70035 Involuntary Resettlement in Brazil: A Review of Policies and Practices March 26, 2011 Sustainable Development Department Social Development Unit Latin America and the Caribbean Region World Bank MONETARY EQUIVALENCY Currency: Real (R$) US$1 = R$1.8 (May - 2010) World Bank Fiscal Year July 1 – June 30 Weights and Measures Metric System Regional Vice-President Pamela Cox Country Director Makthar Diop Sector Director Laura Tuck Sector Manager Maninder Gill Task Team Leaders José Vicente Zevallos/Estanislao Gacitúa-Marió i Acronyms and Abbreviations AGU – Attorney General of the Union (Advocacia Geral da União) APP – Area of Permanent Preservation (�rea de Preservação Permanente) ANEEL – National Electricity Agency (Agência Nacional de Energia Elétrica) BNDES – Brazilian Development Bank (Banco Nacional para o Desenvolvimento Econômico e Social) CAIXA – Caixa Econômica Federal CCAF – Chamber of Conciliation and Arbitration of the Federal Administration (Câmara de Conciliação e Arbitragem da Administração Federal) CDHU – Housing and Urban Development Company of the State of São Paulo (Companhia de Desenvolvimento Habitacional e Urbano do Estado de São Paulo) CEMIG – Minas Gerais Energy Company (Companhia Energética de Minas Gerais) CETESB – Environmental Protection Agency of São Paulo State São Paulo (Companhia Ambiental do Estado de São Paulo) CERB – Bahia State Rural Engineering Company (Companhia de Engenharia Rural do Estado da Bahia) CONAMA – National Environment Council (Conselho Nacional do Meio Ambiente) CONPAM – Ceará State Council of Public Policies and Environment Management (Conselho de Políticas e Gestão do Meio Ambiente do Estado do Ceará) COPANOR – Minas Gerais North and Northeast Integrated Sanitation Services (Serviços de Saneamento Integrado do Norte e Nordeste de Minas Gerais S/A) COPASA – Minas Gerais Sanitation Company (Companhia de Saneamento de Minas Gerais) COSEMA – Superior Council for the Environment (Conselho Estadual do Meio Ambiente – São Paulo) COTS – Social Technical Orientation Book (Caderno de Orientação Técnico Social - CAIXA) CNMP – National Council of the Public Prosecutor‘s Office (Conselho Nacional do Ministério Público) CRAB – Regional Commission of those Affected by Dams (Comissão Regional do Atingidos por Barragens) DERSA – Development Road S/A (Desenvolvimento Rodoviário S/A) DF- Federal District (Distrito Federal) DNOCS – National Department of Works against the Droughts (Departamento Nacional de Obras Contra a Seca) EIA/RIMA – Environmental Impact Assessment/Environmental Impact Report (Estudo de Impacto ambiental/ Relatório de Impacto Ambiental) EJA – Youth and Adults Education Project (Projeto de Educação de Jovens e Adultos) EMATER-MG – Technical Assistance and Rural Extension Company of Minas Gerais (Empresa de Assistência Técnica e Extensão Rural do Estado de Minas Gerais) FEAM – State Foundation for the Environment (Fundação Estadual do Meio Ambiente) ii FUNDEF – Fund for Maintenance and Development of Fundamental Education and Valorization of Teacher (Fundo de Manutenção e Desenvolvimento do Ensino Fundamental e de Valorização do Magistério) GTI – Inter-ministerial Working Group (Grupo de Trabalho Interministerial) IBAMA – Brazilian Institute for the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis) IDACE – Ceará Agrarian Development Institute (Instituto do Desenvolvimento Agrário do Ceará) IMA – Bahia State Environment Institute (Instituto de Meio Ambiente do Estado da Bahia) INCRA – National Institute for Rural Settlement and Agrarian Reform (Instituto Nacional de Colonização e Reforma Agrária) ING� – Bahia Institute of Water Management and Climate (Instituto de Gestão das �guas e Clima do Estado da Bahia) INRC – National Inventory of Culture References (Inventário Nacional de Referência Cultural) IL – Installation License (Licença de Instalação) IPHAN – The Brazilian National Historical and Artistical Heritage Institute (Instituto do Patrimônio Histórico e Artístico Nacional) MMA – Ministry of Environment (Ministério do Meio Ambiente) MME – Ministry of Mines and Energy (Ministério de Minas e Energia) MP – Public Prosecutor‘s Office (Ministério Público) OP 4.12 – World Bank Operation Policy 4.12 – Involuntary Resettlement OP – Operation License (Licença de Operação) PAC – Growth Acceleration Program (Programa de Aceleração e Crescimento) PGRH – Bahia Integrated Water Resources Management Project (Programa de Gestão de Recursos Hídricos do Estado da Bahia) PISCA – Plan for the Social Inclusion of Waste Pickers (Plano de Inclusão Social de Catadores) PL – Preliminary License (Licença Preliminar) PMCMV – Programa Minha Casa, Minha Vida PRI – Involuntary Resettlement Plan (Plano de Reassentamento Involuntário) PROGERIRH – Integrated Management of Water Resources Project (Projeto de Gerenciamento Integrado de Recursos Hídricos do Estado do Ceará) PRONAF – National Program to Strengthen Family Agriculture (Programa Nacional de Fortalecimento da Agricultura Familiar) PROSAM-MG – Environmental Sanitation Program for the Metropolitan Belo Horizonte (Programa de Saneamento Ambiental dos Ribeirões Arrudas e Onça) RwD – Resettlement with Development SABESP – Sanitation Company of the State of São Paulo (Companhia de Saneamento Básico do Estado de São Paulo) SDR – Safeguards Diagnostic Review SEAGRI – Agriculture and Livestock Secretary (Secretaria da Agricultura e Pecuária) iii SEINFRA – Ceará Secretary for Infrastructure (Secretaria da Infraestrutura do Estado do Ceará) SISNAMA – National System of Environment (Sistema Nacional de Meio Ambiente) SRH – Secretariat for Water Resources (Secretaria de Recursos Hídricos) TAC – Conduct Adjustment Term (Termo de Ajustamento de Conduta) TOR – Terms of Reference UCs – Conservation Units (Unidades de Conservação) UGP – Unidade de Gerenciamento do Projeto (Project Coordination Unit, PCU) UHE – Hydropower plants (Usinas Hidrelétricas) iv Acknowledgments This report was prepared by José Vicente Zevallos, Estanislao Gacitúa-Marió,* Flavia Carbonari, Alberto Ninio and Soraya Melgaço. Maninder Gill provided overall guidance and coordination. Stefania Abakerli contributed to the analysis of the environmental licensing process and gave valuable suggestions on the organization of the report. Pinheiro Pedro Advogados contributed to the analysis of the Brazilian legal framework of land acquisition and involuntary resettlement. Sameh Wahba contributed with detailed and valuable comments on a previous version of this report. Mark Lundell, Tito Cordella, Jennifer Sara, and Garo Batmanian also provided guidance and useful comments. Luis Antonio Medeiros da Silva and Carlos Roberto Lopes Gouvêa provided fieldwork support. Ramon Anria and Ana Gabriela Strand provided administrative support in Washington, and Fabíola Vasconcelos, Daniella Arruda Karagiannis and Luiza Guaraciaba did so in Brasília. Flávio Chaves, Manuel Contijoch, Georges Darido, Juliana Garrido, Eric Lancelot, Adriana Moreira, and Jorge Rebelo shared their invaluable experiences related to involuntary resettlement in Brazil. A number of additional institutions and individuals also contributed to the preparation of the report. Márcia Camargo (Coordinator for Socioeconomic Management at MME), Sílivia Fratini (Social Specialist at MME) and IBAMA‘s Environmental Licensing Department‘s team, under the supervision of its director Sebastião Custódio Pires, provided information that was critical for the preparation of the report. Cláudio Salles and Alexandre Uhlig from Instituto Acende Brasil and Ana Maia from BNDES shared their valuable experience and made useful suggestions. Meetings with IMA, ING�, from Bahia State; SRH, DNOCS and CONPAM, from Ceará; CEMIG and URBEL, in Minas Gerais; and COSEMA, DERSA, CETESB, the Municipal and State Housing Secretariats, in São Paulo, were also essential for the development of the report. Juan Piazza de JGP Consultores provided useful comments and recommendations. We would also like to thank the following persons who were interviewed as part of the preparation of this report: Maria Silvia Romitelli, Germano Seara Filho, Rosane Nery de Medeiros, Rosana Jobbagy, Deise Nunes, Mércia Ferreira Gomes, José Geraldo Casas Vilela, Paulo Souza, Ricardo Araújo, Amauri Polachi, Violeta Saldanha Kubrusly, Rita de Cássia Madureira, Ricardo Correa Sampaio, Elizabete França, Wilson Grossi, Guilherme Comitti, José William Campomizzi, Gilberto Borges Silveira, Antonio Celso, José Ulisses Souza Cristiano, Raquel Cristina B. Vieira Pontes, Elaine F.S. Bianchi, and Mônica Freitas. The peer reviewers of this report were Elena Correa, Dan Gibson, Daniel Gross, and Carlos Velez (World Bank). This paper is dedicated to memory our friend and colleague Estanislao Gacitúa-Marió, a first- rate social scientist who initiated this task. Your World Bank colleagues and the development community will be forever indebted to you. v Contents Executive Summary ...................................................................................................................... 1 I. Context, Objective, and Methodology ..................................................................................... 6 II. International Standards on Involuntary Resettlement and Lessons Learned ................... 9 III. Legal Framework for Land Acquisition and Resettlement in Brazil .............................. 12 III.A. The Expropriation Process .............................................................................................. 18 III.B. Requirements of the Environmental Licensing Process .................................................. 23 IV. Institutional Framework for Land Acquisition and Resettlement in Brazil................... 30 IV.A. Authorities Involved in the Expropriation Process ......................................................... 30 IV.B. Environmental Licensing Agencies................................................................................. 30 IV.C. Project Implementation Agencies ................................................................................... 32 IV.D. Private Sector Concessionaires ....................................................................................... 32 IV.E. Monitoring and Evaluation Institutions ........................................................................... 33 IV.F. Institutions for Resolving Resettlement-Related Disputes and Grievances .................... 33 IV.G. Other Mechanisms for Dispute Resolution ..................................................................... 34 V. Emerging Good Practices and Challenges of Resettlement in Brazil ............................... 36 V.A. Resettlement Planning ...................................................................................................... 39 V.B. Consultation and Participation.......................................................................................... 41 V.C. Compensation and Resettlement Assistance .................................................................... 43 V.D. Institutional Arrangements during Resettlement Implementation ................................... 47 V.E. Monitoring and Evaluation ............................................................................................... 49 VI. Conclusions and Recommendations ................................................................................... 51 References .................................................................................................................................... 56 Annex I: Legislation Consulted ................................................................................................. 59 Annex II: Applicable Legislation ............................................................................................... 62 vi Boxes Box 1. Legal Framework Governing Environmental Licensing in Brazil .................................... 24 Box 2. São Paulo Unified Environmental System ........................................................................ 32 Box 3. Three Projects Fiananced by Government Entities ........................................................... 37 Box 4. Three Projects Supported by the World Bank ................................................................... 38 Tables Table 1. Displacement of People Caused by World Bank Investment Projects in Brazil that Triggered OP 4.12, FY03-10) ......................................................................................................... 8 Graphs Graph 1. How Land Expropriation and Involuntary Resettlement Works ................................... 20 vii Executive Summary 1. As Brazil embarks on a period of intensive infrastructure development—fueled by the upcoming World Cup, Olympics, and the government‘s ongoing Growth Acceleration Plan—it is an opportune time to review its experiences with land acquisition and displacement of affected persons, and to assess the extent to which its resettlement practices match up to international standards. 2. The objective of this review of resettlement policy and implementation in Brazil is to identify ongoing good practices as well as areas for further improvement. It draws upon an assessment of the Brazilian legal and institutional framework related to land acquisition for projects in the public interest, a rapid evaluation of the resettlement programs in six projects (three projects that received Bank financing and three implemented without Bank support),1 interviews with experts in this field and with people affected by projects, and a literature review of national and international practices. The key findings and recommendations are summarized below. 3. Over the past decade, Brazil has made significant progress in improving resettlement policy, practice and outcomes. The review found good practice examples related to identifying adverse impacts resulting from land acquisition, comprehensive planning for physical relocation, improved consultations with affected people, and good design of land-based economic rehabilitation programs. However, there are additional aspects of resettlement that it needs to tackle to be at par with the best international practice in this area. For example, resettlement plans are sometimes prepared only to comply with licensing procedures and not properly followed during implementation; projects do not take full advantage of consultations as a tool for developing resettlement solutions and reducing project risks; and the compensation provided to affected persons is not always adequate to restore their incomes and standards of living. The encouraging news is that most of the good practices that can inform improvements is evident within Brazilian projects. The focus now should be to make these good practices systemic, so that it is applied consistently across all projects involving involuntary resettlement. 4. How can this be done? To begin with, Brazil could establish minimum standards on involuntary resettlement. As is common in many countries, land acquisition and involuntary resettlement in Brazil is governed mostly by federal and state legislation on land expropriation. There is no specific national policy or guideline to address physical displacement (relocation) or economic displacement (loss of income sources or livelihoods) of those affected by development projects. At the same time, there is ample scope for policies to be made more consistent across sectors, and practices needs to become more uniform, regardless of the financiers involved. The energy sector stands out as an example of good policies and practices related to involuntary resettlement—primarily because of the experience gained in the sector over the past few decades in the design and implementation of projects involving large-scale resettlement. 1 The projects were implemented in four states (Bahia, Ceará, Minas Gerais and São Paulo). The six projects were selected based on three main criteria: (i) the resettlement program occurred within the last five years, (ii) the resettlement program was complete; and (iii) there was sufficient information on the resettlement program to evaluate resettlement outcomes. 1 5. There are a number of options, not mutually exclusive, that can help improve and establish minimum standards on resettlement. These options include: a. Preparing a national policy on involuntary resettlement: The policy could take the form of national guidelines on resettlement that can then be adapted to the operational realities of different sectors and states, through specific decrees issued by them. b. Strengthening the Environmental Licensing process to include a more explicit emphasis on resettlement issues: This will involve giving adequate attention to social issues in the existing environmental licensing process, which has been the de-facto operational framework to address resettlement issues in the design and approval of projects. Environmental licensing authorities have the mandate to ensure that adverse environmental and social impacts of projects are minimized and properly mitigated. Minimum standards on resettlement could be established through a resolution of the National Environment Council (Conselho Nacional do Meio Ambiente—CONAMA), making compliance with specific requirements for projects involving resettlement a precondition for granting environmental licenses c. Introducing resettlement requirements as a pre-requisite to access funds under sectoral programs: This will involve selective adoption of resettlement guidelines by the Growth Acceleration Program II (PAC II) or other sectoral programs, which would need to be followed by the states applying for these funds. The option creates positive incentives for adoption of good practice standards on resettlement. 6. The legal and policy gap created by the absence of minimum standards on involuntary resettlement at the national level has at times been filled by standards that are specifically put in place for a particular state, sector, project, or financing institution. State governments such as Bahia, Minas Gerais, and Pará have added provisions to their respective Constitutions that provide clearer rules for addressing involuntary resettlement in selected sectors. Furthermore, prominent national public financial institutions, including the two major ones, Caixa Econômica Federal (CAIXA) and Banco Nacional de Desenvolvimento Econômico e Social (BNDES), have strengthened their policies and guidelines for dealing with social impacts, including those related to resettlement. In some cases, guidelines from international organizations, such as the World Bank and the Inter-American Development Bank (IADB), have influenced policies and practice of implementing agencies and local governments.2 7. Minimum national standards on resettlement need to be supplemented with industry- specific guidance. At the federal level, a number of efforts have been made in recent years to develop a framework for involuntary resettlement for the energy sector—and the regulations already present in the energy sector and the practices for its major entities nationwide, such as Eletrobrás, could serve as a useful point of departure. In 2003, the Presidency created the Inter- ministerial Working Group Affected by Dams (Grupo de Trabalho Interministerial Atingidos por Barragens, GTI), which included representatives from 15 public institutions. More recently (2007-2008), the Ministry of Mining and Energy (Ministério das Minas e Energia, MME) and 2 This observation was made repeatedly by practitioners interviewed as part of the case studies. They indicated that implementing agencies had adopted practices based on their experience in the preparation and implementation of resettlement plans for projects financed by the World Bank and the IADB. 2 the World Bank carried out a series of studies on social and environmental issues in energy projects at the federal government‘s request. The Government of Brazil (GOB) has made impressive efforts to strengthen the regulatory framework for resettlement by stimulating the debate on this topic between the MME and the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA). Federal Decree N. 7.342 of October 2010 provides rules for the preparation of the socio-economic studies (cadastros) on the population affected by hydroelectric projects. The Decree establishes that the cadastro should identify and register all persons whose properties are affected by the civil works, as well as persons who suffer economic losses as a result of the civil works. Similarl industry or sector specific guidance is needed in other sectors as well. 8. Along with the need for national standards on resettlement, significant attention needs to be paid to assigning clear institutional responsibilities for managing resettlement. Clear institutional responsibilities for resettlement need to be established at the project, sector, state and national level. The capacity of agencies that are currently involved in resettlement planning, implementation and monitoring is highly variable, depending on the state and sector in which resettlement takes place. Brazil has often used innovative models of resettlement planning and implementation where lack of capacity in the project agency has been addressed by outsourcing significant parts of the resettlement process to external consulting firms. 9. To address capacity issues of implementing agencies, the federal government should identify a nodal agency with expertise in involuntary resettlement, which can help develop expertise at the national level. Similar agencies need to be identified at the state level. A few prestigious academic institutions should also be identified to help develop academic programs on involuntary resettlement. Such initiatives have been taken in China, India, and Bangladesh, and can offer lessons on structuring academic programs. Forums for knowledge sharing should also be promoted, to help Brazilian agencies regularly bring together individuals and institutions with significant experience in resettlement. 10. Resettlement plans, which are essential for achieving good resettlement outcomes, should be prepared for all projects requiring land acquisition and resettlement. In Brazil, resettlement plans are sometimes prepared mainly to comply with the requirements of environmental licensing and financing agencies and thus do not reflect a careful assessment of the socioeconomic conditions of the affected population. Socioeconomic studies carried out to prepare resettlement programs are often inadequate, and are not updated when there is a long time gap between initial studies and resettlement implementation. Preparation of adequate resettlement plans, which are reviewed and approved by a competent authority, will help make a significant improvement in resettlement implementation. 11. While accountability mechanisms exist to help resolve the complaints and grievances of affected people, special efforts need to be made to facilitate the access of affected people to these mechanisms. Conflicts arising from the process of expropriation and involuntary resettlement can be resolved in the judicial or extra-judicial sphere. In the judicial sphere, depending on the nature of the conflict, it is possible to submit lawsuits to the ―special courts‖,3 3 These are the courts of simplified procedures, commonly known as small claim courts, but in federal court they are called "especiais". 3 as an alternative to the common courts. In the extra-judicial sphere, it is possible to take the disputes to the chambers of arbitration or to make a complaint with other statutory authorities created to protect the rights of citizens. Nevertheless, access to such mechanisms is often not facilitated at the project level, and in most cases affected populations are not fully aware of these rights. Project implementation agencies should ensure that affected populations are well informed about the different options for redressing grievances and complaints and facilitate access to these mechanisms. 12. Further improvements need to be made in resettlement planning and implementation practice to improve resettlement outcomes. Special attention should be paid to the following ―pre-requisites‖ to successful resettlement:  A comprehensive and timely resettlement plan—with adequate funding—that is reviewed and approved by a qualified agency.  A careful evaluation of the impacts of land acquisition and physical resettlement and a precise identification of the losses suffered by displaced persons.  Socioeconomic baseline data that helps determine the entitlements of affected persons and permits the monitoring and evaluation of their situation.  Culturally appropriate and meaningful consultations with displaced persons that form an input into the resettlement plan, and are continued during the implementation of the resettlement program.  Appropriate measures to assist affected people in their efforts to restore their incomes and standards of living.  Mechanisms to ensure that assistance is provided to affected people who do not have legal title to the land they occupy, so that they do not suffer as a result of resettlement.  Detailed costing of the resettlement program and inclusion of resettlement costs in the project budget.  Clear institutional responsibility for each aspect of the resettlement program.  Resettlement implementation that is synchronized with project construction activities, so that people are not displaced before the measures to which they are entitled are provided to them. In addition, to prevent opportunistic encroachment of project lands, anyone who invades project lands after a previously agreed cut-off date should not be provided any compensation or other forms of assistance.  Effective, easily accessible and well disseminated mechanisms to redress grievances at the local/project level. 4  Regular monitoring and evaluation of resettlement implementation, based on indicators that are well defined in the resettlement plans or programs.  Ex-post evaluations of resettlement programs. 13. In sum, further improvements in involuntary resettlement policies and practice in Brazil will require near-term efforts to support policy and institutional reforms, and a long-term strategy to support development of sufficient capacity to design and implement resettlement programs as a development opportunity for the affected people. 5 I. Context, Objective, and Methodology 1. Projects considered critical for national or regional development often require expropriation of land and displacement of people. When new infrastructure supplants farmland, new highways cut through forests and residential areas, hydropower dams transform agricultural areas into reservoirs, or ports are built where fishing villages used to be, people are displaced from their homes and communities may face economic and social hardship as a result of the loss of livelihoods and sources of income. At the same time, well designed resettlement programs can provide new opportunities for development and can benefit displaced persons by improving their income levels and living standards. 