HDP Project Manual - World Bankdocuments.worldbank.org/curated/en/708011468131387293/... · 2016....
196
HIFU DEVELOPMENT PROJECT (HDP) PROJECT MANUAL FOR HOCHIMINH CITY INVESTMENT FUND FOR URBAN DEVELOPMENT E2122 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript of HDP Project Manual - World Bankdocuments.worldbank.org/curated/en/708011468131387293/... · 2016....
HIFU DEVELOPMENT PROJECT (HDP)
PROJECT MANUAL FOR HOCHIMINH CITY INVESTMENT FUND FOR URBAN DEVELOPMENT
E2122P
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
edP
ublic
Dis
clos
ure
Aut
horiz
ed
2
PROJECT PREPARATION AND APPRAISAL GUIDELINES
1. Background
HIFU is a financial institution with the responsibility to invest in infrastructure and public service projects though the provision of loans or investment in Project Enterprises established under Vietnamese Enterprise Law and Investment Law. These Project Enterprises have co-investors from the private sector who seek to make a return on their investment through revenues earned by the provision of public services and/or infrastructure.
As a wholly owned subsidiary of the PC HIFU has two mandates with regard to Project Selection. The first is to select those projects that have suitable investment criteria to HIFU as an Investment Company acting within its charter and mandate, the second is to select those projects that have suitable non-financial returns in terms of service delivery outcomes and social safeguards. These mandates are not in contradiction but they do require different project selection criteria and selecting projects that always meet both sets of criteria will often be difficult if this manual is not followed.
This manual sets out:
• Initial exclusionary screening of projects
• The process by which projects are appraised in terms of both financial and non-financial mandates
• A sensible, simple appraisal matrix that describes the appraisal outcomes so that projects can be prioritized
• A risk appraisal methodology
• A basic flow diagram including combining project and social safeguards appraisal methodologies
• A necessary due diligence process
• Links with the HIFU Private Sector Participant Selection Manual.
2. Application, review and amendment of Manual
This manual applies to HIFU as a state owned Investment Company acting within applicable laws and regulations of Vietnam, in terms of its Charter, investment policies, financial covenants and management policies. It provides a process by which HIFU can evaluate on a proactive and regular basis the HIFU portfolio, investment plan and project pipeline.
2.1. Timing and non-retrospective nature of application
It will be adopted by HIFU and has application from [date].
The manual will not apply retrospectively to projects already in development or already implemented.
2.2. Equity participation and loan activities
The manual applies to projects where HIFU has a strong role in the development of the project and typically takes a role as project sponsor and equity provider (direct investor).
2.3. Unsolicited proposals
The manual applies equally to solicited and unsolicited proposals. The selection of projects will be carried out in a uniform manner regardless of the source of the proposal. Failure to do so may result in poor project selection with increased risk to HIFU. In addition, many
3
unsolicited proposals request concession rights in sectors with limited, or no internal market competition (e.g. water distribution, toll roads, waste disposal, etc) as opposed to projects that must compete in licensed markets (e.g. power plants, telecom services, etc). The manner in which unsolicited proposals are dealt with is set out in the HIFU Private Sector Participant Selection Manual. This manual requires that private sector parties who make unsolicited proposals must submit enough details to allow HIFU and the PC to make a very informed decision on the project. This information is the same that would have been prepared by HIFU and the line departments if the project had been initiated by the PC. In other words, the private sector must meet all the requirements that HIFU shall specify in accordance with this manual so that HIFU can verify and interrogate the information and complete the requirements for the feasibility study.
This Manual will be applied to unsolicited proposals in the manner set out in the Manual on the Selection of Private Sector Participants. However since this system for dealing with unsolicited proposals requires time to be made operational and the market informed of impending changes to the current system (which shall not be later than one year after adoption of the PSP Selection Manual); unsolicited proposals may be appraised using current HIFU practices. However these proposals must meet all environmental and social safeguard requirements and the appropriate safeguard instruments must be approved and developed and required environmental approvals must be obtained and implemented.
2.4. Type of Project
HIFU will invest in cost recovery oriented municipal infrastructure projects in key sectors such as civil and municipal infrastructure; water supply, distribution and/ or treatment; solid waste management, sewerage disposal and/ or treatment; toll roads and bridges; transport logistics; ports; fixed infrastructure in support of telecommunications and data/ information technology; residential development including for low-income people, industrial parks and other development infrastructure, electricity generation and/or distribution; energy transport infrastructure; and health and education infrastructure. HIFU shall not invest in sectors that are prohibited by the Vietnam laws and regulations and/or the respective PPC decrees.
The project selection manual has been established in order to suit projects of less than USD 200 million in capital requirement. Projects larger than this are classified as “Mega-Projects” and require specific, more specialist project appraisal including full economic cost/benefit and risk appraisal.
2.5. HIFU Capacity and Management Structures
HIFU as a financial institution using World Bank /IDA funds as well as its own funding sources to invest in projects along with private funds will develop and maintain capacity and management structures capable of project evaluation due diligence and implementation in the context of the Vietnamese laws and regulations and WB Policies and Guidelines as listed in Annex B. This Project Preparation and Appraisal Manual describes the timing and actions to ensure these structures are understood and used by HIFU. The manual allows for the progressive development of these capabilities as project due diligence is carried out on approved projects and as new projects are selected and prepared for the investment process.
HIFU will mobilize three sources of support in this process:
a) independent monitors to review the application of the manual to all stages of specific projects and to provide feedback and recommend corrective measures where required,
b) external consultants to provide specific support in applying the manual to projects and
c) regular WB support in the review and continued development of this manual.
2.6. Summary of process for Equity Investment Projects
4
The purpose of this Project Preparation Manual is to provide HIFU with an outline of the various tasks required in the selection, preparation, and management of investment projects as well as providing information on the preparation of feasibility studies and the various appraisal processes. The Project Preparation Manual has been prepared in line with the various tasks and activities considered necessary for developing a proposed municipal infrastructure project to the level where it can be considered for financing by HIFU. The main identified tasks are:
• Task 1 – Initial Project Screening/Project Identification
• Task 2 – Project Pre-feasibility Study Process for projects above USD 50 million in capital requirement
• Task 3 – Project Feasibility Study Process
Thereafter the selection of private sector participants and implementation including detail design commences with appropriate monitoring and evaluation.
These tasks and the associated process flow for these equity investment projects are set out in flow chart below. In addition Annex A and J set out more details related to the process flow for environmental and social safeguards and the parties associated with each activity. Annex A1 relates to projects with HIFU equity investment in the Project Enterprise, Annex A2 deals with projects for which HIFU provides a loan to a borrower.
Project
Concept
Note
Prepare Project
Description
Exclude unsuitable
projects
Carry out Priority
and Risk Rating
Prioritize list of projects
and IPS report for projects.
HIFU aproves for further
development
Is the project:
Included in Development Plan or PC sector priority?
Suitable Project Type?
Revenue generating?
Suitable for private sector participation?
Not on Social safeguard exclusion list?
Not on Environmental safeguard exclusion List?
Is the project a priority for further
development?
Yes
No
Project for
financing with
City budget
Yes
No
Project for
financing with
City budget Initial Project Screening
5
Technical and
operations viability
Financial and
economic viability
Private sector
investment potential
Prepare
Pre-feasibility study
What is the project capital value?
<USD50m>USD50m
Is there initial project technical,
financial viability?
Is the SEA and EA scoping report
complete?
Yes
No
Revise Inputs and
revisit Pre Feasibility
Study or consider for
financing with city
Socio-economic Assessment and Environmental
Assessment Scoping
Pre-feasibility study
Prepare
Feasibility Study
Needs Analysis Options Analysis Project Due Diligence Financial and
Economic
AssessmentVerify Information and
Sign off
Demonstrate Project
Viability
Prepare Project
Management Plan
Approve
Feasibility Study
Is there project technical, financial
viability?
Are all safeguard instruments in
place?
No
Revise Inputs and
revisit pre FS or
consider for financing
with city budget
HIFU Final Appraisal
Feasibility study
Revisit Feasibility as
required
Develop Safeguard
Instruments
Project Enterprise
Monthly Reports
to HIFU
Line Department
inspections
Technical audit reviews Monitoring of compliance
and remedial measures
Six monthly report to PC and
WB on application of manual
to projects
Annual Audit
Monitoring, Evaluation and
reporting
Monitoring Evaluation and ReportingDevelop and Issue RFP for
Selection of private sector
participants
Project Enterprise
formed
All necessary
Approvals obtained
Detail Designs Sub Contracts Signed
PSP Selection and
Project Implementation
Carry out EIA and implement Resettlement
Plan and Ethnic Minority Plan
6
Summary of process for Loan Investment Projects
Where HIFU only provides loan finance (indirect finance) the manual is applicable to extent of screening of both the project and the borrower and a suitable financial, legal and technical due diligence as shown in the flow chart below. Annex A2 sets out more details related to the process flow for environmental and social safeguards and the parties associated with each activity.
Borrower consults HIFU on
Project Selection Criteria
Review against Project
Selection Criteria
Exclude unsuitable
projects
Carry out Priority
and Risk Rating
Is the project:
Municipal Infrastructure?
Revenue generating?
Involvement of private sector participant?
Not on Social safeguard exclusion list?
Not on Environmental safeguard exclusion List?
Is the project a priority for further
consideration?
Yes
No
Reject
Yes
No
Reject
Initial Project Screening
Technical and
operations viability
Financial and
economic viability
Borrower prepares
Pre-feasibility study
Is there initial project technical,
financial viability?
Is the SEA and EA scoping report
complete?
Yes
NoReject
Socio-economic Assessment and Environmental
Assessment Scoping
Pre-feasibility study
Borrower prepares
Feasibility Study
Project Due Diligence Financial and
Economic
AssessmentVerify Information and
Sign off
Demonstrate Project
Viability
Prepare Project
Management Plan
Sign Loan Agreement
Is there project technical, financial
viability?
Are all safeguard instruments in
place?
NoRevise Inputs and
revisit FS or reject
HIFU Final Loan Appraisal
Feasibility study
Develop Safeguard
Instruments
7
2.7. Review and amendment of the Manual
The WB, HIFU and the PC will work in close co-operation in the application, review and amendment of this manual.
The manual will be reviewed at least once every year by HIFU and the PC and may be amended by resolution of the PC, provided the written agreement of the WB is obtained before the amendment is approved by the PC.
The WB may also request or suggest amendments to the Manual to HIFU and the PC.
3. Definitions used in Manual
This manual uses the following definitions: • BOT • Build-operate-and-transfer- This is a
contractual arrangement whereby the private party undertakes the financing and construction of a given infrastructure facility, as well as its operation and maintenance. The private party operates the facility over a fixed term during which it is permitted to charge facility users. The private party transfers the facility to the PC at the end of the fixed term.
• DPI • Department of Planning and Investment
• HIFU • Hochiminh City Investment Fund for Urban Development
• GoV • Government of Vietnam
• IPS • Initial Project Screening
• PC • Hochiminh People’s Committee
• Project Agreement • The Agreement signed between the PC and the Project Enterprise
• Proponent • An Enterprise or number of enterprises making an unsolicited proposal
• Project Description • A summary of a project completed by HIFU describing the project to ensure all parties have a common understanding of the project technical, financial and legal parameters
• Project Enterprise • An economic organization having its own name, having assets and a
Project Enterprise
Monthly Reports
to HIFU
Technical audit reviews Monitoring of compliance
and remedial measures
Six monthly reports to HIFU
Cashflow management and
Loan Repayment
Scheduling
Monitoring and reporting
Monitoring and ReportingBorrower assumes safeguard
responsibilities
All necessary
Approvals obtained
Detail Designs Sub Contracts Signed
Project Implementation
Carry out EIA and implement Resettlement
Plan and Ethnic Minority Plan
8
stable transaction office, and having business registration in accordance with law for the purpose of conducting the business operations related to the project.
• PSP • Private Sector Participant – An Enterprise or number of Enterprises seeking to co-invest with HIFU in the Project.
• PPP • Public-private partnership - means a formal agreement between an organ of state and a PSP in terms of which the PSP either performs a state function or uses state property for its own commercial purposes. In so doing it assumes substantial financial, technical and operational risks and receives a benefit either by way of payments from a state budget or charges or fees to be collected by the private party from users or customers
• Safeguards • Safeguards refer to the Laws, Decrees and WB policies applicable to sub-projects as set out in Annex B
• Screening • Screening refers to a process to categorize projects relative to type, location, sensitivity and scale in order to determine environmental and social assessment requirements as defined by Vietnamese law and WB policies.
• Unsolicited proposal • Unsolicited proposals are those proposals not requested by an organ of state and originate within the private sector. They typically come from companies with ties to a particular industry, such as developers, suppliers, and financiers, who spend their own money to develop basic project specifications, and then directly approach governments in an attempt to get the required official approvals.
• WB • World Bank
• •
4. Initial Project Identification: Description and Screening
In identifying investment projects, HIFU seeks to:
• Fund viable urban infrastructure projects with high economic returns and realistic financial returns;
• Maximize the leverage of its own capital and that of bi-lateral and multi-lateral donors with private finance from debt and capital markets;
• Facilitate the participation of the private sector in infrastructure development;
9
• Ensure sustainability of the fund by generating a positive return on its portfolio of investments; and
• Improve the financial management of urban local bodies.
The primary manner in which specific municipal infrastructure projects will be identified by HIFU is from the Provincial Government’s Development Plan where a long-list of proposed infrastructure projects have been identified by the concerned Line Departments and included in this approved Development Plan. This Plan is prepared by the Provincial Government’s Department of Planning and Investment (DPI) in coordination with all line departments, and is subsequently approved by the HCMC People’s Committee. The proposed projects are in line with the provincial government’s socio-economic and sectoral development priorities, and are therefore a sound basis for determining a potential infrastructure portfolio where PPPs can be initiated.
Additionally, it allows HIFU to identify an annual program, over a 3-5 year period, in which it can further identify and develop possible financing options/alternatives. This process of project identification will be carried out by DPI and HIFU in consultation with the concerned line departments. This process should be seen as being supportive of the line agency as in most cases the identified projects are only in the concept stage; do not have secured financing; and any support in advancing the processes will be beneficial to the line department.
Step 1: Project Description
Although projects are mainly selected through the Provincial Governments Development Plan, HIFU requires that a clear Project Description is completed as part of the Initial Project Screening (IPS) for each project. This ensures all involved in project review and feasibility analysis have a common technical understanding of the project. Annex C provides a example project description template that should be modified as required and completed by HIFU staff members as a key component of the IPS.
The Project Description includes relevant technical and financial information for decision processes and includes notes for determining project exclusion described below in Step 2.
Step 2: .Exclusion of proposed projects that do not meet HIFU criteria:
The IPS for selection of possible projects from the Development Plan, and based on the available concept notes of specific projects, requires that projects to be funded by HIFU must meet the following criteria:
• The proposed project is included in the Provincial Government’s Development Plan or is a project that supports the sector priorities of the province;
• The proposed project supports urban infrastructure contributing to the improvements of the environment and living standards of the urban populations and is one of the projects types listed in 2.4 above;
• The proposed project is revenue generating, and cost recovery from users is possible;
• The proposed project is likely to attract private sector participation
• The project or any components or anticipated expansions must not be listed on any WB or GoV environmental or social safeguard exclusion criteria (Refer to Annex A)
If the proposed project fails to positively respond to any of the above criteria, then it should be returned to the proponent with a brief report with the initial project screening attached. The initial project screening process should be completed as soon as possible after the project concept is received by HIFU.
Step 3: Project Screening: Social and Environmental Safeguards Integration
10
This component of the Manual addresses the GoV and WB Social, Environmental and related Legal Policies and Guidelines with the objective of ensuring that:
• Environmental and social impact risks are clearly understood, properly articulated and allocated correctly to any party in the legal contracts.
• Minimal delays occur in the environmental authorization, social preparation and approval processes for HIFU projects.
• HIFU implements internal environmental management planning processes that comply with Integrated Environmental Management good practice, that are compatible with incremental planning and the project cycle that is already in place and that underpin the main objectives of cutting out delays and reducing risks.
• HIFU has adequate capacity to ensure projects comply with WB requirements and safeguards including documenting and reporting on project progress.
• Effective and functional cooperative governance between HIFU and other relevant organs of State occurs as part of the overall environmental authorization and social preparation process.
• A successful project Enterprise obtains access to a site or a project that is unencumbered by inappropriate, undesirable or unresolved environmental or social safeguard risks.
Environmental management requirements to underpin implementation of development projects involves far more than simply making sure that there is compliance with the environmental law and regulations. Authorization of projects by the environmental authorities is only one small, but important, step in a much more complex process of environmental assessment that is necessary. There needs to be proper consideration and application of the full range of environmental aspects throughout the project lifecycle, particularly in the early planning stages.
Social considerations require that all investment projects should avoid adverse impacts to the people and be appropriate to the culture of the local communities and beneficiaries. In case adverse impacts are unavoidable, the efforts should be made to mitigate the impacts to ensure the affected people could restore or improve their living standards as before the project.
Environmental and Social inputs into project planning require emphasis on more strategic inputs during the pre-feasibility to insure inclusion of site specific assessments that are focused on consultation and environmental authorization as well as to minimize and mitigate social adverse impacts to the people.
Annex A and J and the Environmental and Social Safeguard Manuals (Annex F and Annex G) are provided as reference and guidance documents for undertaking and completing required project tasks. These documents should be provided to line departments and private investors to assist them in developing projects for HIFU evaluation. These manuals will be updated on a regular basis to reflect the type and complexity of projects in the HIFU pipeline. References on applicable methods are included.
Screening refers to a process to categorize projects relative to type, location, sensitivity and scale in order to determine environmental and social assessment/ preparation requirements as defined by Vietnamese law and WB policies.
Annex D and J provide an example template for Project Screening. Completion of this evaluation provides HIFU with the information on categorization and risk rating for the project’s environmental and social aspects. This template will be modified for each project type. For each project in the HIFU portfolio and pipeline a project screening will be
11
completed. For loan activities, this screening includes a review of the Borrower’s environmental and social responsibility characteristics.
Step 4: Project Priority and Social and Environmental Safeguards Risk Rating
In order to streamline the decision making process, the PC will establish a simple priority rating (Low, Medium or High) based on sector priorities for use by HIFU in prioritizing projects. For example, if a sector priority may be water and wastewater treatment, all such projects that meet the absolute criteria are high priority.
In instances where project proposals other than those identified in this manner are submitted to HIFU for financing consideration the approach will depend on the source. These submissions may come from the PC or line departments or directly from private investors as unsolicited proposals. If they are unsolicited proposals then the process set out in the HIFU Private Sector Participant Selection Manual must be followed. This means that the proposal must be very detailed and substantially complete before it can be considered.
As part of the IPS, consideration must be given to the environmental and social safeguards. This is not to select or screen out the projects with high environmental or social impacts but rather to inform HIFU of the role safeguards will play in project preparation. It is thus a prioritization tool and not a full risk assessment. This full risk assessment will be carried out during the feasibility study stage. In order to carry out this exercise, broad criteria are used to establish risk impact issues. For example:
• Social Safeguards will be considered as follows :
-Resettlement: (Annex G and H)
(i) All affected people having insignificant impact (Low Risk)
(ii) Up to 200 affected people (about 50 households) having significant impact (Moderate Risk)
(iii) Greater than 200 affected people (about 50 Households) having significant impact (High Risk)
• Environmental Safeguards will be considered as follows :
-Environmental Aspects: (Annex F)
(i) Minimal environmental impacts that can be satisfactorily mitigated (Low Risk)
(ii) A number of sensitive environmental impacts that require a full EIA but which can be satisfactorily managed (Moderate Risk)
(iii) Major environmental risks likely which will be difficult and costly to mitigate and which will require considerable time in resolving (High Risk)
If there is significant resettlement to be undertaken or environmental approvals to be obtained before the project can commence then any Investor (including HIFU) will not commit investment funds until the feasible resettlement plan is agreed with the affected people and/or the approvals given. Any delay to the project implementation schedule may impact on the financial viability of the project. Thus the IPS also serves to allow HIFU to select projects that are suitable for development in the short medium or long term.
Step 5: Develop a priority list of projects for development
Each project will thus have a priority rating and environmental and social safeguard risk rating. A simple matrix is then developed as shown below to categorize projects:
12
The arrow and shading indicates the preference towards priority projects with low environmental and social impacts. High priority, high risk projects will take longer to develop while low priority projects will depend on the availability of resources for further development.
While it is not intended to eliminate or exclude projects, those rated high risk and low priority, these projects would not be considered priority projects. If a total of 10-15 projects can be identified from the Development Plan, then these projects could then be prioritized over a five year period and they would form the basis of the HIFU project pipeline. The project description would form a 2-3 page concept summary of the proposed project and be developed to support the prioritization of the various projects for further development. On the annual updating of the Development Plan, HIFU will update their portfolio adding new projects they are identified, screened and accepted for further development. This would result in a “rolling” annual program for project development. HIFU now approves the project for further development.
At this stage based on the type of project, the PC will assign the relevant line department and HIFU to further prepare the project. HIFU will ensure that there is sufficient budget for the project development costs such as technical, social safeguard and environmental consultants as necessary.
5. Project Pre-Feasibility Study Process
The project pre-feasibility study is only required on projects with a total investment capital value greater than USD 50 million.
For projects below USD 50 million where a pre-feasibility study is not done, a detailed environmental and social scoping process shall be completed. The scoping exercise is to provide details to all project participants for the required Environmental and Social Assessment process. This must be completed and added to the Project Description for development and evaluation of subsequent Feasibility Study activities.
For projects over USD 50 million the relevant line department and HIFU will develop a short pre-feasibility study for each prioritized project once there has been agreement on the list and categorization of the projects. This pre-feasibility study is a short, focused, low cost assessment of project viability. The intention is to define the project and to collate information necessary for the relevant line department and HIFU to define the project concept based on engineering design concept, the technical and financial challenges of implementation, and expected project outcomes and impacts. Specifically, the pre-feasibility analysis will:
(1) Determine the Technical and operational Feasibility of the Project Concept through preliminary analysis of:
(a) the engineering/technical aspects of the project;
(b) the manageability of the operational aspects of the project;
Social and Environmental Safeguard Risk
High Medium Low
Priority High
Medium
Low
13
(c) preliminary assessment of all likely technical and operational risks.
(2) Include the following environmental and social safeguard activities (and related reports) that must be completed as shown in Annex A and J.
(a) Socio-Economic Assessment and Analysis
(b) Environmental Assessment Scoping
(3) Determine the Financial and Economic Feasibility of the Project Concept through preliminary assessment of:
(a) the cost recovery/income generation assumptions of the project;
(b) likely private sector interest in the project;
(c) the overall project cost (capital + operations + maintenance);
(d) possible financial risks, and
(e) identification of likely economic benefits generated by the project.
(4) Identify possible arrangements for private sector participation through:
(a) identifying role of the private sector (direct or indirect investment, Joint Venture Partner, etc);
(b) identifying the contractual framework for the PPP arrangement;
(c) outlining procedure for ensuring competition in the selection of the private sector partner(s);
(d) identifying the legal documentation required to allow participation of the private partner(s).
(5) Identification of Next Steps by:
(a) assessing the resources required to complete the project preparation process;
(b) identifying parties responsible for completing next steps;
(c) determining the roles and responsibilities of involved parties;
(d) determining the time frame required for completing project preparation.
At the completion of this task both HIFU and the relevant line department will have a well defined description of the proposed project, its general scope, preliminary cost estimates, identified resettlement and environmental issues and requirements, income generating opportunities, initial financial viability, private sector opportunities, any identified project risks, and what further actions are required to complete the project preparation and by who. This will then provide a good basis for further pursuing the project. HIFU then approves the project for further development in the Feasibility Study.
6. Project Feasibility Study
This feasibility study is not the full Feasibility Study described in Vietnamese law because the full design and other elements are left to the Project enterprise. An appropriate level of design will be agreed between HIFU and line department for each project.
The feasibility study is the critical component and technical working document for project preparation and appraisal.
A feasibility study needs to be authentic, accurate and thorough. It is the basis for the PC and HIFU making an important investment decision, not just a bureaucratic requirement. Regardless of the term and scale of a project, there are long-term implications and a great deal at stake when the project is implemented.
14
For the PC and the line department the feasibility study:
• Ensures that the project is in accordance with predetermined needs and is the most suitable technical solution to the needs;
• provides information about costs (explicit and hidden), and gives an indication of whether costs can be met from within institutional budgets without disruptions to other activities;
• considers the economic rationale for the project;
• allows for the identification, quantification, mitigation and allocation of risks associated with its whole life cycle
• completes the Resettlement Plan including all relocation plans resettlement impacts; the corresponding instruments including compensation programs and costs as well as the Ethnic Minority Plan as set out in Annex A.
• completes the Consultation Plan as set out in Annex A.
• documents all consultation completed for the project,
• includes the project specific land acquisition,,
• provides management programs for supervision to ensure compliance with approvals and defined mitigation plans, and
• considers whether or not the project is affordable to the government and or the end user of the services in terms of explicit and contingent fiscal obligations.
In addition to this, for HIFU the feasibility study will
• consider how the project will be structured;
• contain a financial model establishing key investment ratios and capable of running scenario and sensitivity analyses
• identify constraints which may cause the project to be halted and
• ensure that the project is developed around a proper business plan; and has been subject to a due diligence that shows it is legally, physically and socially compliant.
The study is based on a design of an appropriate level of detail that meets good engineering design practices and the design and construction standards as specified by the Vietnamese Government or other standards/best practices accepted in Vietnam, as well as in accordance with relevant laws, decrees, regulations, ordinances, and circulars of the Government of Vietnam. It is important to point out that the various activities identified at this stage of project preparation can and should be pursued simultaneously to expedite project preparation.
The Feasibility Study, to be undertaken by either the line department, or HIFU or jointly, needs to be a “complete” document containing all aspects of the project that can be fully appraised by HIFU and future intended private sector partner/s. The following box provides a summary outline of the main items to be included in the Feasibility Study.
Checklist for Contents of the Feasibility Study 1. THE NEEDS ANALYSIS
a. Step 1: Demonstrate that the project aligns with the HCMC PC ’s strategic objectives
b. Step 2: Identify and analyze the available budget for project development c. Step 3: Demonstrate the commitment and capacity of HIFU and line
departments d. Step 4: Specify the outputs e. Step 5: Define the scope of the project
2. THE OPTIONS ANALYSIS a. Step 1: List all the solution options the institution has considered b. Step 2: Evaluate each solution option c. Step 3: Choose the best solution option
15
During the preparation of the Feasibility Study there are a number of common project design issues that need to be considered. While key issues will be project specific, common points that arise include the following;
Activity 1 – Needs Analysis
This stage the line department and HIFU gathers all available information on the public present and future need, the project and the available resources, including budget.
• Identify extent of existing facilities in the project area;
• Determine how project will complement other developments in the area through review of sector master plans/studies;
• Review existing land use plans and topographical/geotechnical data for consideration in the project design;
• Demonstrate that the project aligns with the institution’s strategic objectives
• Identify and analyze the available budget(s) for project development
• Demonstrate the institution’s commitment and capacity to carry out administrative responsibilities during project implementation and operation
• Define the scope of the project
• Specify the outputs
Note: The focus should be on output and not inputs. The risk of providing adequate inputs and assets to deliver the required outputs must lie with the private sector. For instance a PPP must
16
provide clean and adequate water to ‘x’ number of households and not a network of pipes and water treatment plants, or an airport capable of handling ‘x’ number or flights and ‘y’ number of passengers and not a building surrounded by ramps. In the process assets are created, over which the PC has certain rights over the life of the project and these assets usually are transferred to the PC at the end of the PPP term. Therefore it is crucial to define project outputs upfront.
• Specify environmental and social assessment workplans through description of projected work tasks.
• Assess land acquisition and resettlement requirements and undertake community consultation processes to determine willingness of community/affected persons to agree with the implementation of the project and the proposed compensation and assistance program;
Activity 2 – Options analysis
The Options Analysis sets out the range of technical, legal and financial options for meeting the PC’s output specifications. The Options Analysis allows the PC to choose a preferred option from the available options.
For example, if the PC were faced with the need to offer working environment accommodation services for its staff of 1000 people, the reasonable options available to the PC might be:
• to refurbish its current building or refurbish another building
• rent space in another more suitable building
• construct a new building.
With the rental option, the PC could enter into a rental agreement for office space in another building, move its staff and continue operating.
With the refurbishment option the PC could either decide to refurbish the building itself and provide its own ancillary services (cleaning, security, IT, furniture, etc) or it could enter into a PPP where a Private Party would refurbish the building and provide ancillary services to the PC, and in return receive a fixed fee for doing so.
The same would apply to the option where the PC wishes to construct a new building.
The line department and HIFU will conduct the options analysis by undertaking the following steps:
• List all reasonable options considered
• Evaluate and assess each option in terms of advantages and disadvantages based on a consideration of:
o technical aspects
o land acquisition and resettlement impacts and costs
o environmental impacts and costs
• Discuss which options are likely to attract private sector investment
• Recommendation of the preferred option
The purpose of this analysis is to identify the advantages and disadvantages of each option and to examine the risks, benefits and potential impacts to the PC of each of them.
The analysis must cover the range of the most viable delivery options available for meeting the PC’s specific identified needs.
17
All reasonable options considered need to be evaluated clearly and with appropriate weightings of criteria. The criteria by which the feasibility study evaluates each option will be decided on by the line department and HIFU. The criteria could include raising private finance, speed of implementation, ease of implementation etc.
Once the preferred option is selected a design appropriate to the complexity of the project is prepared in order to provide sufficient information for the costing and risk and financial analysis. This design may be a preliminary design for more complex, high cost projects and a lesser design standard for simpler projects that have reliable cost data.
Note: This design is not to be provided in full to any private sector bidders at the stage of selecting the private sector participant as it will result in the design risk remaining with HIFU and also in reduced efficiency from private sector design. The final design will be that of the private sector who will obtain the necessary construction approvals and other approvals as required by applicable Vietnamese law.
Activity 3: Project Due Diligence
At this stage of the feasibility study all the legal, land, site, technical, social safeguard and environmental issues are dealt with as set out in Annex A and J. The list below is not complete for every project but gives an example of issues to be considered:
• Include the Environmental Scoping assessment report and identify how the negative impacts will be mitigated and estimate what the magnitude of mitigation measures will be;
• Land acquisition plan including required land expropriation
• Prepare a Consultation Plan in accordance with WB OP4.01, OP4.10 and 4.12 to ensure that all affected parties are provided with information and opportunity to express concerns regarding project impacts.
• Prepare a Resettlement Action Plan (RAP) in accordance with the approved Resettlement Policy Framework with full public disclosure ;
• Prepare Ethnic Minority Plan (EMP)in line with the approved EMP Framework (Annex G)
• Finalize the EIA Terms for Reference, which will be completed by the Project Enterprise (Annex F and J)
• Analyze the relevant design,
• Review supporting infrastructure,
• Review availability of raw material and fuel supply,
• Full technical site analysis
• Consider legal aspects including relevant legislation, tax laws land title etc
• Carry out a preliminary financial due diligence on the availability of financing, sources of revenue, hedging/risk mitigation products, tax structures, etc
Activity 4 – Financial and Economic Aspects
In this activity the deliverable is a reliable risk adjusted financial model for the project.
The model represents the cost of delivering the preferred solutions option. It is necessary to identify and incorporate the following elements into the model:
18
The model will allow for analysis of financial soundness including the fiscal sustainability of the proposed project based on the costs allowed for maintaining and operating the project adequately.
The model must also include an evaluation of the impact of the project on government finances, taking into account (a) the incremental taxes that would result from the project; (b) the increase in recurrent costs resulting from the project and the prospects for financing this increase;(c) the overall level of recurrent costs required to operate the sector adequately and the available budget allocated by the HCMC PC where this is relevant and (e) the availability and certainty of counterpart funds for the project.
In developing the model, the following steps are required:
a) Technical definition of the project
This sets out a technical definition of the parameters of the project. What norms and standards will be applied in the project? What maintenance cycles are expected?
b) Identifying direct costs
Direct costs are those that can be allocated to a particular service. All costs assumed should relate to historical cost information where available, or utilize realistic expected costs and revenues based on other similar projects within Vietnam, if available, or in a similar environment in another country. Some detail regarding types of direct costs are discussed briefly:
• Direct capital costs
These are costs that are specifically associated with the production of new services; these may include the construction of a new facility or the acquisition of a new asset. The model should account for capital costs in the year in which they occur, including, but not limited to, the design, land and development costs, raw materials, construction, plant and equipment. The capital costs should also account for the labor; management and training costs related to the development and implementation of a project, including financial, legal, procurement, technical and project management services. It is also important to include the cost of asset replacement as they occur in the project.
• Direct maintenance costs
The level of maintenance assumed must be consistent with the capital costs; the operating cost forecasts and the residual value treatment of any assets. Maintenance costs will include the full life-cycle costs of maintaining the assets in the condition required to deliver the output specification, and may include elements such as raw materials, tools and equipment costs and labor costs associated with maintenance.
• Direct operating costs
These are associated with the daily operation of the service and will include full staff costs (including wages and salaries, employee benefits, accruing pension liabilities, contributions to insurance, training and development, annual leave, travel and any expected redundancy costs), raw materials and consumables, direct management costs and insurance.
c) Identifying indirect costs
Indirect costs will include that portion of any additional overhead costs related to the project (e.g. senior management’s time and effort, personnel, accounting,
19
billing, legal, rent, communications and other resources that are used by the project). The project’s indirect costs can be determined by using an appropriate method of allocation.
d) Identifying project revenue
The total cost of the output specification should be offset by anticipated project revenues that may be collected from the project. It should be borne in mind that forecasting potential revenues could be a particularly difficult aspect of the model, especially where there is little or no historical data available.
This element is a very important part of the feasibility study, as such specialist advisers and market testing should be considered.
Any assumptions on revenue collected must reflect the project’s ability to invoice and collect revenue. Analyze appropriateness of fees in relation to user affordability and long-term marginal costs and operation and maintenance costs and the effect of pricing and cost recovery policies on the financial viability of the project;
Note: Revenue over-estimation and cost under-estimation is the most common failing of feasibility studies. Carry out scenario analyses to check what happens to the project in worst case scenarios.
e) Model assumptions
Any assumptions made regarding inflation rate, discount rate, depreciation, and budget available must be explained in detail.
f) The Base Case model
A discounted cash flow model must now be created that takes into account the operating costs, capital costs and revenues anticipated for this project.
g) The Risk Matrix
Constructing a risk matrix is a fundamental part of the feasibility study process and can be usefully integrated with the construction of the financial model. It involves the following inter-related stages:
• Identifying risks involved in the project
• Assessing the impact of these risks:
• Assessing the likelihood of these risks arising
• Calculating the value of risk (and ranges of possible outcomes)
• Allocating risks to party best able to manage risk
• Identifying strategies for mitigating risk.
Note: This manual requires the valuation of risk as a separate cash flow item, and not by adjusting the discount rate as an indication of the level of risk for each project. The principal reasons for adopting the cash flow impact method is that it promotes a focus on the costs of each risk and enables an understanding of how risk transfer can be achieved and what its financial effects are. In addition to this, different risks have different timing implications throughout the project term (some risks may only have an impact on the initial stages of the project, whilst the impact of other risks diminishes or escalates over the life of the project). Valuing each risk as a separate cash flow item accounts for the time implication of that risk.
Some risks to be considered are set out in the table below:
20
•• PPrroojjeecctt RReellaatteedd RRiisskkss
•• ((rreellaattiivveellyy mmaannaaggeeaabbllee bbyy PPrriivvaattee PPaarrttyy aanndd lleennddeerrss))
•
• Completion Risk (engineering & construction cost / time cost control)
• Operational Performance Risk (technical & operational know-how)
• MMaarrkkeett RRiisskk (Volume and Tariff)
• Financial Risk (Exchange Rate and Interest Rate Fluctuations)
• Environmental Risk (past and future liabilities, project delays, costs overruns)
• Land Acquisition to the extent that the enablement confirmed by the project due diligence has not been completed.
•
•• NNoonn--PPrroojjeecctt RReellaatteedd RRiisskkss
•• ((nnoonn--mmaannaaggeeaabbllee oorr ppaarrttiiaallllyy mmaannaaggeeaabbllee bbyy PPrriivvaattee PPaarrttyy aanndd
lleennddeerrss))
•
• Political Risk (expropriation, political violence, currency ccoonnvveerrttiibbiilliittyy && ttrraannssffeerr)
•• CCoonnttrraaccttuuaall RRiisskk [Regulatory Risks]. (CA’s default on contractual obligations, i.e., pprriicciinngg ffoorrmmuullaass ))
• Macroeconomics Environment -- VVoollaattiilliittyy RRiisskk (changes in macro balance in relatively short periods, i.e., eexxcchhaannggee rraattee, inflation, etc...)
• Legal Environment (rruullee ooff llaaww, i.e., judicial system, regulatory procedures and arbitration)
h) The risk adjusted financial model
The base case financial model is now revised to include risk. Undertake a Project Risk Analysis covering such items as market forces; price and inflation, demand and sustainability, technology and operational risks, and identify measures to mitigate such risks.
i) Creating the model to reflect PPP project structure and sources of funding
A proposed structure of the project is required. It needs to demonstrate the relationship between the PC, the Project Enterprise (SPV) to be established, shareholders, lenders, suppliers, subcontractors and other players. The suitable project structure must incorporate the funding structure and appropriate equity returns, and the costs and key terms of debt funding, including for instance, debt service cover ratios (if applicable). All assumptions must be clearly stated, as these will directly affect the cost of capital for the project.
For loan projects the Borrower must also demonstrate fully its financial and technical capacity to implement the project, with underwritten commitments to financing and technical performance guarantees where appropriate.
In a project finance structure, the following elements must be addressed:
• Legal and financial structure and participants: legal documentation that supports the structure;
• ratios such as Annual Debt Service Cover Ratio (that, assesses the Project Company’s ability to service debt from its annual cash flow, and is calculated as operating cash flow of the project over the year divided by debt service of the project over the year), This will be determined for each project based on its risk assessment but will not be less than 1.10.
• and Loan Life Cover Ratio (based on a similar calculation as above, but taken over the whole term of the loan: Projected operating cash flow divided by debt outstanding on the calculation date).
• Other analysis would include calculating the Financial Internal Rate of Return, that measures the return on investment over its life – it is the discount rate at which the Net Present Value (value today of sum of money due in future taking into account the cost of money / discount rate) of the project is zero. The rate of return to HIFU should be based on the
21
appropriate (chosen at the time of appraisal and based on the duration of the project) government bond yield plus an appropriate risk margin determined by HIFU for each project. ;
j) Carry-out various sensitivity testing of the FIRR subjecting it to (i) increase in investment cost by 10 to 50%; increase in operating costs by 10% to 50%; (iii) increasing both investment and operating costs by 10% to 50%; and (iv) reduction in revenue by 10% to 50%;
k) Economic Analysis
Calculate the incremental benefits and costs of the project to society as a whole based on the “with” and “without” project scenarios;
Determine the economic costs of the project (investment cost and operating cost) derived from the financial costs by excluding taxes and duties and by converting the non-traded components to the domestic price numeraire;
Determine major assumptions to be applied to the economic analysis including (i) projected life of the proposed project asset; (ii) the constant value (currency and year) for defining incremental costs and revenues; and (iii) opportunity cost of capital based on current savings interest rate of local commercial banks;
Undertake calculation of Economic Internal Rate of Return (EIRR) for each component and for the project as a whole, and the Economic Net Present Value (ENPV) for the whole project;
Estimate the expected economic benefits to be generated from the project such as increase in land costs, time saving, employment generation, improved public health conditions, reduced pollution; and various cost saving benefits; and
Demonstrate in economic terms that the proposed project is the least cost option when considering both capital and recurrent costs.
Activity 5 – Demonstrate Project Viability
Here the project is shown to be viable from the following perspectives:
• It is technically deliverable
• Affordable to users
• Economically viable
• Financially viable to investors
• Socially and environmentally sustainable
The feasibility study must also identify appropriate, comprehensive collateral security arrangements, subject to applicable law, that mitigate the risk of loss to HIFU in the event of a project payment default or bankruptcy of the Project Enterprise and provide defensive security against other creditors from making claims on the project’s assets (i.e. pledge of all material physical assets, security interest in the land or of all bank accounts held by the project’s company and other type of collateral arrangements in Vietnam.
Activity 6 – Verify Information and Sign-Off
HIFU and the line department will ensure that all information used in the feasibility study is as accurate and verified as possible. This will include
• A statement from all advisors on the reasonableness of the information collected and the process by which the information was collected.
22
• A description of how the assumptions used in constructing the financial model are realistic and appropriate, taking into account past practice, performance, current practice and anticipated future developments. For complex projects an independent party will check that the assumptions are reasonable, and confirms that they have been correctly incorporated into the model to produce an accurate result (arithmetic and logic).
• A record of the methodologies used for valuing various costs, including the costs of key risks.
• Ensuring that all inputs into the feasibility study are signed off as accurate and verifiable by each of the transaction advisor specialists.
Once this information verification and sign off has been completed the approval process must be completed in accordance with applicable Vietnamese investment and construction planning and management law.
Activity 7: Project Management Plan
The preparation of a project management plan based on the packaging of the various project components needs to be part of the feasibility study agreed by all concerned parties.
The plan must include a section setting out how the private sector participants will be selected. In the preparation of the this PSP selection component of the plan, economies of scale should be carefully considered in the development of the contract packages in order to minimize the number of contracts thus resulting in greater efficiency and possible cost benefits. In addition, the fewer the packages the easier it is to manage the project.
The plan will refer to the PSP Selection Manual and must contain at least the following:
• a project timetable for the key milestones and all approvals which will be required to take the project to implementation
• a list of any potential challenges to the project and a discussion on how these will be addressed by the project team
• the governance processes to be used by the PC; line departments and HIFU in the management of the project, especially regarding decision-making
• the project stakeholders and the extent of their involvement in the PPP
• the project team with assigned functions
• categories of information to be made available to PSP bidders and how such information will be developed
• a list of required approvals from all departments and agencies
• a GANTT chart of the project including all approvals and work items necessary for obtaining these approvals (for example, land acquisitions and environmental studies)
• contingency plans for dealing with deviations from the timetable and budgets
• the bid evaluation process and teams
• an appropriate quality assurance process for PSP selection documentation
• the means of establishing and maintaining an appropriate audit trail for the selection of PSP participants
• appropriate security and confidentiality systems, including confidentiality agreements, anti-corruption mechanisms, and conflict of interest forms to be signed by all project team members.
23
Activity 8: Revisiting the Feasibility Study
The feasibility study will be updated when changes to the project or external market or macro-economic changes occur in order to keep it up to date.
