Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs A Sourcebook I__ . Energy Sector Management Assistance Programme U.lm B iii la Report 264/03 IU,;1 ' < 4 i *Bank-Netherlands i J1 y jg s j \ sWater Partnership Program July 2003 JOINT UNDP / WORLD BANK ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) PURPOSE The Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) is a special global technical assistance partnership sponsored by the UNDP, the World Bank and bi-lateral official donors. Established with the support of UNDP and bilateral official donors in 1983, ESMAP is managed by the World Bank. ESMAP's mission is to promote the role of energy in poverty reduction and economic growth in an environmentally responsible manner. Its work applies to low-income, emerging, and transition economies and contributes to the achievement of internationally agreed development goals. ESMAP interventions are knowledge products including free technical assistance, specific studies, advisory services, pilot projects, knowledge generation and dissemination, trainings, workshops and seminars, conferences and roundtables, and publications. ESMAP work is focused on three priority areas: access to modem energy for the poorest, the development of sustainable energy markets, and the promotion of environmentally sustainable energy practices. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (the ESMAP CG) composed of representatives of the UNDP and World Bank, other donors, and development experts from regions which benefit from ESMAP's assistance. The ESMAP CG is chaired by a World Bank Vice President, and advised by a Technical Advisory Group (TAG) of independent energy experts that reviews the Programme's strategic agenda, its work plan, and its achievements. ESMAP relies on a cadre of engineers, energy planners, and economists from the World Bank, and from the energy and development community at large, to conduct its activities under the guidance of the Manager of ESMAP. FUNDING ESMAP is a knowledge partnership supported by the World Bank, the UNDP and official donors from Belgium, Canada, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, Switzerland, and the United Kingdom. ESMAP has also enjoyed the support of private donors as well as in-kind support from a number of partners in the energy and development community. FURTHER INFORMATION For further information, a copy of the ESMAP Annual Report, or copies of project reports, etc., please visit the ESMAP website: www.esmap.org. ESMAP can be reached by email at esmap(d)worldbank.or2 or by mail at: ESMAP c/o Energy and Water Department The World Bank Group 1818 H Street, NW Washington, D.C. 20433, U.S.A. Tel.: 202.458.2321 Fax: 202.522.3018 1o rz rs I -s t s 1\ A /\ -t - Bank-Netherlands ?' , t-fL l Water Partnership Program Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs A Sourcebook July 2003 Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) and Bank Netherlands Water Partnership Program (BNWPP) Copyright C 2003 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing July 2003 ESMAP Reports are published to communicate the results of ESMAP's work to the development community with the least possible delay. The typescript of the paper therefore has not been prepared in accordance with the procedures appropriate to formal documents. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The Boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgement on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the ESMAP Manager at the address shown in the copyright notice above. ESMAP encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Contents Acknowledgments ............................................................. xvii Abbreviations and Acronyms .......................... ................................... xix Executive Summary ............................................................. xxi The Evolving Development Context ............................................................. xxi The Benefits of Stakeholder Involvement and Options Assessment ........... xxii Principles for Stakeholder Involvement in Options Assessment ................. xxiii Foreword ............................................................. xxv 1. Introduction ..............................................................I Yacambu-Quibor Project-Venezuela ...........................................................1 The Evolving Development Context ..............................................................2 Global Trends in Water and Energy Management ..............................3 The World Bank's Response to Water Resource Management ..........6 The World Commission on Dams .......................................................6 Options in Water and Energy Provision ..............................................7 Principles for Stakeholder Involvement and Options Assessment ................ 12 Principle 1: Create an Enabling Environment for Stakeholder Involvement and Options Assessment .................................. 13 Principle 2: Involve All Relevant Stakeholders .............. ................... 13 Principle 3: Assess All Options Strategically and Comprehensively. 14 Principle 4: Reach a Decision ....................................................... 14 Structure of the Sourcebook ....................................................... 14 2. The Benefits of Stakeholder Involvement in Options Assessment ............. 17 Introduction ............................................................. 17 Essay 1: Planning, Social Justice Research, and Socially Acceptable Decisionmaking (Geoffrey J. Syme, CSIRO Land and Water, Australia) ............................................................. 18 Why and How Do People Need To Be Involved with Planning for Water Resources Development? .......................................... 19 Distributive Justice, Procedural Justice, and Fairness ...................... 21 Where Does the Social Justice Approach Fit in the Decisionmaking Process? ........................................ 24 Conclusions: Justice, Planning, and Decisionmaking ....................... 25 Essay 2: An Economic Perspectice on Stakeholder Involvement in Options Assessments (Per Lund, PM Global Infrastructure, Washington, D.C.) ......................................... 25 The Limitations of Cost-Benefit Analysis ......................................... 26 Economic (Project) Rent ......................................... 26 Project Risks ......................................... 27 Stakeholder Involvement in Public Sector Projects .......................... 28 Stakeholder Involvement in Private Sector Projects ......................... 32 Stakeholder Involvement from a Lender's Perspective ..................... 34 Conclusion ......................................... 35 3. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment .................................................. 37 The Policy and Regulatory Framework .................................................. 38 Planning Systems .................................................. 42 Use Structured Processes .................................................. 42 Orient Processes to Meet Broad Needs and Objectives ................... 43 Locate Options Assessments Upstream in Strategic Processes ...... 45 Use Iterative and Integrated Processes ........................................... 48 Capacities for Stakeholder Involvement and Options Assessment .............. 49 4. Involve All Relevant Stakeholders ........................................................... 53 Identifying Stakeholders ........................................................... 57 Stakeholder Analysis ................................. .......................... 58 Rights, Risks, and Responsibilities ...................................... ............ 59 Stakeholder Identification and Assessment Instruments .................. 65 Self Identification ........................................................... 65 Standard Lists ........................................................... 65 The Structure for Stakeholder Involvement .................................................. 65 iv Composition of the Advisory Group .................................................. 69 Rules of Interaction ............................................................. 70 Use of Facilitators ............................................................. 71 Communications Plan ............................................................. 72 Techniques for Group Interaction ............................................................. 74 Advising Decisionmakers ............................................................. 75 Time Requirements for Stakeholder Involvement .................. ...................... 77 Leveling the Playing Field ............................................................. 79 5. Assess All Options Strategically and Comprehensively ............................. 85 Options Assessment in a Strategic Planning Exercise ................................. 88 Goals and Needs Assessment ......................................................... 88 Criteria and Performance Measures ................................................. 92 Assembly of the Options Inventory ................................................... 97 Screening and Ranking of Options ................................................. 101 Assessing and Ranking Alternative Plans ................. ..................... 104 Recommending a Preferred Plan ................................................... 107 Options Assessments during the Development of Dams ................ 108 Options Assessment during the Management and Operational Phase of Dams ............................................................. 112 6. Reach a Decision ............................................................. 117 The Terms of Reference for the Assessment Need to be Clear ................. 117 Supporting Process Efficiency ............................................................. 120 Time, Resources, Technical Assistance ......................................... 121 W hat Will Be Done with the Outcomes? ..................................... ............... 123 Appendix 1: Case Studies ................... .......................................... 125 Trends in the Case Studies .......................................... ................... 125 Road Map to the Case Studies ............................................................. 126 Case Study 1: China-Loess Plateau Watershed Rehabilitation Project ..... 130 W hat was the context? ............................................................. 130 What Options Assessments Were Carried Out, and by Whom? ..... 134 v What Other Steps Were Taken to Enhance Stakeholders Involvement in Decisionmaking Processes? ....................... 136 How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? ..................................... 138 What Lessons Are Offered? ....................................................... 138 Case Study 2: Nepal: Medium Hydropower Study Project-Screening And Ranking Phase ....................................................... 139 The Context ....................................................... 140 What Framework and Process Was Developed to Evaluate Hydropower Options and Involve Stakeholders? ................ 142 What Did the New Process Achieve and What Benefits Were Derived? ....................................................... 147 What Lessons Are Offered? ....................................................... 148 Case Study 3: Brazil: Ceara State Integrated Water Resources Management Project ....................................................... 149 The Context ....................................................... 149 What Options Assessments Were Carried Out for Reservoir Components of the Supply Management Plan, and by Whom? ....................................................... 152 PROURB-Urban Development and Water Resources Management Project (1994-2001) ...................................... 153 PROGERIRH (1997-ongoing) ....................................................... 154 What Steps Were Taken to Enhance Stakeholder Involvement in the Decisionmaking Processes? ......................................... 155 How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? ..................................... 157 What Lessons are Offered? ....................................................... 157 Case Study 4: Central Asia: Aral Sea Basin Multistate Water Resource Cooperation ....................................................... 159 The Context: ....................................................... 159 What Were the Strategic Issues for Interstate Water Resources Cooperation? ....................................................... 161 What Mechanisms for Interstate Water Resources Cooperation Were Established? ....................................................... 163 vi What Mechanisms for National Level-Stakeholders Helped to Inform National Positions on Interstate Cooperation? ......... 165 What Benefits Emerged from The Interstate Cooperation and Building Awareness of the Issues among National Stakeholders? ........................................................ 166 What Lessons Were Learned? ....................................................... 167 Case Study 5: Uganda-Bujagali Hydropower Project ............................... 168 The Context ........................................................ 168 What Options and Alternatives Assessments Were Carried Out, and byWhom? ........................................................ 171 Strategic Options Assessments-Development Alternatives for Providing Electricity Services and Alternative Sites for Hydropower ........................................................ 171 Within-Project Alternatives-Assessment of Alternatives for Facilities, Operations, and Social and Environmental Management Activities ....................................................... 173 What Additional Steps Were Taken to Involve Stakeholders in Evaluating Strategic Options and Within-Project Alternatives? ........................................................ 174 What Benefits and Value-Added Was Derived from Involving Stakeholders in Option and Within-Project Alternative Assessments? ........................................................ 177 Case Study 6: Zambia: Power Sector Environment Assessment Scoping and Reconnaissance Study and Power Rehabilitation Project ....... 178 What Was the Context? ........................................................ 179 What Options Assessments Were Carried Out, and by Whom? ..... 