2. Brazilian authorities are aware of the consequences of involuntary resettlement associated with development projects, and they appreciate the potential of resettlement programs to promote broad-based development. State governments and implementing agencies in the country have made progress in the design and implementation of resettlement programs, the promotion of participatory approaches for decision-making, and the restoration of livelihoods of affected people. At the federal level, Brazilian authorities have also demonstrated an increasing interest in improving resettlement outcomes. 3. This report is timely, as Brazil embarks on a phase of intensive infrastructure development, which is likely to require significant amounts of land and displace large numbers of people. Its higher spending in this area reflects the 2014 World Cup, the 2016 Olympics, and the government‘s ongoing Acceleration Growth Plan (Plano de Aceleração do Crescimento, PAC)—with an estimated R$ 500 billion in investments in sectors such as energy, transport, and housing for the 2007–2010 period, and another R$500 billion for the 2010–2014 under PAC II. 4. Brazil has been the country with the largest number of projects with resettlement among World Bank borrowers in Latin American and the Caribbean. 4 During the nineties, Brazil was among the four countries that displaced the largest number of people, along with China, India, and Indonesia.5 However, there have been very few comprehensive assessments of resettlement outcomes in development projects in Brazil. This report tries to help fill this gap, providing timely information for the ongoing national debate on resettlement. It is a first assessment of involuntary resettlement by the World Bank in Brazil and covers both Bank and non-Bank financed programs. 5. The World Bank has supported a large number of development projects in Brazil involving land acquisition and resettlement. A 2005 portfolio review showed that Bank projects in Brazil accounted for 40 percent of all projects under preparation and implementation that required involuntary resettlement in Latin America and the Caribbean in 1989, 53 percent in 1995, 65 percent in 2000, and 31 percent in 2005. In terms of the total number of people 4 Correa and Villegas, 2006. 5 Bhattarai, 2001. 6 displaced by development projects financed by the Bank, the country placed second in the region between 1989 and 2005, with 27,229 persons displaced.6 6. Of the 92 investment projects that were active at some point during the FY03-FY10 period, 39 projects (representing 42 percent of the total) triggered the Bank‘s Operational Policy 4.12 on Involuntary Resettlement. About 7,700 families have been or will be displaced by 14 of these projects, according to the resettlement plans that had been prepared as of July 2010 (Table 1). 7. The objective of this study is to review resettlement policy and implementation in Brazil to identify the policy, planning, and institutional improvements needed to ensure that the country's resettlement practices are at par with international standards. It seeks to inform Brazilian efforts to strengthen the policy and institutional framework for involuntary resettlement. It is expected to inform discussions on involuntary resettlement policies and implementation guidelines among institutions in Brazil, and between these institutions and the World Bank. And it seeks to better inform the preparation of Bank projects. 8. How was the study carried out? It was based on four elements: (i) an assessment of the Brazilian legal and institutional framework related to land acquisition and involuntary resettlement; (ii) a rapid evaluation of the resettlement program in six projects in Brazil; (iii) interviews with experts in this field and with people affected by projects, and (iv) a literature review of national and international practice on involuntary resettlement. 9. The rapid review of the six projects included a review of project documentation, field visits and interviews with key stakeholders, including project staff, local and provincial government officials, specialists from environmental licensing agencies, Bank staff, and affected people. The six projects were chosen based on three main criteria: (i) the resettlement program occurred within the last five years, (ii) the resettlement program was complete; and (iii) there was sufficient information on the resettlement program to evaluate resettlement outcomes. Three of the six projects received Bank financing, while the others were entirely financed, designed, and implemented by government entities. The selected projects covered three different sectors (transport, water resource management, and water and sanitation), were implemented in four states (Bahia, Ceará, Minas Gerais, and São Paulo), and caused displacement in both rural and urban areas. 10. The rapid review of the six projects included a review of project documentation, field visits and interviews with key stakeholders, including project staff, local and provincial government officials, specialists from environmental licensing agencies, Bank staff, and affected people. Three of the six projects received Bank financing, while the others were entirely financed, designed, and implemented by government entities. The six projects—which covered three different sectors (transport, water resource management, and water and sanitation) and were implemented in four states (Bahia, Ceará, Minas Gerais, and São Paulo)—caused displacement in both rural and urban areas. 6 Ibid, p.6-13. 7 Table 1. Displacement of People Caused by World Bank Investment Projects in Brazil that Triggered OP 4.12, FY03-10) Project Ressetlem ent Cost Resettlem ent Policy Process Displacem ent Project ID Project Nam e Approval USD (M) Sector Plan Fram ew ork Fram ew ork Estim ate* P049265 Recife Urban Upgrading Project 2003 84 UD Y 1,780 families P081436 Bahia Poor Urban Areas Integrated Development 2006 82.2 UD Y 721 dw ellings P094199 PeIotas Integrated Municipal Development 2008 31.5 UD Y N/A P089013 Municipal Adaptable Program Loan: Recife 2008 46.8 UD Y 997 families Santa Maria (RS) Integrated Municipal Development P111513 Program 2009 13.95 UD Y N/A Ceara Regional Economic Development: Cidades do P099369 Ceara 2009 46 UD Y N/A Bage (RS) Integrated Municipal Development P111511 Program 2009 6.6 UD Y N/A Uruguaiana (RS) Integrated Municipal Development P111514 Program 2009 6.83 UD Y N/A Rio Grande do Sul Integrated Municipal Development P111512 Program 2010 8.1 UD Y N/A P104995 Santos Municipality 2010 44 UD Y 1,000 families P058503 GEF Amazon Region Prot Areas (ARPA) 2003 81.5 ENV Y N/A GEF Caatinga Conservation and Sustainable P070867 Management 2007 23 ENV Y N/A P082328 Integrated Municipal Project Betim Municipality 2005 49.07 ENV Y 820 families Adjustable Program Loan 1 Para Integrated Rural P082651 Development 2007 100 ENV Y N/A P089440 Brasilia Environmentally Sustainable 2006 159.04 ENV Y Y N/A P099469 Second National Environmental Project - Phase II 2010 24.3 ENV Y N/A P091827 Sustainable Cerrado Initiative N/A ENV Y N/A P060573 Tocantins Sustainable Regional Development 2004 100 TR Y N/A P092990 Road Transport Project 2006 1218.7 TR Y N/A P095460 Bahia Integrated Highw ay Management 2007 200 TR Y N/A 42 properties; 30 P106390 São Paulo Metro Line 4 - Phase II 2010 130 TR Y people 99 properties; P105959 Sao Paulo Metro Line 4 Additional Financing 2008 190 TR Y 271 people P118410 Mato Grosso do Sul State Road Transport Project 2010 300 TR Y N/A 350 properties; P116170 Sao Paulo Metro Line 5 Project 2010 650.4 TR Y 315 people P106663 Sao Paulo Feeder Roads Project 2010 166.65 TR Y N/A P088966 Municipal Adjustable Program Loan 3: Teresina 2008 44.47 WAT Y Y 1588 families Federal Water Resources Management Additional P100154 Financing 2007 200 WAT Y N/A Additional Financing for the Ceara Integrated Water P110487 Resource Management Project – PROGERIRH 2009 103 WAT Y 497 properties P106703 Sao Paulo Water Recovery Project - REAGUA 2010 64.5 WAT Y N/A P108654 Pernambuco Sustainable Water 2010 190 WAT Y Y 220 families Sao Luis Enhancing Municipal Governance and P094315 Quality of Life Project 2009 35 WAT Y 750 properties BR - Integrated Water Management In Metropolitan P006553 Sao Paulo 2010 104 WAT Y 1,350 families P082142 BR-Ceara Multi-sector Social Inclusive Development 2006 649.75 PS Y Y N/A P101324 Second Minas Gerais Development Partnership 2008 976 PS Y N/A P106765 Ceara Inclusive Grow th (SWAp II) 2009 240 PS Y N/A P114204 ELETROBR�S Distribution Rehabilitation Rio de Janeiro Sustainable Rural Development 2010 495 Energy Y N/A P101508 Project 2010 39.5 ARD Y N/A Sao Paulo Sustainable Rural Development and P108443 Access to Markets 2010 78 ARD Y N/A Minas Gerais Partnership II SWAP Additional Y P119215 Financing 2010 416 PS 1,593 families * Indicator of estimated displaced people and properties according to project's documents. N/A: Not available; UD = Urban Development; ENV = Environment; TR = Transport; WAT = Water; PS = Public Sector; ARD = Agriculture and Rural Development; PS = Public Sector. 8 II. International Standards on Involuntary Resettlement and Lessons Learned 11. The need to address involuntary resettlement is based on the nearly universal right to property that exists in most national legal regimes around the world, and that requires that when owners are deprived of their property for a public cause, they need to be compensated for this loss, so that they can be made whole. Resettlement practice has considerably evolved over the past three decades, based on the lessons of implementation from various resettlement programs implemented by public agencies at various levels, sometimes supported by international development institutions. From a narrow focus on payment of compensation for land and other assets acquired by the state for development projects using the principle of eminent domain, involuntary resettlement now encompasses a much broader focus on the adequacy of physical relocation, and on restoration of incomes and livelihoods after relocation. The key broad principles that constitute international good practice on resettlement, and the operational guidelines that should guide preparing, implementing and monitoring resettlement programs, are listed below. Broad Principles  Minimize involuntary resettlement associated with a project by exploring feasible project alternatives that help reduce the scale of resettlement without significantly compromising the development objectives of the project.  Assist all categories of affected people to improve or at least restore their incomes and standards of living. This objective is essential to ensure that people affected by development projects are not made worse off as a result of the project.  Provide compensation for affected assets at their replacement cost.  Provide affected people and other key stakeholders with opportunities for participation in the design and implementation of resettlement programs.  Assist affected people, including those who may not have full legal title to lands being acquired by a project, in their efforts to restore their standards of living. People who have occupied the land that is proposed to be used for the project should also be assisted to restore their incomes after resettlement, as they are often among the poorest and most vulnerable sections of the population, and development projects should be not make them even more worse off. However, to prevent opportunistic encroachment of project lands, anyone who invades project lands after a previously agreed cut-off date should not be provided any compensation or other forms of assistance. Operational Guidelines – Project Preparation 12. Assess adverse impacts associated with land acquisition. All well designed resettlement programs are based on a careful assessment of potential adverse impacts of land acquisition. The assessment includes a census survey of affected people and properties as well as a socioeconomic survey that describes the socioeconomic characteristics of the affected people 9 and describes the impact the proposed land acquisition will have on them. The assessment results in identification of different categories of impact that need to be compensated or assisted in order to achieve the objective of the resettlement program. 13. Conduct meaningful consultations with affected people and other key stakeholders, both as part of the process to identify adverse impacts as well as to help design measures to mitigate the adverse impact. Consultations form the basis of the design of the resettlement program, and can help avoid problems in both design and implementation of the resettlement program. The consultations need to be based on prior information about the project and its impacts, and should be conducted in a form and manner that is appropriate to the affected people. 14. Assess the feasibility of the proposed resettlement measures. The various options for physical relocation, as well as for restoration of livelihoods should be based on detailed feasibility analysis of such options (including technical, economic, financial and institutional feasibility), and the results of such analysis should be presented to the affected people during consultations with them. Emphasis should be placed on maintenance of community / social networks in the process of physical relocation. 15. Agree on resettlement measures (such as payment of compensation, provision of replacement assets, development of infrastructure and provision of allowances etc.) to mitigate adverse impacts. The objective of these measures is to assist affected people in their efforts to improve or at least to restore their standards of living. It is important that each category of impact is explicitly recognized and that compensation and other mitigation measures appropriate for that particular category are agreed with the affected people. 16. Assign clearly institutional responsibility for each aspect of the resettlement program, and ensure that each of the implementing agencies should have the requisite capacity. It is important to ensure that clear institutional responsibility is assigned for each aspect of the resettlement program. Resettlement programs often include measures that are beyond the capacity of institutions responsible for resettlement implementation, resulting in negative outcomes. This institutional analysis should particularly extend to agencies that are not the main project implementing agency (such as local, municipal governments) but that may have a key role in resettlement implementation. 17. Cost out the resettlement program and include resettlement costs in the overall project budget. Unless the costs of resettlement programs are adequately budgeted, the implementation of a resettlement program can suffer because of lack of financial resources. Operational Guidelines – Project Implementation 18. Coordinate the implementation of the resettlement program with civil works under the project to ensure that affected people receive compensation and other assistance before they are displaced from their lands. Good practice requires that the affected people are paid compensation and other key resettlement entitlements before they are required to vacate the lands required for the project. Temporary resettlement can be problematic, and if necessary, should be undertaken only for a limited period of time, up to a maximum of one year. 10 19. Ensure that effective and easily accessible grievance redress mechanisms exist to resolve any complaints the affected people may have with respect to the resettlement program. The presence of well functioning grievance redress mechanisms ensures that complaints and problems related to resettlement are resolved in a timely manner, helping avoid intractable conflicts and problems in the resettlement implementation. 20. Regularly monitor resettlement implementation, and ensure that the key findings and recommendations of periodic M&E reports are considered by key project decision makers. Effective implementation of resettlement requires regular monitoring and evaluation by qualified agencies, so that any necessary remedial actions can be taken in a timely manner. 21. Conduct an ex-post evaluation of the resettlement program to assess the extent to which the objectives of the resettlement program were achieved and what additional measures, if any, are necessary to achieve such objectives. Such evaluations can not only help identify areas that need to be addressed in the respective resettlement program, but also help identify systematic lesions that need to be considered in all future design and implementation of resettlement programs. 11 III. Legal Framework for Land Acquisition and Resettlement in Brazil 22. Brazil does not have specific national legislation on involuntary resettlement. Landowners affected by development projects are compensated through the application of the legislation on expropriation. Other socioeconomic impacts of development projects (including those related to land acquisition) are addressed through the environmental licensing process on a case-by-case basis. Given the lack of normative criteria for establishing the extent and limits of the responsibility of the project sponsor regarding social impacts, the decisions on the specific requirements for projects that involve resettlement are largely left to the discretion and professional judgment of technical staff. 23. While Brazil does not have an overarching policy framework specifically dealing with involuntary resettlement, there are a number of legal provisions that address land acquisition and compensation. There are provisions in the Brazilian Federal Constitution on land expropriation, a decree-law on expropriation for public purposes (Decree-law Nº 3,365, 1941), and a federal law that defines the cases of expropriation in the social interest (Federal Law Nº 4,132, of September 10, 1962). 24. Many of the gaps in the legal and policy framework are filled by state, sector, and project specific laws and guidelines on involuntary resettlement. For example, the State of Minas Gerais has developed specific legislation to protect populations of areas flooded by the constructions of dams. Federal Decree 7,342 of October 2010 requires socioeconomic studies (cadastros) of the population affected by hydroelectric projects. In São Paulo, the Guarapiranga project led to legal reforms to deal with the relocation of people living in risky areas. 25. Environmental licensing provides the main regulatory framework for planning and implementing resettlement. The environmental licensing agencies require that the Environmental Impact Assessment (Estudo de Impacto Ambiental, EIA) include measures to address negative social impacts, including those caused by land acquisition. Normally, expropriation issues reflected in the environmental license are restricted to ensuring governmental consent and the issuance of the relevant expropriation decree - Decree-Law No. 3,365/41. Brazil‘s National Environmental Policy Act of 1981 and the resolutions of the National Environmental Council (Conselho Nacional do Meio Ambiente – CONAMA) on environmental licensing require that an environmental assessment takes into account impacts related to the ―socioeconomic environment‖. However, this legislation does not provide any details on the requirements for projects that involve resettlement. The analysis of social impacts, as part of the environmental licensing process, is based on practice developed through the years without the support of clear legal provisions. The analysis thus depends on the reviewer‘s discretion. 26. The lack of clear requirements for projects that involve involuntary resettlement slows down the environmental licensing process. Given that this process was originally designed to place more emphasis on biophysical impacts, the lack of detailed guidance to assess and mitigate socioeconomic impacts, including involuntary resettlement, often delays the granting of environmental licenses. In some sectors, the requirements attached to the environmental licenses often include the provision of benefits to local communities, such as the construction of schools and health centers. Sometimes these benefits are provided as part of the resettlement program. As 12 a result, it has become difficult to distinguish between mitigation measures and broader development measures needed by large infrastructure projects to gain their ―license to operate‖ or those that are viewed as contributions that ―socially responsible companies‖ (public or private) make to local communities. Clear guidelines are needed to better integrate social dimensions into the environmental licensing process. 27. The following sections describe the legal framework for land acquisition at the federal level and the policy provisions at the state level. It also describes the norms that apply to specific sectors and projects. These norms complement, or fill gaps in, the national legal framework. The Brazilian Federal Constitution 28. The Brazilian Federal Constitution of 1988 provides the overarching framework to undertake land expropriation. It stipulates that the law shall establish the procedure for expropriation for public purposes upon fair and prior compensation in cash (Article 5, item XXIV; Article 182, §3). Only the Federal Government can legislate on expropriation (article 22). The same set of rules establish that the right to property is a social right ensured to all (article 5, items XXII, and 6, caput), and the property expropriation must meet a social purpose (article 5, item XXIII). 29. What is fair compensation? The compensation of affected properties is based on "market value" of the expropriated asset, which is determined on the basis of technical standards set by the Brazilian Association of Technical Standards (Associação Brasileira de Normas Técnicas, ABNT), which follow international standards. However, the Brazilian Federal Constitution does not address situations in which the compensation amount is insufficient to restore the standards of living of the affected population. In these cases, two alternatives are sometimes used:  The expropriated party can accept a ―payment in kind‖ (doação em pagamento) according to the provisions of the Law of Obligations, which is part of the Brazilian Civil Code.7 This occurs whenever a expropriated party accepts a payment from a debtor in a different form from the one originally stipulated in the agreed obligation. For example, in an expropriation case, the affected family or person could accept another dwelling as compensation instead of a cash payment.  The expropriated party can turn to the Public Prosecutor‘s Office (Ministério Público, MP).8 The MP has legal standing to file a civil investigation and a civil action in the public interest—for the protection of the public and social assets, of the environment, and of other diffuse and collective interests (article 129, item III). These instruments are often used by the MP to investigate irregularities in the procedures of involuntary resettlement, and sometimes the parties involved (project sponsor, government, MP, and the impacted population) will use the Conduct Adjustment Term (Termo de 7 Article 356 and following articles of Federal Law nº 10,406 of January 10, 2002. 8 The Brazilian Federal Public Prosecutor's Office is renowned for its activity in the protection of the diffuse and collective interests in areas such as environment, historical heritage, and ethnic and social minorities (articles 127 and following articles of the Federal Constitution). Upon exercising said protection the Public Prosecutor's Office has granted several actions not regulated by specific laws - such as the case of compensation policies in the involuntary resettlement of populations. 13 Acordo de Conduta),9 which establishes the rights and obligations of each party, including on issues such as the compensation to be paid. 30. The initial value, as proposed by the Government, is deposited in court, and the judge may authorize provisional property possession. However, the legal proceedings continue until the Judiciary set the effective value of the compensation in cash. Other cases of compensation, which do not relate to the process of expropriation, are included in the environmental licensing process through which the judicial authority may require mitigation measures for social and economic impacts arising from the implementation of the project. 31. In addition, in the event of conflict, values are established by experts appointed by the judge in the process. The parties may indicate expert assistants. The value generally takes into account market prices prevailing in the region, number of improvements and the situation of conservation and use of the property. 32. The property rights of traditional territories10 occupied by indigenous, slave descendants (quilombolas), or traditional communities11 are ensured by the Brazilian Federal Constitution. Resettling these populations entails a number of additional precautions. Resettlement of indigenous peoples requires the involvement of the Indian National Foundation (FUNAI). Eminent Domain 33. Federal Decree-law on Expropriation for Public Purposes (Nº 3365, of June 21, 1941) describes procedures for expropriation for projects in the in public interest. It establishes that all assets may be expropriated by the Union (Federal Government), States, Municipalities, Federal District, and Territories upon the declaration of public utility or social interest (Article 2). The concessionaires of public services or entities that carry out functions delegated by government are empowered to carry out expropriations upon express authorization from the proper agency (Article 3). Expropriation may include the area adjacent to the area where the actual project will take place, as well as areas that may ―extraordinarily increase in value‖ as a result of the underlying project (article 4 of Decree-law nº 3365/41). 34. What exactly is public interest? Among other cases, Decree-law nº 3365/41 (article 5) specifies the following: (i) government assistance in case of emergencies or disasters; (ii) public health; (iii) the opening, maintenance, and improvement of public streets or roads; (iv) the execution of urbanization plans; (v) the allocation of land, with or without buildings, for better economic, hygienic or aesthetic use; and (vi) the construction or enlargement of industrial districts. 9 Covered by article 5, § 6, of Federal Law nº 7347, of July 24, 1985 (Civil Action in the Public Interest). 10 Established by the National Policy of Sustainable Development of the Traditional Populations and Communities (article 3, item II, of the Federal Decree nº 6040/07) as being "the required spaces for the cultural, social, and economic reproduction of the traditional peoples and communities, whether they are use in a permanent or temporary ways, subject, with respect to the indigenous and slave descendants (quilombolas) peoples, respectively, to the provisions in arts. 231 in the Federal Constitution and 68 do Ato das Disposições Constitucionais Transitórias and other regulations‖. 11 The rights of indigenous, quilombolas and traditional communities are basically protected by the Brazilian Federal Constitution (articles 129, V; 216; and 231), article 68 of the Act of the Temporary Constitutional Provisions - ADCT, and by the Federal Decree nº 6040, of February 7, 2007. 