Involuntary Resettlement Sourcebook Planning and Implementation in Development Projects Involuntary Resettlement Sourcebook Planning and Implementation in Development Projects Involuntary Resettlement Sourcebook Planning and Implementation in Development Projects THE WORLD BANK © 2004 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. ISBN 0-8213-5576-7 Library of Congress Cataloging-in-Publication Data Involuntary resettlement: planning and implementation in development projects. p. cm. Includes bibliographical references and index. ISBN 0-8213-5576-7 1. Economic development projects--Developing countries. 2. Land Settlement--Developing countries. 3. Forced migration--Developing countries. 4. Migration, Internal--Developing countries. I. World Bank. HC59.72.E44I467 2003 325--dc22 2003065763 Contents Foreword xvii Acknowledgments xxi Introduction xxiii Abbreviations xxxiii Section 1: Policy Issues in Involuntary Resettlement 1 1. Scope of OP 4.12 3 Scope of OP 4.12 3 Land Acquisition and Restriction of Access to Conservation Areas 4 Coverage of the Terms "Resettlement" and "Displaced Persons" 5 The Policy Objective of Minimizing Land Acquisition and Resettlement 5 When OP 4.12 Becomes Effective and When It Remains in Force 8 Initial Applicability 8 Project Closing 9 Linkages between Bank and Other Donor or National Projects 10 When OP 4.12 Does Not Apply 15 Structural Adjustment Loans 15 Natural Disasters, War, or Civil Strife 16 Indirect Economic Impacts 18 Adverse Environmental and Other Socioeconomic Impacts 19 National or Regional Resource Management Programs 20 Open-Market Purchase of Project Land 20 Voluntary Resettlement 21 Notes 25 v Involuntary Resettlement Sourcebook 2. Resettlement Instruments and Disclosure 27 Resettlement Plan 27 Policy Framework 27 Process Framework 29 Preparation and Implementation of Specific Components of the Project 30 Selection of Criteria for Determining Eligibility for Assistance 30 Identification of Measures to Improve or Restore Livelihoods and Living Standards 31 Resolution of Potential Conflicts or Grievances 31 Administrative and Legal Procedures 32 Monitoring Arrangements 32 Disclosure 33 3. Eligibility Criteria and Units of Entitlement 35 Eligibility Criteria: Land Tenure and Severity of Impact 35 Land Tenure 36 Severity of Impact 38 Open Access and Other Property 42 Open Access or Common Property 42 Residences 43 Businesses 43 Temporary Permits 45 Temporary Involuntary Acquisition 45 Appropriate Unit of Entitlement 47 4. Compensation and Income Restoration 51 Calculation and Application of Replacement Cost 52 General Principles 52 Replacement Cost for Land 54 Replacement Cost for Houses and Other Structures 57 Replacement Cost for Other Assets 60 Income Restoration Alternatives: Land, Cash, and Jobs 61 General Principles for Replacing Income-Generating Assets 62 Land-Based Options 64 Cash Compensation and Rehabilitation 66 Employment as Rehabilitation 69 Note 70 vi Contents 5. Vulnerable Populations 71 The Poor 72 Women 75 Indigenous Peoples 78 Those Less Able to Care for Themselves 81 Children 81 The Elderly 83 The Disabled 84 Other Groups Not Protected by National Land Compensation Law 85 People without Title or Use Rights 85 Host Communities 87 Community Members Remaining in the Original Area after Resettlement 90 Note 91 Section 2: Technical Aspects of Involuntary Resettlement 93 6. Resettlement Planning and Processing Requirements 95 Processing Requirements at Each Stage of the Project Cycle 97 Preidentification 97 Project Identification 102 Project Quality Enhancement Review 105 Project Preparation 107 Preappraisal 110 Project Decision Meeting 111 Project Appraisal 114 Negotiations 115 Effectiveness 116 Supervision 116 Irregular Processing: Late Identification of the Need for Resettlement 119 Annex: Resettlement Site Selection, Movement of Displaced Persons, and Organization of Community Life 120 vii Involuntary Resettlement Sourcebook Phase 1: Criteria for Site Selection 120 Phase 2: Feasibility Studies 121 Phase 3: Detailed Designs and Land Purchase 121 Phase 4: Final Designs and Construction 122 Movement of DPs 122 Organization of Community Life and Support Services 122 7. Consultation and Participation 123 What OP 4.12 Says 123 Consultation and Participation Defined 124 The Importance of Participation 125 Issues in Consultation and Participation 126 Consultation and Participation in the Project Cycle 128 Project Identification 129 Project Preparation 130 Project Preappraisal 138 Project Appraisal 138 Project Implementation 140 Project Completion 142 The Role of the Bank in Supporting Participation 142 Note 143 Annex: Consultation and Participation Matrix 144 8. Income Improvement 153 What OP 4.12 Says 153 Definition of Income Restoration in Operational Terms 155 Issues in Income Restoration 157 Risk Analysis 162 Design of Income Restoration Strategies 164 Stage 1: Analyzing Existing Sources of Income 165 Stage 2: Surveying and Analyzing Current Economic Conditions 166 Stage 3: Identifying New Opportunities 167 Income Restoration through Land Replacement 169 Strategic Use of Project Opportunities 171 Other Income Restoration Strategies 176 Requirements for Reporting and Review of Income Restoration Plans 176 Monitoring and Supervision of Income Restoration Measures 177 viii Contents Annex: Microfinance as a Tool for Income Restoration 181 Microfinance as an Income Restoration Strategy 182 Collateral 183 Creditworthiness 183 Character 183 Promotion of Favorable Practices among Financial Institutions 184 9. Costs, Budgeting, and Financing 185 What OP 4.12 Says 185 Identifying and Reporting Resettlement Costs 186 Compensation 186 Community Infrastructure and Services Costs 187 Relocation Costs 187 Resettlement Site Preparation Costs 188 Income Restoration and Improvement Costs 188 Administrative Costs 189 Estimating Resettlement Costs 189 Planning Costs 191 Compensation Costs 192 Community Infrastructure Costs 192 Relocation and Resettlement Site Preparation Costs 193 Income Restoration or Improvement Costs 194 Administrative Costs 195 Financial Flows, Arrangements, and Contingencies 196 Key Issues 196 Financial Arrangements for a Resettlement Policy Framework 198 Financial Arrangements for Income Restoration 200 Bank Disbursement for Resettlement 200 Notes 203 10. Surveys, Monitoring, and Supervision 205 What OP 4.12 Says 205 Identification: Land Acquisition Assessment 208 Census of DPs and Inventory of Assets 209 Data Collection Formats 211 Staffing 211 Field Operations 212 Data and Records 212 ix Involuntary Resettlement Sourcebook RP Preparation: Socioeconomic Analysis 213 Implementation: Monitoring 215 Internal Monitoring 219 External Monitoring 219 Bank Supervision of Resettlement Operations 221 Supervision 222 Early Review of Resettlement Implementation 225 11. Organizations for Planning and Implementation 229 What OP 4.12 Says 229 Organizational Responsibility for Resettlement Preparation and Planning 230 Land Acquisition Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Census and Socioeconomic Surveys 233 Eligibility Criteria and Resettlement Entitlements 234 Consultations 234 Feasibility Study of Resettlement Sites 235 Feasibility Study of Income Improvement Measures and Formation of DP Committees 235 Implementation 237 Project Launch Workshop 238 Organizational Units 239 Organizational Models for Resettlement Implementation 248 Checklist for Organizations Involved in Resettlement Implementation 250 Coordination with Local Governments 251 Monitoring and Evaluation 252 Internal Monitoring 252 External Monitoring 253 Training and Capacity Building 253 Notes 255 12. Implementing Resettlement Plans 257 Getting Ready for Implementation 257 Initiating Implementation 258 Payment of Compensation 259 Relocation 259 Linkage of Resettlement Progress and Pace of Project Construction 260 x Contents Reconstruction and Relocation to New Housing 260 Civic Infrastructure 262 Income Improvement Strategies 263 Monitoring and Evaluation 264 Grievance Redress 264 Adaptation When Things Do Not Go According to Plan 264 Circumstances Likely to Require Planning Changes 266 Documentation of Planning Changes 268 Section 3: Involuntary Resettlement in Selected Sectors 269 13. Resettlement in Urban Areas 271 The Context of Urban Resettlement 271 Importance of Initial Planning 272 Minimizing Displacement 272 Preventing Fraudulent Claims of Eligibility for Compensation 274 Encouraging Public Participation and Responsiveness 274 Considering Gender Issues 276 Coordination of Administrative and Financial Responsibilities 277 Administrative Coordination 277 Financial Planning and Coordination 279 Limits of Bank Financing in Urban Projects 280 Resettlement of Urban Squatters 280 Entitlements for People without Security of Tenure 280 Adverse Impacts on Mobile Enterprises 283 Residential Relocation in Urban Projects 284 Replacement Cost for Urban Land 284 Replacement Housing in Urban Areas 285 Location Issues in Urban Resettlement 287 Urban Improvement: Opportunities for Resettlement as Development 289 Improvement of Housing Standards 289 Slum Improvement Programs 290 Land Consolidation Programs 291 Economic Rehabilitation in Urban Projects 292 Distance of Relocation 293 Obstacles to Income Restoration at the Relocation Site . . . . . . .295 xi Involuntary Resettlement Sourcebook Community and Public Infrastructure in Urban Projects 295 Restoring or Replacing Public Infrastructure 296 Creating Public Spaces 296 Urban Linear Projects 297 14. Resettlement in Linear Projects 299 The Context of Linear Resettlement 299 Linear Projects and Their Corridors of Impact 300 Roads and Highways 300 Gas and Oil Pipelines 302 Water and Sanitation Systems 303 Irrigation Systems 304 Transmission Lines 304 Railways 305 Participation and Minimization of Resettlement . . . . . . . . . . . . . . . . 306 Impacts on Vulnerable Populations 309 Informal Economic Enterprises 309 Residents without Secure Title 310 Indigenous People 311 Project Phasing, Censuses, and Studies 312 Administrative Coordination 316 Monitoring 318 Summary of Key Elements 319 15. Dams and Resettlement: Building Good Practice 321 The Context of Dam Construction 321 Organizational Capacity and Commitment 323 Assessment of Institutional Capacity for Resettlement Planning and Implementation 323 Capacity Building in All Relevant Agencies 324 Involvement of Local Institutions Likely to Be Engaged in Operation and Maintenance 325 Resettlement Planning 325 A Panel of Experts for Preparing and Implementing the Resettlement Program 325 Systems for Preparing, Reviewing, and Approving Resettlement Plans 326 Framework for Compliance with Agreements 326 xii Contents Minimization of Displacement 327 Selection of Dams for Construction 327 Use of Dam Design to Reduce Displacement and Resettlement Impacts 328 Use of Barriers to Minimize Displacement and Resettlement Impacts 328 Assessment of Resettlement Impacts 329 Early, Detailed Surveys of Who Is Affected, How, and When 329 Upstream and Downstream Impacts 330 Temporary, Partial, and Other Impacts 330 Consequences of Inadequate Surveys of Impacts and Affected People 331 Impacts of the Long Gestation Period for Dam Construction 333 Consultation and Participation 334 Mechanisms for Consulting Affected People throughout Planning and Implementation 334 Provision of Information to Affected People 335 Consequences of Inadequate Involvement of Affected People 337 Consultation with the Host Communities 338 Systems for Grievance Redress 338 Rehabilitation Strategies 339 Resettlement as Development 339 Feasibility of Sharing Project Benefits with DPs 340 Affected People as Shareholders in the Dam Project 341 Land-Based Resettlement Strategies 341 Non-Land-Based Resettlement Strategies 344 Technical, Legal, Financial, and Economic Feasibility of Strategies and Options 345 Feasible Resettlement Alternatives and Mitigation of All Impacts 347 Detailed Feasibility Assessment of Resettlement Sites 348 Financial Arrangements 349 Resettlement Entitlements and Activities 349 Compensation for Affected Assets 349 Nonmonetary Costs of Resettlement 350 Internalized Resettlement Costs 350 Project Revenues Used to Finance Resettlement Costs 352 Assessment of Risks to the Resettlement Program 353 xiii Involuntary Resettlement Sourcebook Institutional Arrangements 354 Adequate Arrangements During the Resettlement Transition Period 354 Strong Institutional Design to Deliver What the Project Has Promised 355 Linkage of Dam Construction to the Implementation of Resettlement 356 Monitoring and Supervision 357 Clear Benchmarks and Indicators for Monitoring Implementation 357 Resettlement Supervision beyond the Resettlement Program 358 Notes 359 16. Resettlement in Natural Resources Management and Biodiversity Projects 361 Policy Applicability 361 Policy Objectives 363 Policy Instruments 363 Elements of a Resettlement Process Framework 365 Plan of Action 368 Bank Procedures for the Resettlement Process Framework and Plan of Action 369 Appendix 1: World Bank Involuntary Resettlement Policy, OP/BP 4.12 371 Involuntary Resettlement OP 4.12 371 Policy Objectives 371 Impacts Covered 372 Required Measures 372 Eligibility for Benefits 375 Resettlement Planning, Implementation, and Monitoring 376 Resettlement Instruments 377 Assistance to the Borrower 379 Notes 380 OP 4.12--Annex A 384 Resettlement Plan 384 Abbreviated Resettlement Plan 389 Resettlement Policy Framework 389 Process Framework 390 Notes 391 xiv Contents Involuntary Resettlement BP 4.12 393 Appraisal 394 Supervision 396 Country Assistance Strategy 397 Notes 397 Appendix 2: Checklist for Census Information 399 Appendix 3: Census Forms 400 Appendix 4: Terms of Reference for a Socioeconomic Study 404 Introduction 404 Objectives of the Study 405 The Study 405 Scope of the Study 406 Methodology of the Study 407 Appendix 5: Matrix of Resettlement Impacts 408 Appendix 6: Resettlement Entitlement Matrix China Yangtze Basin Flood Control Project 410 Appendix 7: Resettlement Budget 412 Appendix 8: Resettlement Timetable 413 Appendix 9: Resettlement Supervision Guidelines 414 Glossary 417 List of Boxes Box 3.1 Suggested Compensation Guidelines for Temporary Acquisition of Assets 46 Box 4.1 When Replacement Land Is Unacceptable to DPs 65 Box 4.2 Cash Compensation Does Not Ensure Asset Replacement 67 Box 6.1 Assessing the Need for Consultant Services 104 Box 6.2 Meeting the Special Needs of New Borrowers 106 Box 6.3 Estimating the Time Required for Resettlement Preparation 109 Box 7.1 Disclosure Requirements for Bank Resettlement Documents 143 xv Involuntary Resettlement Sourcebook Box 8.1 Impoverishment Risks and Reconstruction: A Framework for Resettlement Analysis and Planning 163 Box 8.2 Microfinance and Market Failure 182 Box 10.1 Censuses, Surveys, and Computer Technology 213 Box 13.1 Vertical Resettlement: A Tool for Urban Renewal 288 Box 13.2 Housing Affordability and Willingness to Pay 290 Box 14.1 Consultation and Minimizing Displacement in Guatemala 309 Box 14.2 Inconsistent Treatment of Squatters and Encroachers 311 Box 15.1 Criteria for Assessing Adequacy of Institutional Commitment and Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . 324 Box 15.2 Typical Adverse Social Impacts of Reservoirs 331 Box 15.3 Laws for Hydropower Revenue Sharing with Affected Communities 352 List of Figures Figure 2.1 Decision Tree: Resettlement Instruments 28 Figure 8.1 Income Restoration Objective in Regions of Economic Growth 156 Figure 8.2 Income Restoration Objective in Regions of Economic Contraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 List of Tables Table 3.1 Severity of Impact of Land Taking and Recommended Entitlement Options 40 Table 7.1 Participation and the Project Cycle 130 Table 8.1 Comparing Compensation and Income Restoration 158 Table 10.1 The Project Cycle and Information Requirements 208 Table 10.2 Land Acquisition Assessment 209 Table 10.3 Elements of a Census 210 Table 10.4 Topics of a Week-Long Training Program 212 Table 10.5 Elements of a Socioeconomic Analysis 215 Table 10.6 Elements of a Monitoring System 216 Table 10.7 Process Model for Tracking Project Performance 217 Table 10.8 Suggested Generic Indicators of Resettlement Performance 218 Table 11.1 Preparation Activities and Agencies Responsible 232 Table 16.1 Choice of Resettlement Instruments 364 xvi Foreword Economic development relies on construction of new physical infrastructure to cater to the increasing needs of growing populations. Infrastructure development, in turn, often requires acquisition of land and other assets that are privately owned. Such acquisition can adversely affect the socioeconomic well-being of the people whose assets are acquired, as well as the communities they live in. Impacts include physical relocation, disruption of livelihoods, and potential breakdown of communities. Resettlement can have serious repercussions that cannot be exclusively measured in economic terms. Breakdown of established community relation- ships, social disarticulation among people who find themselves in a different sociocultural environment after resettlement, and the psychological trauma of moving into an alien environment can be severe if efforts to design and imple- ment resettlement programs are not sensitive to the needs and preferences of communities. Well-designed and well-implemented resettlement can, however, turn involuntary resettlement into a development opportunity. The challenge is to not treat resettlement as an imposed externality but to see it as an integral com- ponent of the development process and to devote the same level of effort and resources to resettlement preparation and implementation as to the rest of the project. Treating resettlers as project beneficiaries can transform their lives in ways that are hard to conceive of if they are viewed as "project-affected people" who somehow have to be assisted so that the main project can proceed. For example, in the Mumbai Urban Transport Project in India, slum dwellers liv- ing along the railroad tracks were helped to become owners of apartments in urban housing cooperatives, which are often beyond the reach of the middle- class residents of Mumbai, a city with some of the highest real estate prices in the world. In a Bank-assisted irrigation project in Bahia, Brazil, people from whom land was acquired were given priority in the allocation of irrigated land, thus becoming the first project beneficiaries. Implementing resettlement as a development program not only helps the people who are adversely affected but also promotes easier, less-troubled imple- mentation of development projects. Projects that do not address resettlement xvii Involuntary Resettlement Sourcebook issues adequately are often subject to delays because of opposition from dis- placed persons (DPs). Bank experience shows that the additional economic gains from expeditious implementation of projects with generous resettlement provisions for DPs can far outweigh the incremental costs of providing adequate resettlement assistance. Good resettlement, therefore, also makes good eco- nomic sense. Displacement necessitating involuntary resettlement of populations can be caused by a variety of triggers, including natural disasters, such as earthquakes, hurricanes, and floods; political events, such as wars and internal conflicts; and development projects. The World Bank's operational policy on involuntary resettlement addresses only issues related to development-induced displace- ment. Development projects, more than any of the other triggers for displace- ment, offer the means and mechanisms to help DPs improve their standards of living. Development-induced displacement provides a unique opportunity for the project team to systematically plan and implement the resettlement pro- gram on the basis of consultations with the DPs, along with making adequate provisions for funding, implementation arrangements, monitoring, and redress of grievances. Failure to capitalize on the tremendous potential of development- induced displacement to improve the lives of resettlers would impose a high opportunity cost on the development process. Realizing the development impact of well-implemented resettlement pro- grams, some countries, states, and private sector companies consciously design development-oriented programs that follow standards higher than the mini- mum needed to restore people's standards of living. The argument for providing such resettlement assistance is that the incremental effort helps achieve overall development of the displaced community and that this overall development results in savings because the resettled community does not need to be targeted for different development programs. It could be years before the development process "touches" a resettled community again, so it makes good sense to address most of the community's development needs as part of the resettlement program. We need to view resettlement as a sector issue and not an externality, given the pervasive need for land acquisition, physical relocation, and economic reha- bilitation in infrastructure projects. For example, resettlement is as integral to road building as the engineering design of roads, so both should be given the same amount of attention by transport sector staff. Resettlement is not simply an issue to be dealt with in implementing a roads project--it is a part of the project. The implementation of resettlement will substantially improve when Bank and borrower staff working in various sectors start treating resettlement as a core sector issue. The challenge of resettlement is no longer restricted to large infrastructure projects with substantial resettlement impacts; many projects require minor xviii Foreword land acquisition or relocate people only a few hundred meters. A linear project cuts through many administrative jurisdictions, posing a unique institutional challenge to resettlement practitioners. An increasing number of projects do not involve any land acquisition or physical relocation, but they impose restric- tions on people's access to legally designated parks and protected areas. Diverse approaches are needed to address the impacts of such restrictions on the liveli- hoods of affected people. Resettlement practitioners have duly responded to the challenge of emerging forms of resettlement by developing a variety of approaches and methodologies applicable to different situations. This book offers a wide range of approaches. The authors also realized that it would be almost impossible to anticipate all types of resettlement situations and provide guidance for each one. This book, therefore, is a living document, to be period- ically updated on the basis of the experience of practitioners and the findings of new research. Involuntary resettlement is an essential and historically underappreciated aspect of development. Unsuccessful resettlement has often been the result of both a lack of sensitivity to this issue and a deficiency of operational guidance on the "how to" of resettlement design and implementation. Today, many gov- ernments are convinced of the need to adopt a "resettlement-with-development" approach and provide affected people with benefits from the projects that displace them. Although attitudes toward resettlement have undergone a sea change for the better over the past decade, this book aims to fill the current gap in available guidance on resettlement. It is hoped that global practice will ben- efit from lessons learned by the World Bank and that this book will help meet the need for capacity building, not only in projects where the Bank is involved, but also in non-Bank projects and in national policies and institutions more generally. By helping people plan and implement better resettlement programs, this book will make a difference in the lives of people displaced by development projects around the world. Ian Johnson Vice President Environmentally and Socially Sustainable Development xix Acknowledgments The preparation of this book was coordinated by a team consisting of Maninder Gill (team leader), Dan Gibson, Lars Lund, Warren Van Wicklin, and Gordon Appleby. The present version of the book draws substantially on an earlier draft prepared in 1996­97 for the two Asia regions (South Asia and East Asia and Pacific) by a team led by Ellen Schaengold and consisting of Dan Gibson, Lars Lund, and Maninder Gill. Other contributors who helped write or substan- tially review a specific chapter of this book were Lou Scura ("Resettlement in Natural Resources Management and Biodiversity Projects"), Reidar Kvam ("Resettlement in Linear Projects"), Tosun Aricanli ("Surveys, Monitoring, and Supervision"), Pramod Agrawal and Maria Clara Mejia ("Resettlement in Urban Areas"), Mary Judd ("Consultation and Participation"), and Chaohua Zhang ("Costs, Budgeting, and Financing"). Significant contributions in the form of comments, suggestions, and case examples were made by Pramod Agrawal, Tosun Aricanli, Dan Aronson, John Briscoe, Michael Cernea, Charles Di Leva, Carlos Escudero, Ashraf Ghani, Dan Gross, Scott Guggenheim, Steen Jorgensen, Mary Judd, Reidar Kvam, Stephen Lintner, Alessandro Palmieri, I.U.B. Reddy, Salman Salman, Lee Travers, Warren Waters, and Chaohua Zhang. Warren Van Wicklin selected and organized the appendices. Leili Makki helped identify useful appendices, both for the paper version of the book and for the accompanying CD-ROM. Gerardo Cruz helped standardize the format of the appendices. The contributions of the above are gratefully acknowledged. xxi Introduction In December 2001, the World Bank officially adopted its revised Operational Policy on involuntary resettlement (OP 4.12). The policy is part of an inte- grated suite of 10 social and environmental safeguard policies. Unlike the for- mat of previous policy coverage, the format of OP 4.12 distinguishes between policy principles, standards, and requirements (OP 4.12) and the Bank's own procedures (BP 4.12). Several other safeguard policies also distinguish between mandatory policy provisions and recommendations for good practice; the latter are offered in a separate good-practice section. The resettlement policy has no good-practice section; instead, it refers readers to this sourcebook for guidance on good practice. The chapters that follow provide resettlement practitioners (whether from the Bank, other donor agencies, borrower agencies, civil society organizations, the private sector, consultants, or others) with guidance on the implementation of policy principles, the procedural requirements for projects, the technical aspects of resettlement planning, and the actual implementation of resettle- ment. This guidance is intended to increase the likelihood that Bank-financed projects will achieve the objectives of OP 4.12: · To avoid or minimize adverse impacts and to conceive and execute reset- tlement activities as sustainable development programs · To give displaced persons opportunities to participate in the design and implementation of resettlement programs · To assist displaced persons in their efforts to improve their livelihoods and standards of living, or at least to restore these to pre-project levels. This sourcebook draws its lessons mainly from the Bank's project experi- ence. In many respects, these lessons are encouraging: they indicate that most egregious forms of impoverishment and harm inflicted in the past can now be avoided through thorough planning and diligent implementation. Many of the people subjected to land acquisition or other adverse impacts have emerged as beneficiaries, with higher incomes or living standards than before the projects. Nonetheless, much remains to be learned. Involuntary resettlement is a com- plicated subject. To achieve resettlement objectives remains an inherently risky proposition (otherwise there would be no reason to avoid or minimize the xxiii Involuntary Resettlement Sourcebook adverse impacts of involuntary resettlement). And new projects bring to the fore--with surprising frequency--new resettlement issues or challenges. This introductory note briefly explains the purposes of the book, highlights some of the key recurring lessons from project experience that informed it, and offers some simple guidance on using the book itself. Why a Sourcebook on Involuntary Resettlement? In all countries, providing public facilities or public infrastructure sometimes requires acquisition of private land or even relocation of people. To ensure that public facilities or infrastructure is provided at reasonable cost and is sited appro- priately, all governments sometimes invoke legal powers--that is, eminent domain--to expropriate land or other fixed assets. In virtually all countries of the world, governments are legally required to pay "just" or "fair" compensation for expropriated private property. If governments in all borrowing countries already are legally required to justly compensate those whose property is taken, why does the World Bank need its own involuntary-resettlement policy? And why is the Bank now publishing an involuntary-resettlement sourcebook? The Bank adopted its first involuntary-resettlement policy in 1980, after it recognized the painful shortcomings in development practice that in some cases led to the impoverishment of thousands of people. Most obvious among these shortcomings, perhaps, was the failure of some governments to pay fair com- pensation for expropriated assets as their own laws required. But for many rea- sons impoverishment also occurred in projects in which compensation was duly paid. In an effort to ensure that Bank-supported projects do not contribute to impoverishment through land acquisition and resettlement, the Bank initiated a policy differing in three significant aspects from most borrower legislation. First, Bank policy is directed at improving (or at least restoring) incomes and living standards, rather than merely compensating people for their expropriated assets. This improvement of incomes and living standards broadens the objec- tive of the policy to include the restoration of income streams and retraining of people unable to continue their old income-generating activities after displace- ment. The broader focus on living standards brings a wide array of factors into resettlement discourse, including social and cultural relationships, public health, and community services. The resettlement process in Bank-assisted projects is no longer the mere mitigation of externalities but an integral part of the development project itself. This new view of the process poses practical and legal challenges to borrowers. Second, the emphasis on incomes and living standards, in contrast to the conventional emphasis on expropriated property, expands the range and number xxiv Introduction of people recognized as adversely affected. Recognition of this broader range of adverse impacts leads to a greater appreciation of the issues to be considered in resettlement. However, this recognition has also contributed to confusion in the use of terminology, as the aggregate number of people statistically catego- rized as "resettled" or "displaced" fails to reflect the variety and severity of resettlement impacts. Whereas the conventional approach is to compensate only people with property rights, as defined by domestic law, the Bank policy extends assistance to others who are affected but did not own property--renters, sharecroppers, and wage-earners, for example--and those who lacked legally recognized property rights for the land or assets they occupied or used. This policy explicitly recognizes people whose welfare may otherwise be over- looked, but in so doing it also brings complex and contentious issues into project planning. Finally, the Bank policy underscores the importance of explicit and distinct resettlement planning. Compensation for expropriated assets requires little more than the identification of eligible persons, the establishment of compen- sation rates, and a one-time payment process. Improvement (or restoration) of incomes and living standards, by contrast, may require attention to many poten- tially relevant variables and the synchronized or coordinated action of many agencies over an extended period. This approach poses numerous issues of responsibility. A compensation-only approach transfers all risk management to the affected persons after payment of the compensation. A focus on incomes and living standards, by contrast, requires careful delineation of responsibilities and elaborate risk management. Since 1980 resettlement planning and practice have improved significantly. The Bank, along with other development agencies and borrower governments, is now more attentive to the lessons of resettlement experience. Most develop- ment agencies and many borrowing-government agencies have adopted reset- tlement policies, often founded on similar principles and standards. Today, the major costs that development projects impose on individuals and communities through expropriation of land or other assets are far more likely to be identified, and plans are more likely to be formulated to avoid or mitigate these costs. Although much has been learned about involuntary resettlement, planning and practice often yield unsatisfactory results as a result of any of several factors: · Project planners (including Bank staff) do not recognize all adverse impacts, or they recognize them only at a late stage, when mitigating them is far more difficult. · Plans may focus only on narrow mitigation, overlooking resettlement- created opportunities to improve local incomes or living standards. · Plans and options may be developed without meaningful consultation with displaced persons, which can make the plans difficult to implement. xxv Involuntary Resettlement Sourcebook · Project agencies may lack the technical, organizational, or financial capacity to implement resettlement plans. · Project agencies may lack the legal authority or political commitment to implement the plans. · Plans do not elicit the behavioral responses from project-affected people that are necessary for successful resettlement. · Resettlement plans become inappropriate, ineffective, or obsolete because of changing conditions in the project area. · New projects--and new kinds of projects--produce unanticipated prob- lems requiring innovation in resettlement methods and strategies. A major portion of this book is aimed at resolving or minimizing such issues in resettlement planning. Although there continues to be room for improve- ment in resettlement planning for standard infrastructure projects, the book also focuses on new policy considerations and resettlement-planning instru- ments created in response to a changing project portfolio. Special planning is needed, for example, when people are adversely affected, not by land acquisition, but by restrictions on resource use in conservation areas. Special arrangements also may be needed to accommodate small-scale land acquisition (or voluntary contributions of land) in community-based lending activities. With the adoption of OP 4.12 and its attendant shift in policy format, this book also serves a useful purpose in elaborating on, or further clarifying, dis- tinctions between mandatory policy provisions and good-practice recommen- dations and between borrower obligations and Bank obligations. Consensus on such distinctions is expected to help borrowers and the Bank improve the effi- ciency of project processing. The Bank's task team leaders, for example, have sometimes complained that lack of clarity on resettlement-policy principles and procedures forces them to give too much time and attention to resettlement. They also sometimes find it difficult to differentiate, for borrower counterparts, what precisely the Bank requires of them and what the Bank is asking them to consider. Some team leaders have indicated that they prefer to avoid projects involving involuntary resettlement, even if these projects are otherwise of great developmental potential. To the extent that this book succeeds in providing useful guidance on implementing policy, projects will benefit from more effi- cient and manageable processing. Still another major strategic purpose of this book is to increase the emphasis on the project implementation phase. As a guide to practice, the book promotes improved resettlement on the ground by helping to distill les- sons from implementation experience and by providing guidance on moni- toring and supervision and on how to best respond to problems identified in implementation. xxvi Introduction Lessons from Experience The following are some recurring lessons derived from Bank projects. These lessons are treated in greater detail in the various chapters on specific issues. · Systematic resettlement planning is important--Although this statement may now seem banal, it bears remembering that resettlement planning is fairly new. The risks of impoverishment that involuntary resettlement may pose to affected people are by now well known. But systematic plan- ning involves far more than the identification of potentially adverse impacts. Unsatisfactory outcomes also result from failure to coordinate the actions of different agencies and to establish clear lines of responsi- bility and contingency arrangements. · An early start is often the key to effective planning--Effective resettlement planning can be time-intensive. In many projects, several months may be needed to gather the required information to establish a range of potentially adverse impacts, estimate the extent of impacts and the num- ber of people affected, and devise alternative approaches to mitigate such impacts. The most effective approach is to have a balanced project design. If too many elements of project design are considered fixed, the range of alternatives available for avoiding, minimizing, or mitigating adverse impacts may be drastically reduced. However, opportunities to minimize the transition period for affected people or to minimize the costs of the resettlement to the borrowing government might also be sac- rificed if appropriate planning steps are not taken at early stages. As well, failure to identify issues of policy interpretation at early stages of prepa- ration makes it more difficult to find appropriate and mutually accept- able solutions and frequently contributes to delays in project processing. · Effective plans should be crafted to fit the particular project context--Earlier formulations of resettlement policy, as well as much of the resettlement literature (external commentary and Bank evaluations and reviews), focused on large-scale resettlement in reservoir projects. Because of the potentially severe impacts on individuals and communities, reservoir resettlement remains a subject of great concern (and the topic of an entire chapter of this book). With time, however, application of the policy has spread to a wider array of investment projects, with widely varying impacts. This broader application may present new obstacles in planning; for example, linear projects that stretch across multiple administrative jurisdictions may run into coordination problems. New investment modalities may also create difficulties in policy interpretation, as when community-based lending activities propose voluntary contribution of xxvii Involuntary Resettlement Sourcebook private land in return for community benefits. In many standard infra- structure projects, the extent of land acquisition and the severity of adverse impacts are fairly minor. In such cases, resettlement planning should be more narrowly tailored to fit the practical need. Experience has demonstrated that applying a planning template designed for large-scale reservoir resettlement to projects with small-scale or fairly insignificant impacts can be more than merely ineffective; in some cases, communities lose access to public investment because planners (including Bank proj- ect team members) expect the resettlement planning process to be too cumbersome or too expensive. · Effective plans should elicit positive responses from the affected population-- Many aspects of project design require technical or professional expert- ise. A lesson clearly emerging from resettlement experience, however, is that successful resettlement--and sometimes the success of the project itself--may hinge on the responses that the affected people make to the changes imposed on them. Effective resettlement planning recognizes the need to inform affected populations about project impacts and reset- tlement opportunities, to encourage the affected populations to partici- pate in formulating and choosing resettlement options, and to engage the affected people as active participants in the resettlement process. As emphasized in chapter 7, giving affected populations opportunities to participate in the process reduces the likelihood of resistance to, and delay of, the resettlement and increases the likelihood that the affected people will adapt to their changed circumstances. · Resettlement plans should be conceived as development opportunities--In most projects, a narrow emphasis on compensation for lost assets or mitigation of adverse impacts leads planners to overlook significant development opportunities. Especially when projects generate large-scale or severe impacts, the extent of disruption to community services or infrastructure may create an opportunity for community improvement. Restoring inad- equate or obsolete urban infrastructure, for example, is virtually pointless when resettlement creates an opportunity to improve or modernize infra- structure to meet current or future needs. Similarly, with careful and participatory planning, opportunities can be identified for the affected people to derive project-related benefits or to capitalize on opportunities to improve their incomes or productivity. · Resettlement plans should not be conceived as blueprints--Although plan- ning may be a necessary condition for effective resettlement, it is usually not sufficient. Even the most thorough and detailed resettlement plans may require adjustment to fit the changing circumstances of the actual implementation, particularly projects involving complex resettlement, xxviii Introduction those unfolding over several years, and those situated in rapidly chang- ing environments. Rigid adherence to plans prepared before implemen- tation may be ineffective or even counterproductive as unanticipated changes occur in the project environment or planning assumptions or estimates prove erroneous. To achieve positive practical results on the ground, as Bank experience clearly demonstrates, resettlement monitor- ing and supervision are critical. Both are needed for assessing the extent to which plans are being implemented effectively and for signaling when the plan itself is out of step with changing circumstances. · Early resettlement supervision should identify any need to make changes--Even the best-designed resettlement programs are likely to face some problems during implementation and may need to be fine-tuned. Close monitoring and supervision of the resettlement program should be carried out early so that the necessary changes in resettlement design can be made. · Close monitoring of resettlement should continue until the likelihood of achiev- ing resettlement objectives is established--Qualified experts should regularly monitor and supervise the resettlement. Most problems in resettlement planning and implementation can be solved if they are quickly and ade- quately identified. If routine resettlement problems are not identified or solved as soon as they arise, they can become difficult to resolve. · Outstanding resettlement issues should be documented at project completion and discussed between the Bank and the borrower--As the main contractual obligation of the borrower is to implement the agreed resettlement instrument, Bank-assisted projects can be considered complete after the resettlement plan has been implemented. However, resettlement out- comes generally take longer to achieve. Therefore, the prospects of achieving desirable resettlement outcomes and the issues likely to affect these outcomes should be well documented at the completion of the project and should be discussed between the Bank and the borrower. If resettlement plans have been implemented but resettlement objectives are not likely to be fully achieved, the Bank and the borrower should dis- cuss possible follow-up measures. The Bank should also determine whether supervision of the resettlement component beyond project completion is necessary. How to Use This Volume This book is divided into four sections: · Policy issues in involuntary resettlement--Because projects involving land acquisition and resettlement take place under a seemingly infinite variety xxix Involuntary Resettlement Sourcebook of circumstances, questions often arise about how to apply certain con- cepts or procedures under unique or unanticipated conditions. Similarly, over the past 20 years, the terminology and definitions have shifted to incorporate broader patterns of experience. This section (chapters 1­5) conveys the current consensual definitions of terms and their application in resettlement policy. The guidance provided in this section is not itself official policy, and consensus views on application may continue to evolve. Nonetheless, this section should be useful to task teams or others involved in resettlement operations who are making informed judgments in a wide variety of circumstances. · Technical aspects of involuntary resettlement--Chapters 6­12 present the Bank's procedural requirements, good-practice guidance, and lessons from project experiences with various technical aspects of resettlement planning and implementation. · Involuntary resettlement in selected sectors--Chapters 13­16 examine unique or especially significant planning and implementation problems in particular categories, specifically urban resettlement projects, linear infrastructure projects, dams and reservoir projects, and sustainable nat- ural resource management promotion projects. · Appendices and glossary of terms--The appendices provide samples of various planning documents, as well as supplementary sources of infor- mation on various aspects of resettlement policy, planning, and imple- mentation. Already evident to all resettlement practitioners is chronic and widespread confusion about the use of terms and concepts. In some cases, existing patterns of word usage are likely to continue to impede clear communication of ideas. For example, the use of "displaced persons" in OP 4.12, as a reference to all adversely affected people, may cause many readers to grossly overestimate the severity of actual resettlement impacts and the number of people subjected to them. The glossary seeks to provide some clarity about the meaning of such difficult resettlement terms as "displaced persons" and "replacement cost." This book is structured as a reference work. For convenience of presentation and reading, each chapter is designed to serve more or less as a stand-alone guide to a selected aspect of resettlement planning or practice. Of course, any actual resettlement process involves complex relationships among various aspects of planning and practice. Dividing this complex whole into a set of stand-alone chapters leads unavoidably to some redundancy. While avoiding redundancy is desirable, the greater challenge for a book like this one is to provide all the available practical guidance on a topic in a reason- ably accessible format. Each chapter is intended to cover its topic as succinctly xxx Introduction as possible. However, this book includes three other features to enable the reader to obtain additional information: · Case references, which briefly highlight relevant lessons from the Bank's project experience, including project identification details for help in finding additional information on a given project; · Cross references, which link treatment of the same subject or closely related subjects in different chapters, sections, or appendices; and · The index, which helps the reader search for specific subjects, as well as relationships among them. Learning from experience is a recurring theme in this book. Of course, such learning implies that standards of good resettlement most likely will continue to evolve as today's practice produces tomorrow's lessons. Although most of its guidance is likely to be pertinent for years to come, this book, as a published volume, cannot stay abreast of all future developments. Therefore, the reader is encouraged to explore the following more timely sources of information and guidance: · Electronic updates--The sourcebook is available on the World Bank's Web site, http://www.worldbank.org/, and may be updated periodically. In addition, information updates will be provided to highlight significant changes in resettlement planning or project processing and significant developments in good practice. · Direct assistance--For people seeking more specific guidance on resettle- ment issues, assistance is available through the World Bank Safeguards Help Desk (safeguards@worldbank.org). For issues of policy interpretation, the policy itself will continue to be the fun- damental reference. Appendix 1 contains the entire text of the policy. The vari- ous chapters of this book contain excerpts from OP 4.12 that are relevant to their subject areas. The resettlement committee, constituted under the provisions of the policy, will provide guidance on application in a particular context. xxxi Abbreviations BP Bank Procedure CDD community-driven development Cr Credit DP displaced person GNP gross national product ICR Implementation Completion Report IPDP indigenous peoples development plan IRR impoverishment risks and reconstruction ISDS Integrated Safeguards Data Sheet LEG Legal Department Ln Loan NHAI National Highways Authority of India NGO nongovernmental organization OD Operational Directive OP Operational Policy PAD Project Appraisal Document PIC public information center PSR Project Supervision Report QER quality enhancement review RP resettlement plan SAL Structural Adjustment Loan TF Trust Fund ZESCO Zambia Electricity Supply Corporation xxxiii Section 1 Policy Issues in Involuntary Resettlement Chapter 1 1 Scope of OP 4.12 The World Bank first adopted its policy on involuntary resettlement, in 1980, as an Operational Manual Statement. The policy was revised, in 1990, as Operational Directive (OD) 4.30. The primary focus of the Operational Manual Statement and subsequently of the OD was on resettlement associated with large dams. When OD 4.30 was converted to Operational Policy (OP) 4.12, in 2002, the policy incorporated the experience with resettlement over a wide range of sectors across all regions of the Bank. Bank policy on involuntary resettlement covers only the direct economic and social impacts of the expropriation of land or the restriction of access to natural resources and does not cover all of the social issues and impacts of an investment, whether or not it involves resettlement. These additional issues are appropriately identified through other instruments, including environmental assessments and social assessments.1 This chapter examines basic issues of the applicability of OP 4.12: the proj- ect activities that trigger OP 4.12, the times when the OP comes into force, the linkages between project components, and the domains where the policy applies (see Appendix 1, "OP/BP 4.12, Involuntary Resettlement," for the entire text of the Bank's policy and procedures on involuntary resettlement). Scope of OP 4.12 Paragraph 3 of OP 4.12 describes the coverage of the policy: "direct economic and social impacts that both result from Bank-assisted investment projects, and are caused by (a) the involuntary taking of land resulting in (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not the affected persons must move to another location; or (b) the involuntary restriction of access to legally designated parks and protected areas resulting in adverse impacts on the livelihoods of the displaced persons." 