REPUBLICOFTHEPHILIPPINES

ENVIRONMENTANDSOCIALSAFEGUARDSFRAMEWORK (ESSF) (February7,2012) FORTHE METROMANILAWASTEWATERMANAGEMENTPROJECT

 FOREWORD This Environment and Social Safeguards Framework (ESSF) has been prepared for the Banks Metro Manila Wastewater Management Project. The team that worked on the preparation of the document comprised of staff from Land Bank of the Philippines, Manila Water Company, Inc., and Maynilad Water Services,Inc.ConsultationstookplacewithrelevantauthoritiesfromthePhilippinesforthepreparation of the document. An earlier draft version of the document was discussed in a meeting at the premises of Department of Environment and Natural Resources on October 5, 2010. The earlier version of the ESSF was also publicly disclosed by LBP, Manila Water, and Maynilad in their websites, and also placed intheBanksInfoshopinFebruary4,2011. The Borrower of the proposed Bank loan would be LBP which will onlend the Bank loan proceeds to Manila Water (MWCI) and Maynilad (MWSI). As a Borrower, LBP will ensure that Banks policies on environmental and safeguards are followed and to this end it would work with the Manila Water and Maynilad.TheBanksenvironmentalcategoryofFinancialIntermediaryisapplicablefortheprojectand theESSFhasbeenpreparedaccordingly. Throughout the document Manila Water and Maynilad have been also referred to Concessionaires or SubBorrowers.Further,LBPhasalsobeenreferredtoasaBorrowerindifferentpartsofthedocument.

TABLEOFCONTENTS LISTOFABBREVIATIONSANDACRONYMS................................................................................................... 4 I. A. B. C. D. E. F. II. A. B. C. III. A. B. C. IV. V. A. B. C. D. VI. A. B. C. Background......................................................................................................................................6 ProjectOverview.............................................................................................................................. 6 ProjectDescription.......................................................................................................................... 7 ProjectCostandFinancing ............................................................................................................... 9 AreasofInfluence............................................................................................................................ 9 ScopeandObjectivesoftheESSF.................................................................................................. 10 RetroactiveFinancing.................................................................................................................... 10 EnvironmentalandSocialSafeguardsIssues................................................................................. 11 EnvironmentSafeguardsIssues..................................................................................................... 11 SocialSafeguardsIssues ................................................................................................................. 12 WorldBankSafeguardsPoliciesTriggeredintheProject..............................................................12 ProjectProcessGuideline.............................................................................................................. 14 EnvironmentalSafeguards............................................................................................................. 16 SocialSafeguards........................................................................................................................... 19 RetroactiveFinancing.................................................................................................................... 29 SubprojectMonitoringandAudit................................................................................................. 31 PublicConsultation,ParticipationandDisclosure......................................................................... 33 Introduction...................................................................................................................................33 PublicConsultationRequirementsforEnvironmentalSafeguards...............................................33 PublicConsultationandParticipationinSocialSafeguards...........................................................33 Disclosure.......................................................................................................................................34 InstitutionalArrangements............................................................................................................ 35 LandBankofthePhilippines(LBP)................................................................................................ 36 ManilaWaterCompany,Inc.(ManilaWater)................................................................................ 38 MayniladWaterServices,Inc.(Maynilad)..................................................................................... 39

D. DepartmentofEnvironmentandNaturalResources(DENR)andLagunaLakeDevelopment Authority(LLDA)......................................................................................................................................39

E. VII. VIII.

LocalGovernmentUnits(LGUs)..................................................................................................... 40 CapacityBuilding............................................................................................................................ 41 GrievanceRedressMechanism...................................................................................................... 43

Annex1:InitialScreeningFormforPotentialEnvironmental&SocialSafeguardsIssues........................46 Annex2:EARequirementsforSanitationandSewerageProjects............................................................48 Annex3:SampleTermsofReference(TOR)foranEAforWastewaterCollection,Treatment,Reuseand DisposalSystems(ConstructionandRehabilitation).................................................................................. 50 Annex4:TemplateforanEnvironmentalManagementPlan................................................................... 56 Annex5:CulturalPropertyandProtectionMeasures............................................................................... 63 Annex6:SafeguardsProceduresforInclusionintheTechnicalSpecificationsforContracts...................65 Annex7:SummaryofPublicConsultationMeetingProceedingsontheMWMPIESSMF........................69 Annex8:TermsofReference(TOR) ............................................................................................................ 74 ThirdPartyEnvironmentalAuditforMWMP............................................................................................. 74 Annex9:Environmentalrequirementsofsubprojects,SupervisionandInstitutionalresponsibilities....77 Annex10:ResettlementPolicyFramework................................................................................................ 79

LISTOFABBREVIATIONSANDACRONYMS ARAP BP CBDI CNC DAO DENR DP EA ECC ECR EDD EIA EIS EMA EMB EMM EMoP EMP EPMAR EPMD ESSF FI FS IEE ISO ESSF LBP LGU LLDA MWCI MWSI MWMP MWSS NIMBY NOL OP PCO PCR PD PENRO PMDII PMO RAP RCR ROW AbbreviatedResettlementActionPlan (World)BankProcedures CorporateBankingDepartmentI CertificateofNoncoverage DENRAdministrativeOrder DepartmentofEnvironment&NaturalResources DisplacedPerson EnvironmentalAssessment EnvironmentalComplianceCertificate EnvironmentalComplianceReport EnvironmentalDueDiligence EnvironmentalImpactAssessment EnvironmentalImpactStatement ExternalMonitoringAgency EnvironmentalManagementBureau EnvironmentalMitigationMeasures EnvironmentalMonitoringPlan EnvironmentalManagementPlan EnvironmentalPerformanceMonitoringandAuditReport EnvironmentalProgramandManagementDepartment EnvironmentandSocialSafeguardFramework FinancialIntermediary FeasibilityStudy InitialEnvironmentalExamination InternationalStandardsOrganization EnvironmentalandSocialSafeguardsFramework LandBankofthePhilippines LocalGovernmentUnit LagunaLakeDevelopmentAuthority ManilaWaterCompany,Inc. MayniladWaterServices,Inc. MetroManilaWastewaterManagementProject MetropolitanWaterworksandSewerageSystem NotInMyBackYard NoObjectionLetter OperationalPolicy PollutionControlOfficer PhysicalCulturalResources PresidentialDecree ProvincialEnvironment&NaturalResourceOffice ProgramsManagementDepartmentII ProjectManagementOffice ResettlementActionPlan ResettlementCompletionReport RightofWay 4

SA SECR SMR SSLDIP STP

SocialAssessment Social&EnvironmentalComplianceReport SelfMonitoringReport SupportforStrategicLocalDevelopmentandInvestment Project SewerageTreatmentPlant

I. Background

A. ProjectOverview

1. The Philippines has been maintaining strong economic growth due to activities in urban areas, especially around Metro Manila. As the urban areas continue to grow, the challenge of providing sustainable urban services arises, especially relating to sanitation and water. Since 1997, water supply, sewerage, and sanitation services in Metro Manila have been assigned by the Metropolitan Waterworks and Sewerage System (MWSS) to be managed by the two private Concessionaires: Manila Water Company Inc. (MWCI) for the east zone and Maynilad Water Services Inc. (MWSI) for the west zone. However, sewerage coverage remains very low at 16 percentintheeastzoneand8percentinthewestzone. 2. TheneedtoincreasetheseweragecoverageinMetroManilaisparticularlyimportantin achieving the timelines set in the Clean Water Act and the Supreme Court mandamus decision torealizeanimprovedwaterqualityinManilaBay.MWCIplanstoincreasecoverageintheeast zone to 30 percent in 2010 and 100 percent by 2037. In the west zone, MWSI also plans to expand its wastewater collection and treatment services to 14 percent by 2012 and to 100 percentby2037. 3. In order to meet the objectives of increasing the coverage and effectiveness of wastewater collection and treatment as well as septage management in Metro Manila and its suburbs, the Government of the Philippines is preparing the Metro Manila Wastewater Management Project (MWMP) through the Land Bank of the Philippines (LBP), which will act as the Financial Intermediary (FI) and Borrower for the project, and through the two Concessionaires: MWCI and MWSI, which will be the SubBorrowers. Specific development objective of the MWMP is to improve wastewater services in selected subcatchments of Metro Manila and surrounding areas. This will be achieved by supporting Manila Water and Maynilad to increase their coverage of wastewater collection and treatment and septage management whichwillcontributetowardsimprovingtheenvironmentinMetroManila. 4. The overall environment and social benefits to be generated by the project will contribute to an improvement in the general state of the environment in Laguna LakePasig RiverManila Bay watershed, leading to better health and wellbeing due to improved living conditions for the people. This promises a better quality of life and economic competitiveness for Metro Manila and its suburbs. Additional project details are available in the Project AppraisalDocument.

B.

ProjectDescription

5. The project has been designed in a manner that allows flexibility in supporting investments to be carried out by the two Concessionaires. An indicative list of investments has been developed and the Concessionaires are in the process of preparing the investments to meet the eligibility criteria for Bank financing. Land Bank as a Borrower will work with Manila Water and Maynilad, both subBorrowers, to ensure that the following eligibility criteria are met: Economic and Technical: The subproject should propose technically feasible options and be justified on cost effectiveness and economic grounds; wherever possible a cost benefitanalysiswouldbepresented; Financial: The revenue stream for the Concessionaires is not directly connected to each subproject as revenues would be based on overall tariffs agreed with the regulator. The costs, however, will increase for the Concessionaires for each treatment plant due to the investments and operations. To ensure that the overall financial viability of the Concessionaires is not affected, they would have to demonstrate that the debt service coverageratioshouldnotbelessthan1.2; Environmental: The subproject should: be in line with the objective of the project; and comply with the environmental safeguard procedures laid out in the Environmental and Social Safeguards Framework (ESSF), which specifies that all environmental safeguard instruments such as the Environmental Impact Assessments or Environmental ManagementPlanshavetobeapprovedbytheBank;and

Social: The subproject should comply with the social safeguard procedures laid out in the ESSF which would include procedures on land acquisition and resettlement due to construction activities of the project. All social safeguard instruments such as Resettlement Completion Report (RCR) or Resettlement Action Plan (RAP) have to be approvedbytheBank.

6. The project is expected to finance investments by Manila Water and Maynilad in wastewater collection and treatment, and septage management in Metro Manila. Investments under the two subcomponents of the project will help the Concessionaires meet their service obligation targets under the Concession Agreement. Eligible investments will include wastewatercollectionandtreatmentandseptagemanagement.Consultingassignmentsrelated to project implementation are also eligible. These would include: preparation of feasibility studies, construction supervision, preparation of environmental and social safeguard reports, preparation of project summary reports and audit reports, and public awareness campaigns to inform the citizens about the project and the benefits of better water and wastewater services.

The Concessionaires will pay for any land acquisition and resettlement costs which will not be financedwithBankfunds. 7. Component1:InvestmentsinWastewaterServicesbyManilaWater($193.4million) This component supports technical assistance and investments by the Concessionaire in wastewater collection and treatment, and septage management in the east Concession zone of MetroManila.OnlyoneinvestmenthasbeenforeseenforManilaWaterwhichistheNorthand South Pasig Sewerage System. It will include the construction of a wastewater treatment plant (capacity of 165,000 m3/day) and associated sewerage lines. The prequalification process to select a contractor that will construct the treatment plant on a Design Build basis is underway. Separate contracts for installation of sewers will also be prepared and for which preparation for designs is underway. Environmental and social safeguard instruments have already been prepared for the treatment plant. However, the designs and location for the sewer systems have not yet been completed. Permanent impacts due to sewer network and laying of wastewater mains are expected to be limited as it is expected that new sewer lines would be laidinpublicspacesandmostlyinthemiddleoftheexistingroads.Theseworkswouldhowever, cause temporary impacts on roadside commercial establishment and residential buildings in terms of temporary restriction of access. Where waste water mains and sewer lines traverse private properties/housing association areas, easement rights for laying of such pipelines, and their periodic repairs/maintenance, would be obtained in consultation with respective owners andassociations.Therefore,nolandacquisitionforsuchareaswouldbenecessary.However,in caseofanyneedforlandacquisition,theprovisionsoftheESSFwillapply. 8. Component2:InvestmentsinWastewaterServicesbyMaynilad($220.7million)This component supports technical assistance and investments by the Concessionaire in wastewater collection and treatment, and septage management in west Concession zone Metro Manila. Six potentialinvestmentshavebeenpreidentifiedthatcouldmeetsubprojecteligibilitycriteriafor Bank financing. The identified investments are: (a) Rehabilitation of the existing AyalaAlabang Sewerage Treatment Plant (STP) that has an existing capacity to treat 7,500 m3 wastewater per day; (b) South Septage Treatment Plant that is expected to treat about 250 m3/day of septage collected from septic tanks; (c) Construction of the Talayan STP in the San Juan river basin with a capacity of 15,500 m3/day; (d) Construction of the Valenzuela STP with a capacity of 60,000 m3/day; (e) Construction of the Pasay1 STP with a capacity of 46,000 m3/day; and (f) Construction of the Muntinlupa STP with a capacity of 66,000 m3/day. Four of the subprojects, namelyTalayan,Valenzuela,PasayandMuntinlupaalsohaveassociatedsewernetworks. 9. Theprojectactivitiesareseparatedundertwophases. Phase 1 investments would be those for which the subprojects sites are known, land has been acquired and for which the safeguard documents have been submitted to the Bank. There are four investments in this phase Manila Waters North and South Pasig Sewerage System,
1

PasaySTPreferstoMaricaban/PasaySTP

including the sewer lines; and Maynilads rehabilitation work in Ayala Alabang STP, Talayan STP andPasaySTP.Itisexpectedthatthesewerlinesinvestmentwouldnotrequirelandacquisition as the lines would be laid under existing public roads. The final designs for the sewer lines will be carried out during project implementation and in case the final designs require land to be acquired, the procedures outlined in the ESSF would be followed. Similarly, pump stations may requirelandacquisitionincasetheyareinstalledinareaswhicharenotpublicland.Incaseland acquisition is needed, the provision of the ESSF would be followed. About 74 percent of the BankloanwillbecommittedthroughthePhaseIinvestments. Phase 2 investments are the indicative investments for Maynilad where construction will start after March 31, 2013. These potential investments are for the South Septage Treatment plant, ValenzuelaSTP,andMuntinlupaSTP.Mayniladisintheprocessofacquiringlandforthesesites. Once the land is acquired, site specific conditions would be known and Maynilad would be able to prepare the necessary safeguard instruments during project implementation. The project is classified as an FI loan for environmental purposes and related Bank procedures would be followed. The safeguard documents would be prepared under phase 2 as per the procedures outlined in the Environment and Social Safeguard Framework (ESSF). Maynilad will hire consultants to carry out detailed designs for the sewer networks. Thereafter contractors would behiredfortheinstallationofthenetwork.Mayniladwillalsohireacontractortoconstructthe STPsandtheseptagetreatmentplantthroughaDesignBuildcontract. C. ProjectCostandFinancing

10. The total cost of the proposed project is US$ 414.1 million with a Bank financing of US$ 275 million and US$ 139.1 million in equity investments provided by the Concessionaires. The total investment cost may change and it would depend on the actual investments that are carriedout.TheBankloanofUS$137.5millionwouldbemadeavailabletoeachConcessionaire for the investments and the rest of the investments would have to be borne by the Concessionaires. The front end fee of US$ 687.5 thousand will be paid by the Concessionaires outsideoftheBankloanandtheinvestmentcostincludespriceandphysical contingencies.For Component 1, the investment cost is US$ 193.4 million of which US$ 55.9 million will be financed by Manila Water and the rest by the Bank. For Component 2, the investment cost is US$ 220.7 million of which US$ 83.2 million is expected to be financed by Maynilad and rest by theBank. D. AreasofInfluence

11. In a subcatchment2 where there is Bank financing, all activities Bank financed or non Bank financed necessary to achieve the stated development objective will follow Bank safeguard procedures. For the proposed septage treatment plant by Maynilad, the Bank's safeguard policies will apply to the construction and operation of the plant, including the associated septage collection, treatment and disposal activities. For this project, the environmentandsocialsafeguardspolicieswillbeapplicablefortheconstruction/rehabilitation of the sewage/septage treatment facilities, main sewer trunk lines, pumping stations, sewer manholes,interceptorcanalsandsludgemanagement. E. ScopeandObjectivesoftheESSF 12. Preliminary investigations carried out by the Concessionaires suggest that environment and social impacts will occur both during construction and operational phases of the project. The scope of the impacts will vary from subproject to subproject. This Environment and Social Safeguards Framework (ESSF) will guide the project to adequately address and mitigate adverse environmentalandsocialimpactsthatwillbepotentiallygeneratedbytheproject. 13. The ESSF establishes the objectives, procedures, institutional framework, and implementation arrangements for identifying, managing and monitoring potential environmentalandsocialimpactsoftheprojectactivities.TheESSFwilladdressmechanismsfor public consultation and disclosure of project documents as well as redress of possible grievances.ThescopeandkeyobjectivesoftheESSFinclude: To establish clear procedures and methodologies for the environmental and social screening, review, approval and implementation of subprojects to be financed under theProject;and To specify appropriate roles and responsibilities, and outline the necessary reporting procedures, for managing and monitoring environmental and social concerns related to subprojects.

F. RetroactiveFinancing

14. Retroactive financing, as defined in the Loan Agreement between the Bank and LBP is possible under the project. For a project to be considered for retroactive financing, the sub project financing criteria, including those related to environment and social safeguards have to be met. The procedures laid out in this ESSF will apply for subprojects to be considered for retroactivefinancingasdescribedinSectionIIICRetroactiveFinancing.
2

Underthisproject,asubcatchmentcomprisesofawastewatertreatmentplant,seweragelinestoconveywastewater andpipelinesforconveyinganddisposingtreatedwastewater,andsystemsforsludgemanagementandtransportation.

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 II. EnvironmentalandSocialSafeguardsIssues

15. The ESSF is responsive to the relevant national and local laws and regulations and the World Bank Safeguards Policies. The safeguards requirements for the project will build upon national guidelines and requirements in order to streamline the documents required for each subproject without compromising in any manner the safeguard requirements of either the governmentortheWorldBank. A. EnvironmentSafeguardsIssues 16. ThisprojectisthefourthofaseriesofinvestmentprojectsassistedbytheWBtoexpand the effective delivery of services for sanitation and sewerage sector in Metro Manila. The WB has assisted the financing of eight sewage treatment plants, two septage treatment plants and seven communal septic tanks that are operating in Metro Manila. These plants are operating satisfactorily and the lessons learned have been incorporated in the project design. Key lessons learned are applying open market purchase for land acquisition to expedite construction, and involving communities upfront to discuss potential investments. These lessons are elaborated furtherinSectionIIIBApplicablePolicies,KeySteps. 17. Sanitation and sewerage projects are classified as environmental enhancement projects because its main objective is to treat domestic sewage before it is discharged to the environment thereby improving the overall environmental conditions of an area. However, the extent of the process of collection and treatment of raw sewage and the disposal of the treated sewage and sludge as well as the construction or rehabilitation of the sewer system may generate environmental impacts during construction and implementation periods. These environmental impacts have to be identified and suitable mitigation measures should be applied. 18. The main environmental issues that are likely to arise during the project construction are: disruptions due to noise, traffic, and dust. During project implementation the impacts are likely to arise from discharge of treated water, although the quality of the treated water will have to meet discharge standards and the quality of water will improve since untreated wastewater is currently discharged to water bodies; smell arising from the treatment plants; disposal of sludge (from wastewater treatment plants); and septage (from the solids collected fromtheseptictanks). 19. Similar projects located in urban areas are severely constrained by the limited space available to maintain buffer zones or complete the entire sludge management process. Another constraintisthelackofacceptancebylocalcommunitiestobelocatedadjacenttoawastewater 11

treatment facility. These issues have to be addressed. Based on experience, it is best practice to initiate an early engagement with the stakeholders and a public disclosure of project documents to end users, local communities, government regulators, Local Government Units, service providers in planning and designing sanitation and sewerage projects to ensure project sustainabilityandsocialacceptability. SocialSafeguardsIssues 20. Land will be required for the physical components of the project (Sewerage Treatment Plant, wastewater treatment plants, interceptor boxes, pump stations, etc.). For STPs, depending upon the capacity, the land requirement may vary (expected to be between 13 hectares).Forpumpstationsandinterceptorboxes,thelandrequirementwillbemuchsmaller. During identification of potential sites, both the Concessionaires will as much as possible avoid land parcels with multiple owners and encumbrances. Permanent impacts due to sewer network and laying of wastewater mains are expected to be limited as it is expected that new sewer lines would be laid within public roads. These works would however, cause temporary impacts on roadside commercial establishment and residential buildings in terms of restriction of access. Where wastewater mains and sewer lines traverse private properties/housing association areas, easement rights for laying of such pipelines, and their periodic repairs/maintenance, would be obtained in consultation with respective owners and associations.Therefore,nolandacquisitionforsuchareaswouldbenecessary. C. WorldBankSafeguardsPoliciesTriggeredintheProject 21. FollowingBanksafeguardprocedureswillbetriggered: OP/BP 4.01 EA: Environmental category of Financial Intermediary (FI) will apply. Individual subprojects will be screened and assigned the appropriate environmental categorization and environmental due diligence (EDD) will be conducted in accordance withOP4.01. OP/BP4.04NaturalHabitats:Thepolicyistriggeredincaseasubprojectaffectsnatural habitats. This will be determined during the preparation of the environmental instruments. However, it should be also noted that site visits for the known sites in Phase 1 have indicated that the project is not expected to cause significant conversion or degradation of natural habitats. All subproject proposals will be screened for potential adverse impacts on critical and noncritical natural habitats and necessary mitigationmeasureswillbepreparedaspartofthesubprojectspecificEAandEMP. OP/BP 4.12 Involuntary Resettlement: Land acquisition and involuntary resettlement are anticipated under the project, particularly for subprojects involving service expansion or reconstruction at new sites. Subprojects will be screened for landrelated B.

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impacts, and appropriate resettlement instruments, if needed will be developed and implemented. 22. Provisionsforchancefindswillbeincludedintheproject:All constructionactivitieswill include mechanisms to address chance finds to avoid or mitigate adverse impacts on Physical Cultural Resources (PCR) in Manila. Further, the environmental assessments to be carried out will confirm whether PCR are affected. In case the environmental assessment identifies that PCR will be affected, the Banks policy on Physical Cultural Resources (OP 4.11) will be triggered and appropriate measures will be taken as per the policy. Ways to address chance finds are elaboratedmoreintheESSF(Annex5,CulturalPropertyandProtectionMeasures). 23. Indigenous Peoples policy (OP 4.10) is not triggered. No indigenous people that correspond to the Bank's definition of Indigenous Peoples are residing within project influence area. There are no ancestral domains in Metro Manila and indigenous peoples found there are dispersed and do not form distinct cultural communities. Many are temporary visitors seeking seasonal economic opportunities. Further, no forced severance from ancestral territories has occurred.ThishasbeenconfirmedinadiscussionheldwithNationalCommissiononIndigenous People (NCIP) in August 2010 as well as a review of the database in the NCIP website http://202.57.46.78/adis/Public/default.aspx.

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III.

ProjectProcessGuideline

24. Assubprojectswillbepreparedforfinancinginacontinuousmannerduringtheproject implementation period, screening for potential environmental and social impacts will be conducted and mitigation and management measures will be developed in line with the agreed ESSF. Environmental and social impact screening, mitigation and management measures developmentandimplementationwill followthesesteps.ThetwoSubBorrowerswillcarryout theworkrelatedtothestepsmentionedbelow.LBPwillreviewtheprocessandthedocuments prepared to ensure that Bank procedures were followed, prior to requesting financing from the Bank for the subprojects. The Bank will also review prior to providing financing to ensure that theprocesshasbeenadequatelyfollowed. Step1IdentificationofSubprojectsAccordingtoSelectionCriteria. The selection criteria are known to the SubBorrowers who will identify the sub projects, including the possible land where the investments are expected to be carried out. MWCI plans to acquire the land through a willingbuyerwilling seller method and the location of site would be known once the contract to sell (signed between MWCI andthelandowner)issigned. Step2Screening Screening for potential environmental and social safeguard impacts and determination of safeguards documents required according to national regulations and World Bank policies.Screeningwilldetermine(i)whethertheprojectisenvironmentalcategoryA,B or C (ii) the national applicable requirements and Bank policies to be triggered and (iii) the choice of safeguard instruments. The social screening will include in particular determination on whether the Banks policy on Involuntary Resettlement will apply and in case where the land is acquired through open market purchase on a Willing Buyer WillingSellerbasis,theprocessandprocedurestodoso. The SubBorrowers will ensure that the subprojects are aligned with the screening process outlined in the ESSF. Because the evaluation of the expected environmental and social impacts requires specialized technical skills, the SubBorrower may employ qualifiedenvironmentalandsocialspecialistsaswellasconsultantstoassisttheminthis task.TheSubBorrowerwillsubmittheresultsofthescreeningtoLBP. Step3ProjectPreparationandDocumentation Once the screening and documentation requirements are acceptable to LBP, it will submit the results of the screening to the Bank. After the Bank provides its comments, the Sub Borrower will provide TORs that determine the scope of the environment 14

instruments to be prepared. In particular for Category A projects, the Bank will review the TORs. Then the SubBorrowers will develop detailed safeguard documents and impactmitigationmeasures. All corresponding safeguards instruments shall be prepared by the SubBorrower. Likewise, it is the responsibility of the SubBorrowers to carry out the necessary permit applications as required by the ESSF, and to obtain the necessary clearances for each subproject before starting the construction. Sound safeguards practices have to be incorporated into the subproject design and implementation, and potential negative impacts will have to be mitigated to acceptable levels / standards. The SubBorrowers are responsible for the quality and accuracy of the information in the safeguards document, as well as the transmission of these documents to Department of Natural Resources(DENR)orothergovernmentagency. Safeguard documents will be subject to consultation and disclosure in an accessible place, in a timely manner, in a form and language understandable to key stakeholders, prior to the finalization of the documents. Particular attention will be given to ensure projectaffected persons have adequate time and ready access to draft documents beforeconsultationtakesplace. Step4Reviewandclearanceofenvironmentalsafeguardsdocuments The environmental and social safeguards documents prepared by each of the Concessionaries will be reviewed by LBP which may consult other related agencies. After the documents are satisfactory to LBP, it will submit the documents to the Bank forreviewandapprovalwithitsassessmentonhowtheESSFconditionshavebeenmet. ThesafeguarddocumentsforallsubprojectsaresubjecttoBanksreview. Step5ImplementationSupervision,MonitoringandEvaluation Implementation of the safeguards measures during subproject implementation is the responsibility of the SubBorrowers. Any costs associated with the government process and cost of monitoring shall be shouldered by the SubBorrower. The primary purpose of compliance monitoring is to ensure the implementation of sound and standard environmentalproceduresasdefinedduringtheprojectpreparation.Specifically,itaims to: (i) monitor project compliance with the conditions set in the safeguards instruments and applicable laws, rules and regulations; and (ii) provide a basis for timely decision makingandeffectiveplanningandmanagementofthemitigatingmeasuresthroughthe monitoringofactualprojectimpactsvisavisthepredictedprojectimpacts.