7. Implementation, Monitoring, Evaluation, and Reporting
The preparation of PSP selection documents will be done and issued at this stage by HIFU in accordance with the manual for PSP Selection.
This RFP will include all outstanding information, plans and approvals required to be developed or obtained by the Project Enterprise. HIFU will also ensure that the obligations of the Project Enterprise are clearly set out in the RFP for:
• Completion of technical, social and environmental work programs in accordance with the approved documentation.
• Preparation and disclose to the public the Environmental Impact Assessment (EIA) findings including an Environmental Management Plan (EMP) in accordance with government regulations and donor environmental policies and guidelines, which will be fully disclosed to the public, and submit for approval by the Department of Natural Resources and Environment (DONRE).
• an Environmental Management Plan including processes to ensure all commitments including WB required mitigation action plans are registered and adhered to during project implementation
• Reporting and monitoring obligations
The Project Enterprise must implement the approved Resettlement Plan and Ethnic Minority Plan if applicable.
On the approval of a loan and in entering into a PPP arrangement, agreement between HIFU and PSPs on the loan withdrawal percentages and basis for payments will be undertaken. The Investor/Borrower will be required to submit monthly progress reports on the status of project implementation to HIFU who in turn will be required to undertake inspection/monitoring visits to the project site. In addition to HIFU undertaking site visits, the concerned provincial government line agency will also undertake technical audit reviews of project implementation to ensure compliance with contract specifications and government procedures.
The monthly reports by the Project Enterprise will include a comprehensive evaluation of the project implementation arrangements, the progress as compared with the designed targets, consultations with community groups, and a review of the institutional and policy development aspects. In addition, and in accordance with the Manuals on Social Safeguards and Environment and the Environmental Management Plan (EMP), monitoring of compliance with agreed remedial measures will be strictly undertaken and enforced.
HIFU will provide six monthly reports to the PC that will provide a narrative description of the progress during the concerned period, any modifications to the schedule, problems and difficulties experienced, and a description of the work to be undertaken in the following period. The progress reports will also provide summary financial accounts for the project consisting of expenditures during the quarter, year-to-date expenditures, and total expenditures to date. Records on the release of loan payments will be maintained by HIFU. Within 3 months of the completion of the project, the Project Enterprise must submit a physical completion report that will include the details of project implementation, costs, benefit monitoring and evaluation activities, and a final statement of accounts under the project.
8. Capacity Development
24
To ensure that HIFU has internal capacity to assess and monitor environmental and social safeguard issues, technical assistance will form a component of HDP funding. This technical assistance will focus on ensuring HIFU has capacity to evaluate and monitor each project and its borrowers, the PSPs in the Project Enterprise and its sub contractors. Key areas of technical capacity development are for provision of assistance for:
• borrowers and the PSPs to develop Environment and Social Safeguard documents,
• evaluation of Environmental and Social Issues,
• appraisal of the adequacy of Environmental and Social Assessment reports (Environmental Scoping Assessment, Socio Economic Assessment, Ethnic Minority Plan, Resettlement Action Plan, EIA and EMP) and implementation mechanisms,
supervision and monitoring of Environmental and Social plans
25
Applicable Government Laws and WB Policies and Guidelines
A. Laws of the Socialist Republic of Vietnam
1. On Social Safeguard
• The Constitution of the Socialist Republic of Vietnam, 15 April 1992;
• Decree No. 60/CP, 5 July 1994, regulation on property ownership and the right to use
urban residential land;
• Decree 91/CP (17 August 1994) regulation on Urban Planning Management;
• Decree No. 64/CP, 27 September 1993, regulation on allocating agricultural land to
households for long-term use;
• Circular No 05-BXD/DT, February, 1993, on classification of houses.
• Construction Law, dated on Dec, 10th
2003,
• Law of grievance and accusion, December, 2nd
1998. Laws amending Law of grievance
and Accusion , dated on June, 15th
2004 and November 29th
2006
• New Land Law 2003 approved by National Assembly on the 26, November, 2003, came
into effect on the 1st of July, 2004, replacing the Land Law 1993
• Decree No181/2004/ND-CP, 29 October 2004, relating to the implementing the Land
Law.
• Decree No182/2004/ND-CP, 29 October 2004, on administrative violation in the land
user-rights...
• Decree No188/2004/ND-CP, 16 November 2004, regulation on price land and price
framework for land categories; and issued guidelines in Circulation No114/2004/TT-BTC
by MOF.
• Decree No197/2004/ND-CP, 03 December 2004, on compensation, assistance and
resettlement when land is recovered by the State (replacing Decree No. 22/CP). And
issued guidelines in Circular No116/2004/TT-BTC by MOF, dated on Dec. 7th
2004.
Circular No69/2006/TT-BTC by MOF, dated on Feb. 18th
2006, amending the Circular
No116/2004/TT-BTC on guidelines for implementation of Decree 197/2004/CP.
• Decree No198/2004/ND-CP, 03 December 2004, on collection of land use fee. And
issued guidelines in Circulation No117/2004/TT-BTC by MOF.
• Circular No 80/2005/TT-BTC, dated on September, 15th, 2005, providing guidelines for
organization of a network for conducting statistics of and surveying, investigating of the
land prices in accordance with Decree No 188/2004/ND-CP of the 16th of November,
2004, on the methods of evaluating land prices and frame of land prices.
• Decree No17/2006/ND-CP, 27 January 2006, on amendment of some provisions of some
Decree guiding implementation of the Land Law and the Decree 187/2004/ ND-CP on
shifting the state companies into stock ones
• Decree No131/2006/ND-CP, on November, 9th
2006, providing regulations on
Management and Utilization of ODA.
• Decision No106/2005/QD-UB dated on June, 16th
2005, issued by the Hochiminh City’s
PC on compensation, assistance and resettlement when the Government acquires land in
Ho Chi Minh City
2. On Environment:
26
• National law on Environment Protection (NLEP) 2005
• Decree 80/2006/ NĐ-GOV/2006 dated on August 09, 2006 “ Guideline for
implementation of the NLEP 2005”. According to this decree, full EIA is needed for the
projects listed in Annexes I and II (category I and II), an environment protection
commitment is needed for the remaining projects (category III)
B. World Bank policies and Guidelines:
1. On Social Safeguard
• Involuntary Resettlement Policy OP 4.12
• Policy on Indigenous People (Ethnic Minorities) OP 4.10
• Policy on Cultural Properties OP 4.11
2. On Environment:
• OP 4.01 Environmental assessment
• OP 4.04 Natural habitat
• OP 4.09 Pest management
• OP 4.37 Dam safety
• OP 4.11 Cultural property
• BP 17.50 Public disclosure
27
Example Project Description Project Name: Concept Project Project Investor: Investor to be determined Total Estimated Project Cost: USD 16 million Estimated Implementation Period: 2 years (2009-2011) Proposed Project Description: 1. Background
This section describes the project background including:
• Sector
• Data on sector
• Sector focus and master planning
• Project need
• Project effect
• Location
• Technical Description 2. Estimated Project Costs
Total project costs 3. Financing Arrangements
Loan or equity type project. Equity to debt ratios 4. Environmental and Social Safeguards
Initial screening process to describe general environmental and social concerns and risks associated with these concerns. These will reflect regulations in Vietnam and World Bank Safeguards.
28
EXAMPLE OF A SCREENING FORM
ENVIRONMENTAL AND SOCIAL COMPONENTS – TYPICAL ROAD PROJECT Project Name: _________________________________________HIFU Code: ____________
Responsible Institutions: __________________________________________________
Borrower/Enterprise: __________________________________________________
Names of Project Screening Evaluators: ______________________________________________________
Date of Project Screening: _____________________________________
1. Project Characteristics (See PPA Manual Annex C and J)
Road Name: _____________________________
Districts Crossed : ________________________
Connections Points to Non-Municipal Roads: yes/no ____
Road Characteristics:
Length __________ Km.
Type ______________________
Width __________ m.
2. Project Type
Project Focus: � Maintenance
� Partial Reconstruction
� Expansion and Modernization
� New route and Road
- Project Type: � Primary Route
� Secondary Route
� Tertiary Route
Type of Infrastructure
Type of Intervention - Potential Tertiary Secondary Primary
Maintenance III III III
Partial Reconstruction III II II
Expansion and Modernization II I I
New route and Road I I I
3. Classification according to Environmental and Social Sensitivity Environmental and Social Characteristics
of the Affected Project Area
Yes/No
Classification
(High 3, Medium
2, Low 1)
Process required
to address issue
Comments
1. Physical Characteristics of Road and Border
Areas:
• Erosion areas
• Subsidence areas
• Inundated areas
• Rivers, Canals, Wells, Intermittent Flows
• Lakes, Lagoons
• Wetlands
• Springs and sources
• Reserves, national parks
• Areas of natural forests
2. Terrestrial Resources:
• Natural Forests
• Critical Habitats
• National Reserves
• Biological Sanctuaries
• Endangered Species
29
3. Aquatic Resources:
• Fisheries
• Aquatic Birds
• Aquatic Mammals
• Water pollution due to sediment,
construction and oil spills, roadside litter
• Aquatic plantation
• Aquiculture
• Recreation activities
•
3. Project Works causing Major Impacts:
Direct impacts:
• Deforestation and other land use change
• Obstruction to movement of wildlife,
livestock and local residents
• Modification of natural drainage patterns
• Landslide, erosion, sedimentation
• Degradation or destruction of cultural sites
• Building material quarries and transportation
• Dust, noise and air pollution from
construction works
• Oil and fuel spills
• Trash and garbage
• Presence of labour force
Use impacts
• Increased air pollution from vehicles
• Accidents
• Roadside litter
• Hazardous material in transition
Indirect impacts:
• Increased access to wildlife and other
natural resources
• Construction of secondary roads
• Labour force migration and displacement of
subsistence economies
• Unplanned land development
4. Social Issues:
(other than safeguard issues)
• affordability of the poor for a project created
service
• health
• employment opportunities
• community participation
• gender
• willingness to pay
• access
5. Socio-Economic Impacts
• Positive impact (easier transportation, better
access to services and market…)
• Negative impact (road safety, accessibility of
the social evils….)
6. Resettlement and Land Acquisition
• Total land would be acquired
• residential land
• agricultural land
• number of households (HH)affected
• HH relocated
• HHs with loss 10% or more of productive
assets
30
7. Ethnic Minority Peoples
• ethnic minority people in the project area
• What ethnic group
• Number of each group
• Is the group a community
8. Cultural Property
• Degradation or damage to cultural premises
• Visual obstacles to cultural sites and value
• Chance of finding cultural, historical and
religion relicts
9. Other Relevant Issues
•
Sensitivity and Risk Rating:
LOW: One (1) or more effects in column 1 yes/no up to two (2) categorized as 2.
MODERATE: Three (3) or more effects characterized as 2, but none characterized as (3).
HIGH: One (1) characterized as 3.
4. Project classification by environmental and social risk level
C FINAL PROJECT CLASSIFICATION
____________________________________
General guide for Project Environmental and Social requirements III C and IIC Apply environmental and social management practices accepted by
the GoV II B and I B Apply environmental and social management practices accepted by
the GoV Undertake specific analyses and recommendations noted in the check list Complete environmental and social studies required under GoV Law Apply the guidance on land acquisition and resettlement if applicable
I A Complete Environmental Assessment Studies Complete Socio-Economic Studies List all Environmental and Social Impacts List all Environmental Approvals required
Develop and implement land acquisition and resettlement plans Develop and implement ethnic minority management plans Develop a project Environmental Management Plan including mitigation actions and monitoring plans
Type Sensitivity of Environment
Low Moderate High
Type III
Type II
Type I
C
B
A A
C
B
B
C
C
Matrix No. 1
31
5. Critical issues for each road section
During the Project work process identify the critical points by kilometre or GPS location on the
route plan where environmental and social issues are located and the work recommendations
Start
Problem Recommendation for design,
EA-SEA, construction
Photo/map
/image
32
7. Observations:
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
Finish
33
Screening Evaluators:
__________________________________DPI
__________________________________DONRE
__________________________________HIFU
34
Example of Project Monitoring and Supervision Checklist
Agency:
For each subproject in the investment plan:
Basic Subproject Information
Name of subproject:
Tracking number:
Sector:
Type of intervention :
Subsector:
Institutional responsibilities (Env):
Institutional responsibilities (social):
Status/Implementation schedule:
Initial Risk Rating:
Type of evaluation (pre or post development):
Materials reviewed (e.g., EA, RP, TORs, manuals, internal reports, consultation):
Evaluated by:
Applicable Issues Yes No
Environmental Assessment
Natural Habitats
Forests
Pest Management
Cultural Property
Indigenous People
Involuntary Resettlement
Safety of Dams
Procedures Yes No N/A Additional Comments
Was initial risk rating correctly assigned?:
Were sample TORs or assistance with TORs provided?
Did project/site screening occur, if required?
Was envtl work reviewed and cleared by responsible agency?
Was social work reviewed and cleared by responsible agency?
Overall Quality of Work Yes No N/A Additional Comments
Is correct work (eg. EIA, SEA, application of manual) completed or scheduled to be completed?
Overall, is environmental work adequate?
35
Is correct social work completed or scheduled to be completed?
Overall, is social work adequate?
For all measures below, indicate whether work is adequate, inadequate, or not applicable (not required)
Environmental Assessment Adeq. Inadeq. N/A Additional Comments
Assessment of potential environmental impacts:
Identification of potential cumulative, indirect, and induced impacts:
Scope of EA work:
Assessment of applicable legal and institutional framework and capacity:
Analysis of feasible alternatives:
Env. Management Plan (EMP) with measures for avoiding, minimizing or compensating for all identified impacts:
Measures to ensure or strengthen institutional capacity, including for implementation of EMP and/or application of technical manuals:
Stakeholder consultation:
Documentation of consultation (inputs and project responses):
Monitoring and evaluation plan to address all environmental issues:
Natural Habitats Adeq. Inadeq. N/A Additional Comments
Assessment of potential threats to natural habitats and/or biodiversity :
Avoidance of significant conversion or degradation of critical natural habitats:
Mitigations to address potential natural habitat impacts, including compensation for any necessary loss:
Monitoring and evaluation plan to address natural habitat issues:
Pest Management Adeq. Inadeq. N/A Additional Comments
Assessment of potential pest management issues:
Integrated pest management plan:
Limits on selection of pesticides and requirements for their how they are packaged, labeled, handled, stored, applied and disposed of:
Assessment of institutional and policy capacity for pest management:
If necessary, plan supports policy reform, institutional capacity development, and/or training:
36
Monitoring and evaluation plan to address pest management issues:
Forests Adeq. Inadeq. N/A Additional Comments
Assessment of potential impacts on forests:
Avoidance of significant conversion or degradation of critical forest areas:
Mitigation measures for any potential impacts on non-critical forest areas:
Monitoring and evaluation plan to address forest issues:
Cultural Property Adeq. Inadeq. N/A Additional Comments
Assessment of potential impacts on cultural property resources:
Mitigations to address potential impacts on cultural property, including "chance find" procedures:
Institutional capacity strengthening measures for cultural property management:
Monitoring and evaluation plan to address cultural property issues:
Indigenous People Adeq. Inadeq. N/A Additional Comments
Assessment of potential effects on indigenous people (IP) in the project area:
Consultation with affected indigenous people:
Documentation and disclosure of consultation (including inputs and project responses):
Plan/measures for avoiding harm and ensuring culturally appropriate benefits to indigenous peoples:
Monitoring and evaluation plan to address indigenous peoples issues:
Involuntary Resettlement Adeq. Inadeq. N/A Additional Comments
Assessment of potential involuntary resettlement impacts:
Assessment of alternative designs to avoid or minimize involuntary resettlement:
Consultation of affected persons, host communities, and NGOs, if appropriate:
Resettlement instrument to provide, as required: prompt compensation; assistance during relocation, and residential housing, housing sites or agricultural sites; and transitional support or development assistance after displacement, as outlined:
37
Monitoring and evaluation plan to address involuntary resettlement issues:
Safety of Dams Adeq. Inadeq. N/A Additional Comments
Project screened for and correctly identified any dam safety implications:
Dam safety evaluation, if required:
Disclosure Yes No N/A Additional Comments
EA disclosed in-country prior to appraisal:
Date:
RAP disclosed in-country prior to appraisal:
Date:
Location(s) of disclosure of EA document:
Location:
Location(s) of disclosure of RAP: Location:
Additional Comments
Overall assessment of the performance of the Borrower or PE:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________
Recommendations for further institutional strengthening:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________
38
ENVIRONMENTAL SAFEGUARD GUIDELINES (ESG)
HIFU DEVELOPMENT PROJECT (HIFU)
1.2 Objectives of the Guideline
The guideline presents guidelines of procedures to meet Environmental Safeguard (ES)
requirements of GOV and WB which apply to projects financed through HIFU a financial
intermediary (FI). The guideline:
• Reviews ES requirements of GOV and WB,
• Highlights ES requirement disparities between GOV and WB,
• Identifies approaches to address disparities to comply with the ES requirements, and
• Clarifies timing and responsibilities for works, to meet ES requirements.
Methods for preparation of environment impact assessment(EIA) and environment management
plans (EMP) are widespread and accepted. An example is provided on the United Nations site
http://eia.unu.edu/course/?page_id=173. This guideline does not review these methods but provides
guidance on compliance with GoV and WB’s ES requirements.
1.3 Guideline Use The guideline assists HIFU staff involved in incorporating Environmental Safeguards (ES) into sub-
projects loans and investments in understanding aspects of ES including :
- Screening, scoping, preparing terms of reference (TORs) for equity project participation ;
- Completing due diligence on applications to HIFU for project debt financing
- Organizing monitoring of EMP implementation,
- Evaluating borrower and Project Enterprise (PE) environmental management capacity
- Assessing overall environmental risk and liability associated with sub-projects.
2.1 EIA Process
A project being considered by HIFU for funding will require an Environmental Assessment process
appropriate for the project. If the project employs WB funds, the process and content of the
Assessment must be in accordance with WB Safeguard Policies. Table 2.1 outlines the process
required..
EIA is a tool to identify and assess potential project environment impacts, EIA process consists of
key steps shown in Table 2.1 as described under the current regulations of Vietnam.
39
Table 2.1: EIA Process, Objective and Outcomes
EIA process Objectives Outcomes
Screening To determine levels of potential
environmental impact
Determine requirement for an
EIA/EA. Generally, projects
with insignificant environment
impacts may not need an EIA,
but an EMP is necessary.
Scoping
To decide the scope of potential
environmental impacts and issues to be
assessed and study detail requirements.
TOR for EIA including study
details for inclusion in
feasibility study
EIA study
To identify potential environment impacts
To assess the severity and reversibility of
impacts …
To assess importance or acceptable levels of
impacts;
To define measures to prevent, minimize,
and mitigate adverse impacts
To define the process for impact mitigation
management and monitoring
Report outcomes of the study
and recommend mitigation,
management, and monitoring
measures
Defines the approval and
licensing procedures
Defines the cumulative effects
of impacts on the environment
Community
consultation
Activities to announce project details and
solicit input from project affected people
(PAP) into project design and decision
process
Viewpoints, ideas and interest
on environment impacts of
project affected people
Agreements and mitigation
measures adopted to address
PAP concerns
Information
dissemination
To provide to PAP and communities to
collect their viewpoints and ideas on the
project prior to decided.
To ensure public disclosure of project
related information
To collect information in line with
disclosure policies
To ensure PAP and
communities are informed
To ensure viewpoints and ideas
have been integrated
To comply with disclosure
policies
EMP
To ensure potential environment impacts are
managed according to impact mitigations
action plans
EMP with impacts mitigation
measures, for all phases
including and monitoring key
monitoring points
Monitoring and
evaluating
To ensure that EMP/mitigation measures are
carried out by involving agencies
Recommend action to deal with
existing issues
Track changes to deal with
discrepancies in impact
mitigation program
performance
2.2.1 Project Ineligibility
Some projects that may severely affect the environment and will not be financed by HIFU including
rehabilitation or expansion are:
40
- Existing or proposed storage capacity for explosive or hazardous materials
- Manufacture or sale of hazardous substances such as those with carcinogenic, mutagenic or
teratogenic properties including creosotes and chlorinated solvents;
- Service and repair of appliances with chloro-fluorocarbons (CFCs);
- Formulation or packaging of pesticides and herbicides;
- Mines (except for small scale sand, stone and gravel)
The GoV publishes an exclusion list and the most recent list should be referenced.
World Bank group maintains a list of projects which are ineligible for funding
(http://www.ifc.org/ifcext/enviro.nsf/Content/IFCExclusionList). If a proposed project does not fall
into these categories it can be considered for HIFU financing if the required environmental
assessment and planning information is provided.
Environment Assessment
Either HIFU borrowers or potential participants with HIFU in a Project Enterprise should be aware
that HIFU may expect that standards of environmental practice meet World Bank Safeguard
Policies. This requires the completion of EIA Reports and EMP’s which may be more
comprehensive than those required by GoV, to meet WB requirements in the areas of public
disclosure. EIA reports and EMP implementation performance monitoring must be publicly
disclosed.
The following describes key compliance variations to meet WB policy requirements
Screening
2.2.2 Screening to identify Project EIA Category
WB requests that HIFU screen sub-projects to ensures that sub-borrowers identify high risk projects
according to Vietnamese requirements and WB Categories A,B,C. Sreening identifies EIA levels
for all sub-projects. For WB these are:
Category A has significant impacts and needs a detailed EIA;
Category B has moderate impacts and needs a detailed Environmental Assessment with EMP;
Category C has low impacts or no impacts and does not needs an EA;
2.2.3 World Bank ES Policies Application
- For Category A and/or high risk sub-projects WB will review and clear the EIA reports before
the sub-projects can be submitted to DONRE for approval.
- For other sub-projects, WB ES policies and GoV policies need consistency with WB OP 4.01 -
Environmental Assessment for sub-projects using loans of WB via FI including policies noted in
table 2.2 as applicable.
- Before approving sub-projects, HIFU must verify through EDD process (see Annex PPA
Manual) that sub-projects meet GOV ES policies, requirements of local authorities (if any). Due
EDD includes WB OP 4.01 and applicable WB ES policies as noted in Table 2.2, to determine
if WB requirements have been triggered.
41
Table 2.2: WB’s other applicable ES policies
No Name of the
policies Summary main goals
OP 4.04 Natural habitat To protect important natural habitats
OP 4.09 Pest management To minimize healthy and environmental risks due consequence of
pesticide usage;
OP 4.36 Forest To reinforce forest management, protection and development
OP 4.37 Dam safety To ensure sustainable development of projects involving dams
OP 4.11 Cultural property To ensure cultural properties in kind are discovered and protected
in projects
OP 7.50 Projects on
international
waterways
To ensure that projects do not affect effective usage and protect
international waterways and do not affect relationships between
WB and other WB’s borrowers.
OP 7.60 Projects in disputed
areas
To ensure that issues related to disputed areas is identified early.
2.2.4 Institutional capacity for ES implementation
- The responsibility, for environmental screening, scoping, EIA review, EMP implementation,
and monitoring, lies with HIFU, ,borrowers and ,PEs.
- Prior review by WB environmental specialists is required for high environmental risk sub-
projects only. HIFU’s EDD should note when borrower and PE capacity is limited both at
early project stages and/or where required specialist consultants were not engaged.
- Where capacity is insufficient to implement ES requirements, HIFU will provide guidance for
capacity building.
- HIFU will also develop capacity and make this capacity available to borrowers and PEs as an
interim measure if loans and investments are approved.
- A sub-project classified as category I (A),requires that HIFU provide WB a written appraisal of
ES implementation capacity of the Borrower/PE according to the process for described in
Section III below(Appraisal Guideline Of ES Implementation Capacity Of Borrower/PE’s).
- A borrower or PE must make a commitment of resources for ES professional capacity
development.
2.3 EIA Variance between GOV with WB Environmental protection requirements of the National Environment Protection Law 2005
approaches international organization standards with disparities compared with WB requirements.
WB breaks projects into four (4) stages: (i) specification (ii) feasibility study (iii) detail design
and (iv) implementation. Variance between GOV with WB guidelines are shown in table 2.3.
42
Table 2.3: Variances of EIA requirements between GOV with WB S
tag
es
Main
contents Requirements of GOV Requirements of WB
Screening Projects requiring an EIA are listed
in annexes I (category I)1 according
to the decree 80/2006/ NĐ-
GOV/2006 dated August 09, 2006.
Projects that must prepare “an
environment protection
commitment” are not in these
annexes (category II)
Category A project: detailed EIA
(I,II)
Category B project: EA according to
impacts(II)
Category C: No EA
Pro
ject
sp
ecif
icat
ion
Implementer Private or Public Borrower/PE FI funded Borrower or PE
- Scoping Borrower/PEs prepare an
environment protection commitment
for category II (B) projects
FI scoping for EIA of the category
A(I);
Borrower/PEs prepare TOR for EIA
the category A (I) and FI approve the
TOR. For high risk projects, WB
approves scoping outcome
Borrower/PEs draft brief EIA for the
category (II) projects Fea
sib
ilit
y s
tud
y
Implementer Private or Public Borrower/PE FI funded Borrower or PE
EIA draft EIA reports mention alternatives,
impacts, mitigation measures and
monitoring (category I)
EMP reports mention alternatives,
impacts, mitigation measures, EMP
implementation monitoring.
Implementer Borrower/PEs prepare EIA internally
(if they have capacity as the
guideline of NEPL) or hire external
consultants.
For category A (I), Borrower/PEs
must hire external consultants who
are not related to the project to
carry out EIA.
Public
consultation
Publicize brief EIA reports of the
category I projects for community
groups
Collect ideas of communes/wards
and representatives of affected
people
Publicize brief EIA draft for
community;
Collect ideas of communes/wards
and representatives of affected
people
Det
aile
d d
esig
n
Implementer Borrower/PEs prepare internally (if
they have capacity as the guideline
of NEPL) or hire external
consultants.
Borrower/PEs prepare internally (if
they have capacity as the guideline of
NEPL) or hire external consultants.
1 Annex I Decree 80/2006/NĐ-GOV dated on August 09, 2006 of GOV stated two lists of projects, requiriing EIA. In
the annexes are the catergory I. Other subprojects that are not in the annexes have to prepare an environment protection
commitment – (Type II).
43
Disclosure Report to wards/communes people’
committees about approved EIA
reports (category I)
Post up near to project sites
(category I)
Summary EIA conclusions for
category A project,
Disclosure near to project sites
(category I)
Outcome of consultation has to be
presented in EIA reports
Implementer Borrower/PEs prepare internally (if
they have capacity as the guideline
of NEPL) or hire external
consultants.
EIA consultants
Finalize the
EIA report
EIA report contents after
supplemental information requests
from involved agencies
EIA report contents after
supplemental information requests
from involved agencies
Implementer Borrower/PEs prepare internally (if
they have capacity as the guideline
of NEPL) or hire external
consultants.
External consultants and FI review
final EIA report
Implementati
on,
monitoring
and reporting
Publicize outcome of EIA study;
Implement mitigation measures
Implement EMP;
Monitor and report EMP
implementation
Borrower/PEs:
Implement EMP;
Report EMP implementation
monitoring for FI
Imp
lem
enta
tio
n
Implementer Borrower/PEs
Report to commune/ward people’
committees about EIA approval
decisions;
Post near project sites;
Implement actions presented in EIA
report and EIA approval decisions;
Announce to EIA approval agency to
check EIA/EMP implementation and
EIA approval decisions
Commission projects after
checked/attested by competent
agencies that they carried out
sufficiently approved requirements
FI:
Organize external monitoring on
EMP implementation;
Report to WB (i) mitigation
implementation status; (ii)
monitoring program results; (iii)
environment management capacity
strengthening results
and (iv) environmental complaints
and complaint resolution
2.3.2 Disparities and approaches
1) Project screening
The project screening outcomes may differ between GoV with WB. GoV classifies projects based
on name of project categories as listed in the Decree 80/2006/NĐ-GoV. WB assesses specific
projects and consider environmental sensitivity. For Example , a category II project that only needs
“an environmental protection commitment” as stipulated in the Decree 80/2006/NĐ-GOV may be
categorized as A depending on WB policy triggers. HIFU staff capacity for EDD including project
screening is developing. HIFU sub-projects are screened as stipulated by GoV, in Decree
80/2006/NĐ-CP dated August 09, 2006 promulgated by GOV – guideline to execute some
44
provisions of NEPL. The EDD process outlined in Annex J of the PPA Manual should be
followed to determine a sub-project risk and WB review requirement.
2) EIA scoping
GoV does not require EIA scoping and EIA TOR. If a sub-project is classified as the category I, II
then an EIA scoping with TOR should be completed for HIFU review and approval (see Annex J,
PPA Manual).
3) EIA study
EIA prepared for GoV category I projects have two disparities with WB:
• GOV does not require a specific EMP with assigned implementation resources; for WB an
EMP is mandatory;
• GoV allows proponent to complete EIA; for WB an EIA must be completed by those without
involvement in sub-projects (no conflict)2.
HIFU projects be completed to comply with these WB requirements.
4) EMP
EMP requirement of GoV has following disparities with WB:
• GoV (NEPL 2005) does not require preparation of a specific EMP with resources for its
implementation.
• WB requires EMP including mitigation measures, mitigation implementation and monitoring
cost, and capacity building for borrowers and PE.
HIFU projects be completed to comply with these WB requirements.
5) Monitoring and reporting:
• GoV requests a monitoring program but does not assign responsibility for mitigation
monitoring and implementation. According to provision 25 of the NEPL 2005,
Borrower/PEs must implement mitigation measures stated in approved EIA reports and
require EIA approval checks prior to projects commissioning.
• Implementation monitoring is obligatory for WB.
Responsibilities of HIFU related to monitoring and reporting consist of:
(i) External monitoring of EMP implementation for category I (A) and high
environmental risk sub-projects.
(ii) Review of external monitoring reports and internal monitoring reports of EMP
implementation.
2 The NEPL 2005 stipulates “ organizations providing the EIA service have to have enough
conditions in term professional cadres, necessary material/technical facilities”.
45
(iii) Summary external/internal monitoring reports and report to WB
Responsibility of Borrower/PEs consists of:
(i) Internal monitoring of EMP implementation;
(ii) Report of EMP implementation and mitigation measures
These must comply with WB requirements.
2.4 Incorporate ES requirements into the sub-project approval process at HIFU According to the stipulation stated at the item II above, the EIA process at HIFU are incorporated
into the sub-project cycle as outlined in Table 2.4:
47
Table 2.4: HIFU Project EIA Process
sta
ges
Main
activities Implementer
Detailed activities
HIFU 1. Send a Project Description (see Annex J, Form 1) for high risk sub-projects to
WB with HIFU Categorization
2. Send a written appraisal of ES implementation capacity of the Borrower/PE to
WB if Category I or high environment risk;
3. Request the Borrower/PE carry out an EIA if the sub-project is the category I
4. Request the Borrower/PE to prepare a “environment protection commitment”
if the sub-project is the category II ( go to step 7)
Pro
ject
sp
ecif
ica
tio
n
Step 1:
screening
(see the annex
4.1)
Borrower/PE 1. Send EDD report summary including implementation capacity of the
Borrower/PE to WB if sub-project belonging to the category I or high
environment risk
HIFU 1. Scope EIA if sub-project is category I or high risk
2. Approve the TOR for EIA
3. Send scoping and EIA TOR WB if sub-project is high risk category;
Fea
sib
ilit
y
stu
dy
Step 2:
Category I
Project
Scoping Line
Department/Borrower/PE
1. Prepare a TOR for EIA if sub-project is category I.
Step 3: EIA
Borrower/PE and
consultants
1. Draft EIA report for category I sub-project, - alternatives, impacts, mitigation
measures and obligatory EMP to organize monitoring.(see annex 4.2)
Step 4: Public
consultation
Borrower/PE and
consultants
1. Disseminate the brief EIA draft to affected communities;
2. Collect opinions of wards/communes and representatives of affected
communities
Step 5:
information
disclosure
Borrower/PE and
consultant
1. Summary EIA conclusions, for the category I sub-projects, EIA reports have to
be disclosed at public places nearly the sub-project area
2. State outcome of the consultation in EIA reports3
Borrower/PE and
consultant
1. Add opinions of concerning stakeholders to finalize the EIA report, submit to
DONRE/MONRE for approval. If the sub-project is the high-risk category, it
has to be cleared by WB prior to being submitted to DONRE/ MONRE for
approval.
Det
ail
ed d
esig
n
Step 6: Finalize
the EIA report
and submit for
approval
HIFU
2. Review the EIA report based on the approved TOR before submitted to WB
(high risk sub-project) or DONRE/MONRE for approval;
Borrower/PE 1. Submit the EIA approval decisions for HIFU, HIFU forwards to WB;
2. Implement mitigation measures through contractors;
3. Internal monitor on mitigation measure implementation of contractors and
report every six months to send HIFU;
imp
lem
enta
tio
n
Step 7: EMP
implementation
HIFU
4. Prepare TOR for external monitoring, recruit and sign contracts with an EMA,
review and comment to external monitoring reports before translated into
English and submit to WB;
5. Report to WB about mitigation measures implementation status and findings
of monitoring program.
3 Futher more about public consultation could be refered to the website:
http://wbln0018.worldbank.org/Institutional/Guidelines/OpGuideline.nsf/toc2/9367A2A9D9DAEED38525672C007D0972?
OpenDocument
49
2.5 Borrowers Responsibilities When a potential borrower contacts HIFU for a loan and the proposed project has an EIA report/or
an environment protection commitment (EPC) approved by DONRE/MONRE the EIA/EMP must
be provided to HIFU as part of projectEDD. HIFU reviews the EIA/EMP to ensure the following is
addressed:
- Does the EIA/EPC have and EMP and does it address WB policies?
- Was public consultation and information disclosure completed?
- Does the monitoring program include internal and external monitoring (the category I sub-
project), internal monitoring (the category II sub-projects)?
- Does the EMP estimate costs and finances for mitigation measures and implementation
monitoring?
- Does the EMP cover organizational needs and capacities?
HIFU will request supplementary information and revisions to the EIA/EPC if required. HIFU will
approve these supplements and revisions as a condition for loan approval and/or disbursement.
HIFU will provide WB with an EDD summary including a risk management plan (if the EIA/EPC
is found insufficient) and appraisal of Borrower/PE ES implementation capacity (if the subproject is
Category A). If ES capacity is insufficient, then a commitment to hire this capacity will be a
condition for loan approval and/or disburesment.
2.6 EMP Monitoring and Reporting System Establishing a monitoring and reporting system is to unify process and monitoring issues at all of
sub-projects using loans from WB via HIFU.
2.6.1 Objectives of EMP implementation monitoring
EMP implementation monitoring is to:
- Identify predicted and unpredicted environment changes;
- Measure and assess changes of environment parameters induced by sub-project implementation;
- Recommend measures to repair unpredicted adverse impacts in a timely manner;
- Ensure that Borrower/PE complies with commitments as stated in the EMP
2.6.2 Monitoring system of EMP implementation
Sub-projects using loans from WB via HIFU have three monitoring levels of EMP implementation:
- Internal monitoring of EMP implementation organized by Borrower/PEs;
- External monitoring of EMP implementation to the high risk sub-projects and the category I sub-
projects organized by HIFU;
- Monitoring and assessing of EMP/ES implementation organized by WB
1. Internal monitoring organized by Borrower/PEs
Internal monitoring of EMP implementation is done by Borrower/PEs. The assignment is organized
on a regular basis during the sub-project implementation stage. Main monitoring issues are based on
the monitoring program stated in the EMP. Internal monitoring reports are prepared by
Borrower/PEs and submitted to HIFU along with progress reports of sub-project implementation
every six months.
2. External monitoring to the category I and high risk sub-projects organized by HIFU
External monitoring is undertaken by external agencies not involved in the sub-projects and
normally carried out every six months. Monitoring issues/contents are stated in TORs prepared by
HIFU.
50
3. EMP/ES monitoring and supervision organized by WB
At minimum once every year or when issues raised and by HIFU or DONRE, WB’s environmental
specialists may undertake EMP/ES implementation monitoring and supervision at HIFU offices and
high risk sub-project sites. To prepare for the monitoring, some contents have to be agreed as
outlined in Table 2.5:
Table 2.5 : Some appraisal and monitoring issues
Contents Detail
Members of the
monitoring team
- WB’s environmental specialists of WB;
Issues could be
reviewed and
evaluated at
HIFU and high
risk sub-project
sites
- ES implementation organization at HIFU;
- Human resource to organize ES implementation at HIFU
- Sub-project implementation progress reports using loans from WB;
- External/internal monitoring reports of EMP implementation;
- ES implementation provisions in borrowing/contribution contracts of HIFU
with Borrower/PEs
- Site visit for high risk sub-projects
Time WB’s environmental specialists at minimum once every year may undertake
monitoring at HIFU offices and sites of high environment risk sub-projects.
2.6.2 Reporting system and contents of EMP implementation monitoring reports
The reporting system structure could be summarized as outlined in Table 2.6:
Table 2.6: Reporting system
No Reporting levels Reporting category Reporting receiving
agencies
Sending time
1 Borrower/PEs Internal monitoring HIFU As specified in EMP
2 Independent
monitoring
consultant
External monitoring HIFU As specified in EMP
2 HIFU Summarize from external and
internal monitoring reports
PC, WB Every six months
Monitoring reporting forms at each management level are shown below
a. Internal monitoring reporting forms
1. Internal monitoring reporting forms to be prepared by Borrower/PEs and sent to HIFU
Along with the monitoring process, Borrower/PEs have to report findings in Vietnamese and send to
HIFU at the end of first/third quarter of every year as the form below:
Borrower/PE Company A HIFU
Reporting dated Receiving date
Name of the sub-project
Monitoring stage from
Sub-project implementation
progress %
51
INTERNAL MONITORING REPORT OF EMP IMPLEMENTATION No Monitoring issues and implementation situation
implementation situation /findings I Typical impacts as stated
in EMP
Mitigation measures as
stated in EMP Good Not done Other
1 …..
II Unpredicted impacts in
EMP
Mitigation measures
done by
Borrower/PE/contractors
1
2
III Complaints of affected people and response of local
authority
IV Comments/ conclusion and recommendations of the Borrower/PE
2. Internal monitoring report forms summarized by HIFU or EMA
After receiving internal monitoring reports from Borrower/PEs, HIFU requests EMA to summarizes
reports or HIFU does itself, translates into English and send to WB and PC at beginning of the
second/fourth quarter as the form below:
HIFU
Total sub-projects under implementation
Total number of received internal monitoring reports at the
quarter
Dated
SUMMARIZING INTERNAL MONITORING REPORTS OF EMP IMPLEMENTATION
No Contents Detail
1 Name of sub-project /Borrower/PE/ implementation
time
- EMP implementation status/findings of EMP
implementation
- Conclusion/recommendation of the Borrower/PE 2 Name of sub-project /Borrower/PE/ implementation
time
- EMP implementation status/findings of EMP
implementation
- Conclusion/recommendation of the Borrower/PE …..
b. Main content forms of external monitoring reports prepared by EMA
External monitoring reports are prepared by EMA every three/or six months and sent to HIFU for
comment. EMA is responsible to finalize the reports after getting feedback from HIFU and translate
them into English. HIFU forwards the reports to WB. Main contents of the reports could consist of
but not limit in following issues:
- Project introduction;
- Summary impacts and mitigation measures stated in EIA/EMP;
52
- Monitoring requirements as stated in TOR;
- Monitoring methods;
- Outcome/monitoring findings consisting of public consultation and information disclosure,
mitigation measures implementation of Borrower/PE and contractors, typical unpredicted
adverse impacts and response of Borrower/PE/contractors, complaints of affected people and
response of local authorities, finding from internal monitoring of Borrower/PE, quality of
EIA/EMP reports (if possible) etc..
- Conclusion, existing issues and recommendations
2.7 Environmental Program Development
2.7.1 Selecting EIA consultants
HIFU may need to guide Borrower/PEs in recruiting qualification consultants. Two categories
involving in ES should be noted (i) EIA consultants and (ii) construction contractors. The person
managing EIA studies should:
- Be experienced on EIA/EMP of development projects;
- Be experienced as a team leader with good leadership and management skill;
The quality of EIA/EMP reports is often poor due to consultant recruitment. The EIA study team
leader is key.
2.7.2 Selecting construction contractors
The Borrower/PE should select environmental contractors experienced in bidding projects with
environmental mitigation and management requirements. Scoring contractors to meet environment
management requirements should be added into total bidding appraisal scores.
2.7.3 Financing Environmental Project Costs
Borrower/PEs should indicate their intention to pay for the following activities:
• EIA study;
• Mitigation measures or environmental infrastructure costs;
• External monitoring of EMP implementation.
2.7.4 ES implementation provisions in borrowing contracts
Borrower/PE is responsible to implement ES requirements. HIFU should have provisions in the
loan agreements that obligate Borrower/PEs to comply with ES requirements. HIFU should also
guide Borrower/PEs to have similar provisions with their construction contractors.
III. APPRAISAL GUIDELINE OF BORROWER/PES ES IMPLEMENTATION CAPACITY
If screening identifies a sub-project as category I or high risk, HIFU sends WB an appraisal of
Borrower/PE ES implementation capacity and general project management capacity including:
• Corporate Environment Health and Safety (EH&S) Policy
• CV’s of relevant qualified staff,
• List of number of similar projects completed by enterprise and staff,
• number of environment management staff available to the sub-project process.
• A committment to hire additional capacity as a condition for loan approval.
53
The appraisal of Borrower/SPEPE capacity develops a basis in HIFU to evaluate the capabilities of a
Borrower/SPEPE to implement EH&S programs. A Borrower/PE’s professional human resource
for ES implementation may include:
• Environmental professional staff,
• Staff with EH&S training courses related to implementation;
• Staffs who have managed/supervised directly related environmental projects;
• Staff with relevant qualifications proposed sub-project type
EH&S staff should also be reviewed and appraised to determine if they have:
• managed/supervised projects requiring ES policies directly related to project environmental
issues;
• participated in projects that require ES policy implementation;
participated local projects directly related to environment;
General project management experience of a Borrower/PE should also be noted when appraising ES
implementation capacity.
Institutional capacity of a Borrower/PE will affect its ES implementation capacity such as:
• A regulatory group with an environment section reporting to line agencies
• A public relations group dealing with environmental complaints/issues but had not any
specific regulations.
3.2.3 Capacity Score
A scoring system to appraise Borrower/PEs ES implementation and procedures used to check
institutional capacity is presented in table 4.1 below. Scoring system is not compulsory but is
provided to assist HIFU in this process.