3 Involuntary Resettlement Sourcebook 1 OP 4.12 (endnote 1) specifies that both loans and projects are subject to the OP: " `Loans' includes credits, guarantees, Project Preparation Facility (PPF) advances and grants; and `projects' includes projects under (a) adaptable program lending; (b) learn- ing and innovation loans; (c) PPFs and Institutional Development Funds . . . if they include investment activities; (d) grants under the Global Environmental Facility and Montreal Protocol, for which the Bank is the implementing/executing agency; and (e) grants or loans provided by other donors that are administered by the Bank. The term `project' does not include programs under adjustment operations." Land Acquisition and Restriction of Access to Conservation Areas Involuntary land acquisition is always an OP 4.12 issue.2 When, in a Bank-financed project, land is acquired through the application of state powers, such as eminent domain, the acquisition is involuntary, and OP 4.12 applies. "Involuntary" connotes the lack of informed consent and power of choice on the part of the people directly affected by the acquisition. Involuntary taking of land includes situations in which the state acquires new lands for development or exerts ownership of land to which it has title but which is nonetheless occupied or used by others. The OP applies regardless of the number of people affected; whether or not they will benefit from the acqui- sition; and whether or not they are fully satisfied with the provisions for com- pensation, relocation, or rehabilitation, as relevant. OP 4.12 covers only the direct impacts of land acquisition and restrictions of access to legally designated parks and protected areas. "Direct impact" means any consequence immediately related to the taking of a parcel of land or to restrictions in the use of legally designated parks or protected areas. People directly affected by land acquisition may lose their home, farmland, property, business, or other means of livelihood. In other words, they lose their owner- ship, occupancy, or use rights, because of land acquisition or restriction of access. The key factor is that the state has taken some or all of the land that people owned, used, or occupied; or, in legally designated parks and protected areas, the state has limited people's use rights.3 Restriction of traditional access to resources in legally designated parks and protected areas is also an OP 4.12 issue. OP 4.12 applies when the state restricts access to resources "in legally designat- ed parks and protected areas." Conservation schemes (for example, wildlife reserves, national parks, classified forests) may not acquire land through eminent 4 Scope of OP 4.12 domain. But the declaration of nature reserves, the upgrading of forest areas to the status of parks, or the enforcement of earlier directives limits access to 1 resources in the protected area and directly affects livelihoods and incomes. These conservation projects fall within the purview of OP 4.12 because the new restrictions on resource use affect the livelihood and well-being of the people who were using the newly restricted area. In these instances, the Bank has instituted a process framework to promote a participatory approach to conservation activities in legally designated parks and protected areas. Encouraging community participation in the design and enforcement of conservation activities helps identify acceptable alternatives to unsustainable patterns of resource use and promotes community support for such alternatives. If sustainability requires that local residents stop or reduce their activities, these residents must be confident that they can find alternative sources of food or livelihoods. Coverage of the Terms "Resettlement" and "Displaced Persons" "Resettlement," in Bank terminology, covers all direct economic and social losses resulting from land taking and restriction of access, together with the conse- quent compensatory and remedial measures. Resettlement is not restricted to its usual meaning--physical relocation. Resettlement can, depending on the case, include (a) acquisition of land and physical structures on the land, including businesses; (b) physical relocation; and (c) economic rehabilitation of displaced persons (DPs), to improve (or at least restore) incomes and living standards. Finally, "displaced persons" are defined as "persons who are affected in any of the ways described in para. 3 of this OP" (OP 4.12, endnote 3). The word thus connotes all those people who lose land or the right to use land (para. 3a) or who lose "access to legally designated parks and protected areas resulting in adverse impacts on the livelihoods" (para. 3b). The term "displaced persons" is synonymous with "project-affected persons" and is not limited to those subjected to physical displacement. The Policy Objective of Minimizing Land Acquisition and Resettlement OP 4.12 states that "involuntary resettlement should be avoided where feasible, or minimized, exploring all viable alternative project designs" (para. 2a). This fundamental policy objective reflects the recognition that resettlement can be severely harmful to people and their communities. Moreover, the planning and implementation of mitigation measures can be both complex and costly, and 5 Involuntary Resettlement Sourcebook even so the measures provide no guarantees of complete success. A project 1 design that reduces the number of people potentially affected and minimizes the severity of potential impacts also helps reduce the resettlement costs, responsi- bilities, and liabilities of the project. The simplest way to minimize resettlement is to design projects that mini- mize land acquisition and the number of people affected by loss of land, by phys- ical relocation, or by disruption of income-generating activities. All things being equal, facilities and transportation corridors, for example, are obviously better sited in or through areas with little or no population, to minimize the number of people affected. Of course, a host of economic, technical, and other factors must also be considered, so land acquisition and resettlement are often impossible to avoid altogether. Bank experience shows that two points deserve attention in striking a bal- ance between accommodating project initiatives and avoiding harm to those potentially affected. First, the severity of the impacts of resettlement can vary tremendously. Some projects (rehabilitation of existing roads, for example) may affect only a few people and in only minor ways. Others (reservoir construction is the usual example) may uproot whole communities, forcing them to reestab- lish lives in unfamiliar surroundings that are less favorable than those they left behind. Because the most severe impacts are also the most difficult and costly to mitigate, minimizing or avoiding the potentially most severe impacts is often more important than focusing simply on minimizing the aggregate number of people affected or amount of land acquired. The second (and related) point is that minimizing or eliminating land acquisition may not always minimize or eliminate adverse impacts. People should not be allowed to continue using or occupying land or structures, for example, if their doing so poses a hazard to themselves or others. Similarly, acquiring only part of a land parcel or structure would be inappropriate if the remainder is of no practical use. With careful attention, however, project design can significantly reduce the number of people affected, the severity of potential impacts, and the costs and burdens for the project itself. Project example: In Brazil, the Water Quality and Pollution Control Project (São Paulo­Guarapiranga component: Ln 3503, Ln 3504, Ln 3505) originally intended to move slum dwellers out of a watershed and into more distant apartment complexes. However, because of the expense of acquiring land near the city and the difficulties of relocating thousands of poor people, the program was revised. Some slum dwellers were moved to apartments already built nearby, but most remained in the slum area. The slum area was provided with sewers, drains, roads, and other infrastructure, to protect the water supply for the city. 6 Scope of OP 4.12 Project example: In China, the Shanghai Sewerage Project (Ln 2794, Cr 1779) made an extraordinary effort during the design and implemen- 1 tation stages to minimize potentially adverse impacts of the project. By optimizing alignment and changing construction methods, the project dramatically reduced the amount of land to be acquired, from 2,814 mu to 470 mu (15 mu 1 hectare); the number of households to relocate, from 1,092 to 946; and the number of affected enterprises, from 209 to 144. These reductions almost halved the resettlement budget, from 1.018 billion yuan to 552 million yuan (in 2003, 8.2872 Chinese yuan renminbi [CNY] US$1.00). Project example: Also in China, the Hunan Power Development Project (Ln 4350) increased the height of transmission towers, where topography allowed, so that nearby residences would have more than the required 6.5-meter clearance and therefore legally would not have to be relocated. Project example: In Kenya, the Tana River Conservation Project (TF 28601) first proposed that people be removed from a legally desig- nated park area. Further studies suggested that an endangered monkey species lived in a symbiotic relationship with the people in the area. The project planners decided to allow the people to remain but created incentives to promote out-migration. Project example: In Uganda, the Bujagali Power Project (Cr B0030) diverted high-voltage transmission lines around a large residential area in the capital city, Kampala. The reorientation of the transmission lines resulted in a longer and more costly route but eliminated much of the need for resettlement. The overall cost­benefit of the initiative was not significantly affected. Project example: In Zambia, the Power Rehabilitation Project (Cr 3042) follows the Zambia Electricity Supply Corporation's (ZESCO's) policy of negotiating with landowners and users, rather than resorting to involun- tary acquisition through the Land Acquisition Act. The corporate policy also requires that its engineers design three alternative routes for each transmission line, to help avoid the lands of landowners and occupiers who refuse to accept the line across their land. In addition, once the line is designed, ZESCO's Environmental and Social Affairs Unit surveys the route to determine the number of properties and structures to be affected. On the basis of these surveys, planning engineers fine-tune the final alignment of the transmission lines, to reduce the number of residences and buildings affected. 7 Involuntary Resettlement Sourcebook When OP 4.12 Becomes Effective and When 1 It Remains in Force Sometimes the temporal boundaries of projects are unclear. Sometimes land acquisition takes place before a project is formally identified, but the acquisition is closely linked to a Bank-financed project. Sometimes the resettlement remains incomplete at project closure. The following section addresses several questions raised by these situations. Initial Applicability OP 4.12 applies whenever land is taken involuntarily for a Bank-financed project. OP 4.12 applies whenever, in a Bank-financed project, land is acquired invol- untarily or access is restricted in legally designated parks or protected areas. If resettlement for the project begins before initial discussions with the Bank and the acquisition of the area is directly linked to the Bank project, then the sub- stantive aspects of OP 4.12 apply retroactively. In other words, if an area is being cleared in anticipation of, or preparation for, a project, OP 4.12 would apply. If, however, earlier resettlement is not directly linked to the project (even though it may facilitate the project), the OP would not apply. For example, a national land regularization or titling program might evict squatters and encroachers, following due process as prescribed by law. If subsequently and independently that area is required for a project, OP 4.12 does not apply. In other words, if the people were resettled with due process for reasons unrelated to the Bank-financed initiative, they are not covered under OP 4.12.4 (See also "People without Title or Use Rights," in chapter 5.) If necessary, task team leaders can seek guidance from the resettlement com- mittee to determine whether a previous displacement is attributable to a project and, if so, to establish retroactive eligibility and entitlement criteria. Whatever the legal determination, Bank experience shows that to resolve previous issues of inequitable or insufficient rehabilitation is good practice and can help avoid resistance by DPs to the project. Project example: In Vietnam, a government decree led to the clearing out of people living within highway rights-of-way in areas designated for Bank-funded improvements under the Highway Rehabilitation Project (Cr 2549). The Bank, insisting that previous project discussions had established the applicability of OD 4.30, halted preparation of the 8 Scope of OP 4.12 project until the DPs were identified and covered under the resettle- ment plan (RP). 1 Project Closing Bank policy requires full provision of all resettlement measures before a project closes: "A project is not considered complete--and Bank supervision continues--until the resettlement measures set out in the relevant resettlement instrument have been implemented" (BP 4.12, para. 16). Moreover, it is the borrower's responsibility to document that the resettlement instrument has been fully implemented: "Upon completion of the project, the bor- rower undertakes an assessment to determine whether the objectives of the resettle- ment instrument have been achieved" (OP 4.12, para. 24). The borrower assesses achievement in the restoration of incomes and living standards before project closing. A project cannot be deemed officially completed until the RP is fully implemented. Outstanding resettlement issues can be pursued during the loan repayment period. OP 4.12 (para. 23) specifies that the borrower has the obligation "to carry out the resettlement instrument and to keep the Bank informed of implementation progress" and that this obligation is "provided for in the legal agreements for the project." Further, "before project completion, an assessment will be made by the borrower, to determine whether the main objectives of the resettlement instrument have been real- ized." BP 4.12 (para. 16) provides that the Bank will verify the accomplishments, specifically that "upon completion of the project, the Implementation Completion Report . . . evaluates the achievement of the objectives of the resettlement instrument and lessons for future operations and summarizes the findings of the borrower's assess- ment." OP 4.12 states further that "if the assessment reveals that these objectives may not be realized, the borrower should propose follow-up measures that may serve as the basis for continued Bank supervision" (para. 24). Even if all agreed compensation and other assistance have been provided, complexities inherent in resettlement may lead to failure in achieving the objectives. Therefore, before the scheduled project closing, the Bank task team 9 Involuntary Resettlement Sourcebook first verifies that all agreed forms of assistance in the RP have been provided. 1 The borrower is obligated to obtain an evaluation of incomes and living stan- dards based on baseline data and on monitoring and supervision results. If all agreed forms of assistance have been provided but evaluation results show that incomes or living standards have not been restored--or are not likely to be restored--for a significant proportion of the affected population, the Bank should initiate discussions with the borrower regarding possible follow-up actions. Continued Bank supervision may be necessary. Project example: In India, the Upper Krishna Irrigation Project (Ln 3050, Cr 2010) closed on June 30, 1997, and an Implementation Completion Report (ICR) was issued on June 29, 1998. The ICR documented that 20 of the 37 legal covenants were incompletely fulfilled and that 3 had not been complied with. The 20 partially fulfilled covenants related largely to the resettlement and rehabilitation of project-affected people and to the participation of farmers in irrigation management (for exam- ple, formation of water-user committees). According to the ICR, the project was far from complete as envisaged, so Bank management still had a responsibility to follow the progress of outstanding activities. Because the Bank and the Government of Karnataka were still bound by the pro- visions of the project agreement, they both agreed that the Bank would continue to supervise these activities until completed. As of October 2003, four post-completion missions have taken place: April 1999, January 2000, November 2000, and February 2002. Linkages between Bank and Other Donor or National Projects Resettlement caused by non-Bank­financed activities critical to the design or performance of Bank projects requires due diligence by the Bank. If a non-Bank­financed activity that causes resettlement is critical to the design or performance of the Bank project, the Bank would carry out due diligence concerning resettlement resulting from such activity by obtaining information on the procedures to identify and address adverse impacts, the applicable stan- dards, the outcomes that are expected, and any significant issues. Bank man- agement and the Board would be fully advised on resettlement issues associated with such non-Bank­financed activity. A key factor in determining whether the OP applies is the sequencing of activities. Activities causing resettlement are usually contemporaneous with the Bank investment. To address the fact that these activities are not a part of the World Bank project, the Bank applies a due diligence approach. 10 Scope of OP 4.12 In terms of the policy, OP 4.12 applies "to other activities resulting in involuntary 1 resettlement, that in the judgment of the Bank, are (a) directly and significantly related to the Bank-assisted project, (b) necessary to achieve its objectives as set forth in the project documents; and (c) carried out, or planned to be carried out, contemporane- ously with the project" (para. 4). In many cases, the Bank finances physical works that are part of broader, integrated infrastructure systems. Systems such as roadways may be constructed incrementally, sometimes over several decades. In some cases, the period of construction is much more contemporaneous, as part of an integrated develop- ment scheme. For various reasons, borrowers may rely on two or more external financing agencies, as well as domestic resources, to fund various parts of the construction. Sometimes, Bank-financed activities are essential to the func- tioning of non-Bank­financed activities. In such cases, the integrally linked components would require due diligence by the Bank, regardless of financing source. Judgment may be needed in assessing the significance of such linkages. In some networks (roads, railways, or transmission grids, for example), all segments within the system are broadly linked to some extent, but the functioning of the overall system may not be critically affected by construction in one segment. Constructing or improving that single segment may be economically feasible and desirable on its own merits, without regard to effects elsewhere in the sys- tem. In such cases, OP 4.12 does not apply. However, if the construction or improvement of connection points (e.g., intersections) is occurring at about the same time as a Bank-financed road construction project, judgment is needed to determine to what extent the policy is applicable. By contrast, a Bank-financed power plant could certainly not deliver elec- tricity or generate economic benefits without transmission lines. Similarly, a Bank-financed wastewater treatment plant could not function without a sewer- age system. If such facilities are to be built contemporaneously with the Bank- supported project, any land acquisition and resettlement needed for them would be reviewed using the Bank's due diligence approach. To determine whether Bank-financed activities and non-Bank­financed activities are contemporaneous, the task team leaders may first have to deter- mine the sequencing of events. In some cases, significant parts of the infra- structure may have been constructed many years before the Bank's investment. In such cases, it would make no practical sense to attempt to review investments undertaken in the distant past. Due diligence is required, however, when the Bank is financing part of an integrated development scheme. When other facilities essential to the functioning of the Bank-financed works are to be 11 Involuntary Resettlement Sourcebook constructed at the same time as, or shortly after, the Bank-financed work, it is 1 good practice to incorporate the resettlement arrangements for the non-Bank­ financed activities into the RP. If the other facilities are newly constructed or are under construction at the same time as the Bank project is under prepara- tion, it is recommended that these arrangements be reviewed for general con- sistency with Bank policy objectives and standards. If such reviews show that resettlement in these activities falls significantly short of Bank policy standards, good practice would be to discuss with the borrower some retroactive measures to mitigate the impacts of these shortcomings. The following are examples of the application of this guidance: Project example: In Burkina Faso, the Ouagadougou Water Supply Project (Cr 3476) financed construction of a water line to the city. The line would draw water from a new dam financed by other donors. Because the only purpose of the main was to provide water to the capital city, the Bank car- ried out due diligence concerning resettlement resulting from the project. Project example: In China, the Tuoketuo Thermal Power Project (Ln 4172) required construction of transmission lines that would not be part of the Bank project. Because the transmission lines were essential to the Bank project, however, the Bank required submission of a resettle- ment framework for the transmission lines that was consistent with Bank standards. Project example: Also in China, illegal structures within the right-of- way were removed along a few of the streets in the Shijiazhuang Urban Transport Project (Ln 4600), then under preparation. The Bank deter- mined that its resettlement policy would not apply to removal of these structures because they were removed as part of a broader, nationally sanctioned enforcement and beautification campaign. Project example: Also in China, the Bank-financed Wanjiazhai Water Transfer Project (Ln 4179) would divert water from the Wanjiazhai Reservoir, which had been financed locally. Because the water main was a critical component of the reservoir, the Bank held that resettlement standards applicable to the reservoir need to be reviewed by the Bank. Project example: In Côte d'Ivoire, the Azito Thermal Power Project near Abidjan (Cr B0010) required, but did not finance, a dedicated gas pipeline from the fractionating plant, as well as transmission lines to the main power grid. The pipeline was built and operated with separate funding from a private firm. Another firm built the transmission lines under contract to the government, which owns them. Because both the gas supplies and the transmission lines were critical to the Bank-funded 12 Scope of OP 4.12 project, due diligence review of the land acquisition and resettlement for all components of the power plant was carried out by the Bank. 1 Project example: In India, the Bank-financed Hyderabad Water and Sanitation Project (Cr 2115) depended on access to water stored behind a dam nearing completion but financed without Bank assistance. Because the Bank project was directly linked to dam construction, the project included infrastructure improvements and rehabilitation assistance to supplement compensation provided to DPs affected by dam and reservoir construction. Project example: Also in India, displacement in a non-Bank­financed dam project was expected to encourage encroachment into wildlife pro- tection reserves to be supported by the Bank-financed Eco-development Project (Cr 2916). Though encroachment might impair effectiveness of the reserves, the dam itself was not linked directly to the Bank-supported project. To discourage encroachment, the Bank obtained assurances that adequate measures would be taken to restore the incomes of those dis- placed by the dam project. Project example: In the Republic of Korea, one component of the Pusan Urban Transport Management Project (Ln 3828) financed the purchase of 280 railroad cars for the Pusan Urban Transit System. Because the cars would serve no other purpose than transit on a rail line under construc- tion but not financed by the Bank, the Bank conducted a due diligence review of resettlement associated with rail-line construction. Project example: In Mali, Mauritania, and Senegal, the Regional Hydropower Development Project (Cr 2970, Cr 2971, Cr 2972), which financed transmission lines from the Manantali Dam to demand centers in the member countries, did not review resettlement in the reservoir area because dam construction and reservoir filling had taken place more than 10 years earlier. Promotion of domestic resettlement policy adoption may eliminate or reduce project linkage issues or problems. In projects involving cofinancing with other multilateral or bilateral agencies, Bank policy is to ensure that, at a minimum, Bank policies are met by the borrower for all components, regardless of other sources of funds. As OP 4.12 states, the "policy applies to all components of the project that result in involuntary resettlement, regardless of the source of financing" (para. 4). (continued) 13 Involuntary Resettlement Sourcebook 1 (continued from p. 13) This insistence on minimum standards for the entire project accords with OP 14.20 on cofinancing, which states that Bank funding is intended "to supplement investment from other sources" (para. 1) and, in part, to "help establish common poli- cies or investment priorities among financing sources at the project and sector level" (para. 2). Of course, the borrower or other financiers may require higher standards. Divergent policies and standards can complicate project implementation. Therefore, reconciliation of the borrowers' and donors' approaches to resettle- ment issues is highly recommended whenever distinct subprojects are funded by different donors under the same program. OP 4.12 (para. 32) provides for Bank support for development of resettlement policies in borrower countries, as good practice is to encourage development of policies consistent with Bank policy objectives and standards. To the extent that Bank and borrower policies are consistent, temporal- and spatial-linkage issues are less likely to arise and are easier to resolve when they do arise. Project example: In Colombia, Bogota city officials accepted the need to implement OD 4.30 in the Bank-financed portion of a ring road when they negotiated the project in the early 1990s. The officials later came to recognize the usefulness of these procedures, and today they have adopted these principles for urban resettlement operations in the city. Project example: In India, the National Thermal Power Corporation (Ln 3632) adopted the principles of OD 4.30 for a Bank-financed proj- ect in the early 1990s. Today, the corporation not only has a policy on resettlement for all of its projects, but also has a cadre of dedicated social units to implement the unified policy in the field. Project example: In Rwanda, the National Highway Project (project number not known) reserved Bank financing for stretches of rural high- way that required no resettlement. The project used other donor funding for peri-urban stretches that would likely require resettlement. In accor- dance with OP 14.20, the Bank insisted that OD 4.30 be applied to the entire highway, as individual segments of road merely constituted parts of an integral investment. Project example: In Vietnam, the Bank's Highway Rehabilitation Project (Cr. 2549) financed one stretch of highway, while another donor financed an immediately adjacent stretch. Because the government was applying widely divergent standards in adjacent areas, DPs in the non- Bank­financed area complained that they should be treated equitably, in accordance with Bank resettlement standards. 14 Scope of OP 4.12 When OP 4.12 Does Not Apply 1 OP 4.12 clarifies the situations in which the policy does not apply. The essen- tial criteria for the application of the policy are (a) the resettlement being involuntary; (b) the project being location specific; and (c) the taking of land or restriction of access being for a Bank-financed investment. The policy does not apply when these criteria are not met. Structural Adjustment Loans OP 4.12 (endnote 1) specifically exempts adjustment operations, such as Structural Adjustment Loans (SALs), from the specifications of the OP: "The term `project' does not include programs under adjustment operations." Adjustment operations provide general budgetary transfers to support econom- ic policy reform and are therefore not location-specific investments. SALs typi- cally do have socioeconomic impacts, such as those resulting from a restructured economy. (See also "Indirect Economic Impacts," below.) But because these consequences are not the direct result of land acquisition, the Bank's policy does not apply. Sectoral Adjustment Loans are a type of adjustment operation, as they may provide general budgetary support in a sector. These loans may, however, list specific investments, and they are also subject to OP 4.01's environmental- assessment instrument, which cross-references OP 4.12. Thus, where construction of new infrastructure at an existing facility or construction of a new facility entails land acquisition, OP 4.12 may apply on the basis of this reference in OP 4.01. Further, the proactive provisions of the Bank's policy on involuntary resettlement would help support policy and institution building in the con- cerned sector. People with income losses attributable to policy or program lending are not entitled to rehabilitation assistance under OP 4.12. Policy or program lending (for example, structural adjustment programs) can lead to economic hardships by, among other things, eliminating subsidies or clos- ing state enterprises. Such programs do not entail land acquisition for physical infrastructure linked directly to the Bank-supported program. Therefore, loss of jobs or incomes resulting from such programs is beyond the scope of OP 4.12. Such matters can usually be considered under social analyses related to the proj- ect. The following are examples of this guidance: Project example: In India, the Coal Sector Environmental and Social Mitigation Project (Cr 2862) was designed to mitigate the adverse effects of a Bank-supported sectoral reform program. The project included 15 Involuntary Resettlement Sourcebook compensation and rehabilitation provisions for people displaced by 1 mining subcomponents; an indigenous peoples' development plan for affected tribal peoples; and some remedial measures developed to address inadequate resettlement from an earlier mine development. Some jobs were also lost due to economic restructuring associated with the project. However, since the loss of jobs resulted not from land acquisition but from economic restructuring--including workforce reductions and closing of unsustainable mines--the Bank project did not include entitlements under OP 4.12 for miners expected to lose their jobs. Project example: In Poland, Romania, the Russian Federation, and Ukraine, projects to restructure the coal sector had significant social consequences. The program in each country closed many mines and downsized those remaining in operation. The impact of these layoffs was significant at every level--personal, familial, communal, regional, and national. In each of these instances, the project instituted major pro- grams for severance payments and economic rehabilitation as part of good project design. But it did so without recourse to the Bank's policy on resettlement, because none of these initiatives required involuntary acquisition of land. Natural Disasters, War, or Civil Strife OP 4.12 (endnote 6) states that "this policy . . . does not cover refugees from natural disasters, war, or civil strife (see OP/BP 8.50, Emergency Recovery Assistance)." Resettlement after a natural disaster or war that may require physical reloca- tion and economic rehabilitation is generally exempt from OP 4.12 and there- fore does not need to follow the standards prescribed in it. The OP would apply, however, to any land acquisition undertaken by the state to relocate the envi- ronmental or war refugees. Also, if the people affected by disasters or war are resettled for a second time, after a few years, from their temporary locations, such subsequent resettlement would be subject to OP 4.12. Project example: In the Azerbaijan Republic Pilot Reconstruction Project (Cr 3109), when refugees from Armenia who had been reset- tled in temporary locations for 12 years were resettled to permanent sites, the second relocation to permanent sites was covered by OP 4.12. 16 Scope of OP 4.12 Natural disasters create emergency situations that require speedy processing. OP 4.12 1 (endnote 23) recognizes that "an exception to this requirement [of having a draft resettlement instrument as a condition of appraisal; see para. 22] may be made in highly unusual circumstances (such as emergency recovery operations) with the approval of Bank Management." In these situations, "decisions that would have been made at the design stage in regular investment projects may have to be made after approval of an ERL [Emergency Recovery Loan] (OP 8.50, endnote 5). Specifically for resettlement operations, "the Management's approval stipulates a timetable and budget for devel- oping the resettlement plan" (OP 4.12, endnote 24) This stipulation accords with the requirement in OP 8.50 (Annex A, para. 4) that the Memorandum and Recommendation of the President . . . append a technical annex that details the "requirements for rehabilitation, reconstruction, or new construction." In natural disaster or civil strife, OP 4.12 would apply if the state used its pow- ers of eminent domain to acquire areas for the relocation of citizens in places other than their original residences and places of business. Similarly, OP 4.12 would apply if, in a Bank-financed project, abandoned land that reverted to the state for reallocation were encumbered by pre-existing use claims. In Emergency Relief Projects (ERP), designed to mitigate adverse impacts of a disaster or civil strife on affected people, detailed resettlement planning can be carried out during the project implementation stage. Project example: In China, the Taihu Basin Flood Control Project (Cr 2463) was designed after the 1991 flood. The RP was prepared on the basis of an incomplete census and inventory, as the project components were at various stages of technical design at that time. Nonetheless, dur- ing implementation detailed census and inventory surveys were conduct- ed on the basis of preliminary technical designs for each component of the project. As a result, the project experienced substantial changes in its estimated impacts: although land acquisition increased, project authori- ties strove to minimize the number of people affected, the number of homes demolished, and the amount of land leased temporarily. Project example: In Ecuador, the El Nino Emergency Project (Ln 4259) was designed to rehabilitate roads and bridges washed out in floods and to provide new housing for poor families, which had been living in envi- ronmentally unsafe areas in 10 provincial towns. The RPs were devel- oped in consultation with the families, after project approval, and were implemented within two years of the project start. Project example: In Turkey, the Marmosa Earthquake Recovery Project (Ln 4517) was designed, and quickly approved, to provide new housing for families with homes destroyed in the disaster. Early in implementation, 17 Involuntary Resettlement Sourcebook project authorities discovered that three sites designated for new apart- 1 ment blocks were actually privately owned farmlands with a few structures. As a consequence, an RP that accorded with OD 4.30 was developed to guide the acquisition of these plots and the implementation of measures to compensate and rehabilitate their owners. Project example: In Azerbaijan, the Pilot Reconstruction Project (Cr 3109) resettled some 5,000 returnees in an area that had been aban- doned during the war and legally alienated from its original owners. Because pastoralists who remained in the area had customary use rights, OD 4.30 applied to the herders' situation, but not to that of the landowners who did not return to the area. Project example: In Sri Lanka, the Northeast Irrigated Agriculture Project (Cr 3301) is rehabilitating irrigation systems in a war-torn area. OP 4.12 does not apply in the southern part of the project area, because people can return to their former homes if they wish. They can do so because the southern part remained under titular government control during the conflict. OP 4.12 does apply in the northern part, however, where the de facto government forcibly expelled Muslims and resettled other populations on the lands, an act not recognized by the official government. Indirect Economic Impacts OP 4.12 explicitly covers "direct economic and social impacts" caused by Bank-assisted investment projects (para. 3). By implication, the policy does not apply to impacts indirectly related to land acquisition. OP 4.12 states that in these instances, "Where there are adverse indirect social or economic impacts, it is good practice for the bor- rower to undertake a social assessment and implement measures to minimize and mit- igate adverse economic and social impacts, particularly upon poor and vulnerable groups" (endnote 5). (See also "Land Acquisition and Restriction of Access to Conservation Areas," above.) Income losses not directly attributable to land taking are not covered by OP 4.12. Projects can indirectly affect incomes with or without expropriation of land, physical relocation of people, or restrictions on use. Often, development com- ponents (road building, electricity generation) can deleteriously affect incomes 18 Scope of OP 4.12 by altering competitive environments, traffic or consumption patterns, or other income-related factors. In the case of commercial enterprises, for example, 1 OP 4.12 requires compensation and various forms of relocation assistance, but the policy cannot address long-term impacts on customer loyalty, differences in local tastes, or other forms of intangible cost. Such indirect effects are not cov- ered by OP 4.12, but they may be identified through social assessment and mit- igated by attentive project design or other special measures. (See also "Calculation and Application of Replacement Cost," in chapter 4.) Adverse Environmental and Other Socioeconomic Impacts Environmental, social, and economic impacts that do not result from land tak- ing may be identified and addressed through environmental assessments and other project reports and instruments" (OP 4.12, endnote 5). Environmental externalities are beyond the scope of OP 4.12. Projects often create environmental externalities not directly caused by, or related to, land acquisition. In principle, negative environmental externalities that are not caused by land acquisition and do not, themselves, lead to forced relocation are to be addressed by OP 4.01. In those instances, the environmen- tal assessment (or environmental management plan) can include measures for compensation and other assistance, and the standards of OP 4.12 can be used to assist in the definition of those measures. If the externalities create conditions that pose a serious risk to health or safety, good practice is to include formal land acquisition in project specifica- tions. People forced to relocate by environmental hazards directly related to project-induced changes in land use are covered by the environmental man- agement plan. This plan may have provisions similar to those in OP 4.12. Project example: In Bangladesh, the Jamuna Bridge Multipurpose Project (Cr 2569) provided resettlement benefits for people affected by river- bank and channel-island erosion in the vicinity of the project. At issue was determining erosion attributable to the project in a generally erosion- prone environment. Accordingly, spatial- and temporal-proximity crite- ria (distance from construction areas and timing of erosion) were used to establish entitlement. Project example: In China, the Shanghai Sewerage Project (Ln 2794, Cr 1779) used tunneling to minimize displacement. Vibrations from the tunneling, however, damaged houses. The project paid repair costs, and authorities agreed to resettle people whose houses were damaged beyond repair. 19 Involuntary Resettlement Sourcebook Project example: In India, effluent odors and coal dust severely affected 1 84 households following implementation of the Tamil Nadu Newsprint Project (Ln 2050). The affected households were resettled under the follow-on Renewable Resources Development Project (Ln 3544). Project example: In Thailand, persistent health and safety complaints arising from blasting during the Pak Mun dam construction led the offi- cials of the Third Power System Development Project (Ln 3423) to offer both temporary and permanent resettlement options to DPs living near blast zones. National or Regional Resource Management Programs National programs to regularize resources are not covered under OP 4.12, because these programs neither require land nor restrict access to legally desig- nated parks or protected areas. This exemption holds, for example, when the program imposes restrictions on the use of natural resources, such as limitations on pumping from aquifers. As OP 4.12 (endnote 8) states, "This policy does not apply to regulations of natural resources on a national or regional level to pro- mote their sustainability, such as watershed management, groundwater manage- ment, fisheries management, etc. The policy also does not apply to disputes between private parties in land titling projects, although it is good practice for the borrower to undertake a social assessment and implement measures to min- imize and mitigate adverse social impacts, especially those affecting poor and vulnerable groups." Open-Market Purchase of Project Land OP 4.12 does not apply if land is acquired through voluntary sale at market price. That the sale is voluntary is important to document, however, because such sales can sometimes be coerced. Also, the land in question is to be free of rival claims or encumbrances. If resident agricultural laborers or others with customary claims to the land are involved, OP 4.12 would apply, and the claimants would be provided with alternative opportunities to earn their livelihood. Project example: In Malawi, the upcoming land-reform program (Project 075247) will provide funds to local communities to purchase bankrupt tobacco farms on the open market. If the farms have resident agricultural laborers, the project will take a census of the workers, deter- mine their employment preferences, and present a menu of rehabilitation options. 20 Scope of OP 4.12 Project example: In South Africa, the government intends to enlarge an existing national park by buying scores of large but highly marginal 1 farms. These sales are to be voluntary. Most of the farms have resident farm workers, many with long tenure and various privileges (for housing, crop land, grazing rights, and so on). These assets and rights are being delineated according to the Bank's resettlement policy. Mechanisms are being designed to restore incomes and living standards; these mech- anisms will include employment opportunities within the enlarged park or in the growing tourism industry that will result from enlarging the park. Project example: In Tanzania, the Boundary Hills Lodge Project (Project 9579), funded under the International Finance Corporation's Africa Project Development Facility, developed a private park and lodge, just outside the Tanangire Game Reserve, on 2,000 hectares of land. This land was sold by the Masai to the developers for a part interest in the investment. The International Finance Corporation hired consult- ants to verify the free sale of the lands, and subsequent studies have doc- umented that the development is paying royalties to the community, as originally agreed. Voluntary Resettlement "Voluntary resettlement" refers to any resettlement not attributable to eminent domain or other forms of land acquisition backed by powers of the state. The operative principles in voluntary resettlement are informed consent and power of choice. "Informed consent" means that the people involved are fully knowl- edgeable about the project and its implications and consequences and freely agree to participate in the project. "Power of choice" means that the people involved have the option to agree or disagree with the land acquisition, with- out adverse consequences imposed formally or informally by the state. By defi- nition, power of choice--and thus voluntary resettlement--is only possible if project location is not fixed. The route of a rural road, for example, could be changed if a landowner objected. The area of a reservoir behind a local dam, by contrast, is immutable. The former instance would allow for voluntary resettle- ment; the latter would not. To have only informed consent is insufficient with- out the power of choice. Voluntary Migration Projects In Bank experience, some projects involve voluntary resettlement, such as gov- ernment programs that provide options for resettling people from one area to another. The area of out-migration is exempt from OP 4.12 if the state does not 21 Involuntary Resettlement Sourcebook acquire any land from the resettlers or the émigrés have the option to keep their 1 holdings or sell their land on the open market. The voluntary move should nonetheless be documented, including the full disclosure of conditions in the receiving area and the risks migrants may face there. If the state acquires the area for in-migration through use of its powers of eminent domain, however, OP 4.12 applies to the host or receiving area. Project example: In China, the Bank-supported Gansu Hexi Corridor Project (Ln 4028, CR 2870) is sponsoring the migration of 200,000 people volunteering to move into areas newly developed for agricultural production. OP 4.12 did not apply to the migrants, but it would apply to any people in a "host community" adversely affected by land acqui- sition for project development. In this case, the OD applied only to about 600 people affected by reservoir construction in the population- receiving area. Project example: In the Russian Federation, the Northern Restructuring Project (Ln 4611) offers people in the arctic regions the opportunity to return to their areas of origin or to move to larger communities in that region. Migration is voluntary, so OP 4.12 does not apply in the area of out-migration. Further, migrants receive housing vouchers to buy new homes in their areas of origin or to buy available alternative housing of equal quality in the arctic region. So OP 4.12 does not apply to the areas of in-migration either. Voluntary Land Donations for Community Projects In some projects, communities may agree to voluntarily provide land in exchange for desired community benefits. The OP does not apply if people or communities make voluntary land donations in exchange for benefits or ser- vices related to the project. Land donations can be voluntary only if the infrastructure is not location specific. That is, a school or clinic can be sited in a different location if the landowner objects. But in case of location- specific infrastructure, such as a dam or reservoir, voluntary donation is pre- cluded, since objectors can be coerced into acceptance. Thus, if the location of the proposed infrastructure cannot be changed, OP 4.12 would generally apply. Further, arrangements for voluntary resettlement are expected to involve no physical displacement or significant adverse impacts on incomes (or they are expected to include community-devised mitigatory mechanisms acceptable to those affected). OP 4.12 defines "minor impacts" as loss of less than 10 percent of an individual's holdings (endnote 25). 22 Scope of OP 4.12 Because determining informed consent can be difficult, the following criteria are suggested as guidelines: 1 1. The infrastructure must not be site specific. 2. The impacts must be minor, that is, involve no more than 10 percent of the area of any holding and require no physical relocation. 3. The land required to meet technical project criteria must be identified by the affected community, not by line agencies or project authorities (nonetheless, technical authorities can help ensure that the land is appropriate for project purposes and that the project will produce no health or environmental safety hazards). 4. The land in question must be free of squatters, encroachers, or other claims or encumbrances. 5. Verification (for example, notarized or witnessed statements) of the vol- untary nature of land donations must be obtained from each person donating land. 6. If any loss of income or physical displacement is envisaged, verification of voluntary acceptance of community-devised mitigatory measures must be obtained from those expected to be adversely affected. 7. If community services are to be provided under the project, land title must be vested in the community, or appropriate guarantees of public access to services must be given by the private titleholder. 8. Grievance mechanisms must be available. Project example: In China, in the Sichuan Agricultural Development Project (Cr 2411), infrastructure and facilities were proposed by the villages and planned as part of the project. The project financed the pur- chase of building materials, such as cement, sand, and stones. The farm- ers contributed the land for tertiary canals, but all donations were less than 10 percent of each holding. Project example: In India, the Bombay Sewage Disposal Project (Cr 2763) provided improved sanitation in a slum community, without involuntary resettlement. The slum dwellers themselves made project site decisions and provided replacement housing materials or other benefits for those agreeing to move. Those relocating were to remain within 100 meters of their previous dwellings. Project example: In Indonesia, the Village Infrastructure Project (Ln 3888) allocated funds to villages specifying their own develop- ment priorities. The Bank accepted the practice of villagers' voluntar- ily contributing minor strips of land. Replacement lands or alternative 23 Involuntary Resettlement Sourcebook rehabilitation packages were to be offered to anyone losing more than 1 10 percent of their holdings. Voluntary Restriction of Access to Resources: Community-Based Natural Resource Projects Community-based natural resource projects on communal lands are a specific case of projects in which communities donate land in expectation of other benefits. OP 4.12 specifies that the OP "does not apply to restrictions of access to natural resources under community-based projects, i.e. where the community using the resources decides to restrict access to these resources, provided that an assessment satisfactory to the Bank establishes that the community decision-making process is adequate, and that it provides for identification of appropriate measures to mitigate adverse impacts, if any, on the vulnerable members of the community" (endnote 6). OP 4.12 is premised on the involuntary nature of land acquisition under the powers of eminent domain. Decisions by local communities to voluntarily restrict access to resources or their use and, where necessary, to institute mea- sures to mitigate adverse impacts on community members must allow informed consent and the power of choice. The community has the prerogative to hus- band its resources in this manner if the whole community participates in the decisionmaking and if weak or vulnerable segments of the population are pro- tected. The Bank verifies that the decisionmaking process is truly community- based--if it isn't truly so OP 4.12 could apply. The determination hangs on the nature of voluntary agreement, which must be premised on truly community- based decisionmaking. Restrictions on resource use require scrutiny. The Bank is required to review the decisionmaking process, as well as the framework for protecting vulnerable groups. The decisionmaking process must be inclusive; that is, women, the landless, and seasonal and other users must be represented as well. Similarly, the action plan needs to take full account of the particular issues and needs specific to these groups. The plan must document the ways these concerns are integrated into the overall program. Recording not only who attends meetings convened with each group, but also the positions expressed by each participant, is helpful in this regard. The following is an example of how a community got involved in planning access to seven new wildlife reserves: Project example: In India, the Eco-development Project (Cr 2916) seeks to strengthen the effectiveness of seven wildlife reserves. As part of the 24 Scope of OP 4.12 project, migration into the reserves is restricted. People within the reserves who indicate a willingness to move to adjacent areas are given 1 incentives to move there. People wishing to remain within the reserves have been assured that they will not be involuntarily resettled during the life of the loan. Project objectives and designs did not require expulsion of all people, and the existing desire of some residents for relocation assistance eliminated the need to apply OD 4.30. Notes 1. Practitioners concerned about other social issues and impacts should refer to the guidelines for social analysis available from the Social Development family website. 