be implemented under the Project. In this sense, the Project may fund measures (e.g. rehabilitation works and preparation of dam safety plans) necessary to upgrade the existing dams to an Nov 01, 2023 Page 17 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) acceptable standard of safety. Given the still-to-understand safety conditions of potentially relevant Project’s dams, and as a precautionary approach, the risk is considered Substantial. Aiming to limit the Environmental Risk at a Substantial level, the Project will not fund water supply systems relying on existing dams with indication of serious dam safety issues or demanding complex rehabilitation works. The Project will include actions to strengthen the Borrower capacity on dam safety. Other soft activities of the Project under Components 1, 2 and 3, i.e., preparation of feasibility/analytical studies, engineering designs, training and capacity building, refurbishment, acquisition of goods and equipment, and development of a water planning platform are considered of Low Risk as they do not have potential adverse risks to and impacts on human populations and/or the environment are likely to be minimal or negligible. Downstream effects of those activities, mainly the ones resulting from technical studies and engineering designs which could entail civil works/project implementation, are preliminarily considered of Moderate Risk and will be properly assessed during Project preparation. The social risk is Moderate. The Project interventions are small-scale, and community-based in nature which are not expected to have any significant or unmitigable social impacts and there will likely be no adverse impacts linked to resettlement or land acquisition primarily associated with activities under Component 1. No significant adverse impacts are anticipated. The expected impacts are predictable, site specific, have minimal adverse impacts and easily mitigable. The project does not anticipate a significant influx of workers, as priority will be given to hiring local labor. The risk of Gender-Based Violence (GBV), Sexual Exploitation and Abuse (SEA)/Sexual Harassment (SH), and Violence Against Children (VAC) during the construction of water and sanitation infrastructure in rural areas is considered low. However, these risks will not be neglected, especially for activities in rural areas where supervision can be challenging. Another risk For Official Use Only is related to project selection criteria and beneficiaries, which may lead to the capture of project benefits by the elite. To mitigate such risks, vulnerability, inclusion (gender, disability), and poverty aspects will be incorporated into the technical criteria for selecting communities under Component 1. Social risks associated with cultural and social practices that discourage adherence to safe sanitation and water services will be addressed through robust support for the communities served under Component 2 - subcomponent 2.1. Additionally, community engagement work will be included in the scope of Component 1 activities. The Project actions to improve the capacity to manage water resources will increase transparency and water security for families and communities. The Project also foresees pilot investments for innovations to promote resilience to climate change in selected communities. If these impacts are managed well, the project is expected to result in better environmental and social outcomes through improved access to “safely managed” sanitation facilities, leading to better health, especially for women and girls - menstrual hygiene, privacy, security, access and comfort will be greatly improved. C. Overview of Required Environmental and Social Risk Management Activities C.1 What Borrower environmental and social analyses, instruments, plans and/or frameworks are planned or required by implementation? [Description of expectations in terms of documents to be prepared to assess and manage the project’s environmental and social risks and by when (i.e., prior to Effectiveness, or during implementation), highlighted features of ESA documents, other project documents where environmental and social measures are to be included, and the related due diligence process planned to be carried out by the World Bank, including sources of information for the due diligence - Max. character limit 10,000] Nov 01, 2023 Page 18 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) As established in the Environmental and Social Commitment Plan, the following environmental and social risk management instruments are planned to be completed, prepared and adopted throughout project implementation: • A Stakeholder Engagement Plan (SEP), an Environmental and Social Management Framework (ESMF), a Resettlement Policy Framework (RPF), and an Indigenous Peoples Planning Framework (IPPF). Post-consultation versions will be publicly disclosed and adopted within 30 days of Project Effectiveness for the SEP and ESMF. And 60 days for the RPF and IPPF. • The Labor Management Procedures (LMP) will be issued within 30 days of Project Effectiveness and thereafter adopted throughout of Project implementation. The LMP will assess the risks to which different project workers may be exposed and define occupational health and safety measures to be adopted by the Project, consistent with the ESS2. It will be referred to in the bidding documents for the hiring of contractors and service providers. • A standard Environmental and Social Construction Manual will be included as part of the ESMF, and will subsidize the development of each Contractor’s ESMP to be adopted by the contractors prior to the beginning of construction works. The requirement for the development an ESMP will be referred to in the bidding documents for the hiring of contractors and service providers, as applicable. • The Bank and the Borrower will also agree upon a Dam Safety Action Plan by Appraisal, which will include the set of actions the Borrower will need to complete in order to comply with the Bank’s requirements on dam safety, as per the Bank’s GPN on Dam Safety. Furthermore and to ensure the implementation of the management of the Project’s environmental and social risks in a proper manner, the ESCP states the Borrower’s commitments of: For Official Use Only • Staffing the Project Management Unit with at least one environmental, and one social development & stakeholder engagement specialist. • Assign a focal point to be responsible for the dam safety-related issues during Project implementation cycle, part of the SHRS organizational structure. • Promptly notifying the Bank after learning of all incidents and accidents related with the works needed to perform all specific project activities that have, or may have, significant adverse effects on the environment, affected communities, the public or workers, (including, but not limited to, cases of SEA/SA), or may lead to fatalities or severe injuries within 48 hours. • Submitting regular bi-annual reports on the performance of the management of Environmental and Social Risks. During Project implementation, the Bank’s E&S team will carry out bi-annual implementation support missions to assess the progress on the implementation of the ESCP and provide guidance on the adoption of adaptative E&S risk management measures as necessary. This team will also review and give prior no-objection to the post-consultation versions of the E&S instruments, and other E&S-related documentation, as further defined in the POM. III. CONTACT POINT World Bank Nov 01, 2023 Page 19 of 20 The World Bank Brazil: Pernambuco Rural Water And Sanitation Project (prosar) (P180430) Task Team Leader: Juliana Menezes Garrido Title: Senior Water Supply and Sanitation Specialist Email: jgarrido@worldbank.org TTL Contact: Marie-Laure Lajaunie Job Title: Lead Water Resources Management Specialist Email: Mlajaunie@worldbank.org IV. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects V. APPROVAL Task Team Leader(s): Juliana Menezes Garrido, Marie-Laure Lajaunie For Official Use Only ADM Environmental Specialist: Guilherme Todt Cardoso De Faro ADM Social Specialist: Juliana Medeiros Paiva Nov 01, 2023 Page 20 of 20