14 35. Expropriation is effective upon agreement between the expropriating entity and the affected landowner or through the judicial system, within five years from the date of issue of the declaration of public utility or social interest of the area required for a project (Decree-Law nº 3,365/41, Art. 10). Compensation should be paid in advance and in cash (article 32). Expropriation Owing to Social Interest 36. Expropriation on account of social interest is covered by a separate law (Federal Law Nº 4,132 of September 10, 1962), which defines cases of expropriation in the social interest. These cases include:  The installation or expansion of crops in areas where land exploration is not in compliance with the agricultural zoning plan.  The maintenance of squatters in urban terrain where, with the express or tacit consent of the owner, the squatters had built residential areas for ten families or more.  Construction of public housing.  Lands and waters subject to extraordinary appreciation in value, owing to the completion of public infrastructure and services, such as sanitation, ports, transportation, electrification, water storage and irrigation, in cases where such lands are not being utilized by communities.  The protection of soil and the preservation of water and forest resources. 37. Expropriations owing to social interest are subject to the rules concerning the process and fair compensation set forth in the legal framework applicable to public interest (article 5), among them the Decree-Law nº 3,365/41. The declaration of social interest is valid for two years. State-specific Laws 38. Example 1: The Constitution of the State of Minas Gerais of 1989 establishes that the state shall sponsor a ―Social Assistance Plan‖ for the populations of areas flooded by the constructions of dams (article 194). As a result, four state laws have been enacted. Three of such laws (Law 12,812/1998, Law 14,687/2003, Law 15,012/2004) regulate the procedures to be carried out in order to assist the affected population. They consider as beneficiaries the businessmen, squatters, wage earners, partners, lessees, and share croppers, and address, among others, the following resettlement-related issues: socioeconomic study; evaluation of assets; compensation options; preferential location in the project region; guarantee of the participation of the impacted population through a representative committee; provision of free legal assistance to the impacted population during the negotiation process; assurance of basic educational services with no interruption; technical assistance and qualification for agricultural activities which would be proper for economic exploration; loans for the development of production activities; and right to access to user-friendly information material about the rights of each stakeholder in the process. 39. The fourth law (Law 14684/2003, article 61) provides for the guarantee of funds for the execution of the established activities. 15 40. This set of laws encompasses several requirements of what is usually held as "good practice" in a process of involuntary resettlement, which indicates that Minas Gerais is one of the states where significant improvements in resettlement and provision of social assistance to affected populations have been put in place. 41. But there are also substantial gaps in this legal apparatus. These laws apply only to the populations in areas flooded by dams; persons impacted by other project facilities (access roads, transmission lines, power houses, etc.) are not covered. 42. Example 2: The Constitution of the State of Bahia stipulates that in all civil works financed by the government that displaces small farmers, the cost of land acquisition and relocation of the affected parties must be included in the project budget, and the affected parties can choose between options of assisted relocation or cash compensation (article 189). 43. Example 3: The Constitution of the State of Pará establishes that if expropriation is required for the construction of hydroelectric plants, dams, or any other project that affects natural resources located in government or non-registered land, the project sponsor shall be responsible for providing compensation to affected parties (article 259). Sector-specific Legal Frameworks 44. Example 1: The National Institute for Rural Settlement and Agrarian Reform (INCRA) enacted INCRA Ordinance Nº 687 of September 27, 2004, which protect farmers affected by the construction of dams for hydroelectric use in the National Program of Land Reform. This Ordinance grants power to INCRA‘s Regional Superintendents to approve, through a Resolution of the Regional Decision Committee, the resettlement programs implemented due to hydroelectric plants. This Ordinance treats resettled people as land reform beneficiaries by making them eligible to receive credit assistance (Article 2). 45. Example 2: On July 7, 2009, Federal Law 11,977 was enacted, which provided for the My Home, My Life Program (Programa Minha Casa, Minha Vida, PMCMV) and the regularization of land in urban settlements located in Areas of Permanent Preservation (APP).12 This law establishes a set of incentives that are likely to reduce the number of people displaced by urban programs of sanitation, recovery of water resources and slum upgrading. 46. Example 3: Federal Decree N. 7.342 of October 2010 provides rules for the preparation of the socio-economic studies (cadastros) on the population affected by hydroelectric projects. The Decree establishes that the cadastro should identify and register all persons whose properties are affected by the civil works, as well as persons who lose access to productive assets or whose income generating activities are affected by the civil works. The Decree also establishes that the cadastro should be widely publicized and disseminated, and creates the Socioeconomic Registry Inter-ministerial Committee, under the coordination of the Ministry of Mining and Energy. The Committee includes representatives from the Ministries of Agriculture, Environment, Fishery, Rural Development and the President‘s Office, being responsible for the supervision of the cadastro’s preparation. 12 APPs are protected areas by Brazil‘s 1965 Forest Code and include areas alongside rivers, the sides of the mountains, and other environmentally sensitive areas. 16 Legal Framework Specific to a Financial Institution 47. Example 1: The Brazilian Development Bank (Banco Nacional para o Desenvolvimento Econômico e Social, BNDES) is a state-owned development bank. Its main sources of financing come from government taxes, which are a stable source for long-term financing. The institution is currently the biggest investor of the federal government‘s main program of infrastructure investments, the Growth Acceleration Program (PAC), and it is in charge of investments of about R$ 216.2 billion in strategic sectors, such as energy, transportation, sanitation, and urbanization.13 Since 2005, BNDES has been trying to improve its performance in the social and environmental areas. The Bank has created an Environmental Unit, consolidated a Social Unit within the Planning Department, and significantly raised the importance of these subjects within the institution‘s work. It has also established Social and Environmental Development as one of the pillars of its Corporate Plan for the period 2009-2014. 48. In 2005, BNDES adopted an Environmental Policy to reduce risks associated with the social and environmental impacts of its projects. In November, 2010 BNDES approved a new Environmental and Social Policy (ESP), which treats social and environmental dimensions of projects as strategic issues and mandates the development and improvement of methodologies and tools for the evaluation and monitoring of the social and environmental aspects of BNDES‘ operations. The ESP also establishes that operational supervision must verify compliance with environmental and social requirements defined in the environmental license. The policy will be supplemented by guidelines for about 50 subsectors (such as hydroelectric plants, roads, mining, and agribusiness). BENDES‘ appraisal methodology and monitoring of project impacts is also under review, supported by a World Bank‘s Development Policy Loan (DPL).14 49. Example 2: The Caixa Econômica Federal bank (CAIXA) is the largest government bank in Latin America and one of the biggest financers of programs in housing, basic sanitation, infrastructure, and services provision areas. It is currently PAC's second largest financing institution. The bank operates mostly through partnerships with state and local governments. All of the projects financed by CAIXA require technical and social interventions, which are detailed in the institution's Book of Technical and Social Guidelines (COTS).15 COTS' Annex VIII is entirely dedicated to resettlement. In 2009, CAIXA adopted a Social and Environmental Framework specifically designed for the Integrated Solid Waste Management Project and Carbon Finance Program,16 which is financed by the World Bank. Influence of specific projects on state legislation 13 "The Portfolio of BNDES in PAC amounts to R$ 123 billion in loans," available at the site www.bndes.gov.br, 07/05/2010. 14 In November 2008, the World Bank announced a Development Policy Loan for Sustainable Environmental Management, SEM DPL, of US$ 1.3 billion, to BNDES. This is the first transaction of a series of two loans, which should take place between 2008 and 2010, and its purpose is to support GOB efforts to improve the efficacy and efficiency of Brazilian policies and procedures of environmental management and incorporate principles of sustainable environmental development into the agenda of development of the strategic sectors for Brazil. Among the priority activities of the loan is supporting the consolidation of a Social and Environmental Institutional Policy for BNDES, including the organization of environmental and social procedures in subsectors for the main investment sectors (World Bank, 2009b). 15 COTS is available at the institution official site www.caixa.gov.br. 16 The Social and Environmental Framework specifically applicable to Projects of Integrated Management of Solid Wastes and Mechanism of Clean Development in Brazil is available at the institution‘s official website (www.caixa.gov.br). 17 50. Example: The Guarapiranga Program in the State of São Paulo, which began in the 1990s and was partially financed by the World Bank, led to the establishment of state rules, which do not only cover the intervention area in the post-project period, but also led to legal reforms in other areas, including relocation of people living in risky areas. In 1997, State Law Nº 9866 was enacted, which reformulated the legislation applicable to hydrographic basins in the state and established new policies and guidelines.17 51. Following the actions carried out under the Guarapiranga Program, the State of São Paulo enacted similar legislation in 2009 for the hydrographic basin of the Bilings water reservoir (State Law nº 13579 of July 13, 2009). This law establishes the planning and management system of the Basin and ensures the implementation of programs for the relocation of populations living in risky areas or environment recovery areas.18 Policy Framework Applicable to Projects Financed by International Agencies 52. Example: The resettlement program of Ponto Novo Dam, in the State of Bahia, adopted some procedures based on the World Bank‘s Policy on Involuntary Resettlement (OP 4.12), which are not required in the Brazilian legal framework or common in state practices. The procedures adopted included: (i) the offer of compensation options (relocation in the irrigated perimeter or assisted self-relocation with grants, and the traditional compensation in cash); (ii) free legal assistance for regularizing personal or property documentation; and (iii) incorporation of the affected population into the irrigated perimeter, which made them project beneficiaries.19 III.A. The Expropriation Process 53. Land expropriation is carried out through an administrative or judicial mechanism, as provided by law, by which the Public Authority (Federal, State, Municipal and Federal District), through the declaration of public utility or of social interest, transfers to itself in a unilateral and compulsory manner the land of a third party, through prior monetary compensation. The expropriation procedure has two stages: the declaratory stage and the executive stage. The latter may be effected judicially or extra judicially, as shown in Graph 1. 54. In the declaratory phase, there will be a manifestation of the will of the Public Authority to expropriate a property to satisfy a public necessity or a social interest.20 The declaration of public utility or social interest is made through a decree enacted by the President of the Republic, the Governor, a Delegate of the President of the Republic appointed to assume provisionally the government of a federal state, or the Mayor.21 17 Information gathered in an interview given to the World Bank team by Ricardo Sampaio, coordinator of the Source Waters Program, on June 8, 2009, Municipal Secretariat of Housing, in São Paulo, State of São Paulo. State Law n.º 9866/97 includes guidelines for determining compensation mechanisms, as well as procedures for monitoring and supervision of projects. 18 Information gathered in an interview given to the World Bank by Rita de Cássia Madureira, an architect of the Source Waters Program, on June 8, 2009, Municipal Secretariat of Housing, in São Paulo, State of São Paulo. 19 Information gathered from an interview given by Maria Auxiliadora Borges Ribeiro from the Environment Institute of the State of Bahia (IMA); Secretaria de Recursos Hídricos, Saneamento e Habitação da Bahia 1997a, 1997b. 20 The cases of public purpose or social interest are provided for in a general manner, respectively, in art. 5 of Decree-Law no. 3,365/41 and in art. 2 of Law no. 4,132/62, in addition to the cases provided for in a specific law. 21 Article 6 of Dec.-law no. 3,365/1941. 18 19 Graph 1. How Land Expropriation and Involuntary Resettlement Works Environmental Project License Resettlement Program Executive Authority declares Public Purpose or Social Interest for purposes of expropriation and project implementation Expropriation Friendly Expropriation through the Judicial System Urgency – Prior Deposit of the amount arbitrated by the judge Payment of Cash Favorable Compensation/Resettlement Sentence Provisional award of Possession Award of Possession Payment of Indemnification/Resettlement Definitive Award of Possession 20 55. The concessionaires of public services or entities that carry out functions delegated by government can expropriate if they are expressly authorized to do so in the law or the concession contract.22 After an area is declared of public utility or of social interest, the administrative authorities are authorized to enter the land and buildings included in the declaration, with the ability to request, in the event of opposition, the assistance of the police force.23 56. In the executive phase, the Public Authority carries out the necessary measures to expropriate the property. If the property owner agrees with the value of the expropriation offered by the Public Authority, the procedure will be implemented through extrajudicial means. If there is no consensus, the Public Authority may, within five years commencing from the date of the issuance of the decree that declares an area of public utility or within two years from the date of declaration of social interest, activate the Judicial Authority to enforce its compliance, having as its principal objective the discussion of the compensation. 57. Upon the termination of this period of five years, the decree expires,24 and the same property may only be the object of a new declaration of public utility or social interest after one year. It is important to mention that the right to seek compensation for restrictions resulting from acts of the Public Authority also expires in a period of five years from the date of the declaration of public utility or social interest. 58. In addition to the requirements of the Code of Civil Procedure (Código de Processo Civil), the initial complaint of the lawsuit for expropriation must contain the price of the offer to be paid to the expropriated party and shall be accompanied by a copy of the contract, or of the official newspaper that published the decree of expropriation, or a certified copy of the same, and the blueprint or description of the property and the limits or boundaries of the property.25 59. If the expropriating party alleges urgency and deposits the arbitrated amount in accordance with the Code of Civil Procedure, the judge may award it the possession of the property provisionally.26 As provided in article 20 of Decree-Law No. 3,365/1941, the defense of the expropriated party can only allege a defect in the legal proceedings or challenge the price; any other question should be decided by a separate lawsuit. . 60. Further, it is possible to have an indirect expropriation by the Judicial Authority, which occurs when the Public Authority does not follow the procedure for expropriation provided in law, occupying the property in a definitive manner or imposing restrictions on the property that will impede its economic functionality. In this case, if the indirect expropriation is concluded, the property owner is entitled to request compensation for losses and damages, which correspond to the fair compensation that would be awarded in a legal expropriation. It would be advisable to have explicit legislation on this issue, particularly in cases involving loss of profits. 61. There is a range of administrative actions in the environmental sphere that may lead to the involuntary relocation of people or taking of properties: 22 Art. 3 of Dec.-law no. 3,365/1941. 23 Article 7 of Dec.-law no. 3,365/1941. 24 Article 10 of Dec.-law no. 3,365/1941. 25 Art. 13 of Dec.-law no. 3,365/1941. 26 Art. 15. of Dec.-law no. 3,365/1941. 21  Creation of Units of Conservation,27 including restrictions of land use in surrounding areas and a transition zones.  Imposition of rigid restrictions of land use in Areas of Environmental Protection (areas of permanent preservation, legal reserves, natural monuments, biomes and landscapes).28  Demarcation of indigenous lands29 and recognition of areas of quilombos and of traditional communities.30  Removal of clandestine subdivisions in water resource areas, shantytowns (favelas), areas of risk, and natural urban parks areas. 62. These situations are generally a consequence of implementing measures of urban territorial planning and control—in some cases owing to emergencies—and could lead to the involuntary resettlement of a significant number of families. Issues with the Compensation Offered for Expropriated Property 63. The compensation for the loss of land is based on "market value" and does not cover transaction costs, such as the fees charged for the registration of properties or the regularization of titles. The market value is defined on the basis of the technical standards established by the Brazilian Association of Technical Standards (Associação Brasileira de Normas Técnicas, ABNT), which follows international standards. However, there is no legislation that requires compensation at full replacement cost or the provision of assistance for resettling people who are physically displaced, as best practice call for. This difference in the method of assessment of the compensation (market value versus replacement cost) limits the ability of displaced persons to replace residential and other properties taken for projects with a property of equal value that can be purchased in the market. 64. When compensation for the loss of houses and other structures is paid in cash and replacement homes are not available in the market, the method of calculation of the value of building materials in Brazil can also be an issue. If the owners are expected to rebuild their houses and other structures on the residual land of the lot affected or in a new lot, the compensation offered under the Brazilian legal framework, which takes into account depreciation, may not be sufficient to buy the new materials needed to rebuild a house of similar conditions. Social Assistance Plans 65. In Minas Gerais, Article 194 of the State Constitution mandates the implementation of a Social Assistance Plan to protect people displaced by reservoirs. According to the Minas Gerais 27 Art. 225 of the Federal Constitution and Federal Law no. 9,985, of July 18, 2000. 28 Arts. 225 and 216 of the Federal Constitution and Federal Law no. 4,771, of September 15, 1965 (Forestry Code) 29 The concept of traditionally occupied lands by indigenous peoples is still not completely defined by the jurisprudence of the Federal Supreme Court, although it is codified by statute in art. 231 of the Forestry Code. 30 Arts. 231 of the Federal Constitution; Art. 68 of the ADCT; and Federal Decree o. 6,040, of February 7, 2007. 22 State Law No. 12.812/1998, project sponsors (public or private) are responsible for presenting the Social Assistance Plan31 to the State Board of Social Services – CEAS for their consideration and approval.32 66. Under Article 5 of Law 12. 812/1998, the precondition for the granting of the Installation License (IL) is the presentation of environmental studies that include the Social Assistance Plan approved by CEAS. Later in the process, the precondition for the granting of an Operation License (OL) is the presentation of evidence, by the CEAS, that the Social Assistance Plan has been implemented. 67. The Minas Gerais State Judiciary recently confirmed that the Social Assistance Plan must be fully implemented33 so that the rights of affected communities are protected. It also clarified that after the completion of this plan the project sponsor should not be required to implement additional actions, beyond those agreed in the plan.34 Squatters' rights 68. Some compensation cases involve good-faith squatters residing in the areas required by projects. The Judiciary has understood that, although these squatters are not the legal owners of the land to be expropriated, they are entitled to compensation for the improvements on the land. However, the amount of compensation takes into account the depreciation of the improvements.35 III.B. Requirements of the Environmental Licensing Process 69. One of the main challenges in Brazil for projects involving involuntary resettlement is the lack of a comprehensive legal and regulatory framework. The legislation on expropriation establishes procedures for compensating land owners for the loss of assets, but Brazil has not established minimum requirements at the national level for cases of physical displacement (relocation) or economic displacement (loss of income sources or livelihoods) of land owners or occupants of the land taken for development projects. Since project sponsors are legally required to obtain an environmental license for development projects, the legal framework on environmental licensing (Box 1), along with the legislation on expropriation discussed in the previous section, became by default the main regulatory framework for planning and implementing involuntary resettlement in Brazil.36 31 Article 6 of Law 12.812/1998. 32 Article 3 of Law 12.812/1998. 33 Civil Appeal No. 1.0521.06.055482-6/001, TJMG. judge. on 03/26/2009; 34 Civil Appeal No. 1.0521.06.047813-3/001. TJMG. judged on 5/27/2009. 35 Civil Appeal No. 456239-5 / 0, TJSP, judge. on 3/14/2006. 36 See further information on the legal framework governing environmental licensing in Brazil in www.mma.gov.br 23 Box 1. Legal Framework Governing Environmental Licensing in Brazil  Article 225 of the 1988 Brazilian Federal Constitution  Federal Law 6.938/81, which establishes the National Environmental Policy  Federal Law 9.605/98, which sets forth the criminal and administrative penalties resulting from conducts and activities harmful to the environment  CONAMA Resolution 237/97, which sets forth the procedures and criteria for environmental licensing  Decree 01/86, which establishes the guidelines for the implementation of Environmental Impact Assessments (EIA)  Decree 09/87, which addresses public hearings (in force for review proceeding)  Decree 10/87, which provides for the compensation for environmental damages inflicted by large construction projects  Decree 279/01, which establishes the simplified procedures for environmental licensing of projects in the energy sector with minor potential environmental impacts  Decree 6514/08, which provides for the violations of the environment and the administrative sanctions, and establishes the federal administrative proceeding for the investigation of said violations Sector-specific CONAMA Resolutions include:  006/87 for large scale civil works  005/88 for sanitation works  009/90 and 010/90 for mining  023/94 for exploration and production of oil activities 70. Environmental licensing is one of the twelve aspects covered by the National Environmental Policy (Law 6.938/81),37 which established the National System of Environment – SISNAMA. This Law establishes that economic activities should be environmentally sound and that environmental assessments should evaluate the impacts of projects on the physical, social and socio-economic environment. 71. Environmental licensing is considered the most important tool of SISNAMA for the avoidance or mitigation of adverse impacts of development projects. The environmental licensing process allows the government to intervene at the planning stage of a proposed 37 Law 6.938/81 (art. 90, I a XII) covers the following aspects: environmental quality standards (padrões de qualidade ambiental); environmental zoning (zoneamento ambiental); environmental impact assessement (avaliação de impacto ambiental); environmental licensing (licenciamento ambiental); incentives (incentivos à produção e instalação de equipamentos e à criação ou absorção de tecnologias voltadas para melhoria da qualidade ambiental); specially protected territorial areas (espaços territoriais especialmente protegidos); national environmental information system (sistema nacional de informação sobre meio ambiente); technical cadastre for environmental protection (cadastro técnico federal de atividade e instrumento de defesa ambiental); compensations (penalidades disciplinares ou compensatorias); environmental quality report (relatóriode qualidade do meio ambiente), information guarantee (garantia de prestação de informações); and technical cadastre for potentially adverse activities (cadastro técnico federal de atividades potencialmente poluidoras e/ou utilizadoras de recursos naturais). 24 program, project or activity that may have adverse impacts on the physical, biological or social environment. It also enables the government to require the development and implementation of measures to avoid or minimize any potentially negative impacts of projects and, when impacts are unavoidable, to develop and implement measures to address them appropriately. 