2. The instances where land acquisition does not trigger OP 4.12 are detailed in the section "Where OP 4.12 Does Not Apply." 3. Indirect impacts may be covered under other Bank instruments. Land acquisition may affect other people indirectly; that is, their properties and assets are not expropriated, but they suffer adverse effects from other people's losses. Communities downstream from a dam or reservoir provide a com- mon example: downstream communities lose no land to the project, but they may be severely affected by the change in water flow. Such indirect impacts are not covered under OP 4.12 because they are not the result of involuntary taking of land used by the affected people, but of other conse- quences of the project. Other instruments, such as OP 4.01's environmen- tal assessment instrument, cover such impacts. Project design should take indirect impacts into consideration, however, regardless of whether other safeguard measures apply. 4. The principle here is analogous to that used in resettlement operations for dealing with people who do not have legal rights or claims. The Bank accepts the date of the baseline survey as the cutoff date for eligibility: those in the area before the census begins are eligible for compensation and assis- tance, as relevant, and those who arrive after the cutoff date are not. (Squatters and encroachers are entitled to "resettlement assistance in lieu of compensation for the land they occupy . . . if they occupy the project area prior to" the date of the beginning of the census or prior to the date the project area was delineated, whichever date is earlier [OP 4.12, para. 16]). 25 Chapter 2 Resettlement Instruments and Disclosure 2 When operational policy (OP) 4.12 applies, the task team must determine which instrument is appropriate for the project under development. One of three main instruments will be required by appraisal: a resettlement plan (RP) (or an abbreviated RP), a policy framework, or a process framework. This chap- ter discusses in some detail only the process framework, which, formally, is a new instrument introduced with OP 4.12; later chapters take up the develop- ment of a resettlement policy and an RP. Resettlement Plan All projects that entail resettlement require an RP. "The scope and level of detail of the resettlement plan vary with the magnitude and complexity of reset- tlement" (OP 4.12, Annex A, para. 2). A full RP is required at appraisal when- ever land acquisition in a project affects more than 200 people, takes more than 10 percent of any holding, and involves physical relocation of population (OP 4.12, para. 25; Figure 2.1). An abbreviated RP is acceptable if fewer than 200 people are displaced. Even if more than 200 people are affected, if all land acquisition is minor (10 percent or less of all holdings is taken) and no physical relocation is involved, an abbreviated RP is acceptable. If fewer than 200 peo- ple are displaced but some physical relocation is involved, the abbreviated RP is expanded to include a rehabilitation program (OP 4.12, Annex A, endnote 6). OP 4.12, para. 6, and Annex A, paras. 2­21, provide the outline and rec- ommended content for an RP. Policy Framework A policy framework needs to be prepared if the extent and location of resettle- ment cannot be known at appraisal because the project has multiple compo- nents, as typically happens in sectoral investments, projects with financial intermediaries, and other projects with multiple subprojects. The policy frame- work establishes resettlement objectives and principles, organizational arrange- ments, and funding mechanisms for any resettlement operation that may be 27 Involuntary Resettlement Sourcebook RK RK cost RK RK and PLAN PLAN PLAN PLAN and PLAN, TED TED TION A 2 institutional TED RAMEWOF estimates) RAMEWOF assessment) and RAMEWOF ECONOMIC RAMEWOF population cost population ABBREVIA ABBREVIA CESS (with capacity WITH REHABILIT POLICY POLICY (with estimates; POLICY RESETTLEMENT RESETTLEMENT RESETTLEMENT RESETTLEMENT ABBREVIA PRO s Ye No Y align- impact DOES APPL and known? 4.12 Precise Relocation required? ment OP NOT s s s No Ye Ye No No Ye 10% align- impact known? and than holdings taken? Instruments any required? Precise zone Relocation ment More of s s s s Ye Ye Ye No Ye No Resettlement 26) 27) 28) multi- more access program? or natural ree:T Sectoral investment? (para. No Financial (para. No (para. affected? to resources? intermediary? Other 200 individuals project Restrict s Ye No Decision Uncertain 2.1 be to eminent Land acquired domain? Figure using 28 Resettlement Instruments and Disclosure necessary during project implementation. The framework also estimates the prob- able number of affected persons and resettlements, and especially for financial intermediary projects, assesses the institutional capability to design, implement, and oversee resettlement operations. When during project implementation the extent of resettlement in any subproject becomes known, an RP (or an abbrevi- 2 ated RP, depending on the scale and severity of impacts) is prepared before the investment is approved for funding (OP 4.12, paras. 29­30) (see Appendix 27, "Resettlement Policy Framework," on the CD-Rom accompanying this book for sample resettlement policy frameworks from several Bank projects). OP 4.12, paras. 26­28, and Annex A, paras. 23­25, provide the outline and recommended content for a policy framework. Process Framework Finally, conservation projects that restrict access to legally designated parks or protected areas without acquiring the land outright require a process framework (OP 4.12, para. 7). The purpose of the framework is to describe the process by which potentially affected communities will participate in planning. In these projects, the participation of the affected population in designing the restric- tions, as well as in proposing the mitigation measures, is critical for success (see CD Appendix 28, "Resettlement Process Framework," for a sample resettlement process framework from a Bank project). The process framework describes how any action plan will be developed with the local population. Once developed, the action plan, which may be part of a natural resources management plan, is submitted to the Bank for approval. "In projects involving involuntary restriction of access to legally designated parks and protected areas, the nature of restrictions, as well as the type of measures necessary to mit- igate adverse impacts, is determined with the participation of the displaced persons dur- ing the design and implementation of the project. In such cases, the borrower prepares a process framework acceptable to the Bank, describing the participatory process by which · specific components of the project will be prepared and implemented; · the criteria for eligibility of displaced persons will be determined; · measures to assist the displaced persons in their efforts to improve their liveli- hoods, or at least to restore them, in real terms, while maintaining the sustain- ability of the park or protected area, will be identified; and · potential conflicts involving displaced persons will be resolved. The process framework also includes a description of the arrangements for implement- ing and monitoring the process" (OP 4.12, para. 7). (continued) 29 Involuntary Resettlement Sourcebook (continued from p. 29) The process framework establishes how the "affected communities [will] partici- pate in the design of project components, [in the] determination of measures necessary 2 to achieve resettlement policy objectives, and [in the] implementation and monitoring of relevant project activities" (OP 4.12, Annex A, para. 26). "For a project involving restriction of access . . . the borrower provides the Bank with a draft process framework that conforms to the relevant provisions of this policy as a condition of appraisal. In addition, during project implementation and before to [sic] enforcing of the restriction, the borrower prepares a plan of action, acceptable to the Bank, describing the specific measures to be undertaken to assist the displaced per- sons and the arrangements for their implementation. The plan of action could take the form of a natural resources management plan prepared for the project" (OP 4.12, para. 31). Key elements of a process framework are identified in OP 4.12 (paras. 7, 31). These are described below. Preparation and Implementation of Specific Components of the Project The framework describes the components or activities that may involve new or more stringent restrictions on the use of natural resources. The key aspect of this section is to describe how potentially affected communities are to participate in deciding the scope of the restrictions and the mitigative measures proposed, including the methods of participation and decisionmaking (for example, open meetings, selection of leaders or councils). Selection of Criteria for Determining Eligibility for Assistance The framework describes how potentially affected groups or communities will be involved in identifying, and assessing the significance of, adverse impacts of the restrictions. The framework also describes how the local population will be involved in establishing the criteria for determining who is eligible for any nec- essary mitigation assistance. While the process framework approach requires that the local population participate in decisionmaking relating to eligibility criteria, another important aspect is to ensure the support of government agen- cies involved in the program. The framework must identify groups who may be particularly vulnerable to hardship as a result of new or strengthened restrictions on access to natural resources. Two additional issues warrant careful consideration in specific cases. 30 Resettlement Instruments and Disclosure First, the framework should consider the interests of nonresidents who also use the resources in question. Second, the framework may need to explain how the project is going to address the claims of people engaging in some form of illicit or unsustainable resource use (for example, poaching of protected wildlife or opportunistic encroaching into areas already subject to customary resource 2 management). Identification of Measures to Improve or Restore Livelihoods and Living Standards The framework describes how groups or communities will be involved in iden- tifying (a) the most equitable basis for sharing access to resources under restricted use, (b) alternative resources available for use, and (c) other opportunities to offset losses. This section describes the participatory method by which adversely affected community members will make collective decisions about the options available to them as eligible individuals or households. The framework also describes enforcement provisions and clearly delineates responsibilities of the community and government agencies to ensure that use restrictions are observed. In general, affected communities will likely use one or more of four strate- gies in devising alternatives: · Devising reliable and equitable ways of sustainably sharing the resource at issue. (Attention to equitable property rights or more efficient prac- tices may significantly reduce pressure on forest products, for example.) · Obtaining access to alternative resources or functional substitutes. (Obtaining access to electricity or biomass energy may eliminate overuse of timber for firewood, for example.) · Obtaining public or private employment (or financial subsidies) to pro- vide local residents with alternative livelihoods or the means to purchase resource substitutes. · Providing access to resources outside of the park or protected area. Of course, a framework promoting this strategy must also consider impacts on people and the sustainability of the resources in these alternative areas. Resolution of Potential Conflicts or Grievances The framework describes processes for addressing disputes among affected groups or communities. A key aspect of these processes will be the role of gov- ernment in both mediation and the enforcement of agreements. The framework also describes processes for addressing grievances raised by affected individuals 31 Involuntary Resettlement Sourcebook or households that are dissatisfied with eligibility criteria, the design of mitiga- tion measures, or patterns of actual implementation. The framework should describe how responsibilities will be distributed among government agencies and the communities themselves in the event that unanticipated problems or 2 impacts arise or mitigation measures cannot be implemented successfully. In addition, a process framework includes at least two elements that may not necessarily be directly related to community participation. Administrative and Legal Procedures The framework reviews the legal basis for acceptance and enforcement of mea- sures and terms included in the framework or policy. As necessary, the frame- work delineates the responsibilities of various government entities involved in the project or in delivery of services within the affected area. It establishes the minimum period for agreements with affected communities to remain in effect. It also establishes measures to protect the affected communities' interests if these agreements are superseded or rendered ineffective by any other govern- ment actions. Monitoring Arrangements The framework establishes arrangements for monitoring progress during project implementation. A general principle is that these arrangements include oppor- tunities for the affected population to participate in monitoring activities. The framework describes the scope and methods for monitoring, taking into account both the extent and significance of adverse impacts and the effectiveness of mea- sures intended to improve (or at least restore) livelihoods and living standards. For a process framework approach to be acceptable, the Bank must be con- vinced that the people affected will have a voice in the decisionmaking process. OP 4.12 emphasizes that affected communities should participate in determin- ing both the nature of restrictions on resource use and the measures needed to mitigate the adverse impacts of these restrictions. Such a high degree of com- munity involvement is essential whenever local cooperation and collaboration are critical for the success of an initiative. And like any framework for partici- patory processes (see chapter 7), the process framework must address issues about the quality of the process, such as leadership, representation, equity, and treatment of individuals vulnerable to specific hardships. In projects that involve both land taking and restriction of access, an RP and a process framework will have to be prepared. Task teams with specific questions can refer their queries to their regional resettlement specialist, the resettlement specialist for the Environmentally and Socially Sustainable 32 Resettlement Instruments and Disclosure Development Unit--Environment Department, or, if necessary, the Resettlement Committee. Disclosure 2 The Bank insists on both integral participation of displaced persons (DPs) and public disclosure of RPs. "Displaced persons should be meaningfully consulted and should have opportunities to participate in planning and implementing resettlement pro- grams" (OP 4.12, para. 2[b]). "The borrower informs potentially displaced persons at an early stage about the resettlement aspects of the project and takes their views into account in project design" (OP 4.12, para. 19). Furthermore, "as a condition of appraisal of projects involving resettlement, the borrower provides the Bank with the relevant draft resettlement instrument which conforms to this policy, and makes it available at a place accessible to displaced persons and local NGOs [nongovernmen- tal organizations], in a form, manner, and language that are understandable to them. Once the Bank accepts this instrument as providing an adequate basis for project appraisal, the Bank makes it available to the public through its InfoShop. After the Bank has approved the final resettlement instrument, the Bank and the borrower dis- close it again in the same manner" (OP 4.12, para 22). Bank Procedure (BP) 4.12 reiterates these instructions: "Once the borrower offi- cially transmits the draft resettlement instrument to the Bank, Bank staff--includ- ing the Regional resettlement specialists and the lawyer--review it, determine whether it provides an adequate basis for project appraisal, and advise the Regional sector management accordingly. Once approval for appraisal has been granted by the Country Director, the TT [task team] sends the draft resettlement instrument to the Bank's InfoShop. The TT also prepares and sends the English language execu- tive summary of the draft resettlement instrument to the Corporate Secretariat, under cover of a transmittal memorandum confirming that the executive summary and the draft resettlement instrument are subject to change during appraisal" (BP 4.12, para. 9). For projects that entail the involuntary restriction of access to legally designated parks and protected areas, "the TT assesses the plan of action to determine the feasi- bility of the measures to assist the displaced persons to improve (or at least restore in real terms to pre-project or pre-displacement levels, whichever is higher) their liveli- hoods with due regard to the sustainability of the natural resource, and accordingly informs the Regional Management, the Regional social development unit, and LEG [Legal Department]. The TL [team leader] makes the plan of action available to the public through the InfoShop" (BP 4.12, para. 15). The DPs are informed about the possibility of resettlement and are consulted in a meaningful way throughout the process. To this end, the borrower may work directly with the DPs and their local groups, contract an intermediary agency to assist in the work, or both. Whatever the organizational arrangement, the borrower is obligated to hear the views of the DPs and to integrate these 33 Involuntary Resettlement Sourcebook views fully into the resettlement instrument and its implementation (see chap- ter 7 for further details). Formal public disclosure entails distribution of the appropriate instruments, both in the project area and through the Bank's InfoShop: the borrower is 2 responsible for dissemination of the documents in the project area in a form and language understandable to the local populations, and the Bank undertakes distribution through the InfoShop. 34 Chapter 3 Eligibility Criteria and Units of Entitlement 3 Operational Policy (OP) 4.12 uses land ownership and severity of impact as guides to determine eligibility for resettlement entitlements. Land ownership includes title, customary, and traditional rights, as well as formal and informal contractual rights. The severity of impact may range from minor to severe. Minor impacts occur when, as defined in OP 4.12, endnote 25, "less than 10% of their productive assets are lost," with no physical relocation. Severe impact is when more than 10 percent of land (or resources) is taken, physical reloca- tion occurs from one's residence or place of business, or people suffer significant loss of livelihood and income. The type of ownership or claim, in combination with the severity of impact, determines the relevant resettlement entitlements, which are generally defined in proportion to the impact on displaced persons (DPs) (see also Appendix 5 and CD Appendix 11, "Matrix of Resettlement Impacts," for several examples from Bank projects). Eligibility Criteria: Land Tenure and Severity of Impact OP 4.12 recognizes the adverse impact that land acquisition and involuntary resettle- ment can have on local populations (para. 1): "Bank experience indicates that invol- untary resettlement under development projects, if unmitigated, often gives rise to severe economic, social, and environmental risks: production systems are dismantled; people face impoverishment when their productive assets or income sources are lost; people are relocated to environments where their productive skills may be less appli- cable and the competition for resources greater; community institutions and social networks are weakened; kin groups are dispersed; and cultural identity, traditional authority, and the potential for mutual help are diminished or lost." OP 4.12 defines categories of eligibility in terms of land tenure (para. 15): "Displaced persons may be classified in one of the following three groups: (a) those who have formal legal rights to land (including customary and traditional rights recognized under the laws of the country); (continued) 35 Involuntary Resettlement Sourcebook (continued from p. 35) (b) those who do not have formal legal rights to land at the time the census begins but have a claim to such land or assets; provided that such claims are recognized under the laws of the country or become recognized through a process identified in the resettlement plan . . . ; and (c) those who have no recognizable legal right or claim to the land they are occupying." 3 OP 4.12 also specifies the general measures required for specific impacts: "prompt and effective compensation at full replacement cost for losses of assets attributable directly to the project" (para 6[a]); "assistance (such as moving allowances during relocation;" and "residential housing, or housing sites, as required" "if impacts include physical relo- cation" (para. 6[b]); and "support after displacement, for a transition period," and "development assistance in addition to compensation measures" if incomes have been affected (para. 6[c]). Responsibility for establishing eligibility criteria rests with the borrower. "The borrower also develops a procedure, satisfactory to the Bank, for establishing the criteria by which displaced persons will be deemed eligible for compensation and other resettlement assistance" (para. 14). Land Tenure Bank policy clearly distinguishes legal tenure from occupancy without legal title, which is often termed encroachment or squatting. Legal tenure covers both ownership through legal title (or lease) or occupation or use based on cus- tomary and traditional rights that are or can be legally recognized. Land tenure--registered title, as well as customary and traditional rights--constitutes the initial eligibility criterion. Land tenure takes a variety of forms. In the simplest case, an individual or col- lectivity possesses freehold title to the area: that is, the area is registered in the name of the individual, corporation, or collectivity. In other cases, parties may hold land through leasehold and therefore have legal rights. This type of land- holding is particularly common in urban areas, where the state holds title but leases land to individuals on a long-term basis (for example, 99 years). Under OP 4.12, customary or traditional rights that are recognized or are recognizable under the laws of the country have the same force as formal legal title. As the OP says, displaced persons include "those who have formal legal rights to land (including customary and traditional rights recognized [or recog- nizable] under the laws of the country)" (para 15[a]). 36 Eligibility Criteria and Units of Entitlement Even in straightforward situations such as freehold tenure, land ownership can be complicated. Land records may be incomplete, out of date, lost, or destroyed. Even seemingly duly registered parcels of land may be subject to dis- pute for any number of reasons. Owners may have informally subdivided the plot. Registered owners may be surrogates for landlords with large landholdings. Inheritance on death of the owner may not have been recorded. In other instances, formal title might not exist, even though people have rec- ognized, customary and traditional rights to use the area. In Africa, for example, 3 village clans may exercise control over surrounding areas, which village elders allot to farmers for slash-and-burn agriculture. Similarly, in the South Pacific, land is held communally and cannot be alienated without a consensus of the community. Customary title also occurs in many special circumstances. In some countries, colonial powers gazetted areas as forest or nature reserves, even though indige- nous populations had resided there for generations. These populations usually remained in the newly demarcated area and continued their customary use of local resources. Even where groups that occupied the area before gazetting still have recognized claims in law, the administrative actions to formally transfer title have sometimes not been completed. This situation can cause difficulties because, today, better communications, heavier population densities, and chang- ing sensitivities about natural resource management have combined to restrict local resource exploitation on land that people regard as effectively theirs. A different situation arises in cities, where merchants and vendors ply their trades in places that in principle belong to the state. The state may have toler- ated the encroachment and may even have imposed taxes and other fees on the occupants, thus effectively establishing the occupants' informal or customary rights to that land. Elsewhere, groups may have seasonal rights to use the land. Transhumant pastoralists, for example, may have traditional rights to graze their animals on fields after the harvest. Itinerant fishers may have seasonal rights to work in spe- cific riverine or coastal areas. Field hands may have the traditional right to glean from the fields after harvest. Given the complexity of land-tenure situations, the census and asset inven- tory should record not only each plot to be acquired but also the owner or occupier, the type of tenure, and the documentation for title or the claim to occupancy. Land acquisition may qualify nonlandowners for assistance. Land acquisition affects anyone who owns, resides in, or works in the area taken by the state. Although only the legal or customary owner is compensated for the loss of the land, other people may be directly affected because of loss of occu- pancy or of other assets and may qualify for alternative forms of assistance. 37 Involuntary Resettlement Sourcebook Three major categories of nonowners are renters, businesses, and workers and employees. Renters occupying residences to be acquired are eligible for relo- cation assistance because they have to move. Relocation assistance typically covers assistance in locating replacement housing, as well as in packing and moving; financial payment for the cost of the move and possibly for refitting the new residence; and follow-up services for the individuals in their new locations. Businesses are similarly eligible for relocation and other assistance, regardless 3 of whether they own the property or building. Businesses using rented properties are given assistance in finding a new location, compensation at replacement value for any immovable assets, compensation for the loss of income during tran- sition, assistance with the physical transfer, and follow-up services. Workers and employees, meanwhile, may be eligible for wages during the transition. In addition, several categories of informal occupiers, often termed squatters and encroachers, may be eligible for specific assistance (see "People without Title or Use Rights," in chapter 5). Severity of Impact Resettlement entitlements are generally commensurate with the severity of impact. The effect on economic viability determines severity of impact. Severity of impact on landholdings varies with the extent of the DPs' holdings. But landholdings vary by size, use, and productive capacity, so viability deter- mines severity of actual impact. But no proportional formula can be relied on to consistently meet the compensation and rehabilitation requirements of OP 4.12. As a general rule, if a project-affected family loses less than 10 percent of a holding, the impact is minor, because the remaining area is likely to remain eco- nomically viable. This rule might not hold if the holdings are very small, in which case even a minor acquisition might render the entire plot unviable. Similarly, as a general rule, if a project-affected family loses less than 20 percent of its productive assets and the remainder is economically viable, the family may receive cash compensation. Again, if the holding is small and the remaining area is not economically viable, the family is compensated both for the lost asset and for the remaining unproductive asset. Furthermore, land may be only one source of income. Families may earn money from any number of activities, such as collecting secondary forest prod- ucts, marketing produce, producing artisanal goods, migrating for seasonal labor, and receiving remittances. Determination of the severity of impact takes into account not only landholdings but also all the income sources available to the DPs. This approach recognizes that families with holdings of the same size and 38 Eligibility Criteria and Units of Entitlement losing the same amount of land might have different incomes and standards of living and hence suffer different probable impacts. Resettlement planning involves two instruments that help in assessing severity of impact. Land surveys are used to determine the proportion of land acquired from each household and thus the probable severity of the impact of the project on landholding. Socioeconomic surveys are used to assess other income sources and thus the severity of the impact on total family income. 3 The nature of the land tenure system, particularly collective land tenure, can mitigate the severity of impact. Unlike individual land tenure, in which the impact of land acquisition falls on the individual or household, collective land tenure can mitigate the severity of impact by distributing the loss among all community members. In rural China, for example, farmers own land collectively, and the farmer group (the produc- tion team under the commune system) is the unit of land ownership. When the state acquires land within a village, the remaining area is reallocated to all the community members. (If the average landholding in the village falls below a regional average, the authorities will invoke other mechanisms, such as migra- tion permits and industrial employment, to ensure that all remaining farmers have plots of at least the average holding size.) Such collective sharing of the loss of land reduces the loss any one family must bear and means that the sever- ity of impact needs to be measured at the level of the collectivity. Collective tenure may not guarantee communal sharing of land loss if plots are locally identified as individual holdings. This situation arises, for example, in Vietnam and parts of southern China, where land is legally held collectively, but in some localities, specific plots are considered effectively the property of indi- viduals. In such instances, the impact of land acquisition will be collective in theory but individual in practice, and entitlements would need to be designed individually (see CD Appendix 4, "Guidelines for Land Acquisition Assessment," for guidance in conducting a land acquisition assessment that will help determine the resettlement implications and impacts of land acquisition). Total income (landholdings and income diversification) affects severity of impact. As mentioned, assessment of the severity of impact is based on a DP's total income. Both the amount of land held and the proportion of income that agri- culture contributes to family earnings are factors. To more accurately assess the actual impact of land acquisition, a good practice is to have the asset inventory cover both the total lands held by a family (rather than just the amount of land to be acquired) and the nonagricultural income available to the family. The impact of land acquisition is likely to be less severe for DPs who derive only a small 39 Involuntary Resettlement Sourcebook proportion of their income from land-based activities (see CD Appendix 10, "Household Income Stream Analysis," for the variety of income streams that need to be considered in designing income restoration strategies). In situations in which farmers depend entirely on farming for their income (rural situations), the loss of one tenth or more of their holdings is considered severe, according to OP 4.12, and "preference should be given to land-based resettlement strategies" because the DPs' livelihoods are land-based (para. 11). 3 Households commonly have both farm and nonfarm sources of income, espe- cially in densely populated rural and in peri-urban areas. In such areas, the extent of land loss alone is insufficient for estimating the impacts of land acquisition. Estimating the total family income in these cases also requires analysis of house- hold employment patterns and income structures. Furthermore, in areas with diversified income streams, giving a range of options to DPs allows them to protect (or enhance) their incomes, as they deem appropriate. Either a land-replacement option or cash compensation and rehabilitation assistance may be appropriate in these instances (Table 3.1). OP 4.12 accepts cash compensation "where (a) liveli- hoods are land-based but the land taken for the project is a small fraction of the affected asset and the residual is economically viable; (b) active markets for land, housing, and labor exist, displaced persons use such markets, and there is sufficient supply of land and housing; or (c) livelihoods are not land-based" (para. 12). Cash compensation is generally sufficient for DPs losing less than 20 percent of their landholding. Generally, DPs losing access to less than 20 percent of their landholding can be paid cash compensation at replacement cost for the portion of land lost to them. Table 3.1 Severity of Impact of Land Taking and Recommended Entitlement Options Option of P replacement L Option to Amount of land for O Prorated cash Rehabilitation U sell residual holdings acquired that taken R compensation package S land Residual Less than 20% holdings economically More than 20% viable More than 80% Residual Percentage irrelevant holdings no longer economically viable 40 Eligibility Criteria and Units of Entitlement Of course, design or land-consolidation considerations may lead governments to offer more than this minimum entitlement. DPs losing more than 20 percent of their total agricultural land are entitled to a land-replacement option. DPs losing more than 20 percent of their total agricultural land are generally considered severely affected. Those whose livelihoods are land-based and who are losing more than 20 percent of their total productive agricultural land are to 3 be given an option allowing them to acquire comparable replacement land. They may, at their option, choose cash compensation and economic rehabilita- tion, instead of land replacement. Those severely affected whose income is not land-based may receive only cash compensation and rehabilitation assistance to allow them to restore or improve their incomes. Residual landholdings that do not remain viable after land acquisition may be acquired, at the option of the DPs. "If the residual of the asset being taken is not economically viable, compensation and other resettlement assistance are provided as if the entire asset had been taken" (OP 4.12, endnote 12). A good practice is to give those people losing 80 percent or more of their total agricultural land an option allowing them to relinquish the remainder at replacement cost, acquire replacement land equivalent in size or productive value to their entire holdings, or choose among other rehabilitation measures, as appropriate. However, in cases in which acquisition of less than 80 percent of the landholding renders the remainder of the landholding no longer viable, Bank policy recommends that the entire plot be acquired. Landless laborers can be offered reemployment options. Landless laborers have no reasonable chance of reemployment if landowners involuntarily cede their property and move away. A good practice in these instances is to establish arrangements for the laborers' economic rehabilitation. (The same approach is followed for open-market purchase of project land; see "When OP 4.12 Does Not Apply," in chapter 1). Project example: In Malawi, the upcoming land-reform program (Project 075247) will provide funds to local communities for purchasing bankrupt tobacco farms on the open market. If the farms have resident agricultural laborers, the project will census the workers, determine their employment preferences, and present a menu of rehabilitation options. 41 Involuntary Resettlement Sourcebook Open Access and Other Property Open Access or Common Property Bank projects frequently affect people whose rights to land or other resources are not legally recognized. Such projects are especially likely to be carried out in regions where the regularization of formal property remains incomplete. 3 Some households depend on open access to resources in unregulated areas. Some communities have long-standing or ancestral customary rights to collec- tively regulate common property, or individuals or families may assert custom- ary property ownership. As OP 4.12 recognizes, the most devastating effects of displacement may be borne by individuals or groups who depend on open access to resources, whose customary rights are not legally recognized, or whose resource use differs from dominant patterns. Project example: In the Republic of Korea, the Ports Development and Environmental Improvement Project (Loan [Ln] 3793) gave licensed ocean fishers directly affected by land reclamation and port construction the equivalent of eight years' earnings. Indirectly affected fishers were to receive compensation amounting to 30 percent of earnings for 2.5 years. Project example: In Pakistan, as a result of a mid-term review of resettle- ment implementation, roughly 200 grazing households displaced by reservoir construction in the Left Bank Drainage Outfall Project (Credit [Cr] 1532) were granted continued use of the reservoir drawdown for grazing (in addition to standard DP entitlements). Roughly 20 house- holds without access to grazing areas received agricultural land accept- able to them. The resettlement package also included income-generation programs, including a milk-collection center. Project example: In India, the indigenous peoples' development plan for tribal peoples affected by the Orissa Water Resources Consolidation Project (Cr 2801) provided a mix of entitlements, including access to forest resources. The plan provided regularized title to land with up to a 30-degree slope and common-use rights on land or in forests in steeper areas. Resettlement plans include a survey of existing uses of all land directly affected by the project. Resettlement plans (RPs) detail the use and tenure of all affected plots in the project area. To ensure that resettlement does not cause secondary displace- ment, task teams ascertain at appraisal that the existing use of land to be acquired, including proposed resettlement sites, has been investigated. This ver- ification extends to public lands allocated for the project, because these lands 42 Eligibility Criteria and Units of Entitlement may be used privately. A good practice is to hold public consultations to find out whether anyone has pre-existing private claims to public lands not in active use. Such nominal public ownership cannot serve as a bar to compensation (or rehabilitation) for those with customary claims to resources. Replacements for common property are also communally owned. When affected lands are communally owned, ownership of replacement lands remains vested in the community (see also "Appropriate Unit of Entitlement," 3 below). Because relocation can disrupt modes of production and social rela- tionships within communities and households, a good practice is to review the arrangements for redistribution established by the community. Residences For partially affected residential land, necessity of relocation is often used to determine severity of impact. Rural If partial land acquisition leaves insufficient area for existing residential struc- tures and family farming activities, the impact is considered severe. Accordingly, the affected household, at its option, is entitled to alternative land of the same size or of a size that permits relocation of the affected structures and resumption of small-scale farming activities, such as fish ponds, chicken coops, or vegetable plots. Compensation at replacement cost is also required for relo- cation or reconstruction of structures or facilities. If land acquisition does not directly affect residential structures, cash compensation at replacement cost for the portion of land acquired (and any assets on it) is sufficient, provided an area acceptable and appropriate for farming activities remains. Urban In urban areas, yard areas required for a project may be acquired for cash, through a process of negotiation with the owner. If parts of the residence must be demol- ished, a good practice is to acquire the entire structure, unless the owner wishes to keep the structure and doing so does not create a threat to public safety. Businesses For enterprises, the necessity to relocate is often used to determine severity of impact. If industrial or commercial activity cannot be continued following partial acqui- sition of land, the affected enterprise is entitled to the cost of reestablishing its 43 Involuntary Resettlement Sourcebook activities elsewhere. This means the enterprise is provided alternative land of the same size or of a size that permits relocation of the affected enterprise. In addition, the affected enterprise is entitled to compensation at replacement cost for struc- tures, compensation for lost net income during the period of transition, and com- pensation for the costs of the transfer and reinstallation of the plant and machin- ery. If an enterprise can be relocated within the existing holding, compensation at replacement cost for the affected portion of the land must be paid, along with 3 any transfer or reconstruction costs for affected structures, plants, or machinery. Project example: In China, the Shanghai Sewerage Project (Ln 3987) compensated all 144 enterprises for their physical losses and reimbursed collective and private enterprises for salary expenses. Project example: Also in China, the Shandong Environment Project (Ln 4237) relocated three enterprises and one shop affected by its pro- gram; paid the workers' salaries during the transition; and waived, for two years after relocation, the contract fee levied on enterprises. Usefulness determines severity of impact for partially affected structures. For fully affected structures, full compensation at replacement cost (including any costs of relocation) is required. If a partially affected structure can continue its existing use, or if reconstructing only the affected portion of the structure can restore existing use, compensation at replacement cost is required for the affected portion of the structure. If a partially affected structure can no longer serve its normal functions, compensation at replacement cost (including provi- sion of a comparable building site), or compensation for all costs of complete restoration, is required. For wage employees, duration of joblessness determines severity of impact. If wage employees are to lose their incomes temporarily because of dislocation or disruption directly related to the Bank project but are likely to eventually be reemployed, they may be given a transition allowance equivalent to lost wages for the duration of their unemployment. If employees do not have a reasonable opportunity for reemployment (at equal or higher wages), a good practice is to provide them with alternative jobs or to take other rehabilitation measures to allow them to restore their incomes. Workers not assured of alternative employ- ment are normally given the equivalent of at least three years' wages. Project example: In the Republic of Korea, the Pusan Port Project (Ln 2726) disrupted employment of both waiters in portside restaurants 44 Eligibility Criteria and Units of Entitlement and landless laborers. The waiters were given a transitional allowance, because they could find reemployment in restaurants elsewhere in the city. However, the landless laborers at the port were given assistance to qualify for and find other employment. Temporary Permits People with valid temporary permits or use rights are eligible 3 for compensation or other assistance. People with valid permits or licenses for temporary use or occupancy of land or structures are eligible for compensation or equivalent forms of assistance. This compensation or assistance should be prorated for the remaining period of valid- ity. These people should also be compensated for loss of crops or for other dam- ages incurred. People whose temporary-use rights have already expired or who have been allowed temporary use in areas acknowledged to be reserved for the project are not generally eligible for compensation. However, a good practice is to provide such people with relocation or transition assistance. Temporary Involuntary Acquisition Infrastructure projects frequently require temporary use of private lands or struc- tures for access, material storage, borrow pits, work sites, or other purposes. In many cases, temporary access can be obtained voluntarily through renting or leas- ing. In some cases, borrowers may find they need to exercise legal or regulatory authority. Because temporary loss of lands or structures can adversely affect incomes or standards of living, task teams must ensure that involuntary tempo- rary acquisition is minimized and that project plans provide compensation for any involuntary temporary acquisition (Box 3.1). People temporarily affected are to be considered DPs. The primary emphasis of OP 4.12 is on mitigating adverse impacts, including temporary ones (for example, impacts of the relocation process). Those people involuntarily bearing costs of temporary acquisition directly attributable to Bank projects are to be considered DPs. The RPs therefore address the issues of temporary acquisition. Mechanisms to regulate prolonged temporary acquisition are provided. Because of contingencies during project implementation, the length of time required for temporary use of land or structures cannot be reliably determined at appraisal. But open-ended or prolonged temporary displacement lessens the 45 Involuntary Resettlement Sourcebook Box 3.1 Suggested Compensation Guidelines for Temporary Acquisition of Assets For land Good practice recommends that DPs receive (a) compensation equivalent to the net average income that would have been obtained from the land during the period of temporary acquisition; and (b) restoration of the land to its original productive use or full compensation for the cost of restoration. Another good practice is to explicitly 3 delineate in contractors' agreements the responsibility for restoring the land to its for- mer productive use. Project example: In China, plans for the Second National Highways Project (Ln 4124) included temporary acquisition of agricultural land for four years. Compensation for loss of access and cultivation was calculated as five times the average annual value of agricultural production. For structures Good practice recommends that DPs receive compensation based on the remaining extent of access or use. If temporary land acquisition produces only minor inconve- niences (for example, periodic disruption of access), compensation to restore the struc- ture to its original condition and an inconvenience allowance can be paid. If structures themselves are temporarily acquired, or if use of the structures is precluded, alternative comparable accommodations, a rental allowance for equivalent temporary housing, or payment for constructing temporary housing of a reasonable standard can be provided. Compensation should also be paid for any moving or restoration expenses. For businesses Temporary loss of access to facilities, suppliers, or customers can diminish business income significantly. A good practice is to pay compensation equivalent to the esti- mated net loss to the owner of the business. Because estimating may be unavoidable when planners are determining losses (or incomes), compensation amounts are usual- ly negotiated with business owners. If an affected business cannot continue in its cur- rent location, another good practice is to provide new premises or a rental allowance for new premises (including the cost of relocating business personnel and equipment to and from these new premises). Project example: In China, replacement accommodations for businesses tem- porarily affected by the Second Shanghai Sewerage Project (Ln 3987) were to be provided at least six months before displacement. Compensation was also to be provided for relocation expenses, lost wages, and net losses. For wages Good practice recommends paying allowances, equivalent to regular wages, to work- ers temporarily losing employment. Project example: In China, the Shandong Environment Project (Ln 4237) paid the workers' salaries in affected shops during the transition. 46 Eligibility Criteria and Units of Entitlement ability of DPs to restore their livelihoods and plan for the future. A good prac- tice is to agree with the borrower on arrangements for, and duration of, tempo- rary acquisition. Beyond that duration, additional allowances can be provided for the landowners and occupiers, in part as incentive for official agencies to speed up the process. Temporary compensation already paid is not to be deduct- ed from the compensation at full replacement cost if the project agency ulti- mately decides to acquire the property. Project example: In China, the Taihu Basin Project (Ln 3560; Cr 2463) 3 required 44,736 mu of land for dumping soil (15 mu 1 hectare). A 1.5-year lease was originally planned. But the heavy, clayey soil took sev- eral years to dry out. Therefore, the Taihu Basin Authority and local governments extended the land-rental period and allocated funds to speed up the restoration of the soil dumps. Appropriate Unit of Entitlement OP 4.12 recognizes individual, family or household, and community losses. "Upon identification of the need for involuntary resettlement in a project, the borrower car- ries out a census to identify the persons who will be affected by the project" (para. 14). "Alternative or similar resources are provided to compensate for the loss of access to community resources (such as fishing areas, grazing areas, fuel, or fodder)" (para. 13[b]). The "unit of entitlement" is the individual, the family or household, or the community that is eligible to receive compensation or rehabilitation benefits. Determining the appropriate unit of entitlement, especially if the resettlement process disrupts current household relationships, is necessary to ensure that entitlements target those adversely affected and to clarify the responsibilities of agencies managing compensation and rehabilitation (see also Appendix 6 and CD Appendix 13, "Entitlement Matrix," for several entitlement frameworks from Bank projects). As a rule, the unit of loss determines the unit of entitlement. As a general rule, those losing assets are compensated for their losses. If an individual loses a small business or access to income-generating resources, the individual is entitled to compensation or rehabilitation. If more than one person owns or customarily uses expropriated resources, then they are entitled to share in compensation. For example, if a household of eight loses a house and 2 hectares of land held in the name of one person, the members of the household are collectively entitled to at least a house and 2 hectares of land 47 Involuntary Resettlement Sourcebook of comparable value or to another form of compensation or rehabilitation acceptable to them. When the unit of entitlement is collective, resettlement arrangements need to take into account the interests of all affected individuals. In countries such as China, where rural land is collectively owned and com- pensation is typically paid to the collective as the unit of entitlement, the use 3 of collective compensation varies from case to case, but typically it is used to benefit the whole collective. Resettlement planning should identify the indi- viduals within the collective who are actually affected by land loss and ensure that adequate arrangements are provided for their economic recovery (through collective land redistribution or other means). The Bank accepts the borrower's census definition of "household." When the household is the appropriate unit of entitlement, the definition of "household" as used in the borrower's censuses can be used in RPs. If the borrower's practice is to categorically exclude certain groups, such as female-headed house- holds, a good practice is to agree with the borrower on a general principle of com- pensation for the effective owner or user (see also "Gender Issues," in chapter 5). Household entitlements are typically payable to the head of the household. In practice, title to replacement land, structures, and any other household assets is generally vested in the head of the household. In principle, the household as a group should jointly decide on an equitable distribution of entitlements. Social assessment may be needed to determine the equitability of existing household practices and the potential effects of resettlement on the distribution of opportunities and rights within the household. The following are common examples of such effects: · The shift from customary use to legal property title vested in the head of household may undermine the position of women. Social assessment may be necessary to determine whether joint title should be encouraged or required, especially if gender discrimination in income regeneration or estate transfer might result. · The shift from rural agriculture to wage employment for the head of household may undermine the productive opportunities and potential of other adults within the household. Social assessment may be necessary to determine whether these other adults have skills that would be appli- cable in the resettlement area or whether alternative entitlements, such as training, education, small-business grants, or other opportunities, can be encouraged or required. 