181 Sector Environment Assessment Scoping and Reconnaissance Study (SEA) ........................................................ 181 Options Assessments in the Project Preparation Phase ................. 183 What Steps Were Taken to Enhance Stakeholders Involvement in Decisions on Options and Within-Project Alternatives? ...... 184 How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? ..................................... 185 What Lessons Are Offered? ........................................................ 186 Case Study 7: Canada: BC Hydro Stave River Water Use Plan (Wup) ..... 187 vii What Was the Context? ....................................................... 187 What Options Assessments Were Carried Out, and by Whom? ..... 190 What Other Steps Were Taken to Enhance the Involvement of Stakeholders in Drafting the Water Use Plan? .................... 192 How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? ..................................... 194 What Lessons Are Offered? ....................................................... 195 Case Study 8: Turkey: Ex-Post Evaluation of the Ceyhan Aslantas Multipurpose Project ....................................................... 196 What Was the Context? ....................................................... 197 What Options Assessments Were Carried Out, and by Whom? ..... 199 What Steps Were Taken to Enhance Stakeholder Involvement in the Ex-Post Evaluation? ..................................................... 200 How Did Stakeholder Involvement Improve the Outcome of the Exercise and Contribute to Better Development Outcomes in Future? ....................................................... 203 What Lessons Are Offered? ....................................................... 204 Case Study 9: South Africa Berg Water Project (Skuifraam Dam) ............ 205 The Context ....................................................... 206 What Options Assessments Were Carried Out, and by Whom? ..... 209 What Other Steps Were Taken to Enhance Stakeholder Involvement in the Decisionmaking Processes? ................. 211 How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? .................. ................... 211 What Lessons Are Offered? ....................................................... 212 Case Study 10: Kyrgyz Republic Irrigation Rehabilitation Project ............. 213 The Context ....................................................... 213 What Options Assessments Were Carried Out, and by Whom? ..... 216 What Steps Were Taken to Enhance the Involvement of Stakeholders in the Selection of Options to Meet Immediate Needs and to Develop Longer-Term Strategies? ....................................................... 218 What Value Did Options Assessment and Stakeholder Involvement Add and What Benefits Were Derived? .......... 219 viii What Lessons Were Offered? ........................................................ 220 Appendix 2: Global Options Portfolio-Expanding Choice, Innovation and Flexibility to Meet Current and Future Needs .............................................. 223 The Context ............................................................. 223 Classification of Options ............................................................. 223 Water Resource Management Options .......................................... 225 Policy Options for Overall Water Management ............................... 225 Institutional Options For Overall Water Management ..................... 226 Flood Control and Management-Balancing Structural and Nonstructural Options ......................................................... 228 Irrigation Services ............................................................. 230 Policy and Institutional Options and Changes in Agriculture Practices Influencing the Demand for Irrigation Services .... 232 Irrigation Demand Management -Technical Options .................... 233 Irrigation Supply Management-Technical Options ........................ 234 Municipal and Industrial Water Supply Services .................. ...................... 236 Policy, Administrative, and Institutional Options ............................. 237 Demand Side-Technical Options ................................................. 239 Supply Side Efficiency-Technical Options ................ ..................... 239 New Supply-Technical Options ........................................... .......... 239 Rural Water Supply ............................................................. 240 Electricity Services ............................................................. 241 Policy and Institutional Options ...................................................... 243 Demand-Side Management (DSM)-Technical Options ......... ....... 244 Supply-Side Efficiency-Grid Options ............................................ 245 New Supply Options-Grid and Decentralized Systems .................. 245 Rural Electrification-Technology Options ....................................... 246 Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise ................... .......................................... 247 Background ............................................................. 247 Objectives ............................................................. 249 ix Outputs ............................................................ 249 Scope Of Work ............................................................ 249 Role 253 Reporting ............................................................ 253 Timeframe ............................................................ 254 Attachment 1: Advisory Group, Stakeholder Forum, and Study Team Composition and Functions ............................................................ 254 Advisory Group ............................................................ 254 Stakeholder Forum ................................ ............................ 255 Study Team ................. ........................................... 255 Attachment 2: Stakeholder Analysis and Communication Plan ......... ........ 257 Appendix 4: Further References and Resources ............................................. 259 On Dams and Development ......................................... ................... 259 On World Bank Group Policies, Strategies, and Sourcebooks ................... 260 On Organizations Concerned with Dams, Options Assessment and Stakeholder Involvement ............................................................ 262 Name, Description, Web Address ................................. ................. 262 Appendix 5: Bibliography ............................................................ 265 Chapter 1 ............................................................ 265 Chapter 2 ............................................................ 265 Essay 1: References ............................................................ 265 Chapter 3 ............................................................ 266 Appendix 1 ............................................................ 266 Case Study 6 ............................................................ 266 List of Tables Table 1.1: Descriptions of Policy, Strategic, and Project Planning .......................... 10 Table 2.1: Components Required in an Adequate Public Involvement Program ..... 20 Table 2.2: Assumptions ............................................................ 29 Table 4.1: Key Groups in Strategic Options Assessment ................. ...................... 55 x Table 4.2: Key Groups in Options Assessment for Dam Development and Management .............................................................. 57 Table 4.3: Definitions of Rights, Risks, and Responsibilities ................................... 60 Table 4.4: Examples of the Time Requirement for Options Assessment and Stakeholder Involvement in Strategic Planning Exercises ................................. 78 Table 6.1: Defining Authorities and Responsibilities and Setting Clear Boundaries for Exercises .............................................................. 119 Table Al.1: Synopses of the 10 Case Studies ..................................................... 128 Table A.1.2: Good Practices Illustrated by Case Studies ..................................... 130 Table A.1.3: Chronology .............................................................. 133 Table A.1.4: Number of Options at Each Stage of the S&R Process and Criteria Applied .............................................................. 145 Table A.1.5: Chronology-Selected Events ......................................................... 152 Table A.1.6: Three Stages in the Selection of Reservoirs under PROURB (1996)153 Table A.1 .7: Representative Water Management Issues and Concerns in the Five Central Asian States in the ASB .............................................................. 162 Table A.1.8: Chronology-Selected Events ......................................................... 164 Table A.1.9: Chronology .............................................................. 180 Table A.1.10: Chronology-Key Events .............................................................. 208 Table A. 1.11: Chronology ................... ........................................... 215 Table A. 1.12: Process for Screening and Ranking of Project Areas: Project Preparations 1996-1997 .............................................................. 217 Table A.2.1: Within-Project Alternatives .............................................................. 224 Table A.2.2: Representative Flood Management Options ............... ..................... 228 Table A.2.3: Illustration of Changes in PMF Estimates Since the Original Design of the Wivenhoe Dam in Australia .............................................................. 230 Table A.2.4: Representative Options in the Agriculture and Irrigation Sub-Sector 232 xi Table A.2.5: Representative Range of Urban Water Service Options ................... 237 List of Figures Figure 1.1: The WCD's Seven Strategic Priorities .................................................... 7 Figure 1.2: Policy, Strategic and Project Planning .................................................... 9 Figure 1.3: Sector Planning Informing Strategic Options Assessment in a Basin Context ............................................................ 1 1 Figure 1.4: The Power Sector as an Example of Available Options ......................... 12 Figure 1.5: Principles for Stakeholder Involvement in Options Assessment ........... 13 Figure 2.1: Community and Planners' Perceptions of Current Community Roles and Preferred Community Influence in Water Allocation .................................... 21 Figure 2.2: Percentage of Hydropower and Thermal Generation Private Sector Projects at Different Stages of Implementation .................................................. 32 Figure 4.1: Schematized Structure for Stakeholder Involvement ............................ 66 Figure 5.1: Roadmap for Option Assessments ....................................................... 86 Figure 5.2: Array of Options in an Options Assessment for Cape Town Water Service Delivery and Management ............................................................ 100 Figure 5.3: Combining Options from Diverse Portfolios into Alternative Plans ....... 105 Figure 5.4: The Life Cycle of Water Infrastructure Multiple Points Where Options Assessment Can Be Employed to Inform Decisions ........................... 113 Figure Al.1: Levels of Planning ............................ ................................ 127 Figure A.1.2: China-Loess Plateau Watershed Rehabilitation Project ......... ........ 131 Figure A.1.3: Nepal: Medium Hydropower Study Project ...................................... 140 Figure Al.4: Nepal S&R Consultation Process ..................................................... 143 Figure A.1.5: S&R Ranking Matrix ............................................................ 146 Figure A. 1.6: Brazil: Ceara State Integrated Water Resources Management Project ............................................................ 150 xii Figure A.1.7: Aral Sea Basin .............................................................. 160 Figure A.1.8: Uganda-Bugali Hydropower Project .............................................. 169 Figure A.1.9: Zambia .............................................................. 179 Figure A. 1.10: Canada-BC Hydro Stave River ................................................... 188 Figure A.1.11: Consultative Committee Structure and Interactions ....................... 193 Figure A.1.12: Ceyhan Aslantas Project .............................................................. 197 Figure A.1.13: Study Process .............................................................. 198 Figure A.1.14: Skuifraam Dam ........................... ................................... 206 Figure A.1.15: Water Reservoirs and Dams in the Kyrgyz Republic ..................... 214 Figure A.2.1: Demand-Side Management and Supply Options ............ ................ 224 Figure A.2.2: Integrated Water Resource Management Concept ........... .............. 225 Figure A.2.3: Variations in Electricity Consumption Per Capita by World Regions (1996)* .............................................................. 241 Figure A.2.4: Power Supply Options .............................................................. 242 Boxes Box 1.1: Recent Trends in Hydropower .............................................................. 4 Box 2.1: An Example of Procedural Justice ............................................................ 22 Box 2.2: Project Risks for a Hydropower Dam as Perceived by the Financing Parties .............................................................. 27 Box 3.1: IEA Recommendations . .............................................................. 39 Box 3.2: Enabling Policies for Stakeholder Involvement ......................................... 40 Box: 3.3: Brazil's Power Sector Environmental Master Plan (EMP) . . 41 Box 3.4: Norway's Dual System of a Protection Plan and Master Plan ................... 43 Box 3.5: Bahia State Water Resources Management (WRM) Project and the Ponto Nova Dam .............................................................. 47 xiii Box 3.6: Seven Dimensions of Integrated Water Management ............. ................. 48 Box 3.7: Multi-Sector and Multi-Stage Approaches for Watershed Rehabilitation on the Loess Plateau in China .............................................................. 49 Box 3.8: Capacity Building in Zambia for Environmental Management and Public Consultations in the Power Sector .............................................................. 