72. CONAMA Resolution 237/97 sets forth the procedures and criteria for environmental licensing. This resolution defines environmental licensing as an ''administrative procedure whereby the competent environmental agency licenses the location, installation, expansion and operation of projects and activities…‖ (CONAMA 237/97, Art. 1). 73. Environmental licenses are issued by the environmental authorities though an administrative procedure by which they approve the location, installation, expansion and operation of projects.38 The Environmental Impact Assessment (EIA) and the Environmental Impact Report (Relatório de Impacto Ambiental — RIMA) are a precondition for the granting of environmental licenses for projects that can cause significant environmental degradation.39 74. The Constitution also mandates the enactment of a ―Complementary Law‖, which should establish rules for cooperation amongst the entities responsible for environmental protection. However, this Law has not been enacted.40 In an attempt to fill this gap, the Executive sent to Congress the Complementary Law Project (PLP) No. 12 B-2003. The final draft of PLP-B No. 12 of 2003 passed the House of Representatives on December 16, 2009 and was referred to the Senate on January 11, 2010, where it remains awaiting a vote. 75. Meanwhile, the norms under CONAMA Resolution 237/97 are applied to define the jurisdiction of the licensor. The federal Brazilian Institute for the Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis, IBAMA) is responsible for licensing large infrastructure projects that may affect more than one state or projects that are located in the border with another country. IBAMA also licenses projects in the oil and gas sector and projects that affect indigenous areas and national protected areas. Other projects are licensed by state environmental agencies, such as the Environmental Company of the State of São Paulo (CETESB). Additional details on the institutions that are involved in the environmental licensing process are provided in Section IV (Institutional Framework for Land Acquisition and Resettlement). Environmental Licensing Process 76. Under the Brazilian environmental system,41 project sponsors must obtain three environmental licenses:  The Preliminary License – PL (Licença Prévia) is obtained during the project planning phase, based on a preliminary definition of project location (or alignment) and engineering data at a preliminary stage. The PL approves the location and preliminary 38 Article 1, section I of CONAMA Resolution 237/97. 39 Article 225, § 1, item IV of the Constitution and CONAMA Resolution No. 01/86 and No. 237/97, 40 The fact that this Complementary Law has not been enacted causes confusion and generates conflicts of jurisdiction. 41 According to Federal Decree 99.274/90 (article 19), which regulates the National Environmental Policy. 25 design of the project or activity, certifies its environmental feasibility, and establishes the basic requirements and conditions to be met in the subsequent phases of project development. A full EIA or a simplified EIA must be submitted at this stage, including a preliminary resettlement plan if the project involves resettlement. The required revisions of the preliminary resettlement plan are normally specified in the PL and their completion is a condition for the issuance of the Installation License.  Installation License – IL (Licença de Instalação) is a permit that must be obtained after the completion of the detailed project designs and before the start of project construction. All plans and programs that are needed to address the project‘s impacts, including resettlement plans, if applicable, must be fully developed at this stage. If this is not the case, the IL may be denied or the environmental authority may decide to grant the IL with conditions that must be met within specified periods of time.  Operation License – OL (Licença de Operação) is a permit required to authorize the operation of a proposed activity. The OL is granted after the project sponsor has demonstrated compliance with all requirements or conditions set out in the PL and the IL, including those related to resettlement, if applicable. 77. According to the CONAMA Resolution 237/97 (article 10), the issuance of environmental licenses requires the following steps: 1) The competent environmental authority defines, with the participation of the project sponsor, the documentation and environmental studies needed to initiate the licensing process corresponding to the requested license. 2) The project sponsor requests the environmental license, supported by relevant documentation and environmental studies. 3) The competent environmental agency analyses the documentation and environmental studies submitted by the project sponsor. 4) The competent environmental authority requests clarifications and complementary information based on the analysis of the documentation and environmental studies submitted. 5) The project sponsor organizes a public hearing, where applicable. 6) The competent environmental authority requests additional clarifications, based on the findings of the public hearing. 7) The competent environmental authority issues its technical opinion and, when applicable, its legal opinion. 8) The competent environmental authority issues the license. Preliminary License – PL 78. The project sponsor must request a PL to IBAMA or delegated environmental agency during the planning phase of the execution/alteration/expansion of a proposed activity. The PL does not authorize the implementation of the proposed activity. The granting of the PL only means that the environmental authority considers that the proposed project is environmentally and socially feasible. The PL is valid for a period of up to 5 years. 26 79. A complete Environmental Impact Assessment (EIA) and an Impact Assessment Report (RIMA)42 are required prior to the granting of the PL for projects with significant adverse impacts. For other projects, a simplified EIA is required. 80. If a project involves resettlement, a preliminary resettlement plan is normally required as part of the EIA or the simplified EIA. Given that at this initial phase the final engineering designs are not available, project sponsors of projects involving resettlement are not likely to have exact information on the extent of land acquisition and the potential displacement of people. Therefore, resettlement plans at this stage does not include a full census, an inventory of affected assets or a detailed budget. But it can include a description of the population potentially affected by land acquisition and a preliminary assessment of impacts, as well as the norms for compensating the main categories of potentially displaced persons for the loss of land and other assets. Installation License (IL) 81. A project must have the IL before the beginning of project construction. IBAMA (or the competent environmental agency at the state or municipal level) grants the IL after the approval of the EIA/RIMA, which must meet all the conditions and requirements of the PL, including those related to resettlement. The EIA/RIMA is approved in a public hearing (audiência pública) and the IL is valid for a period of up to 6 years. 82. At this stage the resettlement plan is based on detailed engineering designs and should contain a precise description of impacts and the population and assets affected, as well as an fairly accurate estimation of land acquisition and resettlement costs. The IL can be granted with conditions to be met within a specified timeframe. Operation License (OL) 83. The OL authorizes project operation. The OL is granted after the project sponsor has demonstrated compliance with all requirements or conditions set out in the PL and the IL, including those related to resettlement, if applicable. 84. At this stage, resettlement plans are likely to have been fully implemented, with the possible exception of plans that include measures to address economic displacement (loss of income or livelihoods), since restoration of incomes and livelihoods usually takes a much longer time than other aspects of the resettlement program such as payment of compensation or completing physical relocation. 85. If the requirements of the PL and the IL have not been met at this stage, IBAMA or other environmental authorities may grant the OL with conditions to be met within a specified timeframe. 42 The EIA is a detailed environmental assessment that is submitted to public authorities for review and approval, whereas the RIMA is a summary version of the EIA that is intended for public information, review and comment. 27 86. The OL must be renewed within a period of time established by the environmental authority. This period varies from four to ten years. Improving resettlement practice through the environmental licensing process 87. In theory, therefore, the environmental licensing authorities have the mandate to ensure adequate resettlement planning and implementation. In practice, however, social issues (including resettlement) do not receive sufficient attention during the licensing process. CONAMA resolutions do not provide detailed guidance to assess and mitigate socioeconomic impacts, including involuntary resettlement. There are no clear requirements on resettlement planning or standards on what constitutes acceptable outcomes. Therefore, the analysis of physical and economic displacement and the review of resettlement plans are left to the professional judgment and discretion of technical staff. 88. The lack of clear legal requirements for projects involving resettlement results in plans of uneven quality. The following problems are common:  Inadequate baseline information. The cadastro or socioeconomic survey often consists of a simple registration of properties affected, while in other cases it consists of a more thorough socioeconomic analysis of the impacted areas. The common practice in Brazil is to rely on a simple real estate cadastre that identifies only the properties to be affected and their owners. This survey is not always based on updated cadastral maps, nor does it provide full information on ownership, tenure, location, area, land improvements, and the value of individual parcels—much less the socioeconomic conditions of the owners or occupants. Furthermore, studies are not updated when there is a long time gap between initial studies and resettlement implementation.  Inadequate consultations. Consultation with the affected families is another key bottleneck of the planning process that requires further attention in Brazil. While ongoing consultations with affected people are now part of routine practice in Brazil, and public hearings are required by the environmental licensing process,43 there is still room for improvement. According to local experts, consultations and hearings are primarily used to disseminate general information on the project. The public hearing is often organized at the end of the process, when all the drawings and specifications have already been defined and the EIA is ready. The language adopted during public hearings is often too technical, which inhibits effective popular participation. The relevant documents are not always available before the hearings or are not presented in a way and language that are easily understood by the affected populations. The quality of consultations related to the resettlement plans vary among states and projects; there is a lack of norms or minimum standards in this area. The first contacts with residents in the project area generally occur during the socioeconomic survey, whereas the resettlement plan is presented to the affected population for the first time during the project‘s public hearing—carried out as part of the environmental licensing—when all aspects of the project are discussed. 43 Public hearings were included as a requirement under the environmental licensing process in 1986. 28 89. Plans are sometimes ignored after their approval by the licensing agencies. In such cases resettlement tends to receive little attention until the project sponsor must gain access to the land required for civil works. As a result, resettlement is carried out in a hurry to permit the initiation of civil works, often leading to practices that are not desirable, such as the provision of temporary housing to displaced persons due to delays in the provision of permanent housing. Inadequate planning often causes construction delays and conflicts between the project sponsor and the affected population. 90. In order to improve resettlement planning and outcomes, a new CONAMA resolution could be issued, establishing minimum requirements and providing better guidance for projects that involve resettlement. The requirements could be linked to the granting of environmental licenses (see section VI). 29 IV. Institutional Framework for Land Acquisition and Resettlement in Brazil 91. There are six types of institutions involved in land acquisition and resettlement in Brazil: authorities involved in the expropriation process; environmental licensing agencies; project preparation and implementation agencies; private sector entities that carry out functions contracted out by project agencies or concessionaires of public services that acquire land as agents of the government; monitoring and evaluation institutions; and institutions responsible for dispute resolution. A brief description of these institutions follows. IV.A. Authorities Involved in the Expropriation Process 92. Land in Brazil can be expropriated by public authorities (at the Federal, State, Municipal or Federal District levels) and other entities that carry out functions delegated by government. In both cases, expropriation is carried out through a decree enacted by the President of the Republic, the Governor, a Delegate of the President of the Republic, or the Mayor, depending on the level at which expropriation is taking place.44 The concessionaires of public services or entities that carry out functions delegated by government can expropriate if they are expressly authorized to do so in the law or the concession contract.45 The expropriation decree declares an area of public utility or of social interest and authorizes the administrative authorities to enter the land and buildings to be expropriated. The administrative authorities have the ability to request the assistance of the police force if the land take is opposed by the property owners.46 93. If the property owner agrees with the compensation offered by the public authority, the expropriation process is completed through extrajudicial means. If there is no consensus, the Public Authority can activate the Judicial Authority to determine the compensation. IV.B. Environmental Licensing Agencies 94. According to the 1988 Federal Constitution (article 23, subsection VI), the responsibility for environmental licensing is shared amongst federal, state and municipal environmental agencies, all of which are part of SISNAMA. 95. SISNAMA comprises three main set of institutions:  The National Environmental Council (Conselho Nacional do Meio Ambiente – CONAMA) is responsible for the approval of environmental policy in Brazil. It is presided by the Minister of Environment and administered by its Executive Secretariat. The Council meets every three months. Its meetings are open to the public. Each State has an equivalent State Environmental Council (Conselho Estadual do Meio Ambiente – CONEMA). 44 Article 6 of Dec.-law no. 3,365/1941. 45 Art. 3 of Dec.-law no. 3,365/1941.. 46 Article 7 of Dec.-law no. 3,365/1941.. 30  The Brazilian Institute for Environment and Renewable Natural Resources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis – IBAMA) is responsible for the execution, regulation, and control of environmental policies in Brazil. Each State has an equivalent implementing agency, such as the INEA (Instituto Estadual do Ambiente) in Rio de Janeiro and CETESB (Companhia de Tecnologia de Saneamento Ambiental) in São Paulo.  States and municipalities are responsible for the application of their own supplementary environmental norms and standards within their respective jurisdictions, and in compliance with all related federal norms. 96. At the federal level, CONAMA develops and approves environmental policies, while IBAMA is responsible for licensing and oversight of the following types of projects: (i) large infrastructure projects that may affect more than one state; (ii) projects located on the border with another country; (iii) projects that affect indigenous areas or national protected areas; (iv) potentially polluting projects of national or regional impact; and (v) all projects in the oil and gas sectors. With the exception of the licensing of the establishments intended to produce nuclear materials or use of nuclear energy and its applications,47 IBAMA issues environmental licenses in all other cases of federal jurisdiction. During the licensing process, IBAMA consults with relevant state environmental agencies, as well as the federal agencies responsible for cultural heritage (IPHAN), indigenous peoples (FUNAI), Quilombolas (Fundação Palmares), and disease control (FUNASA), among others. 97. Agencies at the state level, such as the Environmental Company of the State of São Paulo (CETESB), are responsible for granting licenses for projects implemented within their jurisdiction.48 Municipalities are responsible for licensing and oversight of projects with limited, local impacts. 98. The environmental agencies have the authority to approve or reject resettlement plans proposed by the project sponsor. However, the criteria for doing so is not clear because CONAMA regulations do not establish clear standards for addressing displacement caused by development projects. As a result, the quality of the plans approved IBAMA and other environmental agencies vary widely, as well as the outcomes of resettlement programs. In some cases, the compensation and assistance provided to displaced persons is insufficient and may result in their impoverishment; in other cases the compensation packages for individuals or communities may be excessive and can threaten the economic viability of the project. 99. In recent years, some Brazilian states have improved their environmental licensing systems (see Box 2), both at the policy and operational levels. But some procedural and capacity issues remain. A low number of staff and a lack of qualified technicians to deal with subjects such as resettlement can affect document preparation (for example, Terms of References) and the corresponding analysis within the established deadlines. The social analysts or other professionals responsible for overseeing the preparation of resettlement plans and implementation of resettlement activities are not always regular agency staff, but rather project 47 Nuclear projects require the technical recommendation of the National Commission of Nuclear Energy (Comissão Nacional de Energia Nuclear – CNEN), 48 CONAMA Resolution 237/1997 (article 5) 31 specific. The current approach does not ensure a standard method of analysis, generates delays in the processes, and does not allow for the internalization of good practices within the licensing agencies. Box 2. São Paulo Unified Environmental System In 2009, the State of São Paulo implemented the "Unified Environmental System", which turned its Environmental Company (CETESB) into the agency in charge of the environmental licensing processes in the State. The implementation of this unified system seeks to improve the performance of this agency by reducing the licensing deadlines, standardizing procedures, and facilitating the process for system users—who can now file the licensing request with only one institution, even though the concession of the license can depend on the approval of several agencies. The previous environmental licensing system was divided among several agencies (institutions and addresses), which affected performance and made it difficult for users requesting the licenses to access the system. To facilitate the transition to the new system, technicians from various agencies of the former system were assigned to the new unified system, and training was provided to all technical staff. IV.C. Project Implementation Agencies 100. These agencies include public sector companies and various state, federal, and municipal institutions. Project implementation agencies are often responsible for land acquisition and resettlement associated with the projects that they plan and carry out. These agencies focus primarily on planning, studying, and executing the main investment project. Therefore, land expropriation and resettlement is often not given the same level of emphasis as the civil works and other project components. 101. Resettlement is planned and implemented following three, alternative institutional models: (i) resettlement carried out entirely by the main project implementing agency; (ii) resettlement carried out by a dedicated, internal unit to work specifically on land acquisition and resettlement issues with the support, as necessary, of external consultants; and (iii) resettlement carried out by a consulting firm hired by the implementation agency to handle land acquisition and resettlement issues. The last two models, and particularly the third, which is more common, are found to be very effective in promoting efficient resettlement implementation. However, under the third model, the government agency that hires an external consulting firm should have the necessary capacity and resources to supervise the firm.49 IV.D. Private Sector Concessionaires 102. The concessionaires of public services or entities that carry out functions delegated by government can expropriate if they are expressly authorized to do so in the law or the concession contract.50 Land acquisition for linear projects implemented under concession agreements, such as toll roads and transmission lines, is normally carried out by the concessionaire or an agent of the concessionaire. For example, the concessionaire Autoban acquired the right of way for a 49 It is worth mentioning that, in DERSA's case, the size of the Rodoanel project and the financial power of the company led to the establishment of a unit in charge of resettlement within the company’s Engineering Department. 50 Art. 3 of Dec.-law no. 3,365/1941. 32 highway project in the state of São Paulo and has also been involved in the resettlement of informal dwellings. IV.E. Monitoring and Evaluation Institutions 103. The environmental licensing process and Brazilian legal frameworks applicable to resettlement do not explicitly require monitoring and evaluation of resettlement programs. However, the environmental licensing process requires the mitigation of social impacts, such as resettlement. Therefore, the license grantor has the mandate to require resettlement plans and to ensure that the implementation of plans is monitored and evaluated. In some of the projects analyzed by this study (e.g. Irapé and Rodoanel), the resettlement teams of the implementing agencies were responsible for monitoring the work carried out by the outsourced companies hired to carry out the resettlement programs. In others, such as Castanhão and Aracoiaba, consultants were hired to supervise and monitor the process. IV.F. Institutions for Resolving Resettlement-Related Disputes and Grievances 104. The Public Prosecutor‘s Office (Ministério Público) and the Public Defender‘s Office (Defensoria Pública) have a role in protecting the interests of the affected population during expropriation and involuntary resettlement—working both in the judicial and extrajudicial spheres. In addition, the affected people have the right to access the courts to resolve complaints related to resettlement issues. Public Prosecutor (Ministério Público, MP) 105. Among the various functions that have been constitutionally attributed to the Public Prosecutor, this institution protects diffuse and collective interests in areas such as the environment, historical patrimony, and ethnic and social minorities (Articles 127 and thereafter of the Federal Constitution). The MP can investigate and, if necessary, pursue public civil action for the protection of public and social patrimony, the environment, and other diffuse and collective interests (Article 129, section III, of the Federal Constitution). 106. Based on its constitutional role, the Public Prosecutor can intervene in the expropriation process and investigate irregularities in the compensation procedures. The MP‘s intervention in conflicts related to expropriation and involuntary resettlement often results in the execution of Conduct Adjustment Terms (Termos de Ajustamento de Conduta, TAC)51 among those involved (that is, the project sponsor, the Public Authority, the MP, and the affected population). Public Defender (Defensoria Pública) 107. The Constitution of 1988 guarantees that the State shall provide full and free legal assistance to those who prove insufficiency of resources (Article 5, subsection LXXIV). Toward this end, Article 134 of the Federal Constitution created the Public Defender, a permanent institution, essential to the State‘s jurisdictional function. The Public Defender is charged with 51 Supported by the provision in article 5, § 6, of Federal Law no. 7,347, of July 24, 1985 (Public Civil Action) 33 providing legal guidance, promoting human rights, and defending individual and collective rights. 108. Among the institutional functions of the Public Defender (listed in Article 4 of LC No. 80/1984), the following may be highlighted:  Provide legal guidance and exercise the defense of the needy.  Promote, as a priority, the extrajudicial solution of litigation, seeking the agreement between people in conflict through mediation, conciliation, arbitration, and other techniques of agreement and the management of conflicts.  Promote the dissemination and awareness of human rights and the rights of citizenship.  Institute a public civil action and all types of legal actions to provide adequate protection of diffuse, collective, or homogeneous individual rights when the result of the lawsuit can benefit a group of people without sufficient resources.  Act in special courts. 109. It is important to note that LC No. 80/1984 allows these institutional functions to be exercised even against Legal Entities of Public Law (Article 4, § 2). 110. The Public Defender can have significant participation in cases of involuntary resettlement programs, which most frequently involve the displacement of low-income residents, or those without sufficient resources, who need the assistance of the state to guard against eventual illegalities perpetrated during the process. IV.G. Other Mechanisms for Dispute Resolution 111. The conflicts arising from the process of expropriation and involuntary resettlement can be resolved in the judicial or extra-judicial sphere. In the judicial sphere, depending on the nature of the conflict, it is possible to submit the lawsuit to the Special Courts, as an alternative to Common Courts. In the extra-judicial sphere, it is possible to take the disputes to the chambers of arbitration. Resolution of Conflicts by Judicial Authorities 112. The national jurisprudence reveals the existence of a large number of lawsuits for cash compensation, for material, or moral damages, decided for the affected population through expropriation. For the most part, the plaintiffs are composed by groups of affected persons, in the form of co-plaintiffs. There are also cases in which the MP and the Public Defender act on behalf of the affected collectivity, generally through Public Civil Actions. 