48 Eligibility Criteria and Units of Entitlement · Prolonged moving delays from the time of project identification to actual implementation can also distort normal household patterns (for exam- ple, lack of investment, land divestiture, or inheritance). Updating the census surveys is useful in identifying children who have reached adult- hood in the interim, as well as families within households who may have lost productive opportunities because of the project, but well before dis- placement. 3 Adult offspring in the household are not eligible for separate entitlements. As a general principle, Bank policy does not make adult offspring residing with- in the household individually eligible for the complete household entitlement. If, in the example above, the household of eight includes two adults still residing with their natal family, giving each of them entitlement to a house and 2 hectares of land would go far beyond compensation for losses. Of course, nothing in OP 4.12 precludes the borrower from providing land to adult sons or daughters if the borrower wants to go beyond minimum standards. Project example: In India, the policy of the Upper Krishna (Phase II) Irrigation Project (Ln 3050; Cr 2010) was to entitle each of two sons over 18 years of age (adult brothers living separately) and unmarried daughters over 35 years of age to a house plot and a construction grant for replacement housing. Adult offspring are entitled to compensation for lost assets they own. Adult offspring (sons and daughters alike) residing within a household are enti- tled to compensation for loss of any productive assets in their name, assuming the losses are directly attributable to the project. Adult offspring are eligible for rehabilitation assistance for loss of employment income. Adult sons and daughters residing within the household are entitled to rehabil- itation assistance for any direct loss of employment income. If household enti- tlement packages are sufficient to restore household labor arrangements (for example, an agricultural household receives replacement agricultural lands), adult offspring living within the household are not automatically eligible for alternative rehabilitation assistance. A good practice is to extend such eligibil- ity, if direct replacement of household assets is not feasible or sources of house- hold income are expected to change as a result of resettlement. 49 Chapter 4 Compensation and Income Restoration Operational Policy (OP) 4.12 distinguishes between compensation for expro- priated assets and rehabilitation measures to help improve, or at least restore, 4 incomes or standards of living.1 To compensate displaced persons (DPs) for expropriated assets, the OP requires actual replacement of expropriated assets, when land-based households so desire, or compensation at replacement cost and alternative rehabilitation measures acceptable to the DPs. This chapter first provides guidance for applying the principle of replacement cost; it, then, exam- ines experience with rehabilitation measures. According to OP 4.12, the resettlement plan (RP) provides "prompt and effective compensation at full replacement cost for losses of assets attributable directly to the project" (para. 6). For households with land-based livelihoods that lose a significant portion of their holdings, Bank policy gives preference to land-based strategies. "These strategies may include resettlement on public land, or on private land acquired or purchased for reset- tlement. Whenever replacement land is offered, resettlers are provided with land for which a combination of productive potential, locational advantages, and other factors is at least equivalent to the advantages of the land taken" (para. 11). Payment of cash compensation may be appropriate "where (a) livelihoods are land- based but the land taken for the project is a small fraction of the affected asset and the residual is economically viable; (b) active markets for land, housing, and labor exist, dis- placed persons use such markets, and there is sufficient supply of land and housing; or (c) livelihoods are not land-based. Cash compensation levels should be sufficient to replace the lost land and other assets at full replacement cost in local markets" (para. 12). "`Replacement cost' is the method of valuation of assets that helps determine the amount sufficient to replace lost assets and cover transaction costs. In applying this method of valuation, depreciation of structures and assets should not be taken into account. . . . For losses that cannot easily be valued or compensated for in monetary terms (e.g., access to public services, customers, and suppliers; or to fishing, grazing, or forest areas), attempts are made to establish access to equivalent and culturally accept- able resources and earning opportunities. Where domestic law does not meet the stan- dard of compensation at full replacement cost, compensation under domestic law is supplemented by additional measures necessary to meet the replacement cost stan- dard" (endnote 11). 51 Involuntary Resettlement Sourcebook Calculation and Application of Replacement Cost Asset valuation procedures in many borrowing countries do not result in pay- ment of replacement cost of affected assets. Under these procedures, valuation of structures usually takes depreciation into account, and valuation of land is often based on land registers that do not always reflect market price. It is, there- fore, important to agree on asset valuation procedures to help DPs replace affected assets with equivalent alternative ones. General Principles 4 One source of operational confusion is the distinction between compensation at replacement cost and compensation at market cost. Where markets provide reliable information about prices and availability of comparable assets or accept- able substitutes, market cost plus transaction costs (for example, all preparation and transfer fees) is equivalent to replacement cost. Bank policy uses the principle of replacement cost to ensure that DPs secure assets equivalent to those lost. In many countries, legal compensation criteria are based on a registered "market value" that underestimates actual market value, so landowners are unable to replace their assets. Elsewhere, private prop- erty markets are thin or do not exist, and compensation is set administratively, which may also result in undervaluation. The situation is even more complex where legal compensatory practices discount local resource valuations, recog- nize customary claims but compensate them at a discounted value, or, in some instances, fail to recognize customary claims to land at all. Bank experience has shown that in the long run, insufficient valuation of assets often ends up cost- ing more, in terms of project delays and benefits foregone, than sufficient valu- ation and compensation would. The use of replacement cost as the compensation standard usually comple- ments borrower legislation and is meant, in part, to streamline project imple- mentation. Where legal stipulations result in undervaluation of assets, the mandated values can be supplemented by additional payments agreed to with the borrower. Although the borrower usually has no disagreement in principle, the manner in which supplementary compensation is determined is often the subject of close negotiation in practice (see CD Appendix 12, "Matrix of Compensation Unit Prices," for several lists of compensation rates for various impacts from Bank projects). Replacement cost addresses tangible assets only. Replacement cost addresses compensation for tangible assets, primarily land, houses, other structures, trees, crops, access to water, and improvements on the land (see CD Appendix 7, "Asset Inventory," for examples of assets for which several Bank projects provided compensation). Because valuation cannot be 52 Compensation and Income Restoration established for intangibles--sentimental attachments; proximity to neighbors or relatives; spiritual sites; aesthetic qualities, such as the view--compensation at replacement cost refers to compensation for tangible assets only. Intangible fac- tors can have economic value (for example, customer goodwill), however, and intangible attachments can be important to DPs. As a matter of good practice, such concerns are addressed through attentive project design or negotiation (see also "Indirect Economic Impacts," in chapter 1). Replacement cost includes all administrative fees. Any administrative charges, title fees, or other legal transaction costs must be paid by the project or waived. OP 4.12 (Annex A, endnote 1) notes that "the cost 4 of any registration and transfer taxes," whether for land in rural or urban areas or for houses or other structures, is included in the calculation of replacement cost. The reason for including administrative fees as part of replacement cost is simple. The DPs have not elected voluntarily to sell their property. As this property is being acquired by the state, the DPs cannot be expected to pay the state taxes or fees for land sales or purchases. Replacement cost includes a provision for inflation if payments are delayed. Compensation can fall below replacement cost because of delays in actual pay- ment of compensation. In many countries, the national law on land acquisition requires an interest payment if compensation is not paid within a specified peri- od. Where such provisions are not legally mandated, project-specific provision must be made for interest to accrue to offset inflation (or other price contin- gencies) if payment of compensation is significantly delayed. Potential project benefits are not counted toward replacement cost. Potential project benefits, such as access to irrigation or job-training programs, are properly part of rehabilitation, not compensation. However, borrowers may want to count such benefits against the compensation they are obliged to pay. Such benefits are not counted toward replacement cost, because they do not replace lost assets. "The value of benefits to be derived from the project [is not to be] deducted from the valuation of an affected asset" (OP 4.12, Annex A, endnote 1.) The benefits may be accepted as an income improvement measure, if chosen as an alternative by DPs who are informed of their options. But even in this instance, well-informed choice is critical because such benefits may never be realized or may be realized only after lengthy delays. Supplemental mechanisms can be counted toward compensation. The most direct way to achieve the compensation objective of OP 4.12 is to for- mally calculate compensation on a replacement-cost basis. If legal codes or 53 Involuntary Resettlement Sourcebook institutional practices in borrower countries present obstacles to direct com- pensation at replacement cost, supplementary payments can be used to ensure the overall adequacy of compensation. Relocation, construction, subsistence, transition, or rehabilitation allowances and grants in excess of actual transition costs can be counted as contributing to replacement cost. Only the additional amount in each measure can be counted informally as part of the supplement, however, because the original allotment for each measure represents a necessary payment for some aspect of the resettlement operation. Disclosure and grievance mechanisms are required. 4 Markets that furnish reliable information about the supply of alternatives and costs provide transparent institutional mechanisms for negotiating the value of land, housing, and other structures. Even in these situations, however, disputes over valuation are common. Accordingly, OP 4.12 requires that the RP include "affordable and accessible procedures for third-party settlement of disputes aris- ing from resettlement; such grievance mechanisms should take into account the availability of judicial recourse and community and traditional dispute settle- ment mechanisms" (Annex A, para. 17). Replacement Cost for Land If land is not directly replaced, compensation is to be based on market value, productive potential, or equivalent residential quality. OP 4.12 specifies either direct replacement of land or provision of full replacement cost, along with rehabilitation measures, in order to restore livelihoods. In principle, the replacement cost of agricultural land "is the pre-project or pre-displacement, whichever is higher, market value of land of equal productive potential or use located in the vicinity of the affected land, plus the cost of preparing the land to levels simi- lar to those of the affected land, plus the cost of any registration and transfer taxes" (Annex A, endnote 1). Where land is not provided by the project, the cost of identi- fying acceptable replacement land is included in the budget estimate. "For land in urban areas, it is the pre-displacement market value of land of equal size and use, with similar or improved public infrastructure facilities and services and located in the vicinity of the affected land, plus the cost of any registration and trans- fer taxes" (Annex A, endnote 1). Where markets are active, replacement cost of affected land, in either rural or urban areas, is based on fair market value (plus transaction costs and, in rural areas, any preparation costs). Alternatively, where markets are weak, replacement cost is calculated from the productive potential of agricultural or 54 Compensation and Income Restoration commercial land of equivalent size. Formulations are likely to vary, depending on land systems and market conditions in the borrower country. Replacement Cost in Countries with Active Land Markets Determining replacement cost of affected land can be fairly easy where active land markets exist. Projects can engage private and independent real estate agen- cies, banks, or mortgage firms to determine market prices or evaluate the ade- quacy of administratively set compensation. Alternatively, committees that include DPs or representatives of nongovernmental organizations can be formed to establish land valuation and help DPs identify and purchase replacement land. 4 Project example: In Bangladesh, in the Jamuna Bridge Multipurpose Project (Credit [Cr] 2569), provision of administratively set compensa- tion and an automatic 50 percent solatium (or premium) was replaced with land-purchase committees guaranteeing supplemental compensa- tion sufficient to purchase replacement lands from a willing seller, identi- fied by the DP. As long as the replacement land was within the maximum allowable cost, the DP could choose between more land of lower quality or less land of higher quality. Project example: In India, land committees have been established for several projects to identify or purchase replacement land from willing sellers. In the Orissa Water Resources Consolidation Project (Cr 2801), legal compensation was to be supplemented by rehabilitation assistance grants to purchase replacement land or other productive assets. The projects also promised reimbursement for, or exemption from, all trans- fer fees or taxes. Replacement Cost in Countries with Mixed Land Markets and Property Systems In some borrower countries, or regions within them, formal property titling remains incomplete, leaving a complex mélange of competing legal and custom- ary claims. In areas lacking unitary property systems, resource valuations may vary substantially and some property claims are likely to go unrecognized. (In Indonesia, for example, some land is still untitled, even in downtown Jakarta, and titled land is valued 10­60 percent higher than untitled land.) Hence, estab- lishing replacement cost requires much greater attention to the type of title and use rights held by affected persons. For projects acquiring land in such areas, good practice is to encourage vigorous disclosure of information and the use of nego- tiation or arbitration procedures and independent grievance mechanisms. Project example: In the Philippines, RPs for the Leyte-Luzon Geothermal Project (Loan [Ln] 3746) called for the National Power 55 Involuntary Resettlement Sourcebook Corporation to negotiate land acquisition with the DPs. Because an agreement could not be reached, an independent appraisal committee was established to address the compensation disputes. The committee consisted of a real estate expert and representatives from the local land bank and the Philippines National Bank. Project example: Also in the Philippines, DPs in the Transmission Grid Reinforcement Project (Ln 3996) could choose between compensation as evaluated by an independent appraiser or replacement land provided by the project. 4 Project example: In Indonesia, RPs for the Second Sulawesi Urban Development Project (Ln 4105) give DPs with insecure tenure (and those now in rental housing) tenurial rights in developed house plots, which cannot be sold for at least 10 years. Replacement Cost in Countries without Land Markets In China, the Russian Federation, and Vietnam, land remains collectively or publicly owned and cannot be alienated, although these countries are experi- menting with mechanisms to increase individual or household tenure. In coun- tries like these, the value of land is calculated as equal to the productive value of the land (usually, the value of the crops grown) times a multiplier represent- ing land value in various places (typically set by the distance from major consumer centers). Project example: In China, compensation for expropriated rural land is based on the average annual value of agricultural production over the preceding three years. Normally an amount of 6­10 times that value is paid as land compensation, and an additional 4­6 times that original value is paid as a resettlement subsidy, depending on the extent of land acquisition and its impact on average landholdings. In recognition that many factors can make land in some areas extraordinarily valuable, the law allows land compensation and resettlement subsidy combined to reach 30 times the average agricultural output value. The law also pro- vides a procedure for obtaining even higher rates of compensation. This provision is often used in peri-urban areas, where land values are not a function of agricultural output. Project example: In Vietnam, an emerging market permits buying and selling of land-use rights at highly fluctuating prices. Compensation rates payable in cash to project-affected households were introduced by national decree (87-CP) in 1994. This decree sets lower and upper lim- its on prices for various categories of land. The prices established in this 56 Compensation and Income Restoration decree are set administratively and may not be equal to replacement cost. Bank experience in Vietnam has so far mainly focused on replacing land for people losing more than 20 percent of their total holding, along with cash compensation for people losing less than 20 percent. More recent laws also allow for outright ownership (and alienation) of house plots of up to 200 square meters. The Irrigation Rehabilitation Project (Cr 2711) provides 60 percent of replacement cost for homesteads not privately or legally owned (plus full compensation for the house or other structures), to be used for purchase of privately owned homesteads. In all instances, compensation is to be sufficient to purchase a 200-square- meter parcel. The conversion from informal use rights to outright alien- 4 able ownership is considered as contributing to replacement cost. Replacement Cost for Houses and Other Structures "For houses and other structures, [replacement cost] is the market cost of the materi- als to build a replacement structure with an area and quality similar or better than those of the affected structure, or to repair a partially affected structure, plus the cost of transporting building materials to the construction site, plus the cost of any labor and contractors' fees, plus the cost of any registration and transfer taxes" (OP 4.12, Annex A, endnote 1). Where markets provide adequate information about the supply and cost of comparable substitutes, any replacement structure of equivalent market value, plus any transaction and relocation costs, may be appropriate. Where such market signals are absent or inadequate, replacement cost is equivalent to the delivered cost of all building materials, labor costs for construction, and any transaction or relocation costs (the cost of the land under the structure is considered in "Replacement Cost for Land," above). Replacement cost can be calculated using the infrastructure schedule or contractors' quotes Replacement cost can be calculated on the basis of the following: · The schedule of rates obtained from the infrastructure department--The infrastructure construction departments in all countries have a schedule of rates for preparing estimates for construction projects, which borrow- ers themselves use to estimate costs for construction materials and labor. When applied to calculation of replacement cost, rates current for the period of actual replacement should be used. 57 Involuntary Resettlement Sourcebook · The rates quoted by contractors for similar structures in other construction projects or programs--Where rate schedules do not exist or are out of date, recent contractor quotations for similar types of construction in the vicinity of the project can be used for calculating replacement cost. In projects offering the options of cash compensation or alternative accom- modation, the cost estimates for constructing alternative accommoda- tion could be used for calculating cash compensation payable. Project example: In China, several projects--including Inland Waterway III (Ln 4621), Jiangxi Highway II (Ln 4608), and Inner 4 Mongolian Highway (Ln 4663)--used unit-rate analysis for replacement cost of structures. Project example: In Vietnam, the Mekong Delta Water Resources Development Project (Cr 3198) has a dynamic process for evaluating compensation rates. To meet the stipulations of the provincial govern- ments, an independent monitor and the project office use market surveys and contractor interviews to periodically evaluate compensation rates. Depreciation is not deducted in calculating replacement cost for structures. "In determining the replacement cost, depreciation of the asset and the value of salvage materials are not taken into account" (OP 4.12, Annex A, endnote 1). Where housing markets are active, the replacement value of a structure can be readily determined. The compensation is generally enough to buy a similar structure elsewhere. However, many countries have no residential housing mar- kets or provide no reliable information about the appreciation or depreciation of housing. Moreover, under some compensation regulations, depreciation is used to calculate the present value of structures and improvements. If compen- sation at depreciated cost is paid to DPs under these conditions, the DPs are unable to replace their lost assets. In this instance, Bank policy requires replacement of assets or compensation at actual cost so that people involun- tarily displaced can secure equivalent assets. Therefore, where borrowers apply depreciation in calculating compensation, other mechanisms are typically used to help provide DPs with compensation at replacement cost. In various proj- ects, the Bank has accepted some combination of supplemental devices to bring actual compensation up to replacement cost. Such supplemental devices include moving and house reconstruction grants, transition allowances, free 58 Compensation and Income Restoration access to salvageable materials, and other entitlements above actual DP requirements. Salvage materials may belong to the acquiring agency but are not deducted from replacement cost. Salvage materials become the property of the acquiring entity. Accordingly, borrowers could, in principle, deduct from compensation the value of salvage materials sought by DPs. Because complexities arise in calculating the value of salvage materials, OP 4.12 does not allow for a deduction of the value of salvage materials from compensation. "In determining the replacement cost, . . . the value of salvage materials [is] not taken into account" (OP 4.12, Annex A, 4 endnote 1). Project example: In China, a common practice is to allow DPs to keep and reuse any salvageable materials, and the value of these materials is not deducted from the compensation fund. Project example: In the Philippines, the Transmission Grid Reinforcement Project (Ln 3996) team made no claim to salvage mate- rials. The RP provided DPs with a "disturbance fee" equivalent to the minimum wage for 60 days, in part to pay for the cost of gathering and transporting salvage materials. Materials left behind by the DPs became the property of the project agency. A good practice is to improve substandard living conditions, after displacement. OP 4.12 does not require compensation in excess of replacement cost. In the case of substandard housing or house plots or economically inviable land parcels, however, compensation at replacement cost is likely only to recreate and perpetuate poverty. Careful project design, targeted compensation, and flexibility in compensation arrangements can often improve living standards for the poor. As OP 4.12 notes, particular attention and consideration must be paid "to the needs of vulnerable groups among those displaced" (para. 8). Project example: In Colombia, the Calle 80 Urban Transport Project (Ln 4021) team assessed the economic vulnerability of DPs and provided supplemental payments to the poorest segments to improve the quality of their housing. Project example: In India, the Mumbai Urban Transport Project (Ln 4665; Cr 3662) is providing slum dwellers with new housing in apartment complexes. The new housing is in each case better than the previous residences. The project has put several common measures, such 59 Involuntary Resettlement Sourcebook as collective title, into effect to prevent the sale of the apartments and help collect utility and maintenance fees. Comparable replacement sites are required for movable structures. OP 4.12 makes no reference to movable housing or other structures. A good practice, however, is to calculate replacement cost for such structures as the cost of alternative sites, the cost of replacing improvements (such as foundations), and relocation expenses or other transaction costs (including provisions for replacing any materials ruined in transit). 4 Project example: In India, the National Highways Authority of India's road rehabilitation projects (Ln 4559) provides a small payment to cover the costs of shifting each vendor's movable structure to a new location. Replacement Cost for Other Assets Public Infrastructure Public infrastructure includes a wide array of facilities, such as roads, telephone lines, electric lines, water mains, public telephone offices, police stations, schools, and health clinics. In-kind replacement under force account, within an agreed time schedule, or full compensation to the agency replacing the service, is required. In the latter instance (cash compensation), project planners may need to ensure contractually that the service agency actually replaces the lost infrastructure. Project example: In China, the Shanghai Sewerage Project (Ln 2794; Cr 1779) paid the responsible municipal agencies the requisite amounts to replace public facilities and infrastructure. The project team ensured that the relocation areas were promptly provided with complete infrastructure. Community-Owned Facilities Communities may enjoy a wide range of community-owned facilities: churches, mosques, temples, or shrines; private or community-operated schools; village meeting houses; and local libraries. In-kind replacement or compensation at replacement cost is required for land and structures. In addition, for religious structures, ceremonies may be required to deconsecrate the old structure, give thanks to a deity, or consecrate the new structure. A good practice is to include these costs in the total compensation payment. Some assets, such as graveyards, have high emotional value. Another good practice is to select an appropriate plot, acceptable to the DPs, and conduct all the necessary ceremonies. 60 Compensation and Income Restoration Crops When arrangements cannot be made to allow for harvest, the market value for lost cash crops is paid. In some countries the value of the harvest is determined by the average market value of crops for the previous three years. Whatever the multiplier, if food supplies are sold in the area enough cash compensation is paid to purchase equivalent supplies, taking into account the possibility of price increases caused by heightened demand from DPs. In areas of predominantly subsistence production, good practice recommends that in-kind compensation be made for subsistence crops. Trees 4 Where markets exist, the value of a tree of a specified age and use can be used to determine compensation rates. Where markets do not exist, surrogate values must be determined. For timber trees, the value of a tree equals that of the lum- ber. For fruit or fodder trees, the value is equal to the cumulative value of the fruit crop for its productive life (and any timber value). If replacement trees are provided, good practice indicates that compensation be based on the value of the harvests lost until the replacement trees come into full production (typically, 7­10 years). In the case of immature trees, a less costly alternative may be to directly supply seedlings as a replacement and provide compensation for the resulting delay in reaching fruit-bearing capacity. Other Assets Other productive assets--such as tubewells, fishponds, poultry houses, and fences--are usually replaced in kind (or with functional equivalents), relocated, or compensated for at replacement cost. Income Restoration Alternatives: Land, Cash, and Jobs To restore people's income-earning opportunities after land acquisition and resettle- ment, OP 4.12 specifies that "displaced persons are . . . provided with development assistance in addition to compensation measures . . . , such as land preparation, cred- it facilities, training, or job opportunities" (para. 6[c]). OP 4.12 maintains the preference for land-based solutions, where appropriate. "Preference should be given to land-based resettlement strategies for displaced persons whose livelihoods are land-based. These strategies may include resettlement on pub- lic land . . . , or on private land acquired or purchased for resettlement. Whenever replacement land is offered, resettlers are provided with land for which a combination (continued) 61 Involuntary Resettlement Sourcebook (continued from p. 61) of productive potential, locational advantages, and other factors is at least equivalent to the advantages of the land taken" (para. 11). OP 4.12 also recognizes a number of circumstances in which other options may be desirable and feasible. "If land is not the preferred option of the displaced persons, the provision of land would adversely affect the sustainability of a park or protected area, or sufficient land is not available at a reasonable price, non-land-based options built around opportunities for employment or self-employment should be provided in addi- tion to cash compensation for land and other assets lost. The lack of adequate land must be demonstrated and documented to the satisfaction of the Bank" (para. 11). 4 General Principles for Replacing Income-Generating Assets The Bank established its initial resettlement policy in response to problems with large-scale resettlement in rural areas, including widely publicized episodes of dis- placement that reduced agricultural families to landless poverty. Although alter- native forms of compensation or rehabilitation may have been provided, they often failed to help DPs acquire productive assets and restore their incomes. Recognizing that cash compensation or other benefits can impose a high risk on DPs, Bank policy emphasizes land-centered remedies for loss of land-based incomes. In practice, three sets of issues complicate land-centered resettlement strate- gies. First, replacement land available to borrower agencies is scarce or of poor quality in many densely populated areas. Excessive reliance on direct land replace- ment in some instances has encouraged conversion of forest to agricultural land, unacknowledged secondary displacement, or granting of wastelands to replace productive agricultural lands. Second, a growing proportion of people affected by land acquisition live in nonagricultural settings or are only partially affected by land acquisition, as in linear projects. Third, in peri-urban settings or areas with general economic growth, DPs may prefer other income-generating options. This section discusses appropriate income-generating strategies for DPs. The aim of these strategies is to protect the land-based livelihoods of DPs who prefer to remain in agriculture and to enable others to pursue alternative opportunities (see CD Appendix 10, "Household Income Stream Analysis," for the variety of income streams to be considered in designing income restoration strategies). DPs with land-based livelihoods are to receive the option of obtaining comparable replacement land. RPs are designed to fit specific project circumstances, as well as the preferences of DPs. In rural areas, preliminary consultations with DPs are likely to show that many agriculturalists prefer replacement land. In these cases, all DPs who lose productive land are to have the option of obtaining comparable replacement 62 Compensation and Income Restoration land through either direct exchange or intermediary mechanisms. Two excep- tions are discussed below: · Cash compensation is appropriate for marginal land takings--In many linear projects, small portions (less than 10%) of land parcels are expropriated for transmission lines, drains, or roads. If the impact is likely to be mar- ginal and replacement of small parcels is likely to result in fragmented holdings, cash compensation at prorated replacement cost is enough. If preliminary assessment indicates that some DPs who are losing more than 10 percent of land want this land replaced, a replacement option would be required. DPs must also have the option of having the entire 4 parcel replaced if the area not taken is no longer economically viable. As OP 4.12 notes, "If the residual of the asset being taken is not eco- nomically viable, compensation and other resettlement assistance are provided as if the entire asset had been taken" (endnote 12). (See also "Eligibility Criteria: Land Tenure and Severity of Impact," in chapter 3.) · An agricultural land option is not required in peri-urban (or urban) settings-- OP 4.12 stipulates the option of land replacement for people with land- based livelihoods. In urban or peri-urban areas, where income may be derived from nonagricultural activities, DPs have no need of an agricul- tural land option, although direct or indirect replacement of house plots remains a requirement. In peri-urban areas with mixed land use, an option for direct or indirect replacement of land would be required if pre- liminary assessment of DP preferences indicated that the DPs desire it. Good practice recommends that DPs be able to choose from other feasible options. Bank policy does not bind people to agricultural livelihoods. The consultative process informs DPs about feasible options, including those to obtain replacement land or start non-land-based income-generating activities. Some people may not be satisfied with the quality or location of available replacement land. Some may prefer to shift to wage employment or to start a small business as markets expand. Some may prefer to diversify sources of income. Some in peri-urban areas may already derive much of their income from non-land-based activities. In these instances, good practice suggests that gauging the viability of the non-land options should take into account the risk-bearing capacities of the DPs. All options offered to the DPs should be technically, financially, and economically feasible, and the DPs should have the necessary skills and capacity to undertake them. Project example: In China, the designers of the RPs for the Shuikou Hydroelectric Project (Ln 2775) assumed that about 30 percent of the DPs would opt for nonagricultural rehabilitation. Spurred by rapid 63 Involuntary Resettlement Sourcebook economic expansion, however, about 65 percent chose non-land-based rehabilitation. Land-Based Options Direct replacement is always an acceptable option. Land can be replaced directly or through indirect mechanisms. Direct replacement of expropriated land with land identified by the borrower is acceptable as an option to be presented to DPs. These replacement lands--typically government land, converted forest, or degraded lands--must be of equivalent productive potential 4 (or developed to make them so) and must be acceptable to the DPs themselves. In the terms of OP 4.12, "Whenever replacement land is offered, resettlers are pro- vided land for which a combination of productive potential, locational advan- tages, and other factors is at least equivalent to the advantages of the land taken" (para. 11). Attempts to move DPs to replacement lands without their approval has been a major recurring source of protests and project delays (see below). In some circumstances, direct replacement is encouraged. "Bank experience has shown that resettlement of indigenous peoples with traditional land-based modes of production is particularly complex and may have significant adverse impacts on their identity and cultural survival. For this reason, the Bank satis- fies itself that the borrower has explored all viable alternative project designs to avoid physical displacement of these groups. When it is not feasible to avoid such displace- ment, preference is given to land-based resettlement strategies for these groups . . . that are compatible with their cultural preferences and are prepared in consultation with them" (OP 4.12, para. 9). When displacement affects indigenous peoples with little exposure to mar- kets, these peoples must be offered the option of direct land replacement. (If indigenous lands were collectively owned, replacement lands are usually vested in the collectivity; see "Appropriate Unit of Entitlement," in chapter 3, and "Indigenous Peoples," in chapter 5.) When agricultural projects bring unirrigated land under irrigation, DPs who are losing land can be given the option of obtaining irrigated land as a direct land replacement. Project example: In India, an estimated 75 percent of DPs received irri- gated land in the Orissa Water Resources Consolidation Development Project (Cr 2801). Average incomes were then expected to increase fourfold. DPs who did not receive irrigated land were to be eligible for twice as much unirrigated land or for wastelands converted into lands suitable for plantation agriculture at project expense. 64 Compensation and Income Restoration Indirect replacement mechanisms are also acceptable as an option. Intermediate mechanisms using cash compensation and supplemental assistance may be effective in helping DPs (or local representatives) identify and purchase suitable replacement land from willing sellers. Land-purchase committees com- posedofDPs,projectofficers,andtechnicalspecialistscanbeinstrumentaliniden- tifying land and verifying its productivity (Box 4.1). Disbursement of compensa- tion can be tied to the purchase of replacement land (or other productive assets). Box 4.1 When Replacement Land Is Unacceptable to DPs In some projects, DPs have refused to accept replacement land provided by project agen- 4 cies. Poor land quality or inconvenient location is a common reason for refusal. This sit- uation tends to arise when projects fail to establish technical feasibility studies, site inspections by DPs, or oversight committees. The DPs' refusal of land can have serious consequences: it can lead to public protests and costly delays for the modification of RPs; it can also lead to cost overruns in implementation. A good practice is to have proj- ects not only help DPs participate in identifying land, but also provide alternative land options, as well as non-land-based options. Such preparation helps avoid land refusal. Project example: In China, one of the sites designated for agricultural use in the Xiaolangdi Resettlement Project (Cr 2605) was redesigned as an industrial settlement at the request of the DPs. In addition, an increase in cost of 36 per- cent over South Asia Region estimates has been observed in land compensation and construction of houses and infrastructure at redesigned resettlement sites. Project example: In India, a resettlement area was provided 125 kilometers away from the Upper Indravati Hydroelectric Project (Ln 2278) site. The DPs rejected the proposed site because it provided little access to natural resources and off-farm employment and because they did not want to move that far from their home villages and relatives. Project authorities subsequently established a joint account to enable the DPs to purchase replacement lands they identi- fied closer to their original homes. Project example: In Indonesia, RPs for the Kedung Ombo Multipurpose Project (Ln 2543) estimated that 90 percent of the DPs would join the transmigration program. During implementation, however, more than 80 percent did not want to join. Local resistance contributed to delays in construction, to court chal- lenges, and to international controversy and eventually led to makeshift meas- ures to resettle the DPs closer to the site. Bank evaluations attribute much of the resistance to a lack of consultations with DPs during the planning process. Project example: In Thailand, Third Power System Development Project (Ln 3423) planners selected a Pak Mun Dam resettlement site, but they failed to adequately consult the DPs. Although the implementing agency had already developed demonstration farm plots, a fish pond, a poultry farm, and a dairy farm at the site, and installation of electricity and water supply was in progress, no displaced families took up residence. The agency added an option to enable the DPs to resettle in their own villages, and the proposed site was abandoned. 65 Involuntary Resettlement Sourcebook Project example: In Bangladesh, the Jamuna Bridge Multipurpose Project (Cr 2569) tied compensation to the purchase of replacement land iden- tified by the DP. The level of compensation was increased by the project team to complete the purchase of the replacement land, subject to a maximum allowable replacement value. Project example: In India, RPs for the Upper Krishna II (Ln 3050; Cr 2010) and Sardar Sarovar (Ln 2497; Cr 1552) projects included the creation of local land committees to identify, evaluate, and purchase land for DPs. 4 Project example: Also in India, RPs for the Orissa Water Resources Consolidation Project (Cr 2801) and the Upper Indravati Project (Ln 2278) created joint accounts for depositing compensation. The release of compensation required the approval of both DPs and desig- nated authorities and was tied to the DP's identification or purchase of replacement land from a willing seller. Cash Compensation and Rehabilitation Under certain conditions, cash is an acceptable option for compensation. DPs sometimes prefer cash compensation, because it may provide them with a wider range of opportunities for income restoration or improvement. Cash compensation may be enough to start, extend, or diversify a private business, especially in areas with rapid economic growth. In some cases, cash compensa- tion following displacement may help the DPs retire or migrate, or it may give them educational or training opportunities otherwise beyond their reach. Cash compensation may require careful preparation. The consultative process should not only enable DPs to identify the range of opportunities they may wish to pursue, but also inform them of the potential risks of such activi- ties. Whenever DPs have such options, a good practice is to have the program include independent monitoring to identify, early on, options that are working best and those that require additional support (Box 4.2). To enable DPs to make productive use of cash compensation, it should be paid in its entirety and in a timely manner. Partial or delayed cash payments to do not allow productive investment sufficient to restore incomes. Mechanisms for converting cash into productive investments or replacement assets enable DPs to restore their livelihoods. DPs may have strong views about the activities they would like to pursue after resettlement, but they may have less clear ideas about what exactly is required 66 Compensation and Income Restoration Box 4.2 Cash Compensation Does Not Ensure Asset Replacement In theory, cash compensation valued at replacement cost allows DPs to restore incomes and living standards. In practice, several obstacles have impeded conversion of cash into replacement assets (or alternative income-restoration measures). Most obviously, the amount of compensation may be insufficient. The timing of compensa- tion (either too early or too late) can also reduce the likelihood of income's being restored. Cash may not be convertible into productive assets if markets or opportuni- ties are thin. Or local practices may encourage the use of compensation to pay debts or for social reciprocities, rather than for purchasing replacement assets. The Operations Evaluation Department reported several such inadequacies within a single project, the Karnataka Irrigation Project (Cr 788): 4 · Undercompensation--Despite provision of an additional 15 percent solatium, compensation for land based on registered land values reportedly averaged about 44 percent of actual replacement cost. Widespread court appeals led to an average 37 percent enhancement in compensation. But with legal fees, final compensation still amounted to only 54 percent of replacement cost. Compensation for housing was also inadequate, but DPs had little or no reported recourse to the courts. · Delayed compensation--Compensation amounts were determined at the time of preliminary notification of intent to acquire lands, whereas actual payment of compensation often lagged by several years, with the adequacy of compensation further eroded by inflation. Payment of compensation in installments (gaps ranged from 2 to 15 years) further aggravated this problem. · Use of compensation--Because some installments were received in advance of actual dislocation, compensation was often used for house improvements, con- sumption, ceremonial expenses, repayment of loans, or other activities. · Results--The cost of similar replacement housing exceeded compensation for housing in 76 percent of survey cases and was three times the amount of com- pensation in about half of the cases. In 42 percent of the cases, the cost of replace- ment housing exceeded compensation for land and house combined. Only 25 percent of survey households in fully affected villages reported using com- pensation for purchase of replacement land. In partially affected villages, the propor- tion fell to 8 percent. Source: Operation Evaluation Department, "Early Experience with Involuntary Resettlement: Impact Evaluation on India Karnataka Irrigation Project," World Bank, Washington, DC, 1993. to succeed. Project rehabilitation teams therefore typically undertake technical and economic feasibility studies and put in place a number of extension, train- ing, and small-business loan programs to support the DPs, particularly in the risky, early years of an endeavor. The project itself may provide these services, or existing agencies may be contracted to provide this assistance. A good prac- tice is to assess the delivery and use of cash compensation, through regular mon- itoring, throughout the recovery period. 67 Involuntary Resettlement Sourcebook Annuities, dividends, or shares may be high-risk forms of compensation. Some DPs may prefer annuities that contribute regularly to the income stream while leaving time available for other productive or personal endeavors. One innovative approach used in power projects is to impose a small surcharge on power sales and put this surcharge in a local development fund. When annu- ities are presented as forms of compensation, task teams need to determine that DPs have other options and have been informed of the risks (for example, income volatility of dividends or declining equity value of shares). Supplementary measures will be required if annuities alone are unlikely to restore incomes. 4 Project example: In China, the Liaoning Environment Project (Ln 3781) deposited some of its land compensation funds in the bank and distrib- uted the annual interest to the elderly, students, and laborers, in prorated shares. Project example: In India, RPs for the Coal Sector Environment and Social Mitigation Project (Cr 2862) included optional annuities or lump- sum grants for DPs with small landholdings, for DPs not provided with employment options, or for DPs not seeking land-for-land options. Project example: In Lesotho, land sales are illegal, so the project author- ity of the Highland Water Project (Ln 4339) determined a use value for the land and was to establish an annuity fund to generate interest income equivalent to the amount each farmer would have harvested annually. However, the project authority could not obtain from the gov- ernment the total sum in one year to establish the annuity fund, so the authority now makes annual payments to the farmers in compensation. Provision of pensions requires careful review. In principle, early-retirement pensions are acceptable as options for DPs. Task teams need to review mandatory pension programs to ensure that capable people are given opportunities to remain productive. A good practice is to have the borrower guarantee pension programs (if these are substituted for income restoration measures). Good practice is to ensure that the programs are equi- table (with regard to gender or ethnic identity) and financially adequate (for example, compensation for assets and pension together might restore previous incomes and living standards). Project example: In China, RPs sometimes include pensions for workers. In the Shanghai Second Sewerage Project (Ln 3987), for example, pen- sions were provided for all male workers aged more than 55 years and all females workers aged more than 45 years. But the implementing agency 68 Compensation and Income Restoration and local authorities assured the DPs supplementary jobs or other reha- bilitation measures, as necessary. Employment as Rehabilitation Provision of employment is an acceptable option to present to DPs. Employment (public or private) can be an effective way of restoring and improving incomes, in effect creating assets in the form of skills and human cap- ital. Promising jobs without providing other options, however, is not good prac- tice. Similarly, providing employment training without access to employment 4 cannot be construed as adequate rehabilitation. Project example: In China, the Shanghai Second Sewerage Project (Ln 3987) provided some DPs with specialized training at technical schools, municipal vocational training centers, or training centers at large enterprises. The training was linked to jobs already promised to the DPs. Project example: In China, the Second Red Soils Area Development Project (Cr 2563) provided one permanent job per household in con- struction or in the agroprocessing enterprise causing their displacement. A good practice is to guarantee employment for a minimum of three years. The employment must last long enough for the DPs to acquire the skills needed to reestablish their living standards. A good practice is for RPs to include pro- visions for at least three, and preferably five, years of employment for those DPs choosing employment options. Project example: In China, RPs for the Xiaolangdi Resettlement Project (Cr 2605) encouraged nonagricultural employment for some displaced farmers. To ensure sufficient employment to acquire skills, the project provided five-year job guarantees. Temporary jobs are not acceptable as rehabilitation measures. Permanent income restoration and creation of human capital are the goals when the project provides employment as a rehabilitation measure. Accordingly, employment provided in lieu of compensation cannot be tempo- rary (for example, construction of project works or service roads). Temporary jobs are, nonetheless, appropriate as supplemental sources of household income. 