51 Box 4.1: Questions to Guide Development of A Preliminary List of Stakeholders In South Africa .............................................................. 59 Box 4.2: Rights and Legal Entitlements: Identifying and Empowering Stakeholders for Resettlement and Compensation Negotiations ....................... 61 Box 4.3: Procedures for Stakeholder Analysis, DWAF Guidelines, South Africa .... 64 Box 4.4: Structures and Mechanisms for Involving Stakeholders in China's Anning Valley Agriculture Development Project ................................................. 67 Box 4.5: Structure and Mechanisms for Involving Stakeholders in the Lesotho Highlands Project .............................................................. 68 Box 4.6: Consultative Council for the Yacambu-Quibor Water Transfer Project in the State of Lara, Venezuela .............................................................. 70 Box 4.7: Communications Plan for the Nepal Hydropower Study ............ ............... 73 Box 4.8: Examples of Advising Decisionmakers about Group Opinions ......... ........ 76 Box 4.9: Making Information Accessible for Integrated Water Management ........... 80 Box 4.10: Enabling Poor and Marginalized to Participate . . 81 Box 4.1 1: Disadvantaged Groups and Negotiation ................................................. 82 Box 4.12: Checklist for Reviewing and Evaluating Public Consultation Plans and Processes .............................................................. 83 Box 5.1: WCD Strategic Priority 2: Comprehensive Options Assessment .............. 87 Box 5.2: Scenario Analysis: Considering Options for Climate Change Adaptation in the Water Sector .............................................................. 91 Box 5.3: Irrigation Sector Environmental Assessment in the Kyrgyz Republic: Addressing Immediate Needs .............................................................. 92 xiv Box 5.4: Internalization of Environmental Costs in the Pakistan Power Sector Generation Expansion Plans .............................................................. 94 Box 5.5: Goals, Sub-goals, and Criteria in San Diego Emergency Storage Project (USA) .............................................................. 96 Box 5.6: Poland: Wloclawek and Nieszawa Dam and Options Assessment ........... 99 Box 5.7: Analytical Models Used in Options Assessment ..................................... 103 Box 5.8: Building Options Portfolios and Plans: Canadian Examples ................... 107 Box 5.9: Component Plans Prepared during the Development Phase of a Dam.. 109 Box 5.10: Lesotho Highlands: Assessing Alternatives for Environmental Flow Releases .............................................................. 110 Box 5.11: Within-Project Alternatives for Kipichira Falls Power Project in Malawi. 112 Box 6.1: Establishing Clear Boundaries for a Strategic Exercise .......................... 118 Box 6.2: WCD Strategic Priority 6: Ensuring Compliance ..................................... 123 Box 6.3: Ensuring Compliance in Agreements Reached on Social Arrangements within Projects .............................................................. 124 Box A. 1.1: Loess I Options Evaluated (examples) ................................................ 134 Box A.1.2: 13 Steps in the WUP Process Initiating, Developing, Approving, Monitoring, and Reviewing .............................................................. 189 Box A. 1.3: Stakeholder Assessment of the Development Effectiveness of CAP... 202 Box A. 1.4: Methods to Evaluate Lessons Learned ......................... ...................... 203 Box A.2.1: Dublin Principles (1992) .............................................................. 227 xv II Ii Acknowledgments 1. This report, prepared by Kees Blok (RoyalHaskoning, Rotterdam, The Netherlands), Larry Haas (Consultant, Littlehampton, UK) and Richard Davis (Environment department, World Bank), is an output from the Stakeholder Involvement in Options Assessment project which is part of the World Bank's Dams Planning and Management Action Plan. Geoffrey Syme (CSIRO, Australia) and Per Ljung (consultant, Washington DC) wrote the essays in Chapter 2. Richard Davis (Senior Environment Specialist) was Task Manager for the project and Alessandro Palmieri (Lead Dams Specialist) is manager of the overall Action Plan. 2. The project was jointly funded by the Bank-Netherlands Water Partnership Program and the Energy Sector Management Assistance Program (ESMAP). 3. The sourcebook benefited greatly from the advice of an expert Advisory Panel consisting of Thayer Scudder (University of California), Joseph Milewski (Inter- American Development Bank), Goulsara Pulatova (consultant, Tajikistan), Miguel Nucete Hubner (Consultant, Venezuela), and Tor Ziegler (Consultant, Norway). In addition, Daryl Fields (BC Hydro, Canada), Fred Fortier (indigenous people's representative, Canada) Ken Steele (San Diego Water Authority, California), Gert Sluimer (RoyalHaskoning, The Netherlands), Tod Ragsdale (Consultant, Washington DC), and Frauke Neumann-Silkow (GTZ, Germany) provided comments on the draft. 4. The following World Bank staff provided information and advice: Donal O'Leary, Jakob Granit, Najma Siddiqi, Emanuele Santi, Kenneth Green, Astrid Hillers, Robert Robelus, Ashok Subramanian, Mara Baranson, Maria Teresa Serra, Doug Olson, Uma Subramanian, Craig Meisner, Manuel Sevilla, Nagaraja Harshadeep, Rafik Hirji, Rajeev Gopal, Juan Quintero, and Barry Trembath. The case studies benefited from information provided by Abdul Salam (Consultant, India), Paul Roberts (Consultant, South Africa), Charlotte Bremister (BC Hydro, Canada), Nelson Azambuja (Consultant, Brazil), Janak Karmacharya (Nepal Electricity Authority, Nepal), Anara Tabyshelieva (Consultant, Washington), Joseph Wells (Consultant, Canada). Junhui Wu, Joop Stoutjesdijk, Donal O'Leary, Juergen Voegele, Karen Rasmussen, Stephen Lintner, and Haran Sivam from the World Bank Group checked the case studies. 5. The report was edited by Bob Livernash. Ms. Esther Petrilli from the Oil and Gas Policy Division desktopped this entire report. Marjorie K. Araya, from the ESMAP Programme supervised publication, printing, distribution and dissemination. The maps were provided by Gregory Prakas, Cartography Section of the World Bank, and the photographs were provided by RoyalHaskoning NL. xvii i I Abbreviations and Acronyms 3Rs Rights-Risks-Responsibilities CAS Country Assistance Strategy EA Environmental Assessment EIA Environment Impact Assessment EMP Environmental Management Plan EPA Environmental Protection Agency ESMAP Energy Sector Management Assistance Programme IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change IUCN World Conversation Union IWRM Integrated Water Resource Management LHDA Lesotho Highlands Development Authority MW Megawatt NGO Nongovernmental organization O&M Operation & Maintenance OECD Organisation for Economic Co-operation and Development RAP Resettlement Action Plan S&R Screening and Ranking SEA Strategic Environmental Assessment ToR Terms of Reference UNCED United Nations Conference on Environment and Development UNFCCC United Nations Framework Convention on Climate Change WCD World Commission on Dams WRM Water Resources Management xix I--- ------ Executive Summary 1. This sourcebook provides guidance and practical examples on how to improve the involvement of stakeholders in the systematic assessment of options in planning exercises for water and energy services. Ranging from policy formulation to project planning, it draws on some 30 case studies of programs and projects that considered the development, rehabilitation, or operation of dams. 2. The sourcebook is aimed at World Bank task managers and their client country counterparts involved in the development and management of water infrastructure. It is also intended for water users and stakeholders involved in dam-related planning processes, as well as those involved in policy dialogues that will lead to improvements in the enabling environment for participatory planning in the water sector in different country situations and governance settings. The Evolving Development Context 3. Scarcity, vulnerability to droughts and floods, and degradation of water resources in many parts of the world require both more effective approaches to water management as well as major investments to ensure that sufficient water resources are available to meet the needs of future generations. Over the last few decades, the criteria for public decisions on water management and infrastructure development have widened. No longer is a narrow consideration of technical and economic objectives sufficient. Criteria now have to include complex human development needs and environmental sustainability. 4. In addition, there has been an increasing understanding that it is not only just and equitable that those affected by decisions should have a voice in making the decisions, but that it also makes financial sense to include their views. This understanding became widely accepted in the developed world during the 1970s and 1980s, and has gained acceptance in the developing world in the last decade. 5. There have been a number of cases where decisions on the development and management of dams have not adhered to the emerging norms. Controversy about these cases led the World Bank and the World Conservation Union (IUCN) to initiate the World Commission on Dams (1998-2000), which undertook an unprecedented global consultation on large dams. In its final report, the Commission called for a new framework for decisionmaking on water and energy development services. Under this framework, decisions on major dam projects should not be based solely on the technical merits of a proposed project. Decisions should also include a careful assessment of development needs, alternative options, and stakeholder perspectives. The WCD claimed that much of the controversy about large dams could be turned into constructive dialogue if the discussion over alternatives is brought upstream in the planning cycle, out of project planning and into policy and strategic planning. Thus, there should be an assessment during sector or regional strategic planning of all reasonable options to meet xxi water and energy needs, including dam and non-dam options. This should precede the assessment of site specific alternatives during project planning. This upstream assessment of options should be undertaken with the involvement of concerned stakeholders and with due consideration of alternative development plans. 6. The World Bank's Board of Executive Directors endorsed the WCD report's core values and strategic priorities. This report is one of the products from an Action Plan that was developed to promote the mainstreaming of the WCDs core values and strategic priorities within the Bank. More recently, the Board of Executive Directors endorsed a new Water Resources Sector Strategy aimed at providing more effective assistance to countries in addressing water concerns. It proposes to invest in better management of water resources and in developing and maintaining an appropriate stock of water infrastructure. The Strategy recognizes that major water infrastructure is associated with high risks, both to the developers as well as to those affected by the infrastructure. But it also realizes that major water infrastructure can be a significant contributor to development and to poverty reduction. The inclusion of stakeholders in the assessment of options will be a central component of the Bank's renewed commitment to water resources management and investments in infrastructure. The Benefits of Stakeholder Involvement and Options Assessment 7. The evidence presented here strongly suggests that investing time and resources up-front in a planning exercise for water and energy development is the best way to manage the social risks that are associated with major interventions in the water resources sector. Stakeholder involvement in options assessment forms a risk management approach for major water resources interventions in a number of ways: * Moving the assessment of a comprehensive range of options upstream into strategic planning helps develop a better and more diverse portfolio of interventions for project planning, including the identification and early clearance of fast-track projects that address immediate needs and the early elimination of poor projects. * Involving stakeholders in the strategic planning exercise helps improve public acceptance of projects that are ultimately proposed for development. * Involving stakeholders in the identification and assessment of alternatives in project planning improves project quality, reduces risks to all categories of stakeholders, and enhances compliance with agreements reached during project preparation. 8. The sourcebook includes two essays that elaborate benefits of stakeholder involvement in options assessment. The first describes how participatory decisionmaking leads to higher acceptability of the ensuing decisions, while the second essay looks at the financial benefits from absorbing costs up-front in order to reap downstream benefits. xxii 9. The concepts of stakeholder involvement and options assessment imply a change in investment patterns for water and energy development. More resources and time will be spent at the upstream end of planning. Benefits such as early elimination of unacceptable projects, improved project portfolios, greater public acceptance, improved access to external financing, and lower overall costs outweigh the incremental time and cost spent prior to decisionmaking. Principles for Stakeholder Involvement in Options Assessment 10. Chapters 3 through 6 discuss four principles that can be used to guide client country and World Bank task managers as they set up and facilitate stakeholder involvement in options assessment. These principles are consistent with the core values and strategic priorities of the WCD report. The discussion in these chapters provides practical suggestions on operationalizing the principles using experience drawn from the case studies and wider experience in the development of dams. 11. It is important to develop a supportive environment in which the assessment of options can occur, with the full participation of those affected by the decisions. This environment can include legislative backing for both assessing diverse options as well as inclusion of stakeholders. It is usually also important to strengthen the capacities of government agencies to manage such assessments, as well as to build up the capacity of stakeholder groups who might have little experience in participatory decision- making. 