34 Noncompliance with Agreements or Conduct Adjustment Terms (TACs) 113. In some of the decided cases, it appears that the conflicts arise from a breach of agreements that had been made between the affected populations and the project sponsor, or TACs entered into between the MP and the parties involved. In these cases, the Judicial Authority (the Court) has examined cases requiring the project proponent to comply with the agreed upon obligations,52 resulting in the payment of cash or other forms of compensation. In some cases, part of the affected population has not received the agreed upon cash compensation, or received a compensation less than those paid to the other expropriated parties. The Judicial Authority then requires that the project sponsor comply with its obligations.53 Avenues for Arbitration 114. Arbitration can be an important instrument for resolving conflicts that arise from involuntary resettlement; in practice, however, is not commonly used.54 Only people who are capable of contracting (as defined by the Civil Code) may use arbitration to settle disputes over patrimonial rights, namely those that can be transacted, or that is, which its owner may dispose of the right that it holds. Interested parties may submit their disputes to the arbitration court by means of the arbitration convention, understood as the committing clause and arbitration commitment (Article 3). The committing clause is a convention through which the parties to a contract commit themselves to submit to arbitration the disputes that may arise in respect of such contract (Art. 4). In fact, in the process of involuntary resettlement, arbitration can be formally stipulated —for example, in the agreement made between the parties involved (that is, the Public Authority, the project sponsor, the MP, and the affected population). 115. It is important to mention the existence of the Chamber of Conciliation and Arbitration of the Federal Administration (CCFA) of the Attorney General of the Union (AGU), which deals with the administrative resolution of conflicts involving federal agencies and entities55. Although its performance is exclusively related to federal agencies and entities, many times the conflicts between the federal agencies can directly interfere with the process of involuntary resettlement. 52 RESP no. 1.120.253-PE, STJ, dec. on 10.15.2009; Civil Appeal no. 456.239-5/0, TJSP, dec. on 03.14.2006; Civil Appeal no. 504.010.4/5-00, TJSP, dec. on 12.17.2008; Civil Appeal no. 189.030.5/5-00, TJSP, dec. on 06.12.2006. 53 Civil Appeal no. 504.010.4/5-00, TJSP, dec. on 12.17.2008. 54 Arbitration is governed by Federal Law No. 9307 of September 23, 1996. 55 The CCFA is regulated by AGU Regimental Act No. 05, of 09/27/2007, partially amended by AGU Regimental Act No. 02 of 04.09.2009. 35 V. Emerging Good Practices and Challenges of Resettlement in Brazil 116. This chapter identifies good resettlement practices as well as challenges that can help Brazil learn from its own experience to improve resettlement planning and implementation. In order to do this, the study draws on six projects, three of them financed, designed, and implemented by government entities (see Box 3), and three co-financed by the World Bank (see Box 4). The projects reviewed involved different sectors (transport, water and sanitation), covered cases of urban and rural resettlement, and were implemented in four different states (Bahia, Ceará, Minas Gerais and São Paulo). 117. The analysis of projects is based on the review of project documents, site visits and interviews with key stakeholders, including project coordinators, resettlement unit staff, and affected persons. 118. Resettlement was caused by the construction of dams in four of the six projects: Ponto Novo, Irapé, Castanhão and Araçoiaba/Pesqueiro. Castanhão and Irapé are large investments, while Ponto Novo is a medium sized project and Araçoiaba/Pesqueiro is a relatively small project. They also differ in their goals and target population. Ponto Novo and Aracoiaba/Pesqueiro serve only the regional population around the project area, whereas Irapé and Castanhão benefit larger areas. The urban projects, Rodoanel and Guarapiranga, are located in the metropolitan region of São Paulo. The first is a transportation project, and the second is a sanitation project aimed at improving the conservation of water resources. These urban projects entail major challenges owing to the specific characteristics of the region of intervention. They targeted areas with high population density and very limited availability of space for resettlement sites. 119. Given the diversity among the six projects selected and the wide range of resettlement challenges that they faced, the six cases offer lessons that are relevant for the design and implementation of projects across different sectors and regions. The good practices that were identified cover aspects that are critical for a successful implementation of a resettlement program, such as those related to resettlement planning (Irapé); consultations with affected people and their participation in the development of resettlement options (Porto Novo, Irapé, Rodoanel, Castanhão and Guarapiranga); compensation and resettlement assistance (Ponto Novo, Rodoanel, Guarapiranga and Araçoiaba/Pesqueiro); development of institutional capacity for the implementation of resettlement (Rodoanel and Castanhão); and systematic monitoring of affected families before and after relocation (Guarapiranga and Rodoanel). The challenge now is to mainstream these good practices across states and sectors. 36 Box 3. Three Projects Fiananced by Government Entities The Hydroelectric Project of Irapé was implemented by the Minas Gerais Energy Company (CEMIG) in Berilo, Minas Gerais, and completed in 2006. It has an installed rated power of 360 MW. Project construction required the involuntary resettlement of 810 families located in rural areas. Affected families were able to choose between compensation in cash or in kind. The latter consisted of a house and 2.5 hectares of farmland. A total of 112 families chose cash compensation, while the other 698 families opted for a house and farmland. Land expropriation and titling was carried out by CEMIG, and the resettlement program (socioeconomic studies, surveys, and activities related to the preservation of cultural heritage) was carried out with the support of a consulting engineering firm. The Castanhão Dam was built by the National Department of Works Against Drought (DNOCS) and completed in 2003. It has a storage capacity of 6.7 billion m³, which ranks as the largest multipurpose weir (a small, overflow-type dam) in Latin America. The construction of the dam on the Jaguaribe riverbed, in the city of Alto Santo, Ceará, caused the involuntary resettlement of 2,268 rural households and 1,720 urban households. The resettlement program was divided into irrigation projects, fish farming projects, and urban resettlement. For irrigation projects, the compensation offer included cash up to R$ 11,800, a house, and an irrigated farmland of 3 hectares; for fish farming projects, the compensation offer included cash up to R$ 11,800, a house, cages, supplies, and equipment; and for urban resettlement projects, the compensation offer included cash up to R$ 11,800, and a house with infrastructure for water and sewage for the urban resettlement. Given the size and complexity of this project, which affected families in five different municipalities, resettlement activities were coordinated among several institutions. The State Government of Ceará was primarily in charge of the urban resettlement program. DNOCS and Ceará‘s Secretary for Infrastructure (SEINFRA) was responsible for the overall implementation and monitoring of the resettlement program. The Ceará Institute for Agrarian Development (IDACE) focused on the implementation of the rural resettlement program with funds received from DNOCS. Other agencies, such as the Secretary for Agriculture and Livestock (SEAGRI), were also part of the process, being responsible for activities such as technical assistance. The Rodoanel Mário Covas Project is a ring road surrounding the São Paulo metropolitan region. Upon its completion, it will measure 176 km, with a radius of approximately 23 km from the geographical center of São Paulo city. The ring road is still under construction by DERSA—Desenvolvimento Rodoviário S.A., a mixed capital company linked to the Department of Transportation of the State of São Paulo. The ring road is divided into four sections: West section (in operation since 2002 - 32 km), South section (opened in March 2010 - 57 km), East section (early works scheduled for 2010 - 43 km), and North section (with a schedule for the beginning of works in 2011 - 44 km). In total, about 9,000 families will be relocated because of civil works. The resettlement studied in this report was caused by the construction of the West and South sections. The compensation package offered to the resettled families includes the provision of replacement housing and temporary rental or cash compensation according to the value of the property and improvements, plus a moving allowance. The resettlement program, which is still being implemented, was outsourced to a specialized consulting firm under the supervision of DERSA‘s Resettlement Unit. By December 2009, 2,012 families had opted for cash compensation, including 622 migrants who used the resources to return to their home states, while 1,390 opted for relocation in the vicinity. 37 Box 4. Three Projects Supported by the World Bank The Bahia Integrated Water Resources Management Project (PGRH) was developed by the Department of Water Resources of the State of Bahia (SRH Bahia) between 1995 and 2005. The project aimed to (i) provide water for irrigation and for consumption by municipalities and local industry; (ii) promote participatory management and rational use of water resources; and (iii) develop a sustainable system of administration, operation, and maintenance of rural water supply and irrigation infrastructure. The program involved the construction of dams and irrigation perimeters that displaced population in four cities: Ponto Novo, Saúde, Filadélfia, and Pindobaçu. Involuntary resettlement was caused by the construction of the Ponto Novo Dam and Ponto Novo Irrigation Perimeter, which were expected to affect 186 properties and 213 families at the time of the preparation of the resettlement plan (1997). The compensation package offered to each family included an individual lot of 5 hectares (2 irrigated), housing, surrounded stump removal, infrastructure, and technical assistance for small farmers; self- resettlement in rural or urban areas; or the option of cash compensation sufficient to buy a similar agricultural lot in the same region. According to documents provided by SRH, at the end of the two phases of the resettlement program, a total of 567 families had been affected (directly or indirectly) and compensated by the program. Of this total, 138 opted for resettlement, and 429 for cash compensation. The Ceará Integrated Management of Water Resources Project (PROGERIRH) was initiated in 1997 by the Department of Water Resources of the State of Ceará (SRH Ceará) and it is still being implemented. The project objective is to expand the water infrastructure in the State of Ceará and provide technical, operational, and institutional support for managing water resources. One of the activities financed by the project that led to the involuntary resettlement of populations was the construction of weirs. Within PROGERIRH, the resettlement program of Aracoiaba Weir, completed in 2001 in the city of Aracoiaba, was analyzed as part of this study. A total of 316 families were directly affected and 246 families were indirectly affected. In this resettlement program, the affected population was offered the option of (i) cash compensation, chosen by 50 people (15.8 percent of the total); (ii) cash compensation and staying in the remaining area of the weir, moving to urban areas or to other locations, chosen by 118 (37.4 percent); or simply relocation, chosen by the majority, 148 people (46.8 percent). The Environmental Sanitation Program of Guarapiranga, São Paulo, was implemented by the State Government with World Bank financing and in partnership with São Paulo city municipal government. The Guarapiranga reservoir is one of the most important watersheds in the metropolitan region of São Paulo. At the time of project implementation, one third of the total area of the Guarapiranga River Basin was occupied by irregular settlements, which were responsible for large amounts of sewage and solid waste carried to the streams, affecting the water quality in the basin. This project‘s urban rehabilitation subcomponent included land development and the resettlement of families living in high-risk areas in 93 favelas within the basin. At the conclusion of the project in 2003, 2,839 families had been relocated: 1,764 families opted to move to apartment blocks (Conjuntos Habitacionais, CHs), 869 families opted for properties built within the slum areas, and 206 families opted for ―house swapping,‖ moving to other units within the slums that were not considered at risk and belonged to residents who wanted to move to the apartments in the CHs (the ―chessboard‖ system56). The Housing and Urban Development Company of the State of São Paulo (CDHU) and the Municipal Government of São Paulo were responsible for implementing the resettlement program. 56 The so-called chessboard arrangement is a common practice adopted in urban resettlement programs in São Paulo and other states in Brazil. It consists of relocating families to existing dwellings in slums whose ―owners‖ are interested in leaving the area. The families that move to these dwellings must be willing to take on the financial commitments involved in living in one of the CHs. 38 120. Some of the limitations identified in the six cases also offer lessons for improving resettlement policies and practices in Brazil. These limitations include: inadequate resettlement planning; insufficient attention to the feasibility of, as well as risks posed by different resettlement options, inadequate consultations; compensation packages that do not fully restore living standards and productive capacities; and deficiencies in the monitoring and supervision of the resettlement process. These shortcomings caused delays in project implementation, and poor resettlement outcomes. 121. The following sections will discuss emerging good practices and challenges in the key areas of: (1) resettlement planning; (2) consultation and participation; (3) compensation and resettlement assistance; (4) institutional arrangements during the implementation of resettlement programs; and (5) monitoring and evaluation. V.A. Resettlement Planning 122. Brazilian regulations do not require the preparation of resettlement plans in an explicit manner, but the preparation of EIAs is a precondition for the granting of environmental licenses. Therefore, environmental authorities have an opportunity to ensure proper resettlement planning. In theory at least, if a project involves resettlement, the EIA should include a good resettlement plan. 123. In practice, however, the quality of resettlement plans (and EIAs in general) varies. Some of the cases analyzed as part of this study exemplify good resettlement planning. But, according to the experts interviewed as part of this report, the quality of resettlement plans approved by licensing agencies in Brazil tends to be highly variable. There are two main reasons for this. First, the TOR prepared by licensing agencies for the preparation of EIAs does not necessarily provide good guidance for the preparation of resettlement plans. IBAMA has a shortage of specialists trained in the social sciences57 and this is also the case among state licensing agencies. Second, Brazil does not have clear standards on resettlement, except for those related to the compensation provided to the owners of expropriated properties. 124. The lack of standards for projects that involve resettlement makes the preparation and evaluation of resettlement plans difficult. Without standards, it is difficult to define the entitlements of affected people in a consistent manner. In some projects, the concept of affected population is applied in a very restricted manner—for example, only property owners are considered affected. In other cases, the concept is applied very broadly, which can create an excessive financial burden for the project proponent and affect the project‘s economic feasibility. Similarly, some projects assist certain categories of displaced persons, such as informal dwellers, while other projects may exclude the same groups from benefits under the resettlement program. 125. The cases that were evaluated as part of this study illustrate the importance of resettlement planning in facilitating good resettlement outcomes. Resettlement plans that worked were based on good baseline information, meaningful consultations, participation of affected 57 World Bank, Environmental Licensing for Hydroelectric Projects in Brazil, A Contribution to the Debate, Volume I (Summary Report), 2008, p.9. 39 people in the development of resettlement options, and good coordination among the implementing agencies. Good practices 126. When resettlement programs are planned within a broader focus on development, they can improve the living conditions not only of the affected people but also of the general population in the area. This broader focus reduces the degree of social vulnerability of the local population and promotes local development of the entire area. For this to occur, there must be a committed project sponsor and careful planning and coordination among all the parties involved in the resettlement process. 127. The Irapé project was implemented under an approach that promoted ―regional development‖ of the entire area (called ―Projeto Estruturante‖ in Brazil). This approach required the involvement of a variety of sectors and institutions. A committee was created, consisting of representatives from several departments of the State Government of Minas Gerais was created, and within each department there was a unit for the Irapé Project. The Department of Public Security provided additional resources to improve security at the project area; the Education Department increased the number of schools in the area and implemented the Youth and Adults Education Project (Projeto de Educação de Jovens e Adultos (EJA)58; the Health Department supported the various towns in the region in structuring the sector to meet the growing demand from resettled persons and the arrival of workers during project implementation; the Technical Assistance and Rural Extension Enterprise of Minas Gerais (EMATER-MG) provided technical assistance to small farmers; and the Minas Gerais Sanitation Company (COPASA) helped expand and improve sanitation systems in the areas affected by the project. 128. According to the interviews with resettled families, their situation improved after relocation. The families reported that their incomes rose due to an increase in agricultural production and greater market access. They also indicated that their overall living conditions improved as a result of an increase in employment opportunities, improvements in health and education services, and greater security. Challenges 129. Resettlement planning is required under the environmental licensing process, but resettlement plans are sometimes prepared only to comply with licensing procedures and not properly followed during implementation. In such cases, upon fulfilling its immediate function, the plan is relegated to a secondary level of importance. Resettlement only receives proper attention at the time that the project sponsor must gain access to the land required for civil works. 130. For this reason, resettlement often tends to be carried out in haste, which leads to the adoption of ad-hoc measures, such as the provision of temporary housing to persons who are permanently displaced. 58 The EJA facilitates access to education for those who do not have opportunities to study at their appropriate age, bringing teachers to their workplace or to the communities. 40 131. The resettlement plan prepared for the Integrated Management of Water Resources Project in Ceará (PROGERIRH) included procedures to acquire land through negotiations with the affected landowners. This type of procedure (called administrative route or friendly or extrajudicial land acquisition) is supported by federal legislation. However, during implementation the state government pursued the judicial route, without considering the use of the administrative route.59 After several meetings between the executing and financial agencies, the State of Ceará was able to reach an administrative/friendly agreement with each of the affected families. The court then approved these agreements, and compensations were paid. By not following the resettlement plan, the state government contributed to delays in project implementation. 132. Another challenge during the planning phase is the establishment of a cut-off date for determining eligibility to benefits under the resettlement plan. In the case of Castanhão Dam, for example, a cut-off date was not established—and because of the long project construction period, many squatters were attracted to the areas and the cadastro kept growing. V.B. Consultation and Participation 133. Consultations with the populations affected by a project are an encouraging common practice in Brazil, and public hearings are required by the environmental licensing process. 60 But consultations are not always meaningful and effective. Consultations and public hearings are often a simple forum for disseminating information related to the project. In some cases, the resettlement plan is presented to the affected population for the first time during the project‘s public hearing carried out as part of the environmental licensing process, in which all aspects of the project are discussed. The language adopted during the public hearings is often too technical, which inhibits effective popular participation. The relevant documents are not always available before the hearings or are not presented in a form and language that are easily understandable by the affected populations. Good practices 134. The cases that were evaluated as part of this study illustrate the importance of consultations with affected people and their participation in the development of resettlement and rehabilitation measures. Projects that facilitated the participation of the affected communities from the planning phase ensured more satisfaction among those resettled and prevented conflicts during project implementation. Urban projects that offered housing solutions developed with the participation of the affected families led to successful and conflict-free relocation. Successful resettlement programs adopted agile, transparent, and accessible communication channels (such as using the local radio and relying on public events and regular meetings), and in some cases established field offices at the resettlement sites. Other ingredients of successful communications 59 When a friendly solution is not possible, the judicial route is adopted, which consists of the following stages: (i) preparation, execution, and publication of the Eminent Domain (Declaração de Utilidade Pública, DUP) for the expropriation of the areas required by the program for the execution of construction work; (ii) institution of judicial lawsuits for each area and request of the issuance of possession of the referenced real property, followed by the deposit of the amount of the assessment; and (iii) compliance with the judicial mandate (Government of the State of Santa Catarina, 2009). 60 Public hearings were included as a requirement under the environmental licensing process in 1986. 41 with affected communities were the presence of the executing agency in the project area, transparent compensation and relocation procedures, and the availability of information about the project and the resettlement program at the local level. 135. The Bahia Integrated Water Resources Management Project (Programa de Gestão de Recursos Hídricos—PGRH) is an example of a project that adopted a broad and effective consultation strategy. During the construction of the Ponto Novo Dam the project established an office in the area of intervention, with a permanent social, legal, and engineering team. This team was responsible for the entire resettlement process—from carrying out the socioeconomic survey and assessment of the affected properties to the provision of technical assistance, training and legal support. Good communications with the affected communities facilitated project planning and implementation. 136. In the case of the Irapé Project, the Minas Gerais Energy Company (CEMIG) adopted a comprehensive communications program. It included (i) the establishment of two field offices with permanent staff trained to inform and receive complains from the resettled families; (ii) the promotion of regular visits from CEMIG‘s headquarters‘ management team to field offices, with the two teams together carrying out visits to the communities; and (iii) the use of various types of media to keep the community informed, such as videos explaining the project and resettlement activities, radio and newspaper announcements, and distribution of flyers. This social communication plan was carried out throughout the execution of the project, and a communications specialist remains in the field to maintain good communications between the company and the communities. 137. The Rodoanel Mário Covas Project (the ring road surrounding the São Paulo metropolitan region) illustrates the importance of promoting the participation of affected people in the resettlement process. During the construction of the West section of Rodoanel, the families that opted for resettlement (and not cash compensation) formed a housing cooperative, the Rodoanel Housing Cooperative, which was in charge of managing the resources for the implementation of their own resettlement program, under DERSA‘s monitoring and supervision. The cooperative worked directly with designers and contractors; municipal governments in the areas of intervention; and service dealers and suppliers of business, legal, and accounting services. It also worked with an outsourced company specialized in resettlement, which provided technical assistance and social support during the construction of houses, the transition period, and the post-occupancy phase. The cooperative is still active, engaged in the maintenance of housing complexes and other productive activities in the community.61 138. In the case of the Castanhão Dam in Ceará, a Participatory Working Group (known as Grupão) was established by the affected communities, with the support of the main executing agency, DNOCS. The Grupão acted as a spokesman for the affected population and monitored the resettlement program and the implementation of the project‘s civil works. The Grupão traveled to the municipalities and the districts directly affected by the dam, and met monthly for eight consecutive years. The Grupão was responsible for (i) proposing a price table for land and other assets that were expropriated, which was approved by DNOCS; (ii) supervising the 61 According to resettlement teams of DERSA, despite the good results obtained with the housing cooperative in the West section, a similar program was not developed for the South because housing complexes were already available. However, the company is interested in replicating this model of integrated management in other projects. 