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A. EnvironmentalSafeguards ApplicablePolicies 25. AsperBanksclassification,thisprojecthasbeencategorizedasaFinancialIntermediary (FI) and LBP as a Borrower will ensure that the Banks policies and national regulations on the environment are followed, and appropriate instruments prepared. Under the FI category, it is possible to have subprojects belonging to environmental categories A, B, and C as per Banks classification. The procedures outlined for each of these types of environmental categories will befollowedbytheConcessionairesandLBP. 26. The following national laws and regulations relevant to the environmental safeguards andtheprotectionofwaterbodiesfrompollutionprovidethebasisfortheoverallframeworkof theESSF: PresidentialDecree(PD)No.1586,1978ontheEISSystem; RepublicActNo.9275,2004onthePhilippineCleanWaterAct; PresidentialProclamationNo.2146,1981onEnvironmentallyCriticalProjects/Areas; Administrative Order No. 42 by the Office of the President 2002, describing categories ofprojectsandareassubjecttotheEISSystem; DENR Administrative Order No. 200330, the Implementing Rules and Regulations (IRR) for the Philippines EIS System (2003), and its Revised Procedural Manual issued August 2007; MemorandumCircularNo.:201014StandardizationofRequirementsandEnhancement of Public Participation in the Streamlined Implementation of the Philippine EIS System; and RepublicAct9003,2000,EcologicalSolidWastesManagementAct. KeySteps (i) IdentificationofSubprojectsAccordingtoSelectionCriteria 27. Inidentifyingthesubprojects,includingthelocationofthesite,theConcessionaireswill takeintoaccountrelevantenvironmentalandsocialconsiderations.Thiswillincludeassessment of the various sewage treatment options, locations to minimize potential environmental risks (noise, odor, pumping, discharge from STP, etc), availability of land, as well as suitability of the projectinagivenneighborhoodthatleadtotheselectionoftheseinvestments. (ii) EnvironmentalScreening 28. The environmental screening that would be carried out would identify key potential environmental issues that could arise from the proposed project. The screening process will 16

also be used to determine the environmental category of the project (A, B, C) as per Banks requirements. The success of an environmental screening is dependent on adequate baseline environmentaldata,technicalexpertise,goodplanning,managementsupport,andcoordination withkeyplayersanddecisionmakers. 29. With respect to environmental screening of subprojects, the national regulations and World Bank policies are considered together since both are impactbased and will require the SubBorrower to identify and assess potential impacts to environmental components such as water, air, land and natural habitats and biodiversity. The screening results will be cross checked with national regulations, in order to determine the applicable EA documentation requirements. Three safeguards instruments are specified in the regulations: (a) EIA report; (b) InitialEnvironmentalExamination(IEE);and(c)Projectdescription. 30. Annex 1 provides an Initial Screening Form for potential environmental and social safeguards issues. This form facilitates the determination of applicable World Bank safeguards policies as well as those relevant to national legislations. It provides the checklist for screening, classifiesenvironmentalcategoryandidentifiesthesafeguardsinstrumentsrequired. (iii) ProjectPreparationandDocumentation 31. The environmental safeguards instruments for each subproject will be determined based on the screening procedures, as follows. All documents will be prepared by the Sub Borrowers and submitted to LBP for review. After the documents are acceptable to LBP, it will send the documents to the Bank for review and clearance for the Bank to conform financing of thesubproject.AllsafeguarddocumentswillbesubjecttopriorreviewbytheBank: CategoryA:SubprojectswillrequireanEIAthatincludesanEnvironmentalContingency Plan and an EMP prepared in accordance with Bank requirements, the terms of reference for which can be found in Annex A of the Bank Policy OP/BP 4.01. Moreover, all bidding documents will include a standard contract clause for implementing and reporting compliance to the EMP, occupational health and safety protection measures and chance finds of physical cultural resources. The SubBorrower will consult with the Borrower during preparation of all safeguards documents for Category A projects. The SubBorrower will set up an Environmental Guarantee Fund (EGF) in agreement with DENR for this project. The EGF is money reserved by the SubBorrowers in an escrow bankaccountthatwillbeusedtorehabilitateorrestoredestroyedhabitatsordegraded ecosystemsorcompensateanyprojectaffectedindividualcausedbyanyenvironmental negligence of the project. An EGF committee shall be formed to manage the Fund and shall be composed of representatives of DENR, affected communities, concerned LGUs andrelevantgovernmentagenciesidentifiedbyDENR.

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CategoryB:Subprojects willrequireanEIAorsimplifiedEIA (i.e.,IEE,asrequiredunder the national laws and regulations) and an EMP (as per the Bank policy). The subproject specific EMP and standard environmental codes of practices, including coverage of how to handle chancefinds of physical cultural resources, will be included in all construction contracts/biddingdocuments. Category C: Subprojects that are rated Category C require a Project description and an EMP depending on the size and nature of their activities and will need to comply with the regulatory requirement for registration. Investments that will have minimal impact ontheenvironmentwillbeclassifiedunderCategoryC. (iv) Reviewandclearanceofenvironmentalsafeguardsdocuments 32. Approved Environmental Compliance Certificate (ECC) and other relevant government permits and clearances will be transmitted by the SubBorrower to the Borrower. The Borrower will exercise environmental due diligence (EDD) by keeping records of subproject EA reports, feedback/technicalinformation,andECCs/CertificatesofNonCoverage(CNCs). 33. The requirements for review and clearance of the environmental documents by the WB areasfollows: Category A: The EIA/EMP and other relevant documents for all Category A subprojects will be subject to WB standard prior review and clearance procedures prior to approval ofthesubproject. Category B: The Simplified EIA (or IEE) and EMP for Category B subprojects will be subjecttoWBpriorreviewandclearancebeforeapprovalofthesubproject. Category C: If an EMP is necessary, the WB will conduct a review of the document prior toconfirmingfinancingforthesubproject. Safeguard documents will be subject to consultation and disclosure in an accessible 34. place, in a timely manner, in a form and language understandable to key stakeholders, prior to the finalization of the documents. Particular attention will be given to ensure projectaffected persons have adequate time and ready access to draft documents before consultation takes place. (v) ImplementationSupervision,MonitoringandEvaluation Supervision 35. The SubBorrowers will be responsible for the implementation of the EMP. Annex 6 contains Safeguards Procedures for Inclusion in the Technical Specifications of Contracts for the SubBorrowersContractors.TheBorrowerwillvisitthesubprojectareasasneededthroughout 18

projectimplementationinordertosupervisetheimplementationofthesafeguardsinstruments to ensure they are implemented in compliance with the Bank policy requirements. Roles and responsibilities of each institution involved are described in detail in Section VI Institutional Arrangements. MonitoringandEvaluation 36. The primary purpose of compliance monitoring is to ensure the implementation of sound and standard environmental procedures as defined during the project preparation. Specifically,itaimsto: monitorprojectcompliancewiththeconditionssetintheECC; monitorcompliancewiththeEMPandapplicablelaws,rulesandregulations; provide a basis for timely decisionmaking and effective planning and management of environmental measures through the monitoring of actual project impacts visavis the predicted impacts in the EA /EMP as well as corrective measures to be taken in cases of noncompliancetotheEMP. DENRProcedures 37. In addition to the monitoring and evaluation conducted by the SubBorrower and reviewedbytheBorrowerandtheBank,allprojectscoveredbythePhilippine EISSystemwhich have been issued an Environment Compliance Certificate shall be subjected to periodic monitoringbytheDENR (i.e.,complianceandimpactmonitoring inaccordancewithestablished procedures and protocols). Within the framework of the Philippine EIS System, the responsibilities of monitoring projects are lodged with the EMB regional offices and the Laguna Lake Development Authority (LLDA). As a minimum requirement in compliance monitoring, DENREMBandLLDAshallfocusonthefollowing: statusofSubBorrowersdeliveryofcommitmentmadeinitsEMP(or,inthecaseofIEE Report,theSummaryMatrixofImpacts); effectivenessofthecommittedEMPinmitigatingprojectsenvironmentalimpacts;and meetingthetermsandconditionsoftheECC. B. SocialSafeguards ApplicablePolicies 38. In terms of national legislations in the Philippines, the key legal and administrative policiesrelevanttoinvoluntaryresettlementare:

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The Bills of Rights of the Constitution of the Republic of the Philippines states: In Article III, Section 1, No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. In Article III, Section 9, Private property shall not be taken for public use without just compensation. Executive Order 1035 (1985) requires conducting of Feasibility Studies, Public Information campaign, Parcellary survey and assets inventory. It also provides for compensation for acquired land at fair market value based on negotiations between owner and appraiser; relocation assistance to tenants, farmers and other occupants; financial assistance to farmers and agricultural tenants equivalent to the average harvest for the last three years but not less than P 15,000/ha; Disturbance compensation to agricultural lessees equivalent to 5 times the average gross harvest during the last 5 years; and compensation for improvement on land acquired under CommonwealthAct(CA)141. CA 141, Public Land Act (1936) institutes classification and means of administration, expropriationanddispositionofalienablelandsofthepublicdomain. SupremeCourtRuling(1987)definesjustcompensationasfairandfullequivalenttothe losssustainedtoenableaffectedhouseholdtoreplaceaffectedassetsatcurrentmarket prices. Republic Act 6389 provides for disturbance compensation to agricultural leases equivalentto4timestheaveragegrossharvestinthelast5years. Republic Act 8974 (2000) which facilitates the acquisition of ROW, site or location for National Government Infrastructure Projects and for other Purposes. Implementing Rules and Regulations of RA 8974 was also issued. This mandates the use of replacementvalueoflandandstructures(withoutdepreciation). Republic Act 7279 (1992) "Urban Development and Housing Act" mandates the provision of a resettlement site, basic services and safeguards for the homeless and underprivilegedcitizens. Republic Act 7160 (1991) "Local Government Code" which allows the LGUs to exercise thepowerofeminentdomainforpublicuse.

39. Inadditiontothepriornationalrequirements,WorldBanksPolicyonInvoluntary Resettlement(OP4.12)isapplicable.TheobjectivesandmainprinciplesofthePolicycanbe summarizedasfollows: 20

Involuntary resettlement should be avoided where feasible, or minimized, exploring all viablealternativeprojectdesigns. 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 persons displaced by the project to share in project benefits. Displaced Persons should be meaningfully consulted and should have opportunities to participateinplanningandimplementingresettlementprograms. 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 predisplacement levels or to levels prevailing prior to the beginning of project implementation, whichever is higher.

40. ThekeygapsbetweenthelocallawsandregulationsandprovisionsoftheWorldBanks PolicyonInvoluntaryResettlement(OP4.12)include: Philippine Constitution, Article XIII, Section 10: Urban or rural poor dwellers shall not be evicted nor their dwellings demolished, except in accordance with the law and in a just humane manner. Focus is given on urban poor as per UDHA. Limited assistance or protectionisgiventotheruralpoorunlesstheyaretenuredagriculturaltenants. R.A. No. 8974, Sections 8, 9, 10 and 13 provides compensation of affected properties based on fair market value. However, land donation is the first approach to the acquisitionofprivateland. Notwithstanding the ruling by the Supreme Court, none of the laws and regulations clearlyprovideforcompensationatreplacementcost. Income restoration/ rehabilitation assistance is available only for resettled beneficiaries ofthegovernmentssocializedhousing. There is no policy for displaced vendors and employees of micro/small enterprises that havetoshutdowntheirbusiness/toberelocated. 41. The Resettlement Policy Framework (RPF) for the project has been prepared to address any involuntary land acquisition or resettlement. The RPF, provided in Annex 10, includes specific provisions to ensure that compensation for affected lands and other assets is provided 21

at replacement value to all the Displaced Persons (DPs) including those who may lose access to livelihood due to the project. The RPF is consistent with the provisions of the World Banks OP 4.12andnationallawsandregulationsinthePhilippines.Itaddressesnamelygapsbetweenthe provisions of the World Banks Policy on Involuntary Resettlement (OP 4.12) and local laws and regulations. 42. EntitlementsandcompensationforthetypesoflossesandDPcategoriesshallbeguided bytheResettlementEntitlementMatrixshownintheRPFinAnnex10. 43. In general, the provisions of the ESSF, and RPF, would be applicable in all the sub projects that result in adverse social impacts, permanent and temporary, due to the acquisition of land and other assets or causing loss of incomes and livelihood. However, the requirements for surveys and documentation would vary depending upon the mode of acquisition of land by the Concessionaires. Where the land is obtained through direct negotiations between the Concessionaires and the land owners and the responsibility to relocate any occupants on the land rests with the land owners, the Concessionaires should ensure that the compensation and other assistance provided to affected households is adequate to enable affected households to restore their livelihood and income levels to predisplacement levels. In this respect, ConcessionairesshouldprovideaRCRtoLBPtodemonstratethattheprocedurescarriedoutfor the land acquisition and the compensation provided are in line with the ESSF and that the process to acquire land through open market purchase is in accordance with the proposed protocolspecifiedintheESSF. KeySteps 44. TheSubBorrowerswillberesponsibleforprovidingresourcesforallactivitiesrelatedto the resettlement planning and implementation. Where in a subproject OP 4.12 is triggered, the Concessionaires will carry out necessary studies (census, inventory of assets, etc.) and prepare necessary documents (Resettlement Action Plan (RAP) or an Abbreviated Resettlement Action Plans (ARAP). The scope and contents of the RAP or an ARAP will follow the provisions of the World Banks OP 4.12 Annex A. Each RAP, ARAP and RCR will include detailed cost estimates for compensation and relocation of DPs disaggregated by category of DPs and types of impacts and assets lost. Cost estimates will make adequate provisions for contingencies. In case of any cost overruns,concernedConcessionairewillprovideadditionalfundsinatimelymannertoensure that the implementation of involuntary resettlement activities is completed according to the schedule. All costs in regards to the acquisition of land and other assets, compensation and financial assistance to affected households would be included towards cost of the subprojects. Theproceduresthatwouldbefollowedtomeetthesafeguardrequirementsareoutlinedbelow. (i) Identificationofsubprojectsaccordingtoselectioncriteria

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45. Potential subprojects are identified by the respective Concessionaires based on the overall project objectives and needs assessment. First step in this respect would be on selection of sites and getting general agreement from the communities in the adjoining areas before the siteisconsideredasfinal.Inthepast,manyneighborhoodsresistedconstructionofSTPsintheir immediate vicinity. Together with the Not in My Backyard (NIMBY) syndrome, many have expressed concerns on possible foul odor and noise. To mitigate these fears, the subproject proponents have incorporated community tours to operating STPs as part of the community awareness programs. One of the sub proponents has also incorporated community facilities in their design. In consideration of safety and health, basketball courts, playgrounds and similar structureshavebeenmadeforreceivingcommunityacceptanceoftheproject.Atthisstage,the Concessionaires are also required to identify the types, degree and scale of potential social impactsofthesubproject.Tocorrectlyidentifytherelevantsocialissuesandtoassessthetype andlevelofinformationrequiredduringsubsequentfieldinvestigations,particularattentionwill be paid to adverse impacts to the affected community, such as loss of land and other fixed assets and the number of persons marginally or severely affected and the types of vulnerable groups affected. Preliminary social and land acquisition assessment will also help in identification of risks and in deciding whether or not to proceed with the project or to consider alternatives to ensure that the adverse impacts are avoided, or minimized if cannot be avoided. During this stage, the subproject proponent should identify key stakeholders, local NGOs and DPs.Theyshouldthenundertakepublicconsultationto:(a)provideinformationontheproject, its benefits and impacts; (b) obtain feedback from the public; and (c) discuss the plan for the participationprocessandtherolesofthecommunity,NGOsandotherkeystakeholders. (ii) SocialSafeguardsScreening 46. The Concessionaires are required to carry out screening of the project to determine scale of impacts: marginal or severe and the consequent need for further field investigations, surveys and documentation necessary in order to meet the requirements specified in the ESSF. In cases where social screening results to significant social impact, a social assessment will be undertakenaspartoftheEnvironmentAssessment(EA),asspecifiedinpara3ofOP4.01,bythe SubBorrower irrespective of whether there is land acquisition or involuntary settlement. Additionally, the Concessionaires will also screen the subprojects for national/provincial laws andregulationsregardinglandacquisitionandinvoluntaryresettlement. (iii) ProjectPreparationandDocumentation ProceduresforLandAcquisition 47. Land acquisition for subprojects will be carried out mainly through two modes dependingupontheownershipofpotentialsitesforsubprojects. 23

 o InvoluntaryResettlement(LandAcquisitioninvokingOP4.12)

48. Following modes of land acquisition will trigger WBs OP 4.12 and the Concessionaires would be required to conduct necessary field investigations/surveys in accordance with the provisionsoftheRPFforresettlementplanpreparationandimplementation: Grant of RightOfWay (ROW): Where sewer/wastewater mains/distributary lines pass through any private properties, the subproject proponent may seek the imposition of an Easement of RightofWay (ROW) provided for under the Philippine Civil Code. In such cases, a ROW easement agreement will be executed by the property owner and the subproject proponent, whereby the former will grant the latter the right to use the affectedportionofthelot,asROW,buttheownerretainsownershipofthesaidportion of the lot. In these cases and depending upon the agreement between the subproject proponentandtheowner/softheproperty,eithertheeasementrightsaregivenfreeof any charges or on some payment by the subproject proponent to the owner. The payment can be based on the value of the affected portion of the lot determined by an independent appraiser according to internationally accepted norms. In addition, the subproject proponent is required to compensate the owner for any improvements and/orstructuresonthelandaffectedbytheROWatreplacementcost.Thesubproject proponent will enter the easement area after the provision of the full payment for the easement to the property owner. The ROW easement agreement will be immediately registeredwiththeRegistryofDeeds. Usufruct: The Subproject Proponent may alsoacquire a property through usufruct. The property owner retains the ownership of the land, while the subproject proponent enjoys the benefit of the use of land. The subproject proponent and the property owner will execute a usufruct agreement. The agreement will cover the rights and responsibilities of the two parties, including the duration of the usufruct which should notbelowerthantheprojectlife. Lease Agreement: The subproject proponent may also acquire lands through lease agreements with the rightful property owner. The subproject proponent and the property owner will execute a Lease Contract. The contract will cover the rights and responsibilities of the two parties, including the duration of the lease which should not be lower than the project life. Under this agreement, the land owners continue retain legal ownership of the land parcel. All land transaction should be registered with the RegistryofDeedsforannotationinthetitleofsubjectproperty. o Expropriation. Although both the MWCI and MWSI are private corporations, they are Concessionaires under the MWSS, which is a public enterprise. Both the Concessionaires have the option to acquire private properties for their sub projects using the legal process, eminent domain through MWSS. However, 24

none of the Concessionaires have ever used eminent domain to acquire private properties. o 49. Open Market Purchase. Under the ongoing Manila Third Sewerage Project (MTSP) the project proponent, Manila Water was completely dependent on the respective Local Government Units (LGUs) to acquire and make the required land available for the project. However, the LGUs failed to acquire land for the project causing severe delays in project implementation. Similar experience in other projects caused severe delays and even cancellation of subprojects. Learning from the past experiences and to avoid recurrence of similar problems for this project, the two Concessionaires have decided to acquire the land themselves. Current procedures consisting of open market purchase from the land owners, either through the brokers or in direct negotiations based on open market purchase basis, are borne out of experiences from previous projects. However, where open market purchase fail, otherformsoflandacquisitionwillbeconsidered.Theprocessesandprocedurestobefollowed for voluntary or involuntary land acquisition are presented here in this same Section (III B Social Safeguards). 50. Therefore, negotiated purchase of private assets is the most preferred mode of land acquisition by both the Concessionaires. Once a potential land parcel is identified, both the Concessionaires contract professional appraisers to obtain information on the legal and tenure statusofthelandinquestion,itsmarketvalueandotherissuesthatmaybeofrelevance.Based on the findings of the appraisal reports, the Concessionaires enter into negotiations with the land owner. Since both the Concessionaires are private corporations, they enter into negotiations withthelandownerseitherindirectlythrougharealestateagent(asinthecaseof Manila Water) or directly (as in the case of Maynilad through their ROW unit)3. Once the agreementis reached,the propertyownerissuesawrittenpermittothesubproject proponent to enter the property and a contract of sale is subsequently executed between the property owner and the subproject proponent. Since the Concessionaires plan to follow the open market purchase using direct negotiations with land owners for all future land requirements, a protocolisproposedwiththekeyobjectivesasbelow: toensureatransparentandconsultativeprocess; OpenMarketPurchaseOP4.12isnottriggeredinthiscase.

In Maynilads case, the process is followed through these steps: 1) long list of sites identified based on Options Analysis; 2) prioritization of candidate sites based on cost, land availability, and extent of resettlement required; 3) initial community consultations to determine the NIMBY syndrome; 4) owners offer to sell outlining the price and other conditions; 5) buyers decision to proceed with contract to sell; 6) preparation of the safeguards documents; 7) owners actions prior to sale; 8) deed of absolute sale; 9) land acquired (title transfer) ; and 10) construction of STP to start (after Design Build Contractor is selected)..
3

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to ensure that compensation paid is at or above prevalent market prices to enable all affectedlandownerstoreplacetheiraffectedassets; toensurethatalltheaffectedlandownersarebetteroffduetotheproject;and todocumentpublicconsultationandnegotiationproceedings.

51. The protocol, presented below, will be followed by both the Concessionaires for the Bankfundedprojects. KeyprovisionsoftheProtocolinclude: Inventories of affected land and other fixed assets would be prepared in consultation withaffectedlandownersandsubmitthesametotheBorrowerandtheBank; Alllandwouldbefreefromanydisputesonownershipandencumbrances; Concessionaires to ensure that the subprojects will in no way cause adverse impacts on sourcesofincomesandlivelihoodofadjoiningcommunities; Negotiationsfordirectpurchasewouldbecarriedoutinatransparentmanner; All negotiation proceedings will be documented and the final agreement would be signedbythenegotiatingparties; The negotiated amount will be fully paid after the submission of the required documents;and Concessionaires will submit completed documents including maps together with the subproject proposalstoLBPandtheWorldBanktoshowtheprocessusedforobtaining therequiredland.