12. It takes time, almost always more time than waz initially intended, to effectively engage stakeholder groups. Nevertheless, the benefits of using time to get agreement on strategic and local-level decisions is usually worthwhile as the essays in Chapter 2 show. A variety of methods are proposed for identifying stakeholder groups - a Rights-Risks-Responsibilities framework, formal analytical methods, or even through self-selection. Well-established rules of operation promote constructive discussions. These include such courteous but often overlooked rules as listening to all opinions and allowing time for new information to be digested. 13. There are numerous techniques available for undertaking the assessment of options. The important issues here are to ensure that stakeholders have an opportunity to be involved throughout the assessment. Decisions, such as the criteria to be used for the assessment, will all affect the outcome and cannot be handled solely as technical decisions. Equity as well as efficiency issues should be explicitly included in the recommendations, particularly where poorer communities are likely to be affected- including downstream communities .that derive livelihoods from the services provided by the rivers. Also the risk of alternative options should be explicitly considered in the assessment, given the uncertainty associated with some of the data on which decisions will be made. An initial screening of options is usually sensible to exclude those that are infeasible - again this is not just a technical decision even if the options are clearly infeasible. It is common to use a simple procedure, such as rating-and-weighting, to then rank order the remaining options. The reasons for dropping options, as well as the reasons xxiii why some options emerge as being preferred, should be explicitly recorded and passed on to decisionmakers. 14. Finally, it is important that this assessment process, while inevitably time- consuming, doesn't become protracted. Decisionmakers have to operate within strict timeframes and need to have the outcomes of the assessment within those timeframes. Thus, well-agreed rules, well-structured procedures, ready provision of information and, sometimes, professional facilitation can all help the Advisory Group reach a decision. It is also important that agreements that have been reached as part of the assessment should be recorded formally, sometimes even as legal contracts, and the mechanisms for enforcing these decisions should be clearly and openly spelled out. 15. None of these principles are surprising. However, it can difficult, because of the many pressures surrounding decisions on major infrastructure, to neglect some of them and not fully undertake others. By consciously following these principles and drawing on the lessons contained in the case studies, Bank staff and their country counterparts will be better equipped to assess the need for, as well as plan and develop, new infrastructure such as dams in an efficient and fair way that causes less controversy and economic loss than in the past. xxiv Foreword 1. The World Bank's recent Water Resources Sector Strategy makes it clear that both improvements in management and increases in investments in water resources infrastructure will be needed to meet water shortages in many parts of the world. 2. The Bank's renewed commitment to rehabilitating and constructing infrastructure such as dams needs to be undertaken with a high degree of professionalism. Among other issues, this means that all reasonable options need to be investigated before a decision is made to proceed with a dam, and that those likely to be affected by such decisions should be encouraged to participate actively in the making of the decisions. This sourcebook is designed to assist those engaged in these decisions-including Bank staff, counterparts in developing countries, private sector investors, and NGO staff. 3. Given the breadth of experience that has been incorporated here, I am confident that this sourcebook will help Bank staff and others implement a balanced approach to water resources development and management that is both fair and efficient. Ian Johnson Dominique Lallement Vice President, Environment and Energy Adviser and Socially Sustainable Development ESMAP Programme Manager xxv i i I I i I Introduction Yacambu-Quibor Project-Venezuela When the Government of Venezuela withdrew the budget allocation for the heavily opposed US$500 million Yacambu-Quibor water transfer project in 1986, it expected the decision to be widely welcomed. What followed illustrates that affected communities can, if given a lead role in decisionmaking about dams, turn failures into successes. The project involved transferring water from the Yacambu River in the Orinoco watershed to the state of Lara to irrigate 15,000 hectares in the semi-arid Quibor Valley and double the water supply to Barquisimeto, a rapidly expanding metropolitan area experiencing water shortages. Physical infrastructure included a large dam and a 26-kilometer tunnel across the Los Andes Mountains. Soon after construction started in 1975, the project had become embroiled in legal disputes with civil contractors and work stopped. It was apparent that the communities in the Yacambu River watershed totally rejected the project. They had received no information on how the transfer of water from their area would affect them, and they felt they risked losing land and entitlements, while receiving no benefits. Farmers in the Quibor Valley, the intended irrigation beneficiaries, claimed they were kept in the dark as to how they would individually and collectively participate in the project, or even benefit. The absence of information on how water would be allocated made the farming communities fear that a poorly implemented project might add to the conflicts that already existed among small, medium, and large landholders in the valley at a critical time of agrarian and land reform. This was despite the fact that the groundwater aquifers feeding their existing irrigation schemes were failing and competition for water was growing. In spite of their misgivings about the project, the Lara community mounted an effective, cross- party campaign in response to the government's announcement that funding was to be withdrawn from the project. As a result, the national government established a public company with the mandate to develop the Yacambu-Quibor project, to identify mechanisms for water allocation and use, and subsequently implement the project. To do so, the public company engaged intensively with the communities and stakeholders in the development of the project. The company's Board was formed from the stakeholders in the project. It immediately took the step of constituting a Consulting Council comprising important community organizations, including representatives from local municipal governments, civil society, farming associations, and NGOs. Members came from the Quibor Valley, the Yacambu river watershed, and the Barquisimeto metropolitan area, i.e. the three affected regions. Staff started by drawing up a stakeholder communication strategy. Based on the feedback they received, they began engaging the communities in dialogue about community 2 Stakeholder Involvement in Options Assessment concerns. In the Yacambu watershed, this led to open discussion of the impacts of the water diversion and community involvement in the evaluation and selection of mitigation options. When a Watershed Conservation Plan was eventually developed, objections to the project from this region were withdrawn. Similarly, through formal and informal agreements, consensus was reached among the irrigation interests in the Quibor Valley on water allocation and sharing. With consensus emerging on how to proceed, the central government re-instated the project budget, and today community members widely believe the project will provide an important contribution to Lara's economic development. 1.1 The Yacambui-Quibor project is just one illustration of what can be achieved when stakeholders are actively engaged in identifying options to meet their needs-and what may transpire if they are not. There is now a wide consensus that plans for water and energy development are improved when options are systematically considered and when concerned parties are involved in planning exercises. This publication provides guidance and practical examples on how to incorporate the views of stakeholders in an open and systematic assessment of options and alternatives in planning exercises-ranging from policy formulation to project planning-for water and energy services. The Evolving Development Context 1.2 Over the last 25 years there have been major contextual changes in governance and public decisionmaking, which in turn have influenced decisionnaking in the development and management of water resources. Key shifts include: * The changing role of governments-from their traditional role as a sole service provider to that of regulator (and occasionally facilitator) enabling the private sector, communities, and partnerships to play expanded roles in service provision and management. * An expanding definition of the public interest that places more weight on rights and interests of people and communities affected by development activities, more focus on equity in the distribution of costs and benefits from development, and more emphasis on the concept of inter-generational equity in dealing with resource use. * Increasing efforts by stakeholders to hold authorities and projects accountable for decisions about infrastructure development. * Increasing emphasis on good governance and transparent and participatory decisionmaking, which requires that stakeholders are both consulted and empowered to participate in decisions that affect them. 1.3 Taken together, these trends have broadened the objectives of decisionmaking on public causes from narrowly defined technical and economic objectives to meeting complex human development needs and environmental sustainability. The following sections describe how these changes influence Introduction 3 decisionmaking on the development and management of large dams and more broadly on water and energy service provision. Global Trends in Water and Energy Management 1.4 By 2025, there will be about 3.5 billion people living in water stressed countries (World Commission on Dams, 2000). That is more than a sixfold increase over the current total, and about half the expected world population at that stage (Raskin et al, 1998) Water scarcity is not just a quantity issue. Growing pressure on scarce resources leads to increasing levels of water pollution in many parts of the world. At present, 20 percent of the world population lacks access to improved water sources and 17 percent of the world's urban population lacks adequate sanitation facilities (World Bank, 2003). In addition, the evidence from the latest reports of the Intergovernmental Panel on Climate Change (IPCC)-Climate Change 2001: Impacts, Adaptation and Vulnerability-is that climate change will increase hydrological variability and stress in the management of water systems. 1.5 There is now a consensus that present and future needs in many parts of the world cannot be met solely by developing new sources of water supply. The development of new sources will have to be coupled with wiser use of existing stocks through water conservation measures, water reuse, conjunctive use of surface and groundwater, rainwater harvesting, and water quality management. 1.6 It is now widely accepted that an integrated approach to water resource management (IWRM) is necessary to manage water resources more sustainably and equitably. Agenda 21 and the Dublin Principles (1992) were important milestones along the way. The latter were announced at the International Conference on Water and the Environment (ICWE) in early 1992 attended by government-designated experts from 100 countries and representatives of 80 international, intergovernmental and non- governmental organizations, and reaffirmed by world leaders the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro later that year. These Principles are now the accepted guide to countering the emerging global water resources crisis. The Principles state that: * Freshwater is a finite and vulnerable resource, essential to sustain life, development, and the environment. * Water development and management should be based on a participatory approach, involving users, planners, and policymakers at all levels. * Women play a central part in the provision, management, and safeguarding of water. * Water has an economic value in all its competing uses and should be recognized as an economic good. 1.7 The global policy dialogue on integrated water resources management (IWRM) currently stresses the role of water as a cultural and social good. IWRM is a collective responsibility, which can only be approached through the involvement of all relevant stakeholders. This perspective also introduces new issues in integrated water 4 Stakeholder Involvement in Options Assessment resources management. For example, the inter-basin transfer of water, which may appear to be a viable option from an economic viewpoint, may be objectionable in some cultural contexts since it entails the mixing of the life spirits of different watercourses. 1.8 Efforts are under way to put the Dublin principles into action. Today, accepted elements of integrated water resources management include management of water demand, enhancement of the role of water users in management decisions, and protection of water quality and use of market forces to match water supply and demand. Stakeholders in the water sector increasingly are forming partnerships aimed at jointly addressing the water crisis, as illustrated by the World Water Commission, the Global Water Partnership, and the growing number of national water partnerships. Further steps were taken to address the water crisis at the 2002 World Summit on Sustainable Development in Johannesburg, which proposed that the number of people without sanitation services should be halved by 2015 and identified hydropower development as a renewable source of energy. 