42 relocation processes and proposing alternatives when necessary; and (iii) contributing to the redefinition of the geographical boundaries between municipalities to partially recover the loss of the territory that was flooded.62 The Grupão disintegrated at the end of construction in 2003, but it is still remembered by the resettled population as one of the successes of Castanhão. 139. In the Guarapiranga project, the high level of participation of resettled families in resettlement planning and implementation prevented problems and conflicts that are typical of resettlement programs. As a result of the participatory approach, the affected communities took ownership of the resettlement program and felt an integral part of the project. They contributed to the proper implementation of the resettlement program and expressed a high level of approval of its outcomes. According to the ex-post evaluations conducted in the intervention areas, 77 percent of the resettled families felt that their lives improved after the resettlement and 74 percent said that the program had met their needs.63 Challenges 140. While consultation practices have improved in recent years in Brazil, most projects do not take full advantage of consultation and participation as a tool for developing appropriate resettlement solutions and reducing project risks, from project delays to conflicts with the local population. 141. According to the experts interviewed as part of this study, some project sponsors continue to view public hearings as a formality that must be complied with to obtain environmental licenses. Public hearings provide information on the project, but are not always effective in terms of communicating project risks and allowing people to express their concerns. Compensation procedures often lack transparency and they are not explained very well in public meetings or in the negotiations with the affected owners. Concerns expressed at public hearings are often not well documented and followed up by project sponsors and environmental authorities. V.C. Compensation and Resettlement Assistance 142. Compensation to property owners for the loss of land and other assets taken for development projects in Brazil is based on national legislation on expropriation that apply to all projects that are in public or social interest. However, Brazil does not have national legislation to compensate or assist other categories of displaced persons, such as occupants without land rights, or to address other losses of displaced persons, such as the loss of incomes and livelihoods. Consequently, the practices to assist those without legal titles and to assist persons who are physically displaced or suffer losses of income or livelihoods vary significantly among states, sectors and projects. 143. The compensation provided is based on "market value" and does not cover transaction costs. The market value is defined on the basis of the technical standards established by the 62 Queiroz 2004, 101-109; Lima 2007. 63 World Bank 2004c, p. 101. 43 Brazilian Association of Technical Standards (Associação Brasileira de Normas Técnicas, ABNT), which follows international standards. 144. When compensation for the loss of houses and other structures is paid in cash and replacement homes are not available in the market, the method of calculation of the value of buildings and other structures in Brazil, which takes into account depreciation, can also pose a problem. If the owners are expected to rebuild their houses and other structures on the residual land of the lot affected or in a new lot, the compensation offered may not be sufficient to buy the new materials and pay the cost of labor necessary to rebuild a house of similar conditions. Good practices 145. Good practices observed in the projects that were analyzed as part of this study include (i) the provision of an integrated assistance package (as opposed to relying only on cash payments), (ii) offering legal support to displaced families, (iii) titling replacement properties without delay, and (iv) providing assistance and support to displaced families after relocation. 146. Comprehensive package of entitlements: The resettlement program of the Ponto Novo Dam, which was part of PGRH, Bahia, offered a comprehensive compensation package, which included the training of small farmers, agricultural extension services, electrification, improvement of housing conditions, construction, provision of social services (such as day care facility in resettlement areas), access roads, and provision of water for irrigation and human consumption. Because of the good results achieved with this resettlement program—leading to a considerable improvement in the living conditions of the affected population—the state government began to incorporate a more integrated approach in its compensation packages to resettled populations in other projects.64 Before the Ponto Novo Dam, resettlement programs in Bahia were based solely on cash compensation, usually at levels that were insufficient for restoring the lives of affected populations. 147. Legal Assistance: The resettlement program of the Ponto Novo Dam illustrates the importance of offering free legal support to the affected population, particularly vulnerable groups. Many of the families affected by the Ponto Novo Dam, specially the poorest ones, did not have proper personal and property documentation that was required to establish eligibility for benefits under the resettlement program. For this reason, the resettlement program of the PGRH‘s Ponto Novo Dam offered free legal support to the affected population to (i) obtain the required personal documentation, (ii) regularize the land to be expropriated, and (iii) facilitate the allocation of residential lots in the resettlement site. For this purpose, the project allocated a full-time lawyer in the field office and contacted the judicial authorities of the Districts involved in the process. The regularization process began well in advance and gave the project credibility among the population, facilitating negotiations with families.65 148. Title to replacement lands: In cases where replacement properties are offered as compensation, it is critical to title these properties in a timely fashion. The resettlement program of the Rodoanel‘s South section was the most successful in this regard among the projects 64 Torres, 2005; World Bank, 2006. 65 Information provided by Maria de Auxiliadora Borges Ribeiro, analyst from the Department of Environment of the State of Bahia (IMA). 44 reviewed for this study. Most families received the title to their new homes before their relocation or soon after. Many of the resettled families became legal land owners for the first time. Having a property in their name gave them a sense of citizenship and facilitated their access to credit, which enabled many families to make additional investments in their homes. 149. Assistance after relocation: Resettlement programs in metropolitan areas in Brazil have increasingly adopted condominium-housing solutions (conjuntos habitacionais). This model usually leads to a substantial change in the way of life of affected populations, often accustomed to living in single family houses in informal settlements. It is thus necessary to include in the resettlement program educational activities focused on the use and proper maintenance of housing units and installed infrastructure. Programs that help affected populations adapt to the new living space have significantly reduced the emergence of conflicts, achieved a greater degree of satisfaction among the relocated population, and facilitated a faster achievement of self-sufficiency and independence from the project.66 150. The resettlement program of the West section of the Rodoanel maintained social assistance to families in the post-relocation stage, which lasted about 30 months. The outsourced consulting firm responsible for social management of the program maintained a social worker in each of the housing developments. Support after relocation consisted of (i) helping families manage the housing complexes; (ii) facilitating their integration into the life of the new community and its surroundings (for example, by providing support for the incorporation of children and adolescents into local schools and facilitating access to health service and public transportation); (iii) helping families resolve conflicts generated by their move; and (iv) providing information on new housing costs (water, electricity, gas, condominium, etc.). According to the residents of Mauá Housing Complex, these activities have facilitated their integration into the new housing environment.67 151. In the case of the Guarapiranga Project, the transfer of a large number of families from various slum areas to apartments in public housing complexes generated significant impacts on the residents‘ way of life, requiring behavioral adaptations, learning new rules of conviviality, and taking on responsibilities that were previously not part of their daily lives. To facilitate this process, the municipal government provided social support in the pre- and post-occupancy period. This included training residents on the use of the physical facilities of the buildings and on organizing themselves as residents. 66 This study found that in several resettled communities, especially in rural resettlement programs, it is not clear to the communities that the project implementation agency will not continue to provide of social, technical, or other types of assistance indefinitely after the resettlement program is concluded. 67 Interview with Eliete Lessa de Oliveira and Paula Regina Baess Valdambrine to the IBRD on 11/27/2009, at the Mauá Housing Development / São Paulo. 45 Challenges 152. In all of the projects analyzed, displaced persons were offered compensation for the loss of residential properties in cash or in kind (replacement housing), and the compensation covered at least part of the transaction costs. In addition, they were offered a moving allowance, as well as an allowance to cover the cost of temporary accommodations. However, the compensation did not cover certain transaction costs, such as the fees charged for the registration of properties or the regularization of titles. 153. In some projects, the compensation offered to affected families proved to be insufficient. This occurred in the case of the compensation provided to rural households displaced by the Castanhão Dam.68 Several factors contributed to this outcome, including: (i) resettlement costs were underestimated because of an inadequate inventory and valuation of affected assets; (ii) the areas designated for resettlement were acquired without a study of the productive potential of the land and, as a result, the plots allocated to the displaced families did not generate as much income as originally expected; and (iii) the training, income generation, and irrigation projects have not been fully implemented to date.69 154. In two projects reviewed as part of this study, Irapé and Castanhão, the process of titling the new homes of displaced families took a long time. Some of the families displaced by these projects still lacked title to their homes when the projects were visited by the study team. 155. Project implementation agencies must be prepared to deal with issues such as the lack of personal and property documentation. The fast provision of titles gives the implementation agency greater credibility among the resettled population. 156. Another common issue with resettlement programs in Brazil is the compensation for the displacement of business establishments. Many businesses, large and small, can be affected by land takings for development projects. In some projects, like the Recife Metro Project, the owners of formal and informal businesses were compensated for their losses following displacement. In other cases, however, providing compensation has been difficult, particularly in the case of informal businesses that do not keep good records, which makes it difficult to calculate revenue or profits. Both the legislation and practice for compensating business owners for their losses, particularly informal businesses, need to be strengthened. 157. Informal settlements in urban areas pose special challenges. Although the Federal Constitution requires the payment of compensation in cases of expropriation, the issue of squatters (occupants without legal rights to the land they occupy), known in Brazil as posseiros, is not addressed in the legislation. Many Brazilian cities have squatter settlements or favelas, often on public land and in high-risk areas, such as beneath power lines or areas subject to flooding or landslides. In addition, there are people who rent housing or business locations in favelas. 68 Lima (2007), Pontes (2004) and interview conceded by Raquel Cristina Vieira Batista Ponte at the DNOCS‘s headquarters in Fortaleza, Ceará, on 12/2/2009. 69 Queiroz, (2004). 46 158. Legally, occupants without land rights cannot be compensated, except in cases of adverse possession.70 However, the normal practice in Brazil is to provide some type of assistance to informal occupants. Satisfactory solutions have often been found for such families—for example, resettlement in housing projects, or providing some minimal cash compensation that is sufficient to purchase a small plot of land and build a house in a legal settlement. In the majority of the cases, compensation is paid for the value of the improvements on the land. The resettlement programs of Araçoiaba and Pesqueiro dams, which were part of the PROGERIRH project, recognized the squatters as a population affected by the project. They were resettled in ―agro-villages‖, received agricultural plots for exploitation, and benefited from technical assistance. 159. Favelas can be an induced impact of development projects. When the plans to build infrastructure projects become public, the project areas can be invaded by squatters who expect financial compensation. The establishment of a cut-off date for the provision of compensation and other entitlements is critical to avoid such invasions. Nevertheless, given that the establishment of cut-off dates is not required, projects become more susceptible to opportunistic illegal invasions. In the PROSAM São Paulo project, for example, the population to be benefited in the first seven favelas being rehabilitated increased by 16 percent from the time of initial registration until the time of resettlement.71 160. The adaptation of families from slum areas to apartments in public housing complexes is very difficult, even in cases where they the families are offered support during the pre- and post- occupancy period, as occurred in the case of the Guarapiranga Project. In this project, the social support and training provided to the resettled families were only partly successful. Approximately one third of them had problems adapting to apartment life, whether because of a lack of economic means to meet the payment of condominium fees (electricity, water, and administrative fees), or the lack of cultural ties in the new environment. Many indebted individuals transferred their properties to third parties and returned to the slums. One of the lessons learned from this project is that the selection process of the families that will be transferred to housing developments should be reviewed and should include an analysis of economic and cultural characteristics of families to be resettled.72 V.D. Institutional Arrangements during Resettlement Implementation 161. Successful resettlement requires good coordination among the entities involved in its implementation. Federal, state, and municipal agencies, along with public sector companies and private consulting firms can be involved in the implementation of a resettlement program. Depending on the project‘s complexity, different public entities may coordinate the various tasks—such as land and assets‘ expropriation and titling; preparation of socioeconomic studies; relocation, monitoring, and evaluation of the program; and the provision of technical assistance or social support to affected families. 70 With the approval of the Statute of the Cities (Law 10,257/01), urban adverse possession was recognized in real property of up to 250 m2, provided that the occupant does not have another real property. 71 Mejía, 1996. 72 World Bank 2004c, p.101. 47 162. Successful resettlement also requires coordination between the parties implementing resettlement and the companies that carry out the civil works. Coordination is essential to ensure that displaced people receive compensation and assistance in a timely manner. Good practices 163. In the Castanhao project, which involved rural and urban resettlement, the state government, with its specialized agencies in agriculture, infrastructure, and technical assistance—such as Ceara‘ Secretary for Infrastructure (SEINFRA), the Institute for Agrarian Development (IDACE), and the Secretary for Agriculture and Livestock (SEAGRI)— coordinated with the National Department of Works Against Drought (DNOCS) the works necessary for implementing the resettlement program. The institutional arrangements in this project allowed the intervention of experts who provided technical assistance and support to the resettled population. Challenges 164. Resettlement programs require close coordination among the various institutions that play a role in the resettlement process. The lack of coordination among the various institutions that implement the resettlement program can conspire against the timely implementation of both the resettlement program and project construction. The resettlement model adopted in the Aracoiaba Weir Project —agricultural village and irrigated agriculture, in a community previously accustomed to rainfed agriculture— required that the implementation and monitoring of the resettlement program be entrusted to various institutions with different expertise (e.g. DNOCS, Emater, and IDACE). However, the lack of sufficient coordination and dialogue between the institutions responsible for the program created a lot of confusion among the affected communities. When the study team visited this project, the affected communities still did not have a clear understanding of their entitlements and the procedures that they needed to follow to seek compensation or assistance. 165. The schedule of resettlement implementation needs to be linked to the schedule of project construction. A timing mismatch between the two schedules can delay projects and/or cause conflicts between the project entities and the affected communities. The Castanhão Dam illustrates this point. The Dam started operations in 2003 without the completion of the resettlement program and without the payment of compensation. When the construction of the dam began, the exact number of people who could be affected was not accurately known, and after the dam began operating, there was a drastic reduction in the pace of resettlement implementation. In 2005, almost 10 years after the beginning of the civil works, 42 percent the families registered for resettlement had not been transferred.73 Moreover, among the families that received new housing, many still cannot restore their productive activities. This is the case, for example, of the Irrigation Projects Curupati (155 families), Mandacaru (240 families), and Alagamar (185 families). In the last two, as of December 2009 the irrigation systems had not yet been installed. As a result, many families have opted for emigration. 73 Lima, 2007. 48 166. Delays in resettlement implementation can cause additional problems. Property owners are negatively affected if too much time passes between the Declaration of Public Utility (DPU) of the project area and resettlement implementation. Property owners often stop maintaining property while awaiting resettlement, resulting in a deterioration of living standards. This is because property owners are not compensated for improvements made in their properties after the publication of the DPU. V.E. Monitoring and Evaluation 167. Monitoring and evaluation activities help verify whether the objectives of a resettlement program are being, or have been achieved or not, and help identify the problems in implementation. The projects that do not adopt rigorous monitoring encounter difficulties: non- compliance with deadlines, dissatisfaction of the affected population, and conflicts among the actors involved in the resettlement process. The lack of ex-post evaluations impedes the identification of problems of the resettled families that remain unresolved and limits the ability of the implementing agencies to learn from resettlement experiences and incorporate lessons learned into future projects. Good practices 168. The Guarapiranga Project conducted a satisfaction survey among the resettled families and the Rodoanel program outsourced the monitoring of resettlement implementation. An ex- post evaluation was carried out for the Castanhão dam. None of the other projects included in this study carried out an ex-post evaluation, but the UHE Irapé project, completed in 2005, was planning to carry out an ex-post evaluation at the time of the writing of this report. 169. The ex-post evaluations for the Castanhão Dam were carried out through a partnership between the National Department of Works against the Drought (Departamento Nacional de Obras Contra a Seca, DNOCS) and the State of Ceará‘s Secretariat for Water Resources (Secretaria de Recursos Hídricos, SRH-CE). This project was completed in 2003, after ten years of civil works. The project caused the involuntary resettlement of 2,268 families living in rural areas and 1,720 families living in urban areas. The ex-post evaluations indicated that the compensation program was fairly successful. The resettlement program provided replacement properties to the affected owners. However, income restoration efforts were less successful and their implementation was slow. A program to promote income-generating activities, for instance through the implementation of irrigation systems in the rural areas, was still incomplete at the time of the writing of this report; approximately 35 percent of the activities planned had not been implemented.74 The ex-post evaluation helped identify several issues and problems in resettlement implementation. Challenges 170. Brazilian legislation does not require ex-post evaluations of resettlement programs and environmental agencies do not regularly monitor the implementation of resettlement programs, 74 Information obtained from the coordinator of the Complexo Geral do Castanhão, José Ulisses de Souza, in an interview granted to the World Bank on 06/23/2009, at the headquarters of the coordinators of the Castanhão – Vale do Jaguaribe, Ceará. 49 unless there is some kind of complaint. These agencies lack sufficient personnel to conduct regular monitoring of all the licensed projects. Some monitoring tends to occur after the Preliminary License (PL) is issued and before the granting of the Installation License (IL) and the Operation License (OL). But even then, there is not sufficient technical staff to perform the work, according to staff of the environmental institutions interviewed for this study. 171. The international financing agencies are usually the only ones that recommend ex-post evaluations of resettlement programs. However, ex-post evaluations are rare even in the programs supported by international organizations. Thus, it is difficult to know if a resettlement program has achieved its objectives, especially in terms of the restoration of sources of income and livelihoods. The evaluations are restricted to the examination of compensation for the loss of assets, which can be more easily verified. 50 VI. Conclusions and Recommendations 172. The purpose of this study was to examine the design and implementation of involuntary resettlement programs resulting from development projects in Brazil with the view to identify good practices, and areas for improvement, that could inform future resettlement planning and implementation in the country. While there is room for further research, the overall finding of this study is that Brazilian authorities recognize involuntary resettlement as a significant issue in the country‘s development agenda, and they have made significant improvements in various aspects of resettlement policy, planning, and implementation over the past few years. However, there are a few additional areas in which further improvement needs to be made to place Brazilian resettlement at par with good international practice. Also, while there are several good practice elements of resettlement evident in some Brazilian projects, they are not a part of established practice on resettlement in the country, and are often the result of ad-hoc efforts made at the project level in response to a variety of factors. 173. Salient recommendations of this study, divided into the categories of Identification and Mitigation of Impacts, Institutional Responsibility, Costing and Budgeting, Meaningful Consultations, Grievance Redress, Monitoring and Evaluation are discussed below. The section also discusses three potential approaches to integrate these substantive recommendations into a comprehensive policy framework. Identification and Mitigation of Impacts 174. Identify and mitigate the entire range of adverse impacts associated with land acquisition. Current resettlement practice in Brazil focuses almost exclusively on those who lose their land due to a development projects and have legal title to these lands. Those who use the land informally or temporarily are not entitled to any resettlement assistance. Similarly, the impact on livelihoods and income streams of affected people is not adequately taken into account while determining the compensation that is provided to them. Resettlement practice in Brazil needs to adequately capture the entire range of adverse impacts associated with land expropriation, and needs to put in place mitigation measures that address all categories of impacts that are identified. 