52. The types of surveys and field investigations required and social safeguards documents that would need to be prepared for a subproject will depend upon the degree and scale of the impacts and the method adopted for acquisition of private assets for the subproject. Depending upon the degree and scale of impacts and based on the data collected through the fieldinvestigations,afullRAPorARAPwillbeprepared.ThescopeandcontentsoftheRAPor an ARAP will be consistent with the provisions of the World Banks OP 4.12, Annex A. In cases wherethesubprojectaffectsand/ordisplacesmorethan200personsatimeboundRAPwillbe preparedinaccordancewiththeprovisionsoftheRPF(Annex10).Incaseswheretheimpactsof the subproject are marginal such that less than 200 persons are affected and/or displaced, or where the impacts are minor, an ARAP should be prepared. In cases where land has already been acquired, or is to be acquired voluntarily, a due diligence report or its equivalent will be prepared. 26

53. Where the land is to be acquired using the power of eminent domain (Involuntary land acquisition),theSubBorrowerisrequiredtoconductsurveystocollectinformationoncensusof affected households, inventory of losses and socioeconomic characteristics as specified during thescreening.Priortoundertakingthesurveytheprojectproponentshouldimplementapublic information campaign to describe the project components, types of impacts, content and scheduleforthecensusandinventoryorotherbackgroundsurveys. 54. Where in a subproject required land is obtained under open market purchase through direct negotiations with the land owner, as is the current practice by the MWCI and MWSI, the SubBorrower will hire a professional appraiser to conduct appraisal, including valuation, of the potential site before any decision is taken to proceed with the negotiations with the land owner/s. The SubBorrower is also required to conduct detailed survey of the occupants and improvements on the land parcel to record all types of potential losses, if any, due to the acquisitionoftheland.AspertheagreementbetweentheSubBorrowerandthelandowner,if the occupants on the land and their affected assets are to be relocated, the SubBorrower should ensure that the affected households are provided sufficient support and financial assistance to enable them to improve, or at least restore their livelihood to predisplacement level. 55. When negotiations for acquisition of private assets are carried out on a Open market purchase basis, cases will be carefully documented so as to ensure they meet the policy requirements to be considered, such as land free of encumbrances, no coercion, and ability of the land owner to say no to any sales without the threat of eminent domain land acquisition. ESSF provides a protocol to define objectives, and procedures (see para 4951 in this section on OpenMarketPurchase). 56. In cases where the subproject proponent has already acquired the land needed for the project and that the occupants of the land acquired have been relocated as an agreement between the landowner and the real estate agent of the Subproject Proponent, as in the case of The North and South Pasig Sewerage System STP of Manila Water, a RCR will be prepared. The content of the Completion Report are: project description, description/census of the occupants/projectaffectedpersons and inventory of their affected assets and properties includingcropsandtrees(ifany),compensationandotherassistanceprovidedtothem,possible location where the occupants/DPs will be relocated and a detailed description of how the land was acquired. Documents required are Minutes of the consultation meetings with the occupants, Property (land) Appraisal Report. Based on the RCR, the Borrower will conduct Due Diligence (Resettlement Audit) which will be reviewed by the Bank to check whether the acquisition of land and other assets is consistent with the requirements of the ESSF, and will developaplantofillanygaps. 27

MethodofValuationofAffectedAssets 57. The ESSF (and the RPF) provides for compensation for land and other affected assets at replacement cost. To meet the above objectives, the Concessionaires will follow the valuation proceduresfordifferenttypesofaffectedassetsasbelow: Land: The Concessionaires will contract professional appraisers for valuation of affected landtodetermineprevalentmarketprices.Incaseofopenmarketpurchaseoflandfor subprojects, the negotiations for the land would be based on the market prices determined by the appraisers. Where land is acquired under eminent domain, the final prices of affected land will be at least equal to or higher than the prevalent market pricestoensurethattheDPsareabletoreplaceaffectedlandatcurrentmarketprices. Structures. The Concessionaires will ensure that the compensation for affected structures is paid at replacement cost based on current market prices for material and labor. The compensation for affected structures will be paid without any depreciation and deductions for salvaged material by the DPs. For the purpose, the Concessionaires will contract professional appraisers to conduct market surveys to determine prevalent marketpricesformaterialandlabortoarriveatratesfordifferenttypesofstructures. Trees and crops. Compensation rates for affected trees provided by DENR and for affectedcropsbyDepartmentofAgriculture. Reviewandclearanceofsocialsafeguardsdocuments 58. The subproject proponent will submit all social safeguards documents (ARAP and/or RAP, RCR) to the Borrower, who will review these documents for compliance with the Social Safeguards Framework. The Borrower will approve, refuse approval or request revisions/reformulation of these documents after review and clearance by the Bank. The Borrower will submit to the World Bank all RAPs, ARAPs and RCRs after it has ensured that the documents meet the requirements of the ESSF before the subproject is approved for implementation. ImplementationSupervision,MonitoringandEvaluation 59. TheSubprojectproponentswillsuperviseandmonitortheimplementationofthesocial safeguards in each subproject to ensure that they are implemented in accordance with the approved documents and are in compliance with the ESSF. Periodic progress reports will be prepared and submitted to the Borrower and to the World Bank on a regular basis. The Borrower, through its Programs Management Department II (PMDII) will carry out regular monitoring of safeguards implementation of the two Concessionaires and consolidates for submission to the World Bank. In case of noncompliance with the provisions of the ESSF, the LBP, in consultation with the respective subproject proponent discuss appropriate measures or 28

remedial actions and implementation schedule for such measures/actions. Subproject proponent will be required to implement such measures within the agreed timeframe at its own cost, failing which LBP would take additional measures, which could include suspending further disbursement, until the remedial measures are implemented to the satisfaction of LBP. Monitoring and Reporting requirements are described in Section IV Subproject Monitoring and Audit. 60. Land acquisition and relocation of affected households cannot commence until the RAP or an ARAP has been reviewed by the Borrower and the Bank. The RAP or an ARAP will include implementation schedule wherein all resettlement activities will be coordinated with the civil worksschedule.OncetheRAPorARAPisapprovedbyLBPandtheBank,theBorrowerwillissue its no objection letter to the Concessionaires to allow construction activities to begin. No demolition of assets and/or entry to properties will be done until a DP is fully compensated, except when a court of law grants a Writ of Possession to the Subproject Proponent for the subject property in expropriation. Where the land has already been acquired, the construction activities will begin only after the RCR for each subproject is reviewed and approved by the BorrowerandtheBank. C. RetroactiveFinancing 61. Retroactive financing is possible as long as the procurement procedures followed are in line with that of the project and the subproject eligibility criteria are satisfactorily met. Payments made within 12 months before the signing of the Loan Agreement would be eligible forretroactivefinancingandthetotalretroactivefinancing canbeupto20% ofthevalue ofthe Bank loan. For subprojects that are retroactively financed, a due diligence postreview will be carriedoutforbothenvironmentalandsocialimpactsasfollows: Environmental impacts. The Borrower will review the SubBorrowers subproject implementation to ensure compliance with environmental management requirements undertheESSF.Ifthereareanyoutstandingenvironmentalissues,necessarymitigation measureswillbeagreedandimplementedtoaddressthem. Socialimpacts.Insubprojectswherelandhasalreadybeenacquired,theSubBorrower will review the subproject to determine compliance with applicable national laws and provisions of this ESSF, including consultation and disclosure requirements. The Borrower, on its part, will carry out due diligence to determine how the land was acquiredandwhetherornotthereareanyoutstandingclaims,issuesorrisksassociated with land acquisition, compensation or ownership. If necessary, additional mitigation measures will be developed and implemented. For purposes of due diligence, the Borrower will consider two levels of assessment: i) for land acquired two years prior to the first identification mission by the Bank to determine whether or not the acquisition of land and resettlement was carried out in accordance with the national laws and 29

regulations land whether there are any pending claims and legal issues; and ii) for land acquisition from the date of the first identification mission by the Bank or where land acquisition activities are currently undergoing or recently been completed, the provisionsoftheBanksOP4.12,andtheESSFwillbeapplicable. 62. The Social and Environmental Compliance Report (SECR) will be prepared by the Sub Borrower to briefly describe the safeguards aspects of each retroactively financed subproject. The postreview reports and necessary mitigation measures will be reviewed by the Borrower and the World Bank. Compliance with the ESSF requirements is a condition for retroactive financing under the project. For Maynilads investments, resettlement and land acquisition are not required for AyalaAlabang STP Rehabilitation because it is an existing facility. Retroactive financing is being considered for this plant where the contract for rehabilitation has already been awarded (PhP 51.6 million). At appraisal, the Bank will also confirm its financing for the Plant.

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 IV. SubprojectMonitoringandAudit

63. The implementation of the subprojects would be carried out by the Concessionaires, includingactionsrelatedtosafeguards.LBPwillmonitortheprojectimplementationandsubmit to the Bank a SECR on a semiannual basis that will state how the Banks policies are being met and what corrective actions, if any, are being taken. The SECR would be prepared by the Borrower,basedoninputsprovidedbytheConcessionaires.LBPasaBorroweroftheBankloan will oversee safeguard operations and ensure that the SubBorrowers are in compliance with theproceduresoutlinedinthisESSF.Incaseofnoncompliance withtheprovisionsoftheESSF, theLBP,inconsultationwiththerespectivesubprojectproponentdiscussappropriatemeasures or remedial actions and implementation schedule for such measures/actions. Subproject proponent will be required to implement such measures within the agreed timeframe at its own cost, failing which LBP would take additional measures, which could include suspending further disbursement, until the remedial measures are implemented to the satisfaction of the Borrower. 64. Each Concessionaire will monitor compliance with the conditions of the ECC and the EMP and carry out the requisite data collection during both the preconstruction and construction phases. The Concessionaires must satisfy this requirement by submitting a Sub Borrowers SECR, which will include an Environmental Monitoring Plan (EMoP)4 and a Self Monitoring Report (SMR) on a semiannual frequency ( i.e., within January and July of each year). Copies of the submitted SubBorrowers SECR and SMR must be provided in two sets to LBP for reference and review purposes. LBP will be responsible for monitoring and evaluating the SECRs and SMRs submitted by the SubBorrowers. One set of the SECR received by the Borrower will be transmitted to the Bank for further review. The SubBorrowers SECR will include the following: information on the data collection; discussion on the compliance or non compliance to the RAP, EMP and ECC; corrective actions, if any; conclusions and recommendations;andphotographs,asneeded. 65. External Monitoring. In subprojects with significant (200 persons or more) resettlement,includingphysicalandeconomicdisplacementoflargenumberofhouseholds,the SubBorrower will, in consultation with the Borrower and the Bank, contract an external monitoring agency / consultant group, with adequate experience in involuntary resettlement to conduct periodic independent monitoring of resettlement implementation by the
4

EMoP defines selected indicators for ensuring that mitigation measures are being implemented and are effective (e.g., if there is a mitigating measure to control noise during construction, the monitoring plan should include noise measurements during construction). It ensures the project is complying with national regulations and WB Safeguard requirements, addresses concerns which may rise during the public consultation, and identifies authorities responsible for monitoring including estimated related costs.

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Concessionaires in the subproject/s. The external monitors will submit their periodic monitoringreportstotheBorrowersandacopyofitsmonitoringreporttotheBankdirectly. 66. Duringthesubprojectdevelopmentalphase,theSubBorrowershallfurnishtheSECRto LBP for the preconstruction and construction stages of the subproject. Once construction works are completed, the SubBorrower shall submit a statement of environmental closure for theconstructionphasetotheLBPandDENREnvironmentManagementBureau. 67. During the subproject operational phase, the SubBorrower shall continue the submission of SECRs and start the submission of the SMR to LBP, DENREMB on a quarterly basis. The SubBorrower will also conduct an Annual Third Party Environmental Performance Audit and submit the Audit report to the LBP and DENR. The SubBorrowers will pay for the auditreportfromtheirownresources.ThetermsofreferencefortheAuditisprovidedinAnnex 8.Ifanyirregularitiesareobservedinthethirdpartyaudit,theLBPwillreportitsfindingstothe SubBorroweranddiscussmeasurestobetaken.

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 V. A. 68. Information disclosure and public consultation are important and necessary in sub project preparation and implementation. These enable subproject affected people and other stakeholders to participate in and contribute to the subproject planning and implementation, and thereby help minimize adverse impacts and maximize subproject benefits. The level of public consultation and the scope of information dissemination will be commensurate with the environmentalcategoryofthesubprojectandthesignificanceofthesocialimpacts. 69. The draft ESSF was an object of the public consultation with key institutional stakeholders on October 5, 2010. The ESSF was presented and discussed in detail during the consultation, which was attended by stakeholders with representations from various national and local government agencies and select nongovernment institutions. The summary of the proceedings is presented in Annex 7. Furthermore, copies were made accessible to the public through the Department of Environmental and Natural Resources, the Borrower and the Sub Borrowersthroughtheirwebsite.Commentsreceivedhavebeenincorporated. B. PublicConsultationRequirementsforEnvironmentalSafeguards 70. During the EA process for Category A and B subprojects, as early as possible, the Sub Borrower will consult with projectaffected groups and local nongovernmental organizations (NGOs) about the project's environmental aspects and takes their views into account. For Category A projects, the SubBorrower consults these groups at least twice: (a) shortly after environmentalscreeningandbeforethetermsofreferencefortheEAarefinalized;and(b)after the draft EA report is prepared. In addition, the SubBorrower consults with such groups throughout project implementation as necessary to address EArelated issues that affect them. These groups may be represented in the Multipartite Monitoring Team that the DENR may organizetoserveasthemonitoringarmoftheproject. C. PublicConsultationandParticipationinSocialSafeguards 71. Public consultation and participation ensures project acceptability and fosters good community relationship between the community, community leaders and the Subproject proponents. MWCI and MWSI have Zone Managers and Business Centers to work closely with communities to ensure better reception of their projects. The two Concessionaires will consult and provide relevant information to the community as early as possible. Information provided will include: the purpose, nature and scale of the project; and the duration of the proposed 33 Introduction PublicConsultation,ParticipationandDisclosure

activities and of any risks to and potential impacts on the community. Documentation is the responsibility of the Concessionaries which will provide updates and feedbacks to the community, as needed, on the project activity. Public consultation and information dissemination on key aspects of resettlement will be carried out as a continuous activity throughouttheplanningandimplementationphaseofthesubprojects. 72. Timing of local disclosure will vary depending on the type of assessment involved, the level of risks and impacts and the stage of the projects development or operation. A key minimum requirement that should be taken into account when determining timing of local disclosure in all cases is, if local disclosure has not already taken place at the time of involvement of the Subproject Proponent, the Subproponent should commence local disclosureactivitiesasearlyaspossible. D. Disclosure 73. Environmental and social safeguard information to be disclosed will include, at a minimum: subproject information, impacts, and proposed mitigation measures. Disclosure could be done through community meetings, posters, booklets, newspapers, and the internet. Local disclosure of information should be targeted, at a minimum, to the directly affected communities (including projectrelated workforce, where applicable). LBP and the two Concessionaires will be responsible for the making the information publicly available. Public disclosureofdocumentationshallbeinaccordance withLBPsExecutiveOrderNo.073seriesof 2009 on Guidelines on Classification, Handling, Access and Disclosure of Information Assets, includinganyamendmentsthereof. 74. Documents to be disclosed include the ESSF, EA, EMP, SA, RAP or ARAP. These documents are made publicly available at public places accessible to projectaffectedgroups, NGOs and other interested stakeholders through the World Banks InfoShop. Documents will also be posted in the internet sites of LBP and the two Concessionaires. Where necessary, summary of RAP or an ARAP, particularly the summary of losses and entitlements, will be made available in the form and language understandable to the DPs. Whenever an EA is required, the SubBorrower will prepare it as a separate freestanding document which should be publicly available, accessible to projectaffected groups and local NGOs in accordance with OP/BP 4.01 priortotheappraisaloftheprojectbytheBank.

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 VI. InstitutionalArrangements

75. ThekeyinstitutionshavingaccountabilityfortheimplementationofthisFrameworkare: (i)LBP,astheBorrower;andii)MWCIandMWSIastheSubBorrowers,whoarethesubproject proponents and implementers. The following GOP institutions DENR, LLDA and LGUs have regulatory oversight to ensure that the project is compliant with relevant national laws and regulations. A brief description of these institutions together with their roles and responsibilitiesinplanningandimplementationofsubprojectsispresentedinTable1.

76. It is the responsibility of the SubBorrowers to carry out the necessary EA required by the ESSF, and to obtain the environmental clearances for each subproject before starting the construction. Sound environmental practices have to be incorporated into the subproject design and implementation, and potential negative impacts will have to be mitigated to acceptablelevels/standards.TheSubBorrowersareresponsibleforthequalityandaccuracyof the information in the EA document, as well as the transmission of the EA documents to DENR. Annex 2 provides a list of the environmental safeguards documents for a typical sanitation and sewerage project. Annex 3 provides a typical Terms of Reference for the conduct of an EIA also foratypicalsanitationandsewerageproject. Table1.InstitutionalRolesandResponsibilities
SubProjectEA process Identification/ Screening SubBorrower Env:Screensandscopessubprojectsincoordination withrelevantagencies.Determinescategoryofsub projectsasA,BorC. Soc:Determineslevelofimpactandmodeofland acquisition;identifieskeystakeholders;undertakes publicconsultations. Projectpreparation/ documentation PreparesandsubmitstoBorrowerforreviewthe followingdocuments. Env CatA:EIAthatincludesContingencyPlanandEMP. CatB:EIAorIEEandEMP CatC:ProjectdescriptionandEMPdependingon sizeandnatureofactivities Soc:ARAPandorRAP,RCR Env:TransmitsapprovedECCsandotherrelevant governmentpermitsandclearancestotheBorrower. Reviewsdocumentsforacceptability totheBank. Borrower Confirmsthecategory(env);informs theBank.

Reviewandclearance ofdocumentation priortoappraisalby Bank.

Exercisesenvironmentalduediligence

Reviewsdocumentsacceptabletothe Soc: Submits safeguard documents (RAP, ARAP, RCR) to Borrower,submitstotheBank.All Borrower. environmentalandsafeguard documentshavetobeapprovedby theBankpriortotheBankconfirming itsfinancing.

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SubProjectEA process Implementation Supervision, Monitoringand Evaluation

SubBorrower Env MonitorsprojectcomplianceasperECCandEMP/EIS, IEE SubmitsSECRincludingEMoPandSMR ConductsAnnualThirdPartyEnvironmentalPerformance AuditandEnvironmentalAuditReport Soc:Providesresourcesforallactivitiesrelatedtothe resettlementplanningandimplementation/Ensures projectsareincompliancewiththeESSF/Provides periodicProgressreports,incorporatingmonitoring results,totheBorrower.

Borrower Monitorsprojectimplementationand submitsSECRtotheBankonasemi annualbasis ReviewsEnvironmentAuditReport, Conductsregularmonitoringof safeguardsimplementationfor submissiontotheWorldBank.

A. LandBankofthePhilippines(LBP)

77. LBP is the Borrower under the MWMP and will act as the servicing agent of the Government. LBP has demonstrated through its involvement in past Bank projects5 that it has thecapacitytoreview,monitorandsuperviseprojectactivitiesincludingsafeguards.LBPwillon lend the loan funds to the two SubBorrowers, namely: MWCI and MWSI. As the Borrower, it shall perform oversight function to ensure that environmental and social safeguards covenants are complied with. MWCI and MWSI will submit environmental and social safeguards documents (i.e., EA, ECCs, CNCs, EMPs, land titles, RAPs, etc.) to the LBPs Corporate Banking Department (CBD)I. CBDI will handle the financial management of the project. LBP will make thefundsavailablefortheproject. 78. A Project Management Office (PMO) has been created for MWMP. The PMO will be responsible for supervising project implementation and complying with the reportorial requirements of the project. The PMO draws onCBDI, PMDII, and Environmental Programand Management Department (EPMD) staff as well as the services of a consulting firm that will be hired by LBP if needed (to be funded by its own internal funds) to assist the PMO with: (i) Sub project review, evaluation and advisory services; and (ii) Subproject implementation management monitoring. The consultant shall ensure compliance of the Subprojects with applicable Philippine laws and regulations, the Project Operations Manual and the World Bank policies. 79. LBP will provide the necessary resources and staff to meet the environmental requirements of the framework that will include tapping the personnel of the EPMD to handle the environmental compliance concerns of the project and the PMDII for the social safeguards compliance. PMDII is the Program Manager for MWMP and will also be responsible for the supervision of the SubBorrowers compliance with the agreed framework on procurement,
5

World Bank projects being implemented by LBP include Manila Third Sewerage Project and Support for Strategic Local Development and Investment Project. Past projects include Water Districts Development Project, Rural Finance Project IIII and an ozone depleting project.

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technical and social aspects of the project. The social safeguards counterpart staff of the LBP is nowactivelyinvolvedintheMWMPpreparation.OneofthefunctionsofthePMDIIismanaging Official Development Assistance (ODAs) funds. It is involved in the safeguards monitoring of the SSLDIP, where the expertise of LBP on social safeguards operations was developed and continues to be demonstrated. They will be assisted by a Consultant to fulfill their monitoring and reporting requirements. Trainings will be conducted, with the assistance of WB, to further enhancethecapacityofLBPtoprocessthesafeguardsrequirementsoftheproject. 80. The EPMD will review and validate the sufficiency of the submitted environmental safeguards documents in accordance with the ESSF. The EPMD has three units one of which is the Environmental Review and Assessment Unit (ERAU), which has enough personnel that will provide the needed support to meet the requirements of the World Bank regarding the environmental aspects of MWMP. The EPMD has the environmental expertise to oversee the SubBorrower in carrying out the EA and attaining environmental compliance to the conditions and statement of the ECC/EMP. The Borrower, through the PMDII, as the Program Manager, submitstheenvironmentaldocumentstoWorldBankforconcurrence. 81. The social safeguard documents will be reviewed by PMDII and ensure compliance to the conditions and provisions of the ESSF. Similarly, the SubBorrower through the PMDII will submitthesocialsafeguarddocumentstoWorldBankforreviewandapproval. 82. As the loans for investment financing are channeled to the SubBorrowers through the LBP, LBP shall require subprojects to comply with existing national environmental laws, regulationsandwithapplicableBankpoliciesandEHSGuidelinesforSanitation.TheLBPsEPMD has the environmental expertise to oversee the SubBorrower in carrying out the EA and attaining environmental compliance to the conditions and statement of the ECC/EMP. Environmental safeguards documents may undergo substantive assessment by the Borrower, particularly if pressing environmentally critical issues exist. The Borrower shall conduct EDD for MWMPsubprojects,asfollows: Description of both the positive and negative impacts to provide a balanced risk assessment.ItwillalsorecognizetheDENRasthesolegovernmentalorganizationthatis mandated to issue ECCs based on the Philippine EIS Law (PD No. 1586). SubBorrowers arerequiredtocoordinatewiththeDENREnvironmentalManagementBureau(EMB)to certify through the issuance of an ECC that the proposed subproject/s underwent EA priortofinalizationandimplementationofplans. EA, EMP implementation, monitoring and reporting shall be conducted until project completion. Thereafter, the Borrower will continue monitoring of environmental compliance of the subprojects consistent with its environmental policy on credit delivery,untiltheloanisfullypaid.

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LBPEPMDistheunitassignedtoconductassessment/monitoringontheenvironmental complianceofapprovedsubprojects.

B. ManilaWaterCompany,Inc.(ManilaWater) 83. The Program Management Department is the overall incharge entity for project conceptualization,development,approval,procurement,executionandcloseout.TheProgram Manager is in charge of all stages of the project until closure and turnover to the Operations Group.ThefeasibilitystudiesareundertakenbytheProgramManager,whomakessurethatthe biddocumentsareresponsivetotheobjectivesoftheproject.He/sheorchestratesallnecessary material, personal and financial resources available to Manila Water to ensure project completionaccordingtothescheduleandatthebestqualitypossible. 84. The Project Delivery Group takes charge of project procurement and execution, until commissioning and turnover to the Operations Group. Its main role is to deliver the infrastructureandhardwareinworkingconditiontotheFacilityManager. 85. MWCI will make funds available to implement the ESSF for the duration of the project. Thisbudgetisallocatedforthefollowingactivities:training,EIAandEMPpreparation,settingup of the Environmental Guarantee Fund, environmental performance monitoring, reporting and consultancyservices.Fundswillalsobeallocatedforresettlementactionsandlandacquisition. 86. The Operations Group is the owner of the facilities. Its biggest groups are the Water Supply Department and the Wastewater Operations Department. Each facility or facility cluster is headed by a Facility Manager or Project Delivery Team who is in charge of daytoday operations, including process control, vendor management and environmental compliance. He/she is already on board from the conceptualization of the project but takes over the facility after commissioning. The Pollution Control Officer (PCO) for the facility or facility cluster is a memberoftheFacilityManagersteam. 87. The Environment Department is a support team for the Program Management, Project Delivery and Operations Groups, as well as other Manila Water units. It serves as an internal consultant/enabler on any environmental matter (e.g., government policy development, compliance, training, International Standard Organization (ISO) accreditation) and acts as internal auditor, making sure all commitments indicated in the Environmental Management Plans and Environmental Compliance Certificates (ECC) are complied with at any stage of the project. It is also the team responsible for reviewing project briefs and making sure the necessary environmental issues are brought out and addressed. It assists the Program Manager in preparing and reviewing the Environmental Impact Statements (EISs) and/or Environmental Management Plans, and in acquiring the necessary environmental permits from government regulators. As the Corporate PCO of the company, the department ensures that all facilities and

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projects comply with existing environmental regulations, and also implements beyond complianceenvironmentalinitiativesinsupportofthesustainabilityvisionofManilaWater. C. MayniladWaterServices,Inc.(Maynilad) 88. The Environment Management Department (EMD), headed by Senior Assistant Vice President, will take charge of EA, monitoring, and compliance with all the environmental requirements of the project, assisted by the manager and five Environmental Specialists. PCOs prepare Self Monitoring Reports (SMRs) and submit these to the EMD where the document is reviewed and signed by the Corporate PCO, the EMD Head. The document is sent to DENR or LLDA. 89. The EMD consolidates these quarterly SMRs for submission, and as an attachment for the renewal of the discharge permit. It also audits the PCOs as part of the surveillance audit in its ISO 9000, ISO 14000, and OSHAS 1800 Certification. The department ensures that PCOs are regularlyinformedonthelatestenvironmentalrequirements,andthattheyundergotraining,as needed. The EMD conducts EIA and EISrelated studies, scoping studies, and public consultations. It also applies for the ECC and secures its issuance, conducts regular inspections forissuanceofallECCs,andsecuresotherpermitsrelativetoenvironmentalrequirements. 90. The social safeguard issues will be handled by the EMD unit. The Right of Way (ROW) Unit is responsible in locating/identifying land needed for the construction of project structures and facilities. Once a potential land area has been located, the Wastewater Management Division team conducts community consultation to introduce the project to the community and gather their reactions. If the community accepts the concept of the project, the potential land area is listed and the ROW unit undertakes further investigation of the potential land and its landowner.LandpurchasenegotiationsisalsoundertakenbytheROWunit. 91. MWSI will make funds available to implement the ESSF for the duration of the project forthefollowing3activities:preparationofEIA,EMPandnecessaryinstrumentsrelatedtoLand AcquisitionandResettlementofDisplacedPersons;conductofpublicconsultation;andsecuring necessary permits; training; EMP implementation and monitoring, and securing an EnvironmentalManagementSystem;andEnvironmentalHealthandSafetyCertification. D. DepartmentofEnvironmentandNaturalResources(DENR)andLagunaLakeDevelopment Authority(LLDA)

92. The DENR is the primary national government agency tasked to protect, conserve and manage the countrys environment and natural resources. It is responsible for setting policies, plans and programs and regulating the development and use of the countrys natural resources to ensure compliance to national and international environmental rules, regulations, and guidelines. It enforces various environmental rules and regulations relevant to the construction 39

and operation of various development projects including sanitation and sewerage projects. Among the laws enforced by DENR to which this project will have to comply with are the Philippine EIALawandtheCleanWaterAct.TheroleoftheDENRinsocialsafeguardsislimited toprovidingratesforaffectedtree cropsinasubprojectasandwhensucharequestismadeby theSubBorrowers. 93. The LLDA is a government agency that leads, promotes and accelerates sustainable development in the Laguna de Bay watershed where some of the subcatchment areas of this project are found. LLDA enforces, among other environmental laws, the Clean Water Act in the Laguna de Bay watershed. LBP as the Borrower will coordinate with both DENR and LLDA to ensure that environmental processes of the project are in line with regulations in Philippines. LBPthroughitsPMOwillcoordinatewithDENRandLLDA. E. LocalGovernmentUnits(LGUs) 94. The LGUs being referred to could be the Barangay, City and/or Municipality where the Subproject is located. The role of the LGUs is to facilitate planning and implementation of subprojectsintheirrespectiveareas,specifically: to enforce the National Building Code which includes the issuance of the locational clearance and the building permit of civil works which include wastewater treatment facilitiesandsewernetworksintheirareaofjurisdiction to assist subproject proponents in identifying potential land needed for the constructionofwastewatertreatmentfacilities; to assist in conducting of public information campaign by the Concessionaires and help toensuretheparticipationofthepublic,especiallytheDPs; to assist Concessionaires in receiving complaints and grievances from DPs and other stakeholdersandresolvingthesame;and to provide assistance to Concessionaires in the enforcement of laws/ordinances regardingencroachmentintothesubprojectsiteoritsROW.