55
Table 4.1: Capacity Scoring Matrix
Condition and correlative maximum scores
Norms Condition A Score Condition B Score Condition C Score Condition D Score Condition E Score
(I)
Pro
fess
ion
al
hu
man
reso
urc
e
Has at least 01
environmental PhD,
master
100 Has at least 01
environment
engineer
80 Has at least 01
staff who passed
a short training
course of ES
implementation
60 Has staff who
have relevant
qualification
with proposed
sub-projects
40 Not any staff
match with the
above
conditions
20
(II)
Ex
per
ien
ce
of
ES
imp
lem
enta
tio
n s
taff
Has at least 01 staff who
has taken part in ES
implementation at least
one international
organizations financed
project directly related
to environmental issues
100 Has at least 01 staff
who has taken part
in ES
implementation at
least one
international
organization
financed project
80 Has at least 01
staff who has
taken part in
managing/
implementing at
least one project
directly related to
environmental
issues
60 Has staff who
have taken
part in
managing
/implementing
projects with
similar
features with
the proposed
sub-project
40 Has not any
staff who meet
the above
conditions
20
(III
) g
ener
al
exp
erie
nce
of
pro
ject
m
anag
emen
t
wit
hin
th
e la
st
thre
e
yea
rs
Has managed/
implemented at least 01
international
organization financed
project that requests to
comply with ES policies
and that is directly
related to environmental
issues
100 Has managed/
implemented at
least 01
international
organization
financed project
that requests to
comply with ES
policies
80 Has managed/
implemented at
least 01 project
that is related to
environmental
issues
60 Has managed/
implemented
at least 01
project that
has similar
features with
the proposed
sub-project
40 Has not
managed/
implemented
any projects
20
56
(iv
) in
stit
uti
on
al c
apac
ity
Have a division of
environment that is in
charge of environmental
issues with special
regulations for instance
to dealing with
environmental
complaints/ relationship
with competent agencies
on environmental issues;
reviewing environmental
reports, or establishing
environmental reporting
lines to competent
agencies
100 Have a team/or
staff in charge of
environmental
issues but has not
any specific
regulations
80 Have a division
with many
functions
including works
to deal with
environmental
complaints/issues
and other works
60 40 Have not any
staff/division
to deal with
environmental
issues
20
lvii
Total score of an Borrower/PE:
1. A Borrower/PE is supposed to qualify ES implementation if 3/4 of the above norms has
scores over average; it means 3/4 of the above norms are over 60 scores. In the other
word, total score reaches ≥180, the Borrower/PE will not need to strengthen capacity or
hire consultants at beginning.
2. A Borrower/PE is supposed not qualifying in ES implementation if total of its maximum
score is less than 180. He/she needs to be strengthened prior to joining HIFU.
Based on the scale of score presented above and comparing with human resource and
experience of an Borrower/PE, it could appraise the capacity of ES implementation of any
Borrower/PE.
If screening identifies a sub-project as category I, II then the Borrower/PE should complete an
appraisal report of their ES implementation capacity as the sample below:
Table 4.2: Sample of score table to appraise ES implementation capacity of Borrower/PEs
Borrower/PEs/
Norms Condition (Con) and score
Name of
Borrower/PEs Con
A Score
Con
B Score
Con
C Score
Con
D Score Con E Score
I
II
III
IV
Total
IV. ANNEX Annex 4.1: List of sub-projects that has to be carried out EIA as the annex I
LIST OF SUB-PROJECTS THAT HAS TO BE CARRIED OUT EIA
(Enclosed with Decree 80/2006/NĐ-CP dated on August 09, 2006 issued by GOV)
No PROJECTS SCOPE
1 National vital projects All
2 Partly or fully use land area or adverse affect
national natural preservation areas, national
gardens, historical –cultural heritages, natural
heritages, arranged or not yet arranged
landscapes but protected by people committee of
provinces or cities under the central.
All
3 May have adverse impact risks to water resource
of river basins, coastal area or ecosystem
protected areas
All
4 Atom power plant All
5 Thermonuclear power plant All
6 To build atomic reactors All
7 To build production/service facilities that use
radioactive substances or generate radioactive
waste
All
8 To build communication basis All
9 To build infrastructure of urban areas, residential
areas
All
lviii
10 To build infrastructure industrial, high-tech
zones, industrial complexes, export processing
zone, trade village
All
11 To build infrastructure facilities of economics,
trade areas
All
12 To newly build, renew, upgrade highways or
grade I, II and III roads
All
13 To build new road routes of grate IV ≥ 50 km
14 To build new railway routes, upgrade or renew
railway routes
≥ 100 km
15 To build new/permanent bridges on
roads/railways
≥ 200 m not including connecting
road
16 To newly build, upgrade, renew transport
facilities
That needs to relocate ≥ 2000
persons
17 To build ship manufacturing/reparing plants Ship with a capacity ≥ 1.000 DWT
18 To build a plant for new coach/wagon or car
manufacture, repair or installation
With designed capacity ≥ units/year
19 To build, reform, upgrate river/sea ports For ships with capacity ≥ 1.000
DWT
20 To build airports All
21 To build underground metro routes ≥ 500 m
22 To build elevated railways ≥ 2000 m
23 To exploit natural gas/oil All
24 Oil refinement (except LPG packing, lubricant
mixture)
All
25 To build oil/gas transport piles All
26 To build oil/lubricant stores ≥1.000m3
27 To product petrochemical products (surface
active substances, plastic, methanol
All
28 To clean ships All
29 To build oil/gas transit stores All
30 Thermo-electric plant ≥ 50MW
31 Hydropower plant With its reservoir ≥ 1.000.000 m3
32 To build high-voltage power transmission line ≥ 50 km
33 To temper steel and color metal Designed capacity ≥ 5.000 ton-
product/year
34 To produce plastic Designed capacity ≥ 1.000 ton-
product/year
35 To manufacture chemical fertilizers
Designed capacity ≥ 10.000 ton-
product/year
36 Chemical stores, herbal protection drug Containing capacity ≥ 10 ton
37 To produce paint, basic chamicals Designed capacity ≥ 1.000 ton-
product/year
38 To produce substances for cleaning, additive
Designed capacity ≥ 1.000 ton-
product/year
39 Herbicide production plants
Designed capacity ≥ 500 ton-
product/year
40 Rubber latex processing plant Designed capacity ≥ 10.000 ton-
product/year
41 Rubber processing plant Designed capacity ≥ 1.000 ton-
lix
product/year
42 Pharmacialtical product plant, comestic Designed capacity ≥ 50 ton-
product/year
43 Car tire/inner tube production plants
Designed capacity ≥ 50.000
products/year
44 Bettery plant Designed capacity ≥
50.000KWh/year
45 Ciment plants Designed capacity ≥ 500.000 ton
ciment/year
46 Tile, brick production plant Designed capacity ≥ 20.000.000
brick or tile/year
47 Plants to produce other construction materials
Designed capacity ≥ 10.000 ton-
product/year
48 To exploit construction materials (soil, stone,
sand, gravel) on mainland
Designed capacity ≥ 50.000m3
material/year
49 To exploit, dredge construction materials at the
river bottom (sand, gravel)
Designed capacity ≥ 50.000m3
material/year
50 To exploit solid minerals (without using
chemical)
≥100.000m3/year
51 To exploit, process solid minerals that contain
toxic substances or using chemicals
All
52 To process solid minerals Designed capacity ≥ 50 ton-
product/year
53 To exploint underground water Designed capacity ≥ 1.000 m3
nước/day
54 To exploint surface water Designed capacity ≥ 10.000 m3
nước/day
55 Food processing plant Designed capacity ≥ 1.000 ton-
product/year
56 Frozen seafood processing plant Designed capacity ≥ 1.000 ton-
product/year
57 Suger plant Designed capacity ≥ 20.000 ton-
sugurcandy/year
58 Wine/alcohol production plant Designed capacity ≥ 100.000 liter-
product/year
59 Beer, soft drink production plant Designed capacity ≥ 500.000 liter-
product/year
60 Monosodium glutamate plant Designed capacity ≥ 5.000 ton-
product/year
61 Milk processing plant Designed capacity ≥ 10.000 ton-
product/year
62 Coffee processing plant Designed capacity ≥ 5.000 ton-
product/year
63 Tobacco plant Designed capacity ≥ 50.000
packs/year
64 Livestock slagter Designed capacity ≥ 100 castles/day
or 1000 poultries/day
65 Ice production plant Designed capacity ≥ 50 ice bars/day
or ≥25.000kg ice/day
66 Agricultural product processing plant Designed capacity ≥ 10.000 ton-
lx
product/year
67 Cassava starch processing plant Designed capacity ≥ 1.000 ton-
product/year
68 Lather tanning plant All
69 Waiving plant with dying systems All
70 Waiving plant without dying systems Designed capacity ≥ 10.000.0000 m
cloths/year
71 Mechanic plant or engine, equipment
manufacture plant
Designed capacity ≥ 1.000 ton-
product/year
72 Timber/plywood processing plant
Designed capacity ≥ 100.000m2
/year
73 Electric/electronic equipment production plant
Designed capacity ≥ 10.000
equipments/year
74 Electric/electronic spare part production plant Designed capacity ≥ 10.000 ton-
product/year
75 Plant to manufacture fine art products
Designed capacity ≥ 1.000.000
product/year
76 To build reservoir, irrigation lake
Containing capacity ≥ 1.000.000 m3
77 To build irrigation system, salt prevention Covering ≥ 500ha
78 To build bank for encroaching sea All
79 To develop an aquaculture area: intensive/semi-
intensive production
Water surface area ≥ 10 ha
80 To develop an extensive aquaculture area Water surface area ≥ 50 ha
81 To develop an aquaculture area on sand All
82 To build a concentrated cattle rearing camp ≥ 100 cattles
83 To build a concentrated rearing camp ≥ 10.000 poultries
84 To build a cattle/poultry food processing plant Designed capacity ≥ 10.000 ton-
product/year
85 To forest and exploit forestry Area ≥ 1.000 ha
86 Concentrated cassavas/sugar candy planting Area ≥ 100 ha
87 To develop a concentrated coffee planting area Area ≥ 100 ha
88 To develop a concentrated tea planting area Area ≥ 100 ha
89 To develop a concentrated rubber planting area Area ≥ 200 ha
90 To build an entertainment/tourism area Area ≥ 5 ha
91 To build a golf course ≥ 18 holes
92 To build a hotel area ≥ 50 rooms
93 To build a hospital ≥ 50 patient beds
94 To build a solid waste treatment, recycle plant All
95 To build a landfill for burying
industrial/hazardous wastes
All
96 To build a landfill for burying garbage For ≥ 100 households
97 To build a concentrated industrial wastewater
treatment system that is outside of an industrial,
export processing or high –tech zone
Designed capacity ≥ 1.000 m3
wastewater/day-night
98 To build a concentrated domestic wastewater
treatment system
Designed capacity ≥ 1.000 m3
wastewater/day-night
99 To build a
DA xây dựng đài hoá thân hoàn vũ
All
100 To build a cemetery ≥ 15 ha
lxi
101 Project that occupies upstream protection
forestry or protection forestry to prevent wave,
sea encroachment, special usage forestry
≥ 5 ha
102 Project that occupies a natural forestry area ≥ 50 ha
On behalf of the GoVernment
Primer minister
Nguyễn Tấn Dũng signed
lxii
Annex 4.2: Reference form of an EMP
Main contents of an EMP should at minimum include
1. Summary of all adverse impacts predicted in EIA report;
2. Describe all mitigation measures correlate to impacts and conditions;
3. Describe monitoring program:
− Objective;
− Monitoring indicators showing connection between impacts and mitigation
measures proposed;
− Parameters to be measured, monitored methods, sampling places, monitored
frequency, requested thresholds to trigger additional measures;
− Responsibility matrix for EMP including monitoring program;
− Reports for involving agencies and WB;
4. Implementation should include responsibility matrix for mitigation measurement
implementation and monitoring including proposal to strengthen current capacity of
Borrower/PE;
5. Timing for mitigation implementation;
6. Monitoring and reporting procedures;
7. Costs and resource for implementing EMP and EMP implementation monitoring
Annex 4.3: Reference TOR for EMP independent monitoring
A TOR for independent monitoring should be developed and include some or all of the following:
1. Background
• Project brief, with location, implementation time, components, financial resource,
objectives;
• Brief on project environmental and social impacts with reference to EIA report and
EMP;
• Objectives of the monitoring;
• Requested monitoring methods: Based on sensitive level and predicted environment
impacts to request the monitoring (i) review of documents, (ii) direct observation at
site (ii) monitoring equipment.
2. Monitoring scope
Independent monitoring of EMP implementation is to check if:
• mitigation measures stated in the EMP were verified by approving agencies;
• environmental change monitoring was completed;
• capacity of Borrower/PE has been developed
Monitor the mitigation measures implementation:
• TOR for IM needs to clearly state environmental issues/impacts and mitigation
measures to be checked.
• Ensure monitoring corresponds with contents from approved EMP;
lxiii
• For the Borrower/PE
o Ensure human resource allocation;
o Verify internal monitoring and reports;
o Check environmental grievance records of PAP and;
o Check local authorities’ response and instructions to Borrower/PE and
contractors.
Monitor environmental change:
• Monitor change during project implementation phases (before, during and after
construction) and suggest timely corrective actions;
• Monitor parameters noted EMP
Strengthen ES capacity of Borrower/PE:
• Due to ES capacity of some Borrower/PEs may not meet WB’s requirement, therefore
IM may be requested to help Borrower/PE organize the EMP implementation. It may
include issues to be internally monitored. Monitoring methods, sampling and keeping
sample in good condition before sent to analyze.
3. Monitoring frequency and report
IM is requested every three to six months or as required based on project specifics such as:
• Prior to implementation during the construction phase, after project commissioning,
and during initial operations,
• Monitoring frequency should be stated in EMP,
• After each monitoring occurrence an IM report is submitted to HIFU.
• IM reports are drafted in Vietnamese, submitted to HIFU for comments,revised after
feedback from HIFU and translated into English.
• HIFU is responsible to forward those English reports to WB.
4. IM consultant hiring
Proposed IM consultants should be environmental science or technology specialists with
several years experience in the project type and experienced in EMP implementation
monitoring of projects financed by WB ADB, IFC or others.
lxiv
Social Safeguards Manual
A. General
I. Introduction
1. The Government of Vietnam has requested the World Bank, through IDA, to sponsor
the Project “Local Development Investment Fund” (LDIF). The Project’s objectives are to
assist for policy, legal and institutional improvements, enhancement of LDIF’s operational
capacity to improve efficiency of lending investment and increase participation of private
sector in municipal infrastructure development, improve operational flexibility of LDIFs’ and
make long-term capital available for municipal infrastructure projects, while reducing their
contingent economical, social and environment risks.
2. Within the Project’s framework (context), to participate the Project, the selected Local
Investment Funds should satisfy requirements on their capacity in management of investment
capital as well as in capacity to avoid or mitigate contingent risks. It was planned that the
“Local Development Investment Fund Project” will be started in the year 2008.
3. Among the Local Development Investment Funds currently operated in Viet Nam, the
Infrastructures Development Fund of Ho Chi Minh city (HIFU) is the most advanced and the
best operated Fund and is considered to be well-prepared for absorbing (implement) the
Project. The HIFU Management and HCM city’s People’ Committee has agreed to adopt the
set of key policy and operational reforms which have been prepared under the LDIFP, a
larger, national-level Bank project, into the HIFU practice as a pilot one.
4. Facing acute demands of economic and social development of Ho Chi Minh city
towards development of infrastructure, improvement of institutional financial management,
demands for investment capital and increasing participation of the private sector..., and to
speed up implementation progress of executing projects, the Viet Nam Government has
requested the World Bank to support for Ho Chi Minh city a separate project under the name
of “HIFU Development Project ” (HDP), to be invested in early 2007. The HDP will
demonstrate the LDIFP concept on a pilot basis in HCMC, and greatly contribute to the
success of LDIFP and the national-level policies, incentives and operational improvement
measures that Bank will sponsor.
5. To assist the HIFU to speed up preparation of its capacity carrying out social
safeguards responsibilities in accordance with standards of World Bank, the “Manual on
Social safeguard policies”, is prepared to provide the HIFU and its investors-borrowers under
the HDP with knowledge on social safeguard policies and requirements of the Bank, as well
as their responsibilities on ensuring implementation of social safeguard policies in process of
their project’s preparation and implementation.
II. Objectives of Manual
6. Objectives of the Manual on Social Safeguard Policies are to provide with guidelines,
clarifying responsibilities of HIFU as well as of its investors-borrowers, and required
procedures, to incorporate Social safeguard policies into process of selecting, appraising and
monitoring the investment projects in the lending operational practice of the HIFU.
III. Definitions
Social safeguard policies
lxv
7. The policies to ensure that all activities or investment projects sponsored by the Bank
should be appropriate to the culture of the local communities and beneficiaries. Meanwhile,
they should also avoid any adverse impacts on the local population. In cases, if the activities
or project investments can’t avoid negative impacts, social safeguard policies of the Bank
require that the investors/developers should consider all alternatives to mitigate them to the
least and adopt assistance measures to help their DPs to restoring their living standards at least
equal to previous level or preferably better as without the project.
Screening
8. Screening is to check out to decide whether or not it needs social assessment and
preparation of action plans for ensuring social safeguards requirements, based on the
information on the Project and description of the Project’s impacted area.
Scoping 9. A decision on set of issues, impacts of the project that need to be clarified, studied,
mitigating measures to be analyzed, research methods, tools and steps to be used or
implemented.
Terms of References (TOR) 10. The document indicating technical requirements, contents, procedures and professional
input requirements for engaging assignments.
Resettlement 11. The common term related to land acquisition and compensation for properties/assets
loss, whether or not it be relocation, loss of land, loss of dwellings, assets, income or means of
livelihoods.
Replacement cost
12. The term used to define the value sufficient for replacing the lost assets/properties and
covering all anticipated transition fees. When domestic regulations, provisions do not satisfy
requirements on compensation at replacement costs, the compensation governed by domestic
laws, sub-laws will be complemented with necessary assistance measures to satisfy
compensation standards at replacement costs.
Cut-off Date 13. According to World Bank, the Cut-off Date is the date starting or completing inventory
of affected land and assets during preparation of Resettlement Plan, when the DPs and local
communities are informed on the Cut-off Date and also informed that any person encroaching
into the Project area after the Cut-off date will not be compensated or assisted. In Viet Nam,
the Cut-off date is the day issuing the Decision on land acquisition or land use plans or
planning scheme.
Monitoring 14. Repeated process, in time and space, counting or quantifying social elements or
components to supervise their change, following planned schedule. It aims to review whether
or not implementation of social safeguard plans ensure objectives of these plans o be met.
Evaluation
15. A review, at regulated time, on social impacts of investment activities and mitigation
of negative social impacts, assess whether the objectives of social safeguard action plans are
met.
lxvi
Cultural Properties: 16. Material products (Tangible Cultural Properties) or spiritual products (Intangible
Cultural Properties) of historic and cultural significance.
Ethnic minorities
17. The term addressing vulnerable groups having political, economical, social and
cultural/traditional characteristics distinct from majority group. They have own language
different from official national or regional languages.
IV. Social safeguard policies
4.1. social safeguard policies of World Bank include:
(i) Involuntary Resettlement Policy OP 4.12
(ii) Policy on Indigenous People (Ethnic Minorities) OP 4.10
(iii) Policy on Cultural Properties OP 4.11
4.2. social safeguard policies of Viet Nam include:
(i) Land Law 2003
(ii) Decree No197/2004/ND-CP, dated on December, 3rd
2004, on compensation,
assistance and resettlement in case if the State recover the land for national security, defence,
public interests; Circulation No116/2004/TT-BTC, of MOF providing guidelines for
implementation of Decree No197/2004/CP; Circulation No 69/2006/TT-BTC, on August, 2nd
2006, amending some provisions of the Circulation No 116/2004/TT-BTC.
(iii) Decree 17/2006/N§-CP, dated on January, 27th
2006, amending, adding some
provisions of Decrees guiding implementation of Land Law and Decree No187/2004/ND-CP
on transforming state companies into stock ones.
(iv) Constitution of Socialist Republic of Vietnam, dated on April, 15th
1992: Article 5
of the Constitution says:
“The Socialist Republic of Vietnam is a united nation having many nationalities. The State
implements a policy of equality and unity and supports the cultures of all nationalities and
prohibits discrimination and separation. Each nationality has the right to use its own
language and characters to preserve their culture and to improve its own traditions and
customs. The State carries out a policy to develop thoroughly and gradually improve the
quality of life of ethnic minorities in Vietnam physically and culturally.”
(v) Law on Cultural Properties, 2001
V. Requirements on implementation of Social safeguard policies in Projects using loan of World
Bank
18. One of main operational principles of World Bank is requirement posed on the projects
using loan of the Bank, in these case the projects using credits provided by HCM city’s
Infrastructure Development Fund, within the HDP, to strictly follow social safeguard policies
of the Bank.4
19. Due to existence of some differences of policies related to social safeguards between
Government of Viet Nam and of World Bank (if it’s not in legal documents, then it’s very
common in practice, especially at provincial level), thus it needs to identify them and propose
measures to overcome the gaps in very early stage, at beginning of the project preparation.
The legal framework for waiving of some provisions of Viet Nam Laws or underlaws that are
4 It is noted that World Bank IDA funds cannot be used at this time for compensation payments
lxvii
not met standards of World Bank, to satisfy the Bank’s requirements, is legally provided in
Vietnam’s laws and underlaw documents, including Land Law 2003, Decree No197/2004/N§-
CP on compensation, assistance and resettlement and Decree No131/2006/CP (replacing
Decree 17/2001/ND-CP) on utilization and management of ODA.
20. The proposed measures, in fact the waivers, are applied for the “HIFU Development
Project” to overcome the gaps, should be accurately discussed and agreed between the Bank
and Government of Viet Nam during appraisal and negotiation on the Project and should be
officially included in the Project Agreement Document. To participate the Project, HCM
city’sPC has to commit following principles and policy regulations provided by the Project.
21. Once the Project is agreed and approved by the Bank and Government of Viet Nam,
the policy of the Project will be legal basis for its implementation. In case if there policy gaps
between Viet Nam laws and of the Bank exists, the policy of the Project (the HDP) will be
applied. (See Annex 1)
22. Regarding the proposed projects borrowing credits within the HDP that have land
available, without necessity of land acquisition, or compensation, assistance and resettlement
for acquired land having been completed before investor’s submission of the project’s
documents to the HIFU, both parties, investors and HIFU, do not have to follow guidelines,
procedures of this manual. However, it needs to clearly state about non-existence of land
acquisition or related disputes in the project proposal document.
23. In case if at the time of submission of project’s proposal, all compensation and
resettlement activities have been completed, but there still remain certain unsolved
resettlement issues, then the investors are required to report to the HIFU about problems,
measures to overcome and responsibilities and feasible schedule of clearing the issues. The
HIFU should take it into account and monitor their outcomes before releasing the credit as
scheduled.
V.I. The principles
(a) Social safeguard issues should be paid attention and actions in very early stages of
project preparation.
(b) Social impact assessment and implementation of social safeguard policies should be
based on wide public consultation with DPs and other stakeholders.
(c) In case a project creates resettlement impacts and/or affects ethnic minorities, it has to
prepare Resettlement Plans and Ethnic Minority Plans and consider them as a non-
separate part of the project.
(d) The cost of social impact assessment and cost implementing social safeguard policies
should be included into total cost and benefits of the project.
(e) A projects anticipating land acquisition and/or impacting ethnic minorities has to
prepare budget sufficiently and timely, ensuring smooth and successful
implementation of social safeguard policies.
B. Responsibilities and steps for implementation of social safeguard policies in Projects
using the HDP’s loan
(See Annex 1 on incorporating of social safeguard policies of World Bank into lending and
investment practice within the HDP)
I. HIFU
I.1. Responsibilities
lxviii
24. The HIFU, on behalf of HCM city’s PC, is the direct partner of World Bank,
responsible for management of the project loan as well as has overall responsibilities for
compliance of all commitments agreed in the project Agreement document signed between
Government of Vietnam and World Bank, including commitments on social safeguards
policies.
I.2. Tasks
25. Tasks of HIFU include:
(i) Prepare Social safeguard Policy Frameworks (Resettlement Policy Framework and
Ethnic Minority Planning Strategy) common for the whole Project and submit to the
Government for approval and World Bank for no objection.
(ii) Execute overall supervision on credit use as well as on implementation of
commitments made by the Government to the Bank, including commitments on social
safeguard policies.
(iii) Provide necessary technical assistance to potential investors-borrowers.
26. To fulfill its responsibilities on ensuring social safeguards policies, HIFU will
incorporate requirements of social safeguard policies into process of its lending activities and
management of its credits, including screening, selecting, appraising, releasing of credits and
monitoring credit use towards the investment projects funded by HIFU within the HDP. (See
Annex 1)
1. Preparation of Social safeguard Policy Frameworks5
1.1. Preparation of Resettlement Policy Framework of project
27. To prepare for signing Agreement on the HDP between Government of Vietnam and
World Bank, HIFU has to prepare a Resettlement Policy Framework for its HDP as a whole.
28. This Resettlement Policy Framework will be serving as legal basis for preparation and
implementation of Resettlement Plans for all sub-projects taking loan form the HDP.
1.2. Preparation of Ethnic Minority Planning Framework
29. Besides of preparation of Resettlement Policy Framework, HIFU will have to also
prepare Ethnic Minority Planning Framework for the entire HDP.
30. This Ethnic Minority Planning Framework will be a legal basis for preparation and
implementation of Ethnic Minority Plans for sub-projects taking credits from the HDP in case
if they are executed in the areas where ethnic minorities form communities, and may pose
positive or negative impacts on them.
1.3. Submission of Social safeguard Policy Frameworks for approval
31. HIFU has to obtain feedback from HCMcity’sPC and the Government on Social
safeguard Policy Frameworks then submit to the World Bank for no objection before
submission to the Prime Minister for official approval. It s a precondition for the Bank
appraisal of the HDP as of a program type project.
32. HCMcity’sPC should commit on ensuring compliance of provisions of these Policy
Frameworks as conditions guaranteeing HIFU to joint the HIFU Development Project (HDP).
5 Social safeguard policy frameworks include two types: Resettlement Policy Framework and Ethnic Minority
(Indigenous People) Planning Framework
lxix
2. Screening of project proposals for getting loans for investment
33. On receiving of project proposal documents, HIFU has to carry out screening and
classification of proposals from points of views of social safeguard policies.
34. To carry out screening and make decision on whether or not a proposed project has to
proceed procedures preparing social safeguards action plans, HIFU will require investors to
provide a project concept note and description including, its components, activities, scope,
description on the areas where the project may take place and impact.
35. These project concept notes and descriptions should allow HIFU to answer following
questions to screen the project:
- Is the project located in or passing through area of protected Cultural Properties or
not?
- Is there any component of the project related to land acquisition or not?
- If yes, it needs to identify what are they? Do they acquire new land? Where? How
much land it will acquire?
- To what extend the project will pose land acquisition and resettlement impacts?
- Are there in the project impacted or influenced area of the Project ethnic minorities?
36. Based on information describing the project and its impacted areas, HIFU will request
the investor or the line department to complete an initial socio-economic assessment and
social analysis of the project to classify it based on its social impacts including ial impacts as
follows:
- The Project do not pose resettlement impacts
- The Project poses significant resettlement impacts6
- The Project poses insignificant resettlement impacts2
- The Project do not pose impacts on ethnic minorities, and
- The Project poses impacts on ethnic minorities
- The Project do not pose impacts on Cultural Properties
- The Project poses impacts on Cultural Properties
37. Depending on scales and levels of social impacts of the project as classified above,
HIFU will require investor-borrower to prepare one or two of the documents listed as follows:
- Abbreviate Resettlement Plan (if resettlement impacts insignificant)
- Full Resettlement Plan (if resettlement impacts are significant)
- Ethnic Minority Plan (if the project causes impacts on ethnic minorities)
38. If at time submitting project’s proposal to HIFU for credit, the project’s compensation
and resettlement activities were implemented, but there still remained certain unsolved issues,
then, as mentioned above, the investor have to report to HIFU, providing it with following
information (Report on project’s remained resettlement issues):
- Total area acquired by the proposed project by types of land use
- Total number of DPs, indicating number of relocated DPs and number DPs having
income sources to be severely affected
- Specific remained resettlement issues, problems, their reasons
- Measures to resolve problems
- Responsibilities for solving remained issues
6 Resettlement impacts are considered to be severe if there are equal or more than 200 people experiencing
significant impacts caused by the project. Significant impacts include displacement or relocation of dwelling or loss of more than 10% of productive assets of household. Below these thresholds, resettlement impacts are
considered insignificant.
lxx
- Deadline for solving remained problems.
Based on this report, HIFU will assess appropriateness and feasibility of the measures
proposed by investor to appraise the project’s proposal documents. HIFU will supervise and
will only release credit for investor if the latter complete solution of problems in accordance
with schedule agreed between investor with the HIFU.
39. Due to impacts on Cultural Properties will be detailed in Environment Impact
Assessment report, this manual will only focus on implementation of social safeguard policies
from the point of land acquisition and compliance of principles protecting cultural properties.
3. Scoping requirements on preparation of social safeguard action plans7
40. If results of screening show that the project contains potential social impacts on local
population and their communities, HIFU will require investor to prepare social safeguards
action plans (Resettlement Plan and/or Ethnic minority plan, if relevant) and submit to HIFU
for appraisal together with appraisal of the project proposal documents.
3.1. Request of preparation of Resettlement Plan
41. If results of screening of the project will pose resettlement impacts, HIFU will require
investor to prepare a “Resettlement Plan”.
42. If at the moment of submitting project proposal documents to HIFU for approval of
credit, all the project components, their scale and location have been identified and it could
make accurate assessment of types and scale of social impacts caused by the proposed project,
HIFU will require investor to prepare a Resettlement Plan for the proposal as a whole to
submit for HIFU’s approval together with approval of other related project documents. This
could happen when a project is planned to be implemented in one phase or when the project
plans to be implemented in phases but at the moment of submission its documents, all
information on its land acquisition is available as the case above.
43. In case at moment of submitting project proposal documents to HIFU for approval, the
scope, scale of land acquisition and resettlement impacts of project’s next phases are still not
identified, the investor have to prepare a Resettlement Plan for those project components of
the submitted phase I to HIFU. In each next phases of the project, before its appraisal, the
investor has to prepare Resettlement Plan for respective project components for HIFU’s
clearance.
44. If results of social impact assessment show that resettlement impacts of the Project are
significant, the investor have to prepare a full Resettlement Plan to submit at its appraisal. If
the project causes insignificant resettlement impacts, the investor has to prepare an abbreviate
Resettlement Plan before its appraisal. (See requirements for full or abbreviate Resettlement
Plan in Part II, where it focuses on responsibilities, tasks of investor.
3.2. Request preparation of Ethnic minority plan
45. If the proposed project requesting credit may impact on area with ethnic minorities
living in groups, HIFU will request investor to prepare social impact assessment on ethnic
minorities and Ethnic minorities plan. (See requirements towards Ethnic Minority Plan in Part
II, where it focuses on responsibilities, tasks of the investor).
7 Social Safeguard Action Plans includes of two types plans – Resettlement Plan and Ethnic Minority Plan
lxxi
3.3. Submission of Social safeguard action plans for approval
46. Resettlement Plan and/or Ethnic Minority Plans should be submitted to HCMcity’s PC
for approval as a precondition for HIFU’s appraisal the project proposed for loan from the
HDP.
4. Appraisal of the project
47. According to World Bank, HIFU will appraise social safeguards action plans
(resettlement plan and Ethnic minorities plan) that investors were asked to prepare, depending
on scale, level of social impacts of the proposed project, as precondition for its appraisal.
48. To prepare for Credit Convention between Vietnam Government and the World Bank
on the HDP, besides of project’s Resettlement Policy Framework and Ethnic Minority
Planning Framework, all the proposals selected for HDP’s funding in the first year, involving
resettlement impacts or impacts on ethnic minorities, will have to prepare and submit
respective action plan/s to the Government and World Bank for clearance.
49. During consequent years, HIFU have to submit to the Bank social safeguard action
plans of its funded relevant projects till the World Bank accept for HIFU to take off full
responsibilities for appraisal of social safeguard action plans of its funded, HDP’s, projects.
5. Monitoring implementation of Social safeguards policies
50. The main activities of HIFU’s credit operations is to release capital loan for its funded
projects after their credit proposals being approved. HIFU will integrate its supervision,
monitoring of implementation by investor Social safeguards action plans in accordance with
agreed schedule between HIFU and investor.
5.1. Monitoring responsibilities
51. Monitoring responsibilities of HIFU towards implementation of social safeguard action
plans by investors mainly focus on supervision, monitoring and check and clear over, in
principles, results implementing concrete compensation and resettlement activities or results
implementing concrete Ethnic Minority Plan at each stage releasing credit for respective
project, in accordance with implementation schedule of social safeguards action plans and
plan of credit release, agreed between Investor and the HIFU. However, HIFU is the main
body who is responsible to HCMC PC, Vietnam Government and the bank, while it confirms
compliance executed by investor of social safeguard policies for releasing HDP’s credit.
5.2. Monitoring objectives
52. Main HIFU’s monitoring objective is to ensure that all commitments on Social
safeguard policies are followed in practice and the people affected by the project are fully
provided with compensation, rehabilitation assistance measures to restore their income
generating capacity and living standards at least equal prior-project leval or preferably better,
as well as to ensure that the project’s DPs are able maintaining their social relations in ways
appropriate to their culture and traditions.
5.3. Monitoring contents
53. Monitoring content perfomed by the HIFU towards Social safeguard policies including:
• Does the investor and local authorities appoint any their staff for implementation of social
safeguards activities. It is based on followings indicators (for project involving resettplement
impacts):
- Does the investor devote at least one full time or part time staff for this task?
lxxii
- Is the asigned staff experienced on compensation and resettlement? Does he/she have
good understanding or experiences on WB resettlement policy?
- If the assigned social safeguard staff is not experienced on resettlement issues, then
the question is whether he/she has been trained on VN’s and WB resettlement
policies?
- Is the background of the staff social sciences or anthropologies?
If the investor or local related autorities devote at least one staff, specialized on social
sciences, or experienced on resettlement issues, then it could be considered as satisfies
minimum requirements.
• Are there social safeguard activities implemented in accordance with its project’s
agreed schedule releasing credit ?
• Do the investor follow the policies or provisions set by their social safeguard action
plans (Resettlement Plan/Ethnic minority plan)?
• Are the project’s DPs well and fully informed and consulted? It is based on followings
indicators (for project involving resettplement impacts):
- All (100%) the DPs should be informed on the project, its policy, the compensation
and resettlement plan of the project;
- All DPs should be fully provided with resettlement documents related to them , for
example, the HH’s DMS form filled, compensation option, receipt of compensation
payment...
- DPs should be consulted on compensation, rehabilitation assistance modes and
resettlement. their needs, wishes and priorities..
- All the groups of relocated and other severely affected DPs should be consulted on
relocation and rehabilitation options.
• Are there objectives of Social safeguard plans met?
5.4. Monitoring indicators
54. Monitoring indicators on implementation of social safeguard policies that HIFU is
reponsible for include:
(i) Compensation payment: (a) Are there full compensation packages paid to DPs
before land clearance; (b) Are there the full compensation payment enough for
replacement of lost assets/properties.
(ii) Technical assistance, relocation, assistance allowance and relocation assistance
given to the reorganized DPs who have to build their main house on remaining
land, or who have to rebuild new houses in resettlement site arranged by the
project..
(iii) Rehabilitation assistance to severely affected DPs who lose or have impacted
income sources.
(iv) Consultation and information disclosure on compensation policies..
(v) Are there DP’s grievances resolved? Are there any remained unsolved issues
requiring action of authorities of different levels?
(vi) Are there resettlement activities integrated with and completed before investor
start their civil work at respective site?
lxxiii
5.5. Monitoring methods
55. The HIFU’s activities monitoring implementation of Resettlement Plans and/or Ethnic
Minority Plan (if relevant) will based on following main sources of information:
a. In-office monitoring, based on study of periodic monitoring reports submitted
by investors and independent monitoring consultant to HIFU on (i) Results of
internal resettlement monitoring conducted by investor and (ii) Independent
monitoring report on implementation of social safeguard policies in the
projects involving social impacts.
b. On site, field random check made by HIFU towards implementation of social
safeguard policies of the projects funded by the HDP to confirm accurateness
of information reported by investor and independent monitoring consultant,
before its release of credit as planned
56. HIFU will only release fund if planned resettlement activities of project’s respective
stage have been carried out in accordance with its commited provisions. In oposite case, the
investor will be required to complete the agreed activities before HIFU’s releasing of credit to
them.
5.6. Monitoring schedule
57. HIFU implement periodic and non-periodic monitoring of fulfilment of social safeguard
provisions of its funded projects.
58. Periodic monitoring activities of HIFU are conducted on 6-month basis to overview the
progress of social safeguard policies implementation made by all its HDP sponsored projects
involving land auisition and resettlement impacts, or affecting ethnic minorities, at time of
HIFU’s periodic 6-month reporting.
59. Non-periodic monitoring of HIFU on social safeguard implementation is conducted in
accordance with concrete credit release plans agreed between HIFU and its specific investors
60. The clarification of integration between compensation and resettlement activities and
credit-release plan is a very important part of each Resettlement Plan of project preparation
and should be detailed in project’s implementation planning in its implementation stage. This
will contribute for early agreement between HIFU and investor on main monitoring aspects
that investor is responsible to report to HIFU and that are what HIFU have to monitoring on
of the project in each its stage releasing of the fund.
5.7. Reporting
61. HIFU have to submit periodic monitoring report to the World Bank where the HIFU’s
highest leaders are responsible for its contents on status of social safeguard policies
implementation made by its, HDP, funded projects, as an integrated part of HIFU’s periodic
reports sent to the Bank.
62. Monitoring report on social safeguard implementation of HIFU should address the
followings:
a. Consolidate number of DPs by project and by types of impacts, and by progress of
compensation implementation, relocation and income rehabilitation in each HIFU
sponsored project.
b. Consolidate HIFU allocated compensation and resettlement amount and amount paid
for these activities.
lxxiv
c. Overview status of compliance made by investors towards policy provisions of
Resettlement Plans and Ethnic Minority Plan (if exists) of all HIFU/HDP funded
projects at report periods.
d. Overview status of integration between compensation, resettlement activities and civil
works implementation.
e. Results of solving of problems identified or remained from previous monitoring
round, and newly emerged issues, if relevant;
f. Indicate proposed measures for solving identified, remained issues, and planned
schedule remedying them;
g. HIFU’s assessment on whether or not social safeguard policies of its funded projects
are met.
63. HIFU should know steps of implemetation of project’s resettlement plan to supervise,
monitor its implementation by investor when HIFU plan to release its credit to investor. (See
resettlement implementation arrangement in Decision No106/2005/QD-UBND of HCM
city’sPC).
6. Selection and hiring independent resettlement monitoring consultant
64. Social safeguard policy of World Bank requires independent monitoring of
implementation of Social safeguards action plans of projects using credits of the Bank.
65. To ensure accuracy of results of independent resettlement monitoring, HIFU will
responsible for selecting and signing contract with one or more independent consultants,
specialized on anthropology or social sciences, capable, to carry out independent monitoring
activities for one or more its sponsored projects which involve land acquisition and
resettlement impacts. Terms of Reference for Independent monitoring of resettlement plan
implementation is given in.
66. On principles, the monitoring cost paid to independent monitoring consultant on social
safeguards should be a part of total cost of the Project funded by HIFU that involve social,
resettlement impacts. However, at early stage of the HDP, when investors, especial domestic,
local private investors, still are not familiar with requirements on social safeguard
implementation raised by International donors and moreover are strange with responsibility to
pay for similar social safeguard activities, hence to use a part of its lending profits maintained
at HIFU for independent social safeguard/resettlement monitoring seems to be appropriate
which, in our opinions, could increase attractiveness of credits to investors. This
financial/budget issue should be accurately discussed between the Bank and the Fund (HIFU).
7. Technical assistance for building of Social safeguard capacity
67. Social safeguard policies of World Bank and their implementation procedure
requirements are new, unfamiliar to HIFU and the most of domestic developers, economic
organizations, and private investors in Viet Nam in general and in its municipals as particular.
Thus, in first stage of the HDP’s implementation, HIFU and investors will very need training
to improve their awareness on social safeguard policies as well as technical assistance to
fulfill required procedures and smooth implementation of social safeguard provisions
approved of investment project In next, mid- and long-term stages of the HDP, HIFU have to
build its social capacity and responsible for providing of necessary technical assistance to its
project’s developers for their ensuring social safeguards during process of their project
implementation.
lxxv
68. To fulfill this responsibility, HIFU have to assess social safeguard capacity of its
investors-borrowers, carry out assessment of their training, capacity building needs, on social
safeguard policies, requirements, procedures ensuring social safeguards. Based on this, HIFU
will prepare strategy and plan for training and provision of technical assistance, consulting
service to its funded investors-borrowers on issues related to preparation and implementation
of social safeguards activities in the project’s cycle.
II. investor
II.1. Responsibilities
69. Investor, or in other words, project’s investor, using credits of World Bank within the
“HIFU Development Project” (or the HDP) is responsible for executing or supervising all
activities to ensure social safeguards in its development investment process.
70. Project’s investors have to provide to HIFU all required information, documents as well
as prepare all required procedures and implement all activities related to social safeguards of
their project sponsored/funded within the HDP. (See Annex 1)
II.2. Tasks
71. Investor should fulfill the following tasks:
(i) At time requesting credit from the Fund, investor have to provide to HIFU necessary
documents, on request, showing about whether or not it causes land acquisition and
resettlement impacts and possibility of its impacts on ethnic minorities.
(ii) If the proposed project implicates resettlement impacts and/or affect ethnic minorities,
investor will have to:
a. Prepare Resettlement Plan and/or Ethnic minority plan;
b. Submit these plans for review and approval.
The preparation of such social safeguard action plans should be taken in early stage of the
project preparation.
(iii) If the proposed project is accepted by HIFU, investor is responsible for implementation
and/or supervision of their respective social safeguard action plans. Compliance
executed by project’s investors towards principles and policy provisions of the project’s
approved social safeguard action plans is precondition for HIFU’s releasing credit.
(iv) Investors is responsible for submitting short quarterly report and periodic reports to
HIFU on status, progress, social safeguard implementation outcomes and issues
remained or newly emerged during implementation of social safeguard action plans as
an integrated part of their periodic reports that they have to submit to HIFU.
(v) Project’s investor is responsible for cooperation and facilitating all conditions for
independent monitoring consultant to access all related materials, information as well as
to contact with its DPs and their communities for fulfilling independent monitoring
responsibilities for the project.