1.9 The global energy resource outlook is less gloomy than that for freshwater. The UN's World Energy Assessment (2000) indicates that while individual countries have different energy resource endowments, there is no shortage of renewable energy, conventional fossil resources, or conversion options to meet future electrical needs well into the 21st Century. The immediate concern for global energy is closing the equity gap: close to one-third of humanity lives without electricity. A second pressing issue, related to sustainability, is how to address the causal linkage between present energy resource conversion and climate change. Power generation directly accounts for up to 30 percent of human-generated greenhouse gas emissions, mostly from thermal power plants. Over the last 25 years, global electricity production more than doubled, and electricity is now the fastest growing commercial energy form. 1.10 Hydropower accounts for about 19 percent of the global electricity supply. It represents more than 90 percent of electricity supply in 24 countries and over half the supply in 63 countries. Box 1.2 summarizes recent trends in hydropower development, as identified by the International Energy Agency (IEA). Box 1.1: Recent Trends in Hydropower In a recent report, the International Energy Agency identified the following trends in hydropower development: * Full integration of environmental assessment (EA) into the hydropower planning process * Full recognition of the need for transparency regarding project costs, dam safety, and environmental and social impacts * Increasing public interest and scrutiny of large dam projects * Increasing public consultation in identifying and screening projects * Growing recognition that hydropower may be a major instrument Introduction 5 in the fight against climate change * Developing hydropower within the context of integrated water resource planning * Increasing awareness that environmental sustainability and high discount rates are in conflict * Increasing private sector financing and, as a consequence, increasing emphasis on cutting costs and duration of design and construction, and on reducing financial risks * Increasing difficulty for hydropower to compete against thermal generation in countries with abundant coal and gas supplies * Increasing awareness and understanding of the complex technical, environmental, and social issues that are inherent to large dam projects, and the realization that the development of large dam projects requires tradeoffs between potential benefits and potential losses * Increasing application of multi-criteria ranking models and quantification of secondary and external costs and benefits to select the most attractive hydropower projects and alternatives * Increasing use of technological developments that make the planning and construction of large dam projects more efficient; * Increasing need for safety inspection and environmental management of existing dam projects * Increasing interest in modernization and upgrading of existing hydropower schemes. Based on the above trends, the report identified five issues that pose significant challenges to the hydropower sector: 1) energy policy frameworks; 2) the decisionmaking process; 3) the comparison of hydropower project alternatives; 4) improving environmental management of hydropower plants; and 5) sharing benefits with local communities. Source: International Energy Agency (IEA). 2000 Hydropower and the Environment: Present Context and Guidelines for Future Action. Paris: lEA. 1.11 There is now a broad consensus-exemplified in the World Bank's recent Energy Business Strategy-that the way forward must emphasize regulatory reforms that facilitate the use of both renewable and more efficient conventional technologies; the introduction of consumer-oriented energy services; and the formation of decentralized or distributed electrical systems. Regulatory reforms in the power sector (coupled with political changes) have caused a dramatic increase in the number of agreements for interconnection of regional power grids, in regional power pool arrangements, and in gas and oil pipelines crossing national boundaries to support power generation in neighboring 6 Stakeholder Involvement in Options Assessment countries. All these developments introduce new ways of meeting energy needs and help expand the range of options for energy development. The World Bank's Response to Water Resource Management 1.12 In February 2003, the World Bank's Board of Executive Directors endorsed a new Water Resources Sector Strategy aimed at providing more effective assistance to countries, using water as a vehicle for increasing growth, and reducing poverty in a socially and environmentally responsible manner. The Strategy builds on the Dublin Principles and on the World Bank's 1993 Water Resources Management Policy Paper. It identifies two major challenges that all countries confront in water resource management: * Developing the enabling laws, regulations, and institutions required for managing water resources in a more economically productive, socially acceptable, and environmentally sustainable fashion. The Dublin Principles provide a compass, but the details have to be tailored to the historical, cultural, environmental, social, economic, and political circumstances of each particular country. * Developing and maintaining an appropriate stock of water infrastructure. The costs of water infrastructure are rising rapidly in many countries. The World Water Commission estimates that investments in water infrastructure in developing countries alone need to increase from the current level of about US$75 billion to US$180 billion a year. 1.13 Given the urgency and magnitude of water shortages in many countries, the strategy argues for investing both in management and infrastructure. In many countries, investments in water resources infrastructure have high direct and indirect economic growth and development payoffs and can be part of an effective strategy for poverty reduction. However, investments in dams and other infrastructure would only be made where they could also be justified on social and environmental grounds. With the increasing international pressure to include stakeholders in decisionmaking about water and energy, there is a special responsibility to ensure that the needs of the poor are fully represented. Yet in many countries, the poor lack authority to participate in decisionmaking about water and energy investments. The World Commission on Dams 1.14 The World Commission on Dams (WCD), jointly initiated and founded by the World Bank and The World Conservation Union (IUCN), was asked to propose an approach to the development and management of dams that meets the needs of a diverse set of interest groups. The outcome of this unprecedented dialogue is summed up in the WCD report: "To improve development outcomes in the future we need to look at proposed water and energy development projects in a much wider setting-a setting that reflects full knowledge and understanding of the benefits and impacts of large dam projects and alternative options for all parties. It means that we have to bring new voices, perspectives, and criteria into decisionmaking, and we need to develop a new approach Introduction 7 that will build consensus around the decisions reached. This will result in fundamental changes in the way in which decisions are made." 1.15 The parties represented in the WCD agreed on five core values-equity, efficiency, participatory decisionmaking, sustainability, and accountability-that derive from the 1948 Universal Declaration of Human Rights, the 1986 UN Declaration of the Right to Development, and the 1992 Rio Declaration on Environment and Development. The Commission also identified seven strategic priorities that all parties should adopt and implement when making decisions about dams (Figure 1.1). The WCD core values and strategic priorities were widely accepted by NGOs, borrowing countries, multilateral and bilateral lenders, and professional societies. 1.16 This sourcebook has been commissioned as part of the World Bank's response to the WCD report. Specifically, it provides operational guidance on assessing a comprehensive range of options for providing power and water before committing to investments in dams (strategic priority 2: comprehensive options assessment), while ensuring that the needs and interests of stakeholders affected by the decisions are taken into account (strategic priority 1: gaining public acceptance; and core value 3: participatory decisionmaking). Figure 1.1: The WCD's Seven Strategic Priorities Gaining Comprehensive Public options Acceptance assessment Addressing w-sting Sharing rivers A dams for peace, development, Equitable and security resources . -- ~~~~~~~Sustaining rivers and livelihoods Ensunng compliance Recognizing entitlements and shanng benefits Options in Water and Energy Provision 1.17 The need to undertake widespread options assessment arises from a variety of factors, including: 8 Stakeholder Involvement in Options Assessment * The magnitude of the water development challenge in the 21st Century. Traditional supply strategies alone cannot meet the demands of growing populations in many water-stressed countries and regions. New supply options are needed along with options that contribute to better management of existing assets and also reductions in water demand. * The increased number of technical options now available. * The emphasis placed on poverty alleviation in the global development agenda. * The shift in financing of development initiatives from governments to multiple sources, including public-private partnerships. This has imposed greater rigor on financial returns and thereby on the need to find the most efficient investment option. * The need for governments to ensure that their decisions are sound and reflect the interests of all their citizens. 1.18 Decisionmaking on dams should be part of a much larger decisionmaking framework. Figure 1.2 shows that prior to the construction of a dam, a process of strategic choice should take place in which the decision to construct a specific dam is weighed against other options for the development of a sector or river basin. The options to be considered in strategic planning at sector or basin level are based on policy choices: Would the country pursue expanded electricity or food production? Would it consider large investments, or would it prioritize rehabilitation of existing infrastructure, or a better management of present demands? Much controversy about dams could be turned into constructive dialogue if the discussion over alternatives is brought upstream in the planning cycle, out of project planning and into policy and strategic planning. This upstream assessment of options should be undertaken with involvement of concerned stakeholders and with due consideration of alternative development plans. Introduction 9 Figure 1.2: Policy, Strategic and Project Planning Policy Planning IlNti e le \~~~~~~~~~~~- S\co or Ba 111Lvels . \fi_~~~~~~~~~Prjc ll*eviel 1.19 Once options have been assessed through policy and strategic planning exercises, project planning considers options on a local scale. Table 1.1 elaborates on the differences between policy formulation, strategic planning in water and power sectors or river basins, and project planning for a dam option. Policy formulation and the ensuing strategic planning exercise may result in a decision to develop a dam. Thus, the decision to develop a particular dam should be derived from a robust comparison of alternatives for meeting sector or basin needs. 10 Stakeholder Involvement in Options Assessment Table 1.1: Descriptions of Policy, Strategic, and Project Planning Policy Formulation in a Strategic Planning for Project Planning for a National Development Water and Energy Services Dam Option Context Planning Often a national A sector- or river-basin Takes place within the context (sometimes planning exercise, where context of a river basin and transboundary), state or programs and projects are looks at interactions of the provincial exercise, identified based on sector proposed option with the where national or regional development wider basin development objectives objectives are defined and specified for the different sectors or regions Stakeholders Includes national Includes national and Includes the beneficiaries stakeholders of regional stakeholders of of the proposed government, industry, government, industry, and development and the and private sector; private sector; consumer affected people upstream, consumer groups; and groups; and special issue downstream, and near the special issue organizations such as dam site. Includes organizations such as environmental NGOs environmental groups with environmental NGOs a special interest in the basin. Options Establishes a national Assesses a wide array of Assesses the within-project (or transboundary) options including supply options: Exact siting of the framework, within and demand management, dam, height, depth of which sector and basin new development versus flooding, alternative plans are elaborated. upgrading of existing alignments, environmental This could include facilities, and policy and mitigation measures, generic objectives, institutional intervention resettlement action plans, priorities, and overall versus infrastructure compensation, benefit budget allocations. development. sharing, etc. 1.20 This discussion suggests a linear relation from policy formulation through strategic planning to project plans. Developing coherence among the three levels of planning, however, benefits from feedback loops, whereby policies are adjusted to continue to embed new strategic plans, and where project experience informs new strategies and policies. Information loops not only go "upward" from project to strategy to policy, but also laterally, where experience of one sector, river basin, or project feeds into other such planning exercises. 1.21 The main emphasis of this sourcebook is on strategic (sector/basin) planning, where the widest range of options can be put on the table. Project planning is also discussed, although much of the information about the involvement of stakeholders and the assessment of options for strategic planning also apply to project planning. Introduction 1 1 1.22 The range of options to be included in strategic planning for water and energy development is very wide (Appendix 2). Each sector concerned with planning for water and energy development has its own set of options. Where planning takes place in a basin context (as proposed by the Dublin Principles), the different sectors-power, irrigation, water supply, flood control, etc-provide the options to be considered (figure 1.3.). Figure 1.3: Sector Planning Informing Strategic Options Assessment in a Basin Context SEOR WATER Htrategic Options Assessment t ~~for Water and Energy) \ Services Development POWEOR NAURALS 1.23 Within each sector, the array of options can be categorized along two axes: (1) structural versus non-structural options; and (2) demand management versus supply development options. Figure 1.4 demonstrates these dimensions for the power sector. Within the structural options, a further distinction can be made between options that address existing infrastructure and options that deal with new infrastructure. 