JBIC Guidelines for Confirmation of Environmental and Social Considerations

1. JBIC Guidelines for Confirmation of Environmental and Social Considerations December 1, 2006 in Beijing Tadashi Maeda Director General for Energy and Resources

2. Contents • Outline of the Guidelines • Procedures for the JBIC Confirmation under the Guidelines • Environmental and Social Considerations required for the JBIC Funded Projects under the Guidelines

3. Outline of the Guidelines

4. Major pillars of JBIC’s position • Making the guidelines through transparent procedures including consultations with the stakeholders • Proactive disclosure of the information a. The results of the categorization b. EIA c. The results of review by JBIC • Due attention to the social impacts • Introducing the objections mechanism

5. Other key principles (1)The Project sponsors and implementers assume the primary responsibility for Environmental consideration of the Project. (2) Importance of project stakeholders, including local residents affected by the project and local NGOs, in the environmental and social consideration process. (4)Result of environmental and social considerations to be taken into account in loan agreements or other relevant documents. (5) Monitoring and follow-up

6. Procedures for JBIC confirmation under the Guidelines

7. Procedure of JBIC Review (Category A project) Project Proposal Disclosure 1.Screening and Categorization EIA report Outline of the project Category classification 2.EIA review and draft Checklist (Employment of external consultant ) 3.Questionnaire sending (twice in case of normal process) and Answer receiving 4.Project site visit and confirmation of the answers to our questionnaire 5. Finalizing the consultant report and the Checklist Check report and Screening Form 6.Finalizing the Report Loan Agreement

8. Screening and Categorization • Magnitude of impacts based on Sector, Scale, Characteristics, and Feature of location • Using Screening form (See examples later..) • Classification into Category A, B, C, and FI • Decide the magnitude of JBIC Review based on the Categorization

9. Categorization Category A：Likely to have significant adverse impacts Category B：Potential adverse impacts are less adverse than those of Category A projects. Category C：Likely to have minimal or no adverse environmental impacts 1) JBIC’s funding is below SDR 10 million 2) Human resources development etc. 3) Involvement of the borrower or JBIC is only minor Category FI : Funding to financial intermediary etc., and sub-projects cannot be specified prior to JBIC’s approval of funding

10. Environmental Review Category A：EIA reports must be submitted. Environmental reviews undertaken based on the EIA and other reports (e.g. basic resettlement plan) Category B：Scope of reviews is narrower than that for Category A projects. EIA report is not a mandatory requirement. Category C：Environmental reviews not proceed beyond screening Category FI：Confirm through financial intermediaries etc. that environmental considerations are ensured

11. Submission of EIA Report Review in the light of JBIC Env. Guidelines A ü ü B ü C Categorization of projects Project Impact Large Classification by JBIC (based on Screening form) FI （ü） ü Small

12. Example forCategory A • Sensitive Sectors (e.g. Large-scale projects in Thermal power, dams, Oil and natural gas development, Petrochemicals, Airport, Harbor, Waste Disposal , Irrigation and etc.) • Sensitive Characteristics (e.g. Large-scale involuntary resettlement, ground water pumping, land reclamation) • Sensitive Areas (e.g. Nationally-designated protected area, important ecology, historical or cultural value, ethnic minority)

13. Disclosure of Information by JBIC • Prior to making decision on funding, Outline of the project Category classification with its reason Documents (EIA, permit etc.) that JBIC obtains (for A and B) • After L/A Results of Env. Review • Observe the principles of information disclosure and commercial confidentiality concurrently

14. Environmental and Social Considerations Required for Funded Projects (1/5) (example): Underlying Principles • Alternative measures to avoid and minimize env. and social impact must be examined and incorporated into project plan. Examination of Measures under the plan • Alternative in the plan must be examined. Priority is Avoid, Minimize and Mitigation.

15. Environmental and Social Considerations Required for Funded Projects (2/5) Scope of Impact to be Examined • Pollution • Natural environment • Social issues (e.g. Involuntary resettlement, indigenous people, cultural heritage) • Communicable diseases, gender, children’s right • Trans-boundaries and global environmental problems Compliance with Laws, Standards and Plans • Compliance with regulations of borrower’s country • Reference with international standards

16. Environmental and Social Considerations Required for Funded Projects (3/5) Social Acceptability and social impacts • Projects are accepted in a manner that is socially appropriate to the country and locality. • For projects with large impacts, sufficient consultation with stakeholders must be conducted and the outcome must be incorporated in plan.

17. Environmental and Social Considerations Required for Funded Projects (4/5) Involuntary Resettlement • Involuntary resettlement and loss of means of livelihood are to be avoided where feasible. • When unfeasible, effective measures to minimize impacts and to compensate for losses must be agreed upon with the people to be affected. • Living standard shall be kept or improved. • Participation of the affected people shall be promoted in planning, implementation and monitoring.

18. Environmental and Social Considerations Required for Funded Projects (5/5) Indigenous People • all their rights in relation to land and resources must be respected Monitoring • In cases where sufficient monitoring is deemed essential for the achievement of environmental/social considerations, project proponents must ensure that project plans include monitoring plans which are feasible

19. EIA reports for Category A Projects (1/3) For Category A projects, the following conditions must be met in principle in EIA reports. (1)When assessment procedures already exist in host countries, and projects are subject to such procedures, borrowers and related parties must officially complete those procedures and obtain the approval of the government of the host countries.

20. EIA reports for Category A Projects (2/3) (2) EIA reports must be written in the official language or a language widely used in the country where the project is to be implemented. When explaining projects to local residents, written materials must be provided in a language and form understandable to them.

21. EIA reports for Category A Projects (3/3) (3) EIA reports are required to be made available in the country and to the local residents where the project is to be implemented. The EIA reports are required to be available at all times for perusal by project stakeholders such as local residents, and copying must be permitted. (4) In preparing EIA reports, consultation with stakeholders, such as local residents, must take place after sufficient information has been disclosed (desirable at the time when item to be considered in EIA are being selected and draft report is being prepared). Records of such consultations must be prepared.

22. Increasing Concerns for Environmental Issues(Recent Experience of JBIC) • Involuntary Resettlement • Loss of livelihood (e.g. agricultural land loss, wastewater on fisheries) • Adverse impacts of decreased flow due to a dam construction • Natural resources (flora and fauna) → Insufficient Information Dissemination, Consultation and lack of knowledge being a root cause

23. Please visit http://www.jbic.go.jp Thank you.