1. Preparation of proposed project documents
72. As mentioned above, at time of preparation of project proposal documents to submit the
HIFU for requesting credit, besides of common information required for borrowing credit,
investor have to provide to HIFU initial information to allow HIFU conducting screening of
the project proposal on its potential social, resettlement impacts and level of severity, to
lxxvi
scoping issues, types of documents/reports on social safeguard preparation that investor have
to submit to HIFU before its appraisal of the project.
73. The information provided by investor should allow to answer following questions:
- Is the propose project located or passing through the area of protected cultural
properties?
- Are there any project components involving land acquisition?
- If yes, it should to identify what are they, do they require land being in use, how much
land they require?
- At what extend or level does the proposed project cause resettlement impacts?
- Are there in the project proposed areas ethnic minorities ?
2. Preparation of social safeguard action plans
74. If the proposed project latent social impacts, the investor has to prepare respective social
safeguard action plans such as Resettlement Plan and/or Ethnic Minority Plan.
2.1. Preparation of Resettlement Plan
75. If results of social impact assessment show that the project’s resettlement impacts are
significant, then the investor has to prepare full Resettlement Plan before its appraisal. A full
Resettlement Plan includes followings:
(i) Brief description of the project;
(ii) Potential resettlement impacts of the project;
(iii) Resettlement objectives;
(iv) Socio-economic survey;
(v) Legal policy framework;
(vi) Eligibility;
(vii) Evaluation and compensation for affected properties;
(viii) Selection, preparation of resettlement site and relocation;
(ix) House construction, Infrastructures and social services
(x) Environment protection and management;
(xi) Organizational responsibilities;
(xii) Public participation, consultation and reddressal mechanism;
(xiii) Implementation schedule;
(xiv) Cost and budget;
(xv) Monitoring and evaluation
76. If the project will only pose insignificant resettlement impacts, then the investor have to
only prepare an abbreviated Resettlement Plan before its appraisal. This plan should at least
address the followings:
(i) Census of DPs and inventory of all losses;
(ii) Describe compensation mechanism and rehabilitation assistance measures
adopted;
(iii) Responsibilities of implementation agencies, and
(iv) Implementation schedule and budget
lxxvii
77. Investor will prepare Resettlement Plan for the proposed project requesting for HIFU
credit, based on objectives, principles, policies and provisions of the Resettlement Policy
Framework approved for the HDP.
2.2. Preparation of Ethnic Minority Plan
78. If results of social impact assessment show that the project anticipates impacts on ethnic
minorities, the investor have to prepare Ethnic Minority Strategy before its appraisal, based on
the HDP’s approved Ethnic Minority Planning Framework.
79. Ethnic Minority Strategy should include followings:
i. Legal and institutional framework applied for ethnic minorities
ii. Baseline information;
iii. Information on local land use systems;
iv. Summarized results of SIA
v. Summarized results of public consultation conducted during preparation of the
proposed project;
vi. Strategy for consultation with and participation of affected ethnic minorities during
project implementation;
vii. Action plans and measures for ensuring that the ethnic minorities share project’s
equal social and economical benefits in ways appropriate to their culture;
viii. Appropriate action plan with measures mitigating negative impacts on ethnic
minorities, if relevant;
ix. Mechanism for addressing complaints, grievances;
x. Mechanism for monitoring and evaluation
xi. Cost estimate and budget plan for the EMP.
2.3. Submission for approval and clearance of Social safeguards action plans
80. Social safeguards action plans, including Resettlement Plan and/or Ethnic Minority
Plan, if required, have to be submitted to HCMCity’sPC for approval and to World Bank for
clearance. This is a condition for appraisal of the project’s proposal.
81. Procedures, steps for submission of documents to relevant competent authorities for
obtaining no objection or approval of social safeguards plans are as follows:
a. First of all, investor has to submit its Resettlement Plan and/or Ethnic Minority Plan
they prepared to HIFU for appraisal together with its main project’s requesting credit
documents. These plans will be reviewed, cleared by HIFU regarding its contents and
policies that the plans should address:
b. Investor has to cooperate with HIFU to submit to HCM city’s their Resettlement Plan
and Ethnic Minority Plan (if required) for review.
c. HIFU have to submit to the Bank the final draft of such Resettlement Plan and Ethnic
Minority Plan (if required) for obtaining no objection, after these plans being
reviewed and adjusted based on comments of HCM city’sPC .
d. Investor, in cooperation with the fund, to submit the final Resettlement Plan and/or
Ethnic Minority Plan to HCM city’sPC for official approval, after they got WB’s no
objection.
lxxviii
82. As soon as HIFU will be able to appraise and monitor social safeguard action plans and
be trusted by World Bank, then project’s investor has to only submit their social safeguards
plans to HIFU and HCM city’sPC for approval, without need for the Bank’s direct clearance.
3. Implementation of Social safeguard action plans
83. After the project’s respective social safeguard action plans being approved and the
project credit proposal is being approved, investor will be responsible for daily execution and
monitoring of these social safeguards plans.
84. The forms of institutional arrangement of compensation and resettlement
implementation activities are factors determining set of requirements and steps for their
implementation in the investment project. It could distinguish 2 forms of institutional
arrangement of compensation and resettlement activities of projects funded by HIFU,
corresponding the specifics of project investment:
a. The production, business projects of enteprisers, economic organizations, with the
compensation and resettlement budget paid by private investors, economic
organizations, while they can agree with their DPs on compensation and resettlement;
b. The investment projects developing public infrastructure, with state compensation
and resettlement budget or the projects of private investors but their compensation
and resettlement activities are implemented by the state.
85. In any mentioned above cases, investors should have to ensure policy objectives of the
Bank that DPs could improve or at least to retore their prior-project level living standards.
86. The steps and procedures of compensation and resettlement activities of infrastructure
development projects involving land acquisition impacts, corresponding their institutional
implementation forms, are as follows:
3.1. Procedures requirements for projects having compensation and resettlement paid by
the private sector
87. If the compensation and resettlement budget is of the private sector and its investor can
be able to negotiate with their affected land users or DPs on compensation and relocation
options and implementation schedule, then they don’t need to follow procedures regulated by
the Decree 197/2004/CP.
88. However, even in case that private investor can negotiate with their DPs, investor still is
responsible for reporting to HIFU on the project compensation implementation plan, schedule
and their results. Information on status, implementation progress, results of the project
compensation, assistance payment and relocation that investor have to report to HIFU
includes:
- Implementation plan and schedule of compensation and land acquisition activities of
the project ;
- Plan and results of cooperation between compensation and resettlement activities and
schedule of civil works ;
- Summary on total number of DPs by impact types and relocation options;
- DPs satisfaction on compensation and resettlement ;
- Remained issues and measures , time for overcoming them
89. In case if the negotiation with DPs on compensation and resettlement could not be
reached, investor can sign contract with the city’s land development organization or directly
with resettlement committees to carry out project resettlement activities, based on
lxxix
implementation organization procedures regulated by the Decree 197/2004/CP, similar to the
case of compensation and resettlement budget taken from the government.
3.2. Implementation of Resettlement Plan in projects where state implement compensation
and resettlement activities
90. If a project compensation and resettlement budget is of state, or if it’s of private
investors but the activities are implemented by the state, then all implementation procedures
will be followed regulations provided by decision No 106/2005/QD-UBND issued by
HCMcity’sPC within the city’s boundary, following the Decree 197/2004/CP. Sequence of
compensation and resettlement activities implemented by the government is as follows:
1) Establishment of related Compensation, assistance and resettlement Committees
2) Put project’s land mark in the field ;
3) Information dissemination before Detailed Measurement Survey
4) Conduct Detailed Measurement Survey (DMS):
5) Update replacement unit costs of affected properties:
6) Prepare draft compensation, assistance and resettlement chat/o[options of DPs
7) Disclose draft compensation and resettlement options to DPs and local public
8) Inform final compensation and resettlement options to DPs
9) Delivery of compensation and assistance payment to DPs:
10) Relocation of DPs
11) Clearing and handing land to Investor
12) Awarding construction contracts.
13) Monitoring implementation.
91. In the above mentioned steps of resettlement implementation of the Bank-funded
projects, there worth of attention the two distinct points: the Bank give special significance for
updating replacement costs at time of implementation and requirement on independent
resettlement monitoring.
92. Independent monitoring organization will carry out a replacement cost survey before or
during DMS to update information on replacement costs. If there exist a considerable gap
between compensation unit prices and market prices, then investor will ask provincial
department to advice the City’sPC to adjust them in accordance with legal provisions.
93. Post project evaluation also will be implemented by the independent monitoring
organization within from 6 to 12 months after completion of compensation and resettlement
implementation.
4. Monitoring of implementation of Social safeguard action plans
4.1. Monitoring responsibilities
94. Investor is responsible for internal monitoring of implementation of approved social
safeguard action plans, especially Resettlement Plan, to ensure the principles , provisions on
their social safeguards are complied and social safeguard policy objectives are met.
4.2. Monitoring objectives
95. Objectives of internal resettlement monitoring are to timely identify actual situation,
define and predict possible issues, to make appropriate recomendations on measures and
actions to overcome them during implementation of compensation, assistance and
lxxx
resettlement activities and Ethnic Minority Plan (if relevant) of the Project, to achieve
following common objectives of social safeguard policies:
(i) Ensure that the DPs are able at least to restore or improve their living standards as without
the project intervention;
(ii) Ethnic minorities (if relevant) are benefited equally with other majority, in the way
appropriate to their culture, traditions and assisted in theri endavours to improve their income
generating capacity and living standards.
4.3. Monitoring indicators
96. Indicators of internal monitoring include:
(i) Compensation payment to DPs for all their losses in accordance with compensation
policies described in the project’s Resettlement Plan
(ii) Implementation of technical assistance, relocation, rehabilitation allowances and
transportation, relocation allowances.
(i) Implementation of income rehabilitation assistance and entitlements.
(ii) Development supporting activities to ethnic minorities, if relevant.
(iv) Information disclosure and consultation procedures.
(v) Pay special attention for solving grievances, remained issues requiring attention of
competent authorities.
(vi) Prioritize options selected by DPs.
(vii) Cooperate for and complete resettlement activities and give construction contracts
awards.
4.4. Monitoring methodology
97. Investor will directly carry out supervision, monitoring of daily preparation and
implementation of Resettlement Plan and Ethnic Minority Plan.
98. Investor will monthly collect resettlement information from local RCs. A database on
DPs and information of project resettlement implementation supervision will created,
maintained and updated monthly.
5. Cooperation with independent monitoring organization/consultant
99. As mentioned above, policy of the World Bank requires an independent monitoring of
implementation of Resettlement Plans for projects involving land acquisition, causing loss of
assets, relocation, livelihoods... It aims to provide a reliable feedback on compliance by
investors of provisions of project’s approved Resettlement Policy Framework and Plan during
the project development investment.
100. Investor is responsible for cooperation with independent monitoring organization or
consultant of their project, providing all necessary nformation, favor all conditions for
independent monitoring organization to carrying out monitoring activities; receive reasonable
recommendations of IMO to take necessary and timely adjustment actions during
implementation of social safeguards of the Project.
101. Independent monitoring should be implemented by an external organization selected
and contracted to ensure its independence, reliability and accurateness of its monitoring and
evaluation activities towards project’s compensation and resettlement activities. Secured
independence may allow IMO to report, appropriately and timely provide proposed
recommendations, measures to implementation bodies for their actions overcoming
lxxxi
difficulties or solving emerged issues/problems as soon as possible during implementation of
project’s social safeguard provisions.
6. Reporting on results implementing social safeguard action plans
6.1. Reporting responsibilities
102. Investor is responsible for reporting on results implementing social safeguard action
plan to HIFU. HIFU will only release credit to investor when they comply all committed
provisions of approved social safeguard action plans - Resettlement Plan and/or Ethnic
Minority Plan (if relevant), in accordance with planeed schedule.
6.2. Reporting schedule
103. Investor has to submit periodic internal resettlement monitoring report on
implementation of Resettlement Plan /Ethnic Minority Plan to HIFU as a part of their main
report to HIFU.
104. Periodic reports on implementation of social safeguard action plans that investor have to
submit to HIFU include quarterly, semi-annual and annual reports.
6.3. Reporting contents
105. Requirements on fullness and details of report contents increase with interval between
two-reporting periods. Quarterly report is short, covering overall progress and remained or
emerged issues of time between two reporting periods. Semi-annual report will more fully
address results implementing planned compensation and resettlement activities, progress and
results, relocation, cooperation between compensation and resettlement and schedule of
project’s civil works. Annual report will consolidate and provide relatively comprehensive
evaluation of implementation of compensation, resettlement and rehabilitation of DPs living
standards, and further plan if all activities have not been completed.
106. Semi-annual or annual Internal resettlement monitoring reports should include
following information:
(i) Total number of DPs by types and by project components. The status or
progress of compensation, assistance and resettlement activities, rehabilitation
of living standards by project component.
(ii) Allocated compensation and resettlement budget and amount paid for each
component
(iii) Final solution of grievances and any emerged issues requiring solution by
authorized bodies.
(iv) Emerged issues during implementation.
(v) Updated compensation and resentment implementation progress.
(vi) Integration with civil works of the project.
Annex 1: Integration of World Bank Social Safeguard Policies into HDP
Activities and responsibilities Project’s cycle
HIFU
Preparation of social safeguard Policy Frameworks Provision of general i
components, scales, areas
Pre
pa
ra
tio
n
Screening
Establishment of social safeguard capacity at HIFU
lxxxii
Project’s screening: send specialist to conduct preliminary
assessment of project’s social impacts
Preliminary screening
project
Subdivision of projects proposals, based on their social
impacts
List social safeguard requirements to investors
Assessment of investor capacity, training and technical
assistance needs on social safeguards
Identification of inve
Appoint staff attendin
documents
Preparation of social
Ethnic Minority Plan, if required):
- Send/rent soci
plans, taking me
maximize benefits of the project
- Preparation of
ethnic minority plan (EMP)
Ap
pra
isa
l a
nd
ap
pro
va
l
Project
appraisal
Appraise resettlement plan and ethnic minority plan (if
required)
Consolidate reports appraising social safeguard plans to
submit to WB
Submit a draft RP to
City’sPC draft RP to WB for obtaining no objection.
Supervision and monitoring: Implementation of social safeguard plans:
- Send social/resettlement specialist to supervise, monitor
social safeguard policy implementation fulfilled by
investors
- Prepare documents
requesting land allocation for project investment
- Cooperate with com
project’s landmarks on site
- Hire independent agency/specialist for external
resettlement monitoring
- Provide necessary technical assistance and/or training
assistance on social safeguards issues to investors
- Prepare plan for coo
activities with schedule of project construc
- Report to HIFU on
plans/schedules
- Appoint staff to par
Committees, authorit
- Cooperate with sele
- Review of periodic internal and external resettlement
monitoring reports.
- Select adequate sample for checking, on site monitoring
of implementation of social safeguard plans.
- Prepare periodic repo
(resettlement and/or ethnic minority, if required) plans
Imp
lem
en
tati
on
Budget
disbursement
- Consolidate and report to WB on social safeguards
issues;
Co
mp
leti
o
n Post-
evaluation
Review of post-evaluation report of external monitoring
agency/specialist. Based on random sampling to conduct
own monitoring assessing compliance or achievement of
social safeguard policies.
Prepare and submit g
ethnic minority plans
Annex 2: Inventory Forms for Displaced Peoples and Their Affected Assets
Form 1:Inventory of land loss
lxxxiii
Name of subproject: ____________________________
Name of work: ____________________________
Province: __________________ District: ____________________ Commune:
_____________________ Hamlet: _______________________
Land use right
certificate
No
Name of DP/Type of
affected land Yes
(Long
term)
No Wait
ing
for
LUR
C
Being
dispute
d
(Yes/
No)
Land
Type/
Class
Total
existing
land
holding
(m2)
Total
numb
er of
plots
of HH
Lost area
(m2)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 Household -Nguyen Van
A
1.1. Residential land
1.2. Agricultural (total):
Of which :
a) Annual crop land
b) Perennial crop land
1.3. Acquacultural land
1.4. Forest land
2 Household -Nguyen Van
B
2.1 ....
lxxxiv
Form 2: Inventory of crops/trees
Name of subproject: ____________________________
Name of work: ____________________________
Province: __________________ District: ____________________ Commune:
_____________________ Hamlet: _______________________
Quantity iimpacted Yield
No
Name of DP/ Type of
crops or trees Unit(
8) Area
planted/or
quantity
Year old
(Years)/
Or
diametre
(mm)
Maturity
(Yes/not
yet) Unit (
9)
Average
yield
(1) (2) (3) (4) (6) (7) (8) (9)
(
8) Area: m2; Quantity: tree
(9) Rice and upland crop: kg/ha; Fruit trees: kg/ha; Wood: m3/ha; Others (specify)
(10) In case it can’t identify the productivity, then record yield with unit (ie: 1 tonn, or 1000 kg; 100 m3…)
lxxxv
Form 3: Inventory of houses/structures loss
Name of subproject: ____________________________
Name of work: ____________________________
Province: __________________ District: ____________________ Commune:
_____________________ Hamlet: _______________________
No Name of DP/House or
structures
Type of house/structure(11
) Legal status
(12
)
Purpose of
use (13
)
Existing
area(14
)
(m2)
area(
(1) (2) (3) (4) (5) (6)
1 Household -Nguyen
Van A
1.1. Main house
1.2. Secondary structure:
Of which :
a) Secondary house
b) Kitchen
c) Toilet
d) Well
e) Yard...
Notes: (
11) – Regarding main, secondary houses, and other structures,the classificasion subdivides: Class I; class
II, Class III, Class IV, temporary structure, shelter
- Other structures: describe in details their forms, building materials
(12)Specifyâ: i) owner; ii) renter; iii) in dispute.
(13
) i) Dwelling house; ii) shop/kiosk; iii) production place; iv) Office; v) given for rent; vi) Other (specify)
(14
) Land area c
(15
) Regarding structures that are not measured in m2, record their existing quantity (for example well, sluice,
graves …) or in metres (elecrtict wire...)=
lxxxvi
Form 4: Household’s General information
Name of subproject: ____________________________
Name of work: ____________________________
Province: __________________ District: _________________ Commune:
_______________ Hamlet: _______________________
N
o
Name of Household
Head (HHH)
Ethnic
ity
Sex of
House
hold
Head
Age of
House
hold
Head
Educa
tion of
HHH
HH’s
size
(pers)
Of
which:
Males
Number
of
children
under 18
y.o.
Number
of HH’s
labors
Main
occupation of
HHH
lxxxvii
RESETTLEMENT POLICY FRAMEWORK
1
I. Introduction
1. Vietnam is being in a process of rapid economic and social transformation. Cities
become greater proving their special role in the common development process of the country.
Ho Chi Minh City is the greatest and the most dynamic economic centre of Vietnam.
2. To assist local development investment funds in policy, legal and institutional reforms,
enhancement of LDIF’s operational capacity to improve efficiency of lending investment and
increase participation of private sector in municipal infrastructure development, improve
operational flexibility of LDIFs’ and make long-term capital available for municipal
infrastructure projects, while reducing their contingent economical, social and environment
risks, the Government of Vietnam has requested the World Bank, through IDA, to sponsor the
Project “Local Development Investment Fund” (LDIF). It is under preparation and planned to
be implemented in 2008.
3. Among existing local development investment funds within Vietnam, HIFU is
assessed as the most dynamic and best operational one. HIFU is considered to be well-
prepared for implementing the project. The HIFU Management and HCM city’s People’
Committee has agreed to adopt the set of key policy and operational reforms which have been
prepared under the LDIFProject, a larger, national-level Bank project, into the HIFU practice
as a pilot one.
4. Facing acute demands of economic and social development of Ho Chi Minh city
towards development of infrastructure, improvement of institutional financial management,
demands for investment capital and increasing participation of the private sector..., and to
speed up implementation progress of executing projects, the Viet Nam Government has
requested the World Bank to support for Ho Chi Minh city a separate project under the name
of “HIFU Development Project ” (HDP), to be invested in early 2007. The HDP will
demonstrate the LDIFP concept on a pilot basis in HCMC, and greatly contribute to the
success of LDIFP and the national-level policies, incentives and operational improvement
measures that Bank will sponsor.
5. Main objectives of the HDP are as follows:
(i) Increase private sector participation in municipal infrastructure development in HCMC
by providing investment capital to HIFU and improving its capacity to appropriately
partner with the private sector;
(ii) Develop HIFU as a model LDIF that is financially viable, independent, specialized
institution, capable of working with the DPI and other departments of the HCMC
government to undertake infrastructure investments in partnership with the private
sector, including the management of social and environmental safeguards;
(iii)
Make long-term capital available for municipal infrastructure projects in HCMC with
high economic returns, and institutionalize provincial level policy to mitigate HIFU-
related contingent financial risk to the HCMC PC as well as the GOV.
2. As the HDP is of program type, its resettlement impacts would only be identified when
specific lending projects will be clarified. Hence, this RPF is prepared to guide preparation of
RPs for all respective proposals requesting loan from the HDP fund that involve resettlement
impacts.
3. This RPF lays down the principles and objectives, eligibility criteria of Displaced
People (DP), entitlements, legal and institutional framework, modes of compensation and
rehabilitation, people participation features and grievances procedures that will guide the
compensation, resettlement and rehabilitation of the DPs.
2
4. The RPF provides: (i) Policy and Legal Framework of Vietnam Gov and WB; (ii)
Compensation policy applied for all projects credited from the HDP fund; (iii) Procedures
applied when preparing, implementing and assessment of the project’s Resettlement issues.
The Framework will be distributed to the Central and Local agencies be it a public or private
ones or individuals related to the Project’s preparation, implementation and monitoring. The
RPF should be read in conjunction with the World Bank OP 4.12 and Vietnamese laws and
regulations related to resettlement policy. Resettlement plan of each credited subprojects will
be prepared, using its FS’s information and based on provisions of this RPF.
2. LEGAL FRAMEWORK AND ENTITLEMENT POLICY
5. This Resettlement Policy Framework will apply the various laws, Decrees, and
circulars regulating use of land in Vietnam as well as the World Bank policy.
2.1. Vietnamese Laws, Decrees, and Circulars
6. The following laws of the Socialist Republic of Vietnam are applied:
• The Constitution of the Socialist Republic of Vietnam, 15 April 1992;
• Decree No. 60/CP, 5 July 1994, regulation on property ownership and the right to use
urban residential land;
• Decree 91/CP (17 August 1994) regulation on Urban Planning Management;
• Decree No. 64/CP, 27 September 1993, regulation on allocating agricultural land to
households for long-term use;
• Circular No 05-BXD/DT, February, 1993, on classification of houses.
• Construction Law, dated on Dec, 10th
2003,
• Law of grievance and accusion, December, 2nd
1998. Laws amending Law of
grievance and Accusion , dated on June, 15th
2004 and November 29th
2006
• New Land Law 2003 approved by National Assembly on the 26, November, 2003,
came into effect on the 1st of July, 2004, replacing the Land Law 1993
• Decree No181/2004/ND-CP, 29 October 2004, relating to the implementing the Land
Law.
• Decree No182/2004/ND-CP, 29 October 2004, on administrative violation in the land
user-rights...
• Decree No188/2004/ND-CP, 16 November 2004, regulation on price land and price
framework for land categories; and issued guidelines in Circulation No114/2004/TT-
BTC by MOF.
• Decree No197/2004/ND-CP, 03 December 2004, on compensation, assistance and
resettlement when land is recovered by the State (replacing Decree No. 22/CP). And
issued guidelines in Circular No116/2004/TT-BTC by MOF, dated on Dec. 7th
2004.
Circular No69/2006/TT-BTC by MOF, dated on Feb. 18th
2006, amending the Circular
No116/2004/TT-BTC on guidelines for implementation of Decree 197/2004/CP.
• Decree No198/2004/ND-CP, 03 December 2004, on collection of land use fee. And
issued guidelines in Circulation No117/2004/TT-BTC by MOF.
• Circular No 80/2005/TT-BTC, dated on September, 15th, 2005, providing guidelines for
organization of a network for conducting statistics of and surveying, investigating of the
land prices in accordance with Decree No 188/2004/ND-CP of the 16th of November,
2004, on the methods of evaluating land prices and frame of land prices.
• Decree No17/2006/ND-CP, 27 January 2006, on amendment of some provisions of
some Decree guiding implementation of the Land Law and the Decree 187/2004/ ND-
CP on shifting the state companies into stock ones
3
• Decree No131/2006/ND-CP, on November, 9th
2006, providing regulations on
Management and Utilization of ODA.
• Decision No106/2005/QD-UB dated on June, 16th
2005, issued by the Hochiminh City’s
PC on compensation, assistance and resettlement when the Government acquires land in
Ho Chi Minh City.
2.2. World Bank Policy on Involuntary Resettlement
7. The World Bank policy regulated by OP 4.12 includes safeguards to address and
mitigate impoverishment risks of involuntary resettlement caused by development projects.
8. The basic guiding principles of the World Bank resettlement policy are:
(a) Involuntary resettlement should be avoided where feasible, or minimized
exploring all viable alternative in project design;
(b) Where it is not feasible to avoid resettlement, resettlement activities should be
conceived and executed as sustainable development programs, providing
sufficient investment resources to enable the person displaced by the project to
share in profit benefit. Displaced persons should be meaningful consulted and
participated in planning and implementing resettlement programs
(c) Displaced persons should be assisted in their efforts to improve their livelihoods
and standards of living or at least to restore them, in real terms, to pre-
displacement levels or to levels prevailing prior to the beginning of project
implementation.
9. The OP4.10 on Indigenous Peoples requires all projects that affect indigenous peoples
to engage these people in a process of free, prior, and informed consultation; and to prepare
an Indigenous Peoples Plan that will ensure these people to receive social and economic
benefits that are culturally appropriate and gender and “inter-generationally” inclusive.
10. The OP 4.11 on Cultural Property, ensuring preservation and seeking to avoid the
elimination of sites having archaeological, paleontological, historical, religious and unique
natural values. The Bank declines to assist those projects that will bring damage to cultural
property.
2.3. Policy applied for the HDP
11. In general, the Land Law 2003 and Decree 197/CP, Decree 17/2006/CP on amendment
of some provisions guiding implementation of the Land Law 2003 and Decree 197/2004/CP,
as well as new Decisions issued by HCM city’sPC on implementation of Land Law 2003 and
Decree 197/CP, satisfy the most principles and objectives of the World Bank’s Policy on
Involuntary Resettlement.
12. However, due to existence of some gaps between policy of Vietnam and WB, the
Government will approve this Resettlement Policy Framework for the HDP. The Table 1
provides summary of differences between Resettlement Policies of the Government of
Vietnam and the World Bank and the Policy proposed for the HDP.
Table 1: Differences between Resettlement Policies of the Gov. Decree 197/2004/CP and
the World Bank and the Policy proposed for the HDP
World Bank Policy Decree 197/2004/CP Project Policy
4
World Bank Policy Decree 197/2004/CP Project Policy
DP who are not entitled
to compensation under
domestic law will be
assisted to restore living
standards as before the
project
Article 6: If persons who have
land recovered by the State meet
all conditions prescribed in Article
8 of the Decree, they shall receive
compensation; if they fail to meet
all conditions for compensation,
the People's Committees of the
provinces or central level’s cities
shall consider providing supports.
(Note: The Decree does not
regulate concrete assistance level
for those DPs who do not meet
conditions for compensation. Each
PPC/City’sPC will decide concrete
assistance levels within their
City’s/provincial boundaries)
All project displaced persons
will be entitled to compensation
or assistance for their loat
assets, incomes, and businesses
as described in this RPF
Land compensation
price should be
replacement one
Article 9: The compensation rates
for land shall be determined by the
PPC in accordance with the
Government regulations for the
type of land which has been used
for at the time of land acquisition
(Note: Prices of residential land,
issued by PPC and announced on
the1st of January every Year used
to be lower than the actual land
use right transfer prices)
Replacement cost surveys have
to be carried out to ensure that
project compensation rates for
all categories of loss will be
equivalent to replacement cost
to be updated at the time of
compensation payment.
All affected houses and
structures, irrespective
of land tenure status,
should be compensated
at the full replacement
cost
Article 18,19, 20:
- Houses and structures on non-
eligible-for-compensation land,
which have not violated
announced land use plans or the
right of way will be assisted at
80% of replacement cost
- Houses and structures on non-
eligible-for-compensation land,
which have violated announced
land use plans or the right of way
will not be assisted. In special
cases, the PPC will consider to
assist on the case by-case basis.
Compensation at 100% of
replacement cost for all affected
structure. No depreciation and
no deduction of salvage
materials should be made.
All affected businesses
are eligible for
assistance
Articles 26, 28: only registered
businesses are eligible for
assistance
All affected businesses are
eligible for assistance
5
World Bank Policy Decree 197/2004/CP Project Policy
.Severely affected DP,
including DP losing
more than 20% of
agricultural land, will be
entitled to rehabilitation
assistance
Article 28,29: DP losing more than
30% of agricultural land will be
entitled to living stabilization and
training/job creation assistance
Severely affected DP, including
DP losing more than 25% of
agricultural land, will be entitled
to rehabilitation assistance
It requires an
independent monitoring
of resettlement
implementation
The Decree 197 does not require
this
It requires an independent
monitoring of resettlement
implementation
13. If the Vietnam Government makes certain changes relating to its land use policy
towards benefiting the DPs, the updating of the HDP’s RPF to reflect such changes will be
done in agreement with the Bank.
3. COMPENSATION POLICY
3.1 Objectives of resettlement policy
14. The main objective of the Resettlement Policy is to ensure that all Displaced Persons
(DPs) will be compensated and/or assisted for their losses and provided with rehabilitation
measures to assist them in their efforts to improve, or at least maintain, their pre-project living
standards and income earning capacity.
15. When the gaps exist between Government’s and WB’s policies, the latter will be
applied.
3.2. Displaced People (DP)
16. Displaced People (DP) are those who, at the Cut-off Date, are affected by:
i) The involuntary taking of land resulting in:
(a) relocation or loss of shelter;
(b) lost of assets or access to assets;
(c) loss of income sources or means of livelihood, whether or not the displaced
persons must move to another location; or
ii) The involuntary restriction of access to legally designated parks and protected areas
resulting in adverse impacts on the livelihoods of the displaced persons.
3.3. Principles of Resettlement
17. The principles of resettlement policy in the project will be as follows:
(a) Acquisition of land and other assets, and resettlement of people will be minimized
as much as possible.
(b) All DPs residing, working, doing business or cultivating land within the
recovered area under the Project as of the Cut-off-Date are entitled to be
provided with rehabilitation measures sufficient to assist them to improve or at
least maintain their pre-Project living standards, income earning capacity and
production levels.
(c) The rehabilitation measures to be provided are: (i) compensation at replacement
cost without deduction for depreciation or salvage materials for houses and other
6
structures; (ii) priority given for compensation mode of agricultural land-for-land
of equal productive capacity acceptable to the DP; (iii) transportation and
subsistence allowances, and (iv) business/income rehabilitation allowances and
other relevant assistances.
(d) Replacement of premise and agricultural land will be as nearby as possible to the
land that was lost, and acceptable to the DP. In case if there no land is available for
compensation “land for land” or it is the choice of DPs, then compensation in cash
or provision of apartment (for DPs losing residential land) may be applied. If the
DPs lose more than 25% of their agricultural holding, then besides of compensation
for lost land, the project will provide rehabilitation /assistance measures.
(e) The resettlement transition period will be minimized and the rehabilitation means
will be provided to the DPs prior to the expected start-up date of works in the
respective Project site.
(f) Plans for acquisition of land and other assets and provision of rehabilitation
measures will be carried out in consultation with the DPs to ensure minimal
disturbance. Entitlements will be provided to DPs prior to expected start-up of
works at the respective project site.
(g) The previous level of community services and resources will be maintained or
improved.
(h) Adequate budgetary support will be fully committed and be made available to
cover the costs of land acquisition and resettlement and rehabilitation within the
agreed implementation period. Physical resources for resettlement and
rehabilitation will be made available as when required.
(i) Compensation payment and rehabilitation assistance to DPs should be completed
satisfactorily in accordance with the approved RP before starting of respective
civil works.
(j) Institutional arrangements will ensure effective and timely design, planning,
consultation and implementation of the Resettlement Plan (RP).
(k) Appropriate reporting, monitoring and evaluation mechanisms will be identified
and set in place as part of the resettlement management system. Evaluation of the
land acquisition process and the final outcome will be conducted independently
from the executing agency
3.4. Compensation Policy for Loss of Agricultural Land
18. DPs will be entitled to the following types of compensation and rehabilitation
measures:
(i) Ggeneral mechanism of compensation for lost agricultural land will be through
provision of "land for land" arrangements of equal productive capacity, in a location
acceptable to the DP. If the replacement land plot have smaller size or of lower quality, DPs
will be entitled to compensation in cash equivalent the differences.
However, if replacement land is not available or the DP prefers to receive cash compensation
then the following will be applied:
Legal and legalizable land users (in accordance with Decree 197/2004/ND-CP,
dated Dec.03,2004):
Cash compensation at full (100%) replacement cost for the lost area.
Users with temporary or leased rights to use land:
Cash compensation of an amount corresponding to the remained investment or equal
30% of land replacement cost, if exists, for the lost area;
7
Land Users without recognized Rights to Use Land
In lieu of compensation, assistance will be given to DPs at level equal 60% of
replacement cost for the lost area.
(ii) Income rehabilitation assistances:
� Legal, legalizable land users and poor or vulnerable agricultural land users affected, but
being without recognized rights to use land, if lose more than 25% of their agricultural
land holding or the remained area is economically unviable, then besides of cash
compensation for lost land, they may be allocated a plot of land, with collection of land
use right fee, at location accessible for non-farm production, business or services. The
size of such allocated non-farm land will be decided by the HCM CPC, based on the
land availability and the DPs’ lost areas. The price of the allocated land will be equal to
the price of respective agricultural land plus the investment cost but not exceeding the
land price at the announced moment of the Decision on land acquisition, issued by
HCM City’sPC.
� In case if there is no land available for allocation for non-farm production or
business/service as mentioned above, the DPs will be provided with income
rehabilitation assistance for shifting to new jobs at level of 2,000,000 VND/labour–
aged member, mostly in form of training.
� The cash assistance to poor, difficult DPs should be combined with appropriate
agricultural extension activities to ensure that they can improve their income generating
capacity.
(iii) Subsistence allowance
� The DPs losing more than 25% of their agricultural land holding that are planted with
annual crops will be entitled to assistance of 500,000 VND per HH’s member if they do
not have to move to new site and of 1,000,000VND per household members if they
have to move to new site. In case if the DPs lose more than 25% of agricultural land
used under perennial crops, the subsistence allowances will be as much as double of the
case applied for annual crops.
3.5. Compensation Policy for Residential Land
19. DPs are entitled to the following:
(1) The compensation policy for residential land:
(i) Compensation for loss of land in cash at (a) 100% replacement cost to legal and
legalizable land users; (b) An assistance of amount equal to 60% of land replacement cost to
land users without recognized land use rights
(ii) The DPs who lose all residential land, dwelling houses and have to be relocated into
new site will be eligible to:
(a) Relocation arrangement mostly in form of apartment in multi-storey building or
provision of a new plot, if available, in project’s planned RS.
(b) If legal or legalizable DPs opt for self-relocation, then in addition to compensation for
land at replacement cost, the DPs will be given relocation assistance at level defined
in the existing city regulations.
(c) If non-legalizable relocated DPs have other dwelling site in the city, they will only be
given assistance for affected land as (i) above. If non-legalizable relocated DPs are
8
poor or vulnerable16
and do not have other dwelling site for relocation in the city, then
besides of assistance for lost land at 60% of replacement cost, they are entitled for
relocation measures as applied for legal/legalizable DPs
2) Assistance policy
(a) Transportation allowance equal from 2,000,000 VND/HH to 3.000.000 VND/HH if DPs
relocate within the City and equal 5,000,000 VND per HH if they relocate to another province.
If DPs have to rebuild dwelling house in their remained area, they will be given assistance equal
1,000,000 -1,500,000 VND/HH to demolish house and remove appliances to new location
within their remained areas.
(b) Subsistence allowance equal 1,000,000 per HH’s member if they have to relocate to new
site, and equal 500,000 per HH’s member if they have to rebuild house in remained land;
(c) In case the DPs opt relocating into a RS but the plots or apartments still are not yet available,
then they will be given:
- A house renting allowance at level regulated by City’sPC, from 200.000VND/
person/month to 350.000 VND/person/month, depending on DPs existing location, for
person from the moment handing acquired land to the moment receiving a new
apartment or new plot in the RS.
- Additional transportation assistance at 1.000.000 VND/HH for relocation to temporary
site.
3.6. Compensation Policy for Loss of Houses/Structures
Regarding affected houses/structures:
The DPs will be entitled to the followings:
(i) Compensation or assistance in cash for affected houses/structures will be given
at 100% of the replacement cost, regardless their legal status. The amount will
be sufficient to rebuild a structure the same as the former one at current market
prices.
(ii) If house/structure is partially affected, the project will provide a
house/structure repairing cost, in addition, to DPs to restore it to former or
better conditions.
(iii) Compensation and assistance will be provided in the form of cash. No
deductions will be made for depreciation or salvageable materials.
(iv) The calculation of rates will be based on the actual affected area and not the
useable area.
Loss of Graves:
The level of compensation for the removal of graves will be for all costs of
excavation, relocation, reburial and other related costs. Compensation in cash
will be paid to each affected family.
Tenants,
(a) The tenants of state or organization’s houses that have to be relocated will be provided
an assistance equal 60% of replacement cost of the affected houses. The area created by the
DPs themselves will be compensated at their full (100%) replacement costs.
(b) The tenants who are leasing a private house for living purposes and have to be
relocated, will be provided with assistance equal the remaining value of the house renting
16 Identification of poor or vulnerable will be based on the list of poor HHs in each ward/population group, defined
by the district PC and on data in the socio-economic survey for the Resettlement Plan.
9
contract, but not exceeds renting value for three months, plus transportation allowance at the
level equal to that applied for legal relocated DPs to transport assets to new site. To be
assisted, the DPs should have house renting contract.
3.7. Compensation for loss of Standing Crops and Trees
20. For annual and perennial standing crops, regardless of the legal status of the land,
compensation will be paid to households who cultivate the land, according to the full market
value of the affected crops and/or at replacement cost for affected perennial trees.
3.8. Compensation Policy for Loss of Income and/or Business/Productive Assets
21. For DPs losing income and/or business/productive assets as a result of land acquisition,
the mechanism for compensating will be:
(1) The registered non-farm producer/business DPs, who have income-generating and/or
business/productive assets affected, will be given cash business assistance for the loss of
business income, equivalent to 30% of the annual average for the last 3 years net income.
(This amount is equivalent to 100% of monthly net income for 3.6 months).
(2) The non-registered business or non-farm producer DPs, whose operations are
recognized by local authority, will be given assistance in cash at levels regulated by HCM
CPC.
(3) If business or productive assets are affected, cash compensation for lost business
structure/assets reflecting their full replacement cost, without depreciation;
(4) If the business has to be relocated, then, a provision of alternative business site of
equal size and accessibility to customers, satisfactory to the DP, or, in cash for business
affected area at replacement cost, plus transportation allowance to remove movable
attached assets
3.9. Temporary Impact during Construction
22. For temporary loss of land and properties, DPs are entitled to the followings:
For arable land that will be temporarily affected:
(i) Compensation for one harvest of crops/trees at full market prices
(ii) Compensation for loss of net income from subsequent crops that cannot be
planted for the duration of project temporary use, AND
(iii) Restoration of land to its previous or better quality
For temporary loss of residential land:
(i) Compensation for all affected properties at full replacement cost;
(ii) Restoration of land to its previous or better quality.
For temporary impact on business:
(i) Compensation for temporary loss of income, equivalent an average monthly
net income at least for three months.
(ii) Compensation for all affected properties at full replacement cost.
(ii) Restoration of land to its previous or better quality.
For damages caused by contractors to private or public structures:
23. Damaged property will be restored by contractors immediately to its former condition.
24. Under their contract specifications, the contractors will be required to take extreme
care to avoid damaging property during their construction activities. Where damages do
occur, the contractor will be required to pay compensation immediately to affected families,
10
groups, communities, or government agencies at the same compensation rates that are applied
to all other assets affected by the Project.
3.10. Secondary DPs
25. This applies to those affected by development of resettlement sites. Because all
secondary DPs are to be affected in similar ways as primary ones, they will be entitled to
compensation and rehabilitation assistance in accordance with the same respective provisions
for all other DPs.
3.11. Compensation for Loss of Community Assets
26. In cases where community infrastructure such as schools, bridges, water sources, roads,
sewage systems is damaged, the project will ensure that these would be restored or repaired as
the case may be, at no cost to the community.
3.12. Allowances and Rehabilitation Assistance during Transition Period
27. The DPs who have to rebuild main house in their remained land, or have to relocate to
new site, will be entitled for: (1) transportation assistance at 1.000.000 VND/HH-
1.500.000VND/HH if DPs rebuild house on remained land, and at from 2.000.000 VND/HH
to 3.000.000 VND/HH if DPs will relocate to new site within the city, or at 5.000.000
VND/HH if DPs relocate to new province; (2) Subsistence assistance at 500,000
VND/person/month if DPs rebuild house on remained land; or at 1.000.000
VND/person/month if DPs relocate to new site; (3) Temporal house renting assistance at level
regulated by HCMCity’sPC from 200.000 VND/person/month to 350.000VND/person/month,
depending on DPs’ present location, for period from moment hading acquired land to moment
receiving plot or apartment in RS, and an additional transportation assistance at 1.000.000
VND/HH.
28. The DPs, who have income severely affected, will be provided rehabilitation
assistance:
(i) Severely affected farmers losing more than 25% of their land holding:
(a) Subsistence allowance assistance at 500.000 VND/person if the affected land used
for annual crops and DPs do not have to relocate to new site and at 1.000.000VND/person
if DPs have to relocate to new site. In case if the affected land are planted with perennial
crops, then the levels of such assistances are double of the above;
(b) If legal and legalizable affected farmers or poor/vulnerable affected farmers, without
recognized land use rights, lose more than 25% of their agricultural land holding or their
remained area economically is not viable, then besides of cash compensation or assistance
(respectively to their legal status), the project may allocate a plot (with collection of land
use fee) suitable for non-farm production or business, services. The size of plot depends
on its availability and the DP’s acquired area. The price of allocated land is equal to that
of comparative agricultural land plus cost of infrastructure development but the total could
not exceed price issued by City’sPC.