69 Involuntary Resettlement Sourcebook Note 1. OP 4.12 (para. 6) discusses three sets of required measures: (a) "prompt and effective compensation at full replacement cost for losses of assets"; (b) in the instance of physical relocation, "measures to ensure that the displaced persons are provided assistance" during the move, as well as provided with housing or house sites; and (c) where necessary, "measures to ensure that displaced persons are offered support after displacement . . . and provided with development assistance in addition to compensation measures." 4 70 Chapter 5 Vulnerable Populations Involuntary resettlement affects poor and vulnerable segments of populations more severely than those that are better off. Bank project experience shows that the poor, women, children, the handicapped, the elderly, and indigenous popu- lations are often susceptible to hardship and may be less able than other groups to reconstruct their lives after resettlement. However, the extent, nature, and 5 severity of their vulnerabilities may vary significantly. Good practice therefore calls for careful screening in project design and attentive resettlement to help vulnerable groups improve or at least reestablish their lives and livelihoods. This chapter examines Bank policy and practice for various vulnerable groups: the poor, women, and indigenous peoples; those less able to care for themselves (children, the elderly, and the disabled); and other groups not protected by national land compensation law (those without land or use rights; host com- munities; and community members remaining in the original area after reset- tlement) (see also CD Appendix 14, "Assistance to Vulnerable People," for an example of one Bank project's approach to assisting vulnerable people). Operational Policy (OP) 4.12 specifies the development objectives of resettlement oper- ations and emphasizes the need to assist vulnerable groups in achieving those objectives. "Involuntary resettlement may cause severe long-term hardship, impoverishment, and environmental damage unless appropriate measures are carefully planned and car- ried out. For these reasons, the overall objectives of the Bank's policy on involuntary resettlement are the following: (a) Involuntary resettlement should be avoided where feasible, or minimized, exploring all viable alternative project designs. (b) Where it is not feasible to avoid resettlement, resettlement activities should be conceived and executed as sustainable development programs, providing suffi- cient investment resources to enable the persons displaced by the project to share in project benefits. . . . (c) Displaced persons should be assisted in their efforts to improve their livelihoods and standards of living or at least to restore them, in real terms, to pre-displacement levels or to levels prevailing prior to the beginning of project implementation, whichever is higher" (para. 2). (continued) 71 Involuntary Resettlement Sourcebook (continued from p. 71) "To achieve the objectives of this policy, particular attention is paid to the needs of vulnerable groups among those displaced, especially those below the poverty line, the landless, the elderly, women and children, indigenous peoples, ethnic minorities, or other displaced persons who may not be protected through national land compen- sation legislation" (para. 8). Participatory approaches provide one means of integrating the needs of vulnera- ble groups into project design and implementation. Measures ensure that displaced persons (DPs) are "(i) informed about their options and rights pertaining to resettle- ment" and "(ii) consulted on, offered choices among, and provided with technically and economically feasible resettlement alternatives" (para. 6). 5 The Poor "Sustainable poverty reduction is the Bank's overarching objective. Since the com- plete range of programs and policies affect the well-being of the poor, there are many complementarities between poverty reduction and other operational priorities. . . . The burden of poverty falls disproportionately on women; so it is essential to increase their income-earning opportunities, their food security, and their access to social ser- vices. Maintaining the environment is critical if gains in poverty reduction are to be sustained and if future increases in poverty are to be avoided. If poverty reduction is to be sustainable, institution-building and investing in local capacity to assess poverty and to analyze, design, implement, and finance programs and projects are essential" (Operational Directive [OD] 4.15 [Poverty Reduction], para. 6). In concert with overall Bank policy, OP 4.12 seeks to ensure that resettle- ment improves the lives of the poor and does not reduce more people to poverty. This goal is achieved by requiring compensation at replacement cost and by providing measures for income restoration and improvement. The policy also recognizes that many people were in poverty before displacement. In these instances, resettlement can offer opportunities to improve living standards, rather than merely re-creating poverty in new surroundings, especially for peo- ple who suffer substantial impacts. Because such actions constitute economic improvements, they contribute to the economic justification for projects and may make them eligible for additional Bank financing. This section discusses opportunities to make resettlement an integral part of the development process and engage in nonmandatory but proactive efforts on behalf of the very poor. Specifically, rehabilitation entitlements can provide the poor with assistance to secure landholdings or residential housing of some suit- able standard, regardless of their circumstances before displacement. 72 Vulnerable Populations Disaggregation into socially meaningful groups identifies specific segments of the population below the national poverty line. The Bank accepts the national definition of poverty when identifying DPs who warrant special attention in resettlement operations. However, resettlement affects specific groups of the poor in different ways. For this reason, good prac- tice recommends that the generic definition of "poor" be disaggregated into socially meaningful categories, such as the elderly, women-headed households, and the disabled. Every resettlement operation requires a baseline count of the people to be affected, along with, among other things, an inventory of their fixed property and an estimate of their annual income. This information provides an objective, quantitative measure of the extent of poverty, and the socioeconomic surveys ensure that all vulnerable people are included under the project and disaggre- 5 gated into specific vulnerable groups. Project example: In Colombia, the Calle 80 Urban Transport Project (Loan 4081) team in Bogotá categorized the vulnerability of DPs as high, medium, and low. Those with high vulnerability included the elderly, women-headed households, widows, people entirely dependent on the property to be acquired, and special cases, such as the disabled and people whose incomes were insufficient for them to reestablish their situation after resettlement. These groups were targeted for specific assistance, according to their needs. Good practice is to have the project design include the poorest of the poor. To reach the poorest of the poor affected by involuntary resettlement is difficult. They are sometimes ineligible for compensation, because they own no land or other fixed assets (for example, pavement dwellers). Furthermore, they may not qualify for income restoration, because they may have no identifiable income source. To assist the poorest of the poor affected by resettlement operations, project plans and designs may need to go beyond the requirements of OP 4.12. Within the project framework, a good practice is to have the socioeconomic surveys identify the source of income of the poor and their access to common resources, which are often vitally important to their survival. Good practice also recom- mends reaching out to the poorest of the poor in the consultative process, as they may not always participate in public forums. Good resettlement planning also provides supplemental measures, such as giving the poorest DPs priority for opportunities generated by the project, particularly project-related employ- ment, or assistance through special funds or services. 73 Involuntary Resettlement Sourcebook Taking land from the very poor may deepen their poverty. OP 4.12 has defined a 10 percent loss of any parcel as the threshold below which the loss of land is generally considered minor. For those people already in poverty, however, or for those with substandard landholdings, loss of even a small percentage of holdings may render the rest of their land unviable. In these cases, where monetary compensation alone is likely to re-create poverty, addi- tional benefits may be extended to such DPs, even if the project is acquiring less than 10 percent of their landholding. Other rehabilitation measures can contribute to economic viability. In the case of very poor households, good practice suggests that non-land-based rehabilitation measures go beyond the goal of income restoration, which, in these circumstances, would simply be re-creating poverty. Rather, Bank goals 5 and good practice suggest that households be provided specific opportunities to reach economic viability. Another good practice is to explore prospects for providing agricultural ten- ants and landless laborers with employment in the project. Preferential hiring during the construction phase is a common practice, as is awarding jobs or con- tracts once the enterprise is on-line. In the more successful endeavors, the proj- ect agency will have provided support services specifically for the poor, to give them a clear understanding of their work obligations and help alleviate diffi- culties (such as children's illnesses) that can impede their performance. Good practice recommends that replacement housing and plots meet or exceed existing local standards. In many projects, especially in urban areas, a section of the affected popula- tion may reside in structures that are far from meeting local health or safety standards. The objective of a resettlement program for such groups cannot be restricted to restoration of substandard housing, if for no other reason than that the alternative housing and house plots provided by the project would likely have to meet local standards. Many of the poor want to improve their housing, and many would have at least some means of doing so if bureaucratic obstacles, such as mortgage requirements, were relaxed. Good practice sug- gests that arrangements be made to provide housing that meets acceptable local standards. Such an arrangement would be credit facilities with group responsibility for repayment. If project terms call for construction of replace- ment housing, another good practice is to include adequate drainage and sanitation. Project example: In Brazil, municipal authorities in the Nova Jaguaribara Project (not a Bank project) found an innovative way to 74 Vulnerable Populations provide new houses for landless people. The municipality drew up a list of tasks for which additional help was needed, for example, street clean- ing, gardening, and kindergarten and primary school support. Landless families without the financial resources to pay for the new plots were offered the opportunity of doing community work for the municipality for four hours a day, over a five-year period. In return, the families received title to their new plot. The work obligations were kept flexible. One or more members of the family could work at any time, according to their ability and availability. Any member of the family could fulfil the obligation on any day, and the four hours could be contributed at any time during the day. Project example: In China, some projects are explicitly designed to improve housing standards following displacement. In the Shanghai 5 Sewerage Project (Loan [Ln] 2794; Credit [Cr] 1779), most DPs expressed satisfaction with provisions that, on average, increased their rents but provided nearly double the housing space and included indoor kitchens and sanitation facilities. Plans for the Second Shanghai Sewerage Project (Ln 3987) allowed DPs to choose between government apartments supplied on a rental basis or private apart- ments available at one-third of construction costs. Furthermore, in the early stages of the Xiaolangdi Resettlement Project (Cr 2605), DPs received more space in replacement housing, often leaving behind dank, poorly lit cave dwellings for brick structures with modern conveniences. Project example: In India, compensation at replacement cost for the housing of Scheduled Caste and Scheduled Tribe DPs in the Hyderabad Water Supply and Sanitation Project (Cr 2115) would likely be enough to supply only substandard housing. Therefore, the project provided these DPs with free housing, built to state housing norms. Women Women constitute a vulnerable group because they may be excluded from par- ticipation and because they are often exposed to greater risk of impoverish- ment. "The Bank aims to reduce gender disparities and enhance women's participation in the economic development of their countries by integrating gender considerations in its country assistance program" (OD 4.20 [Gender Dimensions of Development], para. 1). Women have an important role in household management and in economically productive activities, especially by making nonwage contributions to household subsistence. The socioeconomic 75 Involuntary Resettlement Sourcebook studies conducted during project preparation must detail these activities and contributions. The resettlement process incorporates opportunities for women's participation. Participation is fundamentally important in resettlement operations, because people are directly affected and must, in some cases, reestablish their lives. As people's interests and concerns can be very different, resettlement operations strive to include all segments of the population. Good resettlement programming ensures that meaningful consultations with women are included. In many settings, good practice suggests that female project representatives conduct these consultations. Separate venues for par- ticipation, such as focus group discussions that involve only women, can also 5 be made available, as consultations of this nature give women a forum to voice their issues and concerns. Another good practice is to pretest the base- line survey with women to ensure that it covers issues of concern to them, such as the design of replacement housing, access to educational and health- care services, availability of fuel and water, and income-generating activities. Yet another good practice is to issue information on resettlement entitlements and choices to every adult member of the household, not just to the head of the household. Baseline surveys document economic contributions of women to household income and living standards. Women contribute financially to the household economy, through both formal and informal economic activities. Formal income derives from wage labor, arti- sanal production, marketing of produce, and other activities outside the home. Informal contributions to household subsistence include subsistence agriculture and collection of fuel and water, not to mention cooking, cleaning, and child- care. All of these activities are to be included in the baseline survey for calcu- lating household incomes. Project example: In India, the Upper Krishna Irrigation Project (Ln 3050; Cr 2010) originally failed to take gender considerations into account. A survey conducted late in the project (1997) to assess the impacts on women found that most women had fewer chances to work, their incomes from farming and livestock had decreased, they had less personal disposable income, and thus they had less voice in family decisions. As a consequence, two thirds of the women surveyed believed their lives had become worse as a result of displacement, and more than three quarters of the women said they were less happy than in their old village. 76 Vulnerable Populations Access to basic resources must be provided in the areas where households are to be relocated. Fuel and water collection are major household chores that in many countries fall to women and girls. Resettlement site planning can help ensure that access to these basic subsistence resources and the use of them are improved, or at least restored. Resettlement provides an opportunity to introduce new stove technologies. The redesign of local stoves can benefit greatly from the input of women. The new technologies have several benefits. When successful, they can reduce the time spent in collecting fuel. Well-designed stoves can also reduce the pollu- tion in kitchens, which otherwise causes respiratory disease among women and children. Women can also participate in making decisions about water sources in 5 many resettlement operations. The siting of wells and water taps within the community is a social, as well as a technical, decision. Consulting users about their preferences helps ensure that everyone will have equal access to water and that the users are willing and able to maintain the facility. Seemingly simple measures, such as the redesign of cooking stoves or sit- ing of water points, can have major consequences. When fuel or water resources become scarce because of land acquisition or relocation of popula- tions, the women--and especially the girls--often find they have to spend significantly more time collecting these basic materials. As a result, girls more often drop out of school to help out at home. Providing improved fuel and water sources helps avoid such adverse, secondary consequences of resettlement. Baseline surveys include a section on health, for monitoring people's physical well-being, especially women's and children's health status. Bank policy recognizes the importance of considering health issues during and after resettlement. "Provision of health care services, particularly for pregnant women, infants, the disabled and the elderly, may be important during and after relocation to prevent increase in morbidity and mortality due to malnutrition, the psychological stress of being uprooted, and the increased risk of disease" (OP 4.12, Annex A, endnote 2). Because resettlement can be stressful for people and can have adverse con- sequences on nutrition, health, and even mortality rates, baseline surveys in Bank practice now include a section on the health status of DPs, for monitoring the physical repercussions of resettlement. In addition, resettlement operations usually construct infrastructure to address problems such as child malnutrition and waterborne disease. 77 Involuntary Resettlement Sourcebook Female adults may be the appropriate unit of entitlement in male-headed households. Households headed by women are entitled to the same resettlement benefits as those headed by men. In some cases, however, women-headed households are no longer independent, as they reside within larger extended families. Widowed women, for example, may live with their fathers or fathers-in-law. Similarly, households headed by a divorced woman may be part of her extended natal fam- ily. Such cases need to be carefully enumerated, because they may be entitled to compensation and rehabilitation assistance as independent households. Where assets (for example, small enterprises or encroached land) are owned or controlled by a female spouse, she is the individual entitled to compensation or rehabilitation. Joint registration of household assets in the names of both 5 husband and wife may be considered if gender discrimination in income gener- ation or estate transfer might otherwise result (see also "Appropriate Unit of Entitlement," in chapter 3). Project example: In Côte d'Ivoire, the Rural Land Management and Community Infrastructure Development Project (Cr N022) dealt with issues of access, control, and management of land rights. Under custom- ary principles of tenure, land could not be alienated by sale. Consequently, the country had no local institutional framework for transmitting land through market mechanisms. Because the certification of use rights had to take the form of titling, and access rights to land and other productive resources were usually recorded in the name of the male head of the house- hold, some major stakeholders could lose their access rights. The project study found that women, youth, and pastoralists might fall through the cracks of the land-titling system, as their rights were usually not legally recognized. Indigenous Peoples1 OP 4.12 makes particular mention of the issues that may arise for indigenous peoples. "Bank experience has shown that resettlement of indigenous peoples with traditional land-based modes of production is particularly complex and may have significant adverse impacts on their identity and cultural survival. For this reason, the Bank satisfies itself that the borrower has explored all viable alternative project designs to avoid physical displacement of these groups. When it is not feasible to avoid such displacement, prefer- ence is given to land-based resettlement strategies for these groups . . . that are compati- ble with their cultural preferences and are prepared in consultation with them" (para. 9). (continued) 78 Vulnerable Populations (continued from p. 78) The development of resettlement measures reiterates these points: "In addition to being technically and economically feasible, the resettlement packages should be compatible with the cultural preferences of the displaced persons, and prepared in consultation with them" (OP 4.12, Annex A, para. 11). Indigenous peoples are often vulnerable to hardship following displace- ment. They are usually vulnerable because legal codes and government prac- tices may not recognize their claim to resources, they may lack avenues for rep- resentation in the project, or their sociocultural institutions may disintegrate after displacement. Two general issues complicate the resettlement of indigenous peoples. One 5 involves the recognition of customary communal rights to resources (see "Open Access and Other Property," in chapter 3). Second, the valuation of losses and the design of rehabilitation measures require careful qualitative study, as some characteristics of indigenous living standards (for example, subsistence produc- tion, labor reciprocity, and importance of minor forest products) are difficult to quantify. Although income restoration is the main objective of OP 4.12, preserving standards of living may be just as important to indigenous groups. To achieve both objectives, culturally appropriate mechanisms for consultation and participation, including procedures for addressing grievances, need to be designed. Customary land claims of indigenous peoples are to be identified and, if possible, regularized. In areas used by indigenous peoples, land-acquisition assessments ascertain whether public lands and privately titled lands to be affected by the project are clear of customary claims. If potentially affected indigenous peoples do not have legal ownership or use rights for the land or resources on which they customar- ily rely, the Bank discusses prospects for regularization of such claims with the borrower. Indigenous peoples with nonregularizable land claims require special forms of assistance. OP 4.12 establishes that affected people with nonregularizable land claims need not be formally compensated, but they are nonetheless eligible for "other assis- tance, as necessary, to achieve the objectives set out in this policy" (para. 16). For indigenous peoples with primarily land-based livelihoods, it is important that such assistance include the option of replacement land. 79 Involuntary Resettlement Sourcebook Direct replacement of land is preferred if displacement affects indigenous peoples. If acquisition of lands held communally by indigenous peoples is unavoidable, direct replacement of land is the preferred option, with title vested in the com- munity as a whole. OP 4.12 establishes the general policy that "preference should be given to land-based resettlement strategies for displaced persons whose livelihoods are land-based" (para.11). The policy also specifically empha- sizes this preference when dealing with indigenous peoples: "When it is not fea- sible to avoid such displacement, preference is given to land-based resettlement strategies for these groups . . . that are compatible with their cultural preferences and are prepared in consultation with them" (para. 9). Social assessment is crucial in projects likely to affect 5 indigenous peoples. Social assessment, with an emphasis on appropriately designed mechanisms for communication and participation, is important for projects likely to require resettlement of indigenous peoples (see chapter 7). If social assessment shows that the customary rights of indigenous peoples are not recognized by the bor- rower or that special socioeconomic provisions may be necessary for resettle- ment, the Bank can provide assistance to the borrower in addressing such issues. If consultations with indigenous peoples indicate widespread opposition to the project or significant problems that will be inordinately difficult to mit- igate, the Bank can ask the borrower to consider making appropriate changes in the project. Similarly, as part of its own project assessment and appraisal, the Bank determines the capacity and commitment of the borrower agency to do what is necessary to protect the interests of indigenous peoples. If analy- sis shows that the interests of the indigenous peoples are not likely to be pro- tected, the Bank may find it necessary to reconsider its collaboration in the investment. The cultural preferences of affected indigenous peoples determine acceptable resettlement measures. Where indigenous peoples make a unique use of resources, they may assign a unique value to them. For this reason, whenever feasible, the resettlement plan (RP) incorporates measures to replace assets, or at least to provide alternative access to desired resources. When neither of these options is feasible, alterna- tive measures that are "compatible with the cultural preferences" of those affected are to be devised (OP 4.12, Annex A, para. 11). The indigenous peoples are consulted to identify acceptable substitute assets or resources or alternative income-generating activities. 80 Vulnerable Populations Relevant resettlement planning instruments and indigenous peoples development plans are distinct documents, but they can be prepared in tandem. OD 4.20 calls for an indigenous peoples development plan (IPDP) for projects affecting indigenous groups. In projects involving involuntary resettlement of indigenous groups, the IPDP and the RP can be prepared in tandem to ensure that the IPDP fully reflects the mitigation measures included in the RP. Similar coordination is needed for projects that affect indigenous peoples and also require a resettlement policy or process framework. Project example: In India, the Coal India Environmental and Social Mitigation Project (Cr 2862) involved coordination of RPs and IPDPs for 25 of Coal India's 495 mines. The RPs covered all those people whose land or other assets would be acquired for the mining operations, and the 5 IPDPs covered all the inhabitants of the villages and hamlets located in the vicinity of the mines. The two plans complemented each other: the RPs basically gave entitlements to individuals and households for com- pensation and economic rehabilitation, and the IPDPs gave entitle- ments to the communities for their facilities and local capacity building. The plans were not intended to be mutually exclusive; some people were covered under both plans. Those Less Able to Care for Themselves Good resettlement planning and implementation recognize that some segments of the displaced population--children, the elderly, and the disabled--may be unable to express their interests and concerns effectively. A good practice is to design resettlement operations to incorporate the concerns of these often voice- less groups. This section takes up this issue. When large-scale displacement threatens to disrupt communities, RPs include measures to mitigate adverse impacts on vulnerable groups, such as children, the elderly, and those with physical or mental disabilities. Socioeconomic surveys should identify the very young segments of the population (for example, children less than 6 years old) or the elderly (for example, adults more than 65 years old). Especially in projects disrupting entire communities, surveys can also identify people with physical or mental disabilities and the services available to them. Children Bank policy pays "particular attention . . . to the impact of sector policies [and other work] on poor women and children, food security, . . . and the links 81 Involuntary Resettlement Sourcebook between environmental issues and poverty" (OD 4.15 [Poverty Reduction], para. 13). Children typically lack the legal, political, and economic capacity to pro- tect their own standards of living. In resettlement, school-aged children may lose physical or economic access to education, despite the prominent role that education plays in development and Bank lending. Unless special arrange- ments are made to help children continue schooling in the transition phase of resettlement, some of them may find it difficult to resume education once per- manent schools are constructed and staffed at resettlement sites. Disruption of household access to resources can also expose children to nutritional deficien- cies. And in many rural areas, where children contribute significantly to household income or subsistence, poor households may especially rely on the economic activities of children and be severely affected if such losses are not 5 recognized and mitigated. Resettlement operations, therefore, need to ensure children's nutritional needs are met, along with their access to education. In addition, if children contribute economically to family welfare, resettlement operations must include measures to eliminate child labor to the fullest extent possible. Education and health standards are to be surveyed. A good practice is to have baseline socioeconomic surveys document existing community education and health facilities and services before displacement. Such surveys should identify any significant problems likely to occur in child development during resettlement. Ideally, the education section covers both quantitative information, such as attendance rates by grade and gender, and qualitative information, such as parents' attitudes about their children's schooling and domestic chores and obligations. Similarly, information covered in the section on health should be quantitative, such as average distance to clinics, the average use of their services, and the range of services provided; and qualitative, such as people's perceptions of the availability and quality of health services. RPs for projects with large-scale displacement should describe health and education safeguards or improvements. Large-scale displacement can be stressful for people and have immediate conse- quences for their health and their children's schooling. As the Bank's develop- ment experience confirms, improved healthcare and education generally come with social integration and economic growth. In projects involving large-scale displacement, the RP should include provisions for improving, or at least restor- ing, health and educational facilities and standards. 82 Vulnerable Populations Education and health indicators for children are to be monitored in projects with large-scale displacement. A good practice is to have resettlement monitoring include the impacts of reset- tlement on school enrollment, children's nutritional levels, and healthcare ser- vices. When the monitoring identifies a decline in educational attainment or health services, the borrower can implement measures previously agreed on with the Bank. Productive activities of children are to be counted in calculating household entitlements. That children are an important source of household income in many areas is a fact of life. Children's wage incomes and subsistence production are to be counted in calculating household entitlements. (However, children, as legal 5 wards, are not entitled to separate compensation.) As good practice suggests, households dependent on child labor can benefit from alternative income- earning opportunities for adults while the children's access to educational oppor- tunities is improved. The incidence of child labor should thus be reduced. Returning children to a situation of child labor is contrary to development policy. The Elderly Resettlement experience worldwide shows that the elderly often fail to adapt following displacement. They may have a lifelong "place attachment," lack the economic opportunity or physical capacity to obtain new sources of income, and lose traditional leadership roles or social standing as a result of community dispersion or social change. The elderly (like young children) are dispropor- tionately vulnerable to disease and even death in resettlement operations, so project planners and implementers need to be aware of their needs. Special care must be taken to prevent premature and involuntary retirement. To discourage alienation or dependency of the elderly, a good practice is for task teams to ensure that non-recognition of losses or inadequate entitlement crite- ria do not result in premature and involuntary retirement of productive adults. RPs and implementation arrangements should include arrangements for the elderly. The effects of displacement on the elderly will depend on a host of demographic, social, and cultural conditions. Social assessment may be necessary to gauge the 83 Involuntary Resettlement Sourcebook probable impacts of displacement on such individuals, as well as the capacity of existing public health services and social institutions to address those impacts. Social assessment may also be necessary to suggest any necessary special remedies or arrangements. During implementation, monitoring arrangements and griev- ance procedures especially attentive to the concerns of the elderly or of handi- capped people can help project managers identify these issues and implement remedial measures. Project example: In China, the Guangzhou City Center Transport Project (Ln 4329) provided, for more than a year, transportation to enable the elderly and other DPs to see their doctors in the area of former residence. Project example: Also in China, many urban projects use lotteries to 5 allocate high-rise apartment housing to DPs. Because older people may have difficulty with stairs, many projects reserve the ground floors of buildings for the elderly, although apartments are still allotted by lottery to people in this group. Project example: In many rural projects in which resettlers use their own labor and compensation to build replacement housing, special arrange- ments have been made to assist elderly people with the construction of new housing. The Disabled The health section of baseline surveys should include an enumeration of physical and mental disabilities. A good practice is to have RPs and implementation activities include the necessary arrangements for the disabled, particularly in large-scale resettlement operations. People with physical or mental disabilities, depending on their situation, may require special assistance to understand the need to relinquish property, orient themselves to new areas, construct housing, reach their medical providers, and meet a whole suite of other specific needs. A good practice is to have the resettlement operation enumerate the number and types of disabilities in the displaced population and make arrangements to provide the assistance needed by these individuals or their families. 84 Vulnerable Populations Other Groups Not Protected by National Land Compensation Law People without Title or Use Rights Many Bank projects displace people lacking legal title to land or structures. These people are often described as squatters in urban or rural areas or as encroachers in agricultural or forest areas, although the two terms are more or less similar. Unlike people asserting long-standing or ancestral customary claims to property, squatters and encroachers typically claim use rights or even owner- ship after fairly recent occupation of unused or unprotected land. Seeking to enforce legal property systems, borrowers may refuse to extend eligibility for entitlements to people without legal title or other forms of official recognition. OP 4.12, however, explicitly states that those without legal title to 5 affected land may be compensated for their structures and may qualify for other resettlement and rehabilitation assistance. Squatters and encroachers in occu- pation of land before project initiation are likely to have invested in structures or land improvements that are eligible for compensation. Bank policy seeks redress for all people directly and adversely affected by land acquisition or changes in land use required for its projects. But both the borrower and the Bank have a legitimate interest in preventing fraudulent claims from squatters or encroachers arriving in the project area after project initiation, specifically to obtain resettlement benefits. A good practice is to have RPs distinguish between the poor and other occupiers without title or claim to land. Bank policy aims to assist the poor and vulnerable in resettlement operations to avoid re-creating or worsening the extent of their poverty. A good practice is therefore to have RPs distinguish between poor occupiers who have no other property and others who will not be significantly affected by the investment. Project example: In India, the Andhra Pradesh Highways Project (Ln 4192) distinguished between predominantly poor squatters residing in highway rights-of-way and agricultural encroachers supplementing their own substantial land holdings with use of highway rights-of-way. Plans entitled residential squatters to rehabilitation assistance. Agricultural encroachers who owned land equivalent to minimum eco- nomic holding outside the right of way, however, were to receive no assistance for losing the use of the rights-of-way and were to be warned not to replant following the harvest of existing crops. 85 Involuntary Resettlement Sourcebook DPs without legal title or claims receive compensation equivalent to replacement cost for structures and other nonland assets. Squatters and encroachers may have a personal investment in structures or agri- cultural crops. Under OP 4.12, they are entitled to compensation at replacement cost (or an equivalent amount of rehabilitation assistance) for these lost assets. Project example: In India, special rehabilitation plans were drafted after planners discovered that more than 3,000 households were to be dis- placed by flood- and disease-prone storm drains in the Tamil Nadu Urban Development Project (Ln 4478). The government agreed to provide stan- dard rehabilitation packages, including free house plots or subsidized flats, plus grants sufficient to cover loan repayments or rent for 13­25 months. 5 DPs lacking legal title to land can be offered resettlement assistance in lieu of compensation for land. To help obtain assistance for those with de facto use or occupation rights, the Bank accepts provision of assistance as a substitute for compensation if such packages help achieve the objectives of the Bank's resettlement policy. Resettlement assistance can consist of land, cash, jobs, or other forms of assis- tance acceptable to the borrower. Landlords in public safety zones are not entitled to compensation or rehabilitation. The rationale for requiring rehabilitation of squatters living in public safety zones is to protect or improve the living standards of poor and vulnerable groups. Bank policy does not require protection of illegal rents accruing to squatter landlords from structures built in public safety zones. Unlicensed street vendors and pavement dwellers are not considered directly affected. Unlicensed street vendors (such as mobile enterprises lacking structures or other fixed improvements to land) lose no land or assets through displacement and hence are not covered by OP 4.12. Vendors with official site licenses, how- ever, have recognized rights and must be provided with an alternative site and compensation for any transition expenses. Good practice recommends provi- sion of a transition allowance to unlicensed vendors. Project example: In Indonesia, the Jabotabek Urban Development Project (Ln 2932) displaced many vendors who were operating kiosks along roads selected for widening. Roughly 1,600 vendors were given alternative sites in a newly developed market area. 86 Vulnerable Populations Cutoff dates and land-use surveys are essential for protection against fraudulent claims. As OP 4.12 states, "Normally, this cut-off date is the date the census begins. The cut- off date could also be the date the project area was delineated, prior to the census, pro- vided that there has been an effective public dissemination of information on the area delineated, and systematic and continuous dissemination subsequent to the delineation to prevent further population influx" (endnote 21). To prevent false claims for compensation or rehabilitation appearing after disclosure of project plans, a good practice is for the Bank and the borrower to agree on an explicit eligibility cutoff date. If no acceptable cutoff dates have 5 been established by the time the Bank becomes involved in the project, a cen- sus and socioeconomic survey can determine the number of DPs and the extent of impact on their structures and other assets. Another good practice is to exam- ine public lands allocated for the project for evidence of private use. Project example: In Bangladesh, the Jamuna Bridge Multipurpose Project (Cr 2569) encountered the types of problems that arise when safeguards against fraudulent claims are inadequate. In the absence of a full census or socioeconomic survey, an estimated 10,000 structures rapidly appeared in an area designated for expropriation. Aerial mapping and other methods were used to distinguish between legitimate and fraudulent claims. Host Communities OP 4.12 specifically considers the position of host communities receiving displaced populations and promotes the host communities' participation in the resettlement operation. The OP states (para. 13) that "(a) displaced persons and their communities, and any host communities receiving them, are provided timely and relevant information, consulted on resettlement options, and offered opportunities to participate in plan- ning, implementing, and monitoring resettlement. Appropriate and accessible griev- ance mechanisms are established for these groups." Furthermore, "(b) in new resettlement sites or host communities, infrastructure and public services are provided as necessary to improve, restore, or maintain accessi- bility and levels of service for the displaced persons and host communities. Alternative or similar resources are provided to compensate for the loss of access to community resources (such as fishing areas, grazing areas, fuel, or fodder)." (continued) 87 Involuntary Resettlement Sourcebook (continued from p. 87) Also, "(c) Patterns of community organization appropriate to the new circum- stances are based on choices made by the displaced persons. To the extent possible, the existing social and cultural institutions of resettlers and any host communities are pre- served and resettlers' preferences with respect to relocating in pre-existing communi- ties and groups are honored." OP 4.12, Annex A (para. 16), provides further guidance on the integration of dis- placed populations with host communities. Specifically, "measures to mitigate the impact of resettlement on any host communities" should include "(a) consultations with host communities and local governments; (b) arrangements for prompt tendering of any payment due the hosts for land or other assets provided to resettlers; (c) arrangements for addressing any conflict that may arise between resettlers and 5 host communities; and (d) any measures necessary to augment services (e.g., education, water, health, and production services) in host communities to make them at least comparable to services available to resettlers." Bank policy explicitly seeks to mitigate adverse social and environmental impacts on the host communities. Sudden population growth, especially in large-scale resettlement operations, can render existing public infrastructure and services inadequate. Competition between resettlers and hosts for resources, as well as the sudden meeting of socially and culturally incompatible groups of people, can slow social integration or may even spur social conflict. The relationship between resettlers and host communities, therefore, warrants careful attention during project planning and implementation. Consultations with host communities are essential to social integration. The host communities have as much right to information about the project as the displaced populations. Good practice recommends that projects disseminate information among the host communities, just as they do among the displaced communities. Assessing the receptiveness of host communities and the poten- tial for social conflict is important, especially when hosts and resettlers belong to different ethnic communities, have very different standards of living, or engage in different modes of production. Once the feasibility and selection of host communities have been deter- mined, public meetings and consultations with those communities can be car- ried out before RPs and site selections are finalized. Later, meetings of potential resettlers with members of the host communities enable all of them to assess the suitability of the proposed resettlement and identify potential issues. In short, 88 Vulnerable Populations the host communities' full participation is just as critical as that of DPs in the integration of the two groups. Socioeconomic surveys can be used to assess the impact on host communities. Socioeconomic surveys need to be carried out in host communities to determine potential resettlement impacts. The surveys in the host communities cover public infrastructure (such as schools, clinics, electricity, water supply) and employment conditions (for artisans, service personnel, salaried employees, inde- pendent entrepreneurs, and so on). The surveys often detail the compatibility of the ethnic composition of the host communities with that of incoming groups. The surveys may also assess the willingness of local people to accept the addi- tional population. Finally, a good practice is to train the interviewers to answer questions from the host community about the project and its consequences. 5 A good practice is to set up a grievance committee in host communities. An accepted procedure is to establish a grievance committee for displaced pop- ulations in projects with large-scale resettlement into host communities. Similar committees can be established for host communities (usually as a part of the local administration). Such committees would include representatives from the local communities and their leaders. Another good practice is to maintain or improve public infrastructure in host communities. Public infrastructure and services, if substantially affected by a sudden influx of resettlers scattered throughout host communities, must be maintained. They may have to be expanded to maintain, at least, pre-existing levels and quality of service. Furthermore, if existing infrastructure or services in the host com- munities are of a lower standard than those provided for resettlers in the imme- diate vicinity, the host community infrastructure warrants upgrading to the same level, to allay suspicions of preferential treatment. Infrastructure and services can be expected to contribute significantly to the relations between old and new populations. If existing infrastructure is not upgraded to the same level as that provided for the resettlers, the host commu- nity may come to believe that it has sacrificed its own interests for those of the incoming population and not received commensurate benefits. If the resettlers are dispersed in the host communities, but infrastructure is not improved, every- one may see a deterioration in service, which will be blamed on the newcomers. Conversely, improving infrastructure provides everybody with better services and communicates the message to both the old and the new residents that the project is assisting them because they have endured such adverse impacts. 89 Involuntary Resettlement Sourcebook Maintaining or, if necessary, replacing common resources is a good practice. In rural areas, resettlement sites or scattered resettlements need to be planned so as not to contribute to depletion of common resources (for example, access to water, grazing lands, and forests). Where access to, or supply of, such resources is disrupted, good practice recommends some open access or equiva- lent be provided to meet the needs of hosts and resettlers (see also "Open Access or Common Property," in chapter 3). Community Members Remaining in the Original Area after Resettlement 5 Issues with community members remaining in the original home area after resettlement may be more significant in rural areas. People in rural areas are more likely to be closely linked to their communities, and their economic dependence on each other may amplify disruptive effects. People not displaced by an investment but put in economically unviable circumstances can be offered the full resettlement package. OP 4.12 establishes the principle that if the household assets remaining after involuntary acquisition are not viable, the project will acquire the entire asset as if the total had been required. Specifically, "if the residual of the asset being taken is not economically viable, compensation and other resettlement assis- tance are provided as if the entire asset had been taken" (endnote 12). OP 4.12 makes no specific allowances for people who remain in the original community and are not directly affected themselves but may be adversely affected by the displacement of others within their community. Good practice suggests, how- ever, that to the extent that communities are no longer viable, the people remaining be offered the same resettlement options as those displaced. Otherwise, with the relocation of the DPs, those remaining in the community may find re-creating their livelihoods to the same levels as before extremely dif- ficult. Good practice is to determine whether displacement of some members deprives communities of the "critical mass" needed to sustain economic pro- ductivity (for example, access to customers or suppliers) or community services (such as schools, healthcare, or religious activities). A social assessment is the appropriate instrument to determine these issues. Project example: In India, the Sardar Sarovar Project (Ln 2497; Cr 1552) relocated communities likely to face disruption of transport links, as well as those more directly affected, because the cost of building infrastructure to restore access (bridges, roads) was likely to be almost 90 Vulnerable Populations 10 times higher than relocation costs. The communities themselves demanded that they be relocated, rather than waiting for construction of infrastructure. Project example: Also in India, a resettlement policy and an IPDP for the Bank-financed Orissa Water Resources Consolidation Project (Cr 2801) each contained provisions for community members left behind. The Orissa Water Resources Department's general resettlement policy allowed unaffected residents in villages more than 75 percent submerged to opt for treatment as DPs. Under an interpretation of the project IPDP, a tribal community that was split roughly in half by displacement was treated in effect as two communities, and both the resettlement site and the community left behind received infrastructure and other services. 