175. Improve compensation practices. Reform is needed to address five limitations of the method of calculating compensation for expropriated assets: (i) the compensation for the loss of land is based on market value, but does not cover transaction costs, such as the fees charged for the registration of properties or the regularization of titles, which can often be significant; (ii) national legislation does not require the provision of assistance to people who need to physically relocate as a result of expropriation; (iii) the calculation of compensation for houses and other structures takes into account their depreciation and, therefore, it is often not sufficient to replace the structures where new materials must be purchased to rebuild them (if a structure of similar characteristics cannot be purchased in the market), and (iv) compensation often does not take into account the need to initiate alternative livelihoods in order to restore income streams to the pre-resettlement level. 51 Institutional Responsibilities 176. Assign institutional responsibilities for resettlement planning, implementation, and monitoring as a first step to promote stronger institutional capacity in the medium term. Unless clear institutional responsibilities are established, both at the project and at the sector, state and national level, efforts to build capacity on resettlement planning and implementation will not bear optimal results. 177. Further explore the promising institutional model of public-private partnerships where resettlement planning and implementation is contracted out to private consulting firms. Land acquisition and resettlement activities can often be carried out efficiently and effectively by specialized private entities (consulting firms and experienced NGOs), acting as agents of and under the supervision of project implementing agencies. Costing and Budgeting 178. The licensing process should ensure adequate costing and budgeting of resettlement. Plans submitted to obtain the Installation License (IL) need to include detailed costs and budgets for resettlement, and annual budget requirements for resettlement should be spelled out. Grievance Redress 179. Facilitate increased access of displaced populations to accountability mechanisms that already exist in Brazil. There are adequate mechanisms for redressing the grievances of affected people in Brazil, although the knowledge about such mechanisms, as well as access to them varies across the country. Efforts need to be made at the project level to facilitate easy access to such existing grievance redress mechanisms. Meaningful Consultations 180. Mainstream the practice of meaningful consultations, evident in many Brazilian projects. The requirement for consultations enshrined in the licensing process is a significant, positive feature of resettlement in Brazil. Many projects promote meaningful consultations with the affected people, and make systematic efforts to incorporate their views and suggestions into the resettlement program. The practice of meaningful consultations evident in these projects needs to be mainstreamed across all projects, so that it becomes a routine feature of resettlement in the country. Monitoring and Evaluation 181. Mandate monitoring and evaluation of all resettlement programs above a certain threshold. The environmental licensing agencies need to ensure that resettlement plans include monitoring and evaluation activities. Projects requiring large scale or complex resettlement should have a strong monitoring and evaluation system in place and should include an ex-post assessment of the resettlement program. Monitoring and evaluation activities can be carried out with the support of specialized consulting firms. For projects involving small scale land acquisition and limited resettlement, the project agencies could carry out the monitoring of resettlement implementation by themselves. 52 Legal and policy framework 182. In order to be mainstreamed and uniformly complied with, the above, substantive improvements needed in resettlement practice need to be integrated into a policy framework that would form the basis for resettlement planning and implementation in Brazil. This can be accomplished through three potential policy options, which are not mutually exclusive, that would help bring about important improvements in resettlement outcomes: a. Prepare a national policy on involuntary resettlement (paras 186, 187) b. Strengthen the Environmental Licensing process to include a more explicit emphasis on resettlement issues (para 193) c. Introduce resettlement requirements as a pre-requisite to access funds under sectoral programs (para 194) 183. The three approaches are described in further detail below: 184. Prepare a National policy / guidelines on involuntary resettlement: There is no overarching legislation specifically addressing involuntary resettlement issues in Brazil. Involuntary resettlement in the country is mainly covered in federal and state legislation related to land acquisition and expropriation. There is no legal framework with the specific objective of restoring income and livelihoods of persons displaced by development projects. The revised legal framework could take the form of national guidelines on resettlement that can then be adapted to the operational realities of different sectors and states, through specific decrees issued by them. The regulation already present in the hydropower sector, and the practices pioneered by its major public entities, such as Eletrobrás, may serve as a useful starting point for such guidelines. The country may benefit, along the lines of what China and India have been trying to do, from developing national policies and guidelines on resettlement, which can then inform resettlement policy formulation at the level of states, sectors and municipalities. A coherent policy framework on resettlement could help address inconsistencies that currently exist with respect to identification of land acquisition and resettlement impacts, providing compensation and other forms of assistance to address these impacts, preparing adequate resettlement plans, consultations and participation with affected people, providing access to grievance redress mechanisms, and monitoring and evaluation. 185. Several large countries undergoing rapid growth in infrastructure development—similar to what Brazil is poised to experience over the next few years—have established national policy frameworks for addressing resettlement issues beyond those covered by legislation on land acquisition and expropriation. China and India are particularly notable in this respect, as they share many of the same characteristics as Brazil: large countries with many states, sectors, and parastatal organizations involved in land acquisition and resettlement activities, along with a wide variation in socioeconomic contexts in which resettlement takes place. They are also trying to establish national level policies or guidelines to be then adapted by states, sectors, and organizations to suit their needs, while adhering to basic standards enshrined in these policies. 53 187. In China, land acquisition and resettlement is governed by an overarching federal "Land Administration Law" that covers all land related issues. The law includes provisions on land acquisition and resettlement, and the formulae for calculating compensation. It forms the basis of more elaborate provincial—and in some cases, municipal and prefecture—level regulations for resettlement. 188. Given the special context of resettlement related to reservoirs (for power and irrigation), the "Decree on Resettlement And Rehabilitation for Large and Medium Reservoirs" was promulgated and updated over the years following amendments in the Land Administration Law. On the urban front, the need for a greater emphasis on urban resettlement policy development—especially at the local level—is also a high priority, given rapid urbanization, an increasing recognition of individual rights, and an active media role in coverage of resettlement issues. A draft national policy on resettlement has been tabled in the national congress on several occasions, although it is yet to be approved. 189. In India, a national policy on resettlement was approved in 2003 and revised in 2007, but it has not yet been promulgated as a law. The policy is applicable throughout the country and to all sectors, setting minimum standards for resettlement and economic rehabilitation of people affected by development projects. States are required to formulate state-specific resettlement policies which should, at least, meet the minimum standards set out in the national policy. 190. Establish minimum standards for resettlement planning and practice as part of the environmental licensing process. These standards could be established through a CONAMA resolution making compliance with specific requirements for projects involving resettlement a precondition for the granting of environmental licenses. Below are some preconditions that could lead to significant improvements in resettlement planning and implementation: (a) Suggested preconditions for granting the Preliminary License – PL in projects involving resettlement:  Require consideration of resettlement impacts in the analysis of alternatives in the EIA, based on estimates of the number of houses and other types of structures, as well as people affected under each alternative being considered; and  Include a preliminary description of the proposed resettlement program in the EIA, based on the basic engineering study and including the following elements: (i) principles governing the compensation, relocation and rehabilitation of displaced persons (ii) initial estimates of the population displaced under each alternative being considered for the proposed project site or alignment; (iii) a clearly defined cutoff date to discourage encroachment of the project area purely for the purpose of unduly benefitting from the resettlement program; (iv) eligibility criteria for defining the categories of displaced persons; (v) organizational arrangements for planning and implementing the resettlement program; (vi) arrangements for funding land acquisition and resettlement. 54 (b) Suggested preconditions for granting the Installation License – IL in projects involving resettlement:  Require compliance with all the requirements or conditions set out in the PL, including those related to resettlement, with additional information on the following: (i) an inventory of affected assets (physical cadastre) and a census of the population affected (social cadastre); (ii) method of calculating compensation and other assistance under the resettlement program; (iii) institutional responsibility for implementing the resettlement program; (iv) linkage of proposed construction schedule with the progress in resettlement implementation; (v) cost estimates and budget for the resettlement program, including annual allocations; (vi) mechanisms for consultations with, and participation of, displaced persons in planning, implementation and monitoring of resettlement; (vii) grievance redress mechanisms, and (viii) arrangements for monitoring and evaluation of the resettlement program. This information should be summarized in a resettlement plan covering the above elements. (c) Suggested preconditions for granting the Operations License – OL in projects involving resettlement:  Require compliance with all the requirements and conditions set out in the IL, including those related to resettlement before the OL is issued;  The granting of the OL should be accompanied by specifications of conditions that need to be met, within a specified period of time, with respect to implementation of the resettlement plan (especially in the case of projects that cause economic displacement, i.e., loss of income or livelihoods, where the resettlement plan may not be fully implemented at the time of the granting of the OL);  Undertake a new valuation of affected properties if three years pass from the initial valuation to the payment of compensation or the provision of replacement properties. 191. Minimum standards for resettlement would reduce both the uncertainty and the degree of discretion in defining entitlements of persons and communities affected by projects. Therefore, minimum standards would facilitate the land acquisition process and avoid project delays. Projects in key sectors, particularly in the energy sector, have been delayed due to excessive demands from local communities, often influenced by environmental NGOs that oppose hydroelectric projects. Minimum standards would ensure adequate compensation to affected people, while reducing the potential for political outsiders to manipulate the compensation process. 192. Formulate resettlement guidelines that sub-national governments would need to follow as a requirement if they want to access PAC funds (such as those under PAC urbanizacao): Under this scenario, the resettlement policy guidelines would not be binding for all land acquisition and resettlement carried out in a state, but will need to be followed if the respective state want to access PAC funds. Additional assistance such as free TA could also be provided as an incentive for states to follow the established resettlement guidelines. 55 References Bhattarai, A.M. 2001. Displacement and Rehabilitation in Nepal: Law, Policy and Practice. New Dheli: Anmol Publications. Brooke, Mcdolnad; Webber, Michael; Yuefang, Duan. 2008. ‗Involuntary Resettlement as an Opportunity for Development: The Case of Urban Resettlers of the Three Gorges Projects, China.‘ Journal of Refugees Studies. Oxford University Press. Caixa Econômica Federal. ―Caderno de Orientação Técnico Social.‖ 2009. Caixa Econômica Federal, Brasília. Casa Civil. ―Relatório Final do Grupo de Trabalho Interministerial Atingidos por Barragens.‖ 2004. Presidência da República, Câmara de Política Social, Brasília. Cernea, Michael. 1999. ‗Involuntary Resettlement and Development: Some projects have adverse Social Effects. Can these be Prevented?‘. Finance and Development 33(3): 44:46. ______. 2000. ‗Risks, Safeguards and Reconstruction: A Model for Population Displacement and Resettlement‘, in Cernea, M. and McDowell, C (eds.) Risks and Reconstruction: Experience of Resettlers and Refugees. Washington: The World Bank. Companhia Energética de Minas Gerais (CEMIG). 2001. Usina de Irapé. Belo Horizonte: CEMIG. DERSA – Desenvolvimento Rodoviário S/A. ―Relatório para a Fase de LI‖. 2001. DERSA, São Paulo. ______. ―Reassentamento de Famílias – Trecho Oeste do Rodoanel Mário Covas‖. 2003. DERSA, São Paulo. ______. ―Relatório para a Fase de Renovação da LO‖. 2006. DERSA, São Paulo. ______. ―Gerenciamento Social - Rodoanel Mário Covas – Trecho Sul‖. 2007. DERSA, São Paulo. Giovannetti, Frederic. ―Urban Resettlement Guidance Note‖. 2008. World Bank, Washington, DC. Giglio, Germana de Mattos Brito Góes. ―Normas sobre Desapropriações, Indenizações e Reassentamento Involuntário no Processo Administrativo‖. 2000. Governo do Estado do Ceará, Fortaleza, Ceará. Governo do Estado de São Paulo - Secretaria de Energia, Recursos Hídricos e Saneamento. ―Relatório Final, do Programa de Saneamento Ambiental da Bacia da Guarapiranga, Acordo de Empréstimo BIRD no 3504.0 – BR‖. 2003a. Governo do Estado de São Paulo, São Paulo. 56 Governo do Estado de São Paulo - Secretaria de Energia, Recursos Hídricos e Saneamento: ―Relatório de Avaliação Ex-post, do Programa de Saneamento Ambiental da Bacia da Guarapiranga‖. 2003b. Governo do Estado de São Paulo, São Paulo. Governo do Estado de Santa Catarina. ―Programa Santa Catarina Rural: Marco de Reassentamento Involuntário‖. 2009. Governo do Estado, Santa Catarina, Paraná. Lazaro, Victoria Florian S. et al. ―Indigenous Peoples Rights Act: Legal and Institutional Frameworks, Implementation and Challenges in the Philippines.‖ Discussion papers, East Asia and Pacific Region. Social Development, and Rural Development, Natural Resources and Environment Sectors. 2008. World Bank, Washington, DC. Lima, Francisco Pardaillan Farias 2007. Castanhão, Do Sonho à Realidade. Fortaleza: Expressão Gráfica e Editora. Mejía, Maria Clara. 1996. ―Involuntary Resettlement of Urban Population: Experiences in WB- Financed development Projects in Latin America.‖ LATEN Dissemination Note # 16. World Bank, Washington, DC. Moura, Zuleica. 2004a. Proposta para Regulamentar a Elaboração e Aplicação de Xadastro Socioeconômico, no Âmbito do Licenciamento de Empreendimentos Hidrelétricos e do Processo de Desapropriação para Fins de Utilidade Pública. RT1: Avaliação da Aplicabilidade dos Cadastros SocioeconômicosUtilizados atualmente por Meio de Análise Comparativa das Informações Solicitadas nos Cadastros Submetidos aos Órgãos Ambientais de Licenciamento, no Âmbito do Licenciamento Ambiental, e à ANEEL, para Efeito de Aplicação da Declaração de Utilidade Pública. Brasília: Ministério de Minas e Energia/ Programa das Nações Unidas para o Desenvolvimento. ______. 2004b. Proposta para Regulamentar a Elaboração e Alpicação de Cadastros Socioeconômicos, no Âmbito do Licenciamento de Empreendimentos Hidrelétricos e do Processo de Desapropriação para Fins de Utilidade Pública. RT2: Sistematização das Situações que Exigem Cadastro e o Modelo a ser Aplicado, por Meio da Contextualização do Conceito de Atingido por Barragens. Brasília: Ministério de Minas e Energia/ Programa das Nações Unidas para o Desenvolvimento. Prefeitura do Município de São Paulo – Secretaria da Habitação e Desenvolvimento Urbano. ―Relatório de Acompanhamento Social – Programa Guarapiranga‖. 1999. Prefeitura do Município de São Paulo, São Paulo. Queiroz, Raquel. 2004. Reassentamento Involuntário de Populações Atingidas pela Construção de Obras de Infra-Estrutura Hídrica – O Caso da Barragem do Castanhão no Estado do Ceará. Barcelona: Universidade de Barcelona, Faculdade de Geografia e História. Secretaria de Recursos Hídricos, Saneamento e Habitação da Bahia. ―Sistema de Reassentamento Ponto Novo – Volume I‖. 1997. Ponto Novo, Bahia. 57 ______. ―Sistema de Reassentamento Ponto Novo – Volume 2‖. 1997. Ponto Novo, Bahia. Shihata, Ibrahim. 1991. ‗Involuntary Resettlement in World Bank Financed Projects‘, in The World Bank in a Changing World, Tschofen, Franziska and Parra, Antonio R. (eds.). Dordrecht/ Boston/London: Martinus Nijhoff Publishers. The Inspection Panel. Inspection Panel Annual Report. 2008. Washington, DC: World Bank. Torres, Armando. Governo do Estado da Bahia. ―Os Reassentamentos Realizados na Bahia dentro do PGRH‖. 2005. Secretaria de Recursos Hídricos, Fortaleza, Ceará. ______. ―Reassentamento de Ponto Novo – Lições Aprendidas‖. 2005. Secretaria de Recursos Hídricos, Fortaleza, Ceará. World Bank. ―Recent Experience with Involuntary Resettlement.‖ Report No. 17538. Operations Evaluation Department. 1998. World Bank, Washington, DC. ______. ―Involuntary Resettlement: The Large Dam Experience.‖ World Bank Operations Evaluation Department. Number 194. Précis. 2000. World Bank, Washington, DC. ______. 2004a. Involuntary Resettlement Sourcebook: Planning and Implementing in Development Projects. World Bank: Washington, DC. ______. ―Implementation Completion Report – Ceará Urban Development and Water Resources Management‖ (CPL-37890). Report No: 4721 5-BR. 2004b. World Bank, Washington, DC. ______. ―Implementation Completion Report – Water Quality and Pollution Control Project‖ (CPL-35030 CPL-35040 CPL-35050). Report No: 28962. 2004c. World Bank, Washington, DC. ―Implementation Completion Report – Bahia Water Resources Management Project‖ (CPL- 42320 TF-29191). Report No: 35591. 2006. World Bank, Washington, DC. ______. ―Latin America and the Caribbean Region: The Path to Use of Country Systems‖. Brazil. 2007. World Bank, Washington, DC. ______. ―Environmental Licensing for Hydroelectric Projects in Brazil‖. Report No. 40995. Latin America and the Caribbean Region. 2008. World Bank, Washington, DC. ______. ―Feedback Matters - Designing Effective Complaints Handling Mechanisms‖, Demand for Good Governance ―How To‖ Learning Note Series, Social Development Department. 2009. World Bank, Washington, DC. ______. ―Social and Environmental Safeguards Assessment‖, prepared for the Solid Waste Management and Carbon Finance Project (P106702). 2009. World Bank, Washington, DC. 58 Annex I: Legislation Consulted Decreto Estado de São Paulo 49.808, de 21/09/2005: Estabelece as Diretrizes de atenção aos povos indígenas às comunidades indígenas situadas no território do Estado de São Paulo. Decreto Federal 4.339 de 22/08/2002: Institui princípios e diretrizes para a implementação da Política Nacional da Biodiversidade. Decreto Município de São Paulo 49.494, de 16/05/2008: Estabelece os procedimentos administrativos a serem adotados pelo Executivo para a outorga de concessão de uso especial e de concessão de direito real de uso para fins de moradia, bem como de autorização de uso para fins comerciais, institucionais ou de serviços aos ocupantes de áreas públicas municipais destinadas à promoção do Programa de Regularização Urbanística e Fundiária. Decreto Município de São Paulo 49.498, de 16/05/2008: Dispõe sobre a desafetação de áreas públicas municipais. Decreto Município de São Paulo 50.139, de 22/10/2008: Dispõe sobre a desafetação de áreas públicas municipais, situadas em zonas especiais de interesse social. Lei Delegada do Estado da Bahia, no31, de 1983 - Cria o Centro de Recursos Ambientais - CRA e dá outras providências. Lei 6.855, Estado da Bahia, 1995 – Dispõe sobre a Política, o Gerenciamento e o Plano Estadual de Recursos Hídricos. Lei 7.799, Estado da Bahia, 2001 – Institui a Política Estadual de Administração dos Recursos Ambientais e dá outras providências. Lei 8.538, Estado da Bahia, 2002 – Modifica a estrutura organizacional da Administração Pública do Poder Executivo Estadual e dá outras Providências – Cria a Secretaria de Meio Ambiente e Recursos Hídricos, com a finalidade de formular e executar a política estadual de ordenamento ambiental, de desenvolvimento florestal e de recursos hídricos, tendo a seguinte estrutura básica. Lei 9.832, Estado da Bahia, 2005 – Dispõe sobre a Fiscalização de Atividades Utilizadoras de Recursos Naturais e de Atividades Potencialmente Poluidoras do Meio Ambiente. Lei 10.431, Estado da Bahia, 2006 – Dispõe sobre a Política de Meio Ambiente e de Proteção à Biodiversidade do Estado da Bahia e dá outras Providências. Lei 10.432, Estado da Bahia, 2006 – Dispõe sobre a Política Estadual de Recursos Hídricos, cria o Sistema Estadual de Gerenciamento de Recursos Hídricos e dá outras providências. Lei 11.478, Estado da Bahia, 2009 – Aprova o Plano Estadual de Adequação e Regularização Ambiental e da outras providências. Lei 12.233, do Estado de São Paulo, de 06/01/2006 – Lei da Guarapiranga - Define a �rea de Proteção e Recuperação dos Mananciais da Bacia Hidrográfica do Guarapiranga e dá outras providências. Lei 12.812, Estado de Minas Gerais, de 28/04/1998 – Regulamenta o parágrafo único do Article 194 da Constituição do Estado, que dispõe sobre a assistência social às populações de áreas inundadas por reservatórios, e dá outras providências. 59 Lei 13.370, do Município de São Paulo, 2004 – Dispõe sobre a adoção de medidas pelo Executivo Municipal que priorizem o atendimento da mulher como beneficiária dos programas de Habitação de Interesse Social. Lei 13.507, do Estado de São Paulo, de 23/04/2009 – Dispõe sobre o Conselho Estadual de Meio Ambiente - COSEMA, e dá providências correlatas. Lei 13.542, do Estado de São Paulo, de 08/05/2009 - Altera a denominação da CETESB - Companhia de Tecnologia de Saneamento Ambiental e dá nova redação aos artigos 2º e 10 da Lei nº118, de 29/06/1973. Lei 13.579, do Estado de São Paulo, de 13/07/2009 – Lei da Represa Bilings - Define a �rea de Proteção e Recuperação dos Mananciais da Bacia Hidrográfica do Reservatório Billings - APRM-B, e dá outras providências correlatas. Lei 13.662, Estado de Minas Gerais, de 17/07/2000 – Institui no Estado o Fundo Rotativo de Fomento à Agricultura Familiar e de Viabilização de Assentamentos Agrários - FOMENTAR-TERRA - e dá outras providências. Lei 15.012, Estado de Minas Gerais, de 15/01/2004 – Altera dispositivos da Lei nº 12.812, de 28 de abril de 1998, que regulamenta o parágrafo único do Article 194 da Constituição do Estado, o qual dispõe sobre a assistência social às populações de áreas inundadas por reservatórios, e dá outras providências. Lei Federal 6.938, de 31/08/1981: Política Nacional do Meio Ambiente, seus fins e mecanismos de formulação e aplicação, e dá outras providências. Lei Federal 9.605, de 12/021998: Lei dos Crimes Ambientais - Dispõe sobre as sanções penais e administrativas derivadas de condutas e atividades lesivas ao meio ambiente, e dá outras providências. Lei Federal 11.977, de 07/07/2009: Programa Minha Casa, Minha Vida. Resolução CONAMA – Conselho Nacional do Meio ambiente no 01/86, de 23/01/1986: Dispõe sobre critérios básicos e diretrizes gerais para o Relatório de Impacto Ambiental – RIMA. Resolução CONAMA – Conselho Nacional do Meio ambiente no 06/87, de 16/09/1987: Dispõe sobre o licenciamento ambiental de obras do setor de geração de energia elétrica. Resolução CONAMA – Conselho Nacional do Meio ambiente no 09/87, de 03/12/1987: Dispõe sobre a questão de audiências Públicas. Resolução CONAMA – Conselho Nacional do Meio ambiente no 010/87, de 02/12/1987: Dispõe sobre o ressarcimento de danos ambientais causados por obras de grande porte. Resolução CONAMA – Conselho Nacional do Meio ambiente no 07/90, de 17/10/1990: Dispõe sobre a Composição das Câmaras Técnicas. Resolução CONAMA – Conselho Nacional do Meio ambiente no 014/90, de 06/12/1990: Dispõe sobre a criação da Câmara Técnica de proteção ao patrimônio dos povos da floresta. Resolução CONAMA – Conselho Nacional do Meio ambiente no 237/97, de 22/12/1997: Dispõe sobre a revisão e complementação dos procedimentos e critérios para o licenciamento ambiental. 60 Resolução CONAMA – Conselho Nacional do Meio ambiente no 279/01, de 27/06/2001: Estabelece procedimentos para o licenciamento ambiental simplificado. 61 Annex II: Applicable Legislation Federal Legislation Federal Constitution Article 5, sub-section ―Right to property will be assured.‖ XXII Article 5, sub-section ―Property will meet its social function.‖ XXIII Article 5, sub-section ―The law will establish the procedures for expropriation by public XXIV necessity or use, or by social interest, against fair and previous indemnity in money, except for the cases provided for in this Constitution.‖ Article 6 ―Education, health, labor, housing, leisure, safety, welfare, protection to motherhood and childhood, assistance to the helpless, are all social rights, as provided for in this Constitution.‖ Article 22 ―The Union shall privatively rule on: (...) II – expropriation.‖ Article 37, ―Article 37. Direct and indirect administration of any Powers of the paragraph 6 Union, States, Federal District and Municipalities shall obey the principles of legality, morality, publicity and efficiency, and also to the following: (...) paragraph 6 – Legal entities of private law and those of private law providing public services will be liable for any damage that its agents, acting as such, may cause to third parties, assured the right of recourse against the liable party, in cases of fraud or fault.‖ Article 37, sub- ―XXI – except for the cases specified in law, the public works, services, section XXI purchases and disposals will be contracted by a public bidding process, assuring equal condition to all bidders, with clauses establishing payment obligations, maintenance of effective conditions of the proposal, as provided by the law, which only will enable the technical and economical qualification requests that are essential to the fulfillment of obligations.