(c) If there no land available for the option, the DPs will be given assistance for their
labour-aged members shifting to new jobs at 2.000.000 VND/labour, mainly in form of
training.
(ii) DPs having income or business affected:
(a) The registered non-farm producer/business DPs, who have income-generating and/or
business/ productive assets affected, will be given cash business assistance for the loss of
11
business income, equivalent to 30% of the annual average for the last 3 years net income.
(This amount is equivalent to 100% of monthly net income for 3.6 months).
(b) The non-registered business or non-farm producer DPs, whose operations are
recognized by local authority, will be given assistance in cash at levels regulated by HCM
CPC.
4. Implementation arrangement
29. Implementation of compensation and resettlement activities requires participation of
local agencies at the city, district and ward levels. Hochiminh City’sPC is responsible for
overall compliance of provisions of the HDP Resettlement Policy Framework and
Resettlement Plans, where required. RCs will be established at district level, according to
regulations of Decree 197/2004/CP and Decree 17/2006/CP and delegated by the City’sPC
responsibilities. Policy and provisions of this RPF are legal basis for implementation of
compensation, assistance and resettlement activities within the HDP.
4.1. City’s People Committee
City’s People Committee (City’sPC) is a highest competent authority at City level. Ho Chi
Minh City’s People Committee delegates its district’s people committees (DPCs) the most
responsibilities and tasks for implementing compensation, assistance and resettlement
activities in case the Government acquires land within the city’s boundaries. Ho Chi Minh
City’s People Committee is responsible to:
(i) Appraise and approve project’s resettlement plans in accordance with the approved
HDP’s Resettlement Policy Framework;
(ii) Issue decision on land acquisition and allocate the land to investor to develop project;
(iii) Make final decisions on compensation prices, level of assistances, allowances and
assistance policies for DPs and vulnerable groups, in accordance with approved HDP’s
RPF and approved RPs of HDP funded projects;
(iv) Direct relevant agencies to solve complaints, grievances of the DPS on compensation
and resettlement in accordance with their authorized competence;
(v) Provide full and timely compensation fund if budget for land acquisition is funded by
the City;
(vi) Ensure that compensation and resettlement activities are implemented in accordance
with the approved HDP RPF and RPs of its funded projects.
4.2. Project investor
30. Investor of borrowed projects is responsible for daily implementation of its RP. Main
responsibilities include:
(i) Preparing a RP adequate with HDP’s RPF, submitting it to HCMCity’sPC for
approval and to WB for no objection before its implementation.
(ii) To be responsible for coordination of organization and monitoring of compensation
and resettlement implementation within its funded project. Preparing detailed plan for
implementing compensation and land acquisition. Signing contract with relevant
agencies to implement certain compensation and resettlement activities;
12
(iii) Preparing housing fund for resettlement of relocated DPs or request the City’s PC to
arrange it for relocated DPs. Pay cost of infrastructure and housing development in RS
as regulated;
(iv) Participating in respective DRCs. Providing necessary information related to its
project and preparing project’s compensation and resettlement options, assisting
respective DRCs in related appraisal activities;
(v) Reviewing compensation prices for land and other assets. If there exist considerable
gap between compensation prices issued by City’sPC and market prices of respective
properties, investor will cooperate with Department of Finance and others related line
departments of the City to submit to City’sPC a proposal for adequate
review/adjustment of the prices in accordance with the provisions of this RPF.
(vi) Preparing sufficient and timely budget to meet the demand for implementation of
preparation and compensation payment to DPs. Cooperating with DRCs and W/CPCs
to organize compensation payment, assistance and allocation of apartment to DPs;
(vii) Establishing database on DPs by project component and for entire project. All
concerned agencies/ parties should be able accessing this database.
(viii) Preparing plan for internal monitoring of compensation and resettlement
implementation and compliance of project resettlement policy provisions.
(ix) Closely cooperating with external monitoring agency;
(x) Receiving and handling acquired land to contractor for civil works; and
(xi) Preparing and submitting periodic report to HIFU.
4.3. District People Committee
31. DPCs are responsible for followings:
(i) Overall direction of compensation, assistance and resettlement activities within their
districts; Make decision on establishment of DRC in accordance with their delegated
competence and responsibilities.
(ii) Approving compensation and resettlement options of projects occurred within their
district boundaries as delegated;
(iii) Issuing related administrative procedures, assigning tasks and regulating
responsibilities of district’s department’s agencies, ward’s/commune’s PCs and
district staff for resettlement implementation.
(iv) Approving estimate cost of resettlement implementation for delegated cases.
(v) Solving complaints, grievances of DPs in accordance with their authorized
competence.
4.4. Ward’s People committee (W/CPCs)
32. Ward’s/commune PCs are responsible to:
(i) Assign tasks to its staff to participate in, assist compensation and resettlement
implementation within the ward’s/commune’s boundaries;
(ii) Support other agencies, for example investor, to publicize, disseminate information
and organize public, community meeting and consultation with DPs;
13
(iii) Support other agencies, including investor, in carrying out census and socio-economic
survey of DPs, assess replacement costs, DMSs and other resettlement activities;
(iv) Participate in land acquisition, land allocation and resettlement activities;
(v) Participate and assist DPs in all compensation and assistance activities and
rehabilitation of their living standards. Inform DPs on schedule of compensation
activities and monitor them. Co-sign into DPs compensation and resettlement related
documents as regulated;
(vi) Ensure adequate grievance reddressal to DPs. Record and store all grievances of DPs
as well as their solution. Assist and advise DPs for speed remedy of DPs grievances.
4.5. External/independent monitoring agency
33. It need to identify and sign a contract with a specialist or an organization, research
institution, specialized on social sciences, to carry out monitoring and evaluation of RP’s
implementation of respective project. Investor or HIFU will sign contract with this selected
organization/agency or specialist. The budget for external monitoring is a part of the project’s
total cost. The independent monitoring agency will carry out periodic monitoring of
resettlement implementation progress and suggest relevant recommendations for solving
problems identified during monitoring activities.
5. Preparation of resettlement plans for credit-proposed projects
34. Based on this HDP’s RPF, each investor will prepare a RP for their proposed project
and submit it to City’sPC for review. This reviewed RP will be submitted to the Bank for no
objection before the City’sPC approves it officially. Investor with their resettlement staff will
closely cooperate with DPs, local authorities and mass organizations for implementation of
the RP.
35. It needs to prepare a full RP if results of SIA show that resettlement impacts of the
project to be significant17
. Such RP should be prepared before project’s appraisal. This plan
should indicate resettlement objectives, policy, strategy and include the followings: (i) Brief
project description; (ii) Potential resettlement impacts of the project; (iii) Objectives; (iv)
Socio-economic survey; (iv) Legal framework; (vi) Eligibility; (vii) Evaluation of affected
assets and their compensation; (viii) Selection, preparation of resettlement site and relocation;
(ix) Development of houses, infrastructure and social services; (x) Organizational
responsibilities; (xi) Public participation, consultation and grievance reddressal mechanism;
(xii) Implementation schedule; (xiii) Cost and budget; (xiv) Monitoring and evaluation
36. An abbreviated RP is appropriate if results of SIA show that resettlement impacts of
the project to be insignificant. The RP should be prepared before project’s appraisal. It have to
address at least the followings: (i) Census of DPs and inventory of losses; (ii) Description of
mechanism of compensation and assistance measures applied; (iii) Consultation with DPs;
(iv) Institutional arrangement; (v) Implementation and monitoring plan; (vi) Cost and budget.
5.1. Preparation of Resettlement Plan
37. Preparation of a related project (loan proposal) requires participation of community
and comprehensive analysis, including SIA. During project preparation stage, following steps
should be followed:
17
Resettlement impact is considered to be significant if there are 200 persons or more experience significant
impact. A significant impact is when DPs lose house or have to be relocated and/or lose more than10% of their
productive assets.
14
Step1: Mitigation of project’s resettlement impacts. Revise project’s design, based on
results of consultation with potential DPs and technicians to avoid or at least mitigate its
resettlement impacts. For example, selection, alignment of a road direction, utilization of
public space/land, marginal or unused land, land of low economic value... may reduce
resettlement impacts on local population.
Step 2: Identification of level of project resettlement impacts. Based on project
design, after taking mitigation measures, identify to what category among the followings18
the
projects is belonged to (by level of resettlement impacts): (i) Do not pose resettlement
impacts; (ii) Pose insignificant resettlement impacts; and (iii) Pose significant resettlement
impacts. Both cases (ii) and (iii) require preparation of a RP.
Step 3: Inventory of losses and socio-economic survey. Regarding project of cases
(ii) and (iii) as described above, it needs to carry out inventory of losses, census a socio-
economic survey of potential DPs, identify types and level of impacts. This surveys/inventory
should involve of related local authorities of different levels. Following information should be
collected:
(i) Data on all DPs and affected land and properties:
• Total number of DPs, information on population, education, income and
employment;
• Inventory of all losses
• Inventory of local communities assets, if relevant
• Economic activities of DPs, including vulnerable groups
• Social network and organization
• Priorities, wishes on compensation and resettlement options and income
rehabilitation measures
(ii) Data on land and its area :
• Total land acquired for the project
• Types of land use pattern
• Land use rights, renting, and forms of land use
• Existing public works and infrastructure.
Data on results of inventory of losses, socio-economic survey and census of DPs should be
computerized, tabulated and managed as database by administrative unit and project
construction components.
Step 4: Assessment of replacement cost. It needs to collect information on market
prices of land, houses, crops, trees and other properties from local authorities of city’s,
district’s and wards/commune levels, to provide base for estimating cost of the RP.
Step 5: Preparation of RSs and rehabilitation measures. In case the project cause
relocation impacts on DPs, the investor have to prepare relocation options, sites and measures
for rehabilitation income and living standards of DPs.
� Preparation of relocation options are based on numerous preparation activities and
consultation with DPs, local authorities of different levels and concerned parties.
Based on results of inventory of losses and regulated eligibility criteria for relocation,
investor has to define the number of relocated DPs. Based on that, investor has to
consult with competent authorities to identify relocation options available and feasible
18
1 The term "resettlement impact", besides of meaning of relocation, it also means the loss of (impact on) crops,
trees and income/livelihood. Resettlement impacts should be avoided or at least to be minimized, however if it
is unvoidable, then provisions of the project’s RPF should be applied.
15
then inform to and consult with DPs on their relocation needs and their preferences.
The Bank requires investor/local authorities to offer different relocation options to
DPs, including different location options and different compensation mode, to increase
options for selection.
� Feedback consultation on wishes and resettlement priorities of DPs and alternative
options offered by project/local authorities may allow DPs to select optimal, feasible
and appropriate to their own conditions options. Based on DPS selected options,
investor will prepare documents, administrative and technical procedures required to
develop RS or ask for allocation/transfer of the required land/apartments for providing
to project's relocated DPs.
� In case if it needs to acquire land for RS development, then DPs who lose land for
such RS will be included into list of project DPs as secondary ones and will be treated
in the same ways as applied for the project primary DPs.
� Preparation, development of RS requires a lot of time, thus investor should as soon as
possible start all related activities to ensure timely provision of land or apartments for
project relocated DPs.
� Similar to the above, preparation of income rehabilitation measures for income
severely affected DPs also requires participation of and consultation with them as well
as related parties, organizations and local authorities to identify needs, wishes and
priorities of the DPs. Based on results of the consultation, investor will prepare
appropriate rehabilitation measures with feasible implementation planned schedule.
Step 6. Prepare Resettlement Plan. Entitlement Matrix of this RPF (Annex 1) will be
applied for all the HDP funded projects involving resettlement impacts.
Step 7. Dissemination and disclosure of information. The draft project’s RP will be
informed to DPs in community meetings. DPs opinions will be recorded, reviewed and
incorporated into the draft RP. Final RP will be disclosed and available at public, city’s,
information centres, at project’s DPCs, at Information Centre of WB in Hanoi and
Washington.
5.2. Appraisal and approval of resettlement plan
38. HIFU is responsible for appraisal of RPs of its funded projects then submit to WB for
no objection in first years of the HDP’s implementation.
39. Hochiminh City’sPC is responsible for approval of the RPs after them having been
reviewed by HIFU.
6. public Information, community participation and grievance reddressal mechanism
6.1. Objectives of public information and community consultation
40. Dissemination of information to DPs and participated agencies, organizations are
important part of project’s preparation and implementation. Consultation with DPs and
ensuring their active participation will reduce potential conflict and risks delaying project.
This also allows the project to design appropriate resettlement and rehabilitation as
comprehensive development program, appropriate to needs and priorities of DPs, hence
maximize socio-economic benefits of investment capital.
16
6.2. Public consultation during project preparation
41. During project preparation, the public information and community consultation aim to
collect information to assess project resettlement impacts and make adequate
recommendations on alternative options. This is to avoid or at least mitigate project’s
potential negative, resettlement impacts on local population and prepare to face/deal with
issues possibly emerged during its implementation.
42. Methods of public information and consultation may include PRA, with participation
of concerned parties, using techniques of household and site visit, public/community
meetings, focus group discussions, socio-economic survey.
6.3. Public consultation during project implementation
43. Throughout project implementation, investor, in cooperation with local DRCs and
related authorities, will inform to DPs on project resettlement policy, entitlements,
compensation prices application charts, relocation options, rehabilitation measures... to obtain
their common consensus, learning of their actual resettlement needs and suggest appropriate
measures for overcoming emerged problems.
44. DPs also are informed on grievance reddressal mechanism, rights to raise complaints
and grievances, for consultation, advising, on institutional arrangement, and implementation
schedule.
6.4. Grievance reddressal mechanism
45. DPs can lodge their complaints regarding any aspect of compensation policy, rates, land
acquisition, resettlement and other entitlements. Complaints can be lodged verbally or in
written form, but in case they are lodged verbally, the committee to which it is lodged will
write it down during the first meeting with the DP and inform their cases to investor and local
authority. DPs will be exempted from administrative and legal fees. .
46. Local mass organizations, including National Front, Association of Farmers, Women's
Union, mediator groups... will be mobilized to actively participate in process of solving of
DP's emerged complaints/grievances.
47. A four-stage procedure for redressing grievances is as follows:
Stage 1- Complaints from DPs on any aspect of the resettlement program, or losses
not previously addressed shall first be lodged verbally or in written form to the
people's committee at ward/commune level. The complaint can be discussed in an
informal meeting with the plaintiff and the chairman of the people's committee at
commune level. The people's committee at commune level will be responsible for
resolving the issue within 15 days from the day it is lodged.
Stage 2 - If no understanding or amicable solution cannot be reached, or if no
response from the people’s committee at commune level is received by the DPs within
15 days of registering the complaint, he/she can appeal to the District’s Resettlement
Committee. The District’s will provide a decision within 01 month of the registering of
the appeal.
Stage 3 - If the DP is not satisfied with the decision of the District’s or its
representative, or, in the absence of any response by the District’sRC, the DPs can
appeal to the HCM city’s People’s Committee. The City’s People’s Committee together
with the representative of the City’sRC will provide a decision on the appeal within 30
days from the day it is lodged with the City’sPC.
Stage 4 - If the DP is still not satisfied with the decision of the City’sPC or City’sRC on
appeal, or in absence of any response from the City’sPC or City’sRC within the
stipulated time, the DPs as a last resort, may submit his/her case to the district court.
17
7. Implementation schedule
48. A detailed implementation schedule for different activities will be clarified in each RP
8. Cost and budget
49. To prepare budget for project costs, it need to prepare a resettlement cost estimated.
The cost estimate is based on updated information on compensation costs.
50. Investor has to clearly indicate on source of budget for compensation, assistance and
resettlement of the project and cost for implementation of these activities, mechanism of
budget flow.
9. Monitoring and evaluation
9.1. Monitoring
51. Investor will supervise and carry out internal monitoring of daily implementation of its
RP, in cooperation with local authorities of different levels and with the external monitoring
agency. Results will be recorded and reported through periodic reports submitted to HIFU and
WB.
9.2. Internal monitoring
52. Investor carry out internal monitoring to:
� Confirm that all project DPs have been included in the census, all affected properties
haven been inventoried and check out whether evaluation of affected properties and
provision of compensation, assistance and resettlement are carry out in accordance
with provisions of its RPF and RP or not.
� Monitor whether or not resettlement objectives of the RP are met
� Check out whether or not the resettlement budget is provided sufficiently and timely
as well as whether it is used adequately as described in the approved RP
� Record and maintain data on all DPs’ grievance, their solution; ensure that all of
grievances are timely addressed.
9.3. Independent monitoring
53. An external monitoring agency (or in other words, independent monitoring consultant),
specialized on social sciences or anthropology, capable and experiences, will carry out
periodic monitoring and evaluation of RP implementation.
54. Besides of periodic monitoring during RP implementation, the agency/consultant will
conduct sample survey of 20% of DPs after completion of compensation, assistance and
resettlement, to :
� Check out whether or not DPs participation procedures and payment of compensation,
assistance and resettlement are implemented in accordance with provisions of project
RP?
� Assess whether or not objectives of the RPF to improve or at least restore prior-
project’s living standards of DPs are met
� .Collect qualitative information on socio-economic impacts of project implementation
on DPs;
� Suggest recommendations, if necessary, to achieve principles, objectives of this RPF.
- 1 -
Annex 1: Entitlement matrix
No TYPE OF
LOSS
APPLICATI
ON
DEFINITION
OF
ENTITLED
PERSON
COMPENSATION POLICY
1 Permanent
loss of
arable land
DPs losing
agricultural
land.
User with legal
or legalizable
rights to use the
affected land.
(i) Compensation for lost land at 100% replacement cost
(ii) If farmers lose more than 25% their agricultural holding,
then besides of compensation, they will be given: (a)
subsistence allowance at 500.000 VND/HH member if DPs do
not have to move to new site and at 1.000.000 VND/member if
they have to move to new site or if the land was used for
growing annual crops If farmers lose more than 25% their
agricultural holding and the land is used for perennial crops,
then the level of assistance will be double of the above; (b) the
DPs also will be allocated with a non-agricultural land (with
collection of land use right fee) at a location accessible for
running off-farm business or services.
(iii) In case there no land available for allocation for non-farm
production/business as mentioned above, then the DPs will be
given assistance for shifting to new jobs at 2.000.000
VND/labour-aged member , mostly in form of training.
Land Users
With
Temporary or
Leased Rights
Cash compensation for acquired land equivalent to remained
investment put on the land; or equal 30% of its replacement
cost
Users without
recognized rights
to use land as
regulated by
(i) i lieu of compensation, the DPs will be given assistance
equal 60% of land replacement cost;
(ii) If affected DPs are poor, vulnerable farmers, and lose
more than 25% of their holding, they will be treated as for
- 2 -
Article 8, Decree
197/2004/CP
legal land users
2 Permanent
loss of
residential
land
Legal or
legalizable
land users of
affected
residential
land
a. All users of
residential land
marginally or
severely
affected.
b. All relocated
legal/legalizable
land users
(severely
affected)
A/ Land compensation:
(a) Compensate land in cash at full replacement cost to all
legal ore legalizable users of affected residential land.
B/ Resettlement: If DPs have to relocate:
(i) Relocation arrangement mostly in form of apartment in
multi-storey building or provision of a new plot, if available, in
project’s planned RS.
(ii) If legal or legalizable DPs opt for self-relocation, besides of
compensation for land at replacement cost, DPs will be given a
relocation assistance at level decided by HCM city PC
(2 Assistance policy:
(a) Transportation allowance equal from 2,000,000 VND/HH to
3.000.000 VND/HH if DPs relocate within the City and equal
5,000,000 VND per HH if they relocate to another province. If
DPs do not have to relocated but have to build new dwelling
house in their remained area, they will be given assistance
equal 1,000,000 -1,500,000 VND/HH to demolish house and
remove appliances to new location within their remained areas.
(b) Subsistence allowance equal 1,000,000 per HH’s member if
they have to relocate to new site, and equal 500,000 per HH’s
member if they have to rebuild house in remained land;
(c) In case the DPs opt relocating into a RS but the land
or/apartment still are not yet available, then they will be given:
- A house renting allowance at level regulated by City’sPC,
from 200.000VND/ person/month to 350.000
VND/person/month, depending on DPs existing location, for
person from the moment handing acquired land to the moment
receiving a new apartment or new plot in the RS.
- Additional transportation assistance at 1.000.000 VND/HH
for relocation to temporary site
Permanent
loss of
residential
land
Non-
legalizable
land users of
affected
residential
land
a. All users of
residential land
marginally or
severely
affected.
b. All relocated
Residential land users without recognized rights to use land
as regulated by Article 8, Decree 197/2004/CP
A/ Land compensation:
In lieu of compensation, project provides an assistance at 60%
of replacement cost for residential land lost area to the non
legalizable users
B/ Resettlement: If DPs have to relocate:
- 3 -
legal/legalizable
land users
(severely
affected)
(a) If non-legalizable relocated DPs have other dwelling site in
the city, they will only be given assistance for affected land as
(A) above
(b) If non-legalizable relocated DPs are poor or vulnerable and
do not have other dwelling site for relocation in the city, then
besides of assistance for lost land at 60% of replacement cost,
DPs are entitled for relocation measures as applied for
legal/legalizable DPs
3 House/struc
tures and
graves
Houses/structu
res located in
the project
recovered
area.
Owners of
affected
structures.
(a) Compensation in cash for affected houses/structures built
on land with legal/legalizable right at 100% of the
replacement cost;
(b) Compensation in cash for affected houses/structures built
on land with non-legalizable right at 100% of the
replacement cost;
Tenant The tenants of state or organization’s houses that have to be
relocated (i) If have demand, they can buy or rent new
apartment of size not less than the existing affected one. (ii) If
do not like buy or to continue renting, they will be provided
an assistance equal 60% of replacement cost of the affected
houses. The area created by the DPs themselves will be
compensated at their full (100%) replacement costs.
The tenants who are leasing a private house for living
purposes and have to be relocated, will be provided with
assistance equal the remaining value of the house renting
contract, but not exceeds renting value for three months, plus
transportation allowance at level equal to that applied for
other relocated DPs to transport assets to new site. To be
assisted, the DPs should have house renting contract.
Affected
graves
Owner of grave The level of compensation for the removal of graves will be
for all costs of excavation, relocation, reburial and other
related costs. Compensation in cash will be paid to each
affected family.
4 Loss of
standing
crops and
trees
Crops
affected.
Owners of
affected crops
DPs are entitled to compensation for affected crops and aqua
cultural products in cash at current market value.
Trees affected. Owners of
affected trees.
DPs are entitled to compensation in cash at replacement cost
based on the type, age, and productive value. If affected trees
are removable, the compensation will be equal the
transportation cost plus actual loss.
- 4 -
5 Loss of
income and
business/
productive
assets
Loss of
income and
business/other
productive
assets
Owner of the
affected
business/other
productive
assets.
- The registered non-farm producer/business DPs, who have
income-generating and/or business/productive assets affected,
will be given cash business assistance for the loss of business
income, equivalent to 30% of the annual average for the last 3
years net income. (This amount is equivalent to 100% of
monthly net income for 3.6 months).
- The non-registered business or non-farm producer DPs,
whose operations are recognized by local authority and who
have income and/or business/productive assets affected, will be
given assistance in cash at levels regulated by the
HochiminhCPC.
6 Temporary
impact
during
construction
Temporary loss
of arable land
Users of affected
land
(i) Compensation for one harvest of crops/trees at full market
prices
(ii) Compensation for loss of net income from subsequent crops
that cannot be planted for the duration of project temporary use,
AND
(iii) Restoration of land to its previous or better quality
Temporary loss
of residential
land
Users of
affected land
(i) Compensation for all affected movable properties at full
replacement cost
(ii) Restoration of land to its previous or better quality.
Temporary
impact on
business
Owner of
business
(i) Compensation for temporary loss of income, equivalent an
average monthly net income at least for three months.
(ii) Compensation for all affected movable properties at full
replacement cost
(iii) Restoration of land to its previous or better quality
Damages by
contractors to
private or
public
structures or
land
Owner or person
with use rights
(i) The contractor will be required to pay compensation
immediately to affected families, groups, communities, or
government agencies.
(ii) Damaged property will be restored immediately to its
former condition.
7 Secondary
impacts
Loss of land
and properties
for
development of
RS
Land users Because all secondary DPs are likely to be affected in similar
ways as primary ones, they will be entitled to compensation
and rehabilitation assistance in accordance with the same
respective provisions for all other DPs.
- 5 -
ETHNIC MINORITY PLANNING FRAMEWORK
Introduction
6. Vietnam is being in a process of rapid economic and social transformation. Cities become
greater proving their special role in the common development process of the country. Ho Chi
Minh city is a greatest and most dynamic economic centre of Vietnam.
7. To assist local development investment funds in policy, legal and institutional reforms,
enhancement of LDIF’s operational capacity to improve efficiency of lending investment and
increase participation of private sector in municipal infrastructure development, improve
operational flexibility of LDIFs’ and make long-term capital available for municipal
infrastructure projects, while reducing their contingent economical, social and environment risks,
the Government of Vietnam has requested the World Bank, through IDA, to sponsor the Project
“Local Development Investment Fund” (LDIF). It is under preparation and planned to be
implemented in 2008.
8. Among existing local development investment funds within Vietnam, HIFU is assessed as
the most dynamic and best operational one. HIFU is considered to be well-prepared for
implementing the project. The HIFU Management and HCM city’s People’ Committee has
agreed to adopt the set of key policy and operational reforms which have been prepared under the
LDIFP, a larger, national-level Bank project, into the HIFU practice as a pilot one.
9. Facing acute demands of economic and social development of Ho Chi Minh city towards
development of infrastructure, improvement of institutional financial management, demands for
investment capital and increasing participation of the private sector..., and to speed up
implementation progress of executing projects, the Viet Nam Government has requested the
World Bank to support for Ho Chi Minh city a separate project under the name of “HIFU
Development Project ” (HDP), to be invested in early 2007. The HDP will demonstrate the
LDIFP concept on a pilot basis in HCMC, and greatly contribute to the success of LDIFP and the
above mentioned national-level policies, incentives and operational improvement measures.
10. Main objectives of the HDP are as follows:
(ii) Increase private sector participation in municipal infrastructure development in HCMC by
providing investment capital to HIFU and improving its capacity to appropriately partner
with the private sector;
(iii) Dev
elop HIFU as a model LDIF that is financially viable, independent, specialized institution,
capable of working with the DPI and other departments of the HCMC government to
undertake infrastructure investments in partnership with the private sector, including the
management of social and environmental safeguards;
(iv) Mak
e long-term capital available for municipal infrastructure projects in HCMC with high
economic returns, and institutionalize provincial level policy to mitigate HIFU-related
contingent financial risk to the HCMC PC as well as the GOV.
11. Results of primary screening of ethnic minorities show that all districts of Ho Chi Minh
city have ethnic minorities. (See Table 1).
- 6 -
Table 1: Statistics on ethnic composition of Ho Chi Minh City by district
Unit: person
Ethnic composition
No District
Total
populati
on
(person) Kinh Hoa KhoMe Cham Tay Nung Muong Thai
Other &
non-
identified
1 District 1 226.151
203.14
6 21.650 259 544 107 44 34 33 334
2 District 2 102.094
101.04
0 907 62 9 27 2 8 4 35
3 District 3 222.448
212.26
6 9.367 245 283 82 8 15 6 176
4 District 4 192.149
184.50
5 7.125 68 196 26 23 27 10 169
5 District 5 209.528
136.35
3 72.142 421 230 83 21 20 7 251
6 District 6 252.527
180.37
6 71.096 305 517 55 38 20 4 116
7 District 7 111.911
110.30
9 1.321 103 73 12 4 103 0 -14
8 District 8 328.538
292.22
9 34.155 360 1453 49 26 15 13 238
9 District 9 148.804
147.32
0 672 242 92 83 23 213 22 137
10 District 10 240.122
211.80
8 27.216 136 223 150 75 80 116 318
11 District 11 238.494
130.03
7
105.54
1 292 63 291 53 25 25 2,167
12 District 12 168.639
164.56
9 1.321 111 7 57 24 31 22 2,497
13 Binh
Thanh 403.065
396.07
3 5.966 284 384 112 19 41 17 169
Phu
Nhuan 183.837
177.59
9 5.265 57 663 76 23 87 8 59
Tan Binh 579.559
536.14
5 36.925 624 104 265 160 91 77 5,168
Binh
Ch¸nh 329.332
314.28
8 14.233 398 70 49 42 25 20 207
Go Vap 309.586
298.59
2 5.800 217 72 158 105 48 22 4,572
Thu Duc 209.806
205.43
6 2.847 225 106 91 33 55 40 973
Hoc Mon 203.393 199.73 3.437 90 16 9 9 13 10 74
- 7 -
Ethnic composition
No District
Total
populati
on
(person) Kinh Hoa KhoMe Cham Tay Nung Muong Thai
Other &
non-
identified
5
Can Gio 58.155 57.764 260 93 15 6 2 0 4 11
Cu Chi 253.116
251.86
9 1.009 101 18 37 5 18 15 44
Nha Be 62.804 62.340 412 28 7 3 4 1 - 9
Total: 5.034.05
8
45736
89
428.76
8 4.755 5.129 1.602 746 809 454 18,106
% 100.00 90,9 8.52 0.09 0.10 0.03 0.01 0.02 0.01 0.40
Source: General Statistical Office. “Vietnam General Census and Housing investigation 1999 –
General results”. Statistical Publishing House, Ha Noi, 8-2001
12. One of main project’s objectives is to improve counterpart capacity of HIFU to attract
participation of private sector in municipal infrastructure development of the City. This may
involve both direct and indirect, negative (resettlement) and/or positive, on local communities,
including on ethnic minorities.
13. Due to the HDP is of program type, its social impacts would only be identified when
specific credit projects will be clarified. Hence, this EMPF is prepared to guide in preparation of
EMPs for all respective proposals requesting for HIFU credits that involve impacts ®on ethnic
minorities.
14. This Ethnic Minorities Planning Framework is prepared, in accordance with WB’s policy
on Ethnic Minorities (Indigenous People) OP 4.11, to guide implementation of Ethnic Minority
Plans (EMPs) for of next stages projects executed in areas where ethnic minorities live, forming
communities.
15. This Ethnic Minorities Planning Framework is based on results of ethnic minorities
screening of Hochiminh City; reviews of secondary literature related to ethnic minorities of
Hochiminh City; results of stakeholder’s consultation, including consultation with local
authorities of different levels and with social activates dealing with ethnic minorities issues.
II. Policy Framework
16. Main objectives of this EMPF are to provide specific guidelines for preparation of EMPs
of projects proposals requiring credits from the HDP fund. This EMPF set up objectives and
guidelines to prepare and implement issues related to ethnic minorities within the framework of
the “HIFU Development Project”. This EMPF also provides guidelines on how to deal with and
satisfy reporting requirements during preparation, implementation of EMPs and its evaluation.
17. This EMPF provides detailed information such as composition of ethnic minorities living
in project affected areas, information on their livelihood, their social, cultural and political
systems, including institutions and decision making process. help in the project planning to ensure
that the development process fosters full respect for human rights and cultural uniqueness. More
- 8 -
specifically, it aims to ensure that ethnic minorities do not suffer project’s adverse impacts as
results of the project, while their positive impacts would be appropriate to their culture.
18. According to OP 4.11, ethnic minorities are social groups having social and cultural
specifics distinguished from that of majority group, while this may make them vulnerable and be
disadvantaged in the development process. Ethnic Minorities (or Indigenous People) are
identified through following characteristics in varying degrees:
(a) a close attachment to ancestral territories and to the natural resources in these areas;
(b) ) self-identification and identification by others as members of a distinct cultural
group;
(c) an indigenous language, often different from the national language;
(d) presence of customary social and political institutions; and
(e) primarily subsistence-oriented production.
19. The World Bank’s OP 4.11 on Indigenous People (Ethnic Minorities) emphasizes that the
strategy for addressing the issues pertaining to indigenous peoples must be based on informed
participation of indigenous people themselves. Thus identifying local preferences through direct
consultation, incorporation of indigenous knowledge into project approaches are core activities
for any project that affect indigenous people and their rights to natural and economic resources.
Thus starting at an early stage a specialist experienced in ethnic minority issues will work to
ensure that they are consulted throughout the project cycle.
20. The Vietnam Law upholds the equality of ethnic minorities, as stipulated in Article 5 in the
Vietnam Constitution (1992):
“The Socialist Republic of Vietnam is a united nation having many nationalities. The State
implements a policy of equality and unity and supports the cultures of all nationalities and
prohibits discrimination and separation. Each nationality has the right to use its own language
and characters to preserve their culture and to improve its own traditions and customs. The State
carries out a policy to develop thoroughly and gradually improve the quality of life of ethnic
minorities in Vietnam physically and culturally.”
21. Policies for ethnic minority groups have been promulgated by Vietnam GOV are to
improve their basic living conditions, education and build their production, income generation
capacity. A landmark policy is Government Guidance No.525/TTG on 2/11/1993 that called for
the implementation of development in the highland and ethnic areas. Its main points were
• Develop infrastructure especially transportation road system and fresh water supply;
• Increase food security;
• Consolidate the education system, adjust education program based on the
characteristics of provinces, create favorable conditions, and support the non-formal
education programs; and
• Develop the internal economy.
22. Ethnic minority groups have been receiving critical benefits, such as preferential treatment
in college admission and provision of basic necessities such as cooking oil, kerosene, and iodized
salt at highly subsidized rates. The government, foreign donor agencies, and many NGOs have
organized numerous development and special assistance programs that targeted ethnic minorities.
The Government, international agencies, and many NGOs prepared and implemented numerous
- 9 -
development projects and specific assistance programs for ethnic minorities. A great investment
capital has been implemented to assist people in mountainous area in general and ethnic
minorities as particular to “catch up” with lowland areas.
23. In 1994, the Committee for Ethnic Minorities and Mountainous Areas (CEMMA)
(presently under the name of the Committee for Ethnic Minorities - CEM), an agency directly
under the office of the Prime Minister, was assigned as coordinator for Instruction 525, which
significantly increased the role of CEMMA in the development of ethnic minorities.
24. The Government has issues and implemented numerous policies on and socio-economic
development programs for ethnic minorities.
25. In November 1995, the Framework for External Assistance to Ethnic Minority
Development was enacted. Based on previous experience, the Framework suggested a new
strategy for ethnic minority development within the government policy objectives of stability,
sustainable growth and equity, and poverty alleviation.
26. Decision No. 135/1998/QD-TTg of the Prime Minister, dated 31 July 1998 approving
Socio-Economic Development Program for mountainous and remote communes of special
difficulties (Program 135) had enclosed this Framework for External Assistance to Ethnic
Minority Development into the Policy and paid special attention to poverty reduction for ethnic
minorities.
27. Ethnic minorities were among the main targeted groups of the National Goal Program on
clean water and rural environmental hygiene (period 1999 – 2005 in Decision No. 237/1998/QD-
TTg ), issued by the Prime Minister, on December, 3rd
1998.
28. Right after the completion of Program 135 (in 2005), the Prime Minister issued Decision
No. 07/2006/QD-TTg, dated 10 January 2006, approving Socio-Economic Development
Program for mountainous and remote communes of special difficulties (Program 135 - stage II).
29. Decision No. 20/1998/ND-CP dated 31 March 1998 of the Government dealing with
commercial development in mountainous areas, islands and ethnic minority areas, and Decision
No. 02/2002/ND-CP of the Government amending and supplementing some articles of Decision
No. 20/1998/ND-CP.
30. Decision of the Government No. 78/2002/ND-CP dated 04 October 2002 dealing with
credit for the poor and other policies subjects. According to this:
31. Since 2004, the Prime Minister issued Decision No. 134/2004/QD-TTg dated 20 July
2004, promulgating some assistant policies on production land, residential land, houses and living
water for poor ethnic minorities. This Decision aimed at providing direct State's supports to poor
ethnic minority people, together with the implementation of socio-economic programs, to
facilitate production development, improve living quality and get out of the poverty soon.
Subjects to be entitled to the assistance policies as regulated in this Decision were on-the-spot
ethnic minority households who permanently resided in the area; poor households who lived on
agriculture and forestry did not have or did not have sufficient production land, dwelling land and
had difficulties in dwelling house and living water issues.
32. Limited access of ethnic minority people to education on legal knowledge and legal
consultation is a great matter of concerns. To overcome this matter, first of all for leaders in
population communities, in 29 December 2005, Minister of Ministry of Internal Affairs issued
- 10 -
Decision No. 135/2005/QD-BNV regulating education procedure applied to heads of hamlet and
village, heads of population groups etc to provide them with basic knowledge of the State and
Law that are directly related to their work as well as necessary support knowledge and working
skills to assist them to fulfill their work in locality.
33. Thus Vietnam’s legally stated policy concerning ethnic minorities is fully in content to the
World Bank policy on Indigenous Peoples OP 4.11. This Ethnic Minority Planning Framework
will apply to all subprojects under the HDP where necessary.
III. Ethnic minorities in Ho Chi Minh city
34. Statistics of General Census of 1999 in Table 1 show that population of Ho Chi Minh city
includes 23 different ethnic groups. The Kinh (or Vietnamese) is the largest one, accounting for
90,9% in ethnic composition of the City. Chinese occupies the second place by population,
making up 8,52% of the city’s total The Chams take the third position, accounting for 0,1% only,
which are followed by Khomers contributing 0,09% of the total City’s population. Tays, Nung,
Dao are ethnic minorities immigrated from the northern provinces, having population more or less
than one thousand people in the City. The remained part is either foreigners or short-term or long-
term migrants of the City.
35. Although the Chinese in Ho Chi Minh City make up a small part of the city’s population,
but according to the WB’s definition in the OP 4.11, they are not considered as ethnic minority.
Being the most developed and dynamic city of Vietnam, Ho Chi Minh City attracts immigration
from all provinces and cities throughout the country, among the migrants there were ethnic
minorities. Among ethnic minorities in Ho Chi Minh city, which have considerable population,
there only Cham and Khmers ethnic minority groups present more or less concentrated, forming
ethnic minority communities in some wards/communes of certain districts of the City.
III.1. Khmer ethnic group
36. According to results of survey on Khomers ethnic group living in Ho Chi Minh city,
conducted by the Center for South East Asia studies, Institute for Social Sciences of Vietnam in
Ho Chi Minh city19
, the most of Khomers there are originated from provinces of the Mekong
Delta. Some others have origins from the country’s South East region, mostly from the two
provinces - Binh Duong and Tay Ninh. Remained special cases are intermixed Khomers or
intermarried with people of other ethnic groups, where the most were Kinh people.
37. It may distinct 3 periods of Khomers’ immigration flows into Ho Chi Minh City, namely
periods 1945-1954, 1954-1975 and post -1975. The earliest Khmer’s immigrants of Ho Chi Minh
City were in period 1945-1954, involving policemen, soldiers and civil staff of the former
administrative system, or immigrated workers of rubber plantations. The Khomers migrants of
this time are found in districts 11, Binh Thanh, Go Vap and District 8. The most of them were
married with Kinhs or people of other ethnic groups. Most of Khomers have big family which is
considered as the main reason causing their poverty or about average income level.
38. The period 1954-1975 is the time when the most of Khomers immigrated from provinces
of Mekong Delta to the city. The most of them were civil servants of the former Saigon
19
See �Khmers in Ho Chi Minh city and their relationship with others people�, Centre for South East Asia
studies, Institute of Social Sciences of Vietnam in Ho Chi Minh city,1998.
- 11 -
administrative system. Some others immigrated into the city as traders or students. Fierce fighting
occurred in rural areas of Mekong Delta of this period also caused temporary migration flow of
Khomers into the city, which afterwards didn’t turned back to their native provinces. Their
settlement had brought about afterward migration of their family members such as wives, children
or grandchildren.
39. After 1975, particularly after 1986, due to the Government prioritized education policy
applied for ethnic minorities, many Khomers youth, both boys and girls, came to the city for
education and settled here without returning home. During period of Doimoi, Ho Chi Minh city’s
great demand for simple works had leaded to high flow of labor migration from provinces of
Mekong Delta, involving Khomer workers. These migrated Khomers do all different works for
earning livelihood and live dispersedly throughout all districts of the City.
40. The total population of Khomer ethnic group in Ho Chi Minh city is about 5000 people of
more than 1600 households (HHs). Two areas having temples Candaransy (District 3) and
Bodhivong (District Tan Binh) are where Khomers concentrated in communities, the rests live
dispersedly over the city. The most quantity of Khomers, with more than 100 HHs is found in
districts 3, 6,7,8,10,11, district Binh Thanh, Tan Binh and Thu Duc. In remained districts, number
of Khomer HHs are less than 100, mostly less than 50-60 HHs, and are distributed scarcely over
its wards.
41. Except for some areas surrounding temple Candasanry of district 3 of temple Bodhvihong
of District Tan Binh, in general, due to specifics of migration process and economic reasons, the
most of Khomers of Ho Chi Minh city do not form own communities, but rather live dispersedly
and do not maintain special ethnic relationship each with other. The change in settlement
characteristics, urban pressure and lifestyles have broken down many traditions, community
cultural features, economic relations and customs of Khomers in Ho Chi Minh city. Meanwhile,
the Khomers in Ho Chi Minh City have deeply integrated into community of local Kinh majority.
The Khomers in Ho Chi Minh city nowadays maintain few specific cultural features such as
architecture, house decoration, eating and drinking features.
42. By appearance, it is difficult to distinct a Khomer from Vietnamese as daily they dress
similarly to Vietnamese and speak Vietnamese. Present outlook of their houses are little differed
from that of the Vietnamese . There are very few Khomers who still keep their ethnic minority
traditional wearing and rarely dress them during their national festivals. Even within their own
families, many Khomers speak both languages – Khomer and the official language, Vietnamese.
The most of wedding ceremonies have been simplified, transformed into that of Vietnamese,
which are less complicated and also cost less.
43. Results of direct interviews of some Khomers of District 3, Ho Chi Minh city, show that
they do not experience any uncomfortability or discrimination from other ethnic groups.
Controversially, they feel being deeply integrated with local Vietnamese or Chinese in many
respects.
44. The main difference at the community level is that the most of Khomers are official
Hynayaists. Regardless of whether they live next to temples or in distance to them, dispersedly
over space, the most of Khomers still strongly maintain their Theravada Buddhism belief. They
usually participate in all their traditional and religious festivals of the year. For Khomers, their
most respective people in their community are Buddhism monks. The custom that Khomer family
usually sends their son to temple for religious education nowadays is not as popular as the case
- 12 -
found in rural Mekong Delta. The interviewed people in District 3 reported that the fact that
Kinhs usually visit and perform their worship in their, Khmer’s temple Candasanry may be a
good illustration of the deep integration between the two ethnic groups.