5 Access routes and services severed by a project need to be restored. Some infrastructure projects (such as expressways, waterways, and reservoirs) can isolate a portion of the community, effectively creating a community left behind. The impact on access is examined as part of the socioeconomic survey. The best solutions in such cases are those that restore access by, for example, constructing well-sited overpasses or underpasses. Where equivalent infrastruc- ture is accessible (such as, busing to school), no action may be required. But if technical alternatives are unavailable, infrastructure (such as roads, sewer lines, or power transmission) must be replaced. Project example: In China, consultations with people in areas to be affected by the Second Henan Provincial Highway Project (Ln 4027) led to the design of highway underpasses at regular intervals to restore access to divided lands, markets, or other facilities. Note 1. A separate policy, OD 4.20, Indigenous Peoples, treats in detail the issues that may arise from development investments in areas where indigenous peoples reside. If a resettlement operation or restriction of access to legally designated parks or protected areas will affect indigenous groups, the task team must consult OD 4.20 for guidance, in addition to complying with the requirements of OP 4.12. 91 Section 2 Technical Aspects of Involuntary Resettlement Chapter 6 Resettlement Planning and Processing Requirements When a Bank-supported project involves involuntary resettlement, the plan- ning and processing requirements include steps to facilitate effective design and flexible implementation of the resettlement program. The first principle of the Bank's resettlement policy is to avoid resettlement, if feasible, or to minimize it. Bank experience shows that if resettlement is unavoidable, poorly planned resettlement rarely leads to satisfactory implementation. Results are also likely to be poor if resettlement is overplanned and plans are viewed as blueprints to be followed regardless of changes in local circumstances. 6 To improve performance, Bank task teams should view resettlement as part of a development process. Formal project processing requirements should be compatible with, and responsive to, this development process. Resettlement success depends most directly on borrower capacity and commitment. In addi- tion, Bank Procedure (BP) 4.12 emphasizes that Bank task teams need to pay careful attention to resettlement issues, from the earliest stages of project iden- tification all the way through project implementation. At each stage of the project cycle, the task team (and other elements within the Bank) need to address substantive resettlement issues and meet the corresponding processing requirements. This chapter focuses on these substantive planning and processing steps (many of which are considered in greater detail in subsequent chapters). It dis- cusses indicative costs and time required for preparation, as well as the essential planning elements to be addressed before the next stage of project processing. It distinguishes between the processing requirements of resettlement plans (RPs) for specific investment loans and those of resettlement policy frameworks for sector investment loans, financial intermediation loans, and other multiphased projects. It also provides guidance on emerging areas of special concern, includ- ing new borrowers and late identification of resettlement. Experience has shown that several drafts of resettlement planning docu- ments sometimes must be reviewed and revised before becoming acceptable for clearance. Specifying what preparatory steps should be taken at each stage of the project cycle helps make the clearance process shorter and smoother 95 Involuntary Resettlement Sourcebook (see CD Appendix 2, "Planning Matrix," for a list of major tasks during iden- tification, planning, and implementation and for an example from a Bank project and Appendix 8 and CD Appendix 20, "Resettlement Timetable," for resettlement timetables from Bank projects). How is the resettlement component of a project processed? Processing the resettlement component requires the following: · Determining whether a project entails resettlement and, if so, what type of resettlement instrument is required. Step 2 provides further details on how to agree on which resettlement instrument is required. · Taking the steps to prepare the resettlement component--If Operational Policy (OP) 4.12 applies to the project, the following tasks must be com- pleted: (a) conducting a census and socioeconomic surveys to identify impacts and the people that will be affected; (b) finalizing the resettle- ment entitlements for each category of impact; (c) selecting adequate 6 resettlement sites and income-improvement activities (if necessary); (d) establishing institutional mechanisms for delivering entitlements and for undertaking other resettlement activities; (e) preparing budgets and making arrangements to ensure the timely flow of funds for resettle- ment; (f) coordinating implementation arrangements among relevant agencies; (g) establishing mechanisms for continued participation of displaced persons (DPs) in resettlement, as well as for redress of their grievances; and (h) making arrangements for internal and independent monitoring of resettlement activities. · Arranging for preparation of the resettlement planning documents--The bor- rower engages qualified organizations to prepare RPs or resettlement frameworks and coordinates the activities of agencies contributing to planning documentation. · Reviewing and clearing the resettlement planning documents--The bor- rower, any consultants, and the Bank specialists collaborate in prepar- ing the resettlement documentation and arranging for their review and clearance. · Arranging for monitoring and supervision during implementation--Plans for Bank supervision, project monitoring, and independent resettlement monitoring should specify arrangements for responding to obstacles or opportunities arising during implementation. Projects with significant resettlement require an early review during resettlement, ahead of any mid-term project review, to identify and address implementation prob- lems when they are more manageable. 96 Resettlement Planning and Processing Requirements Processing Requirements at Each Stage of the Project Cycle Preidentification Bank Procedures (BP) 4.12 (para. 2) specifies required actions by Bank and borrower staff. "When a proposed project is likely to involve involuntary resettlement, the TT [task team] informs the borrower of the provisions of OP/BP 4.12. The TT and bor- rower staff (a) assess the nature and magnitude of the likely displacement; (b) explore all viable alternative project designs to avoid, where feasible, or mini- mize displacement; (c) assess the legal framework covering resettlement and the policies of the govern- ment and implementing agencies (identifying any inconsistencies between such policies and the Bank's policy); (d) review past borrower and likely implementing agencies' experience with similar operations; (e) discuss with the agencies responsible for resettlement the policies and institu- 6 tional, legal, and consultative arrangements for resettlement, including mea- sures to address any inconsistencies between government or implementing agency policies and Bank policy; and (f) discuss any technical assistance to be provided to the borrower." The task team should discuss land acquisition and resettlement with the bor- rower as soon as possible following identification of potential projects or compo- nents. Late detection of resettlement issues has often led to procedural delays that could have been averted. BP 4.01 (Environmental Assessment) requires that any potential resettlement issues be identified during the initial environmental screening. Specifically, task teams should do the following: · Provide OP 4.12 to the borrower and use it as a basis for resettlement discussions. · Ask the borrower to provide an assessment of all lands to be used for the project (for additional details, see "land acquisition assessment," in chapter 11, and CD Appendix 4, "Guidelines for Land Acquisition Assessment"). · Inquire whether any resettlement was undertaken before discussion of Bank involvement in the project or whether any resettlement results from activities outside the Bank project that are critical to, or facilitate the design or performance of, the Bank project. If such resettlement needs to be covered under Bank policy, additional information on the 97 Involuntary Resettlement Sourcebook policies and procedures that were used may be required (for applicability of Bank policy in such circumstances, see "Linkages between Bank and Other Donor or National Projects," in chapter 1). · Include a resettlement specialist (or consultant) as a regular member of the project task team if the scale or complexity of resettlement is poten- tially significant. · Provide the project resettlement specialist (if one is included) with proj- ect feasibility studies. Ask the specialist to review sections dealing with resettlement or other social impacts and determine how resettlement should be addressed in the overall social assessment for the project (if one is conducted). · Conduct at least a preliminary assessment of resettlement processing requirements for the project when interacting with the borrower at the preidentification stage (see above). Step 1: Determine Whether a Project Triggers the Bank's Policy on Involuntary 6 Resettlement OP 4.12 is triggered by either of the following two conditions: · Involuntary taking of land; or · Involuntary restriction of access to parks or protected areas. Once project components are known, a quick and inexpensive land acqui- sition assessment can be undertaken to help determine whether OP 4.12 applies to the project. The assessment provides answers to the following questions: · How much land area is required for the project? If the project does not need any land, OP 4.12 is not triggered. · Who owns the land? If part of the land has private owners and the project planners intend to acquire the land using eminent domain, OP 4.12 is triggered. If, however, all privately owned land is going to be sold vol- untarily in the open market and the state is not going to use its right of eminent domain and if the potential DPs have the option to refuse land acquisition or purchase, OP 4.12 is not triggered. · If this project requires state-owned land, is this land subject to customary claim, squatters, or encroachers? If all of the land required for the project is state- owned and is not subject to competing customary claims, grazing rights, or squatters or encroachers, OP 4.12 is not triggered. However, if the land is state-owned but is subject to competing claims, OP 4.12 is triggered. · How is the land, including state-owned land, currently used? This question helps to determine the scope of resettlement issues in the case of private land and to identify possible temporary or seasonal use of state-owned land, even though the land may appear to be empty. 98 Resettlement Planning and Processing Requirements · What is the rough estimate of resettlement impacts to result from acquisition? This question helps the project team assess the scale of resettlement and determine the type of resettlement instrument to use (see step 2). · Will the project team be able to identify, before appraisal, all the land required for the project? This question helps determine the type of resettlement instrument required for the project (see step 2). If all the land parcels required for the project cannot be identified before appraisal, a resettle- ment policy framework must be prepared for the project. · If the project is in a legally designated park or protected area, will the access of the people living inside or around the park be restricted? If yes, OP 4.12 is trig- gered and a process framework is required under para. 31 of OP 4.12. Step 2: If the Project Triggers the Bank's Resettlement Policy, Agree on the Type of Resettlement Planning Instrument Required If the project requires resettlement, the Bank task team, the respective regional social development unit, and the Legal Department should agree on the type of 6 resettlement planning documentation required. The choice of resettlement instrument depends on the scale and severity of resettlement, as well as the type of project. The various types of projects that require resettlement planning (some of which are discussed below) are as follows: · Specific investment loans; · Specific investment loans with minor resettlement impacts; · Sector investment loans; · Private sector financial intermediation projects; · Other projects (including community-driven development [CDD] proj- ects) with multiple subprojects; and · Financial intermediation projects in which resettlement, if any, is likely to be minor. In projects for which all the resettlement impacts are known by the time of project appraisal, the borrower must submit a resettlement plan to the Bank as a condition for project appraisal. (For further details about the RP, see OP 4.12, Annex A [Resettlement Instruments], paras. 1­21. A proposed outline of the resettlement plan is also given in the annex to this chapter.) If the resettlement impacts are minor or the project displaces fewer than 200 people an abbreviated RP can be prepared instead of an RP. Resettlement impacts are considered minor if (a) all of the DPs lose less than 10 percent of their land, regardless of the number of DPs; (b) the remainder of their land is economically viable; and (c) they have no need for physical relocation. (For further details on abbreviated RPs, see OP 4.12, Annex A, para. 22.) 99 Involuntary Resettlement Sourcebook In projects for which the specific resettlement impacts cannot be known from a project appraisal, the borrower needs to submit a resettlement policy framework as a condition of appraisal. (For further details on the resettlement policy framework, see OP 4.12, Annex A, paras. 23­25. See CD Appendix 27, "Resettlement Policy Framework," for sample resettlement policy frameworks from several Bank projects.) Subproject- or component-specific RPs need to be submitted to the Bank for approval as a condition of its financing of the respec- tive subproject or component. In projects involving restrictions of access to legally designated parks or protected areas, the borrower needs to submit a process framework as a condition for appraisal. (For further details, see CD Appendix 28, "Resettlement Process Framework," for a sample resettlement process framework from a Bank project.) The process framework describes the consultative process to be used for decid- ing the restrictions of access and the proposed mitigation measures. Specific plans of action describing the mitigation measures agreed to by the affected communities need Bank approval before the restrictions can be imposed. 6 Several types of projects and the resettlement planning instruments required for each are described below. Specific Investment Loans--For specific investment loans, where prelimi- nary designs for all project components can be known by appraisal, submission to the Bank of a time-bound RP or abbreviated RP consistent with the Bank's operational policy on involuntary resettlement (OP/BP 4.12) is a condition for appraisal. The RP or abbreviated RP needs to be finalized by the time of nego- tiations, at the latest, and the borrower's obligation to carry out RP require- ments should be reflected in legal documents. Sector Investment Loans--For sector investment loans (as described in OP 4.12, para. 26), the Bank requires that the borrower submit a resettlement pol- icy framework (for details, see OP 4.12, Annex A), as a condition for project appraisal. In addition, the RPs or abbreviated RPs for subprojects to be imple- mented during the first year of the project also need to be submitted, as a condition for appraisal. Bank approval of RPs or abbreviated RPs for subprojects to be under- taken during subsequent years would be a condition of financing these subprojects. Private Sector Financial Intermediation Projects--The Bank increasingly supports private sector intermediation in infrastructure development projects. In such cases, the Bank extends a line of credit to one or more financial intermedi- aries for lending to private developers that are implementing subprojects. Because specific subprojects are usually not known at the time of appraisal, the Bank requires an approved resettlement policy framework as a condition for project appraisal. The resettlement policy framework should also describe the institu- tional arrangements for preparation, review, and approval of subproject-specific RPs. These RPs or abbreviated RPs for the subprojects need to be approved as a condition of financing of the subprojects. 100 Resettlement Planning and Processing Requirements Other Projects with Multiple Subprojects--Some projects, although not sector investment loans in the strict definition of the term, have one or more components or subprojects that cannot be known by appraisal. Resettlement planning requirements for such projects are generally the same as those for sec- tor investment loans, described above. In such cases, RPs or abbreviated RPs must be submitted for components or subprojects for which preliminary designs can be prepared by appraisal. However, a resettlement policy framework would need to be prepared for the remaining subprojects or components. Bank approval of subproject RPs or abbreviated RPs is a condition of approval for financing. Community-driven development (CDD) projects are a common type of project with multiple subprojects and usually have the following features: · They involve several subprojects, typically in the hundreds. · Each subproject is typically small, with the total outlay of most subpro- jects ranging from $5,000 to $50,000 or more (all dollar amounts are current U.S. dollars). · Any adverse impacts of such activities are likely to be slight; the number 6 of people affected by them, small. · The subprojects are identified and often implemented by the communi- ties themselves, based on some agreed-on parameters. · The subprojects are not individually appraised beforehand by Bank staff or even by a project-implementing agency. · Many individuals may be willing to voluntarily provide small pieces of land necessary for delivery of CDD benefits, but involuntary taking of land within participating communities may also be a possibility. To accommodate the special characteristics of CDD projects, task teams need to alter the general approach to resettlement planning. (The general approach was devised primarily for application in large-scale projects initiated by government agencies, rather than in small projects initiated by communi- ties.) Even the policy framework approach adopted in other forms of projects with multiple subprojects may be inappropriate for CDD projects, because the task team cannot anticipate the range of resettlement issues that might arise in various subprojects (which often span many sectors). Also, for communities implementing small subprojects, preparing an RP can be cumbersome, time- consuming, and costly and may not have adequate capacity to appraise resettle- ment issues in each subproject before implementing them. The new approach reflects the fairly small and simple impacts that may accompany CDD activities, but it also meets the requirements of involuntary resettlement policy. The new approach has the following key features: · An assessment of the likely resettlement issues is made at the time of project identification and is based on the nature of anticipated activities. 101 Involuntary Resettlement Sourcebook · A "positive list" or a "negative list" (delineating the range of acceptable activities in the CDD program) is used to decide whether activities with significant impacts and the need for more intensive resettlement plan- ning should be excluded from funding. · If program arrangements allow for voluntary contributions of land, spe- cial provisions must be included in the project operation manual, which is prepared for all CDD projects. Contributions of land must be shown to be voluntary and of insufficient magnitude to impoverish the individu- als involved. Verifying that the community is voluntarily contributing land belonging to the community and not to individuals is important. If the land involved belongs to individuals, voluntary contributions need to be made by the respective individuals. · The project operational manual describes the process communities use to identify and address resettlement issues if resettlement is anticipated. This description is accepted in lieu of a policy framework. · Receipt of the draft operational manual, including an adequate descrip- 6 tion of resettlement issues, is a condition for appraisal. The draft manual is disclosed, both at the Bank's InfoShop and in the borrower country before project appraisal. · The draft operational manual is finalized during appraisal, including the provisions relating to resettlement issues, and agreed on with the bor- rower at negotiations. The revised operational manual is also disclosed at the InfoShop and in the borrower country, so as to be accessible to communities in the project. · Capacity-building efforts include initiatives to build the resettlement- related capacity of the project-implementing agency and communities. Supervision of subprojects with significant resettlement issues is carried out by the project-implementing agency. Bank supervision missions review resettlement implementation and supervision arrangements and make selective site visits. Project Identification BP 4.12 describes how the Bank and the borrower determine which resettlement framework to use. "Based on review of relevant resettlement issues, the TT [task team] agrees with the Regional social development unit and LEG [Legal Department] on the type of resettlement instrument (resettlement plan, abbreviated resettlement plan, resettlement policy framework, or process framework) and the scope and the level of detail required. The TT conveys these decisions to the borrower and also discusses with the borrower the actions necessary to prepare the resettlement instrument, agrees on the timing for preparing the resettlement instrument, and monitors progress" (para. 3). 102 Resettlement Planning and Processing Requirements For projects involving substantial resettlement, the task team needs to establish an adequate framework for advanced resettlement preparation at the project identification stage itself, especially for projects involving community relocation or change in occupation of a large number of people. The following activities need to be initiated at this stage: · If some project-related resettlement has already been completed, an agency needs to be engaged to evaluate the outcome. If it is unsatisfac- tory, retrofit activities may be necessary. · The regional social development unit and regional legal unit should be consulted on resettlement issues. In projects entailing substantial resettle- ment, a resettlement specialist and a country lawyer should be included in the project task team (see CD Appendix 23, "Legal Framework for Resettlement and Compensation," for resettlement legal frameworks from Bank projects and CD Appendix 24, "Project Loan Agreement Section on Resettlement," for an example of how resettlement issues are incorpo- rated into the project loan agreement for a large resettlement operation). 6 · All Bank resettlement requirements should be explained to the borrower. The task team leader, the borrower, the resettlement specialist, and the project lawyer should agree on the scope of resettlement, the required planning documentation, and the timing of preparation and submission of plans. · The borrower, the task team, the regional social development unit, and the Legal Department should agree to a timetable for submission of plan- ning documents to the Bank for review. The task team or resettlement specialist should inform the borrower about the normal response time after Bank receipt of plans. · For projects with large-scale or complex resettlement, the task team (in collaboration with the borrower) should decide whether a free-standing resettlement (or environment and social mitigation) project should be prepared. · The task team should assist the borrower, as necessary, in establishing organizational arrangements for resettlement preparation and planning. These arrangements could involve a central project resettlement unit, with assistance from relevant national or state agencies; local consult- ants; and international consultants (if needed). Qualified consultants are usually essential for conducting studies for community relocation or for designing income restoration programs (Box 6.1). Terms of reference for the consultants should be approved by the Bank's regional social devel- opment unit. · Project identification is the most appropriate stage to discuss modifica- tions in design to minimize resettlement. The task team should facilitate 103 Involuntary Resettlement Sourcebook Box 6.1 Assessing the Need for Consultant Services Early in the preparation process (preferably during the identification stage), the task team and the borrower should assess the need for consultants to prepare for the reset- tlement. The assessment should consider the following factors: · The scale and complexity of resettlement impacts--Projects with substantial resettlement and relocation of communities, such as reservoir and major urban resettlement projects and complex resettlement situations involving a number of components or requiring changes in occupations of affected people, would usually require consultants. · Resettlement experience of the project organization--If the project organization has successfully implemented projects with substantial resettlement in the past, its in- house resettlement expertise may be sufficient for resettlement planning. · Resettlement planning experience in the country, region, or sector--If sufficient reset- tlement experience is available domestically and transferable to the local project, local consultants (from an experienced organization) can be engaged. However, if resettlement experience is inadequate or not transferable to the local project, international consultants may be required. 6 · Background studies or impact assessments already carried out--Sometimes project feasibility studies already give a clear assessment of the need for resettlement preparation consultants. · Presence of social scientists or resettlement specialists on the engineering design consul- tant's team--Adding a qualified resettlement specialist to the design consultant's team is useful after upstream identification of the need for resettlement. If timely assessment of the need for consultants can be made, the project design team can include a social scientist or resettlement planner. A multidisciplinary team with design engineers and project managers allows better coordination of resettlement planning and project design and implementation. discussion between project engineers and resettlement planners to explore ways of reducing adverse impacts. Changes in project design may require some project reformulation. · The resettlement specialist should determine whether indigenous peo- ples are affected by the project, and if so, ensure that the requirements of OD 4.20 are addressed (see "Indigenous Peoples," in chapter 5). · Links between Bank-financed projects or components and non-Bank- financed projects or components, if any, should be assessed. OP 4.12 applies to resettlement impacts of projects or components that are not financed by the Bank but are essential to the design or performance of Bank-funded projects (see "Linkages between Bank and Other Donor or National Projects," in chapter 1). · Once the scope of the project is determined, organizational and budget- ary arrangements for conducting a census and socioeconomic survey 104 Resettlement Planning and Processing Requirements should be discussed and, if possible, finalized. This initiative allows for smooth resettlement planning at the preparation stage. · The borrower's need for technical assistance in resettlement preparation and planning should be assessed. If necessary, the task team should seek support for this purpose through the various trust funds. Project identification sets the stage for the quality enhancement review (QER). By this time, the scope of resettlement and the main issues to be addressed during project preparation should be identified. For various reasons, however, some resettlement impacts may not be identified until later in the project cycle. (Procedures for handling these impacts are discussed at the end of this chapter.) Project Quality Enhancement Review BP 4.12 specifies what resettlement information is necessary at the project concept 6 stage: "The TT [task team] summarizes in the Integrated Safeguards Data Sheet (ISDS) accompanying the Project Concept Note (PCN) and the Project Information Document (PID) available information on the nature and magnitude of displacement and the resettlement instrument to be used, and the TT periodically updates the PID as project planning proceeds" (para. 4). A description of resettlement impacts and main resettlement issues identi- fied as part of project identification should be provided in the Integrat- ed Safeguards Data Sheet (ISDS) prepared at the QER stage. BP 4.01 (Environmental Assessment), para. 3, requires that the task team record in the ISDS at the QER stage and the initial Project Information Document the key social and environmental issues, including any resettlement. Therefore, the environmental assessment process will also identify any resettlement issues. Usually, the regional social development unit and the Legal Department will submit written comments in advance of the QER. Unit representatives should attend the QER meeting to ensure that resettlement issues are addressed. The objective of the QER is to identify and agree on the main resettlement issues to be addressed during project preparation. At the meeting, the task team should seek the necessary guidance on addressing these issues later, during project preparation. Issues commonly raised include the following: · Have all project activities or components that will cause resettlement been identified? Are all adverse impacts of resettlement identified? Have these impacts been minimized? 105 Involuntary Resettlement Sourcebook · Has agreement been reached on the type of resettlement instrument required? When is it to be submitted to the Bank and reviewed? · What are the key challenges and issues for the resettlement process? Especially difficult are situations in which replacement land is unavail- able for people displaced from land-based livelihoods; indigenous peo- ples must be relocated; the need to assist DPs without legal rights to the land being acquired (squatters or encroachers) is not acknowledged by the borrower; resettlement operations are large and complex; and past resettlement in the same sector or region has been inadequate. · Does the borrower have sufficient organizational capacity for resettle- ment planning and implementation? If not, how can this capacity be strengthened? Evaluating this capacity is especially important when dealing with new borrowers (Box 6.2). If an agency, state, or province is a new borrower, special provisions may be needed to ensure adequate resettlement preparation and planning. Box 6.2 gives 6 an indicative list of the means for assisting new borrowers. Before the QER, the task team also ensures that resettlement information is provided for the project's ISDS. This information should cover the nature and Box 6.2 Meeting the Special Needs of New Borrowers · The resettlement specialist and project lawyer should review local land acquisition and resettlement laws, regulations, procedures, and implementation experience. Gaps between Bank policy and local regulations and practice should be identified and discussed with the borrower, preferably with senior-level decisionmakers. · The rationale behind Bank resettlement policy should be explained to the bor- rower in detail. A consensus on resettlement objectives and on mechanisms to reach these objectives is important. · A resettlement training program for resettlement planners and implementation staff should be organized, where possible, to provide clear instructions and neces- sary clarifications. · When consultants are engaged to prepare or plan resettlement in a new project, introducing capacity-building arrangements is important so that the borrower gains skills and knowledge in preparing resettlement to Bank standards. Absence of such capacity building would substantially dilute the long-term benefits of this exercise and would not reduce borrower dependency on consultants. · The Bank country team should substantially involve a resettlement specialist and the country lawyer in the first few projects as a long-term investment in smooth, efficient resettlement preparation and implementation. The country team should share the expense of these measures with the task team that is preparing these projects for the Bank. The Bank should also offer assistance, including financial assistance, for review and revision of domestic laws and regulations related to land acquisition and resettlement. 106 Resettlement Planning and Processing Requirements magnitude of anticipated adverse impacts, any preliminary planning arrange- ments, and any other points that may appear particularly relevant, given the preliminary stage of project development. The task team also ensures that the ISDS is sent to the InfoShop (see CD Appendix 26, "Integrated Safeguards Data Sheet," for a sample ISDS from a Bank project). (For information on the ISDS, and guidance on filling it out, visit the Intranet website: http://essd. worldbank.org/essd/internal.nsf/wSPHD/ISDS.) Project Preparation BP 4.12 (paras. 5­6) outlines the assessments required during project preparation. "For projects with impacts under para. 3 (a) of OP 4.12, the TT [task team] assesses the following during project preparation: (a) the extent to which project design alternatives and options to minimize and mitigate involuntary resettlement have been considered; (b) progress in preparing the resettlement plan or resettlement policy framework 6 and its adequacy with respect to OP 4.12, including the involvement of affect- ed groups and the extent to which the views of such groups are being considered; (c) proposed criteria for eligibility of displaced persons for compensation and other resettlement assistance; (d) the feasibility of the proposed resettlement measures, including provisions for sites if needed; funding for all resettlement activities, including provision of counterpart funding on an annual basis; the legal framework; and implementa- tion and monitoring arrangements; and (e) if sufficient land is not available in projects involving displaced persons whose livelihoods are land-based and for whom a land-based resettlement strategy is the preferred option, the TT also assesses the evidence of lack of adequate land (OP 4.12, para. 11). For projects with impacts under para. 3 (b) of OP 4.12, the TT assesses the follow- ing during project preparation: (a) the extent to which project design alternatives and options to minimize and mitigate involuntary resettlement have been considered; and (b) progress in preparing the process framework and its adequacy in respect to OP 4.12, including the adequacy of the proposed participatory approach; criteria for eligibility of displaced persons; funding for resettlement; the legal framework; and implementation and monitoring arrangements. Most resettlement preparation and planning work usually occurs during project preparation. At this time, consultations with DPs, task team discussions with resettlement counterparts, background studies needed for resettlement (for example, studies related to resettlement sites and income improvement pro- grams), site inspections of affected areas and relocation areas, and finalization 107 Involuntary Resettlement Sourcebook of resettlement entitlements and organizational arrangements normally culmi- nate in a draft RP. Past experience has shown that several drafts need to be reviewed by the Bank's resettlement specialist and Legal Department during project preparation. This helps ensure that the draft to be formally reviewed by the regional social development unit and Legal Department, as a condition for appraisal, is in an acceptable form. The specific resettlement-related actions that need to be taken by the task team (or other Bank personnel) during proj- ect preparation are the following: · Review the borrower's resettlement policies and procedures to identify gaps between Bank and borrower policies and procedures. The review should be carried out by the Legal Department and the regional social development unit. · Identify ways to address the above-mentioned gaps in resettlement poli- cies and procedures. Some common mechanisms for bridging these gaps are as follows: (a) The borrower issues a project-specific policy to com- 6 ply with Bank requirements. This typically includes special provisions to (i) assist DPs that have no legal rights to the land acquired for the proj- ect or other DPs that are not eligible for assistance under local law; and (ii) provide for compensation for lost assets at replacement cost. (b) The project team obtains government waivers on provisions in local laws or regulations conflicting with the resettlement plan prepared in accor- dance with Bank policy. (c) When compensation at replacement cost is the issue, borrowers sometimes use additional grants or allowances to top up the compensation prescribed by law or regulation (see "Calculation and Application of Replacement Cost," in chapter 4). (d) When the eli- gibility of those lacking legal land title or residency permits becomes an issue, project-specific cutoff dates can be used to discourage entry into the area by people seeking to establish illegitimate claims for assistance (see "People without Title or Use Rights," in chapter 5). (e) The project can serve as a vehicle for dialogue between the Bank and borrower on developing national, regional, or sectoral resettlement policies that will be broadly consistent with Bank and other donor requirements. · Help the borrower obtain qualified consultant services, if required, for detailed resettlement planning. Trust funds used to engage consultants for this purpose should be operated by the borrower and not by the Bank. Consultants engaged through a trust fund operated by the Bank cannot be used to prepare borrowers' documents, including RPs. · If the resettlement program involves community relocation to new sites or identification and design of income improvement programs for DPs who have to change occupations, emphasize that the level of detail in the RP, the extent of participation of affected communities, the number 108 Resettlement Planning and Processing Requirements of preparatory studies for planning, and the time required to prepare the RP are substantially greater than for projects without these impacts (Box 6.3). (Details of income improvement strategies and programs, as well as the requirements for development of resettlement sites, are discussed in chapter 8.) · Ensure that the census and socioeconomic surveys are completed. Because these activities provide the basis for preparing the RP, they should be com- pleted as soon as possible during the project preparation stage. Box 6.3 Estimating the Time Required for Resettlement Preparation For normal investment projects, "resettlement preparation" describes the period of time between identification of resettlement and the completion of project appraisal. All things being equal, the time required for resettlement preparation tends to grow if resettlement involves any of the following: · Large-scale resettlement · The need for community relocation · Multijurisdictional coordination 6 · Impacts on indigenous peoples · Several resettlement components · The need for income restoration programs · Project agency inexperienced with resettlement Steps can also be taken to reduce the preparation period, or at least to relieve proj- ect processing bottlenecks, while sustaining the quality of preparation: · Appointing consultants or increasing the frequency of resettlement missions can shorten preparation time. · Beginning preparation as early as possible in the project identification process can relieve processing bottlenecks during appraisal (or negotiations). Ordinarily, the minimum time required to complete resettlement preparation for various categories of projects is as follows: · Reservoir resettlement 1­1.5 years · Major urban resettlement 9 months­1 year · Rural linear resettlement 6­9 months · Resettlement involving indigenous peoples 1­1.5 years · Resettlement with mainly marginal impacts 4­6 months The preparation activities requiring substantial amount of time are the following: · Census and socioeconomic surveys 3­6 months · Identification of the need, and feasibility studies, for resettlement (especially agricultural) sites 4­8 months · Design of appropriate economic rehabilitation programs 3­6 months Carrying out the above activities simultaneously, as much as possible, helps reduce the overall preparation time required. 109 Involuntary Resettlement Sourcebook · Ensure that the census and socioeconomic survey data are used to categorize impacts and DPs. All impacts must be reflected in this catego- rization, as it forms the basis for determining eligibility and for designing assistance packages. The categorization process should trigger consultation between the Bank and the borrower and between the borrower and DPs (or their representatives) on assistance options, economic rehabilitation strategies, and relocation sites. The process should culminate in a draft entitlement matrix (see Appendix 6 and CD Appendix 9, "Entitlement Matrix," for several examples of entitlement matrices from Bank projects). · Obtain agreement on methods for valuation of lost assets and procedures for compensation or asset replacement, after categories of impact have been established. · Ensure that DPs are consulted on relevant aspects of resettlement plan- ning, especially selection of relocation sites and development of income improvement strategies and programs. The task team should assess the extent to which DPs' views have been considered in planning. A pre- 6 liminary list of income restoration programs, based on consultations with DPs, should be prepared. Proposed programs should be assessed for tech- nical, economic, and financial feasibility. If economic rehabilitation of many DPs is needed, experienced agencies should be contracted to con- duct these studies. The capacity of DPs to implement or manage program activities should also be assessed. · Discuss and finalize, if possible, organizational arrangements for resettle- ment. These arrangements include delivery of all forms of resettlement assistance, coordination of the various implementation agencies, clear delineation of financial responsibilities, and procedures for internal monitoring. If independent monitoring is required, draft terms of refer- ence and a short list of candidate agencies should be prepared. · Assist the borrower, if necessary, with the preparation of tentative cost estimates and budget measures, including clear indication of financial responsibility for all aspects of the resettlement program. After completion of the above activities and before the preappraisal mission arrives in the field, a draft RP should be prepared. Review of draft plans by the regional social development unit and the Legal Department can help the preap- praisal mission focus on any key outstanding issues. Preappraisal By the end of the preappraisal stage (if not before), resettlement policy entitle- ments for various categories of impacts should be finalized. Relocation sites and income restoration programs should be acceptable to DPs. Any outstanding 110 Resettlement Planning and Processing Requirements issues identified during project preparation should be resolved during the preap- praisal mission, before a draft RP (or policy framework) is to be submitted to the Bank for approval. Specifically, the following steps should be taken during preappraisal: · Prepare an agreed resettlement entitlement matrix, detailed layout and design of relocation sites, and operational details of income restoration programs (including an estimate of the number of DPs likely to opt for each program). · Finalize organizational arrangements for implementation, including mechanisms for redress of grievances. Incorporate in the draft RP an organization chart of the project resettlement unit and agencies, and if necessary, a capacity building plan. · Review external monitoring proposals, if applicable, and arrange meet- ings with short-listed agencies during the preappraisal mission. · Compute detailed cost estimates based on finalization of the resettle- ment entitlement matrix, final selection of relocation sites, and income 6 restoration programs. · Include in the draft RP a description of the participatory processes that contributed to its preparation. Include a strategy for consultation with DPs during project implementation (see chapter 7). · Encourage the borrower to prepare resettlement information (in a booklet, pamphlet, or other media) for distribution to DPs. Include in the draft RP an outline of the information to be provided, as agreed with the borrower. · Complete the evaluation of any project resettlement undertaken before the Bank's involvement in the project. Incorporate in the draft RP any provisions for remedial actions, if necessary. · By the end of the preappraisal mission, submit a revised draft RP (if a draft was previously submitted) to the Bank for legal and technical review. · If any significant issues are outstanding, seek clarification or guidance from the regional safeguards coordinator, the Bankwide resettlement coordinator, or the Resettlement Committee. Project Decision Meeting "The borrower submits to the Bank a resettlement plan, a resettlement policy frame- work, or a process framework that conform[s] with the requirements of OP 4.12, as a condition of appraisal for projects involving involuntary resettlement (see OP 4.12, paras. 17­31). Appraisal may be authorized before the plan is completed in highly (continued) 111 Involuntary Resettlement Sourcebook (continued from p. 111) unusual circumstances (such as emergency recovery operations) with the approval of the Managing Director in consultation with the Resettlement Committee. In such cases, the TT [task team] agrees with the borrower on a timetable for preparing and furnishing to the Bank the relevant resettlement instrument that conforms with the requirements of OP 4.12." (BP 4.12, para. 8) "Once the borrower officially transmits the draft resettlement instrument to the Bank, Bank staff--including the regional resettlement specialists and the lawyer-- review it, determine whether it provides an adequate basis for project appraisal, and advise the Regional sector management accordingly. Once approval for appraisal has been granted by the Country Director, the TT sends the draft resettlement instrument to the Bank's InfoShop. The TT also sends the English language executive summary of the draft resettlement instrument to the Corporate Secretariat, under cover of a transmittal memorandum confirming that the executive summary and the draft resettlement instrument are subject to change during appraisal" (BP 4.12, para. 9). 6 The draft RP should be submitted for legal and technical review at least 15 days before the project decision meeting. The regional Legal Department manager and the safeguards coordinator ensure that the draft RP is reviewed. Although clearance procedures may vary from region to region, clearance should be based on there being an adequate description of the following key planning attributes in the RP: · Census and socioeconomic data necessary to establish baseline condi- tions and formulate entitlements · Legal framework · Entitlement policy and assistance packages covering all categories of impacts · Budget and identification of funding sources · Organizational arrangements for RP implementation · Time-bound implementation schedule linked to civil works · Selection of relocation sites, based on consultations with DPs · Feasible income restoration programs, based on consultation with DPs · Plans for housing, infrastructure, and social services · Plans for environmental protection and management · Consultation with DPs and host communities · Accessible grievance procedures · Monitoring plan. In the event that the draft RP is generally acceptable but requires some additional improvement or clarification, specific deficiencies are identified. A conditional clearance is provided in this case. Then, after outstanding issues are 112 Resettlement Planning and Processing Requirements satisfactorily completed, the appraisal process will be considered complete. However, if key planning issues have not been addressed at this stage and the RP is found not to form an adequate basis for project appraisal, project appraisal can be delayed. In many cases, the technical specialist reviewing the document provides the task team with detailed technical comments on RP deficiencies or outstanding issues. All identified deficiencies or outstanding issues should be resolved during the appraisal mission, and a revised RP must be submitted to the Bank for review. Project appraisal is considered complete only when an RP is determined to be acceptable to the Bank. (The review process described above also applies to draft resettlement policy frameworks submitted as a condition for project appraisal.) "In the Project Appraisal Document (PAD), the TT [task team] describes the reset- tlement issues, proposed resettlement instrument and measures, and the borrower's commitment to, and institutional and financial capacity for, implementing the reset- tlement instrument. The TT also discusses in the PAD the feasibility of the proposed resettlement measures and the risks associated with resettlement implementation. In the annex to the PAD, the TT summarizes the resettlement provisions, covering, inter 6 alia, basic information on affected populations, resettlement measures, institutional arrangements, timetable, budget, including adequate and timely provision of counter- part funds, and performance monitoring indicators. The PAD annex shows the over- all cost of resettlement as a distinct part of project costs" (BP 4.12, para. 11). Before the formal project decision meeting, the task team should summarize the status of resettlement preparation in the Project Appraisal Document (PAD). This summary should address resettlement issues (including scope and magnitude of adverse impacts), proposed resettlement measures to be undertak- en, the borrower's capacity (organizational and financial) for and commitment to implementing the RP. The PAD should also assess any risks (to DPs and to the Bank) posed by the resettlement. Typically, more detailed information relat- ing to various aspects of resettlement is provided in an annex to the PAD. BP 4.12 defines the use of the Resettlement Committee to obtain guidance. "The TT [task team] may request a meeting with the Resettlement Committee to obtain endorsement of, or guidance on, (a) the manner in which it proposes to address reset- tlement issues in a project, or (b) clarifications on the application and scope of this policy. The Committee, chaired by the vice president responsible for resettlement, will include the Director, Social Development Department, a representative from LEG [Legal Department], and two representatives from Operations, one of whom is from the sector of the project being discussed. The Committee is guided by the policy and, among other sources, [this book], which will be regularly updated to reflect good practice" (para. 7). 