12 Stakeholder Involvement in Options Assessment Figure 1.4: The Power Sector as an Example of Available Options Structural A i1 F 7] Bukmeeng||Efflcient end- Upgrade coal Hydropower [ j 0juse technology 0j plant Dam |Distribution | Structural Connect to Add turbines to transformers changes in foreign grid irrigation dam manufacturing processes Stand-alone Reduce system u mral systems loss Demand Power Supply L- J ' | ~~~~~~~~~~~~~~~~~~Development| Manageme Sector Dee, t Subsidy on Improve facility Pnvatisation power saving T meaureoperations policies Preferential Carbon Taxes Imprve cost Policies to energyrates recovery attractcinvestors Non structural 1.24 The options or alternatives that can be considered for a particular dam ("within-project alternatives") are very specific to the situation in the field. They also interact across sectors. A proposed dam might affect fishery interests, which leads to an option to safeguard capture fisheries or to assist fisherman to shift to aquaculture. Impacts on household properties and livelihoods lead to negotiations about resettlement and compensation. It is only through the active involvement of those affected by dams that all of these issues are exposed and that possible alternatives are developed. This is an organic rather than a mechanistic process and takes time to unfold. Principles for Stakeholder Involvement and Options Assessment 1.25 The material in this document is organized under four principles that task managers and their client country counterparts should address when planning the development of water and energy services. The principles are valid for both strategic planning and the planning of dam projects, though their application will differ between these levels of planning. The principles are consistent with World Bank strategies for water resources, energy, and environment, as well as with recent multi-stakeholder dialogue at international and national levels. The implementation of these principles draws on an assessment of some 10 dam-related case studies (Appendix 1), many of which have been partly funded by the World Bank. The four principles are shown in Figure 1.5. Introduction 13 Figure 1.5: Principles for Stakeholder Involvement in Options Assessment ... ................. ............. . ........ i 4L- Reaching Decisions Principle 1: Create an Enabling Environment for Stakeholder Involvement and Options Assessment 1.26 This principle argues that involving stakeholder groups works best if there is a supportive background environment. The environment can be improved by developing enabling policies and legislation, by reorienting existing systems for planning, and by building capacities-all aimed to ensure that major public decisions are informed by stakeholder involvement and options assessment. * Policies and legislation can be introduced to ensure that stakeholder involvement and options assessment are systematically undertaken in major planning exercises. * Optimum benefits can be drawn from planning processes by using structured approaches for options assessment and stakeholder involvement that start with assessing needs; that place the assessment of options upstream; that integrate different perspectives; and that iterate between steps. Principle 2: Involve All Relevant Stakeholders 1.27 Strategic and project-level planning processes should be open to all relevant stakeholders, starting from the point where needs are assessed and planning objectives are formulated; to identifying the range of options available to meet needs; and finally to identifying the preferred option. The quality and acceptability of decisions reached in a major planning exercise for water and energy development depends to a 14 Stakeholder Involvement in Options Assessment large degree on whether the appropriate stakeholders have been involved in a meaningful manner. This principle argues for identifying stakeholders based on (a) whether they could be affected by the outcomes of the planning exercise; and (b) whether they are committed to contributing to it. To foster stakeholder involvement, information and studies must be made accessible to all stakeholders. Difficult choices may have to be made, which require an atmosphere of trust and openness. Stakeholder involvement requires considerable commitment and may require professional management, but can help resolve conflicts that may arise later in project level decisions. It takes resources and time to foster this degree of effective and meaningful participation. Extra efforts may need to be directed to poor and marginalized stakeholders, who are to be primary beneficiaries in World Bank projects. Principle 3: Assess All Options Strategically and Comprehensively 1.28 The options assessment exercise needs to be planned in advance. This principle argues that all options should be put on the table and that all should be assessed equally. Options include those proposed by stakeholders; options for new development and for improved management; structural and non-structural options; demand- and supply-side options; options at different scales; and, depending on circumstances, options aimed at correcting problems from earlier developments. A level playing field for the assessment comes through a step-wise-and at times iterative-assessment procedure, wherein criteria for the assessment are agreed upon and options are screened and ranked, assessed individually and jointly, and selected for inclusion in a preferred development plan. Careful records should be kept of the rationale behind the recommendations in order to fully inform the authority making or confirming the decision. Principle 4: Reach a Decision 1.29 Decisions on water and energy development are government decisions, unless explicitly delegated. Providing recommendations within the government's decisionmaking timeframes is essential if the voices of stakeholders are to be heard. Efficient assessment processes require up-front clarity about the role of the stakeholders in the options assessment exercise and clarity about the procedures, timeframes, and resources. Ideally, there should be a formal and public response from the decisionmaking authority to the recommendations of the options assessment exercise. Agreements reached between stakeholders, as part of the decision, should be confirmed including methods for ensuring compliance with such agreements. It is crucial to address compliance of agreements and to monitor whether decisions, once implemented, lead to the desired outcomes. Better planning processes are important, but are not an end in themselves. Structure of the Sourcebook 1.30 The sourcebook consists of six chapters. The first chapter describes the changing international setting, which today demands that a diverse range of options be assessed and that the needs and views of all affected stakeholders are included. Chapter 2 consists of two essays that provide both a theoretical basis for and an empirical assessment of the benefits of stakeholder involvement and options assessment in the development of water and energy services. Chapters 3 to 6 elaborate the four principles Introduction 15 for stakeholder involvement and options assessment. These are expressed in practical terms, with examples drawn from recent World Bank practice as well as from examples that did not involve World Bank support. 1.31 Appendix 1 comprises 10 detailed case studies of strategic and project- level planning exercises that were selected to provide rich experiences from a wide range of country backgrounds. Two of these case studies describe projects where the immediacy of the needs of a community were identified during a strategic assessment and fast-tracked while a larger set of options were evaluated. Appendix 2 enumerates the diverse range of options that are available for providing energy and water. Appendix 3 provides a generic terms of reference (TOR) to incorporate stakeholder involvement and options assessment in a sector level planning exercise. It is intended to provide task managers with a starting point for such exercises, although these TOR will need to be tailored to the situation in the specific sector, country, or region of interest. Appendix 4 includes a bibliography and list of training resources on options assessment exercises and stakeholder engagement. I The Benefits of Stakeholder Involvement in Options Assessment Introduction 2.1 Stakeholder involvement and assessing a wide range of options are now generally accepted as part of the World Bank's approach to infrastructure rehabilitation and development. For example, a sample review of projects, including environmental assessments, shows that close to 90 percent of the projects included public consultations (World Bank, 2002). Yet many governments are cautious when it comes to promoting stakeholder involvement in public decisionmaking. Reasons for their caution include unwillingness to devolve authority; concerns about the time and resources required for stakeholder involvement; and concerns about the added value from involving stakeholders. 2.2 The motivation to involve stakeholders falls into two broad categories, which each split into two sub-categories. The first category includes the quality of the development outcomes that can be achieved, and the increased attractiveness of the project for funding. The second category deals with the legitimacy of the decisionmaking that contributes to good governance and acceptance of decisions. 2.3 Decisionmaking processes that involve stakeholders and consider social, environmental, technical, and financial criteria are likely to result in improved development outcomes. In addition, the inclusion of project-affected people helps address short- and long-term equity concerns. Strategic decisions based on a wide range of options often include policy, regulatory, and institutional measures that enable sustainable functioning of the investment options. 2.4 Another measure of the quality of planning outcomes is their attractiveness for funding. Due consideration of alternatives and constructive involvement of stakeholders often means that beneficiaries of a project are more willing to pay for the services they receive, private investors are more willing to step in, and international funding agencies will feel more reassured that the safeguards on their investment policies will be met. In the second essay in this chapter we argue that benefits such as early elimination of unacceptable projects, improved project portfolios, and in 17 18 Stakeholder Involvement in Options Assessment many cases improved access to external financing and lower overall costs usually outweigh the incremental time and cost of engaging stakeholders. 2.5 Legitimacy includes both good governance and acceptability of decisions. By incorporating the views of stakeholders into major planning decisions, governments are applying the global normative framework for governance as recorded in the UN Declarations on Human Rights and on Environment and Development. Moreover, they are seen to address the interests and concerns of all their constituencies and to act for the wider public interest. 2.6 The legitimacy of the process is also enhanced by the greater consensus that often arises from participatory decisionmaking. Even when the approach does not produce full consensus, it does demonstrate that the decisions are taken in good faith and that narrow interests have not dominated the agenda. This is termed procedural justice and is further explored in the first essay below. 2.7 The involvement of the World Bank in the development of water resources infrastructure, as proposed in the Water Resources Sector Strategy-discussed in chapter 1-can bring high rewards to developing countries, while at the same time entailing substantial risk. As shown in the World Commission on Dams' analysis, past dam projects have not sufficiently considered all risks during the planning stage, which often led to serious under-performance. Transparent and candid assessment of risks associated with major water resources interventions and the management of these risks has to be part of the decisionmaking. Investing up-front in stakeholder involvement and options assessment pays off in terms of reduced risks and uncertainties during project implementation. That is, it helps manage the risks. Essay 1: Planning, Social Justice Research, and Socially Acceptable Decisionmaking (Geoffrey J. Syme,1 CSIRO Land and Water, Australia) 2.8 Both development planners and social scientists are increasingly interested in the effects of public involvement on the acceptance of public decisions. Since the 1960s, there has been an increase in public involvement in planning in order to ensure that benefits from development are in the public interest. Social scientists, particularly social and community psychologists, have developed normative theories relating to social justice in decisionmaking. These include the theories of equity, procedural and distributive justice and, more recently, fairness theory. It has only been in the last five years or so that research on both planning practices and social justice research have started to merge in the natural resource development area. 'Australian Research Center for Water in Society, CSIRO Land and Water The Benefits of Stakeholder Involvement in Options Assessment 19 Why and How Do People Need To Be Involved with Planning for Water Resources Development? 2.9 The planning profession received a great boost to its development because of its contribution in World War II. Systematic and logical planning by professionals (whether engineers, scientists, architects, or economists) was considered the way forward. Logical forecasting of demands, which could be met by the best technical solutions, was thought to protect the public interest. By the 1960s, however, it became evident that in order to define the public interest the community2 needed to be consulted. In many countries, with the rise of conservation and consumer movements, growth forecasts were being questioned and communities that were to host certain developments began to protest in systematic ways. Particularly in developed countries, there was a rise in the phenomena of NIMBY (Not in My Back Yard) and LULU (Locally Unwanted Land Uses) protests in the community. At this point, planners and developers themselves were engaging in a form of protest by using the above labels to stigmatize communities as irrational and selfish. 