‖ Article 127 ―Article 127 –The Public Prosecution Service is a permanent institution, essential to the judiciary function of the State, in charge of the defense of the legal order, the democratic regimen and inalienable social and individual interests.‖ Article 129, sub- “Article 129 – The following are institutional functions of the Public sections II, III and V Prosecution Service: (...) II – zeal for the effective respect, by the Public Authorities and services of public relevance, regarding to the rights assured in this Constitution, taking the required measures to guarantee such assurance; III – promote public investigations and public civil actions for protection of the public and social wealth, the environment and other diffuse and collective interests; (...) V – judicially defend the rights and interests of indigenous 62 populations;‖ Article 182 ―The urban development policy exercised by the municipal Public Authority, according to general guidelines established in the laws is aimed to organize the full development of the social functions of the city and assure the welfare of its inhabitants. (...) paragraph 3 – The expropriation of urban properties will be made against previous and fair compensation in money.‖ Article 184 ―Article 184.The Union will be entitled to expropriate by social interest, for agrarian reform purposes, any rural property which is not fulfilling its social function, against previous and fair compensation in agricultural debt securities, with clause to preserve the real value, redeemable within twenty years, as of the second year of respective issue, and whose use will be defined by law. paragraph 1 – Useful and necessary improvements will be compensated in money. (...) paragraph 3 – The supplementary law shall establish special contradictory procedures of summary proceedings, for the legal process of expropriation.‖ Article 216 ―Article 216. The assets of material and immaterial nature, individually or together, bearing references to the identity, action, memory of the different groups forming the Brazilian society are Brazilian cultural heritage, this including: I –forms of expression; II – ways of creating, doing and living; III – scientific, artistic and technological creations; IV – works, objects, documents, buildings and other spaces destined to artistic-cultural manifestations; V – urban complexes and sites of historical, natural, artistic, archaeological, paleontological , ecological and scientific value. paragraph 1 – The Public Authority, in collaboration with the community, will promote and protect the Brazilian cultural heritage by means of inventories, records, surveillance, listing as historical assets and expropriation, and by other ways of precaution and preservation. (...) paragraph 4 – Damages and threats to the cultural heritage will be punished in accordance with the law. paragraph 5 – All documents and sites bearing historical reminiscences of old quilombos (slave refugees camps) are listed as historical.‖ Article 225, sub- ―Article 225. Everyone is entitled to an ecologically balanced section III, environment, as an asset of common use for the people, essential to a paragraph 1 healthy quality of life, being a duty of the Public Authorities and the community to defend and preserve it for the present and future generations. paragraph 1 –In order to assure the effectiveness of this right, the Public Authorities shall: (...) III – define, in all the units of the Federation, the territorial spaces and respective components to be protected, with any change or suppression only being allowed by law, prohibited any use that may compromise the integrity of the attributes justifying their protection.‖ 63 Article 231 ―Social organization, customs, languages, beliefs and traditions shall be granted to the Indians, plus the originary rights to the lands effectively occupied by them, with the Union being responsible for demarcating and protecting it, and enforcing the respect to all of its assets.‖ Constitutional Transitory Provisions Act - ADCT Article 68 ―The definitive property of the land shall be granted to the remnants of quilombo communities, and the State shall issue the respective ownership titles.‖ Federal Laws Federal Law No. Provides for Programa Minha Casa, Minha Vida – PMCMV (My 11.977, of July 07, Home, My Life Program) and land regularization of settlements 2009 located in urban areas; amends Decree-Law No. 3.365, of June 21, 1941, Laws No. 4.380, of August 21, 1964, 6.015, of December 31, 1973, 8.036, of May 11, 1990, and 10.257, of July 10, 2001, and the Provisional Measure No. 2.197-43, of August 24, 2001; and makes other provisions. Federal Law No. Provides for land regularizations of occupations occurred in lands 11.952, of June 25, located in areas of the Union, within the Legal Amazon sphere; amends 2009 Laws No. 8.666, of June 21, 1993, and 6.015, of December 31, 1973; and makes other provisions. Federal Law No. Provides new wording to paragraph 2-B of article 17 of Law No. 8.666, 11.763, of August 01, of June 21, 1993, regulating sub-section XXI of the caput of article 37 2008 of the Federal Constitution, and establishes rules for public administration biddings and contracts. Federal Law No. Establishes the Civil Code. 10.406, of January 10, 2002 Federal Law No. Regulates articles 182 and 183 of the Federal Constitution, establishes 10.257, of July 10, general guidelines for urban policies and makes other provisions. 2001 Federal Law No. Regulates article 225, paragraph 1, sub-sections I, II, III and VII of 9.985, of June 18, Federal Constitution, establishes the National System of Nature 2000 Conservation Units and makes other provisions. Federal Law No. Provides for penal and administrative sanctions derived from behaviors 9.605, of February and activities harmful to the environment. 12, 1998 Federal Law No. Regulates paragraph 3 of article 226 of the Federal Constitution. 9.278, of May 10, 1996 Federal Law No. Establishes the rules for granting and prorogation of concessions and 9.074, of July 07, permits for public services, and makes other provisions. 1995 Federal Law No. Provides for the concession and permits regimen related to public 8.987, of February services provision, provided in article 175 of the Federal Constitution, 13, 1995 and makes other provisions. Federal Law No. Regulates article 37, sub-section XXI, of the Federal Constitution, 8.666, of June 21, establishes rules for Public Administration biddings and contracts and 1993 makes other provisions. Federal Law No. Provides for the regulation of constitutional provisions related to the 64 8.629, of February agrarian reform, provided in Chapter III, Title VII, of the Federal 25, 1993 Constitution. Federal Law No. Regulates the public civil liability action for damages caused to the 7.347, of July 24, environment, to the consumer, to assets and rights of artistic, aesthetic, 1985 historic, tourist and natural value. Federal Law No. Provides for the National Environment Policy, its purposes and 6.938, of August 31, mechanisms of formulation and implementation, and makes other 1981 provisions. Federal Law No. Provides for Urban Soil Parceling and makes other provisions. 6.766, of December 19, 1979 Federal Law No. Establishes the Rules of the Agricultural Law, provides for the 4.947, of April 06, Organization and Operation System of the Brazilian Institute of the 1966 Agrarian Reform, and makes other provisions. Federal Law No. Establishes the Forestry Code. 4.771, of September 15, 1965 Federal Law No. Defines the cases of expropriation by social interest and provides for 4.132, of September the respective application. 10, 1962 Federal Law No. Provides for the Land Statute, and makes other provisions. 4.504, of November 30, 1964 Federal Law No. Amends the law on expropriation for public utility. 2.786, of May 21, 1956 Decrees-Law Decree-Law No. Regulates the writ of entry, initio litis, in urban residential properties. 1.075, of January 22, 1970 Decree-Law No. Provides for the real estates of the Union and makes other provisions. 9.760, of September 05, 1946 Decree-Law No. Provides for expropriations for public utility. 3.365, of June 21, 1941 Decree-Law No. 58, Provides for subdivision and sale of land plots for payment in of December 10, installments. 1937 Federal Decrees Decree No. 6.514, of Provides for infringements and administrative sanctions related to the July 22, 2008 environment, establishes the federal administrative process for assessment of such infringements and makes other provisions. Decree No. 6.040, of Establishes the National Policy for Sustainable Development of February 02, 2007 Traditional People and Communities. Decree No. 4.339, of Establishes principles and guidelines for implementation of the August 22, 2002 National Policy of Biodiversity. Decree No. 3.079, of Regulates Decree-Law No. 58 of December 10, 1937, which provides September 15, 1938 for subdivision and sale of lands for payment in installments. 65 Provisional Measures Provisional Measure Amends articles 1, 4, 14, 16 and 44, and adds provisions to Law No. No. 2.166-67, of 4.771 of September 15, 1965, which establishes the Forestry Code, and August 24, 2001. also amends article 120 of Law No. 9.393, of December 19, 1996, which provides for the tax over Rural Territorial Property - ITR, and makes other provisions. Resolutions of the National Council of the Environment – CONAMA Resolution No. 387, Establishes procedures for Environmental Licensing of Agrarian of December 27, Reform Settlement Projects and makes other provisions. 2006 Resolution No. 369, Provides for exceptional cases of public utility, social interest or low of March 28, 2006 environmental impact enabling interventions or suppression of vegetation in Permanent Preservation Areas - APP. Resolution No. 302, Provides for the parameters, definitions and limits of Permanent of March 20, 2002 Preservation Areas of artificial reservoirs and the environment use regimen. Resolution No. 279, Provides for the Simplified Environmental Licensing. of June 27, 2001 Resolution No. 237, Provides for the Environmental Licensing. of December 19, 1997 Resolution No. 14, of Provides for the creation of a Technical Chamber for forest people December 06, 1990 heritage protection. Resolution No. 07, of Provides for Technical Chambers composition. October 17, 1990 Resolution No. 010, Provides for the compensation for environmental damages caused by of December 03, large works. 1987 Resolution No. 009, Provides for Public Hearing. of December 03, 1987 Resolution No. 06, of Provides for the general rules for environmental licensing of large sized September 16, 1987 works, specially those in which the Union has relevant interest, such as electric power generation Resolution No. 001, Provides for Environmental Impact Assessment (EIA). of January 23, 1986 Normative Resolutions of the National Agency of Electric Energy - ANEEL Resolution No. 279, Establishes the general procedures for requirement of public utility of September 11, declarations for purposes of expropriation and imposition of utility 2007 easement for land areas demanded for deployment of electric power generation, transmission and distribution facilities by concessionaires, licensees and authorized entities. Resolutions of the National Institute of Colonization and Agrarian Reform – INCRA Resolution No. 12, de Approves INCRA Normative Instruction No 46, of May 26, 2008, May 26, 2008 which establishes the procedures for land regularization of possessions in rural areas owned by the Union, bigger than 100 hectares and up to the limit of 15 tax modules, located in Legal Amazon region. Implementation Rules of the National Institute of Colonization and Agrarian Reform – INCRA Implementation Provides for the process of creation and recognition of agrarian reform 66 Rule Incra No. 69, settlement projects. of March 12, 2008 Ordinances of the National Institute of Colonization and Agrarian Reform – INCRA Ordinance No. 687, Determines the inclusion, in the National Program of Agrarian Reform, of September 27, of the family farmers affected by the construction of hydroelectric use 2004 dams with remaining area of up to 3 (three) rural modules, which have been registered and selected by INCRA, specifically to benefit them with the credits of PRONAF "A"; the Technical, Social and Environmental Advisory Services to the Agrarian Reform – ATES, and the National Program of Education in Agrarian Reform - PRONERA. Normative Instructions of the National Institute of Colonization and Agrarian Reform- INCRA Normative Establishes the procedures for land regularization of possessions in Instruction No. 46, rural areas owned by the Union, bigger than 100 (one hundred) of May 26, 2008. hectares and up to the limit of 15 tax modules, located in Legal Amazon region Normative Provides for procedures for recognition of the Dam Resettlement Instruction No. 42, Project - PRB and the inclusion of farmer women and men resettled of September 18, due to dams construction, within the National Program of Agrarian 2007 Reform and the access to the National Program of Family Agriculture Strengthening - Pronaf – Group A. Ordinances of the National Heritage Secretariat - SPU Ordinance No. 100, Regulates the use and exploitation of properties of the Union in federal of June 03, 2009 areas of river floodplain areas in the Legal Amazon area, in behalf of traditional riverine populations, in order to enable the rational and sustainable exploitation of the natural resources available, face to its traditional use, focused in the subsistence of these populations, by granting Authorizations of Use, to be given in exceptional , transitory and precarious circumstances. State Legislation State of São Paulo Constitution of the State of São Paulo Article 202 ―The areas declared of public utility for purposes of expropriation, aimed to the implementation of environmental conservation units will be considered as specially protected territorial spaces, note being permitted, in these areas, activities that may degrade the environment or in any way compromise the integrity of the environmental conditions which have motivated the expropriation.‖ Article 203 ―State vacant lands assessed in discriminatory actions and taken by the Public Authorities, inserted in preservation units or necessary to protect the natural ecosystems shall be considered as unavailable.‖ Laws of the State of São Paulo Law No. 13.579, of Defines the Water Sources Protection and Recovery Area of the July 13, 2009 Billings Reservoir Watershed - APRM-B, and makes other related provisions. Law No. 13.542, of Changes the name of CETESB - Companhia de Tecnologia de May 08, 2009 Saneamento Ambiental [Company of Environmental Sanitation Technology] and provides new wording to articles 2 and 10 of Law 67 No. 118, of June 29, 1973. Law No. 13.507, of Provides for State Council of the Environment - CONSEMA, and April 13, 2009 makes other related provisions. Law No. 12.233, of Defines the Water Source Protection and Recovery Area of January 16, 2006 Guarapiranga Watershed, and makes other related provisions. Law No 9.866, of Provides for guidelines and rules for watershed protection and November 28, 1997 recovery, for the water sources of regional interest for the State of São Paulo and makes other provisions. Decrees of the State of São Paulo Decree No. 55.342, of Regulates the provisions of State Law No. 13.579, of July 13, 2009, January 13, 2010 which defines the Water Source Protection and Recovery Area for the Billings Reservoir Watershed - APRM-B, and give correlated provisions. JOSÉ SERRA, Governor of the State of São Paulo, exercising the powers conferred to him. Decree No. 51.686, of Regulates the provisions of State Law n° 12.233, of January 16, 2006, - March 22, 2007 Guarapiranga Specific Law, which defines the Water Sources Protection and Recovery Area of Guarapiranga Watershed - APRM-G, and makes other related provisions. Decree No. 43.022, of Regulate the provisions related to the Emergency Plan for Water April 07, 1998 Sources Recovery in the Metropolitan Region of Great São Paulo, approached by Law No. 9.866 of November 28, 1997, which provides for guidelines and rules for protection and recovery of water sources of regional interest in the State of São Paulo and makes related provisions. Opinion of the State Secretariat of the Environment - SMA Legal Advisory Instruction about the procedure, regarding to the ownership, proof of Opinion No. 25/2004 control or possession of the area where the enterprise or activity shall be implemented. Circular Letter Circular Letter No. Provides for Proof of Regular Domain and Possession of Property. 26, of January 12, 2006 Legislation of the Municipality of São Paulo Laws of the Municipality of São Paulo Law No. 14.665, of Provides for misallocation of municipal public areas under ‗people January 08, 2008 common use assets class‘, and disposal of municipal public areas under ― proprietary assets class‖, in order to promote the Program of Urban and Land Regularization; authorizes the Executive Power to grant special use concessions for housing purposes, or granting real rights of use, as well as to donate areas to Public Authorities‘ agencies or entities, directly or indirectly, for construction of social interest housing; amends article 3 and replaces Annexes I and II to Law No. 13.514 of January 16, 2003. Law No. 13.770, of Provides for the adoption of measures by the Municipal Executive January 29, 2004 Power, prioritizing the women as beneficiary of the Social Interest Housing Program. Law No. 13.514, of Provides for misallocation of municipal public areas under the ‗people 68 January 16, 2003 common use class‘, occupied by low income populations, in order to promote the Program of Urban and Land Regularization; authorizes the Executive Power to grant special use concession, for housing purposes, or real right of use concession, and makes other provisions. Decrees of the Municipality of São Paulo Decree No. 49.498, of Regulates Law No. 13.514, of January 16, 2003, and Law No. 14.665, May 16, 2008 of January 08, 2008. State of Minas Gerais Constitution of the State of Minas Gerais Article 194 ―Article 194 – The state actions, in the area of social care, will be implemented with resources of the State budget, and other sources, taking in account the following guidelines: I – administrative diversification according to the policy of regionalization, with participation of the charity and social care entity; II – participation of the population, through representative organizations, in the formulation of policies and in the control of actions, in all levels. Sole paragraph – The State will promote a social care plan to benefit the populations of areas flooded by reservoirs.‖ Laws of the State of Minas Gerais Law No. 15.012, of Amends provisions of Law No. 12.812, of April 28 , 1998, regulating January 15, 2004 the sole paragraph of article 194 of the State Constitution, which provides for social care to the populations of areas flooded by reservoirs, and makes other provisions. Law No. 14.687, of Provides new wording to sub-section III of article 5 of Law No. 9.444, July 30, 2003 of November 25, 1987, which provides for the biddings and contracts of the State Centralized and Autarchic Administration. Law No. 14.684, of Provides for the policies for elaboration of budgetary law for 2004 and July 30, 2003 makes other provisions. Law No. 13.662, of Establishes, State level, the Revolving Fund to Foster Family July 17, 2000 Agriculture and Feasibility of Agrarian Settlements - FOMENTAR- TERRA - and makes other provisions. Law No. 12.812, of Regulates the sole paragraph of article 194 of the State Constitution, April 28, 1998 which provides for social care to populations from areas flooded by reservoirs, and makes other provisions. State of Pará Constitution of the State of Pará Article 259, sole ―Article 259. The public or private companies carrying out paragraph hydroelectric plant works, dams formation or any other work determining the submersion, exploitation, consumption or extinction of natural resources located in public or vacant lands, even if appraised or granted, will be obliged to indemnify the State, as determined by law. Sole paragraph. In case of necessary expropriation of the works referred to in this article, the amount of compensation will be paid by the companies interested in such works.‖ 69 Laws of the State of Pará Law No. 5.849, of Provides for the agrarian and land agricultural law of the State of Pará. June 24, 1994 Decrees of the State of Pará Decree No. 713, of Creates the State Pro-Settlement Project (PROA-PA) and the State December 07, 2007 Settlements Projects, using the powers conferred by article 135, sub- section VII, of the Constitution of the State of Pará. Decree No. 857, of Provides for environmental licensing, within the territory under January 30, 2004 State of Pará jurisdiction, for the activities discriminated thereto. State of Mato Grosso do Sul Constitution of the State of Mato Grosso do Sul Article 218 ―The law will establish the state policy for housing, which shall provide the articulation and integration of the Public Authorities actions and the participation of organized communities, as well as the suitable institutional and financial instruments for its respective implementation, in order to assure housing access as a special condition to the quality of life. Sole paragraph. The State Public Authority, when elaborating the annual budgetary proposal, will give priority to social needs, in terms of the state housing policy, allocating specific resources within the percentual limits of current revenues, whose rate will be established in the respective laws of budgetary guidelines. Article 219 ―The State and the Municipalities, in collaboration with the society, will promote and perform programs of social interest, prioritizing the following: I – land regularization; II – appropriation of basic infrastructure and social equipment, specially those related to education and health; III – implementation of housing-related enterprises.‖ Article 222 ―Everyone will have the right to enjoy a physical and social environment free from health harmful factors. paragraph 1 – The Public Authority, via suitable agencies of its own and by supporting popular initiatives, shall protect the environment, preserve the natural resources, regulating its use and exploitation, and preserve the balance of the ecological system, with no discrimination of individuals or regions, through the environment protection policy defined by law. paragraph 2 – The Public Authority will also: I – Evenly distribute the urbanization in its territory, administrating the territorial space in order to compose biologically balanced landscapes (...) IV – reconcile the economical and social development of the State, with preservation, improvement and stability of the environment, safeguarding its capacity of renewal and the improvement of the quality of life; V – prevent and suppers the degradation of the environment and enforce the liabilities of authors of harmful behaviors and activities.‖ Article 225 ―Vacant lands taken by the State Public Authority in discriminated actions, required for ecosystems protection will be essential.‖ Article 230 ―The rural policy plans shall: (...) 70 IV - Promote, as provided by Law, by means of agreements with other federal entities, the compensation, in cases of expropriation, to the rural landowners who, in good faith, have the possession, title and ownership registration of their respective properties.‖ State of Santa Catarina Constitution of the State of Santa Catarina Article 184 ―The following are ecological interest areas, whose use will depend on previous authorization by the competent agencies, homologated by the Legislative Assembly, preserved their special attributes: I – the Atlantic Forest; II – the Serra Geral Region; III – the Serra do Mar Region; IV – the Serra Costeira Region; V – the surface water protection strips; VI- the slopes subject to landslides.‖ State of Bahia Constitution of the State of Bahia Article 171 ―These are the key principles and objectives of the agricultural and land policy: I — the dignity of the human beings; II — valuation and protection of labor, expressed by the cultivation and economical and rational exploitation of the earth, recognizing to the workers and their families the fruits of their work; III — assurance of access to land ownership to the workers who depend of it to their existence or subsistence, and that of their families, as a requirement of social order attainment; IV —modernization of land structures, in search of a peaceful solution of conflicts, the economic and social balance, and the stability of the democratic regimen, with eradication of inequalities; V — the social function of property.‖ Article 172 ―As a duty, the State and the Municipalities shall collaborate in the implementation of the agrarian reform, in order to achieve economic development and to promote social justice.‖ Article 173 ―The actions of the State will be developed in harmony with nature conservation, in defense of the soil, climate, vegetation and water resources.‖ Article 187 ―The State, through a competent body, will develop a discriminatory action, aimed to identify and take public lands as an essential element to land regularization, which will be preferably destined to the settlement of landless rural workers or ecological reserves.‖ Article 189 ―In all construction projects involving public works requiring the displacement of small farmers, the previous land expropriation for resettlement of the affected people will be obligatorily included, leaving to them the option by resettlement or money compensation.‖ Laws of the State of Bahia Law No. 11.478, of Approves the State Plan for Environmental Adaptation and Regulation, July 01, 2009 and make other provisions. Law No. 10.432, of Provides for the State Policy on Water Resources, creates the State December 20, 2006 System of Water Resources Management and makes other provisions. Law No. 10.431, of Provides for the Policy of Environment and Biodiversity Protection of 71 December 20, 2006 the State of Bahia and makes other provisions. Law No. 9.832, of Provides for Supervision of Activities Using Natural Resources and December 05, 2005 Potentially Environment-Pollutant Activities. Law No. 8.538, of Changes the organizational structure of the Public Administration of December 20, 2002 the State Executive Power and makes other provisions – Creates the Department of the Environment and Water Resources, in order to formulate and implement the state policy of environmental organization, and forest & water resources development, under the following basic structure. Law No. 7.799, of Establishes the State Policy of Environmental Resources February 07, 2001 Administration and makes other provisions. Law No. 6.855, of Provides for the Policy, Management and State Plan of Water May 12, 1995 Resources. Delegated Law Delegated Law No. Creates the Environmental Resources Center - CRA and establishes 31, of March 03, other provisions. 1983 72