45. Results of survey on Khomers of Ho Chi Minh city again confirmed on high poverty
incidence among this ethnic group in the city. Main reasons are that they were poor migrated
farmers, with low economic potential, many children family, low educated, mostly engaged in
different simple works, thus being low paid, having little knowledge on business or commercial
activities... Due their low income and living standards, their sanitary conditions are poor and they
often face health problems.
46. The deep integration of Khomers into the local communities, with other ethnic groups in
the city, is favoring development activities related to them. Improved education, employment
provision assistance and improved living standards for Khomers in the City are the issues serving
due attention. The language is not a problem, but in case if a project causes resettlement impacts,
it needs to pay due attention on community coherence of this ethnic group. The voice of
Buddhism monks has special significance for Khomers people, thus the community and
stakeholder consultation should involve their participation.
III.2. Cham ethnic group
47. The most of Cham ethnic minority group living in Ho Chi Minh City are Muslim (Islamic)
and originated from An Giang province. Some of them consider themselves as migrants from
Malaysia. Similar to case of Khomers, the biggest migration flows of Cham into Ho Chi Minh
City were found in different times in the period from 1945 to1975, the time of fierce fights
occurred in rural Mekong delta areas, when the people evacuated into the city, for escaping the
war. According to opinions of some interviewed social specialists and activists of Ho Chi Minh
City, the Chams of Ho Chi Minh city still maintain close relationship with their native province
An Giang, being considered as people of two native lands because of their kinship relations and
economic reasons, where their original dwelling houses, farming land still exist. The earliest
Cham immigrants into Ho Chi Minh City were found during 1940-s, but in limited number,
mostly presented as traders...
48. After 1975, the Government applied policy encouraging city’s immigrants, including
Cham people, to return back to their original provinces. Many Cham went back to An Giang, but
during the “Doi Moi”, they again turned back to Ho Chi Minh city to live with their relatives,
families.
49. A specific of Cham people is that they live in communities along previously swam canals
of the city. Reasons causing it were blamed to availability of land for resettlement, while
waterways are main transport means and close to markets of the time, tittly related with their
main economic activities of Cham people.
50. The Cham migrated from An Giang are islamics. In areas where they settled, they built
mosques for their believers praying. Islam is a very strong religion, governing the most economic,
cultural and social activities of An Giang’s Cham in general and Cham of Ho Chi Minh city in
particular. The number of Cham came from other provinces are very few, mostly from 2 southern
coastal provinces, but they believe to Hindu religion.
- 13 -
51. The city’s Islam Chams have own script and language. They give important significance
for study of Koran Bible and follow Islam strict dogmas. They pray scriptures 5 times a day and
take vegetarian diet one month in year. The males have to go praying in mosque every Friday.
They speak Cham language among themselves, but use official language while communicate with
other ethnic groups. Thus, the Islam Chams are less integrated with other religious ethnic groups.
They live relatively separately from the outside world.
52. By appearance, it’s easy to recognize an Islam Chams among a crowd through their
wearing: Male Chams used to wear traditional checked “xa rong”, with white hat. Females wear
ethnic traditional dress, with colored headscarf. When Cham females do not wear their traditional
dress, they wear home clothes but still have headscarf. There only young Cham generation, civil
staff or some new occupation workers may wear popular dresses.
53. Chams have clear gender division of labor. Husband provides main economic base for
family, responsible for earning livelihood for the whole family. Their main sources of income are
wandered traders, operated mostly in rural Mekong delta throughout its provinces. The few do
other works such as guardians, porters, passenger pickings...
54. Female Chams are home keepers, taking care of family. Being not participated in earning
income activities, they have few social contacts, being less educated and can hardly speak official
language.
55. Due to the distinctive Islamic lifestyles, the Chams not only find difficult to integrate with
other ethnic groups but also face certain problems in getting employment. Thus, income,
education and living standards of Chams usually are very low or generally low, compared to the
average level observed for the City. These may be confirmed by results of the survey conducted
in 2002, by Phu Nhuan district PC, on living standards of Chams in the district, where Chams
communities are concentrated in considerable number: There were 65% of the district’s Cham
HHs were poor; the remained 35% were average income HHs, and very few HHs were of above-
average income group thanks to the advantaged, frontier to main road, location of their houses.
There up to 1/4 of Cham labor aged people do not have jobs or were unemployed. Living
conditions, sanitation and environmental conditions of Chams do not satisfy sanitary standards so
that it leads to poor health and high incidence of children malnutrition among the Chams.
However, nowadays, thanks to the Government and city’s housing programs for poor and ethnic
minorities, the most Chams have radically improved houses with basic living infrastructure.
56. The Chams pay litter attention for official education of their children. The language
creates problems for Cham children to attend formal school. The adult illiteracy without knowing
official Vietnamese language and script are high.
57. The religious, cultural and language specific features of Chams require special approaches
to them when one would like to implement development activities related to them.
III. 3. Other ethnic minority groups
58. According to ethnologists and social activists, other ethnic minority groups living in Ho
Chi Minh City are dispersedly distributed and fully integrated with local majority, without
recognized ethnic differences. It’s difficult to recognize an ethnic minority person without asking
about his/her ethnic origin.
- 14 -
IV. Guideline for preparation of ethnic minority’s plans
59. This guideline have been prepared to ensure that all ethnic minorities would be informed
on, consulate with and participated in process of preparation and implementation of projects
sponsored by the HDP. Their participation in these processes may ensure at higher level benefits
brought about to them, or protecting the ethnic minorities from any possible adverse impacts
caused by the HDP funded projects.
60. The main steps of preparation of an ethnic minority plan (EMP) includes: (1) preliminary
screening of ethnic minorities; (2) Social impacts assessment; (3) Preparation of mitigation action
plan for ethnic minorities.
IV.1. Preliminary screening
61. The objective of screening is to identify whether ethnic minority communities present in
the project’s influenced areas, and, if yes, to collect necessary information on the ethnic
minorities.
62. Based on project’s preliminary design, investor will screen population statistics of project
influenced areas and discuss with village leaders to identify whether or not ethnic minority
communities present in the project areas. The screening process will collect following
information: (See Table 2)
(a) Names of ethnic minorities living in the project areas
(b) Population of ethnic minorities in project wards/communes
(c) Proportion of ethnic minority in ethnic composition of ward/commune
(d) Number and ratio of ethnic minorities living along project influenced areas.
Table 1: Screening of ethnic minorities
Province: ________ District: _________ Ward/commune: ________ Subproject:
___________
No. of Total Ethnic
Minority Persons along the
influenced Zone.
Name of
Villages,
Communes
along the
Influenced Zone
Name of Ethnic
Groups along the
influence Zone
(including Kinh)
No. of Ethnic
Minority
Households along
the influenced
zone Women Women
63. If results of screening show that there are ethnic minority communities living in project
influenced zone, then it needs to conduct social impact assessment for the area.
- 15 -
IV.2. Social impact assessment
� If results of screening show that there are ethnic minority communities living in project
influenced zone, the investor have to follow the next step – social impact assessment for
the area where ethnic minorities may experience project impacts to identify the level and
nature of impacts on ethnic minorities, caused by the proposed project.
� To conduct social impact assessment of ethnic minorities, it needs to collect some
information such as population statistics, economic situation, cultural and social data on
ethnic minorities, socio-economic and environmental impacts, both positive and negative,
of the proposed project.
� Project resettlement impacts on ethnic minorities are identified through results of
inventory of losses and based on feedback information from local ethnic minority
communities and other stakeholders. Results of inventory of losses will be separated for
ethnic minorities for review and analysis. Apart from reviewing social impacts on EM
individuals, households, it needs to review the impacts on their, ethnic minorities’
communities, on local infrastructure and social services of areas where they live.
� Social impact assessment towards ethnic minorities should clarify their concerns and
views, define their characteristics and benefits. It needs to understand how ethnic
minorities forecast project impacts on them from their economical, cultural and social
perspectives, and identify proposed measures mitigating negative impacts and measures
increasing benefits to ethnic minorities and their communities.
IV.3. Strategy for participation of and consultation with ethnic minorities
35. Dissemination of information about the project, and discussion on its possible impact on
ethnic minorities and the others are essential for living up to World Bank policy on informed
participation of the ethnic minorities themselves. During Project preparation local preferences
should be identified through direct consultation with ethnic minorities and their indigenous
knowledge should be incorporated into project approaches. Only accurate information and
consultation between implementing agencies and ethnic minorities can maximize Project benefit
to ethnic minorities, and secure their human rights and respect for their particular cultural values.
Consultation and participation can also contribute to conflict mitigation and help Project
implementation in a timely and cost efficient manner.
36. If the social impact assessment identifies that ethnic minorities would be affected
(positively or negatively) in project areas, the public participation and consultation procedures
developed in the Policy Framework for Resettlement should apply to ethnic minorities as well. In
the case ethnic minorities will be affected, during Project implementation and monitoring and
evaluation, consultation and participation should be particularly adapted to their specific
circumstances and living conditions.
IV.4. Ethnic Minority Plan (EMP)
37. The Objectives of EMP is to avoid or reduce project possible negative impacts, assuring
that ethnic minority will benefit from the project equally to other ethnic groups and in the way
acceptable to their culture.
- 16 -
38. Such EMP includes activities and measures mitigating the project’s potential negative
impacts, relevant modification of the project’s design and identifies appropriate development
assistances, if applicable. In the event of land acquisition among ethnic minority communities, the
project will ensure that their, EM’s, rights will not be violated and that they be compensated for
the use of any part of their land in a manner that is culturally acceptable to them. The
compensation will follow the Resettlement Policy Framework developed for the HDP. An Ethnic
Minorities Plan will include
(1) Legal and institutional framework applicable to ethnic minorities
(2) Baseline information;
(3) Information on land use right system;
(4) Summary of SIA’s results
(5) Summary of results of consultation conducted during project preparation;
(6) Strategy for consultation with and participation of ethnic minorities during project
implementation stage;
(7) Action plan indicating particular activities and measures to ensure that ethnic minorities
are socially and economically benefited from the project in the way acceptable to their
culture;
(8) Appropriate action plan with measures mitigating the project’s possible negative
impacts on ethnic minorities, if applicable;
(9) Grievance reddressal mechanism;
(10) Mechanism for monitoring and evaluation; and
(11) Cost estimate and budget flow planning for the EMP.
39. Regarding projects that only cause positive impacts on ethnic minorities, an EMP should
report on followings:
(1) Identification of efforts and results;
(2) The social, economic, and cultural uniqueness of the ethnic groups;
(3) The information dissemination strategy;
(4) Consultation process and effort;
(5) Feedback from the communities;
(6) The project impact upon the ethnic minority groups, and
(7) The strategy for the ethnic minorities to participate in Project design and
implementation.
IV.5. Monitoring
40. An independent agency or specialist hired by investor for undertaking external monitoring
and evaluation of project’s resettlement plan (RP), will also takes care of M&E of EMP’s
implementation. When the external monitoring consultant will visit a sample of project affected
households for resettlement in each project area on an annual basis, the agency/specialist will also
visit a sample of at least 10% of ethnic minority households in the project areas
- 17 -
IV.6. Cost and budget
41. The EMP will include information on detailed cost of mitigation measures and other
assistances for ethnic minorities in the project affected area. Sources of funding for the various
activities and financing plan will be clearly specified in the cost tables of the EMP. The cost of
EMP’s preparation and/or for compensation and resettlement, if relevant, will be a part of project
cost to the investor - borrower. Ho Chi Minh city’s PC or HIFU may pay for cost implementing
development assistances for ethnic minorities.
- 18 -
Consolidated Reference
Project Screening
Social and Environmental Due Diligence (EDD)
HCMC Urban Infrastructure Projects
SECTION A - Pgs 1-12
BACKGROUND
SOCIAL AND ENVIRONMENTAL DUE DILIGENCE
HCMC URBAN INFRASTRUCTURE PROJECTS
SECTION B – Pgs 13 - 43
SOCIAL AND ENVIRONMENTAL DUE DILIGENCE PROCESS
- 19 -
List of Information Boxes
1. Box 1: HIFU Commitment to Social and Environmental Management Practices
2. Box 2: HIFU Adoption of Socio-Economic and Environmental Procedures
3. Box 3: Sources of Social and Environmental Risk and Liability
4. Box 4: Social and Environmental Actions – Commitment Registry Maintenance4
List of Forms
1. Form 1: Form 1 – Project Description
2. Form 2: Risk Categories - Projects in HIFU Portfolio and Investment Pipeline
3. Form 3 : Borrower/SPVE/Private Partner Corporate Evaluation
4. Form 4 –EDD Screening – Urban Projects Environmental and Social components
5. Form 5: Loan or Project Appraisal Land Clearance: Acquisition, Compensation and
Resettlement
6. Form 6: Social and Environmental Action Plan Commitment Registry
7. Form 7: HIFU Social and Environmental Management Team Action Plans
8. Form 8: Project EDD Summary
9. Form 9 : Project Monitoring and Supervision Checklist for Safeguard Compliance
List of Figures
1. Figure 1: HIFU Social and Environmental Due Diligence Process Flow
List of Reference TORs
1. General Format of Terms of Reference for Consultants
2. Reference TOR #1 - Socio-Economic Analysis
3. Reference TOR #2 - Environmental Impact Assessment
4. Reference TOR #3 - Resettlement Action Plan Development
5. Reference TOR #4 - Indigenous Peoples Action Plan
Regulations and Policies
1. Laws of the Socialist Republic of Vietnam
2. World Bank policies and Guidelines
- 20 -
List of Acronyms
HIFU HCMC Investment Fund Unit
HCMC Ho Chi Mihn City
EI Equity Investor
EDD Environmental Due Diligence
SPVE Special Purpose Vehicle Enterprise
HSE Health, Safety and Environment
CSR Corporate Social Responsibility
SEA Socio-Economic Analysis
EIA Environmental Impact Assessment
EMP Environmental Management Plan
RAP Resettlement Action Plan
IPAP Indigenous Peoples Action Plan
CAP Consultation Action Plan
RMP Risk Management Plan
EAP Environmental Action Plan
- 21 -
SECTION A - BACKGROUND
Social and Environmental Due Diligence
HCMC Urban Infrastructure Projects
Environmental and Social Liability Management
HIFU is owned and operated by Ho Chi Mihn City (HCMC). HIFU operates as a Financial Intermediary
to enterprises (para-statal and private) developing urban infrastructure. HIFU’s mandate is equity
investment and debt financing for private and private/public operated urban infrastructure in HCMC.
HIFU may act as one of the following:
1) Equity Investor (EI) with ownership of a shares in a Special Purpose Vehicle Enterprise (SPVE)
2) Investment Bank (IB) to a Private Enterprise
3) Both EI and IB
HIFU requires due diligence methods for portfolio and investment management. Environmental Due
Diligence (EDD)20
incorporates evaluation of both socio-economic and environmental project risks in
HIFU’s investment portfolio. Evaluations may recur at various stages of an investment/project lifecycle.
EDD ensures that:
• HIFU operations do not conflict with regulations and/or legal contracts
• Unforeseen liabilities do affect investment quality or project enterprise value
• Social and Environmental review is integral to HIFU Project Preparation and Appraisal
• Regular proactive evaluation of the HIFU portfolio, investment plan and project pipeline
includes Social and Environmental observations.
20
Environmental Due Diligence in this context denotes issues related to socio-economic and social concerns such as resettlement, land
expropriation, health and welfare, livelihood replacement as well as those issues commonly related to environmental management
PREAMBLE
Annex D provides HIFU officers assistance with the Social and
Environmental Due Diligence Process (EDD) for equity investments
and/or loans to:
1. Assign Social and Environmental Risk;
2. Understand Project Social and Environmental requirements;
3. Complete documentation review for equity and debt investments;
4. Assist Investors and Project Managers in Understanding and
fulfilling Regulations and Policies
Section A provides a background to EDD and should be reviewed by
those officers new to the process. Section B is the EDD process for an
investment. The appraisal officer should go directly to Page 12 to begin
the EDD process.
- 22 -
HIFU is providing equity and debt finance to private sector operated enterprises. Development of internal
systems to identify and quantify investment risk is mandatory to qualify investments for private sector
involvement. This document is a guide to direct HIFU with management of social and environmental
risks. It tracks the HIFU Project Preparation and Appraisal Manual process. The BOX inserts
provide background and guidance on the development of information for EDD. FORMS are
included which can be copied and modified to fit project needs. The Forms should be completed and
maintained and updated in the investment file. Some of the information may be more applicable to
equity investment, others to loans. The user is advised to assess these needs as information is
developed. FIGURES are flowcharts to show process flow for EDD completion.
HIFU has undertaken to utilize WB funds in accordance with principles summarized in Box 1.
Urban infrastructure projects generally are viewed as socially beneficial and in the best interest of the
public. This viewpoint may not consider people marginalized, damaged or impaired by the project.
Equally environmental damage may be overlooked by investors and financiers in evaluating a project’s
economic and/or financial benefit. Adopting Socio-Economic and Environmental Procedures is
fundamental for HIFU management. Box 2 provides an outline of these procedures.
Box 1: HIFU Commitment to Social and Environmental Management Practices HIFU use of World Bank credit facilities for equity investment and project lending is based on HIFU’s agreement
with the following:
• HIFU will conduct its activities with regard to social and environmental factors and the principles of
environmentally sound and sustainable development
• HIFU's investment strategy must comply with GoV Decreed and WB FI Exclusion Lists
• HIFU invests only in Enterprises which shall comply, at a minimum, with the health, safety, worker
protection and environmental regulations and standards applicable in the country where the investment is
situated
• HIFU invests only in Enterprises which shall comply with WB Safeguard Standards
• HIFU will report periodically to WB on social and environmental performance of high social and/or
environmental risk investments
• HIFU Management will have overall responsibility for social and environmental risk management and
implementation of necessary procedures within the Fund for management of these risks
- 23 -
EDD requires HIFU develop management procedures to include EDD in the project preparation and
appraisal process. The process should reflect standards used by financial institutions to incorporate EDD
in Financial Intermediary investment appraisal21
. HIFU process varies to accommodate the realities and
necessities of HIFU operations and project development, however EDD steps are common.
Without management procedures in place, impact oversights occur. Oversight allows development of
unaccounted project risks. Social and environmental risks convert into project liabilities, frequently with
direct effect on project costs, subsequently into lower investment performance. These costs diminish the
attractiveness of an investment. If costs are overlooked or inaccurately described during project
preparation/appraisal, initial costs may increase in a non-linear fashion as the project progresses. Over
time, this non-linear progression has a multiplier effect22
on liabilities and project cost. Investment quality
and value may decrease.
21
Adapted From EBRD – Environmental Risk Management Manual 2006 22
Multiplier effect relates to a disproportionate change in costs from the lack of resources being allocated or lack of
knowledge being applied during project planning stages
Box 2: HIFU Adoption of Socio-Economic and Environmental Procedures
Adopting procedures, to focus on socio-economic and environmental risks associated with investment, increases
opportunities for acceptable and sustainable economic development and minimizes exposure to associated
financial risks. The term Environmental Due Diligence (EDD)* is used to denote this sub-set of the overall due
diligence process. Specific objectives of EDD procedures are to:
• Identify and assess the socio-economic and environmental impacts and issues (liability and risk)
associated with an investment
• Identify and evaluate the financial implications related to social and environmental issues.
• Aid the investment decision-making process
• Maximize opportunities for benefits and minimize the potential for adverse impacts (pollution,
resettlement)
• Comply with local and national environmental, health and safety, permitting, labor and public
consultation requirements and/or other standards of good international environmental practice
• Comply with the environmental standards expressed in WB’s Policies and Guidelines
EDD, as with similar investment due diligence procedures, will vary according to the nature of the investment, the
sectoral nature of the enterprise and the investment size. EDD requires collection and evaluation of socio-
economic and environmental information and the access to and application of appropriate knowledge and skills.
HIFU will address these tasks through:
• Assignment of staff resources and internal training from experts in EDD
• Utilizing the capabilities of local environmental and social consultants to assist HIFU staff in completion
of EDD
• Continuous improvement and review of EDD procedures appropriate to HIFU’s investment portfolio and
pipeline
• Contracting of consultants to assist with implementation and integration of EDD into project preparation
and appraisal and portfolio management
* “Environmental Due Diligence in this context denotes issues related to socio-economic and social concerns such as resettlement, land
expropriation, health and welfare, livelihood replacement as well as those issues commonly related to environmental management”
- 24 -
Adoption of procedures to understand and evaluate the root causes of social and environmental costs
significantly decreases investment portfolio risk.
EDD Purpose - Social and Environmental Risk Identification Environmental Due Diligence extended to EI and IB will increase HIFU profitability. Identifying sources
of present and future social and environmental risk at early stages of investment appraisal allows HIFU to
adjust loan terms or reject equity opportunities. Effect of change in regulatory regimes on loan/equity
performance requires assignment of risk and costs. Systematic implementation of EDD procedures will
increase HIFU’s competitive position (with other funds) through elimination of risks and liabilities. EDD
offers an additional selection to obtain the best private partner participants.
HIFU operates as an equity investor and lender. These activities attract a range of risks depending on the
investment type; loan or ownership. The key difference between the investment vehicles is management
risk associated with ownership. HIFU ownership in an SPVE may reach 25%. This level of ownership
implies active involvement of the HIFU Board of Directors and senior management. It implies a level of
direct control in the SPVE. Active involvement provides a direct line of responsibility from the private
enterprise to HIFU requiring detailed knowledge of enterprise activities.
HIFU faces several types of risks and liabilities common to banks and equity investors such as:
1.1. Enhanced Credit Risk
1.2. Security Impairment Risk
1.3. Lender Liability Risk
1.4. Owner and Director Liability Risk
The examples of socio-economic and environmental risks which affect these common banking risks are
provide in Box 3.
Enhanced Credit Risk - Indirect Liabilities
In this case the customer or private enterprise vehicle is violating social, environmental and/or
health and safety regulations. Penalties accruing from these activities affect the ability service
debt (bank and shareholder loans) and/or pay dividends to HIFU. Additionally the security or
asset value may be diminished by the penalized action (e.g. contamination, poor construction,
litigation) making recovery or sale difficult. These types of liabilities are acute for privatization.
Audits (operations and asset) prepared before fund disbursement are the due diligence process to
understand and negotiate indemnification against such risks.
Security Impairment Risk and Foreclosure
If HIFU takes title to land that has been affected by a borrower or partner’s activities HIFU as
successor to the property title may be legally liable for clean-up costs. The land value itself may
have decrease due to the activity. HIFU will then bear the shortfall. IF HIFU also has equity
ownership the enterprise share value may be diminished. Lender Liability Risk – Direct Liabilities
- 25 -
A lender such as HIFU with considerable stature and available funds (deep pockets) may result in
HIFU being held directly responsible for social and environmental damages caused by the
enterprise. This may occur even if HIFU does not have ownership in company assets or shares.
Owner and Director Liability Risk – Negligence and Fraud
If HFU takes an equity position in an enterprise in will become legally liable for social and
environmental costs including compensation claims. Given HIFU’s position, default of the private
partner may leave HIFU with the entire costs of such claims.
HIFU needs to assess how the above issues affect their operations. In doing so they need to
clearly define:
• How they evaluate and what criteria they use to choose investment opportunities and risks
• How they evaluate and what criteria they use to choose private partners
• How they evaluate the risk of equity participation versus debt
Infrastructure projects are wide reaching and vary considerably in an area such as HCMC. One
operation may be involved in trade (e.g. Container Port), another in waste water treatment (e.g.
Septage Treatment) and another yet in waste management (e.g. Compost Production). Each may
involve a change in approach to both the due diligence process and the management of defined
risks. Equally the required documentation may differ substantially for each project type and the
selected mechanism for HIFU involvement.
Applying systematic procedures, to develop an investment portfolio is the intention of all due
diligence procedures.
Portfolio Management - Assigning Risk
Different investment types require different approaches to socio-economic and environmental risk
management. The larger the amount and longer term of the investment and the level of
management control exercised over the enterprise company the greater the potential risk. Social
and Environmental Risks in HIFU’s Investment Portfolio will vary according to the investment
vehicle chosen (equity, debt, both). These risks may vary over time as noted in Figure 1 and may
escalate unless accurate up-to-date information is maintained for three key risk factors:
Enterprise Risk : Corporate Social and Environmental Risk refers to risks associated with an
investment which accrue to HIFU due to the policies of:
• The Private Sector Partner
• The SPVE
The approach to managing enterprise risk has commonly become known as Corporate Social
Responsibility (CSR)23
.
23
Corporate Social Responsibility (CSR) is a concept that organizations, especially (but not only) corporations,
have an obligation to consider the interests of customers, employees, shareholders, communities, and ecological
considerations in all aspects of their operations (Wikipedia).
- 26 -
Management Risk: Management Risk refers to the risks associated with an investment not managed
in accordance with social and environmental Best Practices. This will occur in HIFU investments if:
• Best Practices are not available or transferred from the Private Partner to the SPVE
• Best Practices are not developed and integrated into an SPVE organization
Project Risk: Project risk refers to activities directly related to a site(s) and the unmitigated impacts
of project activities on the site and affected peoples.
Box 3: EDD - Sources of Social and Environmental Risk and Liability
When HIFU provides funds to a private enterprise as EI or IB, it is exposed to potential social and environmental
risks and liabilities from:
Social Issues
• Disputed land acquisition and title transfer
• Disputed resettlement and associated costs
• Disputed business and personal asset losses
• Livelihood loss and replacement for marginalized groups
• Cultural disruption
• Health degradation
Environmental Issues
• Economic cost from key ecosystems losses (forests, soils, food production)
• Soil and/or water contamination (previous, current, future)
• Off-site contamination (soil, water, air, noise)
• Hazardous waste (transport, handling, disposal)
• Accidental pollution
• Penalties for non-compliance with laws, regulations, decrees and standards
Legal Issues
• Regulation and approval/operation certificate change
• Private partner external activity and litigation
Financial Issues
Risks lead to problems such as:
• Public opposition
• Project delay (land clearing, government line department approvals)
• Increased capital cost for social program cost (resettlement, livelihood compensation)
• Individual or group compensation claims (worker health and safety claims)
• Pollution charges
• Clean up costs
• Litigation
Investment Performance
Risks and the occurrence of associated problems affect SPVE financial performance. This affects the ability to
service debt in an orderly manner, decreases loan performance and possibly the status of collateral. Changing social
conditions, environmental laws, health and safety regulations, and enforcement may affect enterprise valuation and
ability to service debt. The extent of exposure to these risks and liabilities varies according to:
• Industry sector
• Size of loan
• Level of ownership, directorship and management
- 27 -
Enterprise Risk – Corporate Social Responsibility
Enterprise Risk is associated with the structure, corporate headquarters, corporate policies and
corporate history/legacy. Corporations develop a “personality and character” that creates both real and
perceived risks. Becoming involved as a minority equity shareholder requires a clear understanding of
how the enterprise will act under the direction of the majority shareholder (private or para-statal
partner). A Special Vehicle Enterprise formed for a defined project development and operation will
take on the “personality and character” of the private or para-statal majority partner. The process to
select a Private Sector Participant (PSP) is outlined in the “HIFU Manual for Selection of Private
Sector Participants”. For EDD an assessment or “background check” on the partner is essential.
Form 3 reviews the essential checks needed to recognize these risks, prior to inclusion of a Private
Sector Participant in a Special Purpose Vehicle Enterprise (SPVE) or sector loan.
HIFU should develop an internal organization structure to address Enterprise Risk. This organization
should:
• Have the line capabilities to ensure that social and environmental risks and liabilities are
understood and documented,
• Have clear reporting structures to ensure that senior management are informed of risks as they
are uncovered or develop,
• Have clear decision making and authorities to sign off on risks for various sectors and
investment size.
Management Risk – Commitment to Action
An enterprise developing projects with social and environmental impacts must adopted and adhere
to a model that ensures:
• Management understands social and environmental risks
• Management informs both leadership (board of directors) and staff of the nature of the risks
and associated liabilities
• Management ensures staff act upon and mitigate any impacts and offsets any associated
liabilities
• Management ensures staff are adequately trained with sufficient capacity to perform the duties
required
• Staff ensures that management and leadership is informed of impacts, mitigation and follow-
up including changes to internal systems
Management should be reviewed at all stages of the project lifecycle to determine if the key
actions are being implemented by the enterprise. It is not adequate to do so at the project initiation
stage. Enterprises grow and mature with a society and therefore the enterprise must be committed
to continuous improvement in all operational aspects. HIFU in completing management enterprise
due diligence should include those questions outlined in Form 3.
Managing Active Investments
If HIFU is a major stock holder (>5%) in an enterprise, involved in actively managing SPVE, or
the project financed has defined risks and actions Social and Environmental Actions Plans should
- 28 -
requested from the SPVE and added to a commitment registry in the investment files as described
in Form 6.
Managing Passive Equity and Debt Investments
If HIFU is not a major stock holder (<5%) in an enterprise and,
• it is impractical to actively monitor the social and environmental risk, and
• has no capability to influence enterprise strategy or management,
the following should be done:
• Ensure shareholders agreements allow for divestment of shares in the event of poor
performance including social and environmental criteria.
• Ensure loan covenants have language to allow for loan recall for non-performance of specific
social and environmental actions
HIFU should monitor the press and other publicly available information for indications that
enterprises are experiencing social and/or environmental problems. This process should be
followed for debt investments as an early warning indicator of business performance and debt
service capability.
Project Risk
As a project is followed from inception through implementation there are key stages of evaluation on
which HIFU management must focus. The Steps describe in Section B follow Figure 1 and the PPA
Manual and provide the information for HIFU Investment management. The process describe is that
Box 4: Social and Environmental Actions – Commitment Registry Maintenance
Social and Environmental Action Plans (EAP) summarize, in one document, all the actions an enterprise has agreed to
take to improve its social and environmental performance including the implementation schedule and an estimate of the
associated costs. In particular, borrowers that are not in compliance with regulatory requirements and permits should
have an EAP outlining the actions to be taken to address any problems and achieve compliance. In many countries,
EAPs (or similar documents e.g. compliance schedules) are legally required for non-compliant companies. Some
actions may be needed urgently, particularly when there is significant health and safety risk. In addition, the EAP
should address issues requiring a long-term or phased approach, such as compliance with expected future regulatory
requirements, or with good industry practice. The EAP should also address opportunities identified during the due
diligence to further improve the environmental performance of the project and the costs of doing so.
HIFU should check that any environmental mitigation or improvement measures identified in environmental due
diligence studies and documents (e.g. environmental audit of the borrower’s operations; inspections reports from the
authorities) are included in the EAP.
HIFU should ensure that the EAP includes all actions described in:
• Environmental Management Plans,
• Risk Mangement Plans,
• Consultation Plans,
• Social Mitigation Plans,
• Resettlement Plans,
• Indigenous Peoples Plans
An EAP Commitment Registry should be completed for each project and for all investments in the HIFU portfolio.
Examples are provided in Form 3.
- 29 -
required by a Financial Institution. A SPVE or Borrower enterprise must have design, operations and
management controls in place in accordance with country standards and required by insurers.
Initial Risk Assessment: HIFU has developed a priority list of projects that will be assessed using the
Project Preparation and Appraisal Process developed in conjunction with the World Bank. These projects
should be categorized with updates at regular intervals. Form 3 should be up-dated and the assigned risk
level verified in order to define the level of planning detail required for GoV approval and to determine if
WB review may be required.
For high risk projects HIFU should ensure that WB Safeguards are included in all analyses and
assessments developed for project approvals. All assessments completed for the project must include
Environmental Management Plans and Risk Management Plans to address social and environmental risks.
Screening: Once an initial project and enterprise assessment has been completed and the project accepted
for further preparation a detailed screening should be completed. This Screening provides additional
information on levels of project risk and the actions required to evaluate risks and mitigate against
potential liabilities. The following Forms should be completed as applicable and the activities
summarized below provides an example format for project screening and risk allocation which should be
adapted to HIFU operations and individual project conditions for each sector or project type
- 1 -
SECTION B
SOCIAL AND ENVIRONMENTAL DUE DILIGENCE PROCESS
The primary purpose of EDD is assigning specific risk to an investment, equity or debt. This
defines the project/loan requirements and provides a baseline from which to measure risk
management. The manner in which an SPVE (including key shareholders) or borrower manages
a specific project provides global risk information. During the initial stages of an enterprise
HIFU should integrate enterprise and management evaluation with project risk evaluation. A
process for inclusion of EDD in a complete investment cycle is shown in Figure 1.
Figure 1 explains where actions are required in the project cycle and what tools may apply for
task completion. TEMPLATE FORMS for conducting EDD are provided in sequence following
Figure 1. These should be modified as required to fit the project and HIFU operations. The steps
are matched to project evaluation and credit appraisal steps. FORMS developed for EDD are
examples and should be adapted to HIFU needs and specific projects.
NOTE: HIFU may act as a project developer and equity investor or a lender. As such EDD must
consider the variation in due diligence process for a project developed internally having
subsequent HIFU control of a partially owned enterprise. The EDD process for equity investment
will differ from a borrower’s application.
1) STEP 1: Project Identification - Project concept is developed by a Line
Department (such as DPI for HIFU evaluation)
a) Step 1A Equity Investment –Initial Social and Environmental Review of Projects
Developed by Line Departments and/or HIFU staff
i) REJECT the project if it is a type listed on an exclusion list published by World Bank for
example www.ifc.org/ifcext/enviro.nsf/Content/IFCExclusionList
ii) Complete Project Description: Form 1 - Project Description
iii) Categorize for Social and Environmental Risk: Form 2 – Project Risk Categories – ensure
GoV Decrees 80 Annex I and World Bank Social and Environmental Categorization and
Risks are referenced (see PPA Manual pg. 12-13)
iv) determine what GoV and local government regulations may apply and what approvals and
certificates may be required (see Applicable Government Laws and WB Policies and
Guidelines
For Equity Investments this stage should indicate whether the project is acceptable for
preparation by the submitting Line Department or HIFU. The Line department or HIFU
project staff should be informed of the Risk Category applied and provided with the Project
Description (new or up-dated) for review and verification.
Responsible Parties: DPI, Line Departments, HIFU
- 2 -
NOTE: As of April 16, 2007 HIFU has listed several projects for further development that have
project descriptions assigned and included in the HDP Appraisal. All projects should be
reviewed in the context of the EDD process.
b) Step 1B Loan : Project Identification – Initial Social and Environmental Review
i) REJECT the project if it is a type listed on an exclusion list published by World Bank for
example www.ifc.org/ifcext/enviro.nsf/Content/IFCExclusionList
ii) Complete Project Description: Form 1 - Project Description
iii) Categorize for Social and Environmental Risk: Form 2 – Project Risk Categories – ensure
GoV Decrees 80 Annex I and World Bank Social and Environmental Categorization and
Risks are referenced (see PPA Manual pg. 12-13)
iv) Develop for the borrower an initial list of documents required to meet Social and
Environmental requirements for the Category of Project noted in Form 2.
For Loans, this step determines if HIFU considers the project appropriate for it’s debt portfolio. The
Borrower should be provided with a copy of the Project Description to ensure accuracy. The
Borrower should be informed of the Category and Risk to understand the documentation requirements.
Responsible Parties: Borrower, HIFU
2) STEP 2: Project Pre-Feasibility - Approval for SPVE Development and Project
Preparation for Private Investor Selection
a) Social and Environmental Screening including Review of Designs and Project
Documentation i) Complete Site Visit,
ii) Review design documents,
iii) Review site drawings and maps of project location
iv) Complete EDD for project: Form 4 – EDD Screening
v) Complete EDD Action Summary: Form 5- EDD Summary vi) Confirm Risk and Category for EIA and Social Analysis
vii) Complete Socio-Economic Analysis: See Reference TOR #1 Annex A
viii) Complete Environmental Assessment Scoping and EIA TOR: See Reference TOR #2
Annex A Note: Methods for Social and Environmental Assessment in Annex F and
G of PPA Manual ix) Finalize TOR for EIA to meet GoV and WB requirements
x) Finalize TORS for Resettlement Plan, Indigenous Peoples Plan, and Consultation Plan: see
Referecne TOR #3, #4, #5 Annex A
xi) High Risk Projects Reviewed by WB staff: Reference PPA Manual Pg 12, Annex F, G,
H, I for specifics
Responsible Parties: HIFU, Line Departments, Borrower, Consultants, Affected Peoples
3) STEP 3: Feasibility Study - Investment Appraisal and Project Approval OR Final
Credit Application by Borrower for Approval with Conditions
- 3 -
a) Step 3A – Line Departments develop sufficient information to allow a SPVE with a
Private Partner to take over final design and complete planning
i) Completed and implemented Resettlement Action Plan (including land acquisition
agreements): Note Reference methods for RAP in Annex H in PPA Manual- See
Reference TOR #3
ii) Verification of land resettlement and land acquisition if completed prior to project
development or loan application: Form 5- Loan or Project Appraisal Land Clearance:
Acquisition, Compensation and Resettlement
iii) Completed Indigenous Peoples Action Plan: Reference methods for RAP in Annex I in
PPA Manual- See Reference TOR #3 pg
iv) Completed Consultation Plan: See Reference TOR #5
Responsible Parties: HIFU, Line Departments, Consultants, Affected Peoples, WB
b) Step 3B - Borrower provides project documents for Screening and Evaluation: i) Engineering Designs,
ii) Social Analysis,
iii) Environmental Impact Assessment,
iv) Environmental Management Plans,
v) Resettlement and Land Acquisition Report,
vi) Indigenous Peoples Report,
vii) Consultation Report,
viii) Approvals
c) Complete Enterprise Evaluation to assess Enterprise Management: Form 3
Borrower/SPVE/Private Partner Corporate Evaluation
d) HIFU completes all required EDD Forms for loan file:, Form 4, Form 5, Form 6
Responsible Parties: HIFU, Line Departments, Borrower, Consultants, Affected Peoples,
DONRE , WB(high risk only)
4) STEP 4: SPVE Formulation with Project Documentation AND/OR Loan
Documentation with Covenants
a) Project Enterprise Assumes Responsibilities defined in SPVE Contract Negotiations or Loan
Disbursal Agreements
b) Complete Enterprise Evaluation to assess Enterprise Management: Form 3
Borrower/SPVE/Private Partner Corporate Evaluation
c) Completion of Technical Components = all Final Engineering Design including
environmental controls
d) Contract Completion = all contracts describing: i) Project Outputs
ii) Legal Requirements
iii) Project Operations and Management Plans e) Completion of Project Enterprise Capacity Development Plan
f) Completion of Environmental Assessment according to Categorization and EIA TOR: Assumption
of RAP under RPF: see Annex H
NOTE: As on going quality control HCMC PC SHOULD monitor all project outputs to ensure
delivery under contract terms
- 4 -
Responsible Parties: HIFU, Line Departments, Borrower, Consultants, Affected Peoples, WB
(high risk only)
5) STEP 5: Implementation and Monitoring - This includes the verification of
compliance by the project of various key activities such as Land Compensation, Resettlement,
Internal Reporting, External Reporting, Site Inspection, Independent Monitoring, Capacity
Development
a) Capacity Development:
i) Assessment of Borrowers,
ii) HIFU Internal Equity Management Capacity,
iii) SPVE Sector Capacity: Form 3 Borrower/SPVE/Private Partner Corporate Evaluation should be revisited and up-dated for these.