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 VII. 95. The capacity oftheLBPin managingthesocialsafeguardsrequirementsandprocedures is satisfactory. This has been demonstrated in the safeguards management of the SSLDIP, an ongoing WB financed project with LBP as its financial intermediary. The Borrower is able to provide technical assistance to the local government units in the screening of projects for impacts, preparation, implementation and monitoring of 6 ARAPs. The social safeguards counterpart staff prepares and submits to the Bank semiannual reports that indicate the status of compliance by LGUs on conduct of social impacts including quality of public consultations held and issues addressed during implementation of mitigation plans. The LBP staff is actively participatingintheMWMPpreparation.ComparedtothemagnitudeofSSLDIP(nationwidewith more than 100 LGU sub Borrowers), MWMP is more manageable in regards to the social safeguards issues. It is also noted that the technical capacities of MWSI and MWCI for safeguardsoperationsaremuchhigherthanmanyLGUcounterpartstaffwithwhomtheLBPhas dealtwithunderSSLDIP. 96. The Borrower and SubBorrowers have prior experience working with the Bank in previous loan projects where the environmental safeguards are required. The Borrower has implemented the Water Districts Development Project, the SSLDIP and the Manila Third Sewerage Project. As for Manila Water, they are involved in the Manila Third Sewerage Project wherein the environmental safeguards are also required. Maynilad has also worked with the Bank on MTSPGEF. In addition, MWSS is familiar with Bank procedures through previous operations and will provide the necessary guidance, as needed. Also, MWSS staff can provide guidancetoManilaWaterandMaynilad,asnecessary. 97. Both Concessionaires have adequate capacity to carry out subproject preparation and theyhaveeachestablishedateamtocarryouttheproject.Inaddition,trainingwillbeprovided to ensure familiarity with processes to be carried out under the project. Both Concessionaires have clear systems of audits and accountability in place (public disclosure of financial statements in accordance with international standards); their procurement practices are in line with international good practice and both companies regularly carry out large investments takingintoconsiderationenvironmentalandsocialissues. 98. CapacityBuildingandTraining Requirements:LBP willhireconsultantstostrengthenits capacityandassistinprojectimplementation.TheSubBorrowerswillallocatefundsfortraining onsafeguardsrelatedmattersfortheproject.ToensurethattheprocedureslaidoutintheESSF are implemented properly, the following six trainings will be provided by the Bank for the staff of LBP, MWCI, MWSI and the LGUs who are responsible for the environment and social safeguardsaspects: 41 CapacityBuilding

CourseonWBSafeguardsPoliciesandtheirapplicationperprojectstage PreparationofanARAPandaFullRAP PreparationofanEMP HowtoConductPublicConsultation GrievanceMechanism Monitoringofresettlementimplementation

99. Although the Borrower has sufficient capacity to manage social safeguards requirements and to provide guidance to the Concessionaires in accordance with the provisions of the ESSF, the Bank will review all subprojects implemented in the first year and will continue review and approve all Category A and some Category B subprojects and the subprojects with significant involuntary resettlement issues to ensure that the subprojects are in full compliance with the requirements of the World Banks relevant safeguards policies and until it is fully satisfied that the Concessionaires have achieved sufficient capacities to the level they can functionwithoutanyoversightbytheBank.

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 VIII. GrievanceRedressMechanism

100. A grievance redress mechanism for the project is necessary for addressing legitimate concerns of affected individuals and groups who may consider themselves deprived of appropriate treatment under the project. MWCI and MWSI have a Public Complaints Section in their Consumer Relations Departments to address all complaints and grievances received from members of the public. The Public Complaints Sections will be responsible to address and resolve any grievances from the DPs and other members of the public in regards to the sub projects. Complaints and grievances related to any aspect of the subprojects, including environmentalandsocialsafeguardsissues,willbeaddressedasfollows: Step1:Asafirststage,complainantswillpresenttheircomplaintsandgrievancestothe Barangay officials for onward transmission of complaints to the Concessionaires. The subprojectstaffoftheConcessionaires,togetherwiththeLGUofficials,willmakeevery attempttoresolvethegrievancesatthelocallevel. Step 2: If the complaint is not addressed to the satisfaction of the complainant, or remain unresolved, for 15 days from the date of first submission, the complainant may then submit his/her complaint directly to the Complaints Section of the Consumer RelationsDepartmentsofMWCIandMWSI Step3:Ifthecomplaintsarenotaddressedtothesatisfactionofthecomplainantwithin 15 days from the date of submission to the Concessionaires, or remain unresolved, the complainantcanapproachthecourtoflaw. 101. Followingprincipleswillapplytoaddresscomplaintsandgrievancesintheproject: Complainants will be exempted from all administrative and legal fees incurred in pursuant to the grievance redress procedures. All such costs will be borne by the respectiveConcessionaire. All complaints would be written, if received verbally, and documented properly. The Concessionaires will also put all relevant details of complaints and the actions taken on theirrespectivewebsiteforthepurpose; Designated staff with responsibility to address complaints would be appointed at variouslevels;

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Concessionaires will maintain proper documentation of all complaints received and actions taken. These documents would be available to the LBP which is responsible for monitoring. 102. The concessionaires will provide LBP with a report on any complaint received and actions taken. As the Borrower, LBP will monitor said complaints as part of its due diligence and closely coordinate with the Subborrowers on possible remedial actions to resolve complaints expeditiously and adequately. LBP will keep the Bank informed about the complaintsandthestepstakenbytheSubborrowerstoresolvethecomplaints. 44

ANNEXES

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Annex1:InitialScreeningFormforPotentialEnvironmental&SocialSafeguardsIssues ThisformistobeusedbytheSubBorrowersforinitialscreeningofpotentialenvironmentaland social safeguards issues. It is meant to facilitate the determination of applicable World Bank safeguards policies, as well as those relevant to Philippines legislation. The completed form will besubmittedtotheBorrowerandWorldBanktaskteamforconfirmation. SubprojectName SubprojectLocation SubprojectProponent SubprojectType/Sector EstimatedInvestment Start/CompletionDate ScreeningforPhilippinesenvironmentalregulations ScreeningChecklistforWorldBankEnvironmentalandSocialSafeguards Questions Answer yes Arethesubprojectimpactslikelytohavesignificant adverseenvironmentalimpactsthataresensitive,diverse orunprecedented?Pleaseprovidebriefdescription: Istheproposedsubprojectlikelytohaveminimalorno adverseenvironmentalimpacts?Pleaseprovidebrief justification: No IfYes WBPolicy triggered OP4.01 CategoryA OP4.01 CategoryC Afull/detailedEIAisrequired: Permitgrantedwithconditions: Rejected: Yes:__No:__ Yes:__No:__ Yes:__No:__

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IsthesubprojectneitheraCategoryAnorCategoryCas definedabove?Pleaseprovidebriefjustification: Willthesubprojectinvolvepotentialconversionor degradationofnaturalhabitats?Pleaseprovidebrief justification:

OP4.01 CategoryB

OP4.04 (Rejectedincase ofsignificant conversionor degradation)

Doesthesubprojectinvolveinvoluntarylandacquisition, lossofassetsoraccesstoassets,or lossofincomesourcesormeansoflivelihood?Please providebriefjustification: Arethesubprojectimpactslikelytohavesignificant adverseSocialimpactsthataresensitive,diverseor unprecedented?Pleaseprovidebriefdescription: SafeguardsInstrumentsRequired:

OP4.12 Resettlement ActionPlan

OP4.01 Social Assessment

_______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ InitialScreeningCompletedby(Sub [date] Borrower) Reviewedandconfirmedby(Borrower) [date]

1. 2. 3. 4. 5.

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 Annex2:EARequirementsforSanitationandSewerageProjects EAprocess Screening: Classificationof environmental assessment PhilippineEIALaw(PD1586) CategoryA: Domesticwastewatertreatment facility(WWTF):equaltoorgreater than5,000cubicmeters(cu.m.)per dayandsewernetwork CategoryB: WWTFlessthan5,000cu.m.perday orrehabilitationofsewernetwork CategoryC: RehabilitationofsmallscaleWWTF orequipment CategoryA: PublicHearing CategoryB: PublicConsultation WorldBank OP4.01EnvironmentalAssessment CategoryA: Projectswhoseenvironmentalimpactsare significant,sensitive,diverseand unprecedented CategoryB: Projectswhosepotentialenvironmental impactsaremoderate,manageableandsite specific CategoryC: Projectswithminimalenvironmentalimpact CategoryA: 2publicconsultationswithprojectaffected groupsandlocalNGOsandpublicdisclosure ofprojectinformation: CategoryB: Onepublicconsultationandpublic disclosureofprojectinformationanddraft EA CategoryC: Publicdisclosureofprojectinfo. CategoriesAandB: Potentialadverseenvironmentalimpactsin ProjectAppraisalDocument(PAD),Project IdentificationDocument(PID),Integrated SafeguardsDataSheet(ISDS) EIA/IEEandEMP Publicconsultations/hearings CategoryC: ProjectdescriptionandEMP

Public Consultation: (documentation, participants, issuesraisedand howtheywillbe addressed)

ConductofEA CategoryA: anddocumentary SubmissionofECCapplicationwith requirements fullblownEIAandEMP;minutesof publichearing;attendancelist; publicdisclosureofEIAandEMP CategoryB: SubmissionofECCapplicationwith IEEandprogrammaticexpansion applications:Environmental PerformanceReportand ManagementPlan(EPRMP) CategoryC: Submissionofprojectdescription (PD)andapplicationforCNC Reviewand CategoryA: Approval Projectscopingwithstakeholdersis conductedbyproponent;EISand EMPsubmittedtoDENRtosecure 48

EIA EMPs

EAprocess

PhilippineEIALaw(PD1586) ECC;independentReview committeereviewsEIA;public hearingisconducted;DENR processes CategoryB: Proponentconductspublic consultationwithstakeholders;IEE andEPRMPsubmittedtoDENRto secureECC CategoryC: PD,EMP,CNC CategoryA: Environmentalsafeguards instruments(EIA,EMP,ECC) disclosedinthe DENRwebsite,publiclibrary,and availableuponrequestattheDENR EIAoffice CategoryB: IEE,EMPandECC CategoryC: PD,EMP,CNC

WorldBank OP4.01EnvironmentalAssessment

PublicDisclosure

Monitoringand reporting

CategoryA: Project'sobjectives,description,anddraft EIApresentedin2publicconsultations;EIA, EMPandECCareinInfoshopandwidely availabletothepublic CategoryB: Project'sobjectives,description,anddraft EIApresentedin1publicconsultation;IEE andEMPareinInfoshopandwidely availabletothepublic CategoryC: PD,EMP,CNCareinInfoshopandwidely availabletothepublic CategoryA: CategoryA: EMPmonitoringreport EnvironmentalComplianceReport MMT/Annualthirdpartyauditreport (ECR) Semiannualselfmonitoringreports CategoryB: EMPmonitoringreport (SMR) MMT/Annualthirdpartyauditreport MultipartiteMonitoringTeam (MMT)/AnnualThirdpartyaudit report CategoryB: EPMRandSMR

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 Annex3:SampleTermsofReference(TOR)foranEAforWastewaterCollection,Treatment, ReuseandDisposalSystems(ConstructionandRehabilitation) 1. Introduction. State the purpose of the TORs, identify the new projects/subprojects or rehabilitationactivitiestobeassessedandexplaintheexecutingarrangementsfortheEA. 2. Background Information. Provide pertinent background for any parties who may conduct the EA, whether they are government agencies, consultants or NGOs. Include a brief description of the major components/subcomponents of the proposed project, a statement on its need and objectives, the implementing agency, a brief history of the project (including alternatives considered), its current status and timetable, and the identities of any associated projects.Identifyotherprojectsinprogressorplannedwithintheregionwhichmaycompetefor thesameresources. 3. Major components of the project to be described include, as appropriate: conduits for collection and conveyance of wastewater, pumping stations, conventional and innovative treatment works, wastewater reclamation and reuse projects, ocean outfalls, wastewater treatment sludge management facilities, a variety of small scale sanitation systems for rural and urban areas, and urban storm water drainage projects. Water pollution control programs often include significant institution building and national water pollution control policy formulationcomponents 4. Objectives. Summarize the general scope of the EA and discuss its timing in relation to other aspects of project preparation, design, and execution. Identify constraints, if any, regarding the adequacy of existing environmental baseline data and needs to phase additional datacollection(e.g.,seasonalrainfall,riverflows)andassessmenteffortstoavoidhinderingthe restoftheprojectdevelopmentschedule. 5. EA Requirements. Identify laws, regulations and guidelines that will govern the conduct of the assessment or specify the content of its report. They may include any or all of the following: Nationallawsand/orregulationsonEA; Regional,provincialorcommunalEAregulations;and EAregulationsofanyotherfinancingorganizationsinvolvedintheproject. World Bank Operational Policy (OP) 4.01: "Environmental Assessment," and other pertinent environmental/social safeguard policies, e.g., resettlement (land acquisition); andtheDisclosureHandbook(December,2002)

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Note: the project may include a broad array of activities, some of which may cause direct adverse environmental and social impacts and are consequently likely to be classified as categoryAorB;othersmaycauseverylimitedimpactsandarethereforelikelytobecategoryC. TheseTORsfocusupontypesofactivitieslikelytobeclassifiedAorBandwhichwouldtherefore requireanEA. 6. Identify design or operating standards which project components must meet to be in compliance with environmental safeguards, e.g.,, effluent discharge limitations, air emission standards,receivingwaterqualitystandards,andoccupationalhealthandsafetyrequirements. 7. Study Area and Likely Major Impacts. Depending upon the study area, the assessment consists of the service area of the wastewater collection system; the tracts of land on which effluentorsludgearetobeapplied/recycled;marine,estuarineorinlandwaterswhichcouldbe influencedby effluent discharge; remote sites identified for disposal of solid waste generated in the treatment process; and, if incineration is included as a sludge disposal technique, the air shedwhichmightbeaffected. 8. Summarize the outcome of the scoping exercise in which a broad assessment will have beenmadeofthemajorbiophysicalandsocialimpactslikelytobegeneratedbytheproject. 9. ScopeofWork.Insomecases,thetaskstobecarriedoutbyaconsultantwill beknown with sufficient certainty to be specified in the TORs. In other cases, information deficiencies need to be identified and resolved or specialized field studies performed to assess impacts; accordingly, the consultant should define particular tasks in more detail for contracting agency reviewandapproval. Task 1. Description of the Proposed Project. Provide a full description of the project: location; general layout; unit process description and diagram for rehabilitation/new components;populationserved,presentandprojected;numberandtypesofconnected industries; anticipated influent and effluent characteristics (depending upon primary, secondary or tertiary treatment); preconstruction and construction activities; schedule, staffing and support facilities and services; operation and maintenance activities; requiredoffsiteinvestments;lifespan;adjacentcommunitiestosite;existing/newroad orothersupportiveinfrastructure. Task 2. Description of the Environment and Social Aspects. Assemble, evaluate and present relevant baseline data on the environmental characteristics of the study area. Includeinformationonanychangesanticipatedbeforetheprojectcommences. o Physical environment: geology (general description for overall study area and details for land application sites); topography; soils (general description for overall study area and details for land application sites); monthly average 51

temperatures, rainfall and runoff characteristics; description of receiving waters (identity of streams, lakes, or marine waters; annual average discharge or currentdatabymonth,waterquality;existingdischargesorwithdrawals). o Biological environment: terrestrial communities in areas affected by construction, facility siting, land application or disposal; aquatic, estuarine or marine communities in affected waters; rare or endangered species; sensitive habitats, including parks or reserves, significant natural habitats; species of commercialimportanceinlandapplicationsitesandreceivingwaters. Social aspects: present and projected population; present land use/ownership; planned development activities; community structure; present and projected employment by industrial category; distribution of income, goods and services; recreation; public health; cultural properties; involuntary resettlement, indigenouspeoples;andcustoms.

This section should indicate the accuracy, reliability and sources of the data and consequencesforassessingimpactsandtheirmitigation Task 3. Legislative and Regulatory Considerations. Describe the pertinent laws, regulations and standards governing environmental quality, pollutant discharges to surface waters and land, industrial discharges to public sewers, water reclamation and reuse, agricultural and landscape use of sludge, health and safety, protection of sensitive areas and endangered species, siting, land use control, etc., at international, national, regional and local levels (The TORs should specify those that are known and require the consultant to investigate for others. If transboundary impacts are likely, relevantinternationalconventionsshouldbedescribed. Task 4. Determination of the Potential Impacts of the Proposed Project. In this analysis, distinguish between significant positive and negative impacts, direct and indirect impacts, and immediate and longterm impacts. Identify impacts that are unavoidable or irreversible. Wherever possible, describe impacts quantitatively, in terms of environmental costs and benefits. Assign economic values when feasible. Characterize the extent and quality of available data, explaining significant information deficiencies and any uncertainties associated with predictions of impact. Provide TORs forstudiestoobtainthemissinginformation.

Specialattentionshouldbegivento: o The extent to which receiving water quality standards and/or beneficial use objectiveswillbeachievedwiththeproposedtypeandleveloftreatment.

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The length of river/ stream or expanse of lake or marine waters that will be positively or negatively affected by the discharge, and the magnitude of the changesinwaterqualityparameters. Projectedquantitativechangesinbeneficialuses,suchasfisheries(species composition,productivity),recreationandtourism(visitordays,overnights, expenditures),andwatersavailableforportablesupply,irrigation,andindustrial use Sanitationandpublichealthbenefitsanticipated.

Task 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 that would achieve the same objectives. The concept of alternatives extends to siting and design, technology selection, rehabilitation/construction techniques and phasing, and operating and maintenance procedures for collection systems, treatment works, disposal and sludge management. Compare alternatives in terms of potential environmental impacts, land and energy requirements, capital and operating costs, reliability, suitability under local conditions, and institutional, training, and monitoring requirements. When describing the impacts, indicate which are irreversibleorunavoidableandwhichmaybemitigated.Totheextentpossible,quantify the costs and benefits of each alternative, incorporating the estimated costs of any associated mitigating measures. Include the alternative of not constructing the project todemonstrateenvironmentalconditionswithoutit. Task 6. Development of an Environmental Management Plan (EMP). Estimate the impacts and costs of the mitigation measures and of the institutional and training requirements to implement them. Assess compensation to affected parties for impacts that cannot be mitigated. Prepare an EMP, including proposed work programs, budget estimates, schedules, staffing and training requirements, and other necessary support servicestoimplementthemitigatingmeasures,monitoring,etc.Considercompensation to affected parties for impacts that cannot be mitigated. Include measures for emergency response to accidental events (e.g. entry of raw sewage into rivers, streams, etc),asappropriate. Prepare a detailed plan to monitor the implementation of mitigating measures and the impacts of the project during rehabilitation/construction and operation. Include in the plananestimateofcapitalandoperatingcostsandadescriptionofotherinputs(suchas training and institutional strengthening) needed to implement the plan. For projects that include a land disposal facility, environmental monitoring should include a regular scheduleofmonitoringthequalityofsurfaceandgroundwaters.

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Depending upon local conditions and predicted impacts upon communities/individuals, theremaybeneedforaResettlementPolicyFrameworkand/orRAP. Review the authority and capability of institutions at local, provincial/regional, and national levels and recommend steps to strengthen or expand them so that the EMP may be effectively implemented. The recommendations may extend to new laws and regulations, new agencies or agency functions, intersectoral arrangements, management procedures and training, staffing, operation and maintenance training, budgeting,andfinancialsupport. An outline of the contents of the EMP to be included in the projects Operational Manual should be provided along with environmental/social protection clauses for contractsandspecifications. Task 7. Assist in InterAgency Coordination and Public/NGO Participation. The Consultant will assist the government in coordinating the EA with relevant agencies and the government will consult with affected groups likely to be affected by the proposed project and with local NGOs on the environmental and social aspects of the proposed project. For projects categorized A, these groups will be consulted at least twice: in meetings held during preparation before the TORs for the EA are finalized and when a draft EA is available (a summary of the EA will be available prior to the meeting). For projects categorizedB,thesegroupsshouldbeconsultedonceadraftEAhasbeenpreparedand a summary of the EA conclusions will, be made prior to the meeting. For both A and B category projects the draft EA should also be available in a public place accessible to affectedgroupsandlocalNGOs. Relevant materials will be provided to affected groups in a timely manner prior to consultation and in a form and language that is understandable and accessible to the groups being consulted. The Consultant should maintain a record of the public consultation and the records should indicate: means other than consultations) e.g., surveys) used to seek the views of affected stakeholders; the date and location of the consultation meetings, a list of the attendees and their affiliation and contact address; andsummaryminutes 10. Report. Provide an EA report that is 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 in interpretingthosedata.Detailedoruninterrupteddataarenotappropriateinthemaintextand should be presented in appendices or a separate volume. Unpublished documents used in the assessmentmaynotbereadilyavailableandshouldalsobeassembledinanappendix.Organize theEAreportaccordingto theoutlinebelow.(Thisis theformatsuggestedinOP4.01;theTORs 54

may specify a different one to satisfy national agency requirements as long as the topics requiredintheBank'sdirectivearecovered): ExecutiveSummary Policy,LegalandAdministrativeFramework DescriptionoftheProposedProject DescriptionoftheEnvironment SignificantEnvironmentalImpacts AnalysisofAlternatives Environmental Management Plan, incl. mitigation, monitoring, capacity development and training and implementation schedule and costs; include environmental protection clausesforincorporationincontractagreements. InterAgencyandPublic/NGOConsultation ListofReferences Appendices: o ListofEAPreparers; o o RecordsofInterAgencyandPublic/NGOCommunications; DataandUnpublishedReferenceDocuments:

11. ConsultingTeam.Thefollowingspecialtiesshouldbeconsideredforthecoreconsulting team: environmentalengineering,environmentalplanning(orotherenvironmental generalists); ecology (terrestrial, aquatic or marine, depending on type of discharge); water quality; soils science (for land application); wastewater utility management; and sociology/anthropology. Other specialties that may be needed depending on the nature of the project are public health, agronomy,hydrology,landuseplanning,limnology/oceanography(especiallyforoutfalldesign), waterqualitymodeling,andresourceeconomics. Note: the team will be required to work closely with specialists undertaking the social analysis and to define arrangements for the final report, especially if the EA and social analysis are to be combinedinonereport 12. Schedule. This section will specify dates for progress reviews, interim and final reports, andothersignificantevents. 13. Other Information. Include here lists of data sources, project background reports and studies, relevant publications, and other items to which the consultant's attention should be directed. Examples are prefeasibility studies, population and land use projections, land use plans, industrial activity information, water quality studies, sewerage service needs surveys, publichealthreports,sewersystemevaluations.