113 Involuntary Resettlement Sourcebook Before the project decision meeting, the task team should seek guidance on strategies for resolving outstanding issues, if any, and for RP revision, if required. (Any resettlement-related conditionality attached to formal project negotia- tions should be discussed at the meeting.) Before the project decision meeting, the task team should review the draft legal documentation to ensure that references to resettlement-related matters are accurate and that actions legally required of the borrower are adequately identified. Before the project decision meeting, the task team should also ensure that the borrower has fulfilled its obligations to publicly disclose the RP. The task team should send the revised RP to the Bank's InfoShop and the host country PIC, update the ISDS, obtain clearance from the regional safeguards coordina- tor, and send the ISDS to the InfoShop as well. The draft RP should also be made available to DPs, other affected people, and local nongovernmental organizations (NGOs) through local government offices, the project office, the resettlement agency office, and other locations convenient to the DPs. 6 In projects involving emergency recovery operations (such as earthquakes, floods, hurricanes, or other disasters), the managing director can waive the requirement to submit resettlement plans as a condition of appraisal. In such cases, the written waiver provided by the managing director should describe the proposed alternative schedule for preparing the RP. Project Appraisal "During project appraisal, the TT [task team] assesses (a) the borrower's commitment to and capacity for implementing the resettlement instrument; (b) the feasibility of the proposed measures for improvement or restoration of livelihoods and standards of living; (c) availability of adequate counterpart funds for resettlement activities; (d) significant risks, including risk of impoverishment, from inadequate implementa- tion of the resettlement instrument; (e) consistency of the proposed resettlement instrument with the Project Implementation Plan; and (f) the adequacy of arrange- ments for internal, and if considered appropriate by the TT, independent monitoring and evaluation of the implementation of the resettlement instrument. The TT obtains concurrence of the Regional social development unit and LEG [Legal Department] to any changes to the draft resettlement instrument during project appraisal. Appraisal is complete only when the borrower officially transmits to the Bank the final draft reset- tlement instrument conforming to Bank policy (OP 4.12)" (BP 4.12, para. 10). Comments raised during RP review or the project decision meeting should be conveyed in time to allow the borrower (including planning and implemen- tation agencies) to address outstanding issues as much as possible before the 114 Resettlement Planning and Processing Requirements arrival of the appraisal mission. The following issues usually need to be addressed during appraisal: · Deficiencies or outstanding issues identified during the review of the project decision package should be addressed. · Terms of reference for independent monitoring and selection of the monitoring agency should be finalized. Internal monitoring procedures (including formats) and responsibilities should also be finalized. · In addition to the appraisal requirements (see box above), other issues or clarifications are likely to be outstanding at the appraisal stage. These issues are addressed during the appraisal mission, in addition to the spe- cific objectives of appraisal. All outstanding issues need to be resolved and incorporated into a revised RP, if necessary, before the appraisal can be considered complete. · The schedule and arrangements for staffing the resettlement unit and engaging independent monitors (if applicable) should be discussed dur- ing appraisal. 6 · A revised RP, if necessary, should be submitted for technical and legal review. Following review, regional clearance procedures are essentially the same as those used for the initial draft. · If applicable, the draft resettlement policy framework or the process framework should be further discussed with the borrower at appraisal and finalized by the end of the appraisal mission. Negotiations "The project description in the Loan Agreement describes the resettlement compo- nent or subcomponent. The legal agreements provide for the borrower's obligation to carry out the relevant resettlement instrument and keep the Bank informed of project implementation progress. At negotiations, the borrower and the Bank agree on the resettlement plan or resettlement policy framework or process framework. Before pre- senting the project to the Board, the TT [task team] confirms that the responsible authority of the borrower and any implementation agency have provided final approval of the relevant resettlement instrument" (BP 4.12, para. 12). Sometimes issues may still need to be addressed or clarified after completion of the appraisal mission. If the issues are significant, resolution may be required as a condition of negotiations. This means that revisions to the RP or policy framework must be found acceptable by the regional safeguards unit and the Legal Department before an invitation to formal project negotiations can be 115 Involuntary Resettlement Sourcebook issued. However, minor clarifications and presentational issues can be addressed during negotiations. At the time of negotiations or before a Board presentation, the task team must confirm that the borrower and responsible implementation agencies have provided final and official approval of the RP. Once the RP has been finalized, the task team should send the final RP to the Bank InfoShop and the host coun- try public information center (PIC), finalize the ISDS, and send that to the Bank InfoShop as well. The final RP should be distributed to the same locations as the draft RP. Effectiveness Any resettlement-related conditions of effectiveness must be complied with before the project is declared effective. Such cases require clearance by the regional social development unit and the Legal Department. 6 Supervision BP 4.12 defines Bank requirements for resettlement supervision. "Recognizing the importance of close and frequent supervision to good resettlement outcomes, the Regional vice president, in coordination with the relevant country director, ensures that appropriate measures are established for the effective supervision of projects with invol- untary resettlement. For this purpose, the country director allocates dedicated funds to adequately supervise resettlement, taking into account the magnitude and complexity of the resettlement component or subcomponent and the need to involve the requisite social, financial, legal, and technical experts. Supervision should be carried out with due regard to the Regional Action Plan for Resettlement Supervision" (para. 13). "Throughout project implementation the TL [team leader] supervises the imple- mentation of the resettlement instrument ensuring that the requisite social, financial, legal, and technical experts are included in supervision missions. Supervision focuses on compliance with the legal instruments, including the Project Implementation Plan and the resettlement instrument, and the TT [task team] discusses any deviation from the agreed instruments with the borrower and reports it to Regional Management for prompt corrective action. The TT regularly reviews the internal, and where applica- ble, independent monitoring reports to ensure that the findings and recommendations of the monitoring exercise are being incorporated in project implementation. To facil- itate a timely response to problems or opportunities that may arise with respect to resettlement, the TT reviews project resettlement planning and implementation during the early stages of project implementation. On the basis of the findings of this review, the TT engages the borrower in discussing and, if necessary, amending the relevant resettlement instrument to achieve the objectives of this policy" (para. 14). (continued) 116 Resettlement Planning and Processing Requirements (continued from p. 116) "For projects with impacts covered under para. 3(b) of OP 4.12, the TT assesses the plan of action to determine the feasibility of the measures to assist the displaced persons to improve (or at least restore in real terms to pre-project or pre-displacement levels, whichever is higher) their livelihoods with due regard to the sustainability of the natural resource, and accordingly informs the Regional Management, the Regional social development unit, and LEG [Legal Department]. The TL makes the plan of action available to the public through the InfoShop" (para. 15). "A project is not considered complete--and Bank supervision continues--until the resettlement measures set out in the relevant resettlement instrument have been implemented. Upon completion of the project, the Implementation Completion Report (ICR) evaluates the achievement of the objectives of the resettlement instru- ment and lessons for future operations and summarizes the findings of the borrower's assessment referred to in OP 4.12, para. 24. If the evaluation suggests that the objec- tives of the resettlement instrument may not be realized, the ICR assesses the appro- priateness of the resettlement measures and may propose a future course of action, including, as appropriate, continued supervision by the Bank" (para. 16). 6 BP 4.12 makes regional management and country program directors respon- sible for ensuring that adequate resources are committed to resettlement super- vision. Regional resettlement supervision plans should be prepared to ensure that supervision resources are allocated appropriately and that the supervision team includes a skills mix appropriate for the project context. The RP should contain a detailed plan for internal and independent moni- toring, including a timetable for periodic submission of monitoring reports to the Bank. Any project monitoring indicators should be consistent with the resettlement monitoring indicators. If well prepared, these reports, supplement- ed with project supervision by the Bank, constitute an effective mechanism for reviewing implementation of resettlement activities (see chapter 10). Specifically, the following actions need to be taken by the task team during implementation: · The team ensures that monitoring reports are prepared and submitted according to the schedule provided in the RP. Monitoring reports should be reviewed by a resettlement specialist, whose comments should be con- veyed to the relevant implementing agency or agencies. · Supervision activities should be based on the project's legal documents, the RP, and monitoring reports. At the end of each supervision mission, any outstanding issues should be discussed with project counterparts. A timetable for resolving issues identified during supervision should be agreed on. Repeated lack of compliance with salient agreements in the RP or supervision reports should be reported to senior management. 117 Involuntary Resettlement Sourcebook · An early review of resettlement implementation should be held to iden- tify implementation problems or RP deficiencies, especially if the proj- ect is large scale or has complex resettlement operations and when ample time is available for adaptation or correction. If necessary, the task team and the borrower should revise or amend the RP so that policy objectives are more likely to be achieved. · In the case of sector investment loans or other projects for which a reset- tlement policy framework has been prepared, the borrower prepares subproject-specific RPs. These RPs are submitted to the regional social development unit for review and approval, as a condition for Bank approval of the subproject for financing. In projects with many sub- projects, the authority to approve subproject RPs may be delegated to responsible government agencies or, if applicable, to private financial intermediaries. In projects with only a few subprojects or where counter- part agencies or financial intermediaries lack capacity for RP review, the Bank retains this responsibility. 6 · If conditions have been applied to initiation of civil works or Bank dis- bursement, the task team and the Legal Department need to ensure com- pliance with these conditions during project supervision before lifting them. · During resettlement supervision, the task team's periodic Project Supervision Report should include accurate information gleaned from supervision or data relating to resettlement. The project is not considered complete unless a resettlement plan has been fully implemented. Because the resettlement program is one of the components of the project, the project cannot be considered complete until the resettlement plan agreed to by the borrower is fully implemented. The Bank's resettlement policy requires an assessment, at the time of proj- ect completion and after the RP has been fully implemented, of the extent to which the DPs have improved or restored their standards of living. This assess- ment is usually based on the results of a follow-up socioeconomic survey con- ducted by the borrower at the time of project completion (see CD Appendix 33, "Implementation Completion Report Section on Involuntary Resettlement," for an example of how an ICR should report on involuntary resettlement, including whether the resettlement instrument is fully implemented and if any additional actions are required or recommended). If the assessment reveals that a majority of DPs have already improved or restored their standards of living and that the remaining DPs are likely to reach this stage in the near future, no further supervision is necessary. 118 Resettlement Planning and Processing Requirements If the assessment reveals that a significant proportion of DPs have not been able to improve or restore their incomes and are also unlikely to do so in the near future and that this failure is due to the design of the resettlement instrument or its implementation, the task team should discuss additional measures with the borrower to assist DPs. The task team may decide, in consultation with the bor- rower, to continue supervision of the resettlement program after the formal com- pletion of the project, as necessary. Irregular Processing: Late Identification of the Need for Resettlement Sometimes, the need for resettlement is discovered late in the project prepara- tion stage or even during project implementation. Late discovery is typically a result of one of three unanticipated situations: · Addition of project components requiring resettlement; · Redefinition of the scope of a component; or · Impacts unforeseen during project identification 6 Processing requirements for resettlement under these circumstances can vary. A major consideration is whether an RP or a resettlement policy frame- work is already under preparation or in place. Amending an existing RP or framework will usually be less of a problem than producing such a document in midcourse. If an RP already exists or is under preparation, components such as mechanisms for participation, redress of grievances, and monitoring normally would not change, and only the institutional arrangements and budgets may need minor modifications. If no other resettlement has been identified in the project, and no RP or framework is in place, the task team should convene a meeting with the bor- rower and Bank technical and legal specialists as soon as possible to determine what kind of planning documents needs to be prepared and under what timetable. When the need for resettlement is identified during implementation, sub- mission of an acceptable RP will be a condition of disbursement for the given component. If land acquisition and displacement have occurred before the need for resettlement is brought to the attention of the Bank, the borrower must con- duct a retroactive assessment. This assessment should provide the Bank with basic information relating to the scope and magnitude of adverse impacts, the compensation paid for assets, and other forms of assistance extended to DPs. If baseline data are available, a socioeconomic survey should be conducted to determine whether incomes and living standards have at least been restored. If no baseline data are available, DPs should be consulted regarding their views on the effectiveness of resettlement measures. The task team and the borrower 119 Involuntary Resettlement Sourcebook should subsequently discuss and agree on any supplementary resettlement mea- sures necessary to meet Bank policy requirements. Annex: Resettlement Site Selection, Movement of Displaced Persons, and Organization of Community Life Resettlement site selection and feasibility studies of the proposed actions and economic packages are the most important steps for successful implementation of RPs. The major objectives of these steps are to ensure that the resettlement sites have been properly selected and that the proposed income restoration activities are not only technically, economically, and financially viable, but also within the capacity of the DPs to manage. The site selection, feasibility studies, and site development process can be divided into four phases as follows. 6 Phase 1: Criteria for Site Selection Site selection must be carried out systematically. Criteria for site selection must be determined. For evaluating the potential sites against the prescribed site selection criteria, basic data sources must be assembled. These sources might include national survey authority or agency topographical maps, at a scale of 1:100,000 or 1:50,000, satellite imagery, aerial photography, and any other available maps or data. Site selection criteria are suggested below. These criteria should be discussed with the DPs, their representatives, and local officials before being finalized. In general, potential sites should · Be as close as possible to the affected areas (this criterion needs to be bal- anced with the potential of these sites for sustainable economic activities); · Be easily accessible via existing roads or capable of becoming so via con- struction of inexpensive, economically feasible roads (accessibility, not remoteness, is the issue); · Include no protected areas, classified forests, nature reserves, or environ- mentally sensitive lands, such as sloping terrain or shallow soils; · Have an even and smooth topography and no mountainous areas, rolling topography, or steep slopes; · Have soils adequate for irrigated or rainfed agriculture after minimal reclamation works (saline soils or lands susceptible to floods and water logging should be avoided unless inexpensive reclamation works can be implemented); 120 Resettlement Planning and Processing Requirements · Have good potential for surface or groundwater irrigation; and · Have, preferably, a low population density, large holdings, and good potential for further development (areas already developed should be avoided, unless a market for land purchase is active). Phase 2: Feasibility Studies During the feasibility studies stage of site selection, planners should carry out detailed studies to determine the technical and economic feasibility of the pro- posed activities. The studies should include the resettlement component for the DPs and the land development component for the host community, over the entire study area. Cost estimates should be prepared, and sites found to be eco- nomically unviable or environmentally unsuitable should be rejected. Phase 2 should include the following components: · A detailed demographic and land-ownership survey of the host commu- nity, by sampling; 6 · A topographical survey, at a scale of 1:10,000, with 1-meter contours; · A land-cover or land-use map, at a scale of 1:10,000; · A soil survey and soils map, at a scale of 1:10,000, to determine the capa- bility of the soil to support rainfed and irrigation agriculture; · An agro-meteorological survey of rainfall, temperature, sunshine hours, pan evaporation, and consumptive use of water; · A survey of surface water and groundwater resources, taking into account actual discharges and data generated over 30 years to determine the available surface water and groundwater resources; · A proposal of various agricultural development options for the area as a whole, that is, without any distinction between the DP and host communities; · A study of the economic and financial viability of the proposed agricul- tural development options; and · A recommendation, with cost estimates and semidetailed plans, of selected development options. Phase 3: Detailed Designs and Land Purchase At the design and land purchase stage of site selection, resettlement planners need to obtain (a) the DPs' final agreement on the suitability of the proposed sites and site development options; and (b) the host community's consent to allow or sell the land to be used for the relocation. During this phase, contigu- ous tracks of land should be purchased to rationalize the layout of the resettle- ment villages and agricultural plots and reduce the cost of road, irrigation, and 121 Involuntary Resettlement Sourcebook drainage infrastructure. Care should also be taken to lay out the resettlement villages along the lines of former DP villages. Phase 4: Final Designs and Construction The final design and construction stage is rather straightforward. The construc- tion of provisional housing for each displaced family and the provision of basic amenities, such as water supply, access roads, and partial electrification, are pre- requisites for the movement of the DPs and their families. Phase 4 comprises the following steps: 1. Final designs, cost estimates, and tender documents for the construction of the resettlement sites; 2. Bidding and award of contracts; and 3. Construction of works. Movement of DPs 6 The movement of DPs and their families needs to be carefully planned. The movement should take place only when the sites are ready with basic amenities, that is, provisional housing, water supply, and good access roads. The planning of this phase requires the preparation and medical checkups of the DPs and their families to ensure that they are all fit for travel, the mobilization of buses and trucks to move the DPs and their belongings, and the assistance of social workers and NGOs as the DPs take over their new residences. Usually, some food distribution is necessary during the transport of DPs and their belongings and during the first few days after their arrival at the new site. Some cash, basic tools, seeds, and fertilizers should also be distributed to enable the DPs to start working their land from the beginning. Organization of Community Life and Support Services Community life will need to be organized. Local groups will need to be estab- lished for village administration and for operation and maintenance of the resettlement villages and public facilities, such as roads, water supply, power supply, and irrigation and drainage systems. These organizations also increase the effectiveness of various support services, such as agricultural extension, credit, input supply, and seed distribution. Initial training of resettlement staff, extension workers, and DP representatives should start before the actual move- ment of DPs so that community life can be organized soon after their arrival at the new sites. 122 Chapter 7 Consultation and Participation What OP 4.12 Says Operational policy (OP) 4.12 states, as a policy objective, that "displaced persons should be meaningfully consulted and should have opportunities to participate in planning and implementing resettlement programs" (para. 2[b]). The OP further requires that the resettlement plan or resettlement policy frame- work include measures to ensure that "the displaced persons are . . . consulted on, offered choices among, and provided with technically and economically feasible reset- tlement alternatives" (para. 6[a]). The OP provides the additional guidance that "displaced persons and their com- munities, and any host communities receiving them, are provided timely and relevant information, consulted on resettlement options, and offered opportunities to partici- 7 pate in planning, implementing, and monitoring resettlement. Appropriate and acces- sible grievance mechanisms are established for these groups" (para. 13[a]). OP 4.12 provides a detailed outline of the elements of a participation plan: "Involvement of resettlers and host communities, including (a) a description of the strategy for consultation with and participation of resettlers and hosts in the design and implementation of the resettlement activities; (b) a summary of the views expressed and how these views were taken into account in preparing the resettlement plan; (c) a review of the resettlement alternatives presented and the choices made by dis- placed persons regarding options available to them, including choices related to forms of compensation and resettlement assistance, to relocating as individu- als[,] families[,] or as parts of preexisting communities or kinship groups, to sus- taining existing patterns of group organization, and to retaining access to cultural property (e.g. places of worship, pilgrimage centers, cemeteries); and (d) institutionalized arrangements by which displaced people can communicate their concerns to project authorities throughout planning and implementation, and measures to ensure that such vulnerable groups as indigenous people, eth- nic minorities, the landless, and women are adequately represented" (Annex A, para. 15). Similarly, for projects involving restriction of access to legally designated parks and protected areas, OP 4.12 requires a process framework. The process framework describes "the participatory process by which (a) specific components of the project will be prepared (continued) 123 Involuntary Resettlement Sourcebook (continued from p. 123) and implemented" (para. 7[a]). Indeed, "the nature of restrictions, as well as the type of measures necessary to mitigate adverse impacts, is determined with the participation of the displaced persons during the design and implementation of the project" (para. 7). Consultation and Participation Defined Participation is conventionally divided into two dimensions: information exchange and decisionmaking, each of which in turn has two component activ- ities. Information exchange conventionally comprises dissemination and con- sultation. Decisionmaking comprises collaboration and direct extension of choice to affected individuals, households, or communities. Participation includes, on this view, four levels or types of activities: · "Dissemination" refers to the one-way transfer of information, in this case, from project staff to the affected population. Providing early and accurate information to displaced persons (DPs) allays fears, dispels mis- 7 conceptions, and builds trust, providing a foundation for collaboration between DPs and project authorities. · "Consultation" refers to two-way transfer of information or joint discus- sion between project staff and the affected population. Systematic consul- tation implies a sharing of ideas. Bank experience shows that consultation often yields the best resettlement alternatives, fruitful procedures for con- tinued participation, and independent information on actual conditions or implementation. · "Collaboration" refers to joint decisionmaking through membership in committees, tribunals, or other formal or informal bodies. The DPs and their representatives not only are consulted but also have a voice in decisionmaking. · "Extension of choice" refers to the transfer of decisionmaking power to the people affected (for example, providing DPs with options for their rehabilitation, among which they choose). Participation, in this sense, involves empowerment and represents a step by which DPs resume responsibility for their lives. Extension of choice may be more relevant in projects involving physical relocation or economic rehabilitation than in projects that have not greatly disrupted peoples' lives. These dimensions often occur, and should occur, during resettlement plan- ning and implementation in an iterative, rather than a sequential, fashion. For example, an initial dissemination of information to the potentially affected 124 Consultation and Participation public usually begins the participatory process, because this information is nec- essary for informed consultations. Subsequent dissemination of resettlement plans (RPs), for example, helps to ensure that information obtained through consultations has been considered appropriately and accurately, leading to fur- ther refinement of those plans through additional consultation. By the time of project preparation, consultation and collaboration become more significant, as people can contribute to the design of the project and its implementation, espe- cially regarding the aspects that affect them most directly. Finally, participation in decisionmaking usually occurs during the later stages of project planning and implementation. The Importance of Participation Participation is important because the success of resettlement depends in part on the responsiveness of the people affected. A fundamental objective of OP 4.12 is to assist DPs in their efforts to improve, or at least restore, their incomes and living standards. The DPs must themselves be able and willing par- ticipants if they are to return to productivity and resume responsibility for their lives. Providing appropriate mechanisms for participation is likely to benefit the project--it decreases the likelihood of delays, or even cancellations, which may 7 occur when people are forced to participate outside the project (for example, in the media or in the courts). Project example: In India, the Upper Krishna Project (Loan [Ln] 3050; Credit [Cr] 2010) long failed to provide participatory forums for DPs. As a consequence, 96 percent of DPs had taken their cases to court by 1997. The courts generally doubled the compensation offered by the govern- ment. After 1997, participation and compensation increased, and the number of court cases decreased. Participation plays an important role in resettlement operations for many reasons: · Information allays fears. In the absence of information, rumor and interpretation hold sway. Such misinformation can create fears about what may happen once the project gets under way. Calibrated informa- tion programs help fill the void that gives rise to misinformation and apprehension. · Consultation provides some of the detail that planners cannot foresee. Land acquisition and displacement often generate a wide variety of impacts, even within the same project. Consultation helps identify impacts, sources of vulnerabilities, and the people and groups likely to be affected. 125 Involuntary Resettlement Sourcebook · Similarly, because the DPs know their economic, social, and physical surroundings best, consultation is useful in formulating resettlement options that balance the DPs' needs and capabilities with the technical requirements of the options. · Consultation helps avoid unnecessary and costly development of options that people do not want. Project example: In Thailand, the Pak Mun Hydroelectric Project (Ln 3423) started to develop a relocation site, complete with an irriga- tion system and model houses. These facilities were being introduced next to a reservoir built in an earlier project, at some distance from the affected houses. But no DPs at all moved to the relocation site, as they preferred to move short distances from their previous homes. Project example: In Guatemala, the Chixoy Hydroelectric Project (Ln 1605) built houses in closely spaced rows, neglecting to leave room for household gardens. The DPs refused to move into the houses, and the project was compelled to offer alternative housing with room for gardens. Collaboration helps to verify empirical facts, such as the identity of the people 7 affected or the amount of assets to be acquired, and helps to make delivery of entitlements and services transparent. Collaboration is essential to reaching consensus on issues not subject to technical solutions. Such issues include negotiated valuation standards in the absence of markets; the acceptability of substitute sites or other assets; bases for social integration of DPs into host communities; and legitimization for the proj- ect, itself. Participation per se can have a powerful impact on perceptions and behaviors. In the resettlement context, the participation of DPs in decisions affecting their lives helps diminish risk aversion and perceptions of acute vulnerability, thus reducing the dependency of DPs and the incidence of failure to adapt to their new surroundings. Finally, participation engenders commitment or ownership, increasing the likelihood that resettlement programs will operate satisfactorily and sustainably once assistance from the project ends. Issues in Consultation and Participation Although participatory approaches contribute significantly to resettlement suc- cess, some practical issues may arise. Because approaches often need to be tai- lored to fit widely varying circumstances, only limited guidance can be offered regarding these issues. Nonetheless, task teams can improve the efficiency of 126 Consultation and Participation project preparation (and often project performance) if they take steps to avoid or manage issues such as the following: · How can participation be structured efficiently? Participatory processes can be time- and labor-intensive, but project preparation usually has a restric- tive time line. Initiating participatory processes at the earliest feasible opportunity will reduce pressure on the project preparation time line. · How can a meaningful participatory process be ensured? Effective participa- tion provides people with an opportunity to express their interests and concerns and suggest alternatives and options. Current measures of par- ticipation, however, are typically formal and minimal: they emphasize the numbers of meetings and participants, instead of the quality, content, and impact of interaction. Participation should not become just one more thing to check off on the list of things to do. · How can sufficiently representative participation be ensured? Participation is frequently constrained by issues of representation. Who should legitimate- ly represent others can be difficult to establish. The desire to represent others may heighten conflict or impede compromise. Alternatively, com- promise, as part of project participation, may lead to claims of false repre- sentation or new demands from others. 7 · What happens if people make poor decisions? As OP 4.12 recognizes, partic- ipation ultimately involves decisionmaking and responsibility for deci- sions. But DPs may fail to participate according to plan. They may change their minds about resettlement options. They may decide on short-term rather than long-term goals. And they may choose poorly--they may favor improvement of living standards over income restoration, even though by most measures successful resettlement programs emphasize the latter. Project example: In Brazil, in the Itaparica Resettlement and Irrigation Project (Ln 2883), Polo Sindical, the main NGO representing the affected people, insisted that land-based resettlement next to the reser- voir was the only acceptable option. But the costs of preparing substan- dard lands for irrigated agriculture proved to be exorbitant (almost $250,000 per household [all dollar amounts are current U.S. dollars]). Incomes from irrigated plots were still insufficient and had to be supple- mented with additional income assistance and with subsidies for irriga- tion water. However, direct dialogue with the affected people might have identified other, feasible alternatives. · How can the borrower support the participatory process? Officials may be biased against participatory processes if they believe they already know 127 Involuntary Resettlement Sourcebook what is needed at the local level. In the extreme case, attempts by the Bank to promote collaborative decisionmaking can be seen as political interference by some borrowers. Conversely, the involvement of govern- ment officials in consultative processes may be perceived as intimidating by some DPs in some areas. Participation cannot be entirely structured, thoroughly planned, or politically stage-managed. In the Bank's experience, the assumption that people cannot or would not find alternatives for obtaining information if denied formal channels for participation has often proven erroneous. Without an open and flexible process of communication, people are likely to view resettlement design as inad- equate and to shift their participation to the courts or the streets. Under such cir- cumstances, even otherwise proficient project plans may become subject to delays, overruns, or outright cancellation, all of which might have been avoided. Consultation and Participation in the Project Cycle The consultation and participation matrix in the annex to this chapter provides general guidelines for incorporating participation in resettlement planning and 7 implementation.1 The following sections provide elaboration, relating partici- pation to the various stages of the project cycle. In practice, the stages of par- ticipation themselves often overlap, coming together at various times in project preparation and implementation. Participation is a fluid process. The specific form, sequence, and content of participatory processes vary significantly by country, project, and local environmental and social factors. Accordingly, the time and funding required for participatory resettlement processes can vary sub- stantially (see CD Appendix 21, "Possible Participation Outputs," for examples of participation at each stage of the project cycle). Early initiation of participation helps synchronize local contributions over the project cycle. Participatory processes begin as early in the project cycle as is feasible. Delay in disclosure of basic information increases the likelihood that misinformation will generate uncertainty, distrust, and possibly hostility among those rumored to be affected. Therefore, a good practice is to have the initial information campaign describe and justify the project, explain why resettlement is necessary, give a preliminary assessment of its impacts, and disclose the fundamental principles on which the resettlement program will be designed, the procedures for assess- ing compensation, and the timetable for any displacement and relocation. Oral or visual presentations may be necessary to inform the illiterate. Special efforts may be necessary to reach isolated groups and vulnerable populations. 128 Consultation and Participation If the project authority has little experience in conducting local dissem- ination campaigns, it can hire a local organization familiar with this work. In that case, a representative of the project authority should attend the meetings to pro- vide any needed clarification of technical matters. The information dissemination campaign includes any host communities, if these have already been identified. Deciding when to initiate participatory processes is complicated. Bank bor- rowers have legitimate reasons to undertake some project-related activities and agenda-setting functions before inviting public involvement. Potential projects must be identified, usually with an initial emphasis on technical criteria. Feasibility assessments can be kept confidential to some extent if disclosure is likely to provoke unrest or high levels of uncertainty early in the process. In some projects, it may be necessary to undertake steps such as site selection and census taking at a very early stage in order to prevent land speculation, in- migration, or various forms of rent seeking. In such instances, project agencies would do well to devise culturally and politically appropriate approaches to dis- semination, consultation, and participation. Participatory processes shift over the project cycle. Ideally, resettlement planning and implementation will involve most or all of the activities identified in Table 7.1. In many cases, participation deepens over 7 the course of the project cycle (the steps are the same as in the consultation and participation matrix in the annex). Project Identification Step 1: Identification of Stakeholders and Analysis Project identification entails collection and analysis of basic information from stakeholders. In this effort, the borrower, with the task team, identifies the groups with an interest in the investment, along with their composition, con- cerns, and potential influence on resettlement design and outcomes. Cast broadly, stakeholders usually include the project sponsor; other government agencies involved in the project; the people to be adversely affected by the operation; those who will benefit; and others, such as civil society groups with a possible interest in the project or the implications of resettlement. Stakeholder analysis provides an initial list of local organizations and lead- ers whose cooperation may be necessary or important in resettlement planning, implementation, and monitoring. This initial list also gives a preliminary idea of the support for the project and of possible obstacles. Furthermore, the pre- liminary analysis of probable impacts helps in assessing the viability of project design and identifying potential sources of conflict and ways to mitigate them. 129 Involuntary Resettlement Sourcebook Table 7.1 Participation and the Project Cycle Project cycle Steps Identification 1. Identification of stakeholders and analysis Preparation (Concept Paper) 2. Preliminary dissemination of information; consultation 3. Gathering of information (census and socioeconomic survey) 4. Dissemination of information (socioeconomic surveys, social assessment, preliminary RPs, options, and enti- tlements) and consultations with DPs, their represen- tatives, and local NGOs; participation on decisions regarding resettlement sites and income restoration options. Preappraisal 5. Preparation of the RP (exploration of site and income restoration options) Appraisal 6. Finalization of the RP; dissemination of information Implementation 7a. Participation in committees 7 7b. Participation in delivery of assistance 7c. Participation in monitoring Completion 8. Participation in evaluation Note: RP, resettlement plan. Project Preparation Step 2: Preliminary Dissemination of Information and Consultation Once basic project information is available, the project team can begin to pro- mote dissemination, consultation, and collaboration. The earliest document containing information related to resettlement is the Integrated Safeguards Data Sheet (ISDS). The ISDS should be made publicly available by sending it to the Bank InfoShop before the first formal review of the proposed operation is held by Bank management, generally the project concept review meeting. Participatory approaches should fit the project's scale and nature. In large-scale projects, whether urban or rural, the large number of displaced or affected people makes the quality of participatory processes important. Many people feel intimidated by large gatherings, meaning that the voices and demands heard there are not likely to be representative. The remedy is disag- gregation, arranging for consultations on a smaller scale or supplementing gen- eral proceedings with focus group consultations. 130 Consultation and Participation Project example: In China, in the Shanghai Sewerage Project (Ln 2794; Cr 1779), strenuous efforts were made to disseminate information. Project offices and local governments used pamphlets, booklets, posters, films, and neighborhood and individual meetings. These media were used to inform people of a wide range of issues, such as compensation policy and rates, entitlements, and relocation schemes and schedules. The project then sponsored neighborhood meetings to inform people and allow them to air issues. These meetings were followed up with indi- vidual visits, as required. Finally, the project team published the phone numbers, locations, and working hours of both the project office and the grievance committee, giving people better access to project authorities. Project example: Also in China, the Guangzhou City Center Transport Project (Ln 4329) strongly emphasized participation and transparency. Information on policy and entitlements was disseminated through book- lets and pamphlets (more than 10,000 were printed), large and small meetings, work unit meetings, and door-to-door consultation by reset- tlement staff. Information on resettlement was also widely disseminated via radio, television, and newspapers. Resettlement offices were estab- lished throughout the city. Telephone hot lines were set up for anyone to 7 call for more information or consultation. Project example: In India, the Mumbai Urban Transport Project (Ln 4665; Cr 3662) held large public meetings to explain the goals of the project and the fact that the alignment of the arteries had yet to be final- ized. Although these meetings helped allay fears of mass relocation, the large public meetings were also followed by small-group consultations. These consultations were facilitated by a local nongovernmental orga- nization (NGO), and they provided a forum for answering specific answers. In linear projects, treating participatory processes uniformly may be impos- sible. Some linear projects run across two or more geographic, cultural, or lin- guistic zones, requiring adjustments in participatory strategies or methods. In rural areas, the DPs are often too dispersed to gather together and com- municate among themselves. Often they are culturally or linguistically diverse, as well. One remedy is to work with smaller groups; doing so provides a greater degree of geographic, cultural, and linguistic opportunity to participate. Another method, appropriate for highway or road projects, is to convene local community meetings to discuss the route. Project example: In India, the Third National Highways Authority of India Project (Ln 4559) team convened local meetings with villagers to discuss the proposed routing of the rehabilitated highway. These meetings 131 Involuntary Resettlement Sourcebook involved both DPs and other residents and often provided useful local information for the highway engineers. In one village, for example, the villagers preferred to route the highway around the settlement, rather than widen the road through it. They actually walked the engineers along their proposed alignment and noted that most of the land that would be taken already belonged to the government. This meant that land acqui- sition costs would be no greater than those already budgeted. The project engineers accepted the suggested alignment and redrew their plans accordingly. In projects involving restriction of access to resources in nature parks or other legally designated conservation areas, an inherently participatory process framework should be prepared. In these circumstances, the cooperation of the local people is needed to achieve sustainable resource use, as they know the area and use its resources. People must be consulted meaningfully if they are to accept limitations on their access to resources. Moreover, the local population can usually suggest feasible alternatives to illegal use and are often the most effi- cient enforcers of such restrictions. Representativeness is a concern in consulting with local notables. 7 A good practice is to have project agencies consult, formally or informally, with leaders and representatives of the affected groups or communities. Particular attention must be paid at this stage to determining the legitimacy of the lead- ers and representatives as spokespeople accepted by the DPs. This initial con- sultation solicits early reactions to the project and to tentative resettlement arrangements. The purpose of these discussions is to reexamine the preliminary concepts and premises of project design so that local preferences are addressed, displacement will be minimized, and adverse social impacts will be reduced. Efforts to reduce the impacts must balance and consider the benefits and trade- offs of various technical, economic, and social criteria. The project authority should keep a record of the meetings, including a detailed list of recommenda- tions and concerns, along with project action on these concerns. This informa- tion will make it easier to assess the extent of local participation. NGOs can represent DP interests, but their acceptability to the DPs should be verified. Affected people often trust NGOs to represent their interests. NGOs usually have more knowledge of, and experience with, the relevant legal frameworks than the DPs. NGOs also know the best ways to deal with project and govern- ment staff and can advocate for the interests and positions of DPs. Care must be taken to ensure that NGOs represent the DPs' interests, rather than their own agendas. A good practice is for the project team to meet with NGOs and DPs 132 Consultation and Participation together, to minimize the risk that the NGOs will fail to represent the DPs' interests. The media can be effective allies in information dissemination. Local and familiar media can be used for dissemination and consultation. Media representatives can be invited to public meetings at village or community cen- ters, schools, places of worship, or other places where people usually gather. The media representatives can be given the project information, printed in local languages, that has been disseminated to all groups, including those often mar- ginalized in local deliberative processes (such as indigenous peoples, ethnic minorities, or women). In dealing with the media, the project authorities should emphasize that many aspects of resettlement planning at the project preparation stage are preliminary and may change significantly before final designs are approved and implementation begins. For projects likely to attract considerable media attention throughout the implementation process, the borrower may decide to assign a liaison officer to handle media requests for further information. Step 3: Gathering of Information Consultation during project preparation can take various forms. Scoping the environmental impact assessment provides one opportunity for wide participa- 7 tion. Subsequently, the population census of DPs and the socioeconomic survey give other opportunities for consultation. Scoping the environmental assessment provides a useful forum for participation. While initial stakeholder analysis identifies the various interested groups, scop- ing the environmental assessment is an opportunity to involve these key stake- holders early in the project design process. Government officials, technical experts, academics, and NGOs all have their own expertise and can help define terms of reference for the environmental studies. The affected people can provide information on potential impacts of alternative designs, including information on land tenure arrangements. This approach not only taps into the existing pool of national expertise, but also provides a forum for meaningful consultation on the issues that may arise during project design and implementation. Project example: In Lesotho, the Highland Water Project (Ln 4339) team invited government officials and technical staff, academic researchers, and NGO representatives to the scoping exercise for the environmental assessment. The participants formed groups according to their substantive expertise (for example, terrestrial, aquatic, or social) and identified and ranked the key issues that, in their experience, they thought might arise in the project. The substantive groups presented 133 Involuntary Resettlement Sourcebook their ranked lists of key issues at the plenary. The following day, the workshop as a whole harmonized the lists prepared by experts into a mas- ter list of key issues that integrated all sectors. The master list became the basis for the terms of reference for the environmental studies. In this way, the project not only defined the major issues, but also involved key stakeholder groups in this task. The resettlement census and other surveys provide an opportunity to consult the directly affected people. The establishment of entitlements and the design of RPs require a census, an asset inventory, and a socioeconomic survey, conducted in tandem or separately (see chapter 10 for details.). The census identifies and enumerates individuals to be affected and is often combined with an inventory of fixed assets to be expropriated. The asset inven- tory, in turn, lists all the immobile property that will have to be acquired. It also records the use and condition of that property and may establish a preliminary valuation of the affected assets. Preparatory work done before the census (or various feasibility studies) sometimes provides an opportunity to disseminate 7 information and to record views about the possible impact of the investment in local areas. Project example: In Senegal, the Regional Hydropower Development Project (Cr 2970, Cr 2971, Cr 2972) team convened meetings in each province traversed by the power lines. The initial meetings, chaired by the district prefects, informed all local officials, including village heads, about the nature and timing of the project and its probable local impact. Subsequently, each village head chaired local meetings to convey the same information to the populace, and field surveyors were instructed to inform landowners of the reason they were surveying in the area and of the probable area of impact of the transmission lines. The purpose of the socioeconomic survey is broader. This survey provides the baseline information on income and socioeconomic indicators in the affected population and helps identify and develop a range of preliminary resettlement options. Socioeconomic information is gathered to determine the social dynamics likely to hinder or help the effectiveness of resettlement measures. The survey, then, solicits a much wider range of information not captured in a census or in an asset inventory. Accordingly, the survey uses a mix of both quantitative and qualitative methods to · Record intrahousehold and community divisions of labor; · Record information regarding sources of income or access to resources; 134 Consultation and Participation · Identify groups especially vulnerable to impoverishment or marginaliza- tion as a result of land acquisition or displacement; · Identify social relationships and local institutions that DPs use and trust; · Assess the acceptability of measures proposed to restore or improve incomes and living standards; · Identify DP needs and aspirations; and · Record basic education and health information, including access to schools and health services. Key-informant interviews can provide important overview information. Surveys for quantitative analysis provide only some of the necessary informa- tion. Consultation is required to identify and gain an understanding of the role of leadership, the mechanisms of informal intrahousehold and community relationships, and the social impacts of the project. Local government officials, traditional elders, or others with similar status may speak with authority on resettlement issues, and their words may shape the perceptions and influence the actions of other DPs. Focus groups can provide vitally important local information. 