2.10 Similar interactions also frequently occurred in developing countries. The philosophy of "planner knows best" often led to culturally insensitive planning with unintended outcomes. It was often assumed that higher formal levels of education could replace local environmental and cultural knowledge about impacts of large developments. Planner ignorance in these circumstances sometimes lead to unintended environmental injustices where the social costs-for example, those associated with inundation after dam construction-were borne by one sector of the community. 2.11 There is now growing recognition by some in the planning community that they have been imposing their own values. Sometimes they were acting as advocates of development in much the same way as those opposing it were supporting the status quo. Some academic literature recognized that social and environmental activists were not necessarily "selfish" people, but were using local knowledge. The "emotional response" to proposed developments was to be expected by those who perceived that they had no control over what was about to be imposed on them. The psychological literature for years had demonstrated that perceived lack of control was strongly correlated with stress, which expresses itself in anger and in turn motivates actions that are designed to regain influence over one's daily life. 2.12 There is now a comprehensive literature on public involvement in planning. The premise of this literature is simply that if the public interest is to be protected and community acceptance and consent is to be obtained, then planners have no alternative but to solicit community input. Table 2.1 shows the basic components of an adequate public consultation process. 2The term community is used here to cover a wide variety of stakeholder groups as well as the general public. 20 Stakeholder Involvement in Options Assessment Table 2.1: Components Required in an Adequate Public Involvement Program Components a The process of public involvement should be agreed between the agency and participants b Public involvement should start early in the decisionmaking process c The objectives of the public involvement process need to be clearly stated d People need to be aware of the level of influence being offered e Efforts should be made by the agency to identify all interested parties f Information should be freely available to all participants g Participants should know how their submissions or inputs will be processed h Where appropriate (e.g. for travel or large time commitments) costs for participants should be reimbursed Source: Syme et al. (1987) 2.13 Recent research has found that both the community and responsible public servants want processes that conform to the type of process described in Table 2.1. In addition, they can define the methods (e.g. public meetings, negotiation forums, public surveys, and so on) they would prefer for a particular process. So in terms of what to do and in what order, there is a clear prescription from the planning based literature. There are also demonstrated guidelines to evaluate whether this prescription has been adequately met. 2.14 Critics of public involvement have fears that if the community becomes involved they will demand to make the decision themselves and that chaos may rule. Early advocates of public involvement such as Arnstein (1969) suggested that the further one went along the ladder of influence from planner "manipulation" to community "control," the better the planning process. Many planning professionals assume that the community will agree with Arnstein and they fear, if that is the case, that questions may be raised about whether planners are necessary at all. 2.15 Recent Australian research has directly investigated this issue. People and senior public servants from government agencies were asked what degree of influence they felt the public should have in water resource allocation, wetland protection, and land management on the Moore River catchment north of Perth in Western Australia. In Figure 2.1, the X-axis is Arnstein's ladder of influence. The graph shows clearly that, while the current level of public involvement is seen by both groups to be less than the desired one, the preferred level of power is a partnership rather than community domination of decisionmaking. It is interesting also to note that the public servants also prefer such an arrangement. The Benefits of Stakeholder Involvement in Options Assessment 21 Figure 2.1: Community and Agency Perceptions of Current Community Roles and Preferred Community Influence in Water Allocation 50 45 40 35 mu rrent-Cor\unity /Crrent-Agency 30 -4- ;; ^ | i| / \ +Wanted by Both 25 20 / 15 10 5 0 - No Interaction Inforrning Consulting Involving Shared Corrnnnity ConrrTunity Planning Decisions Control Source: McCreddin, et al. (1994) Note: The desired level of community involvement is represented as a single line for both groups because there was virtually no difference between the views of the community and the agency staff. 2.16 The community in this study was also able to define what they meant by a partnership. In essence, this involved their setting the criteria for assessing options (facilitated by the planner), and the planner deciding on the best way to meet those criteria (with input from the community). The fear of some planners that the public wishes to replace them is therefore unfounded. The community is all too aware that they will not necessarily agree on all issues, that there will be conflicts to be dealt with, and that there is value in expert knowledge and an external view. Distributive Justice, Procedural Justice, and Fairness 2.17 Social justice research has emerged from social psychology and so has a large component of laboratory-based experiments and survey work. In general, it has concentrated on social services, interpersonal relationships, and workplace issues. Social justice research is an attempt by the psychology profession to understand the principles of sharing and allocation from the perspective of exchange between individuals and groups. Because public involvement in planning is preoccupied with forming partnerships in a decisionmaking process, this research has the potential to provide the theoretical underpinning for what that partnership really means. 22 Stakeholder Involvement in Options Assessment Box 2.1: An Example of Procedural Justice In an assessment of problems in irrigation systems in eastern Bhutan, a difference emerged between communities that had been engaged by the district irrigation office to define irrigation rules and those that were not. In both types of communities, hardly anyone was able to describe the list of rules. Nonetheless, the communities that had engaged in a formal process of defining rules experienced considerably less water theft and damage through negligence. This was explained, in the words of one respondent: "I do not remember what exactly are these rules, but I do remember we've had a meeting with all users and with the government irrigation department, where we made the rules and agreed to behave decently-and that's what I do." Having been involved, was sufficient motivation for changing one's behavior. Source: Royal Government of Bhutan, 1995 2.18 Early social justice theory focused on the investigation of perceptions of equity. These theories of distributive justice deal with how much of a limited resource differing groups in the community deserve. In about the mid-1970s however, social justice researchers realized that justice issues could be associated with the actual decisionmaking process itself. According to the hypothesis that was put forward, if procedures for making decisions were seen to be just, then the outcomes of the process were more likely to be accepted by the recipients. This concept became known as procedural justice (box 2.1). Later embellishments of this concept referred to the notion of interactional justice, which broadly referred to the quality of the interaction between the planner and the community. Steps in decisionmaking may have been procedurally just, in that they incorporated public input at appropriate stages. But because people were treated rudely or without consideration for their preferred modes of providing input, the decisions could be viewed as lacking interactional justice. 2.19 Tyler and Blader (2000) have incorporated interactional justice into procedural justice. The concept of procedural justice now combines both the quality of the decisionmaking process and quality of the treatment of the participant. According to these authors, procedural justice has a. formal and informal component. The structure or sequence of the decisionmaking process is regarded as the formal component. Issues arising from the quality of implementation (e.g. pleasant interactions with participants) are regarded as part of the informal component of procedural justice. 2.20 Research shows that major contributors to people's perceptions of procedural justice relate to process control (i.e. knowing that one can influence the outcome); trust in the organization that is conducting the planning; the feeling that there is neutrality in decisionmaking; and the recognition by the planning agency of the legitimate status of the participant. It is noteworthy that feelings of control over the decision outcome, in contrast to having voice in the process, do not influence perceptions of procedural justice. This is similar to the findings described above from Western The Benefits of Stakeholder Involvement in Options Assessment 23 Australia, which showed a preference for working in partnership over having full community control over the outcomes. 2.21 Studies have shown that perceptions of procedural justice and distributive justice are consistently related. It is this relationship, and the contention that both types of justice are important in deciding whether the overall outcome is just or not, that has been key to the development of the fairness theory. The concept of fairness embraces both process and outcome. Often planners criticize the concept of procedural justice (despite evidence to the contrary) because they feel if people don't get what they want they will oppose the outcomes regardless of the quality of the process. Fairness theory clearly shows and makes use of the fact that it is the process and the outcome-acting synergistically-that result in acceptable decisions. It is pointless to consider one without the other. 2.22 A fairness heuristic sums up all the justice issues into one overall measure. It is the story that someone will tell you in simple language about the justice of a decision. It summarizes whether the process and its outcome were adequate or "fair enough." 2.23 According to Peterson (1994), "once an impression of faimess has been produced it becomes extremely resistant to change ... because it provides a cognitively available summary judgment. People use their summary fairness judgment in lieu of a more complicated analysis of policy each time they are asked." In short, if a decision is regarded as being fair, long-term community support is likely to result. 2.24 Until the mid- to late-1990s, there was comparatively little attention to social justice in natural resources management. Public involvement in decisionmaking in natural resources management tended to follow the pragmatic planning literature and practice. Since then, most of the research that has been conducted on social justice in natural resources management has been carried out in the United States and Australia (Syme and Fenton, 1993; Lawrence, Daniels, and Stankey, 1997). 2.25 A study (Smith and McDonough, 2001) found that people thought that adequate representation, voice, personal consideration, logic, and aspects of desired outcome were all important elements of procedural justice. The first two of these reflect the formal elements of procedural justice identified above, and the third is a key informal element. The element of logic deals to a large extent with the significance of the role of experts. While the community wishes to state to the expert what their goals and aspirations are, they look to the experts for their technical understanding. While feelings, opinions, and desires are important, it is recognized that there is a need for decisions to have a basis in fact or evidence. For example, if there are concerns about a new dam causing a loss of an endangered species, the community will turn to the scientist for reasoned, dispassionate evidence. The following quote exemplifies this attitude. "I think if there is a rational reason for why it's being done, it's easier for me to understand and accept even if I don't agree." (Smith and McDonough, 2001). 24 Stakeholder Involvement in Options Assessment 2.26 In a longitudinal evaluation (Syme and Nancarrow, 2002) of a long-term public involvement program in wastewater planning conducted in southwestern Australia, both informal and formal aspects of procedural justice were measured. The study showed that, as people moved through the 18-month public involvement program, they found it easy to answer questions about procedural justice. Belief that the process was procedurally just correlated with an increased commitment to future involvement with the decisionmaking agency. Feelings of procedural justice also led to an increased confidence that the best decisions would be made. One of the important things about this example from the water sector is the demonstration that justice perceptions can be assessed with extremely simple questions: Did you have a chance to have your say? Did the agency listen to what you said? 2.27 Most fairness studies in natural resources have been of water allocation and watershed management decisionmaking in Australia. They have found that measures of perceived procedural and distributive justice could be carried out using typical attitudinal scales (Syme, Nancarrow and McCreddin, 1999). For example, people can respond on a five point agree/disagree scale to a statement as to whether decisionmakers were listening to what they were saying. In addition, using fairness heuristics and judgments, it is possible to derive a great depth of understanding about where tradeoffs can be made and what is required in terms of public input. Understanding how fairness is perceived in the community provides a solid basis for detailed decisionmaking that is regarded as fair and hence more easily accepted. Where Does the Social Justice Approach Fit in the Decisionmaking Process? 2.28 Despite the ongoing demonstration that the achievement of procedural justice results in greater acceptance of the decision, there persists a notion that communities oppose the advancement of a general good on the basis of their own narrow interest. It is assumed that the prime motivation for involvement in decisionmaking is self-interest, and that people interact with planners in order to get the best deal for themselves. This attitude-which is pervasive among both planners and the public-has been labeled the "culture of self-interest" by prominent community psychologists. If public involvement programs are badly planned, without procedural justice criteria in mind, this may become a self-fulfilling prophecy. 