b) For SPVE Projects the following should be monitored by HIFU: see Form 6 Project EDD
Summary i) Implementation of Final Resettlement Plan
ii) Implementation of Ethic Minority Plan
iii) Implement Environmental Management Plans
iv) Site Preparation
v) Construction vi) Project Commissioning
For Borrowers and Loan Management HIFU should request periodic reports and update EDD information
to ensure compliance. Refer to FORM 6: Social and Environmental Action Plan Commitment
Registry
AUDIT Protocols for each project or loan should be developed See Form 9 Project Monitoring for
Safeguard Compliance
Responsible Parties: HIFU, SPVE, Borrower, Consultants, Affected Peoples, WB (high risk
only)
6) STEP 6: Completion and Closure – a) Management System Development in HIFU and SPVEs to ensure compliance with EDD: see
Form 3 Borrower/SPVE/Private Partner Corporate Evaluation b) Maintenance of Internal Documents
c) Maintenance of SPVE and Borrower EDD Verification and Reporting Documents
Responsible Parties: HIFU, SPVE, Borrower, Consultants, WB (high risk only)
- 1 -
Identification
of
Projects by
HIFU
Or Line
Departments
Identification
of Loan
Opportunities
By Borrowers
Approval for
SPVE
Development
Project
Preparation for
Private Investor
Selection
Credit/Investment
Appraisal Step
Corresponding Social and Environmental Safeguards Steps
Pro
ject
Id
enti
fica
tio
n
Step 1A
Investment -Initial
Social and
Environmental
Review
• “Reject” - Activities listed on Exclusion List www.ifc.org/ifcext/enviro.nsf/Content/IFCExclusionList
• Complete Project Description: Form 1 - Project Description
• Add Project to Risk Category List: Form 2 – Project Risk Categories
• Categorize for Social and Environmental Risk: Form 2 – Project Risk Categories – ensure GoV Decrees 80 Annex I and World Bank Social and Environmental
Categorization and Risks are referenced (see PPA Manual pg. 12-13)
Planning
Implementation
Responsible Parties
Step 1B
Loan - Initial
Social and
Environmental
Review
Pre
-Fea
sib
ilit
y S
tud
y
Investment
Appraisal and
Project
Approval
Fea
sib
ilit
y S
tud
y
Step 2
Social and
Environmental
Screening
Review of Designs
and Project
Documentation
LOW RISK MEDIUM RISK HIGH RISK
Complete Site Visit, Review design documents, Review site drawings and maps of project location
Complete EDD for project: Form 4 – EDD Screening Complete EDD Action Summary: Form 5- EDD Summary
Confirm Risk and Category for EIA and Social Analysis
Complete Socio-Economic Analysis: See Reference TOR #1 Annex A
Complete Environmental Assessment Scoping and EIA TOR: See Reference TOR #2 Annex A
Note: Methods for Social and Environmental Assessment in Annex F and G of PPA Manual
Finalize TOR for EIA to meet GoV and WB requirements
Finalize TORS for Resettlement Plan, Indigenous Peoples
Plan, and Consultation Plan: see Referecne TOR #3, #4, #5
Annex A
High Risk Project Review by WB staff: Reference PPA
Manual Pg 12, Annex F, G, H, I for specifics
-HIFU
-Line Departments
-Borrower
-Consultants
- Affected Peoples
- DPI
- Line Departments
- HIFU
Step 3
Social and
Environmental
Risk Control
1. Completed and implemented Resettlement Action Plan (including land acquisition): Note
Reference methods for RAP in Annex H in PPA Manual Verification of land resettlement and
land acquisition if completed prior to project development or loan application: See Form 5
2. Completed Indigenous Peoples Action Plan: Note Reference methods for RAP in Annex I in PPA
Manual
3. Completed Consultation Plan
1. Complete Final TOR for EIA if for transfer to an
equity investment SPVE: See Reference PSP Selection
Manual for SPVE Investor Selection Process
-HIFU
-Line
Departments
Borrower provides project documents for Screening
and Evaluation: Engineering Designs, Social
Analysis, Environmental Impact Assessment,
Environmental Management Plans, Resettlement and
Land Acquisition Report, Indigenous Peoples Report,
Consultation Report, Approvals
HIFU completes all required Forms; Form 3, Form
4, Form 5, Form 6
• “Reject” - Activities listed on Exclusion List www.ifc.org/ifcext/enviro.nsf/Content/IFCExclusionList
• Complete Project Description: Form 1 - Project Description, Form 4 – EDD, Form 5 Land Clearance and Compensation
• Request Data and Complete Borrower CSR and HS&E Management Processes: Form 3 Borrower/SPVE/Private Partner Corporate Evaluation
• Add Project to Risk Category List: Form 2 – Project Risk Categories
• Categorize for Social and Environmental Risk: Form 2 – Project Risk Categories –GoV Decrees 80 Annex I and World Bank Categorization referenced (PPA pg. 12)
Actions and
Recommendations
Report for Loan
Covenants
- Borrower
- HIFU
Figure 1: HIFU Social and Environmental Due Diligence Process Pg. 1
See Page 2 for Project and Loan Implementation Steps
Final Credit
Application
by Borrower
for
Approval
with
Conditions
Final Due Diligence Report for Project Approval
-Borrower
-HIFU
-WB
-DONRE
Final Due Diligence Report for Loan Approval
-Borrower
-HIFU
-WB
-DONRE
- 2 -
Figure 1 Cont’d: HIFU Social and Environ mental Due Diligence Process Pg 2
SPVE Formulation
with
Project
Documentation
AND/OR
Loan
Documentation
with
Covenants
PS
P/P
roje
ct E
nte
rpri
se C
on
tra
cts
Imp
lem
enta
tio
n a
nd
Mo
nit
ori
ng
C
om
ple
tio
n a
nd
Clo
sure
Project
Management
AND
SPVE Management
AND/OR
Loan Management
SPVE Share Sale
Project Contract
Completion
Loan Repayment
Credit/Investment
Appraisal Step
Corresponding Social and Environmental Safeguards Steps
Planning
Implementation
Responsible Parties
Step 4
Social and Environmental
Management Plans
Document Disclosure
Social and Environmental
Supplemental Data
GoV Approvals and Licenses
WB Safeguard Clearance
Project Enterprise Assumes Responsibilities defined in SPVE Contract Negotiations or Loan Disbursal Agreements
Completion of Technical Components = all Final Engineering Design including environmental controls
Contract Completion = all contracts describing:
a) Project Outputs
b) Legal Requirements
c) Project Operations and Management Plans
4. Completion of Project Enterprise Capacity Development Plan
Completion of Environmental Assessment
according to Categorization and EIA TOR:
Assumption of RAP under RPF: see Annex H
SPVE
OR
Borrower
-HIFU
-DONRE
-HCMC PC
-WB (high risk)
Step 5
Land Compensation
Resettlement
Internal Reporting
External Reporting
Site Inspection
Independent Monitoring
Capacity Development
HCMC PC monitors project outputs to
ensure delivery under contract terms
For SPVE Projects the following should be monitored by HIFU: see Form ??? Project EDD Summary
1. Implement Final Resettlement Plan
2. Implement Ethic Minority Plan
3. Implement Environmental Management Plans
4. Site Preparation AUDIT See Form ???? Project Monitoring for Safeguard Compliance
5. Construction
6. Project Commissioning
Borrower provides reports on key risk areas as described in loan covenants and
disbursement agreements: see Form ??? Project EDD Summary
Borrower provides information on capacity and resources for EED issues management
Capacity Development: Assessment of Borrowers, HIFU Internal Equity Management Capacity, SPVE Sector Capacity
Step 6
EMP Evaluation
Operations Audits
Final RAP Report
Final Environmental Report
Management System Development in HIFU and SPVEs to ensure compliance with EDD:
see Form 3 Borrower/SPVE/Private Partner Corporate Evaluation
Maintenance of Internal Documents
Maintenance of SPVE and Borrower EDD Verification and Reporting Documents
SPVE
OR
Borrower
-HIFU
-Affected Peoples
-WB
-Borrower
-HIFU
HIFU Internal Capacity Development
HIFU Social and Environment Organization
SPVE Social and Environment Organizations
-HIFU
-HCMC PC
- 1 -
Form 1 – Project Description: (Complete for all proposed projects or credit applications)
1. Project File Number:
2. Project Name:
3. Project Investment Type: Equity___ Debt ___ Equity + Debt___
4. Proposed HIFU % Ownership:
5. Investor: include brief on investor ownership, structure, capitalization, local operations
6. Total Estimated Project Cost:
7. Implementation Period:
8. Project Background: General Description to include
8.1 Sector:
Data on sector:
Sector focus and master planning:
Project need:
Project effect:
Location:
Technical Description:
9. Project Cost Breakdown: to include at minimum
9.1 Land:
Capital Construction Works:
Development and Commissioning:
Contingency:
Extraordinary Costs:
10. Financing Arrangements:
10.1 Equity to Debt Ratio:
Loan Covenants:
Shareholders Agreements:
11. Social and Environmental Safeguards
11.1 Approvals:
Permits:
Certificates:
Planning Documents:
12. General Comments
12.1 Specific Concerns
References
Actions: Responsible Person/Department Action Date
- 2 -
Form 2: Projects in HIFU Portfolio and Investment Pipeline- Risk Categories Category and Sub-Category Risk Levels
High/Med/Low
GoV Category I/II/II
Toll Roads – Vehicular corridors operated on a per vehicle use basis High/Medium
Category I/II
Toll Bridges – Water body Crossings operated on a per vehicle use basis High/Medium
Category I/II
Land Transportation Hubs – centralized locations
Public Transport - Buses Medium, Category II
Commercial Transport – including Less Than Load trucking Medium, Category II
Container Terminal – intermodal transfer site Medium, Category II
Ports
Containers High/Med., Cat I/II
Raw Materials High/Med., Cat I/II
Waste Water Treatment
Centralized Domestic Sewage High, Cat. I
Centralized Industrial Wastewater High, Cat. I
Septage High/Med., Cat. I/II
Water Treatment
Domestic Potable Medium, Cat. I/II
Industrial Medium, Cat I/II
Waste Management Facilities
Hazardous Waste Handling and Transfer High, Category I
Hazardous Waste Landfill High, Category I
Memorial Park
Cemetery Plots Medium, Category II
Crematorium Medium, Category II
High risk or Category I projects require complete Environmental Assessments. Medium or Category II
projects may require less comprehensive works but must obtain required approvals. High Risk projects must
be reviewed by World Bank Staff
- 3 -
Form 3: Borrower/SPVE/Private Partner Corporate Evaluation
HIFU Reviewer:_______________________ Review Date:______
Borrower/SPVE/Private Partner Contact: _______________________
The following should be requested and verified:
1. Provide a description of the SPVE ownership including all major shareholders with greater than 10%
shareholding.
2. Is there one enterprise owner that is assigned responsibility for operations Yes__No__
3. Provide a description of the enterprise organization indicating assigned responsibilities. Include parent
organization charts including HSE details.
4. Providing project development and operations experience for the type of project being considered for HOFU
funding
5. Provide a description of non-controlling shareholders with Board of Directors or assigned senior managerial
roles
Environmental Regulatory Compliance and Liability
1. Does the Enterprise comply with national Health, Safety and Environmental (HSE) regulations and standards?
Yes___No___.
Provide confirmation for other jurisdictions if not in HCMC
2. Is the Enterprise in possession of all required HSE permits and approvals? Yes___No___.
Provide copies for project or for other jurisdictions to ensure compliance from similar operating conditions.
3. Do Enterprise operations meet Vietnam HSE regulations and standards as well as those of the originating
country if a foreign investor? Yes__No__
4. Has the Company paid excess charges or fines/penalties for non-compliance with HSE regulations and standards
in the last two years? Yes__No__ Attach copies of non-compliance report and most recent remedial action and
inspection report indicating compliance achievement
5. Is the Company subject to ongoing or pending administrative or court action because of environmental offences?
Yes___No___ Provide details including statements of claim and defence.
6. Is the Company exposed to potentially significant HSE liabilities, such as those arising from land / groundwater
contamination, related to the Company’s past or ongoing operations? Yes__ No__.
Provide details including magnitude of liability and history of occurrence.
7. Has the Company had any significant accidents or incidents in the last two years (e.g. oil spills, fires) involving
deaths or multiple serious injuries and/or significant environmental damage? Yes__No__ Provide incident reports and follow up actions.
8. Does the Company/Enterprise maintain Environmental Actions Plans which reflect social and
environmental commitments and action completion? Yes__No__ Provide an example of an
environmental commitment registry.
In the event that the Company is not materially in compliance with HSE regulations and standards,
or if there are potentially significant HSE liabilities, please describe further actions required by the
authorities and/or planned by the Company to address these issues satisfactorily, and to achieve
regulatory compliance.
- 4 -
FORM 3 Continued: Management System Evaluation The following information should be obtained for both the private partner company and the SPVE
HIFU Reviewer_______________________ Review Date______
Enterprise Contact_______________________
Information Requested
Yes/No On file
Yes/No
Date File
&
Doc
No.
Policy - Is there a specific policy for social and environmental management
which governs enterprise operations?
Planning – Does the enterprise have a planning process to manage social and
environmental issues?
Legal Procedures - Are there legal procedures taken by the enterprise to
ensure regulatory matters are correctly addressed
Objectives and Programs – Are social and environmental objectives,
enterprise or project based documented with actions allocated for specific
programs
Resources – Have resources been allocated for social and environmental
programs in management budgets?
Roles and Responsibilities – Has leadership appointed a management
representative with defined responsibility for ensuring implementation and
performance? Y
Authorities – Does the management representative have authority to ensure
social and environmental objectives and programs are carried out?
Training and Awareness – Are those performing tasks involving these risks
competent and appropriately trained?
Communication – Is a system of internal communication addressing these
risks evident
Documentation – Is a system of documentation in place for these risks? Document Control – Is there a system of document control in place to
following process in the event of legal intervention?
Operational Control – Are controls (e.g. engineering, financial) in place to
ensure implementation of specific project and regulatory criteria.
Emergency Preparedness and Response – Does the enterprise have active
and tested emergency response plans where required?
Monitoring and Measurement - Are procedures for monitoring in place
including calibration of measurement equipment?
Compliance Evaluation – Is a procedure in place to ensure monitoring
results are in compliance with legal and contractual requirements?
Corrective Action – Are corrective actions taken in a timely fashion? Preventative Actions – Are preventative actions developed based on both
design and operational experience?
Records Control – Are records maintained in a secure location and in a
legible and identifiable format if required for legal or regulatory verification?
Internal Audit - Is a process for auditing the management of risks in place? Management Review – Does senior management conduct a review of the
risks and actions on a regular basis?
Board of Directors Review – Is information on these risks summarized for
Director review and discussion as appropriate at Board of Directors meetings?
Some components may be managed together. These documents should be up-dated on a regular basis for
long-term loans, large loans and equity holdings >10% of an enterprise. This will assist in ensuring that
enterprises are adapting and up-dating risks management processes. Private Partner policies may be adopted
directly if applicable to the SPVE. HIFU should develop an information package to address these questions to
ensure that where required are proactive and prepared to participate in SPVE management process.
- 1 -
FORM 4 - EDD SCREENING – URBAN PROJECTS
ENVIRONMENTAL AND SOCIAL COMPONENTS
Project Name: _________________________________________HIFU Code: ____________
Responsible Institutions: __________________________________________________
Borrower/Enterprise: __________________________________________________
Names of Project Screening Evaluators: ______________________________________________________
Date of Project Screening: _____________________________________
1. Borrower/SPVE/Private Partner CSR and Management Background
Enterprise Background Form 2 Complete: Yes__No___
Date Requested______________ Contact_______________________
Management Information Form 2 Complete: Yes__No___
Date Requested______________ Contact ______________________
Enterprise Characteristics: (Summarize CSR management)
General Comments:
2. Project Characteristics
Facility Name: _____________________________
Districts Involved : ________________________
Connections Points to Municipal Roads and Facilities: yes/no ____
Facility Characteristics: Type ___________________________________________________________________
Length __________ Meters
Width __________ Meters.
Location Map: Yes__No__ Requested from Name:______________________________
Site Drawing: Yes__No__ Requested from Name: ______________________________
General Comments:
3. Project Sector and Type
- 2 -
Project Focus:
� Maintenance
� Partial Reconstruction
� Expansion and Modernization
� New Facility
- Project Type:
� Greenfield Site
� Peri-Urban
� Industrial Area
� Commercial Area
� Residential Area
Type of Infrastructure
Type of Development Action - Potential Tertiary Secondary Primary
Maintenance III III III
Partial Reconstruction III II II
Expansion and Modernization II I I
New Facility I I I
Description of Project: (include type, typical impacts and requirement for site visit by appraisal officer)
4. Classification according to Environmental and Social Sensitivity Environmental and Social Characteristics
of the Affected Project Area
Yes/No
Classification
(High 3, Medium
2, Low 1)
Process required
to address issue
Comments
1. Physical Characteristics of Road and
Border Areas:
• Erosion areas
• Subsidence areas
• Inudated areas
• Rivers, Canals, Wells, Intermittent Flows
• Lakes, Lagoons
• Wetlands
• Springs and sources
• Reserves, national parks
• Areas of natural forests
2. Terrestrial Resources:
• Natural Forests
• Critical Habitats
• National Reserves
• Biological Sanctuaries
• Endangered Species
3. Aquatic Resources:
• Fisheries
• Aquatic Birds
• Aquatic Mammals
• Water pollution due to sediment,
construction and oil spills, roadside litter
• Aquatic plantation
• Aquiculture
• Recreation activities
- 3 -
4. Project Works causing Major Impacts:
Direct impacts:
• Deforestation and other land use change
• Obstruction to movement of wildlife,
livestock and local residents
• Modification of natural drainage patterns
• Landslide, erosion, sedimentation
• Degradation or destruction of cultural sites
• Building material quarries and transportation
• Dust, noise and air pollution from
construction works
• Oil and fuel spills
• Trash and garbage
• Presence of labour force
Use impacts
• Increased air pollution from vehicles
• Accidents
• Roadside litter
• Hazardous material in transition
Indirect impacts:
• Increased access to wildlife and other
natural resources
• Construction of secondary roads
• Labour force migration and displacement of
subsistence economies
• Unplanned land development
2. Social Issues: (other than safeguard issues)
• affordability of the poor for a project created
service
• health
• employment opportunities
• community participation
• gender
• willingness to pay
• access
10. Socio-Economic Impacts
• Positive impact (easier transportation, better
access to services and market…)
• Negative impact (road safety, accessibility of
the social evils….)
11. Resettlement and Land Acquisition
• Total land would be acquired
• residential land
• agricultural land
• number of households (HH)affected
• HH relocated
• HHs with loss 10% or more of productive
assets
- 4 -
12. Ethnic Minority Peoples
• ethnic minority people in the project area
• What ethnic group
• Number of each group
• Is the group a community
13. Cultural Property
• Degradation or damage to cultural premises
• Visual obstacles to cultural sites and value
• Chance of finding cultural, historical and
religion relicts
14. Other Relevant Issues
Sensitivity and Risk Rating:
LOW: One (1) or more effects in column 1 yes/no up to two (2) categorized as 2.
MODERATE: Three (3) or more effects characterized as 2, but none characterized as (3).
HIGH: One (1) characterized as 3.
4. Project classification by environmental and social risk level
C FINAL PROJECT CLASSIFICATION
__________________________________________
General guide for Project Environmental and Social requirements
Type Sensitivity of Environment
Low Moderate High
Type III
Type II
Type I
C
B
A A
C
B
B
C
C
Matrix No. 1
- 5 -
III C and IIC Apply environmental and social management practices accepted by the GoV II B and I B Apply environmental and social management practices accepted by the GoV
Undertake specific analyses and recommendations noted in the check list Complete environmental and social studies required under GoV Law Apply the guidance on land acquisition and resettlement if applicable
I A Complete Environmental Assessment Studies Complete Socio-Economic Studies List all Environmental and Social Impacts List all Environmental Approvals required
Develop and implement land acquisition and resettlement plans Develop and implement ethnic minority management plans Develop a project Environmental Management Plan including mitigation actions and monitoring plans
- 6 -
FORM 4 Cont’d- EDD SCREENING – URBAN PROJECTS
ENVIRONMENTAL AND SOCIAL COMPONENTS
5. Critical issues for each road section
During the Project work process identify the critical points by kilometre/GPS location on the route plan or by site location on
facility development drawings where environmental and social issues are located and the work recommendations
Problem Recommendation for design,
EA-SEA, construction
Photo/map/image
- 7 -
Start point
Date of occurrence
- 8 -
7. Site Visit Observations:
Finish Point
Date of
completion
- 9 -
Screening Evaluators:
__________________________________DPI
__________________________________DONRE
__________________________________HIFU
_____________________________________ World Bank
__________________________________Other (name)
- 1 -
FORM 5: Loan or Project Appraisal Land Clearance: Acquisition,
Compensation and Resettlement PROJECT NAME/FILE NUMBER:
PROJECT DESCRIPTION: (insert correct information) Asset
Acquired
Type of
Impact
Entitled
Person
Compensation
Entitlement
(knowledgeable seller)
Market
Value
Paid
Yes/No
Payment
Made
Yes/No
Resettlement
Location/
Contact
Land
Agricultural
Land
Commercial
Land
Residential
Buildings
Business
Trees
Standing
Crops
Temporary
Acquisition
Information should be obtained from the borrower or project developer with supporting documents
in order to verify that land clearance was done according to GoV prevailing standards, forced
relocation did not occur and sellers were aware of their right to reasonable compensation.
- 2 -
FORM 6: Social and Environmental Action Plan Commitment Registry PROJECT NAME/FILE NUMBER:
PROJECT DESCRIPTION: (insert correct information)
Action Action Details – Reference Documents,
Consultant Name, Approvals
Start
Date
Done
Date
Responsible
Party
Follow up
Action
Land Clearance Complete remaining agreements and
resettlement of landowners
Approvals Obtain all certificates and approvals
Final Design Complete any changes to design for
environmental controls
Contractor Hired Hire and train contractor in environmental
requirements
Action Plan
Summary
HIFU should complete a similar internal action plan as a component of HIFU capacity development
within the organization. All actions committed for development of Social and Environmental
Management capacity should be listed and up-dated.
- 3 -
FORM 7: HIFU Social and Environmental Management Team Action Plans Action Description Start
Date
Done
Date
Responsible
Party
Follow up
Action
Consultants Hire Social and Environmental Consultants
Training Conduct Training Courses for HIFU Staff
Conduct Training Courses for Borrower/SPVE
EDD Complete screening on pipeline projects
1. Septage Treatment Facility
2. West Bus Terminal
EED Summary Summarize EDD in Form 8
- 4 -
Form 8: Project EDD Summary
PPA
Stage
HIFU Social and
Environmental
Procedures
Tools/Process Date
Received
Critical
Yes/No
5
Form 9 : Project Monitoring and Supervision Checklist for Safeguard Compliance Agency:
For each subproject in the investment
plan:
Basic Subproject Information
Name of subproject:
Tracking number:
Sector:
Type of intervention :
Subsector:
Institutional responsibilities (Env):
Institutional responsibilities (social):
Status/Implementation schedule:
Initial Risk Rating:
Type of evaluation (pre or post
development):
Materials reviewed (e.g., EA, RP, TORs,
manuals, internal reports, consultation):
Evaluated by:
Applicable Issues Yes No Comments
Environmental Assessment
Natural Habitats
Forests
Pest Management
Cultural Property
Indigenous People
Involuntary Resettlement
Safety of Dams
Procedures Yes No N/A Additional Comments
Was initial risk rating correctly assigned?:
Were sample TORs or assistance with
TORs provided?
Did project/site screening occur, if
required?
Was environmental work reviewed and
cleared by responsible agency?
Was social work reviewed and cleared by
responsible agency?
Overall Quality of Work Yes No N/A Additional Comments
Is correct work (e.g. EIA, SEA,
application of manual) completed or
scheduled to be completed?
Overall, is environmental work adequate?
6
Is correct social work completed or
scheduled to be completed?
Overall, is social work adequate?
For all measures below, indicate whether work is adequate, inadequate, or not applicable (not required)
Environmental Assessment Adeq. Inadeq. N/A Additional Comments
Assessment of potential environmental
impacts:
Identification of potential cumulative,
indirect, and induced impacts:
Scope of EA work:
Assessment of applicable legal and
institutional framework and capacity:
Analysis of feasible alternatives:
Env. Management Plan (EMP) with
measures for avoiding, minimizing or
compensating for all identified impacts:
Measures to ensure or strengthen
institutional capacity, including for
implementation of EMP and/or
application of technical manuals:
Stakeholder consultation:
Documentation of consultation (inputs
and project responses):
Monitoring and evaluation plan to
address all environmental issues:
Natural Habitats Adeq. Inadeq. N/A Additional Comments
Assessment of potential threats to
natural habitats and/or biodiversity :
Avoidance of significant conversion or
degradation of critical natural habitats:
Mitigations to address potential natural
habitat impacts, including
compensation for any necessary loss:
Monitoring and evaluation plan to
address natural habitat issues:
Pest Management Adeq. Inadeq. N/A Additional Comments
Assessment of potential pest
management issues:
Integrated pest management plan:
Limits on selection of pesticides and
requirements for their how they are
packaged, labeled, handled, stored,
applied and disposed of:
Assessment of institutional and policy
capacity for pest management:
7
If necessary, plan supports policy
reform, institutional capacity
development, and/or training:
Monitoring and evaluation plan to
address pest management issues:
Forests Adeq. Inadeq. N/A Additional Comments
Assessment of potential impacts on
forests:
Avoidance of significant conversion or
degradation of critical forest areas:
Mitigation measures for any potential
impacts on non-critical forest areas:
Monitoring and evaluation plan to
address forest issues:
Cultural Property Adeq. Inadeq. N/A Additional Comments
Assessment of potential impacts on
cultural property resources:
Mitigations to address potential impacts
on cultural property, including "chance
find" procedures:
Institutional capacity strengthening
measures for cultural property
management:
Monitoring and evaluation plan to
address cultural property issues:
Indigenous People Adeq. Inadeq. N/A Additional Comments
Assessment of potential effects on
indigenous people (IP) in the project
area:
Consultation with affected indigenous
people:
Documentation and disclosure of
consultation (including inputs and
project responses):
Plan/measures for avoiding harm and
ensuring culturally appropriate benefits
to indigenous peoples:
Monitoring and evaluation plan to
address indigenous peoples issues:
Involuntary Resettlement Adeq. Inadeq. N/A Additional Comments
Assessment of potential involuntary
resettlement impacts:
Assessment of alternative designs to
avoid or minimize involuntary
resettlement:
Consultation of affected persons, host
communities, and NGOs, if
appropriate:
8
Resettlement instrument to provide, as
required: prompt compensation;
assistance during relocation, and
residential housing, housing sites or
agricultural sites; and transitional
support or development assistance after
displacement, as outlined:
Monitoring and evaluation plan to
address involuntary resettlement issues:
Safety of Dams Adeq. Inadeq. N/A Additional Comments
Project screened for and correctly
identified any dam safety implications:
Dam safety evaluation, if required:
Disclosure Yes No N/A Additional Comments
EA disclosed in-country prior to
appraisal:
Date:
RAP disclosed in-country prior to
appraisal:
Date:
Location(s) of disclosure of EA
document:
Location:
Location(s) of disclosure of RAP: Location:
Additional Comments
Overall assessment of the performance of the Borrower or Enterprise:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Recommendations for further enterprise strengthening and capacity development:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
9
B. Laws of the Socialist Republic of Vietnam
1) On Social Safeguards
a) The Constitution of the Socialist Republic of Vietnam, 15 April 1992;
b) Decree No. 60/CP, 5 July 1994, regulation on property ownership and the right to use urban
residential land;
c) Decree 91/CP (17 August 1994) regulation on Urban Planning Management;
d) Decree No. 64/CP, 27 September 1993, regulation on allocating agricultural land to
households for long-term use;
e) Circular No 05-BXD/DT, February, 1993, on classification of houses.
f) Construction Law, dated on Dec, 10th 2003,
g) Law of grievance and accusion, December, 2nd
1998. Laws amending Law of grievance and
Accusion , dated on June, 15th 2004 and November 29
th 2006
h) New Land Law 2003 approved by National Assembly on the 26, November, 2003, came into
effect on the 1st of July, 2004, replacing the Land Law 1993
i) Decree No181/2004/ND-CP, 29 October 2004, relating to the implementing the Land Law.
j) Decree No182/2004/ND-CP, 29 October 2004, on administrative violation in the land user-
rights...
k) Decree No188/2004/ND-CP, 16 November 2004, regulation on price land and price
framework for land categories; and issued guidelines in Circulation No114/2004/TT-BTC by
MOF.
l) Decree No197/2004/ND-CP, 03 December 2004, on compensation, assistance and
resettlement when land is recovered by the State (replacing Decree No. 22/CP). And issued
guidelines in Circular No116/2004/TT-BTC by MOF, dated on Dec. 7th 2004. Circular
No69/2006/TT-BTC by MOF, dated on Feb. 18th 2006, amending the Circular No116/2004/TT-
BTC on guidelines for implementation of Decree 197/2004/CP.
m) Decree No198/2004/ND-CP, 03 December 2004, on collection of land use fee. And issued
guidelines in Circulation No117/2004/TT-BTC by MOF.
n) Circular No 80/2005/TT-BTC, dated on September, 15th, 2005, providing guidelines
for organization of a network for conducting statistics of and surveying, investigating
of the land prices in accordance with Decree No 188/2004/ND-CP of the 16th of
November, 2004, on the methods of evaluating land prices and frame of land prices.
o) Decree No17/2006/ND-CP, 27 January 2006, on amendment of some provisions of
some Decree guiding implementation of the Land Law and the Decree 187/2004/ ND-
CP on shifting the state companies into stock ones p) Decree No131/2006/ND-CP, on November, 9
th 2006, providing regulations on Management
and Utilization of ODA.
q) Decision No106/2005/QD-UB dated on June, 16th 2005, issued by the HoChiMinh City’s PC
on compensation, assistance and resettlement when the Government acquires land in
HoChiMinh City
2) On Environment:
a) National law on Environment Protection (NLEP) 2005
b) Decree 80/2006/ NĐ-GOV/2006 dated on August 09, 2006 “Guideline for implementation of
the NLEP 2005”. According to this decree, full EIA is needed for the projects listed in
Annexes I and II (category I and II), an environment protection commitment is needed for the
remaining projects (category III)
10
B. World Bank policies and Guidelines:
3. On Social Safeguard
• Involuntary Resettlement Policy OP 4.12
• Policy on Indigenous People (Ethnic Minorities) OP 4.10
• Policy on Cultural Properties OP 4.11
4. On Environment:
• OP 4.01 Environmental assessment
• OP 4.04 Natural habitat
• OP 4.09 Pest management
• OP 4.37 Dam safety
• OP 4.11 Cultural property
• BP 17.50 Public disclosure
11
General Format of Terms of Reference for Consultants
TERMS OF REFERENCE FOR CONSULTANTS
Sometimes a HIFU analyst may be requested to develop a terms of reference for external
consultants or to provide an example to a client as part of the review of documentation. The
following general format is suggested. More detailed reference TOR’s are provided for various
technical areas. HIFU staff should adapt these for internal work or distribution to Line
Departments and Borrowers.
Background:
In this section, the nature of the task must be introduced. The history of the task, how it fits into
the overall context of the project including the mandate and the broad purpose should be
outlined.
Assumptions: The critical issues that form the basis of the TOR, which are assumed to be in place and without
which the task cannot be accomplished.
Objectives:
The purposes for the task and what it is expected to achieve must be unambiguously outlined.
Outputs:
State the deliverables that will be required.
Proposed Activities: The methodologies that will be used to achieve the outcomes.
Project Management:
Who will manage and how will management be carried out.
Resource Requirements: The types of specialists/ human resources that will be required and their experience, any other
resources or materials that may be needed to complete the task.
Expected Timeframe And Reporting Requirements:
What deliverables are expected and the deadlines.
Proposed Budget:
The costs of the tasks, the overall cost and the cash flows for each period are described.
12
Reference TOR #1 - Socio-Economic Analysis
Annex 4 Generic terms of reference for social assessment (From World Bank) Social assessment (see Chapter 4) is the instrument used most frequently by the
Borrower to analyze social issues and solicit stakeholder views for the design of Bank supported
projects. Social assessment helps make the project responsive to social development concerns,
including seeking to enhance benefits for poor and vulnerable people while minimizing or
mitigating risk and adverse impacts. It analyzes distributional impacts of intended project
benefits on different stakeholder groups, and identifies differences in assets and capabilities to
access the project benefits
A social assessment is made up of analytical, process, and operational elements, combining (a)
the analysis of context and social issues with (b) a participatory process of stakeholder
consultations and involvement, to provide (c) operational guidance on developing a project
design, implementation, and monitoring and evaluation (M&E) framework. Bank staff then (a)
provide guidance and technical assistance to the borrower (and consultants) to undertake the
social assessment, and (b) verify, assess and appraise the Borrower's social assessment findings,
as an integral part of their social analysis.
This annex provides a generic Terms of Reference for social assessments. This
Terms of Reference is offered as guidance only; task teams are expected to assist the
Borrower in adapting this general framework based on country, sector and project specific needs
and specificities. The scope and depth of the social assessment should be determined by the
complexity and importance of the issues studied, taking into account the skills and resources
available. If requested, the World Bank would also consider supporting related programs of
capacity building in social assessment processes. To the extent possible, the project social
assessment should build on existing data and analysis relevant to the sector and project.
Consideration should be given to doing the social assessment in two stages, by first conducting a
Rapid Context Assessment of available data, identify stakeholders and key issues, and
undertaking a gap analysis of where additional data or consultations are required. Based on that,
an update and further detailing of the Terms of Reference may be done.
Introduction
This section should state the purpose of the terms of reference, identify the development project
to be assessed and explain the implementing arrangements for the social assessment.
Background information
Pertinent background for potential parties, who may conduct the social assessment, whether they
are consultants or government agencies, would include a brief statement of the rationale for the
project, its intended objectives, a description of its major components, the implementing
agency(s), its current status and timetable, and whether there are any associated projects.
Purpose and Objectives
Summarize the general objectives and scope of the social assessment, briefly lay
out the main design and methodological issues related to completing the social assessment, and
discuss its timing in relation to the project preparation, design and implementation.
Task 1: Description of the proposed project
Provide a full description of the project to the extent known when the social assessment is
undertaken. Include the following information: location, size, schedule and planned sequence of
13
activities, resources available, expected implementation arrangements and life span. If the
proposed project has more than one component, describe each one as it relates to social analysis.
Task 2: Description of the socio-cultural, institutional, historical and political context
Conduct a rapid review of available sources of information to describe the socio-cultural,
institutional, historical and political context in which the project operates. The review should
include qualitative descriptions and quantitative indicators of development trends relevant to the
project, such as significant demographic changes, patterns of asset ownership and livelihoods,
external political or economic environment, etc. The purpose of this exercise is to describe what
constraints and opportunities the context poses to the project.
� Socio-cultural context: Describe the most significant social and cultural features that
differentiate social groups in the project area. Describe their different interests in the project, and
their levels of influence. In particular, explain any particular effects the project may have on the
poor and excluded. Does the project offer any opportunities to influence the behaviour of and
outcomes for such groups? Are there any known conflicts among groups that may affect project
implementation?
� Institutional context: Describe the institutional environment; consider both the presence and
function of public, private and civil society institutions relevant to the operation. Are there
important constraints within existing institutions, e.g. disconnect between institutional
responsibilities and the interests and behaviors of personnel within those institutions? Or are
there opportunities to utilize the potential of existing institutions, e.g. private or civil society
institutions, to strengthen implementation capacity?
� Historical context: Describe the "big picture," those conditions in the history of the country
that might uniquely impinge upon the project. If a project proposes to restructure an industry that
had great importance and visibility in the national economy, such as coal mining in Eastern
Europe, it may be reasonable to assume that industrial layoffs would be affected by political
economy issues. In a country with a history of tension between ethnic or religious groups, the
operation may need to be extra-sensitive to differential impacts on those groups.
� Political context: Describe the political background relevant to the project. Political instability,
for example, could affect long-term project planning, as could an election between the project
design and implementation phases. On the other hand, a shared political vision such as the drive
for EU accession can be an important enabling condition for a project.
Task 3: Legislative and regulatory considerations
Review all national legislation and regulations pertinent to the project, as well as particular
attention to laws and regulations governing the project’s implementation and the access of poor
and excluded groups to goods, services and opportunities provided by the project. In addition,
review the enabling environment for public participation and development planning. Social
analysis should build on strong aspects of the legal and regulatory systems to facilitate program
implementation and identify weak aspects while recommending alternative arrangements. (The
TOR should specify those that are known and require the consultant to investigate other
arrangements.)
14
Task 4: Key social issues
The social analysis provides the baseline information for designing the social development
strategy. The analysis should determine what the key social and institutional issues are in relation
to project objectives; identify the key stakeholder groups in this context and determine how
relationships between stakeholder groups will affect or be affected by the project; and identify
expected social development outcomes and actions proposed to achieve those outcomes. Social
development outcomes are the socially relevant results the project is expected to achieve, such as
poverty reduction, equity and inclusion, strengthening of social capital and social cohesion, and
promotion of accountable and transparent governance, as well as the mitigation of adverse
impacts arising out of the project. The key elements and entry points for the social analysis
relevant to the project (see Chapter 2) encompass:
(a) Social diversity and gender: Examine how people are organized into different social groups,
based on the status ascribed to them at birth – according to their ethnicity, clan, gender, locality,
language, class, or some other marker – or on the status or identity they have achieved or chosen
– civil servant, industrial labourer, white collar worker, environmentalist, etc. Importantly, an
analysis of social diversity also includes looking at the ways in which such diversity interacts
with social and power relations and the implications this has for questions of access, capabilities
and opportunities;
(b) Institutions, rules and behaviour: Examine social groups’ characteristics, intragroup and
inter-group relationships, and the relationships of those groups with public and private (e.g.
market) institutions (including the norms, values and behaviour that have been institutionalized
through those relationships). Such an analysis should provide a detailed assessment of the formal
and informal organizations likely to affect the project and the informal rules and behaviours
among them. Possible institutional constraints and barriers to project success, as well as methods
to overcome them, should be described.
(c) Stakeholders: Identify the various groups who have an interest or a stake in the project.
Stakeholders are those who are likely to be affected by a project, as well as those that may
influence the project’s outcomes. In addition to the beneficiaries of the project and other groups
directly affected by it, stakeholders may include organized groups from the public and private
sectors as well as civil society who have an interest in the project. The characteristics, interests
and likely influence of various groups in the development process are the subject of stakeholder
analysis;
(d) Participation: Examine opportunities and conditions for participation by stakeholders –
particularly the poor and vulnerable – in the development process (e.g. contributing to project
design, implementation and/or monitoring; influencing public choices and decision-making;
holding public institutions accountable for the goods and services they are bound to provide;
access to project benefits and opportunities; etc). Otherwise excluded groups affected by the
project as well as project beneficiaries should be brought into the social assessment process, and
appropriate mechanisms to sustain such participation in project implementation and monitoring
should be deployed; and
15
(e) Social risks: Identify social risks (e.g. country risks, political economy risks, institutional
risks, exogenous risks, and vulnerability risks, including but not limited to those that may trigger
World Bank Safeguard Policies). Social risk analysis examines the social groups vulnerable to
stress and shocks and the underlying factors that contribute to this vulnerability. Drawing on this,
risk management plans should be prepared with an eye to addressing these concerns during
project design, implementation, and monitoring and evaluation. The analysts examine these key
elements in order to assess and describe the opportunities, constraints and likely social impacts
of the proposed operation. The consultant should fill the gaps in the information on these issues
that the Bank task team identifies, and should summarize information from other organizations
where available.
Task 5: Data collection and research methods
Describe the design and research methodology for the social analysis. In this regard:
� Clarify the research objective by stating the research hypotheses and identifying the social
processes and relationships to be examined by the social assessment;
� Build on existing data;
� Clarify the units of analysis for the social assessment: intra-household, household level, as well
as communities/settlements and other relevant social aggregations on which data is available or
will be collected for analysis;
� Choose appropriate data collection and analytical tools and methods, employing mixed
methods wherever possible; mixed methods include a mix of quantitative and qualitative
methods, and a mix of data from different units of analysis for triangulation of results;
� Provide the rationale for sampling employed, including criteria for research sites and selection
of respondents. Employ representative sampling wherever possible. When this is not feasible
(such as when dealing with impacts on a discrete population group), explain the reason and
criteria for purposive sampling employed. For purposive sampling or qualitative research,
research rigor is enhanced by providing a control group or establishing matching pairs to obtain
robust results;
� Establish baselines and/or benchmarks with indicators for use in future monitoring. Indicators
should be of such a nature that results and impacts can be disaggregated by gender and other
relevant social groups.
Task 6: Strategy to achieve social development outcomes
Identify the likely social development outcomes of the project and propose a social development
strategy, including recommendations for institutional arrangements to achieve them, based on the
findings of the social assessment. The social development strategy could include measures (a)
that strengthen social inclusion by ensuring that both poor and excluded groups and intended
beneficiaries are included in the benefit stream and in access to opportunities created by the
project (i.e. a social inclusion framework); (b) that empower stakeholders through their
participation in the design and implementation of the project, their access to information, and
their increased voice and accountability (i.e. a participation framework); and (c) that enhance
security by minimizing and managing likely social risks and increasing the resilience of intended
beneficiaries and affected persons to socio-economic shocks (i.e. a risk management framework).
Additionally, the strategy should address broader questions of social sustainability, by assessing
(a) the resilience of project benefits, institutional mechanisms, etc, to risks over time, and (b)
how well integrated the approach is into the larger set of development interventions in the
16
country and sector in order to minimize inconsistencies and take advantage of potential
synergies.
The social development strategy is expected to increase the benefits to the poor and vulnerable as
well as reduce social and political risks that could undermine the gains of development, thereby
increasing the equity and social sustainability of projects.
Task 7: Implications for analysis of alternatives
Review the proposed approaches for the project, and compare them in terms of their relative
impacts and social development outcomes. Consider what implications the findings of the social
assessment might have on those approaches. Should some new components be added to the
approach, or other components reconsidered or modified? Has the social assessment revealed the
need for heretofore-unnecessary risk-management measures? If the social analysis and
consultation process indicate that alternative approaches are likely to have better development
outcomes, such alternatives should be described and considered, along with the likely budgetary
and administrative effects these changes might have.
Task 8: Recommendations for project design and implementation arrangements
Provide guidance to project management and other stakeholders on how to integrate social
development issues into project design and implementation arrangements. As much as possible,
suggest specific action plans or implementation mechanisms to address relevant social issues and
potential impacts. These can be developed as integrated or separate action plans, for example, as
Resettlement Action Plans, Indigenous Peoples Development Plans, Community Development
Plans, etc.
Task 9: Developing a monitoring plan
Through the social assessment process, a framework for monitoring and evaluation should be
developed. To the extent possible, this should be done in consultation with key stakeholders,
especially beneficiaries and affected people. The framework shall identify expected social
development indicators, establish benchmarks, and design systems and mechanisms for
measuring progress and results related to social development objectives. The framework shall
identify organizational responsibilities in terms of monitoring, supervision, and evaluation
procedures. Where possible, participatory monitoring mechanisms shall be incorporated.
� Establish a set of monitoring indicators to track the progress achieved. The benchmarks and
indicators should be limited in number, and should combine both quantitative and qualitative
types of data. The indicators should include outputs to be achieved by the social development
strategy; indicators to monitor the process of stakeholder participation, implementation and
institutional reform; indicators to monitor social risk and social development outcomes; and
indicators to monitor impacts of the project’s social development strategy. It is important to
suggest mechanisms through which lessons learned from monitoring and stakeholder feedback
can result in changes to improve the operation of the project. Indicators should be of such a
nature that results and impacts can be disaggregated by gender and other relevant social groups;
� Define transparent evaluation procedures. Depending on context, these may include a
combination of methods, such as participant observation, key informant interviews, focus group
discussions, census and socio-economic surveys, gender analysis, Participatory Rural Appraisal
(PRA), Participatory Poverty Assessment (PPA) methodologies, and other tools. Such
procedures should be tailored to the special conditions of the project and to the different groups
living in the project area;
17
� Estimate resource and budget requirements for monitoring and evaluation activities, and a
description of other inputs (such as institutional strengthening and capacity building) needed to
carry it out.
Expected outputs, schedule and reporting
Prepare a detailed schedule of the social assessment activities described in the terms of reference.
Explain what kinds of outputs the social assessment plans to produce, and note when the team
will give preliminary and final drafts of each output to the Bank staff conducting social analysis.
Include relevant charts and graphs, statistical and qualitative analysis and, in some cases, raw
data obtained during the social assessment. In addition to the outputs of the social assessment,
include a note on the social assessment process itself, stating any difficulties faced by the team in
conducting the social assessment, and recommend the most appropriate dissemination strategy
for the findings. Provide the report and accompanying materials in English and the local
language.
Consultant team
Social assessment usually requires a multidisciplinary team to meet the different demands of the
assignment. The terms of reference should specify key positions on the team. Individual time
requirements should be specified for each assignment. One team member should be appointed
team leader, and be responsible for the team's performance.
18
Reference TOR #2 - Environmental Impact Assessment
Sample Terms of Reference for EIA (Includes Scoping Process)Sample Terms of Reference for EIA (Includes Scoping Process)Sample Terms of Reference for EIA (Includes Scoping Process)Sample Terms of Reference for EIA (Includes Scoping Process) (http://eia.unu.edu/course/?page_id=17(http://eia.unu.edu/course/?page_id=17(http://eia.unu.edu/course/?page_id=17(http://eia.unu.edu/course/?page_id=173)3)3)3)
1.1.1.1. Scoping an EIAScoping an EIAScoping an EIAScoping an EIA
Scoping refers to the early, open and interactive process of determining the major issues and impacts to be addressed in an EIA. Public input helps to ensure that important issues are not overlooked when preparing Terms of Reference and/or initiating the EIA study. The purpose of scoping is to identify:
• the important issues to be considered in an EIA;
• the appropriate time and space boundaries of the EIA study;
• the information necessary for decision-making; and
• the significant effects and factors to be studied in detail.