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 Annex4:TemplateforanEnvironmentalManagementPlan TemplateforEMPChecklistforCategoryBprojects GeneralGuidelinesforuseofEMPchecklist: 1. For Category B subprojects such as the wastewater treatment facilities financed by MWMP, the following template serves as basis for a more streamlined approach to preparing EMPs.The checklisttypeformathasbeendevelopedtoprovideexamplesofgoodpracticesand isdesignedtobeuserfriendlyandcompatiblewithsafeguardrequirements. 2. The EMP checklisttype format attempts to cover typical core mitigation approaches to civil works contracts with small, localized impacts. It is accepted that this format provides the key elements of an EMP or Environmental Management Framework (EMF) to meet World Bank EA requirements under OP 4.01. The intention of this checklist is that it would be applicable as guidelines for the small works contractors and constitute an integral part of bidding documents forcontractorscarryingoutsmallcivilworksunderBankfinancedprojects. 3. Thechecklisthasfoursections: Part1 General Project and Site Information includes a descriptive part that characterizes the project and specifies in terms the institutional and legislative aspects, the technical project content, the potential need for capacity building program and description of the public consultation process. This section could be up to two pages long.Attachmentsforadditionalinformationcanbesupplementedwhenneeded. Part2 Safeguards Information includes an environmental and social screening checklist,whereactivitiesandpotentialenvironmentalissuescanbecheckedinasimple Yes/No format. If any given activity/issue is triggered by checking yes, a reference is madetotheappropriatesectioninPart3. Part3 Mitigation Measures the table clearly formulates management and mitigation measures. Part4 Monitoring Plan represents the monitoring plan for activities during project construction and implementation. It retains the same format required for EMPs proposed under normal Bank requirements for Category B projects. It is the intent of this checklist that Part 2 and Part 3 be included into the bidding documents for contractors, priced during the bidding process and diligent implementation supervised duringworksexecution. 56

PART1:GeneralProjectandSiteInformation INSTITUTIONAL&ADMINISTRATIVE
Subprojecttitle Location Scopeofprojectand activity Institutional arrangements Implementation arrangements SITEDESCRIPTION Nameofsite Describesitelocation Whoownstheland? Descriptionofgeographic, physical,biological, geological,hydrographic andsocioeconomic context Locationsanddistancefor materialsourcing, especiallyaggregates, water,stones? LEGISLATION Identifynational&local legislation&permitsthat applytoprojectactivity PUBLICCONSULTATION Identifywhen/wherethe publicconsultation processtookplace Attachment1:SiteMap[]Y[]N (ResponsibleLBPPMO counterpart) SafeguardSupervision (Responsible Concessionaire counterpart) LocalCounterpart Supervision Contractor LocalInspectorate Supervision

Contractor

INSTITUTIONALCAPACITYBUILDING Willtherebeanycapacity building? []Nor[]YifYes,Attachment2includesthecapacitybuildingprogram

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PART2:safeguardsinformation DETERMINATIONOFPOTENTIALENVIRONMENTAL/SOCIALASPECTS Activity Constructionworks Rehabilitationactivities Individualwastewatertreatmentsystem Willthesite activities include/involve anyofthe following? Historicbuilding(s)anddistricts Acquisitionofland Hazardousortoxicmaterials Impactsonforestsand/orsensitiveareas Handling/managementofwaste TrafficandPedestrianSafety Otheractivities Status []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No []Yes[]No TriggeredActions SeeSectionAbelow SeeSectionAbelow SeeSectionBbelow SeeSectionCbelow SeeSectionDbelow SeeSectionEbelow SeeSectionFbelow SeeSectionGbelow

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PART3:Mitigationmeasures
ACTIVITY 0.General Conditions PARAMETER Notificationand WorkerSafety MITIGATIONMEASURESCHECKLIST Thelocalconstructionandenvironmentinspectoratesandcommunitieshavebeennotifiedofupcomingactivities Thepublichasbeennotifiedoftheworksthroughappropriatenotificationinthemediaand/oratpubliclyaccessiblesites (includingthesiteoftheworks) Alllegallyrequiredpermitshavebeenacquiredforconstructionand/orrehabilitation TheContractorformallyagreesthatallworkwillbecarriedoutinasafeanddisciplinedmannerdesignedtominimizeimpacts onneighboringresidentsandenvironment. WorkersPPEwillcomplywithinternationalgoodpractice(alwayshardhats,asneededmasksandsafetyglasses,harnesses andsafetyboots) Appropriatesignpostingofthesiteswillinformworkersofkeyrulesandregulationstofollow. A.General Construction Activities AirQuality Duringinteriordemolitiondebrischutesshallbeusedabovethefirstfloor Demolitiondebrisshallbekeptincontrolledareaandsprayedwithwatermisttoreducedebrisdust Duringpneumaticdrilling/walldestructiondustshallbesuppressedbyongoingwatersprayingand/orinstallingdustscreen enclosuresatsite Thesurroundingenvironment(sidewalks,roads)shallbekeptfreeofdebristominimizedust Therewillbenoopenburningofconstruction/wastematerialatthesite Therewillbenoexcessiveidlingofconstructionvehiclesatsites Noise Constructionnoisewillbelimitedtorestrictedtimesagreedtointhepermit Duringoperationstheenginecoversofgenerators,aircompressorsandotherpoweredmechanicalequipmentshallbeclosed, andequipmentplacedasfarawayfromresidentialareasaspossible

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WaterQuality

Thesitewillestablishappropriateerosionandsedimentcontrolmeasuressuchase.g.haybalesand/orsiltfencestoprevent sedimentfrommovingoffsiteandcausingexcessiveturbidityinnearbystreamsandrivers. Wastecollectionanddisposalpathwaysandsiteswillbeidentifiedforallmajorwastetypesexpectedfromdemolitionand constructionactivities. Mineralconstructionanddemolitionwasteswillbeseparatedfromgeneralrefuse,organic,liquidandchemicalwastesbyon sitesortingandstoredinappropriatecontainers. Constructionwastewillbecollectedanddisposedproperlybylicensedcollectors Therecordsofwastedisposalwillbemaintainedasproofforpropermanagementasdesigned. Wheneverfeasiblethecontractorwillreuseandrecycleappropriateandviablematerials(exceptasbestos)

Waste management

B.Individual wastewater treatment system

WaterQuality

Theapproachtohandlingsanitarywastesandwastewaterfrombuildingsites(installationorreconstruction)mustbe approvedbythelocalauthorities Beforebeingdischargedintoreceivingwaters,effluentsfromindividualwastewatersystemsmustbetreatedinordertomeet theminimalqualitycriteriasetoutbynationalguidelinesoneffluentqualityandwastewatertreatment Monitoringofnewwastewatersystems(before/after)willbecarriedout Constructionvehiclesandmachinerywillbewashedonlyindesignatedareaswhererunoffwillnotpollutenaturalsurface waterbodies.

C.Historic building(s)

CulturalHeritage Ifthebuildingisadesignatedhistoricstructure,veryclosetosuchastructure,orlocatedinadesignatedhistoricdistrict, notificationshallbemadeandapprovals/permitsbeobtainedfromlocalauthoritiesandallconstructionactivitiesplannedand carriedoutinlinewithlocalandnationallegislation. Itshallbeensuredthatprovisionsareputinplacesothatartifactsorotherpossiblechancefindsencounteredinexcavation orconstructionarenotedandregistered,responsibleofficialscontacted,andworksactivitiesdelayedormodifiedtoaccount forsuchfinds.

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ACTIVITY D.Acquisition ofland

PARAMETER LandAcquisition Plan/Framework

MITIGATIONMEASURESCHECKLIST Ifexpropriationoflandisrequired,oriflossofaccesstoincomesourcesoflegalorillegalusersoflandwasnotexpectedbut mayoccur,thattheBanksTaskTeamshallbeimmediatelyconsulted. AppropriatesectionsofESSFwillapply.

E.Toxic Materials

Toxic/ hazardouswaste management

Temporarilystorageonsiteofallhazardousortoxicsubstanceswillbeinsafecontainerslabeledwithdetailsofcomposition, propertiesandhandlinginformation Thecontainersofhazardoussubstancesshallbeplacedinanleakproofcontainertopreventspillageandleaching Thewastesshallbetransportedbyspeciallylicensedcarriersanddisposedinalicensedfacility. Paintswithtoxicingredientsorsolventsorleadbasedpaintswillnotbeused Asurveyandaninventoryshallbemadeoflargetreesinthevicinityoftheconstructionactivity,largetreesshallbemarked andcordonedoffwithfencing,theirrootsystemprotected,andanydamagetothetreesavoided Adjacentwetlandsandstreamsshallbeprotectedfromconstructionsiterunoffwithappropriateerosionandsediment controlfeaturetoincludebynotlimitedtohaybalesandsiltfences

F.Affected Protection forests, wetlands and/orsensitive areas G.Trafficand Pedestrian Safety

Therewillbenounlicensedborrowpits,quarriesorwastedumpsinadjacentareas,especiallynotinprotectedareas. Directorindirect Incompliancewithnationalregulationsthecontractorwillinsurethattheconstructionsiteisproperlysecuredand hazardstopublic constructionrelatedtrafficregulated.Thisincludesbutisnotlimitedto trafficand (a) Signposting,warningsigns,barriersandtrafficdiversions:sitewillbeclearlyvisibleandthepublicwarnedofall pedestriansby potentialhazards(b)Trafficmanagementsystemandstafftraining,especiallyforsiteaccessandnearsiteheavy construction traffic. Provisionofsafepassagesandcrossingsforpedestrianswhereconstructiontrafficinterferes.(c)Adjustment activities ofworkinghourstolocaltrafficpatterns,e.g.avoidingmajortransportactivitiesduringrushhoursortimesof livestockmovement(d)Activetrafficmanagementbytrainedandvisiblestaffatthesite,ifrequiredforsafeand convenientpassageforthepublic.(e)Ensuringsafeandcontinuousaccesstoofficefacilities,shopsandresidences duringrenovationactivities,ifthebuildingsstayopenforthepublic.

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PART4:MonitoringPlan What Phase (Isthe parameter tobe monitored?) Where (Isthe parameter tobe monitored?) How (Isthe parameterto be monitored?) When (Definethe frequency/ or continuous?) Why (Isthe parameter being monitored?) Cost (ifnot includedin project budget) Who (Isresponsiblefor monitoring?)

Duringactivity preparation

Duringactivity implementation Duringactivity supervision

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Annex5:CulturalPropertyandProtectionMeasures WBPolicyonManagementofCulturalProperty(OP4.11,July2006)

Culturalresourcesareimportantassourcesofvaluablehistoricalandscientificinformation,as assetsforeconomicandsocialdevelopment,andasintegralpartsofapeople'sculturalidentityand practices.Thelossofsuchresourcesisirreversible,butfortunately,itisoftenavoidable TheobjectiveofOP/BP4.11onPhysicalCulturalResourcesistoavoid,ormitigate,adverse impactsonculturalresourcesfromdevelopmentprojectsthattheWorldBankfinances. ProtectionofCulturalProperty 1. Cultural property include monuments, structures, works of art, or sites of significance points of view, and are defined as sites and structures having archaeological, historical, architectural, or religious significance, and natural sites with cultural values. This includes cemeteries, graveyards and graves. Following procedures for identification, protection from theft, and treatment of discovered artifacts shouldbefollowedandincludedinstandardbiddingdocuments. ChanceFindProcedures 2. Chancefindprocedureswillbeusedasfollows: Stoptheconstructionactivitiesintheareaofthechancefind; Delineatethediscoveredsiteorarea; Secure the site to prevent any damage or loss of removable objects. In cases of removable antiquities or sensitive remains, a night guard shall be present until the responsible local authoritiesandtheNationalMuseumtakeover; Notify the supervisory Engineer who in turn will notify the responsible local authorities and the NationalMuseumimmediately(within24hoursorless); Responsible local authorities and the National Museum would be in charge of protecting and preservingthesitebeforedecidingonsubsequentappropriateprocedures.Thiswouldrequirea preliminary evaluation of the findings to be performed by the archeologists of the National Museum (within 72 hours). The significance and importance of the findings should be assessed according to the various criteria relevant to cultural heritage; those include the aesthetic, historic,scientificorresearch,socialandeconomicvalues; Decisions on how to handle the finding shall be taken by the responsible authorities and the National Museum. This could include changes in the layout (such as when finding an irremovable remain of cultural or archeological importance) conservation, preservation, restorationandsalvage;

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Implementation for the authority decision concerning the management of the finding shall be communicatedinwritingbytheNationalMuseum;and Construction work could resume only after permission is given from the responsible local authoritiesandtheNationalMuseumconcerningsafeguardoftheheritage. 3. These procedures must be referred to as standard provisions in construction contracts, when applicable. During project supervision, the Site Engineer shall monitor the above regulations relating to thetreatmentofanychancefindencounteredareobserved. 4. Relevant findings will be recorded in World Bank Implementation Supervision Reports (ISRs), and Implementation Completion Reports (ICRs) will assess the overall effectiveness of the projects culturalpropertymitigation,management,andactivities,asappropriate.

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Annex6:SafeguardsProceduresforInclusionintheTechnicalSpecificationsforContracts A. General 1. TheContractorandhisemployeesshalladheretothemitigationmeasuressetdownandtakeall othermeasuresrequiredbytheEngineertopreventharm,andtominimizetheimpactofhisoperations ontheenvironment. 2. The Contractor shall not be permitted to unnecessarily strip clear the Right of Way (ROW). Where roads need to be dug to lay sewer networks or to conduct other constructions, the Contractor shall only clear the minimum width for construction and diversion roads should not be constructed alongside the existing road. In case this is unavoidable, such diversion roads should not create obstructions or disruptions of roadways, passageways, and drainage channels. Provisions to maintain smooth pedestrian and vehicle traffic and drainage flow should be in place to allow at all times accessibilitytohomesandbusinessesandavoidwaterponding. 3. Remedial actions which cannot be effectively carried out during construction should be carried outoncompletionofeachSectionoftheroad(earthworks,pavementanddrainage): these sections should be landscaped and any necessary remedial works should be undertaken withoutdelay,includinggrassingandreforestation;and watercoursesshouldbeclearedofdebrisanddrainsandculvertscheckedforclearflowpaths; 4. The Contractor shall limit construction works as agreed with the LGU and as approved by the HomeownersAssociationifitistobecarriedoutinornearresidentialareas. 5. The Contractor shall avoid the use of heavy or noisy equipment in specified areas at night, or in sensitiveareassuchasnearahospital. 6. To prevent dust pollution during dry periods, the Contractor shall carry outregular watering of earthandgravelhaulroadsandshallcovermaterialhaulagetruckswithtarpaulinstopreventspillage. B. Transport 7. The Contractor shall use selected routes to the project site, as agreed with the Engineer, and appropriately sized vehicles suitable to the class of road, and shall restrict loads to prevent damage to roads and bridges used for transportation purposes. The Contractor shall be held responsible for any damage caused to the roads and bridges due to the transportation of excessive loads, and shall be requiredtorepairsuchdamagetotheapprovaloftheEngineer.

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8. The Contractor shall not use any vehicles, either on or off road with grossly excessive, exhaust or noise emissions. In any built up areas, noise mufflers shall be installed and maintained in good conditiononallmotorizedequipmentunderthecontroloftheContractor. 9. Adequate traffic control measures shall be maintained by the Contractor throughout the durationoftheContractandsuchmeasuresshallbesubjecttopriorapprovaloftheEngineer. C. Workforce 10. The Contractor should whenever possible locally recruit the majority of the workforce and shall provideappropriatetrainingasnecessary. 11. The Contractor shall install and maintain a temporary septic tank system for any residential laborcampandwithoutcausingpollutionofnearbywatercourses. 12. The Contractor shall establish a method and system for storing and disposing of all solid wastes generatedbythelaborcampand/orbasecamp. 13. The Contractor shall not allow the use of fuelwood for cooking or heating in any labor camp or basecampandprovidealternatefacilitiesusingotherfuels. 14. The Contractor shall ensure that site offices, depots, and workshops are located in appropriate areasasapprovedbytheEngineerandnotwithin500metersofexistingresidentialsettlementsandnot within1,000metersforasphaltplants. 15. The Contractor shall ensure that site offices, depots and particularly storage areas for fuel are not located within 500 meters of watercourses, and are operated so that no pollutants enter watercourses, either overland or through groundwater seepage, especially during periods of rain.The contractor shall ensure that any facility or equipment shall not discharge any waste such as (such as domestic, solid or liquid waste, equipment or vehicle washings, construction debris) or pollute these watercourseswithindustrialleakagesduringthepreparationorstorageofbuildingmaterials. The contractor shall not use fuel wood as a means of heating during the processing or 16. preparationofanymaterialsformingpartoftheWorks. 66

D.

Earthworks

17. Earthworksshallbeproperlycontrolled,especiallyduringtherainyseason. 18. The Contractor shall maintain stable cut and fill slopes at all times and cause the least possible disturbancetoareasoutsidetheprescribedlimitsofthework. 19. The Contractor shall complete cut and fill operations to final crosssections at any one location assoonaspossibleandpreferablyinonecontinuousoperationtoavoidpartiallycompletedearthworks, especiallyduringtherainyseason. 20. In order to protect any cut or fill slopes from erosion, in accordance with the drawings, cut off drains and toedrains shall be provided at the top and bottom of slopes and be planted with grass or otherplantcover.Cutoffdrainsshouldbeprovidedabovehighcutstominimizewaterrunoffandslope erosion. 21. Any excavated cut or unsuitable material shall be disposed of in designated tipping areas as agreedtobytheEngineer. 22. Tipsshouldnotbelocatedwheretheycancausefutureslides,interferewithagriculturallandor anyother properties,orcausesoilfromthedump tobewashedintoanywatercourse.Drainsmayneed tobedugwithinandaroundthetips,asdirectedbytheEngineer. E. HistoricalandArcheologicalSites 23. If the Contractor discovers archeological sites, historical sites, remains and objects, including graveyardsand/orindividualgravesduringexcavationorconstruction,theContractorshall: Stoptheconstructionactivitiesintheareaofthechancefind. Delineatethediscoveredsiteorarea. Secure the site to prevent any damage or loss of removable objects. In cases of removable antiquities or sensitive remains, a night guard shall be present until the responsible local authoritiesandtheNationalMuseumtakeover. Notify the supervisory Engineer who in turn will notify the responsible local authorities and the NationalMuseumimmediately(lessthan24hours). Contact the responsible local authorities and the National Museum who would be in charge of protecting and preserving the site before deciding on the proper procedures to be carried out. Thiswouldrequireapreliminaryevaluationofthefindingstobeperformedbythearcheologists of the National Museum (within 72 hours). The significance and importance of the findings should be assessed according to the various criteria relevant to cultural heritage, including the aesthetic,historic,scientificorresearch,socialandeconomicvalues. Ensure that decisions on how to handle the finding be taken by the responsible authorities and the National Museum. This could include changes in the layout (such as when the finding is an 67

F.

irremovable remain of cultural or archeological importance) conservation, preservation, restorationandsalvage. Implementation for the authority decision concerning the management of the finding shall be communicatedinwritingbytheNationalMuseum;and Construction work will resume only after authorization is given by the responsible local authoritiesandtheNationalMuseumconcerningthesafeguardoftheheritage. DisposalofConstructionandVehicleWaste

24. Debris generated due to the dismantling of the existing structures shall be suitably reused, to theextentfeasible,intheproposedconstruction(e.g.asfillmaterialsforembankments).Thedisposalof remaining debris shall be carried out only at sites identified and approved by the project engineer. The contractor should ensure that these sites (a) are not located within designated forest areas; (b) do not impact natural drainage courses; and (c) do not impact endangered/rare flora. Under no circumstances shallthecontractordisposeofanymaterialinenvironmentallysensitiveareas. 25. In the event any debris or silt from the sites is deposited on adjacent land, the Contractor shall immediately remove such, debris or silt and restore the affected area to its original state to the satisfactionoftheSupervisor/Engineer. 26. Bentonite slurry or similar debris generated from pile driving or other construction activities shallbedisposedoftoavoidoverflowintothesurfacewaterbodiesorformmudpuddlesinthearea. 27. All arrangements for transportation during construction including provision, maintenance, dismantling and clearing debris, where necessary, will be considered incidental to the work and should beplannedandimplementedbythecontractorasapprovedanddirectedbytheEngineer. 28. Vehicle/machineryandequipmentoperations,maintenanceandrefuelingshallbecarriedoutto avoidspillageoffuelsandlubricantsandground contamination.An'oilinterceptor"will be providedfor washdownandrefuelingareas.Fuelstorageshallbelocatedinproperbundedareas. 29. All spills and collected petroleum products shall be disposed of in accordance with standard environmental procedures/guidelines. Fuel storage and refilling areas shall be located at least 300m fromallcrossdrainagestructuresandimportantwaterbodiesorasdirectedbytheEngineer. 68

Annex7:SummaryofPublicConsultationMeetingProceedingsontheMWMPIESSMF October5,2010,AirQualityTrainingRoom,EMBDENR

AttendancebyLGUs: AttendancebyAgencies: AttendancebyPartners: Bacoor,Cavite DENREMB LBP CaviteCity EMBNationalCapitalRegion ManilaWater Valenzuela EMBRegionIVA Maynilad Muntinlupa PasigRiverRehabilitationCommission MandaluyongCity Dept.ofInteriorandLocalGovernment Manila NationalHousingAuthority Paranaque MWSS QuezonCity MTSPGEFPMO Proceedings: 1. The public consultation opened with the introduction of the participants from the different LGUs and government agencies invited to attend. This was followed by the Welcome Remarks and Project Overview delivered by Land Bank. It was mentioned that LBP is the intermediary bank for the project, and that environmentrelated projects are one of the priority sectors of LBP. ItwasemphasizedthattheprojectisinaccordancetotheDecember2008rulingoftheSupreme Courttocleanupandrehabilitate ManilaBay.Astheprojectproponent,LandBankwilloversee the management of the environmental and social impacts of MWMP, and that this consultation is consistent with the projects Environment and Social Safeguards Management Framework on publicdisclosureandtransparency. 2. MWCI Environmental Planning Division presented the strategy and subprojects of MWCI which consists of putting in place a combined sewerdrainage system to convey the wastewater to be treated in the STPs prior to their discharge to the water bodies. MWCI mentioned that by 2018, the catchment areas for the 3 river systems in Metro Manila will be covered by a sewerage system;andby2037,100%oftheeastzonewillbecovered. MWCI requested the national government and the LGUs their assistance in land acquisition, clearing of areas with informal settlers, solid waste management, ensure the coordinated implementation of sanitation and sewerage policies and continue advocating for the implementationofthesepolicies. 3. MWSI, presented the MWSI Sewerage Program, wherein their main drivers are the Clean Water Act, and the Supreme Court Decision on the Manila bay Cleanup. Their sewerage target is 31% by 2016; 66% by 2021; and 100% by 2037, with a total cost of $78.8 billion. MWSI strategy is combinedsewerdrainagenetwork. 69

4. The WB Environmental Framework and an example of an MWSI Environmental Management Plan(EMP)waspresented. 5. MWCI presented the Social Safeguards Framework, the objectives of which include: (i) Avoid land acquisition that would result in displacement of illegal settler; and (ii)Assist displaced persons to improve or at least restore their living conditions to preproject level. He presented the Safeguards Legal Framework, the applicable World Bank policies, a full Resettlement Action Plan(RAP),andanARAP. 6. OPENFORUM Q:EMBNCR Whowillberesponsiblefordecloggingthedrainagesystemtoensurethatthecombinedrunoff flowfreelytotheinterceptorcanals? A:MWSI It is the responsibility of the LGU to implement a solid waste management plan as stipulated in RA9003whichincludeskeepingthedrainagecanalsfreefromsolidwastes.TheConcessionaires will coordinate with the LGUs to make sure that the drainage systems are regularly declogged theLGUtoensurethatthecombinedsewerdrainagesystemwillfunctionproperly.Connections totheSTPswillbemanagedbytheConcessionaires. Q:NationalHousingAuthority(NHA) The acquisition of the right of way is usually the least priority of projects. Who will shoulder the resettlement cost and which national government agency will give the cue for the resettlement informal settlers? Will the project cover the social costs both for formal and informal settlers? NHArecommendedthatresettlementprogramofLGUmustbestandardizedtoavoiddelays. A:MWSI TheprojectispartofthebusinessplanapprovedbyMWSSandthecostoftheresettlementwill becoveredbytheloan. A:Representative,MWCI In the case of Manila Water, a pilot project on a resettlement master plan with Quezon City is underway with the support of HUDCC and NHA. Using this pilot arrangement as a guide in movingforward,Mr.MuanadisclosedthatfuturepartnershipswillheavilyinvolvetheLGUs. As for the fund to cover the resettlement costs, Mr. Muana explained that the Concessionaires have set aside budget in their business plan to cover for these costs. However, this budget needs to be augmented by the NHA and the LGUs to cover for the development of the relocation sites. MWCI noted that the development of a standardized resettlement program canbespearheadedbyNHA. Q:MWSS 70

MWSS wrote the World Bank in April asking why MWSS is not part of the project. MWSS wants toplayanactiveroleintheprojectastheassetownerofthefacilities. A:MWSI This project will be funded by a loan that will be taken out by the Concessionaire as part of its privateborrowingsthroughLandBankwhichputsupthesovereignguarantee. A:WorldBank MWSS approves the business plans of the Concessionaires which these projects emanate from. MWSSbeingpartoftheNEDAICCBoardwhichreviewsthefundingrequestsforforeignassisted projects has approved the project. The Aide Memoire of the mission held in April 2010 outlined theinvolvementofMWSSintheproject. Q:NHA Securing the right of way is always a tedious process which usually leads to the delay of the project. Will the loan earn commitment fees if there is a delay in project implementation? Proceeds. A:LBP This project will not be charged with any commitment fee. Since there still has been no disbursementmadeundertheproject,theprojecthasnotyetbeenchargedwithanyinterest. A:MWCI Quezon City is doing a programmatic approach in addressing the right of way issues and we would like to seek the cooperation of the LGUs to follow the approach similar to what Quezon Cityisdoingwhichincludescostsharinginsecuringtherightofway. Q:EMB Doesthisprojectcoveronlywastewatercomingfromhouseholds? A:MWCI Yes. While EMB has pretreatment standards for industrial waste, it is difficult for the Concessionaires to accept wastewater from industries as this will upset the operations of the STPs.EMBwillhavetoregulatetheindustriestomakesurethattheytreattheirownwastes. Q:EMBWilltheprojectincluderehabilitationoftributaries? A:Mark No.DENRhasaprogramthatincludesrehabilitatingthetributariesofPasigRiver. Q:LGUParanaqueCity Maynilad should get good contractors. Construction debris are left uncollected on the road after theworkiscomplete. A:MWSI It is the responsibility of the contractors to observe good housekeeping. We are now training inspectors to make sure that the contractors complete their work thoroughly and we also ask thehelpoftheLGUstomonitortheirwork. 71

Q:ValenzuelaCity CantimingoftheprojectbesynchronizedwiththeLGUs,particularlyonitsroadconcretingand pipelayingtoavoidtrafficcongestionandincreasedcostduetoadditionalrepairs? A:MWCI Yes, we will inform the LGUs in advance the schedule of our projects since we also secure from themtherelevantpermitsbeforestartingconstruction. Q:WilltheprojectalsoconnecthouseswithoutseptictankstotheSTPs? A:MWCI No. The project will only treat septage that flow into the combined sewer systems. A dedicated sewer costs 3 to 5 times more than a combined sewer. As a compromise, only households will septic tanks will be allowed to connect to the sewer system. The quality of construction of the septic tanks should be the look out of the LGUs and they should ensure that they are designed andconstructedaccordingtotheNationalBuildingCode. A:MWSI The project will only construct interceptor pipes, not separate sewers to convey untreated sewage. Q:MuntinlupaCity WhenwilltheSeptageManagementProgramstart? A:MWSI It is an ongoing activity. Right now, we are constructing one SpTP to treat the septage in Paranaque. Q:QuezonCityEnvironmentalOfficer Can you give us a list of your subprojects so we can plan ahead? The LGU CENRO should also be informednotonlytheMayorsoffice. A:MWCI Yes,wewillcopyfurnishalltheCENROsoffice. A:MWSI The LGU CENRO are be informed for they will be part of the Third Party Audit which is required inthisproject. A:WB Like the Manila Third Sewerage Project (MTSP), we would like to seek the cooperation of the LGUs to provide the Concessionaires a list of potential sites for the subprojects. The project wouldliketoseeklargerareas(1,000sq.m.)assitesforthefacilities.Todate,DENRhasentered into a MOA with ten LGUs in Metro Manila to signify their commitment in supporting the national governments ongoing work on Sanitation and Sewerage and several of the LGUs have completedtheirSanitationActionPlans. Q:CityofManila 72

WillMWCIprovideusalistingofestablishmentsnotconnectedtothesewer?Wewantacopyof thelistingsothatwewillnotissuethembusinesspermits.Wewillplanningtopassanordinance requiringallbusinessestablishmentstobeconnectedtothesewersystemsinlinewithourpolicy tocontributeinkeepingManilaBayacleanerbay. A:MWCI Yes,wewillgivetointerestedLGUsalistofcommercialandindustrialestablishmentsconnected tooursewers. A:MWSI For MWSI, there are only 47,000 accounts in Manila connected to our sewers. We can still accommodate40,000moretoourexistingsewers.Wearenowconstructingmoresewersinthe Pacoareaandconnectingmoreclients. Q:DENR Willtherebeadditionalcosttohouseholdsasaresultofthisproject? A:MWSI The cost for the new facilities is already incorporated in the Business Plan approved by MWSS. Thisispartofthesingletariffcurrentlychargedtothehouseholds. 7. ThePublicConsultationendedwithaClosingRemarksfromtheWorldBank.