7 Bank experience shows that formal surveys of social impacts have frequently failed to capture the productive role of women or the prevalence of common property that supports community living standards. Quantitative surveys alone do not capture attitudinal and cultural nuances. Other methods, such as focus group discussions (semistructured interviews of small groups composed by gen- der, age, income levels, occupations, interests, etc.), help fill this information void. A good practice is to conduct personal interviews with affected people and with experts and leaders with first-hand knowledge of local conditions. The findings of these interviews can be incorporated in the socioeconomic survey, to complement and qualitatively validate the quantitative findings. Focus groups can be invaluable in identifying people most likely to be vul- nerable to hardship and those whose voices are not likely to be heard in the project process. Focus group discussions allow people with similar life circum- stances to voice their concerns among peers. In many cases, focus group partici- pants will speak more thoughtfully and freely than they would in a larger, open meeting attended by a wider variety of DPs or officials. Step 4: Dissemination of Information and Preparation for Participation The census and socioeconomic survey together identify the extent of impacts and establish baseline data, providing the necessary foundation for resettlement planning. 135 Involuntary Resettlement Sourcebook Once collected and analyzed, information can be shared to validate results and foster public involvement. A good practice is for the project team to disseminate the census and survey results to the DPs. This exercise in communication may require the establish- ment of a public information unit. To be effective, the unit would have to be accessible to the DPs. Depending on the local culture, information may best be disseminated through various media (printed, visual, or oral). In fact, a combi- nation of media is recommended, because each approach has its own advantages and may reach a different segment of the potentially affected population. Meetings with communities is a standard method of communication; each meet- ing would cover a neighborhood or village. Television and radio are best suited to communicating general information. Printed materials allow for repeated ref- erence whenever questions arise. In some areas, social workers can answer spe- cific questions and provide more detailed information when visiting households. Project agencies may be tempted to use census and survey information to pro- duce a blueprint for resettlement. Therefore, a good practice is to emphasize that consultation is needed at this stage to help define feasible resettlement options and to discourage resistance to resettlement or to the broader project. 7 Specifically, at this stage, consultation with DPs helps the project agencies for- mulate options for replacement land, community resettlement sites (if needed), income restoration measures, and so on. Consultation on replacement land will give the DPs an opportunity to identify desirable parcels of land on the basis of fertility, location, or other preferred attributes. The formulation of income restoration measures may require consultations with DPs, local government agencies, and NGOs to identify the range of alternative opportunities available and the skills required to take advantage of these opportunities. Identifying com- munity resettlement sites, by contrast, requires community consultations and site visits, as well as consultation with host communities. More significantly, con- sulting DPs about their options may diminish their sense of dependency and risk aversion and increase their responsiveness and commitment to chosen options. Project example: In the Lao People's Democratic Republic, the IFC Sepon Gold Mine Project (Project 10626) team extensively consulted the multiethnic population in the project area to identify appropriate relocation sites for three villages of 28 households. Site selection bal- anced the desire of the DPs to be close to their farmland (and the main road) with the need for general safety in the area (blasting and heavy truck traffic). Consultations resulted in the inhabitants of one village settling within the boundaries of another existing village and the inhab- itants of the other two villages selecting a new site. The company pre- pared the site, removed unexploded ordnance, built houses, and installed 136 Consultation and Participation potable water and irrigation. It also established a trust to support public health, agricultural extension, and small-enterprise development for the entire population. Project example: In China, the Yunnan Environment Project (Ln 4055; Cr 2892) supported participatory planning for economic rehabilitation. At village meetings, the villagers participated in planning how to use compensation funds. They decided to improve their power supply sys- tem, repair the irrigation and drainage system, and build pumping sta- tions and a village center. This stage of consultation may be protracted, depending on geographic dis- tances between DPs and host communities, seasonal access, cultural and social issues, and other factors. Culturally distinct and geographically remote DPs are often costly to interview because they are scattered in small groups and difficult to reach. In Bank experience, however, these DPs may be most vulnerable to impoverishment, because they are socially or politically marginalized and their relationships with each other and to their physical environment are often not well understood by project planners. Therefore, consultation with such groups is important. 7 DPs commonly make decisions on the basis of short-term considerations. As the project evolves, consultation is likely to shift gradually into collabora- tion and participation. In the blueprint approach, DPs simply choose among presented options or are given no options at all. A more participatory approach incorporates the DPs' preferences into the formulation of the options, which is important in developing a functional RP. The RP can be executed much more effectively if it reflects choices made by the DPs themselves, but the DPs need to be given time to formulate their choices. The choices they make at the ear- liest stages of project dissemination are likely to be more risk-averse than those they might make after community consultations and the identification of alter- natives. When feasible, DPs should be offered sufficient time and opportunity to consider options before making final, binding choices. Project example: In China, the Guangzhou City Center Highway Project (Ln 4329) team developed a computerized resettlement and rehabilita- tion information system to enable DPs to select apartments. The DPs could select from eight resettlement sites by scrolling through a computer program (30 terminals were set up in the five project offices, all con- nected through a main server). As long as units were available, the DPs could change their minds as often as they wished after visiting the apart- ments. One DP reportedly changed his mind 20 times. 137 Involuntary Resettlement Sourcebook Project Preappraisal Step 5: Preparation of the Resettlement Plan The census and survey, supplemented with other interviews, inform the draft RP. If the resettlement process is to be responsive to DP concerns, however, some aspects of the resettlement and rehabilitation process must wait to be fully addressed after project appraisal or negotiations. To promote a responsive process, the RP must specify venues for consultation with affected people, not only dur- ing planning, but also during implementation. The RP therefore describes deci- sionmaking responsibilities and procedures for making resettlement decisions, mechanisms for participatory planning, mechanisms for making modifications during implementation, and grievance mechanisms available to DPs. Project Appraisal Step 6: Finalization of the Resettlement Plan and Dissemination of Information Submission of a draft RP acceptable to the Bank is normally a condition of project appraisal. Even before the draft RP is formally submitted for Bank acceptance, however, a good practice is to share the document with various 7 community leaders and with the local agencies responsible for implementa- tion. The draft RP (or draft policy framework or draft process framework) should be made available in the resettlement agency office, the project office, government offices of the borrower, and other locations in the project area that can be conveniently accessed by the DPs, other affected people, and local NGOs and in a language and format that is understandable to these groups. The draft RP must also be sent to the Bank InfoShop and the Bank PIC in the project country. The ISDS should also be updated at this time and sent to the Bank InfoShop. Making the draft RP (or other resettlement instrument) public is a precondition for appraisal. If the project requires a resettlement policy framework or process framework, rather than an RP, then the appropriate draft resettlement instrument should be made locally available and also be sent to the Bank InfoShop and the host coun- try PIC. In these instances, it may not always be possible to disseminate a policy framework at the local level because the location of the impacts is not yet known. The draft resettlement instrument should be made available at government offices within the administrative unit where the project is known to be located. To supplement the draft RP, the Bank should encourage the resettlement agency to produce a resettlement information booklet that summarizes the key impacts, compensation rates, entitlements, rehabilitation options, grievance pro- cedures, and other information of greatest interest to DPs. This booklet should be proactively distributed to the DPs in their villages by the local government or the 138 Consultation and Participation resettlement agency. (See CD Appendix 16 for an example of a resettlement information booklet from a Bank project.) In principle, clearance of the RP by the Bank technical and legal depart- ments binds the borrower to meet contractual obligations. The final RP, accord- ingly, reflects the final range of options presented to the DPs and, usually, their final choices. If final choices have not been made, the RP should indicate how and when choices are to be finalized. Although preliminary consultations can be group based, final resettlement options must be chosen by individual DPs, heads of households, or (in the case of community entitlements) affected com- munities. Such choices always involve elements of risk and responsibility. Before RPs are submitted to the Bank for review and clearance, another good practice is for task teams to ascertain that DPs · Have been presented with options consistent with OP 4.12 objectives; · Have been adequately informed about the range of options available (the options must not have been misrepresented); · Are aware that formal acceptance of options may be irreversible; and · Are aware of the responsibilities they assume when accepting options. In the case of compensation or replacement land, the DP's acceptance gen- erally extinguishes the liability of the borrower. In the case of alternative 7 income restoration, responsibility is likely to remain shared, and clear assign- ment of responsibility is likely to be more difficult. Therefore, good practice is to have the RP describe procedures for altering income restoration provisions during implementation, along with procedures to extend protective measures when failure to achieve income restoration is attributable to factors beyond the control of the DPs. Having been given a range of choices, DPs may prefer the advantages of a certain location or situation (for example, proximity to relatives or home villages, or relocation as part of an existing community) over a narrow emphasis on income restoration. The objective of OP 4.12 is improvement or at least restoration of incomes and living standards, so a good practice is to make a concerted effort to provide DPs with options that will allow them to achieve these objectives. But the OP does not guarantee indefinite income mainte- nance; nor does it require DPs to sacrifice preferred living standards. In a reset- tlement context, these obligations are part of what "choice" means. Project example: In China, some of the people affected by construction of the Jiangya dam and reservoir in the Yangtze Basin Water Resources Project (Ln 3874; Cr 2710) elected to move away to alternative reset- tlement sites, while others elected to move back onto hillsides adjacent to the reservoir. With time, most of those remaining in the area began to have difficulty making a living and decided they would like to join the ones who had moved away. Although measures required by the RP had 139 Involuntary Resettlement Sourcebook already been implemented, the project authorities agreed to help these families by identifying available land for their use and partially compen- sating them for their additional housing and moving expenses. Once the RP has been finalized, it should once again be distributed to the same set of locations as the draft RP, including the Bank InfoShop and the host country PIC. Final resettlement policy frameworks and process frameworks fol- low the same distribution as that of their draft versions. The ISDS should also be finalized and sent to the Bank InfoShop. Project Implementation Step 7a: Participation in Committees The quality of resettlement and rehabilitation depends on the quality of imple- mentation, which in turn is often enhanced by supportive and responsive par- ticipation. A minimal step is to ensure that project agencies charged with implementing the RP systematically consult the affected communities through- out implementation. Another method to increase DP support and responsive- ness is to ensure that the DPs are represented in formal committees established 7 for land valuation or purchase, grievance redress, and other purposes. Project example: In Brazil, the Nova Jaguaribara Project (a non-Bank project) authorities constituted a committee of project officials, DPs, and representatives from local and state agencies. The committee met quar- terly and heard the reports of its technical subcommittees, which took up specific issues. The existence of the committee helped maintain institu- tional coordination, because representatives from the concerned agencies participated in the decisions. Also, participation of the state environmen- tal control agency and the Public Works Minister made modifications pos- sible in the original basic design, and these changes were implemented immediately. Project example: In Cambodia, the Phnom Penh Power Rehabilitation Project (Cr 2782) team created local grievance committees composed of the legal authority in the municipality, a representative of an indepen- dent and reputable NGO, and a village elder. All grievances were referred to the committee, and the company based its subsequent nego- tiations with landowners on this committee's recommendations. The committee members received a small honorarium for each case. Project example: In India, the National Highways Authority of India Project (Ln 4559) team established valuation and grievance committees whose members were government officers, Authority officials, and DP representatives. 140 Consultation and Participation Step 7b: Participation in Delivery of Assistance In many projects, a good practice is to enlist DPs for the actual implementation, either directly or through NGOs. (As OP 4.12 suggests, local institutions and representative organizations can be used to represent the interests of DPs: "Experience has shown that local NGOs often provide valuable assistance and ensure viable community participation" [Annex A, endnote 4].) At the com- munity level, local organizations, such as NGOs accepted by DPs, often have a deeper understanding of local social and environmental conditions and may already enjoy the support of the affected population. Using local institutions may also help preserve these institutions or help them adapt to new circum- stances. At the level of individual DPs, incentives that enable DPs to recon- struct their own housing where they desire may ensure acceptance, and hiring DPs to assist in preparing resettlement sites or project infrastructure may help create a greater sense of local ownership. After resettlement sites have been pre- pared, a good practice is to provide incentives to encourage DPs to look after the maintenance of community services or facilities, including schools, water and sanitation facilities, and irrigation works. Participating in implementation does not mean that DPs only contribute labor; they can also take control of decisionmaking through community con- tracting of necessary goods and services and other activities involving decisions 7 and management tasks. (The DPs could be hirers as well as hirees in different situations, depending on their capacity and interest.) Project example: In Brazil, the project team of the Salto Caxias Hydropower Project (a non-Bank project) established residents' associa- tions of 50­60 members for each of the 19 areas where the DPs were to be relocated. The associations participated in the construction of houses and communal buildings (for example, warehouses, recreational areas) and directly negotiated agreements with local supporting agencies. The residents' associations are also responsible for the management of each resettlement project once the project authority fulfills its obligations. Project example: Also in Brazil, the Urban Development and Water Resource Management Project (also referred to as the PROURB Project [Projeto de Desenvolvimento Urbano], a non-Bank project) sponsored residential house construction through community associations of DPs. Each family contributed 24 working hours a week over the course of 18 months to construct 200 houses. More than 80 percent of the future inhab- itants participated in this work, and they were satisfied with their housing. Equally important is the fact that some inhabitants learned new skills, such as masonry, while others, especially the construction supervisors, were able to secure employment in other municipal or private projects. 141 Involuntary Resettlement Sourcebook Project example: Also in Brazil, the Nova Jaguaribara Project (a non-Bank project) established a development fund. The fund received income from each of the nine affected municipalities, which contributed 1 percent of the royalties they received from the power project. An NGO skilled in enterprise development used the development fund to support the cre- ation of new companies and oversee their business program. The first small companies specialized in products previously imported into the area, such as brooms and cooking pots. The Nova Jaguaribara Project submitted various proposals to a vote by the DPs. Specifically, the project asked the DPs to vote on the delimitation of the area to be used for the new city to which they would be relocated, the architectural style for the new church, and the preferred style for the new cemetery. While the DPs showed no unanimity on any of these matters, a majority vote determined the deci- sion, and all parties were bound to accept the democratic outcome. Step 7c: Participation in Monitoring Another good practice is to include mechanisms for systematic internal, as well as external, monitoring (see chapter 10). If monitoring teams include represen- tatives of the DPs, then monitoring is more likely to accurately reflect DPs' 7 reactions and perceptions. In phased resettlements, feedback from initial phases of relocation or income restoration can be used by project managers to improve subsequent phases. Project Completion Step 8: Participation in Evaluation In many projects, post-implementation evaluation is likely to require consulta- tion with DPs. Also, DPs may be directly involved in planning and carrying out this evaluation--their input is especially valuable in the areas of fundamental resettlement objectives (such as restoration of incomes and living standards) and follow-up plans or remedial actions. The Role of the Bank in Supporting Participation A critical aspect of an effective RP is the provision of an adequate budget to ensure compliance with its terms. Accordingly, the Bank frequently extends financing to cover many costs of resettlement. In terms of participation, the financing of tech- nical assistance may be particularly relevant. Technical assistance is normally pro- vided to improve the technical or administrative capacity of project agencies. Technical assistance can include direct assistance for incorporating participatory methods in resettlement planning. Technical assistance can also include financial 142 Consultation and Participation Box 7.1 Disclosure Requirements for Bank Resettlement Documents The first document containing information related to resettlement is the Integrated Safeguards Data Sheet (ISDS). The ISDS should be made publicly available by send- ing it to the Bank InfoShop after the first formal review of the proposed operation is held by Bank management, generally the project concept review meeting. The second document requiring disclosure is the draft resettlement instrument (RP, policy framework, or process framework). Making the draft resettlement instru- ment public is a precondition for appraisal. The draft resettlement instrument must be made available at locations that are convenient to the DPs and other local stakehold- ers in a form and language understandable to these groups. The draft resettlement instrument is also sent to the Bank InfoShop and the Bank project information cen- ter (PIC) in the project country. The ISDS should also be updated at this time and sent to the Bank InfoShop. If the project requires a resettlement policy framework, it may not be possible to disseminate it at the local level because the location of the impacts is not yet known. The draft resettlement instrument should be made available at government offices within the administrative unit where the project is known to be located. Once the resettlement instrument has been finalized, it should once again be dis- tributed to the same set of locations as that of the draft RP, including the Bank InfoShop and the host country PIC. Final resettlement policy frameworks and process frameworks follow the same distribution as their draft versions. The ISDS should also be finalized and sent to the Bank InfoShop. 7 (See the World Bank's 2002 Disclosure Policy paragraphs 30 [ISDS] and 34 [RP] and Disclosure Handbook paragraphs 37 [ISDS] and 40 [RP] for official requirements and guidance.) assistance for training in consultation and participation, stakeholder analysis, and related methodologies for resettlement staff, local NGOs, village leaders, the DPs' representatives, and others. (Additional financial resources may be available through trust funds, grant facilities, or special arrangements.) The Bank can also help borrowers enhance consultation and participation by ensuring these issues are included in the policy, legal, and institutional frameworks for resettlement. This is particularly relevant for new member coun- tries and for countries recovering from major conflicts or other forms of politi- cal or legal disruption. Finally, the Bank supports participation through its disclosure policy and requirements for project processing. For easy reference and access, the various steps and requirements for disclosing resettlement documents are summarized in Box 7.1. Note 1. For more detailed information on methods and tools for enhancing participa- tion in Bank projects, consult The World Bank Participation Sourcebook (1996). 143 on of cases 1: of orld for and this part project this W analysis as most in "Step and in to Participation 195­196) information Remarks Undertake exercise preliminary design Refer Identification Stakeholders Analysis" chapter Bank Sourcebook (pp. more stakeholder a offi- or for the mainly local local scien- unit pro- Is under hired with,T unit, as T have the role; from with T Bank team; social be social (T effort to stakehold- by also visit or key --Advice can 4.12 government assist and Who Borrower-- responsibility of cials administration government plays consultants trained tist to Bank overall vided assistance regional development particularly related OP should discussions selected ers field) , influ- project groups sector assessment the communities interested (NGOs, forth) donors stakeholders relative following so of potential on the the government rojectp beneficiaries ffecteda (DPs) host other groups private and Bank other 7 Output List and impacts; of ence of stakeholders: · · · · · · · Matrix of bor- the for forth for so economic discuss ideas strategies, and assessment references and forth resources, 4.12 so other restoration Participation OP preliminary preliminary and and natural or arrangements, and data Bank income sites, and of plans, legal visits situations, sites, and d field impacts: information stakeholders borrower policies,s demographic out livelihoo How Identify Inform rower' resettlement institutional Carry potential and Review additional Consultation cycle analysis stakehold- steps Identification of ers; Annex: Project and Identification 1. 144 ) fit be as ds, that are effort mech- as nature repre- as may partici- con- local NGOs metho consulta- possible ISDS isolated and ensure people that in continued( for much as and special and allies a that approaches project with media the preparation local as marginalized scale the many include the aware concern information Remarks Use avenues, anisms tion possible; as reached Make to and groups Ensure patory the of Be sentativeness a sulting notables Use effective in dissemination Update project evolves as it local through, resettle- if who a team agencies with consultants or and unit their task Who Borrower same above ment exists Project (or designees), consult leaders community representatives The of of project likely from forth) and T provided obtained negative of women, so borrower T stakehold- and meetings feedback and and of and material, feedback, impacts) material, Bank stakeholders consultations DPs, community groups vulnerable stakeholders (regarding ritten forth Output Informed and Documentation information to Documentation information from (their concerns, recommendations) Informed ers objectives positive social Record and with (from meetings small households, other groups, W visual so 7 the alter- if lan- other design resettle- be community )3 local via explore can families, in -to-door project of step and this halls, door minimize worship or also to of village (groups see information appropriate InfoShops information impacts impacts; of preliminary halls, places groups, small; where Bank' on social and meetings is printed the consultation town of to at DPs media group vulnerable of adverse dissemination schools, ISDS through information and via the resettlement-related Meetings halls, Smaller women, number Distribution guages; audiovisual Paper) How Share and natives ment done · · · Send (Concept cycle steps information; Preliminary dissemination of consultation Project and Preparation 2. 145 on DPs with con- Bank ben- local carry for NGOs, and tools to and with orld informa- using group from W and assessment, assessment possible to ds analysis, assessment, forth gathering others focus 191­202) information appraisal, participatory so Remarks Integrate tion social where Consider sultants universities, and out discussions interviews beneficiaries Refer Participation Sourcebook (pp. more metho for rural eficiary gender social and a a or of leader team guidance above scientist team as the leadership social Who Same contracted under and trained or the based based most and input DPs RP resettle- entitle- of to of survey informa- informa- for affected) options options negative social social 7 Output Census (individuals assets Socioeconomic baseline (information pertinent understanding community; needed formulation) Preliminary ment on tion Preliminary ment on tion Assessment likely impacts in that to peo- ds and, ge,a, and so key on inter- survey (refer because NGOs, gathering, cultural metho and responses relocation informants) area private affected gender to the and provide number communities data key techniques) aspects 10) and by groups of institutional, provincial of information interests, given groups, social is (can brunt people and institutions, potentially preferences; location, socioeconomic chapter (semistructured social, a systematic sampling in composed people and vulnerable the (including the community) local a assets out dynamics quantitative the relevant emphasis (use bear national community groups occupations, other about participants of and the the affected experts forth socioeconomic of officials, Determine Carry feelings, discussions they about of of with appropriate Gather as and so small affected requirements levels, groups, persons on group of particular cases dynamics be well and, of determine determine women oT will based oT as survey attitudes,s Focus views income forth); of many Interviews Interviews knowledgeable Observation information power Discussions government religious sector How Quantitative-- types Quantitative-- · · Qualitative-- data, ple' include · · · · · of ) and cycle steps Gathering information (census socio- economic survey) continued( Project and 3. 146 ) 4: of in and for for, for the and of "Step of document continued( to information institutional wide chapter budgetary results Remarks Refer Dissemination Information Preparation Participation," this more erifyV and mechanisms implementation Ensure coverage information consultation program; the consultations unit and manage- team Who Project ment resettlement in reset- DP forth) entitle- on sites, mobile presen- entitle- choices or media, visual so and oral design, and based feasible for restoration packages, DP information and difications of of available (using Output Mo project tlement, ment feedback List options ment resettlement income measures List from options Stationary public unit printed material, tations, 7 results; other and and survey resettlement, on feedback, implementation DPs design, to unit and communities, responses, consultation project host logistic for obtain information DPs, to information through options with concrete public entitlement up How Disseminate present and Consult stakeholders preferences Set Establish arrangements RPs, for social and cycle steps information Dissemination of (socioeconomic surveys, assessment, preliminary options, entitlements); preparation participation Project and 4. 147 RP the a the the the of and proj- docu- draft on the whole the as for of for and DPs, the or the which, framework overall the and accessible for of from phases people, for RP the year RP an form, prepare complete resettlement NGOs a a policy for project plans implementation schedule first project schedule next the in Remarks Depending nature ect, as ment project beginning rolling includes · · · Distribute RP place, language affected local the the by unit con- mis- above) with assistance project local (as regional usually of with resident or development the Who Coordinated resettlement or team; prepared help sultants and from sions social unit and that (includ- input options, choices) redress RP DP of of and sets 7 Output Draft reflects consultation ing risks, Grievance mechanisms Informed stakeholders for con- the data during for plan of and institutional following: procedures corrective the PIC the if to and grievances the personnel changing information participation ISDS to for the timetable, include and RP information DP on for redressing updated draft budget, forth), resettlement ds responsibilities implementation for based of location, resettlement 1­4 required so procedures and the RP the plan, or required and metho during RP send steps to or timing, during are draft in mechanism draft and a (census, country echanisms the addition RP Strategy implementation Specific sultation Decisionmaking M provisions measures How Prepare collected In an arrangements, · · · · Establish Send InfoShop project of ) and cycle RP site steps Preparation the (exploration of income restoration options) continued( Project and Preappraisal 5. 148 , ) the sub- RP meet RP by loan the legally the to that the borrower a conditions the and requires continued( of the document the contractuals are clearance after and borrower RP' appraisal becomes Remarks Remember mission and Bank of Inform that agreement incorporates it binding between borrower Bank the the obligations is the unit draft for which,T a to dis- with RP it T of and reviewers Who Project resettlement Bank responsible submitting copy Bank cussing Bank of of assets final record their DPs choices and DP' losses Output erifiedV DPs and Informed (regarding options) Each options Informed stakeholders 7 unit of and and resub- PIC manage- and the the leaders, to to development project discussion,, RP ISDS feedback discussions with social final community review final RP for after the draft draft additional officials, regionals and the any share necessary RP send local Bank' as country and to Department final and obtain RP clearance team, to RP the Legal dify for project How Consult ment DPs Send and clearance Mo mit Send InfoShop the of of dis- cycle RP; steps Finalization the semination information Project and Appraisal 6. 149 RP col- to the are insti- moni- and of (this for are in and reset- the or to local and these, DPs); responsi- agencies basis make require project NGOs screened the competence, presence surrogates to women unit local using agencies receive will successful the manner and on however that or transfer compensation local vulnerable justification and from a carefully allowed protect timely to ensure a Remarks Consider tutions implementation toring; laborating be selected experience, and area Ensure not choices collect is other exceptions strong oT tlement, bility resettlement settlers in DP DP with with and resettle- resettle- unit, unit, community Who Project ment committee Project ment committee with representatives and DPs and to of of client decision- activities facilities 7 services RP joint Output Systematic consultation facilitate implementation of Representation participation in making Community-based decisionmaking management development activities Physical and and tasks hous- a of facili- representa- encourage community establish management sanitation to in process implementation feasible, manage (construction resettlement and RP and and above agencies in in participate committees: water programs activities consultation to and project community training other DPs appropriate implement training valuation to and schools, How Instruct systematic Invite land Appoint tives Provide Where DPs development es, ties) Provide of ) cycle committees delivery steps Participation in Participation in assistance . concluded( Project and Implementation 7a 7b. 150 a the local , moni- be eht in which imple- center; and to and in using RP are eenedrcs no d being for however experience, order collaborating are of presence selecte the efully information they Remarks Consider institutions NGOs toring; these agencies car and basis competence, local area and public steps which DP in PIC,; ecific with and RP sp agency evaluation country policy resettle- plan; unit, community dically the and action Who Project ment committee with representatives External perio monitoring implementation External team operational, rural) OP and DPs and initial urban, of resolved resettlement to for remedial resolution from action performance follow-up used and needed or project organization; if transport,, monitoring Output Representation involvement in grievance processes Grievances satisfactorily Feedback phases improve Mechanisms corrective functioning effectively Report action steps, generic a power 7 dam, mon- nongovernmental and evaluation implementing example, NGO, the and (for in Sheet; type grievance Data preparing the for project in by participate above Safeguards and above in in guidelines affected participate plan are and to to component Integrated DPs committees training training DPs matrix RP team. ISDS, this the determined in How Invite itoring Provide Invite of Provide be task, person; TT will described plan; steps displaced, cycle process Completion undertaken DP evaluation steps Participation in management and monitoring The Participation in are resettlement, Project and 7c. Project 8. Note: they mented. RP 151 Chapter 8 Income Improvement This chapter identifies means for enhancing the effectiveness of measures to improve or at least restore incomes after resettlement. After stating the relevant parts of Operational Policy (OP) and Bank Procedure (BP) 4.12, it defines income restoration, discusses its importance, and reviews the issues commonly affecting it. This chapter outlines a generic approach to income restoration and briefly explores the issues of implementing land replacement options in rural areas, strategies for directing project benefits to displaced persons (DPs), other income generation strategies, monitoring, and the adequacy of income restora- tion measures. (The annex to this chapter discusses the role of microfinance arrangements in helping DPs assume responsibility for their own livelihoods.) What OP 4.12 Says 8 OP 4.12 applies when the involuntary taking of land results in "loss of income sources or means of livelihood, whether or not the affected persons must move to another location" (para. 3[a]). In those instances, "displaced persons should be assisted in their efforts to improve their livelihoods and standards of living or at least to restore them, in real terms, to pre-displacement levels or to levels prevailing prior to the beginning of project implementation, whichever is higher" (para. 2[c]). More particularly, "the resettlement plan or resettlement policy framework also include[s] measures to ensure that displaced persons are (i) informed about their options and rights pertaining to resettlement; (ii) consulted on, offered choices among, and provided with technically and economically feasible resettlement alternatives; (iii) provided prompt and effective compensation at full replacement cost for losses of assets attributable directly to the project; (iv) provided assistance (such as moving allowances) during relocation; (v) provided with residential housing, or housing sites, or, as required, agricul- tural sites with a combination of productive potential, locational advan- tages, and other factors at least equivalent to the advantages of the old site; (vi) offered support after displacement, for a transition period, based on a rea- sonable estimate of the time likely to be needed to restore their livelihood and standards of living; and (continued) 153 Involuntary Resettlement Sourcebook (continued from p. 153) (vii) provided with development assistance in addition to compensation measures, suchaslandpreparation,creditfacilities,training,orjobopportunities"(para.6). Furthermore, "preference should be given to land-based resettlement strategies for displaced persons whose livelihoods are land-based. . . . [Where the DPs do not desire land or this is not a feasible option,] "non-land-based options built around opportuni- ties for employment or self-employment should be provided in addition to cash com- pensation for land and other assets lost. The lack of adequate land must be demon- strated and documented to the satisfaction of the Bank" (para. 11). "Payment of cash compensation for lost assets may be appropriate where (a) liveli- hoods are land-based but the land taken for the project is a small fraction of the affected asset and the residual is economically viable; (b) active markets for land, housing, and labor exist, displaced persons use such markets, and there is sufficient supply of land and housing; or (c) livelihoods are not land-based" (para. 12). Whether land-based, non-land-based, or a mix of the two, the resettlement plan includes "a description of the packages of compensation and other resettlement mea- sures that will assist each category of eligible displaced persons to achieve the objectives of the policy. . . . In addition to being technically and economically feasible, the reset- tlement packages should be compatible with the cultural preferences of the displaced persons, and prepared in consultation with them" (OP 4.12, Annex A, para. 11). OP 4.12 also requires completion of resettlement activities before construction begins. "The implementation of resettlement activities is linked to the implementation of the investment component of the project to ensure that displacement or restriction of access does not occur before necessary measures for resettlement are in place. For 8 impacts covered in para. 3(a) of this policy [land taking], these measures include pro- vision of compensation and of other assistance required for relocation, prior to dis- placement, and preparation and provision of resettlement sites with adequate facilities, where required. In particular, taking of land and related assets may take place only after compensation has been paid and, where applicable, resettlement sites and moving allowances have been provided to the displaced persons. For impacts covered in para. 3(b) of this policy [restriction of access], the measures to assist the displaced persons are implemented in accordance with the plan of action as part of the project" (para. 10). Where restrictions need to be imposed in legally designated parks and protected areas, "the borrower prepares a process framework acceptable to the Bank, describing the participatory process by which . . . measures to assist the displaced persons in their efforts to improve their livelihoods, or at least to restore them, in real terms, while maintaining the sustainability of the park or protected area, will be identified" (para. 7). Furthermore, "during project implementation and before enforcing of the restric- tion, the borrower prepares a plan of action, acceptable to the Bank, describing the specific measures to be undertaken to assist the displaced persons and the arrange- ments for their implementation" (para. 31). BP 4.12 mandates that the TT [task team] assess the likelihood of income restoration during supervision. Specifically, the TT is to examine "the plan of action to determine the feasibility of the measures to assist the displaced persons to improve (or at least restore . . .) their livelihoods with due regard to the sustainability of the natural resource" (para. 15). 154 Income Improvement Definition of Income Restoration in Operational Terms Defining income restoration operationally depends on economic conditions in the project area. Most simply, "income restoration" can refer to reestablishment of income levels prevalent at the time of displacement. This narrow interpreta- tion, however, is inconsistent with Bank policy objectives and insufficient for achieving these objectives for a number of reasons: · Bank policy refers to "restoration of incomes" as the minimum accept- able outcome. Improvement in income is the policy objective. Resettlement plans (RPs) should therefore include income generation strategies to at least restore income and measures to yield improved incomes and living standards. · Income restoration is often a fairly lengthy, dynamic process. Reestablishment of preproject income levels deprives DPs of any bene- fits of growth (or protection from inflation) generated in the interven- ing years. Conceptually, then, "income restoration" refers to recovery of income levels that would have prevailed in the absence of the project. · Income restoration strategies need to be sustainable. Temporary employment in project construction and temporary living support, for example, may be desirable forms of short-term assistance, but they do not constitute long-term income restoration. They are necessary, however, if their absence would impede prompt income restoration. DPs cannot be made 8 to suffer loss of income levels and living standards during the transition to income restoration. · Income restoration needs to be based on productive income-generating activities. Although cash payment may be appropriate under certain cir- cumstances, in other cases DPs may use cash payment for consumption, preventing the acquisition of productive assets. · "Income restoration" refers to recovery of aggregate household resource flows. But livelihoods are often based on both the formal and the infor- mal economic activities of all members of a household. To consider the impacts of income restoration activities on equity and the distribution of opportunity within the household is therefore also important (see "Gender Issues," below). · Income-generating activities must be legal and culturally appropriate. Income restoration does not cover illegal or immoral activities, and it does not include the financial contributions of children if they have to discontinue schooling. In view of these considerations, the objective of restoring livelihoods and standards of living "to pre-displacement levels or to levels prevailing prior to the 155 Involuntary Resettlement Sourcebook beginning of project implementation, whichever is higher" (OP 4.12, para. 2[c]) depends on the time frame and economic conditions. Generally, projects that take place within a short time frame pose little difficulty, because the income levels to be achieved are those the DPs had immediately before the project. However, projects with long gestation or implementation periods pose more dif- ficulty, because the national or regional economy will have evolved in the inter- im. In countries where the economy has grown and incomes have risen, the objective of income restoration is to create conditions enabling people to achieve the higher income levels they presumably would have had without the project (Figure 8.1). In countries where the economy has contracted and incomes have fallen, the aim is to restore incomes to at least the predisplacement level, in real terms, even though this level is higher than the DPs would have achieved without the project (Figure 8.2). The rationale is that involuntary reset- tlement takes place in a development context, so projects incur the obligation to at least restore previous levels of livelihood and standards of living. Compensation for expropriated assets is often not enough to restore liveli- hoods and standards of living, especially among poor and vulnerable groups. Compensation fails because of the inefficiencies that make markets unable to translate this compensation into income-generating assets. Therefore, in accord with the Bank's poverty alleviation objectives, its resettlement policy encourages the orientation of projects toward development, meaning additional assistance may be needed. In this perspective, people bearing the burdens of displacement 8 are thought to deserve full benefit from the projects affecting them. Accordingly, RPs should provide opportunities for DPs to restore or increase their incomes and living standards. In essence, Bank policy recognizes that the Figure 8.1 Income Restoration Objective in Regions of Economic Growth Income level objective after displacement level Income level before project Income (or displacement) Project Displacement Income approved restored Time 156 Income Improvement Figure 8.2 Income Restoration Objective in Regions of Economic Contraction Postdisplacement income restoration objective level Income level before project Income (or displacement) Income level in region Project Displacement Income approved restored Time changes imposed by displacement frequently involve loss of more than physical capital. People affected also risk impoverishment because existing skills cannot be transferred to new circumstances (loss of human capital) or because institu- tionalized norms and relationships are dismantled or are inappropriate in the new circumstances (loss of social capital). To meet the Bank's development objective, OP 4.12 mandates additional 8 assistance to DPs who are compensated for assets but are still unable to restore incomes because replacement assets or alternative economic opportunities are not available or attainable. In addition, the policy extends protection to several categories of people whose hardships have often been overlooked: specifically, DPs who lose assets but are ineligible for compensation because they lack formal title; and DPs who do not lose assets but nonetheless lose access to income-generating opportunities, notably as a result of lost wages, sales, or rental agreements. Issues in Income Restoration Unlike compensation, income restoration is both complex and uncertain, unfolding over time and contingent on factors beyond the control of project agencies or the Bank (Table 8.1). These aspects of income restoration make planning difficult and the limits of project responsibility harder to determine. The scale and extent of the resettlement operation magnify the difficulties of income restoration. Lessening as much as possible the number of DPs and the degree of change imposed on them by displacement significantly increases the chances of restoring 157 Involuntary Resettlement Sourcebook Table 8.1 Comparing Compensation and Income Restoration Compensation Income restoration Compensation is usually a single Income restoration is usually conceived in payment, often received before the more dynamic terms as plans or actions move and before DPs fully recognize required to reestablish an income stream options or constraints inherent in new over time circumstances If provided as a lump sum, no As income restoration involves a series of recurrent monitoring is likely to be steps or stages over time, recurrent provided monitoring is essential Compensation strategies assume the Supplemental-income strategies are existence of replacement assets or necessary where markets are thin, appropriate substitutes, so DPs remain replacement assets are scarce, or loss of responsible for their own welfare human or social capital may be debilitating Although valuation methods vary, the Domestic law in many countries has no principle of compensation is normally explicit provision for income restoration enshrined in domestic law measures In Bank projects, compensation is In Bank projects, income restoration is defined as the amount required to operationally defined by reference to obtain equivalent assets at the time of income streams over time, in comparison 8 the expropriation