The scoping process can be used to help define the feasible alternatives to a proposed action. Consideration of alternatives during scoping is becoming accepted internationally, as an EIA ‘good practice’. Scoping takes forward the preliminary determination of significance made in screening. The scoping process places limits on the information to be gathered and analysed in an EIA and focuses the approach to be taken. Scoping is completed when the detailed studies required in the EIA have been specified –and a Terms of Reference (ToR) or an equivalent document prepared. This document sets out what the EIA is to cover, the type of information to be submitted and the depth of analysis that is required. It provides guidance to the proponent on how the study should be conducted and managed. Experience shows that the ToR should be a flexible document. The terms may need alteration as further information becomes available, and new issues emerge or others are reduced in importance.
19
Scoping provides the foundations for an effective and efficient EIA process. It helps to avoid the problem of unfocused, voluminous reports and the attendant delay. Scoping thereby helps to make sure that resources are targeted on collecting the information necessary for decision-making and not wasted on undertaking excessive analysis. The scoping process can be tailored to include some or all of the aims listed below. Key objectives of scoping are to:
• inform the public about the proposal;
• identify the main stakeholders and their concerns and values;
• define the reasonable and practical alternatives to the proposal;
• focus the important issues and significant impacts to be addressed by an EIA;
• define the boundaries for an EIA in time, space and subject matter;
• set requirements for the collection of baseline and other information; and
• establish the Terms of Reference for an EIA study.
Guiding principles for carrying out the scoping process include the following:
• recognize scoping is a process rather than a discrete activity or event;
• design the scoping process for each proposal, taking into account the environment and
people affected;
• start scoping as soon as you have sufficient information available;
• prepare an information package or circular explaining the proposal and the process;
• specify the role and contribution of the stakeholders and the public;
• take a systematic approach but implement flexibly;
• document the results to guide preparation of an EIA; and
• respond to new information and further issues raised by stakeholders.
The elements of scoping differ to some degree with the EIA requirements established by different countries and international agencies. A comprehensive scoping process will include all or a combination of the following functions:
• identify the range of community and scientific concerns about a proposed project or
action;
• evaluate these concerns to identify the significant issues (and to eliminate those issues
which are not important); and
• organize and prioritize these issues to focus the information that is critical for decision
making, and that will be studied in detail in the next phase of EIA.
Sample Terms of Reference for EIA Sample Terms of Reference for EIA Sample Terms of Reference for EIA Sample Terms of Reference for EIA
20
1. IntroductionIntroductionIntroductionIntroduction: state the purpose of the terms of reference. 2. Background informationBackground informationBackground informationBackground information: briefly describe the need for, objectives of and major components of the proposal. 3. ObjectivesObjectivesObjectivesObjectives: summarize the scope of the EIA and timing in relation to project preparation, design, and approval. 4. EIA requirementsEIA requirementsEIA requirementsEIA requirements: identify the regulations and guidelines governing the conduct of the EIA and/or specify the content of its report. 5. Study areaStudy areaStudy areaStudy area: outline the time, space and jurisdictional boundaries of the study. 6. Scope of workScope of workScope of workScope of work: identify the tasks to be carried out, information deficiencies to be addressed, studies to be carried out, methodologies etc. a. Task 1Task 1Task 1Task 1. Description of the proposed project: provide a brief description of the relevant parts of the project, using maps (at appropriate scale) where necessary. b. Task 2Task 2Task 2Task 2. Description of the environment: assemble, evaluate and present baseline data on the relevant environmental characteristics of the study area. Include information on any changes anticipated before the project commences. c. Task 3Task 3Task 3Task 3. Legislative and regulatory considerations: describe the pertinent regulations and standards governing environmental quality, health and safety, protection of sensitive areas, protection of endangered species, siting, land use control, etc. d. Task 4Task 4Task 4Task 4. Determination of the potential impacts of the proposed project: distinguish between significant positive and negative impacts, direct and indirect impacts, and immediate and long-term impacts. Identify impacts that are unavoidable or irreversible. Wherever possible, describe impacts quantitatively, in terms of environmental costs and benefits. e. Task 5Task 5Task 5Task 5. Analysis of alternatives to the proposed project: describe alternatives that were examined in the course of developing the proposed project and identify other alternatives which would achieve the same objective. f. Task 6Task 6Task 6Task 6. Development of management plan to mitigate negative impacts: recommend feasible and cost-effective measures to prevent or reduce significant negative impacts to acceptable levels and describe the actions necessary to implement them. g. Task 7Task 7Task 7Task 7. Identification of institutional needs to implement environmental assessment recommendations: review the authority and capability of institutions at local, provincial/regional, and national levels. Recommend steps to strengthen or expand
21
them so that the management and monitoring plans in the environmental assessment can be implemented. h. Task 8Task 8Task 8Task 8. Development of a monitoring plan: prepare a detailed plan to monitor the implementation of mitigation measures and the impacts of the project during construction and operation. i. Task 9Task 9Task 9Task 9. Public/NGO participation and inter-agency co-ordination: describe how the arrangements for obtaining the views of local NGOs and affected groups, and in keeping records of meetings and other activities, communications, and comments and their deposition. 7. EIA reportEIA reportEIA reportEIA report: keep it concise and limited to significant environmental issues. The main text should focus on findings, conclusions and recommended actions, supported by summaries of the data collected and citations for any references used.
22
Reference TOR #3 - Resettlement Action Plan Development
PART 1- GENERAL INTRODUCTION
PART 2: BACKGROUND
PART 3: PRINCIPLES AND OBJECTIVES
PART 4 – SCOPE OF THE WORK
Based on the setting objectives for implementing this program, the consultant needs to
define assignment contents to propose the Client. The Client will consider all proposals
which include the following:
4.1. RAP preparation
RAP Consultant will prepare a Resettlement Action Plan for the tertiary infrastrucutre component outside Tan Hoa-Lo Gom Basin
(the Sectoral project No. 2) based on the supporting documents listed in Annex 1 that supplied by the Client and based on the
practical results from detailed design consultant. RAP will consist of the following activities:
a. An analysis and describes of project affections to the resettlement process such as:
name of Project, project technique, aims of land use, project client, project budget,
scope of work (includes location, planned area of acquisition, time to acquisition,
schedule for implementing ground clearance, etc..); based on the surveyed figures and
statistic data under the technical design in order to determine effectiveness of the
project (including nature and number of people effected by the project and estimate the
degree of damage caused by the project). Basic information on the persons affected by
the project such as age, sex, nationality/ethnic group, education, occupation, incomes
and total household income;
b. Describe the sectoral project and detailed socio-economic studies on the effectiveness
of the sectoral project, housing conditions, infrastructure and social services in the
project areas;
c. An analysis of policy framework and institutional routines to apply RAP
implementation, interests of compensation and support based on the common policy
framework which has been approved in combination with regulations made by the city
as follows:
(i) Criteria will be applied to determine people groups which have fully conditions
compensated or supported and people groups which not be considered for
compensation and support for asset damages (regarding type of lands, status
conditions on the available owners assets: housing land, cultivated land,
agricultural land, house and other private housing system belonging to individual
or state apartment tenants etc.;
(ii) Replacement cost for compensation to land, house, construction architecture and
other assets such as agricultural crops, tombs, electricity and water meters,
telephone, etc.;
(iii) Methods will be used to realize damages to set up compensation expenditure;
(iv) Compensation & resettlement methods: location, position, area of land,
resettlement housing area, design, type of house, area of each apartment/plot of
23
land, price of house and land for resettlement of the project. Prepared detailed
housing plan and chart;
(v) Consult with the PAPs, who are severely affected by the loss of income sources
on the preferred income rehabilitation measures
(vi) Supply plans (or sponsor) for resettlement inhabitant on resident, infrastructure
and social services;
(vii) Plans to ensure services on basic infrastructure in responding with the number of
inhabitant resettled;
(viii) Any necessary construction of infrastructure for resettlement area, engineering
design and its architecture (engineering and social works at resettlement area);
(ix) Any solutions to mitigate environmental impact at resettlement area (this
information can be collected from Environmental Management Plan prepared by
the Consultant);
d. Description of the community participated/will participate in the planning and
implementation process includes both resettlement and existing communities in the
area.
e. Proposals for implementing and monitoring of RAP including complaint procedures
and processes about RAP;
f. Implementation plan in accordance with construction of the works;
g. Estimate of resettlement budget and budget allocation (detail estimated budget for
compensation and rehabilitation of living conditions and if needed, to construct a new
area for resettlement). The estimation must be covered the budget to implement RAP,
independent consulting and contingencies. All financial resources to carry out RAP
activities must be clear and detail listed in the table of budget.
4.2. Detail outline of RAP as follows:
(i) Summary
(ii) Brief description of sectoral project and impacts of the subproject
(iii) Criteria for compensation, support on land damage and other assets
(iv) Policy and method on rehabilitating income and other support from subproject
(v) Resettlement Plan
(vi) Institutional and organizing responsibilities
(vii) Complaint and solution mechanism (based on the Resettlement Policy
Framework)
(viii) Monitoring structure
(ix) Agenda, plan of operation
(x) Budget and expenditure
4.3. Coordination the related consultants:
•••• The RAP Consultant will be responsible in the preparation of program, plan as
well as necessary content in order to cooperate, to instruct and to train for the
24
designing consultants of groups 1, 2 and 3 during the investigation, collecting
information for RAP preparation for each FS and general RAP which is collecting
from each separate RAP to present in FS for submitting to related departments for
approval.
•••• Preparation of necessary common forms for the designing consultants to supply
information for preparing RAP. The outline and investigation forms must be agreed
by the Client before carrying out.
PART 5 – TIME-SCHEDULE AND OUTPUTS:
PART 6 – COMPOSITION OF STAFF AND PROPOSED INPUTS:
PART 7 – REPORTING
25
Reference TOR #4 - Indigenous Peoples Action Plan Development
Terms of Reference for Local Consultants for Ethnic Minority Development Plan preparation
Background
The Mekong Health Support Project is included in the Country Assistant Strategy (2003-2006)
of the World Bank to Vietnam. The purpose of the Project is to achieve medium term health
gains in the Mekong Delta provinces especially for the poor. In order to prepare the Project, the
Japanese Government granted Technical Assistance to the Ministry of Health of Vietnam. The
general objective of this Grant is to provide inputs, information and data needed for preparing
and designing Mekong Health Support Project.
The TA includes six major components:
• Component A: Situation Analysis
• Component B: Mekong Regional Hospital Roles and Capacities
• Component C: Health Insurance Expansion Study
• Component D: Health Promotion Strategy and Regional Preventive Health Centre
• Component E: Medical Education Assessment
• Component F: Project Design and Grant Implementation Management
This TOR is seeking for 1 Local Consultants for preparing Ethnic Minority Development Plan in
the Mekong region.
Objectives of the assignment
The assignment aims (i) to undertake a social assessment to evaluate the project’s potential
positive and adverse effects on the ethnic minorities people and (ii) to prepare an Ethnic
Minorities Development Plan (EMDP) to ensure they receive culturally appropriate social and
economic benefits and to avoid, minimize and mitigate the adverse effects, if any.
Scope of work
1) Conduct a social assessment to evaluate project potential positive and adverse effects on
ethnic minorities people:
(a) A review of the legal and institutional framework applicable to ethnic minorities’ people.
26
(b) Gathering of baseline information on the demographic, social, cultural and political
characteristics of the affected ethnic minorities’ communities.
(c) Taking the review and baseline information into account, the identification of key project
stakeholders and the elaboration of a culturally appropriate process for consulting with the
ethnic minorities people at each stage of project preparation and implementation.
(d) An assessment, based on informed consultation with the affected ethnic minorities’
peoples’ communities, of the potential adverse and positive effects of the project, taking
into account their distinct circumstances and their lack of access to opportunities relative to
other social groups in the communities and the region.
(e) The identification and evaluation, based on informed consultation with the affected ethnic
minorities communities, of measures necessary to avoid, minimize, mitigate adverse
effects, and to ensure that the ethnic minorities people receive culturally appropriate
benefits under the project.
2) Develop an Ethnic Minorities Development Plan, included:
(a) A summary of the collected information on legal, institutional framework and baseline
information on ethnic minorities groups.
(b) A summary of the social assessment.
(c) A summary of results of the informed consultation with the affected ethnic minorities
communities.
(d) A framework for ensuring informed consultation with the affected ethnic minorities
communities during project implementation to fully identify their views and to
ascertain their broad community support to the project.
(e) An action plan of measures to ensure that the ethnic minorities people receive social
and economic benefits that are culturally appropriate, including, if necessary, measures
to enhance the capacity of the project implementing agencies.
(f) When potential adverse effects on ethnic minorities people are identified, an
appropriate action plan of measures to avoid, minimize or mitigate these adverse
effects.
(g) The cost estimates and financing plan for the EMDP.
(h) Accessible procedures appropriate to the project to address grievances by the affected
ethnic minorities’ communities during project implementation, taking into account the
availability of judicial recourse and customary dispute settlement mechanisms among
the ethnic minorities’ people.
(i) Mechanisms and benchmarks appropriate to the project for monitoring, evaluating and
reporting on the implementation of the EMDP. The monitoring and evaluation
mechanisms should include arrangements for the informed consultation with the
affected ethnic minorities’ communities.
Deliverables/outputs
A report on ethnic minority development plan, acceptable by the MOH and the IDA Workshops.
The Consultant will hold 1 workshop to present and discuss the preliminary findings and draft
report for objectives above with the MOH and local governments.
27
Reports and schedule of delivery The length of the assignment is 2 months for the consultant. Final reports should be in
Vietnamese and English (hard copy and electronic file) to be submitted to the Ministry of Health
and IDA. The number of copies will be decided later on. The first draft report should be
submitted before June 10.
Facilities to be provided by Ministry of Health and provinces The Ministry of Health and local governments will facilitate the Consultant and their working
team in legislation procedures.
Qualifications:
The Consultant should:
• Prove experience in assessing and situation analysis.
• Have the familiarity in working with ethnic minorities. The consultant should have
facilitation skills to conduct focus group discussions.
• Knowledge of World Bank projects and experience in Bank projects preparation would be
desirable.
The Consultant must possess a good command of English (Fluent in reading, speaking, writing
reports..).
28
MANUAL FOR THE SELECTION OF PRIVATE SECTOR PARTICIPANTS BY THE HOCHIMINH CITY INVESTMENT FUND FOR URBAN DEVELOPMENT
29
9. Background
This manual applies to the selection of private sector participants (PSPs) under the HIFU Development Project. It does not cover the procurement of any goods or services by the Project Enterprise, which shall be done in accordance with applicable Vietnamese law.
The manual is not applicable to loans made by HIFU. If there is equity and loans in the same project then the manual applies to the selection of the PSP for HIFUs equity investment. The full development of a Private Sector Participant (PSP) selection process for HIFU will be phased over three years. The process will be streamlined for maximum efficiency while meeting international good practice requirements for competitive selection by the end of the third year after adoption of this manual. The manual will not apply retrospectively to projects already implemented.
10. Need for a Manual of the selection of Private Sector Participants
HIFU is a financial institution with the responsibility to invest in infrastructure and public service projects though financial intermediaries or Project Enterprises established under Vietnamese corporate and investment laws. These Project Enterprises have co-investors from the private sector who seek to make a return on their investment through revenues earned by the provision of public services and/or infrastructure.
A manual for the selection of Private Sector Participants in these Project Enterprises is necessary to:
• establish transparent processes that provide information and certainty to potential investors
• ensure the consistent application of selection processes
• meet international good practice requirements as part of the development of HIFU governance and operations systems
11. Application Review and Amendment of Manual
This manual applies to HIFU as a state owned Investment Company acting within applicable corporate and investment laws, in terms of its Charter, investment policies, financial covenants and management policies.
It will be adopted by the HCMC PC and has application from the date of adoption.
The World Bank, HIFU and the PC will work in close co-operation in the application, review and amendment of this manual.
The manual will be reviewed at least once every year by HIFU and the PC and may be amended by resolution of the PC, provided the written agreement of the World Bank is obtained before the amendment is approved by the PC.
The World Bank may also request or suggest amendments to the Manual to HIFU and the PC.
12. Definitions used in Manual
This manual uses the following definitions:
DFI Development Financing Institution
DPI Department of Planning and Investment
EPC Engineering Procurement and Construction
30
HIFU Hochiminh City Investment Fund for Urban Development
PC Hochiminh People’s Committee
PEC Project Evaluation Committee
Pre-qualification The process of selecting a limited number of bidders qualified to implement the project in order to issue the RFP to these bidders only
Project Agreement The Agreement signed between the PC and the Project Enterprise
Proponent An Enterprise or number of enterprises making an unsolicited proposal
Project Enterprise An economic organization having its own name, having assets and a stable transaction office, and having business registration in accordance with law for the purpose of conducting the business operations related to the project.
PSP Private Sector Participant – An Enterprise or number of Enterprises having less than 50% State Equity seeking to co-invest with HIFU in the Project.
PPP public-private partnership - means a formal agreement between an organ of state and a PSP in terms of which the PSP either performs a state function or uses state property for its own commercial purposes. In so doing it assumes substantial financial, technical and operational risks and receives a benefit either by way of payments from a state budget or charges or fees to be collected by the private party from users or customers
RFP Request for Proposal
RFQ Request for Pre-Qualification
SPV Special Purpose Vehicle – an Enterprise constrained to providing only those services allowed by the Project Agreement
SoE Enterprise with more than 50% state owned shares
TET Technical Evaluation Team
Unsolicited proposal Unsolicited proposals are those proposals not requested by a government and originate within the private sector. They typically come from companies with ties to a particular industry, such as developers, suppliers, and financiers, who spend their own money to develop basic project specifications, and then directly approach governments in an attempt to get the required official approvals.
13. Core Components of Manual
13.1. Competitive selection at the level of the project Enterprise
31
HIFU is responsible for co-investing in suitable projects by taking an equity stake in an Enterprise established in order to implement the project. Its selection processes therefore extend to the establishment of that project Enterprise. The activities of the Enterprise are governed by Vietnamese law and/ or the Project Agreement entered into between the Project Enterprise and the responsible state authority.
This is illustrated in the diagram below where the various relationships between parties involved in a typical project finance or PPP structure are shown.
HIFU has three different relationships, its relationship with the PC, its role as lender and its role as equity participant in a project enterprise. It is this last relationship and the means by which other co-investors in the Project Enterprise are selected to share ownership of the project enterprise that is governed by this manual.
The requirements for the selection of PSPs are that it must be in a competitive, transparent and fair process that uses objective and measurable evaluation criteria.
13.2. HIFU as project financier available to all bidders
HIFU’s participation in suitable projects is necessary to leverage private sector investment on terms that provide best value for money to the HCMC PC. The manner in which HIFU will meet both its financing role obligations to the PC and still allow a competitive selection process is by making its financing terms available to all private sector bidders. These will be made available to all bidders via the formal project Request for Proposals (RFP) issued by HIFU.
Precedent for such a system is found in many Development Financing Institutions (DFIs) where debt, equity or guarantees are made available in the form of common term sheets to any bidder for a project.
HIFU
PSP 1
PSP 2
PSP 3
Project Enterprise
Lenders
EPC Contract Operations and Maintenance Contract
HCMC PC Ownership (equity)
Loans
Sub Contracts
Project Agreement
32
For all projects (other than unsolicited proposals) from the end of the first year after the adoption of this manual, there will be a full feasibility study that sets out the technical and financing requirements of a project. Thereafter HIFU issues a Request for Proposals (RFP) that has been prepared by HIFU with input from the relevant line department. In this RFP, HIFU is granted a reserved participation in any project, defined in terms of direct and / or indirect investments up to a specified maximum of Project Enterprise equity, as set out and quantified in the feasibility study. Reference must be made to the Manual on Project Preparation and Appraisal with regard to the feasibility study.
The PC will determine the level of participation of HIFU in the project being the maximum and minimum amounts of debt and equity, equity returns, debt interest rate and the tenure of any debt. This will be based on a rational analysis of the project and the market.
The amount and terms of direct and indirect financing to be provided by HIFU must be specified in the RFP and based on a feasibility study which has either been prepared by or thoroughly reviewed by HIFU for the project. Because the amount of capital required for the project may change during bidding and subsequent negotiations, the term sheet will set an expected and a maximum amount of direct and indirect financing.
HIFU then is able to evaluate all bidders’ responses equally, using the criteria set out in Section 14 below.
13.3. Use of Special Purpose Vehicle Enterprises
The Project Enterprise in which HIFU participates as direct investor will be prohibited from any activities other than the project activities set out in the project Agreement. In other words it will be set up as a Special Purpose Vehicle (SPV). This is for two reasons:
• To prevent the project from exposure to risk from the Enterprise participating in other activities and to limit the exposure of the project to the liabilities of its sponsor companies.
• To prevent future possible conflict of interest that would arise from the Enterprise, of which HIFU is a shareholder, bidding for future projects.
There is no prohibition on the same sponsors (without HIFU) from bidding for future projects as a separate SPV or consortium.
13.4. Cases where there is no bidder response to RFP’s issued
If, following the issuance of public tenders, there are no bidders who meet predetermined evaluation criteria, then HIFU will have the right to nominate private sector participants by invitation and negotiate terms with such PSPs subject to the requirements of the Financial Covenants as agreed between WB and HIFU and included in the HDP documentation, the HIFU Charter and any limits set on maximum HIFU ownership of Project Enterprises and provided that:
a) It has adequate capability and experience in accordance with the evaluation criteria published in the RFP
b) Its proposals on technical matters are assessed as satisfying the requirements stipulated in the set of requirements pursuant to the assessment criteria; and
33
c) The proposed price acceptable to the PC based on the estimated cost established in the feasibility study.
13.5. Exit Strategy for HIFU from Project Enterprises
In each project HIFU will have a pre-determined exit strategy based on whether or not the Project Enterprise meets expected financial and operational performance requirements. It is explicitly noted that HIFU has an obligation to implement fiscally sound practices so as to ensure sustainable investments. This requires a balance between making new investments and maintaining adequate returns from existing investments. Thus project specific exit strategies must be implemented within an overall policy of fiscal prudence.
Where the project substantially meets the projected financial returns anticipated in the Project Agreement the HIFU exit strategy will be set in a way that commences not less than 36 months and subject to applicable Vietnamese law from commencement of operations or provision of full services in the project. This exit window period must be set with a view to ensuring that the project is as stable as possible from a financial and operations perspective. HIFU will also analyze market conditions prevailing at the time and review whether the objectives for HIFU investment in a particular project have been met.
The exit strategy will incorporate the sale of shareholding, which may be phased over an appropriate period of time as well as any operational and managerial handover applicable in the project.
The disposal of equity may be as part of a refinancing of the project or as a sale of shares to other shareholders within the Project Enterprise or by sale of shares in a competitive market. In the case of a refinancing or sale to exiting shareholders, the fair market value of the shares is to be determined and used as a base for determining the sale value. The process to determine this fair market value will be stipulated in the Charter of the Project Enterprise.
In the sale of shareholding in a competitive, open market the Project Enterprise should have a right to refuse any specific shareholder on reasonable grounds.
The terms of the exit should be set out in the Project Agreement and the Project Enterprise shareholder’s agreement and Charter and the HIFU charter.
Where the project is not meeting the required financial returns at the proposed time of exit, HIFU will either delay the sale of shares until such time as the project performance is improved or market conditions have changed in favor of the sale of shares. Where the exit strategy is delayed, the Project Agreement and shareholders agreement will be revised accordingly.
13.6. Who may participate as PSPs
It is necessary to create categories of entities that may and may not be part of any Project Enterprise with HIFU
13.6.1. Enterprises with State Owned Shares
a) Participation of Enterprises with State Owned Shares in Project Enterprise
This manual acknowledges the important role of Enterprises with State Owned Shares in the economy of Vietnam and the current process of equitization of Enterprises with State Owned Shares. Accordingly, for a
34
two year period from adoption of this manual, SOEs may participate as private sector participants. From end of the second year onwards, only private sector companies may participate. Where a particular Enterprise with State Owned Shares is required to be part of the Project Enterprise it must, in the same way as HIFU, make available its terms to all bidders.
b) Participation of Enterprises with State Owned Shares as Sub Contractors to the Project Enterprises
From the end of the third year onwards, SoEs may only participate as contractors to Project Enterprises where they offer a specific service not offered by private entities in Vietnam and that is secured by agreement with the PC or HIFU and available to all bidders to a project. As an example, a project may require the distribution of products throughout the region and the Vietnam Post and Telecommunications Group may have the single largest network in that region. VPTG’s participation in any single bidding group would create a great advantage to that bidder. VPTG’s service availability to all bidders would increase competition and ensure fairness in the bidding process.
13.6.2. Enterprises in which HIFU has a shareholding or both shareholding and loan interest
This manual acknowledges that any form of direct or indirect investment in a company bidding for participation in a project enterprise creates a potential for conflict of interest that is contrary to good practice. Accordingly the following strategy will be implemented:
a) All new Project Enterprises established after one year from the time of adoption of this manual will be special purpose vehicles (SPVs) and thus may not bid on future projects
b) Existing Enterprises in which HIFU has a shareholding and representation on the Board of Management will not be permitted to participate in any selection process as a bidder. Enterprises in which HIFU has a shareholding but no representation on the Board may participate as a bidder in a selection process provided that:
� No HIFU representatives, employees, directors or legal agents participate in any activities of the Enterprise related to the bid and
� The PC appoints independent advisors to participate in the Technical Evaluation Teams (TET) as set out in section 14.3 and the recommendation of the TETs are appraised by the relevant line departments who then submit a recommendation to the PC for approval.
c) Auditable, objective and clear evaluation processes and criteria will be applied in accordance with the evaluation process set out below, where appropriate using independent advisors.
13.6.3. Other categories
All companies must be registered and compliant with the law of Vietnam or the country in which they are registered. They must not be subject to a competent body’s formal determination of no-transparent financial status,
35
bankruptcy or insolvency and not being in the process of dissolution and must not have been found guilty in a court of law of fraud or corruption-related crimes.
13.7. Maximum Equity stake in any Project Enterprise
This is subject to the Charter and financial Covenants.
13.8. Unsolicited proposals
This manual acknowledges that Unsolicited Proposals received from potential PSPs may be implemented provided they comply with the requirements of this section.
Unsolicited proposals received before adoption of this manual; and until this system for dealing with unsolicited proposals set out below is made operational and the market informed of impending changes to the current system (which shall not be later than one year after adoption); may be accepted without being subjected to competitive tendering.
Thereafter Unsolicited Proposals must be considered in the following manner:
Step 1: Submission by Proponent
The proponent must submit the proposal in writing.
The proposal must be developed to the extent that it is capable of being implemented in terms of technical, financing and cost to user proposals.
It must represent genuine effort, reasoned analyses and a demonstrated appreciation of the requirements of the public sector. It must be technically innovative and it must not be for a project identified by the PC for development as a project for open tender. Partial or limited proposals are very high risk to HIFU in that the project needs much more development and decisions have to be taken on incomplete information.
This manual requires that private sector parties who make unsolicited proposals must submit enough details to allow HIFU and the PC to make a very informed
In developing the manual for Unsolicited Proposals the following systems in use in other countries were considered:
• Project Developer status with reimbursement to unsuccessful proponents
• Swiss Challenge with opportunity for proponent to match or better other offers
• Best and Final Offer System where proponent has automatic entry into final bidding round
• Bonus system where original proponent receives a predetermined bonus in the evaluation of proposals
The system best suited to HIFU on the basis that it is in compliance with the practice established under Decree 111 of the GoV dated 29 September 2006 guiding the implementation of Law of Tendering is the bonus system. This will be applied by granting the Project Proponent a 7,5% bonus to the total score allocated to that bidder in the evaluation.
36
decision on the project. This information is the same that would have been prepared by HIFU and the line departments if the project had been initiated by the PC. In other words, the private sector must meet all the requirements for the feasibility study that HIFU shall specify in accordance with the manual on Project Preparation and Appraisal. HIFU will verify and interrogate the information in the feasibility study
This means that partly complete or incomplete proposals should be returned to the proponent. It must further contain at least the following (reference should be made to requirements for the feasibility study in the Project Preparation and Appraisal manual for further information):
Overall aspects
� Clear description of the objectives, scope and outcomes of the project
� Demonstration of deliverability
� Transaction structure (I.e. management contract, BOT, BOO etc)
� Population served
� Environmental and social impact analysis
� Time frame for implementation
� Details of all parties to the proposal including details of their capabilities, experience in the field of the proposal
Technical aspects of the project
� Outputs to be delivered
� Preliminary design
� Specifications to be used
� Full method statement of how to be delivered
� Quality assurance systems
� Operations and maintenance plans
� Capacity and proven experience to deliver the outputs
Financial
� Project costs
� Capital costs
� Non –capital (operational) costs
� Project revenues including source and reliability
� Financing structure
� Full risk analysis
� Full financial model
� Amount and terms of debt and equity financing required from HIFU
� Security arrangements, i.e. financial and non-financial guarantees to be provided
37
� Termination arrangements
Cost
� To government
� To user
� Contingent liabilities accruing to government
� Termination payments
� Take or pay arrangements
� Revenue guarantees
Economic Appraisal
Demonstration of Project Viability
Information Verification and Sign off
HIFU will acknowledge in writing receipt of all proposals and advise Proponents of the process to be followed.
Step 2: Consideration by HIFU
HIFU must advise the PC, the DPI and relevant line departments and consult with them on whether the proposal meets the criteria for an unsolicited proposal and whether to proceed further with the proposal or return it to the proponent.
HIFU will the carefully consider the proposal in consultation in committee with the PC, DPI and relevant line departments. A period of six months is allowed for consideration. In this time HIFU will ensure that all the information required by the Project Preparation and Approval Manual for the feasibility study is provided and the due diligence is completed by HIFU. If it is missing elements as set out above then it should be returned to the proponent advising them that the proposal was incomplete in specified areas. The proponent must supplement the proposal and re-submit but HIFU makes no commitments regarding the future acceptance of this information.
If the proposal is for a project that is already in development to be issued to public tender then the proposal should be returned immediately so as to avoid any disputes as to intellectual property being used by the PC in the project.
If the unsolicited proposal is complete and it is not an existing government project then the committee advised where necessary by HIFU and independent advisors will then consider it in terms of its business and strategic planning, its technical and financial aspects. Note that this is not a selection process but a consideration of the feasibility of the project set out in the proposal.
If, after consideration, the proposal is considered acceptable in terms of technical and financial feasibility then the Proponent is informed and further steps are followed as set out below. The Proponent is formally appointed as Project Proponent with the right to:
� Participate in an open, merit based, competitive bidding process
� To receive a 7,5% bonus in the points allocated in the evaluation of bids
At HIFU’s discretion a bid bond issued by a recognized financial institution in the amount of up to 0.5% of the estimated capital value may be requested of the
38
Proponent as a condition to appointment as Project Proponent because HIFU and the PC will be prejudiced by withdrawal by the project Proponent.
If the proposal is considered unsuitable for whatever reason then the Proponent is so informed and the proposal is returned. No compensation is payable to the Proponent.
If more than one unsolicited proposal is received for the same project then only the first proposal should be considered on a “first come first served” basis. Subsequent proposals should be returned unopened.
Step 3: Preparation of PSP Selection Documents
Once the Proponent has been appointed then HIFU will prepare the tender plan, cost estimation, and PSP Selection Documents within 60 days for issuance to the open market.
These will be advertised in three consecutive editions of the Tendering Newsletter and the tendering website and local and where necessary foreign publications inviting proposals. These advertisements will make it clear that proposals are requested in response to an Unsolicited Proposal and that the Project Proponent will have the right to receive a 7,5% bonus in evaluation points.
These PSP Selection Documents must set out in full detail the project, expressed as outputs. Intellectual property of the Project Proponent must not be issued. This includes the use of any specific technology or equipment and the method statement to be used in developing the project.
The evaluation criteria must be published in these documents and details given on how the process is administered.
The documents should allow between 8 and 12 weeks for responses to be submitted. They must also allow for bidders to ask questions related to the project.
The Project proponent must submit a response in this open competitive bidding process.
Step 4: Evaluation of proposals
The receipt and management of tenders, withdrawal of proposals and the opening of proposals should be done in a manner consistent with good practice as set out in Vietnamese law.
This includes treating proposals as confidential, deeming invalid proposals received after the deadline for submission, and opening the proposals in an open manner witnessed by parties making the proposals should they so wish.
All proposals are evaluated in accordance with the process set out in the section below. This is a merit based selection.
If there are no additional proposals received then the evaluation of the original or revised proposal from the Proponent must proceed. This is because the evaluation identifies areas of weakness in the proposal that must be negotiated with the Project Proponent.
Step 5: Bonus system
If the Project Proponent is the one and only bidder then it is not necessary to add a bonus.
39
For projects where there is more than one bidder, the Project Proponent shall receive an additional 7,5% of its score, which is added to the total score determined during the evaluation. Any other bidder must score more points than this adjusted total score of the Project Proponent in order to be appointed the preferred bidder.
If, in a bidding process there are two stages for projects with high technical requirements, then in the first stage, the Project Proponent shall receive an additional 7,5% of its technical score. If this adjusted score is not sufficient to achieve the points necessary to proceed to the next round, the Project Proponent shall be eliminated from bidding further. If the Project Proponent does proceed to the next round then no further bonus is added to the price and socio-economic score components.
Step 6: Appointment of Preferred Bidder
The preferred bidder is appointed in writing and final negotiations to conclude the necessary Project Agreements commence. The appointment may be made conditional on the receipt of a bid bond of up to 1,0% of the project capital value and any other conditions related to deficiencies in the proposal of the preferred bidder.
Step 7: Negotiation and Project Agreement
Negotiation on areas of deficiency in the proposal as identified in the evaluation commences. On completion of these the Project Agreement is signed.
14. Criteria and requirements for selection of PSPs by HIFU
A system will be established prior to the end of the first year after the adoption of this manual for the transparent evaluation of proposals from potential PSPs by HIFU: These will include technical, financial and socio-economic criteria in a system that places technical and financial competence and capacity as a priority followed by cost/ revenue assumptions and lastly socio economic criteria. This is a merit based evaluation system.
Detailed evaluation criteria and rules and procedures of bidding will be established by the end of the first year after adoption of this manual.
14.1. Three criteria sets
The three sets of criteria are:
� Technical and financial capacity and competence
� Socio economic criteria
� Price
Technical and financial capacity and competence represents the ability of the proponents to deliver infrastructure that meets specification and can deliver outputs over the full life of the project as well as the capacity to deliver a project that is fully financed with appropriate risk allocation.
Socio-economic represents benefits of the project to specified external stakeholders.
Price represents the cost to government or the user.
14.2. Turning the criteria into scoring
Weightings are attached to each criteria set. Because cost to government or user can be constrained within an envelope, this criteria set is weighted as less important
40
than technical and financial capacity and competence. Socio –economic cannot be more than 10.
Criteria Set Weightings
Technical and financial capacity and competence
50 to 70
Price 20 to 40
Socio economic criteria 5 to 10
Total 100
The sub criteria are set out in the sections below.
The total score for any proposal is then calculated using the following formula:
The process of scoring is thus simple. In each criterion set bidders are given a score out of one hundred. (The section below shows how these 100 points are allocated between sub criteria). Then these are multiplied by the weightings (which must add up to 100). The bidder scoring the highest points is the preferred bidder subject to confirmation that there are no fatal flaws in the proposal that would render that proposal inadequate.
14.3. Evaluation Levels
Two separate evaluation levels are required.
The first is a Technical Evaluation Team (TET) set up by HIFU made up of experts in technical experts (e.g. engineers), financial experts, legal experts and environmental or socio- economic aspects. If there is no proposal received from an Enterprise in which HIFU has a shareholding, then HIFU staff will participate in the TETs.
The second is the Project Evaluation Committee (PEC) set up by HIFU responsible for oversight of the TET, ensuring it carries out its work properly and for the final evaluation and allocation of scores.
The PEC recommends to HIFU as to the outcomes of the selection and evaluation process. If there is a proposal received from an Enterprise in which HIFU has a shareholding, then the recommendation will be made to the PC for approval.
All processes are documented and subject to audit.
Total score achieved by the bidder = a* (technical score/100) + b* (socio-economic score/100) + c* (price score/100)
where:
a is the weighting for technical (between 50 and 70)
b is the weighting for socio economic (between 5 and 10)
c is the weighting for price (between 20 and 40)
41
14.4. Detailed analysis
Prior to the detailed analysis, the TET must carry out a compliance assessment confirming that the formal RFP requirements have been met. These include:
� Validity of tender form
� Validity of the joint venture agreement:
� Business registration certificate/ Investment Certificate/decision on establishment/certificate of lawful registration of operation; and appropriate professional certificates.
� Number of originals and copies of the technical proposal
� Appendices and documents attached to the tender.
Then in the detailed analysis the TET must asses whether the project is deliverable and whether or not the required outputs can be delivered.
Each element of the system service specification must be assessed from the design, development and operational perspectives. More than merely evaluating the bids, the objective here is to:
� capture the deficiencies or added benefits
� evaluate the response on a simple scale of inadequate/adequate/good to carry through to scoring
� compile a list of deficiencies that require negotiation should that proposal be selected
In addition the TET must carry out a legal due diligence on the bidding consortium, its structure, legal status, local component credentials, and the status of individual firms (including any record of insolvency or crime)
The financial evaluation of a bid is complex. It requires a complete understanding of the project costs over its whole term, the structure of the bidding consortium and its funding, and, most importantly, the key deficiencies or additions in each bid. The TET must identify the following:
� certainty of project costs (development and operational)
� nature and cost of funding
� Contingent fiscal obligations
� project participants and overall structure
� all items omitted by bidders from the financial model
� Project bankability, which is a function of the consortium’s composition, structure, risk distribution, and funding plan.
� The distinct price evaluation is required in terms of either cost to user or government via capital grant or subsidy.
The evaluation will also consider the overall integrated solution offered by each bid.
The following process and evaluation methodology should be set out so that bidders take comfort from an auditable process with checks and balances.
14.5. Evaluation criteria
42
The table below sets out the generic evaluation criteria for the technical and financial capacity and competence, the total of which should be scored out of 100.
a) Technical and financial capacity and competence
1.1 Respondent’s capability and strength
Proposed respondent composition and structure
Skill and experience of relevant organizations
� Construction
� Operations
� Advisors
� Suppliers Strength of covenant between relevant bidding companies and any financiers
Financial and market standing
Ability to raise debt and equity and to provide security
Capacity and capability to implement Environmental and Social Safeguard instruments 1. 2. Deliverability
Commitment and capacity to meet project timetable
Project management capability
Current workload of consortium members
Quality assurance systems
Risk management capability 1.3. Project awareness
Demonstration of understanding key project demands and complexities
1.4. The development phase
Extent, quality, safety, cost effectiveness, functionality and innovation of designs
Level of design and robustness of cost estimates
Impact on social and biophysical environment consistent with the environment and social safeguard due diligence conducted in accordance with the Project Preparation and Appraisal manual.
Deliverability and time schedules
Integration of design, development and operations with a clear commissioning programme
Quality management systems proposed by the bidders
1.5. The delivery phase
Extent to which proposed performance targets and measurement systems exceed minimum specifications
Operating methodology
Quality and type of proposed services to end users
Extent to which asset management and maintenance philosophy support the project objectives and maximize value for money
Quality of proposed management structure, staffing, systems and practices
Quality and extent of proposals on branding, promotion and public relations
Quality of safety plans
Integration with existing services
43
Quality management system proposed by the bidders
Compliance with institution’s monitoring and reporting requirements
1.6 SPV structures
Robustness of the bidders’ structures: Are bidders’ responses or representations in the proposal reflected in their structures and shareholders’ agreements? The evaluation would include the level of commitment to and undertakings of each consortium member to the consortium, and the equity participation of each member.
1.7. Financial solution
Total project cost in relation to the affordability constraints of the PC or line Department
Realism of operating and capital expenditure, including an assessment of whether the quality management systems have been costed in the financial model
Robustness of the financial proposals, including their sensitivity to changes in operating and maintenance costs, currency fluctuations, inflation and interest rates, and changes in the cash-flow profiles
Robustness of the funding structure
Level and nature of equity in the funding structure
Level of commitment demonstrated by the debt and equity providers and the terms and conditions linked to the provision of this funding
Level of risk assumed, and deviation from the terms of the tender documentation
Cost, level and nature of insurance cover proposed
Risk allocation: the risk profile proposed by bidders in their proposals will be tested in relation to:
– the nature and extent of the risk
– the likelihood of risk
– passing down of the risk and obligations assumed to the key contractors.
In order to be evaluated further a proposal must score at least 70 out of 100 for technical and financial capacity and competence.
Exclusionary criteria will be established to exclude participants who do not have the required technical or financial capacity to implement the project in a pre-qualification.
b) Price scores will be allocated pro-rata so that the lowest price for any proposal scoring above the required 70 technical point threshold (at least) will score 100 and those with higher prices progressively fewer points. Price will be pre-defined as a cost to user or cost to government e.g. VND per cubic metre of treated water from a water treatment plant. Care must be taken to ensure that prices are consistent (e.g. inclusive of taxes and no excluded costs).
c) Socio economic criteria are to be determined on a project by project basis.
15. Phasing of application of manual
End of Year 1 End of Year 2 End of Year 3
Application of The manual applies to Enterprises with HIFU participation in equity
44
Manual ownership.
Evaluation system for solicited proposals
Develop detailed evaluation process and bidding rules
Commence with pilot Operational
Unsolicited Proposals
Unsolicited proposals accepted before manual adopted without competitive selection process.
Manual adopted and made known to market
Operational Operational
Prequalification of Bidders
Not applicable Commence with pilot Operational
Participation of Enterprises with State Owned Shares in Project Enterprise
All Enterprises with State Owned Shares eligible (including SoEs)
Only private sector Enterprises.
Participation of Enterprises with State Owned Shares as Sub Contractors to the Project Enterprises
No restriction No restriction Enterprises with State Owned Shares to make available their services to all PSP bidders.
Maximum equity stake
Subject to Charter and covenants
Use of SPVs Not required Commence with Pilot Operational
Exit Strategy for HIFU
In development Operational Operational
16. Links with Project Preparation and Appraisal Manual
This manual works best when projects selected in terms of the project appraisal are bankable and need HIFU development finance because of a project risk or market gap in terms of availability and terms of financing.
Provided the project selection, appraisal and development system is established and operational, a target of 90% of all projects after Year 3 should be prepared by the PC and HIFU for competitive tender with 10% by means of unsolicited proposals.