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Annex8:TermsofReference(TOR) ThirdPartyEnvironmentalAuditforMWMP Background 1. This Terms of Reference covers the environmental audit for MWMP. This TOR is based on the thirdpartyauditguidelinesprovidedbytheEMB/DENR. B. ObjectiveofhiringThirdPartyEnvironmentalAuditor(EA) 2. TheoverallobjectiveofthisThirdPartyAuditistoprepareanindependentauditreportthatwill monitor and evaluate the environmental compliance of MWMP consistent the projects Environmental ComplianceCertificateissuedbyDENR. 3. A Third Party Environmental Auditor (EA) should be duly certified by the Bureau of Product StandardsAccreditationSchemeandotheraccreditationschemesdulyrecognizedbyEMB/DENR. C. ScopeofWork 4. TheauditshallbedoneinaccordancewiththeDENRguidelinesonthirdpartyaudits. 5. TheConsultant/ThirdPartyEAisexpectedtoprovidethefollowing: AuditplanconsistentwiththeagreementbetweenEMB/DENRandMWC. a. Auditobjectivesandoverallscope b. c. d. e. Auditscheduleforoffsite,onsite,andreportingactivities. Auditcriteriaandotherreferencedocuments Preauditactivities Onsiteaudit auditscope datesandsitesofaudits expectedtimeanddurationofonsiteactivities A.

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roles and responsibilities of the audit team members and accompanying person. Accompanyingpersonsareprocess experts/resource persons. Only one accompanyingpersonshallbeallowedperfacility name(s)ofauditees workingandreportinglanguage prescribedonsiteactivities:openingmeeting,facilitywalkthrough,closingmeeting prescribed evidence collection methods: observation, interviews, review of documents

Auditreportshouldincludethefollowing: a. Listofpeople,includingtitle,formallyinterviewedduringtheaudit b. c. d. e. f. Listofauditorsandaccompanyingpersons Listofdocumentsreviewedduringandbeforetheaudit Listofareasobserved Indicationofanydocumentsnotreviewedandjustificationfornotreviewingsuch Indicationofanyareas/facilitiesnotvisitedandjustificationfornotvisitingthose areas/facilities Assessmentfindings Anynonconformancesfoundclassifiedintomajorandminor Areasofconformanceandlistofauditevidence Areasofpotentialnonconformanceandlistofauditevidence

g.

h.

Followupactivities Recommendedareastobeauditedduringthenextthirdpartyenvironmentalaudit. Recommendedscopeandscheduleofthenextthirdpartyenvironmentalaudit.

6. An audit checklist to be used by the shall be identified in evaluating the components of MWMP and shall be the basis of EMB/DENR in the evaluation of the audit report submitted. The Third Party Environmental Audit Checklist Guide in Annex A is from the given third party audit guidelines of EMB/DENR. 75

SubmissionofReport 7. The Third Party Environmental Auditors shall prepare and submit an annual environmental audit.Thetimeperiodfortheauditshallnotexceedsix(6)months. ThirdPartyEnvironmentalAuditChecklistGuide Planning/Regulatoryrequirement ECC EnvironmentalComplianceCertificate EnvironmentalSanitationClearance EnvironmentalPermits LLDAClearance PCOAppointment PermittoOperateGensets HazwasteID Dischargepermit SelfMonitoringReports OutcomeIndicators6 Increaseinsatisfactioninareascovered BOD removed by STPs & SpTPs (cumulative tones/yr) Percentincreaseofdesludgingservices Number of STPs complying with the dischargestandards) Cost of operation in an acceptable range (PhP/tones) SewageManagement Number of water connections with sewage treatmentservice Volumeofsewagetreated Length of drainage lines installed/rehabilitated SeptageManagement Numberofseptictanksdesludged Volumeofseptagetreated PercentageofBODreduction InstitutionalStrengthening
6

D.

Legalbasis/Audit criteria PD1586 ECCconditions

Remarks

RA4850 DENRDAO199226 DENRMC200903 RA6969 RA9275 Permitconditions KPIBEM

KPIBEM/ Environmental Performance

KPIBEM/ Environmental Performance KPIBEM

List of outcome indicators is part of the key performance indicators for MWSS

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Annex9:Environmentalrequirementsofsubprojects,SupervisionandInstitutionalresponsibilities

Number of people reached by public informationcampaign Percent increase in takeup rate of desludgingservices

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Environmental permitting requirements 1. EA

Concessionaires PrepareEA

Governmentagencies LBP DENR/LLDA Approve environment screeningand reviewEA Recordkeeping Recordkeeping Reviewand approve DENR Review/ approval Review/ approval Review/ approval n/a Monitor compliance

LGU Endorsement

2. Permitsneeded: a. PermittoOperate Gensets b. Dischargepermit c. Waste/sludge disposal d. Construction/buildin gpermit 3. Supervision a.Construction

Applyw/DENRorLLDA Applyw/DENRorLLDA

n/a

n/a n/a Review/ approval Monitor compliance

Applyw/DENR,DAand Recordkeeping DOH Applyw/LGUs Recordkeeping Supervisecontractors EMPimplementation; submitprogressreport andEMPmonitoring reportandEnvtl. ComplianceReportto LBPandDENR Conductmonitoring Monitor construction progressand complianceto safeguards;submit EMRtoWB ReviewEMRs

b. STPoperation

c. Monitoring

PrepareEMR&submit toLBPandDENR

ReviewEMRand monitor operations;submit EMRtoWB Reviewaudit report

d. Audit

Commission3rdparty auditandsubmitaudit reporttoLBP,WB& DENR

Respondto citizen complaintsif any Visitation powers, prerogativeto monitor operations Visitation powers

Respondto citizen complaintsif any Visitation powers, prerogative tomonitor operations Visitation powers

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Annex10:ResettlementPolicyFramework A.

Introduction

1. Background 1. In order to meet the objectives of increasing the coverage and effectiveness of wastewater collection and treatment as well as septage management in Metro Manila and its suburbs, the Government of the Philippines is preparing the Manila Wastewater Management Project (MWMP) through the Land Bank of the Philippines (LBP), which will act as the financial intermediary (FI) and Borrowerfortheproject,andthroughthetwoConcessionaires:MWCIandMWSI,whichwillbetheSub Borrowers. Specific development objective of the MWMP is to improve wastewater services in selected subcatchments of Metro Manila and surrounding areas. This will be achieved by supporting Manila Water and Maynilad to increase their coverage of wastewater collection and treatment and septage managementwhichwillcontributetowardsimprovingtheenvironmentinMetroManila. 2. Theoverallenvironmentandsocialbenefitstobegenerated bytheprojectwill contribute toan improvement in the general state of the environment in Laguna LakePasig RiverManila Bay watershed, leading to better health and wellbeing due to improved living conditions for the people. This promises a better quality of life and economic competitiveness for Metro Manila and its suburbs. AdditionalprojectdetailsareavailableintheProjectAppraisalDocument.

2. ProjectDescription 3. The project is expected to finance investments by Manila Water and Maynilad in wastewater collection and treatment, and septage management in Metro Manila. Investments under the component will help the Concessionaire meet their service obligation targets under the Concession Agreement. Eligible investments will include wastewater collection and treatment and septage management. Consulting assignments related to project implementation are also eligible. These would include: preparation of feasibility studies, construction supervision, preparation of environmental and social safeguard reports, preparation of project summary reports and audit reports, and public awareness campaigns to inform the citizens about the project and the benefits of better water and wastewaterservices.The Concessionaireswillpayforanylandacquisitionandresettlementcostswhich willnotbefinancedwithBankfunds. 4. Component 1: Investments in Wastewater Services by Manila Water ($193.4 million) This component supports technical assistance and investments by the Concessionaire in wastewater collection and treatment, and septage management in the east Concession zone of Metro Manila. Only one investment has been foreseen for Manila Water which is the North and South Pasig Sewerage System. It will include the construction of a wastewater treatment plant (capacity of 165,000 m3/day) 79

and associated sewerage lines. The prequalification process to select a contractor that will construct the treatment plant on a Design Build basis is underway. Separate contracts for installation of sewers willalsobepreparedandforwhichpreparationfordesignsisunderway. 5. Component 2: Investments in Wastewater Services by Maynilad ($220.7 million) This component supports technical assistance and investments by the Concessionaire in wastewater collection and treatment, and septage management in west Concession zone Metro Manila. Six potential investments have been preidentified that could meet subproject eligibility criteria for Bank financing. The identified investments are: (a) Rehabilitation of the existing AyalaAlabang Sewerage Treatment Plant (STP) that has an existing capacity to treat 7,500 m3 wastewater per day; (b) South Septage Treatment Plant that is expected to treat about 250 m3/day of septage collected from septic tanks; (c) Construction of the Talayan STP in the San Juan river basin with a capacity of 15,500 m3/day; (d) Construction of the Valenzuela STP with a capacity of 60,000 m3/day; (e) Construction of the Pasay STP with a capacity of 46,000 m3/day; and (f) Construction of the Muntinlupa STP with a capacity of 66,000 m3/day. Four of the subprojects, namely Talayan, Valenzuela, Pasay and Muntinlupa also have associatedsewernetworks.

B.

ScopeofLandAcquisitionandResettlement 1. ScopeofResettlement

6. For component 1 of the project, necessary social safeguard instruments have already been prepared for the treatment plant. However, the designs and location for the sewer systems have not yet been completed. Permanent impacts due to sewer network and laying of wastewater mains are expected to be limited as it is expected that new sewer lines would be laid within the Right of Way (ROW) and mostly in the middle of the existing roads. These works would however, cause temporary impacts on roadside commercial establishment and residential buildings in terms of temporary restrictionofaccess.

7. Land will be required for the physical components of the project (Sewerage Treatment Plant, wastewater treatment plants, interceptor boxes, pump stations, etc.). For STPs, depending upon the capacity,thelandrequirementmayvary(expectedtobebetween13hectares).Forpumpstationsand interceptor boxes, the land requirement will be much smaller. During identification of potential sites, both the Concessionaires will as much as possible avoid land parcels with multiple owners and encumbrances.Permanentimpactsduetosewernetworkandlayingofwastewatermainsareexpected to be limited as it is expected that new sewer lines would be laid within the Right of Way (ROW) and mostly in the middle of the existing roads. These works would however, cause temporary impacts on roadside commercial establishment and residential buildings in terms of restriction of access. Where waste water mains and sewer lines traverse private properties/housing association areas, easement rights for laying of such pipelines, and their periodic repairs/maintenance, would be obtained in consultation with respective owners and associations. Therefore, no land acquisition for such areas

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would be necessary. However, in case of any need for land acquisition, the provisions of this RPF will apply. 8. Preliminary investigations carried out by the Concessionaires suggest that the subprojects will create social impacts both during construction and operational phases of the project. The scope of the impacts will vary from subproject to subproject. Land acquisition and involuntary resettlement are anticipated undertheproject,particularlyforsubprojectsinvolvingserviceexpansionorreconstruction at new sites. This will trigger World Banks policy on Involuntary Resettlement (OP 4.12). Subprojects will be screened for landrelated impacts and Resettlement Action Plans (RAPs) or Abbreviated Resettlement Action Plans (ARAPs), if needed will be developed and implemented as explained in the subsequentsectionsof thisframework.This ResettlementPolicyFramework(RPF)willguidetheproject to adequately address and mitigate adverse social impacts that will be potentially generated by the project. 2. ObjectivesofRPF 9. The RPF establishes the objectives, procedures, institutional framework, and implementation arrangements for identifying, managing and monitoring potential environmental and social impacts of theprojectactivities.TheRPFwilladdressmechanismsforpublic consultation anddisclosureofproject documentsaswellasredressofpossiblegrievances.ThescopeandkeyobjectivesoftheRPFinclude: To establish clear procedures and methodologies for social screening, review, approval and implementationofsubprojectstobefinancedundertheProject; To specify appropriate roles and responsibilities, and outline the necessary reporting procedures, for managing and monitoring environmental and social concerns related to sub projects;

C.

LegalFramework

10. The RPF is responsive to the relevant national and local laws and regulations and the World Bank Safeguards Policies. The safeguards requirements for the project will build upon national guidelines and requirements in order to streamline, the documents required for each subproject without compromising in any manner the safeguard requirements of either the government or the WorldBank. 1. PhilippinesLocallawsandRegulations

11. In terms of national legislations in the Philippines, the key legal and administrative policies relevanttoinvoluntaryresettlementare:

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The Bills of Rights of the Constitution of the Republic of the Philippines states: In Article III, Section 1, No person shall be deprived of life, liberty, or property without due process of law, norshallanypersonbedeniedtheequalprotectionofthelaws.InArticleIII,Section9,Private propertyshallnotbetakenforpublicusewithoutjustcompensation. Executive Order 1035 (1985) requires conducting of Feasibility Studies, Public Information campaign,Parcellarysurveyandassetsinventory.Italsoprovidesforcompensationforacquired land at fair market value based on negotiations between owner and appraiser; relocation assistance to tenants, farmers and other occupants; financial assistance to farmers and agriculturaltenantsequivalenttotheaverageharvestforthelastthreeyearsbutnotlessthanP 15,000/ha; Disturbance compensation to agricultural lessees equivalent to 5 times the average gross harvest during the last 5 years; and compensation for improvement on land acquired underCommonwealthAct(CA)141. CA 141, Public Land Act (1936) institutes classification and means of administration, expropriationanddispositionofalienablelandsofthepublicdomain. Supreme Court Ruling (1987) defines just compensation as fair and full equivalent to the loss sustainedtoenableaffectedhouseholdtoreplaceaffectedassetsatcurrentmarketprices. Republic Act 6389 provides for disturbance compensation to agricultural leases equivalent to 4 timestheaveragegrossharvestinthelast5years. Republic Act 8974 (2000) which facilitates the acquisition of ROW, site or location for National Government Infrastructure Projects and for other Purposes. Implementing Rules and RegulationsofRA8974wasalsoissued.Thismandatestheuseofreplacementvalueoflandand structures(withoutdepreciation). Republic Act 7279 (1992) "Urban Development and Housing Act" mandates the provision of a resettlementsite,basicservicesandsafeguardsforthehomelessandunderprivilegedcitizens. Republic Act 7160 (1991) "Local Government Code" which allows the LGUs to exercise the powerofeminentdomainforpublicuse.

2. WorldBankPolicy

12. Inadditiontothepriornationalrequirements,WorldBanksPolicyonInvoluntaryResettlement (OP4.12)isapplicable.TheobjectivesandmainprinciplesofthePolicycanbesummarizedasfollows: Involuntary resettlement should be avoided where feasible, or minimized, exploring all viable alternativeprojectdesigns. 82

Where it is not feasible to avoid resettlement, resettlement activities should be conceived and executed as sustainable development programs, providing sufficient investment resources to enablethepersonsdisplacedbytheprojecttoshareinprojectbenefits. Displaced Persons should be meaningfully consulted and should have opportunities to participateinplanningandimplementingresettlementprograms. 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 predisplacement levels or to levels prevailingpriortothebeginningofprojectimplementation,whicheverishigher.

3. KeygapsinLocalLawsandOP4.12 13. ThekeygapsbetweenthelocallawsandregulationsandprovisionsoftheWorldBanksPolicy onInvoluntaryResettlement(OP4.12)include: Philippine Constitution, Article XIII, Section 10: Urban or rural poor dwellers shall not be evicted nor their dwellings demolished, except in accordance with the law and in a just humane manner. Focus is given on urban poor as per UDHA. Limited assistance or protection is given to theruralpoorunlesstheyaretenuredagriculturaltenants. R.A. No. 8974, Sections 8, 9, 10 and 13 provides compensation of affected properties based on fairmarketvalue.However,landdonationisthefirstapproachtotheacquisitionofprivateland. Notwithstanding the ruling by the Supreme Court, none of the laws and regulations clearly provideforcompensationatreplacementcost. Income restoration/ rehabilitation assistance is available only for resettled beneficiaries of the governmentssocializedhousing. There is no policy for displaced vendors and employees of micro/small enterprises that have to shutdowntheirbusiness/toberelocated. 14. This Resettlement Policy Framework (RPF) is prepared to address the gaps between the provisions of the World Banks Policy on Involuntary Resettlement (OP 4.12) and local laws and regulations. The RPF includes specific provisions to ensure that compensation for affected lands and other assets is provided at replacement value to all the Displaced Persons (DPs) including those who mayloseaccesstolivelihoodduetotheproject.Intheunlikelyeventofphysicaldisplacementof200or more households due to the subproject, the government and nongovernment agencies will work closelyandcoordinatetheireffortsforlivelihoodrestorationandrehabilitationassistanceinaccordance withtheprovisionsoftheRPF,andincompliancewiththeprovisionsoftheWorldBanksOP4.12.The

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RPF is consistent with the provisions of the World Banks OP 4.12 and national laws and regulations in thePhilippines.

D.

CompensationPolicy

1. ScopeandObjectivesforResettlement 15. This RPF will apply to all investments related to wastewater collection and treatment undertaken by MWCI and MWSI without Bank or with Bank financing, within the same subcatchment area. However, this RPF will not apply to investments carried out by the two Concessionaires outside the subcatchment area of the Bank financed subprojects as there will be no flowthrough of wastewaterfromonesubcatchmentareatoanother.Forthisproject,theRPFwillbeapplicableforthe construction/rehabilitationofthesewage/septagetreatmentfacilities,mainsewertrunklines,pumping stations,sewermanholes,interceptorcanalsandsludgemanagement. 2. DisplacedPerson(DP)

16. Displaced Persons (DP) are those who as of the cutoff date (e.g start date of census surveys), areaffectedinasubprojectby: (i)theinvoluntarytakingoflandresultingin: (a)relocationorlossofshelter; (b)lossofassetsoraccesstoassets; (c)lossofincomesourcesormeansoflivelihood,whetherornottheaffected personsmustmovetoanotherlocation;or ii) the involuntary restriction of access to legally designated parks and protected areas resulting in adverseimpactsonthelivelihoodsofthedisplacedpersons

3. PrinciplesofResettlement 17. KeyprinciplesandentitlementsoftheResettlementPolicyFramework(RPF)include: Involuntarytakingoflandresultingini)relocationorlossofshelter;ii)lostofassetsoraccessto assets;oriii)lossofincomesourcesormeansoflivelihood,whetherornottheaffectedpersons mustmovetoanotherlocation. The framework also provides for process and procedures where land is obtained through direct negotiationsunderopenmarketpurchasesystemonavoluntarybasiswiththelandowner,asis thecurrentpracticebySubBorrowers. 18. KeyelementsofRPFinclude: A brief description of the project and components for which land acquisition and resettlement arerequired An explanation of why a resettlement plan or an abbreviated plan cannot be prepared by projectappraisal; 84

Principlesandobjectivesgoverningresettlementpreparationandimplementation; Adescriptionoftheprocessforpreparingandapprovingresettlementplans Estimated population displacement and likely categories of displaced persons, to the extent feasible; Eligibilitycriteriafordefiningvariouscategoriesofdisplacedpersons; A legal framework reviewing the fit between Borrower laws and regulations and Bank policy requirementsandmeasuresproposedtobridgeanygapsbetweenthem; Methodsofvaluingaffectedassets; Organizational procedures for delivery of entitlements, including, for projects involving private sectorintermediaries,theresponsibilitiesofthefinancialintermediary,thegovernment,andthe privatedeveloper; A description of the implementation process, linking resettlement implementation to civil works; Adescriptionofgrievanceredressmechanisms; A description of the arrangements for funding resettlement, including the preparation and reviewofcostestimates,theflowoffunds,andcontingencyarrangements; RetroactiveFinancing A description of mechanisms for consultations with, and participation of, displaced persons in planning,implementation,andmonitoring; Disclosure Arrangements for monitoring by the implementing agency and, if required, by independent monitors

19. Eligibility Criteria for Entitlement to Compensation, Relocation and Rehabilitation Assistance. DPs eligible for compensation and rehabilitation will include: (a) those who have formal legal rights to land or other assets; (b) those who initially do not have formal legal rights to land or other assets but haveaclaimtolegalrightsbaseduponthelawsofthecountry;uponthepossessionofdocumentssuch as land tax receipts and residence certificates; or upon permission of local authorities to occupy or use the project affected plots; and (c) those who have no recognizable legal right or claim to the land they areoccupying. 20. Persons covered under (a) and (b) are provided compensation at full replacement costs for the land they lose, payment for nonland assets they own and necessary assistance in cash or inkind. Persons covered under (c) are provided compensation at full replacement cost for nonland assets they ownandresettlementassistanceinlieuofcompensationforthelandtheyoccupy,andotherassistance, as necessary, to achieve the objectives set out in this policy provided that they occupy the project area priortothecutoffdateoftheproject. 21. Persons who occupy the project area after the cutoff date will not be eligible to any compensationorassistance. 85

22.

Thegeneralprinciplesofcompensationsprovidedare: Compensationatreplacementcostforhousesandotheraffectedstructures. Compensation in terms of land for land of equal productive capacity acceptable to the DPs for agricultural land (where land is not available, compensation is to be provided in cash at replacementcost). Replacementofpremise/residentiallandofequalsizeacceptabletotheDPs. Transferandsubsistenceallowance.

23. In the design and implementation of the Subprojects, efforts will be made to ensure that all adverse impacts of acquisition of assets and properties are fully mitigated and that Project affected people are benefited and at a minimum, are not worse off. Toward this end, the key principles and measureswillincludethefollowing: Involuntary resettlement and adverse affects on income and resources will be avoided or minimizedbyexploringallviableprojectoptions. DPs are provided with compensation for lost assets at replacement cost and additional assistance for loss of income sources and livelihood that will assist them to improve, or at least maintaintheirpreSubprojectstandardofliving. Theabsence ofaformallegaltitletolandisnotabartotheentitlements.Informalsettlers who are affected by the project will be entitled to compensation at replacement cost for affected structuresandassistanceforotherlosses. No demolition of assets and/or entry to properties will be done until a DP is fully compensated, except when a court of law grants a Writ of Possession to the Subproject Proponent for the subjectpropertyinexpropriation. Particular attention must be paid to the needs of the poorest affected households and other vulnerable groups that may be at high risk of impoverishment. This may include affected householdswithoutlegaltitletolandorotherassets,householdsheadedbywomen,theelderly ordisabled. All subproject stakeholders, including DPs, are consulted and are encouraged to participate in varyingpracticablewaysinthedesign,implementationandoperationofthesubproject. Only those DPs found to be residing in, doing business in, or cultivating land, or having rights over resources within the project area as of cutoff date (e.g., date of start of census surveys) are eligible for compensation for lost assets and for other assistance. DPs will be compensated 86

for affected land, based on their tenure status (e.g. legitimate owner, lessee, etc.). Proof of ownership shall include full title and tax declaration of settlers in public land. However, in cases where a tax declaration over assets that are inalienable or those that cannot be titled as prescribed by law (e.g., river easement, forest reserve) is the only proof of ownership, only structuresandotherimprovementsfoundthereinshouldbecompensated. In addition to compensation for crops or property acquired or damaged by the subproject, the subproject proponent will provide the following resettlement assistance to eligible DPs: (a) Financial assistance to tenants/settlers/occupants; (b) Rental allowance for house tenants of affectedmainstructureswhowillhavetofindanewplaceonaccountoftheproject,equivalent to the period between project site clearing and transfer to their new home; and (c) Transportationassistance(incashorinkind,dependingonthemutualagreementoftheDPand the subproject proponent) to DPs who are relocating, including displaced shanty dwellers in urbanareas.

24. SiteSelectionandRelocation.Iftherearefamilieshavetoberelocatedbecauseoftheproject impactsandresettlementsitesarerequired,theConcessionaireswillclearlydescribeinRPabout alternativerelocationsitesconsideredandexplanationofthoseselected,covering: institutionalandtechnicalarrangementsforidentifyingandpreparingrelocationsites,forwhich a combination of productive potential, locational advantages, and other factors is at least comparable to the advantages of the old sites, with an estimate of the time needed to acquire andtransferlandandancillaryresources; measures necessary to prevent land speculation or influx of ineligible Person at the selected sites; procedures for physical relocation under the project, including timetables for site preparation andtransfer; legalarrangementsforregularizingtenureandtransferringtitlestoresettlers;and housing, infrastructure, and social services. Plans to provide (or to finance resettlers' provision of) housing, infrastructure (e.g., water supply, feeder roads), and social services (e.g., schools, health services); plans to ensure comparable services to host populations; any necessary site development,engineering,andarchitecturaldesignsforthesefacilities. a description of the boundaries of the relocation area; and an assessment of the environmental impacts of the proposed resettlement and measures to mitigate and manage these impacts (coordinated as appropriate with the environmental assessment of the main investment requiringtheresettlement). 25. Entitlements and compensation for the types of loss shall be guided by the Resettlement EntitlementMatrixshowninTable2: 87

Typeof Loss
1.Arable Land

Application
Actualarea neededbythe projectand theremaining landisstill economically viable

Table2:EntitlementMatrix EntitledPerson Compensation/Entitlement

Fortheportionofthelandneeded: Cashcompensationatreplacementcostforthelandas determinedbyalicensedindependentappraiserusing internationallyrecognizedvaluationstandards. SubjecttotheprovisionssetforthinSection5ofRA 8974. Cashcompensationforperennialsofcommercialvalue asdeterminedbytheDENRorconcernedappraisal committee. DPwillbegivensufficienttimetoharvestcropsonthe subjectland.

Ownerswithfull title,tax declarationor otheracceptable proofof ownership; Farmer/sand farmworker population workinginthe landarea acquiredbythe projectwith formallegalrights (including customaryrights recognizedbythe lawsofthe country Farmer/sand farmworker population withoutthetitle, taxdeclaration,or otheracceptable proofsof ownership Remaining landrendered Ownerswithfull economically title,tax unviable(i.e. declarationor otheracceptable DPlosing proofof >20%ofland ownership; holdingor evenwhen Farmer/sand farm worker losing<20% population butthe workinginthe remainingland landarea isnot acquiredbythe economically projectwith viable formallegalrights (including anymore) customaryrights recognizedbythe

Fortheportionofthelandneeded: DPwillbegiventimetoharvestcrops. Cashcompensationforperennialsofcommercialvalues asdeterminedbyDENRortheconcernedappraisal committee. Financialassistancetomakeupfortheland preparation Cashcompensationatreplacementcostforthelandas determinedbyalicensedindependentappraiserusing internationallyrecognizedvaluationstandards,or,if feasible,landforlandwillbeprovided(anewparcel oflandwithanequivalentproductivity,locatedatan areaacceptabletotheDP&withlongtermsecurityof tenure. Subsistenceallowance DPwillbegiventimetoharvestcrops. Cashcompensationforperennialsofcommercialvalue asdeterminedbytheDENRorconcernedappraisal committee. Ifrelocating,DPtobeprovidedfreetransportation Rehabilitationassistance(skillstrainingandother developmentactivities)willbeprovidedin coordinationwithothergovernmentagenciesifthe presentmeansoflivelihoodisnolongerviableandDP

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lawsofthe country Farmer/sand farmworker population withoutthetitle, taxdeclaration,or otheracceptable proofsof ownership,

willhavetoengageinanewincomeactivity. Financialassistanceequivalenttotheaverageannual grossharvestforthepast3years DPwillbegivensufficienttimetoharvest Cashcompensationforperennialsofcommercialvalue asdeterminedbytheDENRorconcernedappraisal committee. Financialassistancetomakeupfortheland preparation Ifrelocating,DPtobeprovidedfreetransportation Rehabilitationassistancewillbeprovidedin coordinationwithothergovernmentagenciesifthe presentmeansoflivelihoodisnolongerviableandDP willhavetoengageinanewincomeactivity. AsperRA6389andEO1035 Disturbancecompensationequivalentto5timesthe averagegrossharvestonlandholdingduringthe5 precedingyearsbutnotlessthanPhp15,000per hectare. Rehabilitationassistance Fortheportionofthelandneeded: Cashcompensationatreplacementcostforthelandas determinedbyalicensedindependentappraiserusing internationallyrecognizedvaluationstandards. SubjecttotheprovisionssetforthinSection5ofRA 8974. Cashcompensationforperennialsofcommercialvalue asdeterminedbytheDENRorconcernedappraisal committee. AffectedSquatters/informalsettlerswillnotbeentitledto compensationforaffectedland. Compensationforinvestmentsmadeontheaffected landparcel Cashcompensationatreplacementcostforthelandas determinedbyalicensedindependentappraiserusing internationallyrecognizedvaluationstandards. SubjecttotheprovisionssetforthinSection5ofRA 8974,oriffeasible,landforlandwillbeprovidedin termsofanewparceloflandofequivalent productivity,atalocationacceptabletoDP,andwith longtermsecurityoftenure.Thereplacementland shouldbeofacceptablesizeunderzoninglawsoraplot ofequivalentvalue,whicheverislarger,inanearby resettlementwithadequatephysical,social

Agricultural lessees,farm workersand informalsettlers

2.Residential landand/or Commercial land

Actualarea neededbythe projectand theremaining landisstill viablefor continuesuse

Ownerswithfull title,tax declarationor otheracceptable proofof ownership. Squatters

Remaining residentialor commercial landbecomes notviablefor continueduse

Ownerswithfull title,tax declarationor otheracceptable proofof ownership.

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3.Main structures (e.g.house, shops,etc)

infrastructure.Whentheaffectedholdingislargerin valuethantherelocationplot,cashcompensationwill coverthedifferenceinvalue. Cashcompensationforperennialsofcommercialvalue asdeterminedbytheDENRorconcernedappraisal committee. Ifrelocating,DPtobeprovidedfreetransportation. Affectedsquattersandotherinfrmalsettlerswillnotbe Squatersand entitledtocompensationforaffectedland informalSettlers Compensationforaffectedstructuresandother investmentsmadeontheland; Relcoationassistance Compensationincashforaffectedportionofthe Structurewith Ownersof structureswith structureincludingthecostofrestoringtheremaining orwithouta fulltitleortax building structureasdeterminedbytheconcernedappraisal declarationtothe permit committeewithnodeductionforsalvagedbuilding land. partially materials. affectedand DPsthathavebusinessaffectedduetopartialimpacton theremaining thestructureareentitledtoasubsistenceallowancefor structureis thelossofincomeduringthereconstructionperiod(to stillviablefor becomputedbyLRIC). continueduse. Ownersof Compensationincashforaffectedportionofthe structureincludingthecostofrestoringtheremaining structures, includingshanty structureasdeterminedbytheconcernedappraisal dwellersinurban committeewithnodeductionforsalvagedbuilding materials. areas,haveno Shantydwellersinurbanareasoptingtogobacktotheir titleortax placeoforiginortobeshiftedtogovernmentrelocation declarationtothe siteswillbeprovidedfreeoftransportation. landorother acceptableproof DPsthathavebusinessaffectedduetopartialimpacton thestructureareentitledtoasubsistenceallowancefor ofownership. thelossofincomeduringthereconstructionperiod. Professionalsquatterswillnotreceivecompensationbut theycancollecttheirsalvagedmaterials. Rentersof Given3monthsnoticeonthescheduleofdemolition structures Ifshiftingisrequired,DPisgiventransitionalallowance includingrenters equivalenttoonemonthrentofasimilarstructure ofshantydwelling withinthearea. inurbanareas Forhousetenantsrentingoutsideof,orwithintheROW, andwhohavetotransferelsewhere,freetransportation willbeprovided. Rentingshantydwellersinurbanareaswhoopttogo backtotheirplaceoforiginintheprovinceofbeshifted togovernmentrelocationsiteswillalsobeprovidedfree

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4.Independ entshops

of transportation. Entire Ownersof Compensationincashfortheentirestructureat structure structureswith replacementcostdeterminedbytheconcernedappraisal fulltitleortax committeewithoutdeductionforsalvagedbuilding affectedor materials. when declarationtothe Inconvenienceallowance remaining land. DPsthathavebusinessaffectedduetothesevereimpact structure onthestructureareentitledtoasubsistenceallowance becomesnot forthelossofincomeduringthereconstructionperiod. viablefor Freetransportation,ifrelocationisnecessary. continueduse Rehabilitationassistanceintheformofskillstrainingand withor otherdevelopmentactivitieswillbeprovidedin withouta coordinationwithothergovernmentagenciesifthe building presentmeansoflivelihoodisnolongerviableandthe permit. DPwillhavetoengageinanewincomeactivity. Encroacherswillnotreceivecompensationbuttheycan collecttheirsalvagedmaterials. Rentersof Given3monthsnoticeonthescheduleofdemolition: structures Ifshiftingisrequired,DPisgiventransitionalallowance includingrenters equivalenttoonemonthrentofasimilarstructure ofshantydwelling withinthearea. inurbanareas Forhousetenantsrentingoutsideof,orwithintheROW, andwhohavetotransferelsewhere,freetransportation willbeprovided. Rentingshantydwellersinurbanareaswhoopttogo backtotheirplaceoforiginintheprovinceofbeshifted togovernmentrelocationsiteswillalsobeprovidedfree oftransportation. Rehabilitationassistance(skillstrainingandother developmentactivities)willbeprovidedincoordination withothergovernmentagenciesifthepresentmeansof livelihoodisnolongerviableandDPwillhavetoengage inanewincomeactivity Shopswithor Ownersof Compensationiscashforaffectedportionofthe structureswithor structure,includingthecostofrestoringtheremaining without structureasdeterminedbytheconcernedappraisal building withoutfulltitle committeewithoutdeductionforsalvagedbuilding permit, ortaxdeclaration materials. partially totheland. AsdeterminedbytheLRIC,DPswillbeentitledto affectedand transitionalallowancetocoverfortheircomputed theremaining incomelossduringthedemolitionandreconstructionof structuresare theirshops,butnottoexceedamonthperiod. stillviablefor continueduse. Renters(tenants) AsdeterminedbytheLRIC,shoprenterswillbeentitled ofaffectedshops toatransitionalallowancetocoverfortheircomputed incomelossduringtheperiodthattheirbusinessis

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Entireshop affectedor whenthe remaining structure becomesnot viablefor continueduse withor without building permit

Ownersof structureswithor withoutfulltitle ortaxdeclaration totheland.

Renters(tenants) ofaffectedshops

Lossof,or 5.Other fixedassets damageto orstructures affected assets, partiallyor entirely Lossof,or 6.Electric and/or damageto water affected connection assets, partiallyor entirely 7.Public Lossof,or facilities damageto public infrastructure 8. Owner/operat Temporary orofthe Impactson affectedplot structures and/or andother structuresor assetsdue businesses tocivil works

DPs

interrupted. Compensationiscashforentirestructureatreplacement costasdeterminedbytheconcernedappraisal committeewithoutdeductionforsalvagedbuilding materials. SubsistenceallowancetoeachDP Freetransportationifrelocating. Rehabilitationassistanceintheformofskillstrainingand otherdevelopmentactivitieswillbeprovidedin coordinationwithothergovernmentagenciesifthe presentmeansoflivelihoodisnolongerviableandthe DPwillhavetoengageinanewincomeactivity. Professionalsquatterswillnotreceivecompensationbut theycancollecttheirsalvagedmaterials. Given3monthsnoticeonthescheduleofdemolition AsdeterminedbytheLRIC,shoprenterswillbeentitled toatransitionalallowancetocoverfortheircomputed incomelossduringtheperiodthattheirbusinessis interrupted,butnottoexceeda3monthperiod. Cashcompensationforaffectedportionofstructure, includingcostofrestoringremainingstructureas determinedbytheconcernedappraisalcommittee, withnodepreciationordeductionforsalvagedbuilding materials. Compensationtocovercostofrestoringfacilities.

DPs

Concerned agencies

Compensationincashatreplacementcosttorespective agencies.

AllDPs

DPs will be given one month notice prior to start up of civilworks.. Cash compensation for loss of income potential for the periodoftemporaryimpact; Compensation for standing crops and trees as per the marketrate; Restorationoflandtoitspreviousorbetterquality. contractor to negotiate a rental rate with the owner for temporaryacquisitionofland. Projectandcontractortoensurethatpersonsotherthan the owner affected as a result of the temporary acquisition are compensated for the temporary period

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9.Any unanticipate dadverse impactdue toproject intervention

foranylossofincomes. Anyunanticipatedconsequenceoftheprojectwillbedocumentedandmitigatedcasebycase basisbasedonthespiritoftheprinciplesagreeduponinthispolicyframework.

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E.

InstitutionalArrangements 1. RolesandResponsibilitiesofKeyInstitutions

26. ThekeyinstitutionshavingaccountabilityfortheimplementationofthisFrameworkare: (i)LBP,astheBorrower;andii)MWCIandMWSIastheSubBorrowers,whoarethesubproject proponents and implementers. The following GOP institutions DENR, LLDA and LGUs have regulatory oversight to ensure that the project is compliant with relevant national laws and regulations. A brief description of these institutions together with their roles and responsibilitiesinplanningandimplementationofsubprojectsispresentedinTable1.

27. It is the responsibility of the SubBorrowers to carry out the necessary surveys and field investigations required by the RPF, and to obtain the approval on the necessary safeguards documents from appropriate authorities for each subproject before starting the resettlement implementation. The SubBorrowers are responsible for the quality and accuracy of the information in the RAP or an ARAP, as well as the transmission of the social safeguards documentstotheLBPandtheBank. Table1:InstitutionalRolesandResponsibilitiesinplanningandimplementationofsub projects
SubProjectEA process Identification/ Screening SubBorrower Env:Screensandscopessubprojectsincoordination withrelevantagencies.Determinescategoryofsub projectsasA,BorC. Soc:Determineslevelofimpactandmodeofland acquisition;identifieskeystakeholders;undertakes publicconsultations. Projectpreparation/ documentation PreparesandsubmitstoBorrowerforreviewthe followingdocuments. Env CatA:EIAthatincludesContingencyPlanandEMP. CatB:EIAorIEEandEMP CatC:ProjectdescriptionandEMPdependingon sizeandnatureofactivities Soc:ARAPandorRAP,RCR,DueDiligence Env:TransmitsapprovedECCsandotherrelevant governmentpermitsandclearancestotheBorrower. Reviewsdocumentsforacceptability totheBank. Borrower Confirmsthecategory(env);informs theBank.

Reviewandclearance ofdocumentation priortoappraisalby Bank.

Exercisesenvironmentalduediligence

Reviewsdocumentsacceptabletothe Soc: Submits safeguard documents (RAP, ARAP, RCR) to Borrower,submitstotheBank. Borrower.

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SubProjectEA process Implementation Supervision, Monitoringand Evaluation

SubBorrower Env MonitorsprojectcomplianceasperECCandEMP/EIS, IEE SubmitsSECRincludingEMoPandSMR ConductsAnnualThirdPartyEnvironmentalPerformance AuditandEnvironmentalAuditReport Soc:Providesresourcesforallactivitiesrelatedtothe resettlementplanningandimplementation/Ensures projectsareincompliancewiththeESSF/Provides periodicProgressreports,incorporatingmonitoring results,totheBorrower.

Borrower Monitorsprojectimplementationand submitsSECRtotheBankonasemi annualbasis ReviewsEnvironmentAuditReport, Conductsregularmonitoringof safeguardsimplementationfor submissiontotheWorldBank.

LandBankofthePhilippines(LBP) 28. LBP is the Borrower under the MWMP and will act as the servicing agent of the Government. LBP will onlend the loan funds to the two SubBorrowers, namely: MWCI and MWSI. As the Borrower, it shall perform oversight function to ensure that environmental and social safeguards covenants are complied with. MWCI and MWSI will submit environmental and socialsafeguardsdocuments(i.e.,EA,ECCs,CNCs,EMPs,landtitles,RAPs,etc.)totheLBPsCBD I.LBPwillmakethefundsavailablefortheproject. 29. Throughout the implementation of the Project LBP will provide the necessary resources and staff to meet the social safeguards requirements that will include tapping the personnel of the Program Management Department II (PMDII) for the social safeguards compliance. The social safeguards counterpart staff of the LBP is now actively involved in the MWMP preparation. One of the functions of PMDII is managing Official Development Assistance (ODA) funds.ItisinvolvedinthesafeguardsmonitoringoftheWorldBanksSupportforStrategicLocal Development and Investment Project (SSLDIP) where the expertise of LBP on social safeguards operations was developed and continues to be demonstrated. They will be assisted by a Consultant to fulfill their monitoring and reporting requirements. Trainings will be conducted, with the assistance of WB, to further enhance the capacity of LBP to process the safeguards requirements of the project. In addition the Bank will review all safeguard documents prior to confirmingitsfinancing.ThisreviewwillfacilitateinstitutionalstrengtheningofLBP. 30. The social safeguard documents will be reviewed by PMDII and ensure compliance to the conditions and provisions of the RPF. Similarly, the SubBorrower through the PMDII will submitthesocialsafeguarddocumentstoWorldBankforreviewandapproval. 31. As the loans for investment financing are channeled to the SubBorrowers through the LBP, LBP shall require subprojects to comply with existing national laws and regulations regarding land acquisition and resettlement and with applicable Bank policy on involuntary resettlement. 95

ManilaWaterCompany,Inc.(ManilaWater) 32. The Program Management Department is the overall incharge entity for project conceptualization,development,approval,procurement,executionandcloseout.TheProgram Manager is in charge of all stages of the project until closure and turnover to the Operations Group.ThefeasibilitystudiesareundertakenbytheProgramManager,whomakessurethatthe biddocumentsareresponsivetotheobjectivesoftheproject.He/sheorchestratesallnecessary material, personal and financial resources available to Manila Water to ensure project completionaccordingtothescheduleandatthebestqualitypossible. 33. The Project Delivery Group takes charge of project procurement and execution, until commissioning and turnover to the Operations Group. Its main role is to deliver the infrastructureandhardwareinworkingconditiontotheFacilityManager. 34. MWCI will make funds available to implement the RPF for the duration of the project. Thisbudgetisallocatedforthefollowingactivities:training,RAPorARAPpreparation,reporting and consultancy services. Likewise, trainings will be conducted, with the assistance of WB, to further enhance the capacity of MWCI to process the safeguards requirements of the project. Fundswillalsobeallocatedforpreparationofresettlementactionplansandlandacquisition. 35. The Operations Group is the owner of the facilities. Its biggest groups are the Water Supply Department and the Wastewater Operations Department. Each facility or facility cluster is headed by a Facility Manager who is in charge of daytoday operations, including process control and vendor management. He/she is already on board from the conceptualization of the projectbuttakesoverthefacilityaftercommissioning. MayniladWaterServices,Inc.(Maynilad) 36. The social safeguard issues will be handled by the Environment Management Department (EMD). The Right of Way (ROW) Unit is responsible in locating/identifying land needed for the construction of project structures and facilities. Once a potential land area has been located, the Wastewater Management Division conducts community consultation to introduce the project to the community and gather their reactions. If the community accepts theconceptoftheproject,thepotentiallandareaislistedandtheROWunitundertakesfurther investigation of the potential land and its landowner. Land purchase negotiations is also undertakenbytheROWUnit. 37. MWSIwillmakefundsavailabletoimplementtheRPFforthedurationoftheprojectfor the following activities: preparation of necessary instruments related to Land Acquisition and Resettlement of Displaced Persons; conduct of public consultation; training; implementation and monitoring. Likewise, trainings will be conducted, with the assistance of WB, to further enhancethecapacityofMayniladtoprocessthesafeguardsrequirementsoftheproject. 96

DepartmentofEnvironmentandNaturalResources(DENR)andLagunaLake DevelopmentAuthority(LLDA) 38. The role of the DENR in social safeguards is limited to providing rates for affected tree crops in a subproject as and when such a request is made by the SubBorrowers. LLDA leads, promotes and accelerates sustainable development in the Laguna de bay watershed where some of the subcatchment areas of this project are found. It enforces, among other environmentallaws,theCleanWaterActintheLagunadeBaywatershed. LocalGovernmentUnits(LGUs) 39. The LGUs being referred to could be the Barangay, City and/or Municipality where the Subproject is located. The role of the LGUs is to facilitate planning and implementation of subprojectsintheirrespectiveareas,specifically: to enforce the National Building Code which includes the issuance of the locational clearance and the building permit of civil works which include wastewater treatment facilitiesandsewernetworksintheirareaofjurisdiction; to assist subproject proponents in identifying potential land needed for the constructionofwastewatertreatmentfacilities; to assist in conducting of public information campaign by the Concessionaires and help toensuretheparticipationofthepublic,especiallytheDPs; to assist Concessionaires in receiving complaints and grievances from DPs and other stakeholdersandresolvingthesame;and to provide assistance to Concessionaires in the enforcement of laws/ordinances regardingencroachmentintothesubprojectsiteoritsROW.

2. InstitutionalStrengtheningandCapacityBuilding

40. The capacity oftheLBPin managingthesocialsafeguardsrequirementsandprocedures is assessed to be satisfactory. LBP has demonstrated its capacity in the safeguards management of the SSLDIP, an ongoing WB financed project with LBP as its financial intermediary. The Borrower is able to provide technical assistance to the local government units in the screening of projects for impacts, preparation, implementation and monitoring of 6 ARAPs. The social safeguardscounterpartstaffpreparesandsubmitstotheBanksemiannualreportsthatindicate the status of compliance by LGUs on conduct of social impacts including quality of public consultations held and issues addressed during implementation of mitigation plans. The LBP staff is actively participating in the MWMP preparation. Compared to the magnitude of SSLDIP (nationwide with more than 100 LGU Sub Borrowers), MWMP is more manageable in regards to the social safeguards issues. It is also noted that the technical capacities of MWSI and MWCI

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forsafeguardsoperationsaremuchhigherthanmanyLGUcounterpartstaffwithwhomtheLBP hasdealtwithunderSSLDIP. 41. The Borrower and SubBorrowers have prior experience working with the Bank in previous loan projects where the environmental safeguards are required. The Borrower has implemented the Water Districts Development Project, the SSLDIP and the Manila Third Sewerage Project. As for Manila Water, they are involved in the Manila Third Sewerage Project wherein the environmental safeguards are also required. Maynilad has also worked with the Bank on MTSPGEF. In addition, MWSS is familiar with Bank procedures through previous operations and will provide the necessary guidance, as needed. Also, MWSS staff can provide guidancetoManilaWaterandMaynilad,asnecessary. 42. Both the Concessionaires have adequate capacity to carry out subproject preparation and they have each established a team to carry out the project. In addition, training will be provided to ensure familiarity with processes to be carried out under the project. Both Concessionaires have clear systems of audits and accountability in place (public disclosure of financial statements in accordance with international standards); their procurement practices are in line with international good practice and both companies regularly carry out large investmentstakingintoconsiderationenvironmentalandsocialissues. 43. CapacityBuildingandTraining Requirements:LBP willhireconsultantstostrengthenits capacityandassistinprojectimplementation.TheSubborrowerswillallocatefundsfortraining on safeguards related matters for the project. To ensure that the procedures laid out in the RPF are implemented properly, the following trainings modules will be provided by the Bank for the staffofLBP,MWCI,MWSIandtheLGUswhoareresponsibleforthesocialsafeguardsaspects: CourseonWBSafeguardsPoliciesandtheirapplicationperprojectstage PreparationofanARAPandaFullRAP HowtoConductPublicConsultation GrievanceMechanism Monitoringofresettlementimplementation

44. Although the Borrower has sufficient capacity to manage social safeguards requirements and to provide guidance to the Concessionaires in accordance with the provisions of the RPF, the Bank will review all subprojects implemented in the first year and will continue review and approve all subprojects with significant involuntary resettlement issues to ensure that the subprojects are in full compliance with the requirements of the RPF and the World Banks relevant safeguards policy, and until it is fully satisfied that the Concessionaires have achievedcapacitiestotheleveltheycanfunctionwithoutanyoversightbytheBank. 98

F.

ResettlementPlanningandImplementationProcess

45. In general, the provisions of the RPF would be applicable in all the subprojects that result in adverse social impacts, permanent and temporary, due to the acquisition of land and other assets or causing loss of incomes and livelihood. However, the requirements for surveys and documentation would vary depending upon the mode of acquisition of land by the Concessionaires. Where the land is obtained through direct negotiations between the Concessionaires and the land owners and the responsibility to relocate any occupants on the land rests with the land owners, the Concessionaires should ensure that the compensation and other assistance provided to affected households are adequate to enable affected households to restore their livelihood and income levels to predisplacement levels. In this respect, Concessionaires should provide a RCR to Land Bank to demonstrate that the procedures carried outforthelandacquisitionandthecompensationprovidedareinlinewiththeRPFandthatthe process to acquire land through open market purchase is in accordance with the proposed protocolspecifiedintheRPF. 1. KeySteps 46. TheSubBorrowerswillberesponsibleforprovidingresourcesforallactivitiesrelatedto the resettlement planning and implementation. Where in a subproject OP 4.12 is triggered, the Concessionaires will carry out necessary studies (census, inventory of assets, etc.) and prepare necessary documents (Resettlement Action Plan (RAP) / Abbreviated Resettlement Action Plans (ARAP). The scope and contents of the RAP or an ARAP) will follow the provisions of the World Banks OP 4.12 Annex A. Each RAP, ARAP and RCR will include detailed cost estimates for compensation and relocation of DPs disaggregated by category of DPs and types of impacts and assetslost.Costestimateswillmakeadequateprovisionsforcontingencies.Incaseofanyover runofcosts,relevantConcessionaireswillprovideadditionalfundsinatimelymannertoensure that the implementation of involuntary resettlement activities is completed according to the schedule. All costs in regards to the acquisition of land and other assets, compensation and financial assistance to affected households would be included towards cost of the subprojects. Theproceduresthatwouldbefollowedtomeetthesafeguardrequirementsareoutlinedbelow. Identificationofsubprojectsaccordingtoselectioncriteria

47. Potential subprojects are identified by the respective Concessionaires based on the overall project objectives and needs assessment. First step in this respect would be on selection of sites and getting general agreement from the communities in the adjoining areas before the site is considered as final. In the past, neighborhoods resisted construction of STPs in their immediate vicinity. Together with the NIMBY syndrome, citizens have expressed concerns on possible foul odor and noise. To mitigate these fears, the subproject proponents have incorporatedcommunitytourstooperatingSTPsaspartofthecommunityawarenessprograms. At this stage, the Concessionaires are also required to identify the types, degree and scale of 99

potentialsocialimpactsofthesubproject.Tocorrectlyidentifytherelevantsocialissuesandto assess the type and level of information required during subsequent field investigations, particular attention will be paid to adverse impacts to the affected community, such as loss of land and other fixed assets and the number of persons marginally or severely affected and the typesofvulnerablegroupsaffected.Preliminarysocialandlandacquisitionassessmentwillalso help in identification of risks and in deciding whether or not to proceed with the project or to consider alternatives to ensure that the adverse impacts are avoided, or minimized if cannot be avoided. During this stage, the subproject proponent should identify key stakeholders, local NGOs and DPs. They should then undertake public consultation to: (a) provide information on the project, its benefits and impacts; (b) obtain feedback from the public; and (c) discuss the plan for the participation process and the roles of the community, NGOs and other key stakeholders. SocialSafeguardsScreening 48. The Concessionaires are required to carry out screening of the project to determine scale of impacts: marginal or severe and the consequent need for further field investigations, surveysanddocumentationnecessaryinordertomeettherequirementsspecifiedintheRPF.In cases where social screening results to significant social impact, a social assessment will be undertakenaspartoftheEnvironmentAssessment(EA),asspecifiedinpara3ofOP4.01,bythe SubBorrower irrespective of whether there is land acquisition or involuntary settlement. Additionally, the Concessionaires will also screen the subprojects for national/provincial laws andregulationsregardinglandacquisitionandinvoluntaryresettlement. ProjectPreparationandDocumentation

49. The types of surveys and field investigations required and social safeguards documents that would need to be prepared for a subproject will depend upon the degree and scale of the impacts and the method adopted for acquisition of private assets for the subproject. Depending upon the degree and scale of impacts and based on the data collected through the field investigations, a full RAP or ARAP will be prepared. The scope and contents of the RAP or ARAP) will follow the provisions of the World Banks OP 4.12, Annex A. In cases where the sub project affects and/or displaces more than 200 persons a timebound RAP will be prepared in accordancewiththeprovisionsofthisFramework.Incaseswheretheimpactsofthesubproject are marginal such that less than 200 persons are affected and/or displaced, or where the impacts are minor, an ARAP should be prepared. In cases while land has already been acquired,aduediligencereportoritsequivalentwillbeprepared. 50. Where the land is to be acquired using the power of eminent domain (Involuntary land acquisition),theSubBorrowerisrequiredtoconductsurveystocollectinformationoncensusof affected households, inventory of losses and socioeconomic characteristics as specified during thescreening.Priortoundertakingthesurveytheprojectproponentshouldimplementapublic 100

information campaign to describe the project components, types of impacts, content and scheduleforthecensusandinventoryorotherbackgroundsurveys. 51. Where in a subproject required land is obtained under open market purchase through direct negotiations with the land owner, as is the current practice by the MWCI and MWSI, the SubBorrower will hire a professional appraiser to conduct appraisal, including valuation, of the potential site before any decision is taken to proceed with the negotiations with the land owner/s. The SubBorrower is also required to conduct detailed survey of the occupants and improvements on the land parcel to record all types of potential losses, if any, due to the acquisitionoftheland.AspertheagreementbetweentheSubBorrowerandthelandowner,if the occupants on the land and their affected assets are to be relocated, the SubBorrower should ensure that the affected households are provided sufficient support and financial assistance to enable them to improve, or at least restore their livelihood to predisplacement level. 52. When negotiations for acquisition of private assets are carried out on a Open market purchase basis, cases will be carefully documented so as to ensure they meet the policy requirements to be considered, such as land free of encumbrances, no coercion, and ability of the land owner to say no to any sales without the threat of eminent domain land acquisition. ThisRPFprovidesaprotocoltodefineobjectives,andprocedures(seepara56). 53. In cases where the Subproject Proponent has already acquired the land needed for the project and that the occupants of the land acquired have been relocated as an agreement between the landowner and the real estate agent of the Subproject Proponent, as in the case of The North and South Pasig Sewerage System STP of Manila Water, a RCR will be prepared. The content of the Completion Report are: project description, description/census of the occupants/projectaffectedpersons and inventory of their affected assets and properties includingcropsandtrees(ifany),compensationandotherassistanceprovidedtothem,possible location where the occupants/DPs will be relocated and a detailed description of how the land was acquired. Documents required are Minutes of the consultation meetings with the occupants, Property (land) Appraisal Report. Based on the RCR, the Borrower will conduct Due Diligence (Resettlement Audit) which will be reviewed by the Bank to check whether the acquisition of land and other assets is consistent with the requirements of the ESSF, and will developaplantofillanygaps. ReviewandClearanceofSocialSafeguardsDocuments 54. The subproject proponent will submit all social safeguards documents (ARAP and/or RAP, RCR) to the Borrower, who will review these documents for compliance with the Social Safeguards Framework. The Borrower will approve, refuse approval or request revisions/reformulation of these documents after review and clearance by the Bank. The Borrower will submit to the World Bank all RAPs, ARAPs and RCRs after it has ensured that the 101

documents meet the requirements of the ESSF before the subproject is approved for implementation. ImplementationSupervision,MonitoringandEvaluation 55. TheSubprojectproponentswillsuperviseandmonitortheimplementationofthesocial safeguards in each subproject to ensure that they are implemented in accordance with the approved documents and are in compliance with the RPF. Periodic progress reports, incorporating the Social and Environmental Compliance Report (SECR) will be prepared and submittedto theBorrowerandtotheWorldBankonaregularbasis.TheBorrower,throughits PMDII will carry out regular monitoring of safeguards implementation of the two ConcessionairesandconsolidatesforsubmissiontotheWorldBank. 56. In case of noncompliance with the provisions of the RPF, the LBP, in consultation with the respective subproject proponent discuss appropriate measures or remedial actions and implementation schedule for such measures/actions. Subproject proponent will be required to implementsuchmeasureswithintheagreedtimeframeatitsowncost,failingwhichLBPwould take additional measures, which could include suspending further disbursement, until the remedial measures are implemented to the satisfaction of LBP. Monitoring and Reporting requirementsaredescribedinSection11ofthisRPF. 2. ProceduresforLandAcquisition

57. Land acquisition for subprojects will be carried out mainly through two modes of land acquisitiondependingupontheownershipofpotentialsitesforsubprojects. InvoluntaryResettlement(LandAcquisitionInvokingOP4.12) 58. Following modes of land acquisition will trigger WBs OP 4.12 and the Concessionaires would be required to conduct necessary field investigations/surveys in accordance with the provisionsoftheRPFforresettlementplanpreparationandimplementation: Grant of RightOfWay (ROW): Where sewer/wastewater mains/distributary lines pass through any private properties, the subproject proponent may seek the imposition of an Easement of RightofWay (ROW) provided for under the Philippine Civil Code. In such cases, a ROW easement agreement will be executed by the property owner and the subproject proponent, whereby the former will grant the latter the right to use the affectedportionofthelot,asROW,buttheownerretainsownershipofthesaidportion of the lot. In these cases and depending upon the agreement between the subproject proponentandtheowner/softheproperty,eithertheeasementrightsaregivenfreeof any charges or on some payment by the subproject proponent to the owner. The payment can be based on the value of the affected portion of the lot determined by an 102

independent appraiser according to internationally accepted norms. In addition, the subproject proponent is required to compensate the owner for any improvements and/orstructuresonthelandaffectedbytheROWatreplacementcost.Thesubproject proponent will enter the easement area after the provision of the full payment for the easement to the property owner. The ROW easement agreement will be immediately registeredwiththeRegistryofDeeds. Usufruct: The Subproject Proponent may alsoacquire a property through usufruct. The property owner retains the ownership of the land, while the subproject proponent enjoys the benefit of the use of land. The subproject proponent and the property owner will execute a usufruct agreement. The agreement will cover the rights and responsibilities of the two parties, including the duration of the usufruct which should notbelowerthantheprojectlife. Lease Agreement: The subproject proponent may also acquire lands through lease agreements with the rightful property owner. The subproject proponent and the property owner will execute a Lease Contract. The contract will cover the rights and responsibilities of the two parties, including the duration of the lease which should not be lower than the project life. Under this agreement, the land owners continue retain legal ownership of the land parcel. All land transaction should be registered with the RegistryofDeedsforannotationinthetitleofsubjectproperty. Expropriation. Although both the MWCI and MWSI are private corporations, they are ConcessionairesundertheMWSS,whichisapublicenterprise.BoththeConcessionaires have the option to acquire private properties for their subprojects using the legal process, eminent domain through MWSS. However, none of the Concessionaires have everusedeminentdomaintoacquireprivateproperties.

OpenMarketPurchaseOP4.12isnottriggered 59. UndertheongoingManilaThirdSewerageProject(MTSP)theprojectproponent,Manila Water was completely dependent on the respective Local Government Units (LGUs) to acquire and make the required land available for the project. However, the LGUs failed to acquire land for the project causing severe delays in project implementation. Similar experience in other projects caused severe delays and even cancellation of subprojects. Learning from the past experiences and to avoid recurrence of similar problems for this project, the two Concessionaires have decided to acquire the land themselves. Current procedures consisting of open market purchase from the land owners, either through the brokers or in direct negotiations based on Willing BuyerWilling Seller basis, are borne out of experiences from previous projects. However, where open market purchase fail, other forms of land acquisition willbeconsidered.

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60. Negotiated purchase of private assets is therefore, the most preferred mode of land acquisition by both the Concessionaires. Once a potential land parcel is identified, both the Concessionaires contract professional appraisers to obtain information on the legal and tenure statusofthelandinquestion,itsmarketvalueandotherissuesthatmaybeofrelevance.Based on the findings of the appraisal reports, the Concessionaires enter into negotiations with the land owner. Since both the Concessionaires are private corporations, they enter into negotiations withthelandownerseitherindirectlythrougharealestateagent(asinthecaseof Manila Water) or directly (as in the case of Maynilad through their ROW unit). Once the agreementis reached,the propertyownerissuesawrittenpermittothesubproject proponent to enter the property and a contract of sale is subsequently executed between the property owner and the subproject proponent. Since the Concessionaires plan to follow the open market purchase using direct negotiations with land owners for all future land requirements, a protocolfortheprojectisproposed. 61. KeyobjectivesoftheProtocolforOpenMarketPurchase: toensureatransparentandconsultativeprocess; to ensure that compensation paid is at or above prevalent market prices to enable all affectedlandownerstoreplacetheiraffectedassets; toensurethatalltheaffectedlandownersarebetteroffduetotheproject;and todocumentpublicconsultationandnegotiationproceedings. 62. The protocol, presented below, will be followed by both the Concessionaires for the Bankfundedprojects. 63. KeyProvisionsoftheProtocolinclude: Inventories of affected land and other fixed assets would be prepared in consultation withaffectedlandownersandsubmitthesametotheBorrowerandtheBank; Alllandwouldbefreefromanydisputesonownershipandencumbrances; Concessionaires to ensure that the subprojects will in no way cause adverse impacts on sourcesofincomesandlivelihoodofadjoiningcommunities; Negotiationsfordirectpurchasewouldbecarriedoutinatransparentmanner; All negotiation proceedings will be documented and the final agreement would be signedbythenegotiatingparties; The negotiated amount will be fully paid after the submission of the required documents;and Concessionaires will submit completed documents including maps together with the subproject proposalstoLBPandtheWorldBanktoshowtheprocessusedforobtaining therequiredland. 3. MethodofValuationofAffectedAssets 64. The RPF provides for compensation for land and other affected assets at replacement cost.Tomeettheaboveobjectives,theConcessionaireswillfollowthevaluationproceduresfor differenttypesofaffectedassetsasbelow: 104

Land: The Concessionaires will contract professional appraisers for valuation of affected landtodetermineprevalentmarketprices.Incaseofopenmarketpurchaseoflandfor subprojects, the negotiations for the land would be based on the market prices determined by the appraisers. Where land is acquired under eminent domain, the final prices of affected land will be at least equal to or higher than the prevalent market pricestoensurethattheDPsareabletoreplaceaffectedlandatcurrentmarketprices. Structures. The Concessionaires will ensure that the compensation for affected structures is paid at replacement cost based on current market prices for material and labor. The compensation for affected structures will be paid without any depreciation and deductions for salvaged material by the DPs. For the purpose, the Concessionaires will contract professional appraisers to conduct market surveys to determine prevalent marketpricesformaterialandlabortoarriveatratesfordifferenttypesofstructures. Trees and crops. Compensation rates for affected trees provided by DENR and for affectedcropsbyDepartmentofAgriculture. PublicParticipation,Consultation,andGrievanceMechanisms

G. 1. PublicConsultationandParticipation

65. Information disclosure and public consultation are important and necessary in sub project preparation and implementation. These enable subproject affected people and other stakeholders to participate in and contribute to the subproject planning and implementation, and thereby help minimize adverse impacts and maximize subproject benefits. The level of public consultation and the scope of information dissemination will be commensurate with the degree and significance of the social impacts. Public consultation including information dissemination on key aspects of the project in general and resettlement issues in particular, will beongoingthroughouttheresettlementplanningandimplementationineverysubproject. 66. The draft ESSF, incorporating RPF, was an object of the public consultation with key institutional stakeholders on October 5, 2010. The ESSF/RPF was presented and discussed in detail during the consultation, which was attended by stakeholders with representations from various national and local government agencies and select nongovernment institutions. The summary of the proceedings is presented in Annex 7 of the ESSF. Furthermore, copies were madeaccessibletothepublicthroughtheDepartmentofEnvironmentalandNaturalResources, the Borrower and the SubBorrowers through their website. Comments received have been incorporated. 67. Public consultation and participation ensures project acceptability and fosters good community relationship between the community, community leaders and the Subproject proponents. MWCI and MWSI have Zone Managers and Business Centers to work closely with 105

communities to ensure better reception of their projects. The two Concessionaires will consult and provide relevant information to the community as early as possible. Information provided will include: the purpose, nature and scale of the project; and the duration of the proposed activities and of any risks to and potential impacts on the community. Documentation is the responsibility of the Concessionaries which will provide updates and feedbacks to the community,asneeded,ontheprojectactivity. 68. Documentation. Both the Concessionaires will maintain detailed record of public consultation exercises to document: date and place of public consultation/meetings; information disseminated; issues discussed; feedback received from the participants; problems identified and actions taken; and names and number of participants. Minutes of meetings wouldbemaintainedandcountersignedbytheDPs,theirrepresentatives,civilsocietymembers andotherkeystakeholders. 2. Disclosure

69. Timing of local disclosure will vary depending on the type of assessment involved, the level of risks and impacts and the stage of the projects development or operation. A key minimum requirement that should be taken into account when determining timing of local disclosure in all cases is, if local disclosure has not already taken place at the time of involvement of the Subproject Proponent, the Subproponent should commence local disclosureactivitiesasearlyaspossible. 70. Social safeguard information to be disclosed will include, at a minimum: subproject information, impacts, and proposed mitigation measures. Disclosure could be done through community meetings, posters, booklets, newspapers, and the internet. Local disclosure of information should be targeted, at a minimum, to the directly affected communities (including projectrelated workforce, where applicable). LBP and the two Concessionaires will be responsible for the making the information publicly available. Public disclosure of documentation shall be in accordance with LBPs Executive Order No. 073 series of 2009 on Guidelines on Classification, Handling, Access and Disclosure of Information Assets, including anyamendmentsthereof. 71. Documents to be disclosed include the ESSF incorporating RPF, SA, RAP or ARAP. These documents are made publicly available at public places accessible to projectaffectedgroups, NGOs and other interested stakeholders through the World Banks InfoShop. Documents will also be posted in the internet sites of LBP and the two Concessionaires. Where necessary, summary of RAP or an ARAP, particularly the summary of losses and entitlements, will be made availableintheformandlanguageunderstandabletotheDPs. 106

3. GrievanceRedressMechanism 72. A grievance redress mechanism for the project is necessary for addressing legitimate concerns of affected individuals and groups who may consider themselves deprived of appropriate treatment under the project. MWCI and MWSI have a Public Complaints Section in their Consumer Relations Departments to address all complaints and grievances received from members of the public. The Public Complaints Sections will be responsible to address and resolve any grievances from the DPs and other members of the public in regards to the sub projects. Complaints and grievances related to any aspect of the subprojects, including environmentalandsocialsafeguardsissues,willbeaddressedasfollows: Step1:Asafirststage,complainantswillpresenttheircomplaintsandgrievancestothe Barangay officials for onward transmission of complaints to the Concessionaires. The subprojectstaffoftheConcessionaires,togetherwiththeLGUofficials,willmakeevery attempttoresolvethegrievancesatthelocallevel. Step 2: If the complaint is not addressed to the satisfaction of the complainant, or remain unresolved, for 15 days from the date of first submission, the complainant may then submit his/her complaint directly to the Complaints Section of the Consumer RelationsDepartmentsofMWCIandMWSI.

Step3:Ifthecomplaintsarenotaddressedtothesatisfactionofthecomplainantwithin 15 days from the date of submission to the Concessionaires, or remain unresolved, the complainantcanapproachthecourtoflaw. 73. Followingprincipleswillapplytoaddresscomplaintsandgrievancesintheproject: Complainants will be exempted from all administrative and legal fees incurred in pursuant to the grievance redress procedures. All such costs will be borne by the respectiveConcessionaire. All complaints would be written, if received verbally, and documented properly. The Concessionaires will also put all relevant details of complaints and the actions taken on theirrespectivewebsiteforthepurpose; Designated staff with responsibility to address complaints would be appointed at variouslevels; Concessionaires will maintain proper documentation of all complaints received and actions taken. These documents would be available to the LBP which is responsible for monitoring. 74. The concessionaires will provide LBP with a report on any complaint received and actionstaken.AstheBorrower,LBPwillmonitorsaidcomplaintsaspartofitsduediligenceand

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closely coordinate with the SubBorrowers on possible remedial actions to resolve complaints expeditiouslyandadequately. H. ResettlementImplementation

75. Land acquisition and relocation of affected households cannot commence until the RAP or ARAP has been reviewed by the Borrower and the Bank. The RAP or an ARAP will include implementation schedule wherein all resettlement activities will be coordinated with the civil works schedule. Once the RAP or ARAP is approved, the Borrower will issue its no objection letter to the Concessionaires to allow construction activities to begin. No demolition of assets and/or entry to properties will be done until a DP is fully compensated, except when a court of law grants a Writ of Possession to the Subproject Proponent for the subject property in expropriation. Where the land has already been acquired, the construction activities will begin onlyaftertheRCRforeachsubprojectisreviewedandapprovedbytheBorrowerandtheBank. I.

Budget

76. The total cost of the proposed project is US$ 414.1 million with a Bank financing of US$ 275 million and US$ 139.1 million in equity investments provided by the Concessionaires. The total investment cost may change and it would depend on the actual investments that are carriedout.TheBankloanofUS$137.5millionwouldbemadeavailabletoeachConcessionaire for the investments and the rest of the investments would have to be borne by the Concessionaires.Nofrontendfee7willbefinancedfromtheBankloanandtheinvestmentcost includes price and physical contingencies. For Component 1, the investment cost is US$ 193.4 millionofwhichUS$55.9millionwillbefinancedbyManilaWaterandtherestbytheBank.For Component 2, the investment cost is US$ 220.7 million of which US$ 83.2 million is expected to be financed by Maynilad and rest by the Bank. Additional details are provided in the Project AppraisalDocument. 1. ResettlementCost

77. Resettlement cost for the subprojects would be borne by the respective Concessionaires. All resettlement costs would be included in the overall cost of the project. Respective RAP/ ARAP and RCRs for the subprojects will provide detailed account of the estimated resettlement cost. Sufficient provision will be made for contingencies. During implementation, in case of over run of costs, respective Concessionaires will make necessary funds available in a timely manner to ensure resettlement implementation in accordance with theschedule. 2. RetroactiveFinancing
7

Front end fee of US$ 687.5 thousand

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78. Retroactive financing is possible as long as the procurement procedures followed are in line with that of the project and the subproject eligibility criteria are satisfactorily met. Payments within twelve months before signing the Loan Agreement would be eligible for retroactive financing and the total retroactive financing can be up to twenty percent of the value of the Bank loan. For subprojects that are retroactively financed, a due diligence post reviewwillbecarriedoutforsocialimpactsasfollows: In subprojects where land has already been acquired, the SubBorrower will review the subproject to ensure compliance with applicable national laws and provisions of this ESSF, including consultation and disclosure requirements. The Borrower, on its part, willcarryoutduediligencetodeterminehowthelandwasacquiredandwhetherornot there are any outstanding claims, issues or risks associated with land acquisition, compensation or ownership. If necessary, additional mitigation measures will be developed and implemented. For purposes of due diligence, the Borrower will consider two levels of assessment: i) for land acquired two years prior to the first identification mission by the Bank to determine whether or not the acquisition of land and resettlement was carried out in accordance with the national laws and regulations land whether there are any pending claims and legal issues; and ii) for land acquisition from the date of the first identification mission by the Bank or where land acquisition activities are currently undergoing or recently been completed, the provisions of the BanksOP4.12,andtheESSFwillbeapplicable. The SECR will be prepared by the SubBorrower to briefly describe the safeguards aspects of each retroactively financed subproject. The postreview reports and necessary mitigation measures will be reviewed by the Borrower and the World Bank. Compliance with the ESSF requirements is a condition for retroactive financing under theproject.

J. SupervisionandMonitoring

79. The implementation of the subprojects would be carried out by the Concessionaires, includingactionsrelatedtosafeguards.LBPwillmonitortheprojectimplementationandsubmit to the Bank a Social and Environmental Compliance Report (SECR) on a semiannual basis that will state how the Banks policies are being met and what corrective actions, if any, are being taken. The SECR would be prepared by the Borrower, based on inputs provided by the Concessionaires. LBP as a Borrower of the Bank loan will oversee safeguard operations and ensure that the SubBorrowers are in compliance with the procedures outlined in this RPF and theESSF.IncaseofnoncompliancewiththeprovisionsoftheRPF,theLBP,inconsultationwith the respective subproject proponent discuss appropriate measures or remedial actions and implementation schedule for such measures/actions. Subproject proponent will be required to 109

implementsuchmeasureswithintheagreedtimeframeatitsowncost,failingwhichLBPwould take additional measures, which could include suspending further disbursement, until the remedialmeasuresareimplementedtothesatisfactionoftheBorrower. 80. Each Concessionaire will monitor resettlement implementation activities regularly to ensurethatimplementationofresettlementiscarriedoutinaccordancewiththeapprovedRAP or ARAP. The Concessionaires will submit a periodic SECR, which will include an Environmental Monitoring Plan (EMoP) and a SelfMonitoring Report (SMR) on a semiannual frequency (i.e., within January and July of each year). Copies of the submitted SubBorrowers SECR and SMR must be provided in two sets to LBP for reference and review purposes. LBP will be responsible for monitoring and evaluating the SECRs and SMRs submitted by the SubBorrowers. One set of the SECR and SMR received by the Borrower will be transmitted to the Bank for further review. TheSubBorrowersSECRandSMRwillincludethefollowing:informationonthedatacollection; discussiononthe complianceornoncompliancetothe RAP,EMPandECC;correctiveactions,if any;conclusionsandrecommendations;andphotographs,asneeded. 81. External Monitoring. In subprojects with significant (200 persons or more) resettlement,includingphysicalandeconomicdisplacementoflargenumberofhouseholds,the SubBorrower will, in consultation with the Borrower and the Bank, contract an external monitoring agency / consultant group, with adequate experience in involuntary resettlement to conduct periodic independent monitoring of resettlement implementation by the Concessionaires in the subproject/s. The external monitors will submit their periodic monitoringreportstotheBorrowersandacopyofitsmonitoringreporttotheBankdirectly.

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