2.29 While self-interest is an important motivator, there is a body of research showing that there are clearly other motives at play. For example, a review of the game- theoretic experimental literature on allocation problems in the late 1980s shows that there are three primary motivations when people make allocation decisions. These are self- interest, efficiency (that is, is there evidence of waste?), and fairness. 2.30 There has also been information from fieldwork on why people are motivated to become involved in decisions. In the most relevant study for this sourcebook, an attitudinal model was developed to explain the motivation to participate in planning for regional groundwater resources (Syme, Nancarrow, and McCreddin, 1999). By far the major determinant was to "have a say" or, in procedural justice terms, The Benefits of Stakeholder Involvement in Options Assessment 25 to obtain voice. Personal interests or specific aspects of the planning issues were not significant motivators. 2.31 Other studies in different spheres are also revealing. For example, early studies of the motivation for participation in urban planning have shown that social standing can be important and that convenience (or process quality) can be an issue as well as self-interest. In the most recent research on motivation for community participation, four categories of motives were identified: (1) egoism (to increase one's own welfare); (2) altruism (to increase welfare of one or more other individuals); (3) collectivism (to increase the welfare of a group or collective); and (4) principalism (to uphold a moral principle). Thus, self-interest is but one of four motives. The other motives relate to social or ethical considerations. Any one individual is likely to use all four motives with varying degrees of emphasis, but it is clear that the motivation is driven by much more than just self-interest. This is reflected in the continual demonstration of the importance of procedural justice and fairness in the acceptance of a decision. Conclusions: Justice, Planning, and Decisionmaking 2.32 Professionally responsible planning now demands that social processes and distributive outcomes be considered when evaluating the effects of plans and policies. The research summarized here makes it clear that the fears planners have of losing control of planning are not justified and that the community seeks a partnership approach to planning for development in natural resources and other planning. The criteria for assessing partnership can also be clearly defined and are incorporated in the remainder of this sourcebook. These findings are supported by findings from the professional planning literature. 2.33 In addition to this partnership approach, it is important that plans be developed and justified on properly collected and interpreted evidence. While the community is prepared to set the guidelines for the outcome of a plan, they are happy that the expertise of planners is used to achieve properly justified outcomes. Essay 2: An Economic Perspectice on Stakeholder Involvement in Options Assessments (Per Lund, PM Global Infrastructure, Washington, D.C.) 2.34 This essay looks at stakeholder involvement in the planning, development, and management of dams from three different perspectives: (1) as a vehicle for overcoming the inherent shortcomings of traditional cost-benefit analysis; (2) as a bargaining process for project rent; and (3) as a risk minimization tool for the three key decisionmakers-the government, the project developer and equity investor(s), and the lender(s).3 The government defines the legal and regulatory framework for water resource development and approves-directly or indirectly-projects. The public or private sector developer decides on the design parameters and drives the project development process. The lenders can, by withholding funding, in effect exercise veto power over a project. 3 In public sector projects, the government can play all three roles. 26 Stakeholder Involvement in Options Assessment The Limitations of Cost-Beneflt Analysis 2.35 Cost-benefit analysis has been the traditional way of evaluating and comparing water and energy options. Unfortunately, cost-benefit analysis, as commonly applied, is poor at handling externalities and distributional impacts. While economists have developed tools, like contingent evaluation techniques4 or income distribution 5 weights, to put a monetary value on some of these impacts, others are by their very nature are not quantifiable. Ultimately, the decisions related to the construction of dams are political, and must take into account the tradeoffs among different water use interests. Broad-based stakeholder participation in options assessments is a way of informing and enlightening the political decision-makers about the interests of all stakeholders and the degree of their consensus. To some extent, the bargaining and consensus building among stakeholders will reflect a multi-dimensional social welfare function. Thus, any agreement or decision that emerges from a stakeholder-driven process can be regarded as "optimal" from a welfare economic point of view, although a traditional cost-benefit analysis might indicate otherwise. Economic (Project) Rent 2.36 Project rent is the excess return (earnings or profits) that intrinsic factors generate when a dam site is developed. The amount of rent available from developing a particular dam project, for example, is a reflection of the unique characteristics of a given site, such as its location, geology, topography, and the relative costs of the alternatives. In the case of a proposed hydropower project, rent would result if the cost of generating power at that site were lower than could be achieved from the second best alternative or mix of alternatives (e.g. thermal generation, electricity imports, or demand-side management options).6 7 2.37 The point is that these returns are not the result of an investment by any of the parties to developing the hydropower site. The regulatory and contractual arrangements determine how the rent is shared among the government, the owners, power or water consumers, and other stakeholders.8 In public sector hydropower projects, the bulk of the rent typically accrues to electricity consumers, in the form of lower tariffs. The negotiations among different stakeholders (in any meaningful participation process) can be regarded as not only a means of assessing the rent and ensuring that each party receives a fair compensation for any potential loss, but also as bargaining for an appropriate share of the project rent. 4See for example Mitchell et al (1989). 5 See for example Squire and van der Tak (1975). 6 For a more extensive discussion of project rent in the context of hydropower projects, see Trembath (2001). 7The cost of resettlement and rehabilitation programs and mitigation measures to offset the direct environmental impacts would be deducted before any rent would accrue. 8 In the case of the Bujagali hydropower project (Uganda), the project agreements are structured in such a way that most of the rent will accrue to power consumers and project-affected people. The project developer will receive little, if any, of the rent. The Benefits of Stakeholder Involvement in Options Assessment 27 Project Risks 2.38 Identification and mitigation of risks are at the core of project financing.9 These risks are allocated and mitigated through elaborate legal arrangements and agreements among the parties. The treatment of economic or financial risks in public sector projects is usually more straightforward, in part because the multiple roles that governments play in such projects help to internalize many of the risks and make the allocation and mitigation of risks simpler. 2.39 Every project is different. Something that is a major risk in one project might be negligible in another. The risks are also very different for different participants in a project. What might look like a major risk to the project sponsor/developer might not concern the government or the lenders. The financiers of a project would be concerned about the risks illustrated in box 2.2. The nature of the risks also changes over time as the project moves from early planning stage through construction and commercial operation to eventual decommissioning. Typically, the risks are classified depending on the stage of the project. Box 2.2: Project Risks for a Hydropower Dam as Perceived by the Financing Parties Development risks. The process from project concept to financial closure can be long and cumbersome. The detailed feasibility study might demonstrate that the project isn't viable or lenders might consider macroeconomic conditions too risky for long-term loans. However, slow approval processes and drawn-out negotiations of the key contracts are the most common obstacles that impact the viability of the project-assuming that the basic policy and regulatory framework doesn't change during the development phase. In India, for example, after more than five years of negotiations, only two of eight "fast track" thermal power projects reached financial closure. The development risk for infrastructure projects is generally high, especially so for dam projects. At this stage, the project sponsors and equity holders assume the financial risks. Construction risks. These are almost universally mitigated through a fixed-price and date- certain design and construction contract. Thus, the turnkey contractor bears most of the risks (including geological risks). Experience has shown that dam projects are more 9 The preferred way of financing private infrastructure schemes in the developing world is "project" or "limited recourse" finance. This means that each project is set up as a separate company and that the repayment of the financing relies on the cash flow and the assets of the project itself rather than on the strength of the sponsor's balance sheet. The risks (and returns) are borne not by the sponsor alone but by the different participants in the projects. Non-recourse financing implies that the lenders to and investors in the project do not have any direct recourse to the sponsors, for example through loan guarantees. Although creditors' security include the assets being financed, these assets tend to be illiquid and of limited value as collateral. Thus, the lenders rely on the operating cash flow generated by the project. Sometimes, lenders have limited recourse to the sponsors. Such recourse often involves some form of pre-completion guarantee by the sponsors and commitments to provide some additional financing for the project in case something goes wrong during construction and the early years of operation. 28 Stakeholder Involvement in Options Assessment susceptible to delays and cost overruns than other types of infrastructure projects-and these risks are reflected in the construction contract price. There are residual risks that affect the sponsors and lenders such as those due to foreign exchange and interest rate movements and a variety of political force majeure risks. Operating risks. The proper operation of the plant is ensured through warranties by the equipment supplier/turnkey contractor and through an O&M contract with an experienced operator. Most critical, however, is the off-take risk that in the case of power plants typically is mitigated through a long-term contract with a state-owned utility (typically with the government guaranteeing the performance of the utility). The risks associated with economic factors outside the project company's control are typically passed on to the state-owned utility (and the final consumers) through indexation of the tariff for general inflation and devaluation. Other risks are those that affect the benefit/revenue stream; for example, siltation of water storages and changes in hydraulic flows may be due to a number of factors relating to upstream water use and diversions, climate change, or changes in the watershed affecting runoff. 2.40 Lenders and project developers typically make a distinction between commercial and political risks. The former cover risks that are a natural part of doing business, such as construction of the plant and its efficient operation, market prospects, and interest rate fluctuations. In the project finance context, political risks typically cover all factors that are directly controlled by the government or strongly influenced by the actions of the government. Political risks include the availability and convertibility of foreign exchange, changes in law, timely approvals and issuance of permits and licenses, and the contractual performance of government-owned entities. The borderline between commercial and political risk is often fuzzy and varies from case to case. 2.41 While the above risks primarily concern the direct financial or economic loss resulting from a specific project, many actors involved in dam projects are increasingly concerned about reputational risk that will affect their ability to do business in the future. For governments, reputation risk might involve bad publicity that makes the ruling party lose the next election. A commercial bank might be concerned about maintaining an image based on trust that might be essential for its ability to mobilizing savings and, thus, stay in business. A project development company might want to avoid controversy that could affect the price of its shares. Stakeholder Involvement in Public Sector Projects 2.42 Governments and public agencies that are reluctant to fully involve all stakeholders in decision processes very often are concerned about the cost of events outside their direct control, such as the possibility that some stakeholders might claim an unreasonable share of the project rent (for example "too high" compensation for land acquired for the project). However, the costs arising from including stakeholders in the assessment of options have only a minor effect on the rate of return of a project, while the The Benefits of Stakeholder Involvement in Options Assessment 29 increased risks resulting from a failure to include stakeholders can have a significant effect on financing costs. 2.43 A simple example helps to explain this. The basic assumptions for a single purpose hydropower project are summarized in table 2.2 below. The cost of resettlement and rehabilitation programs, and mitigation measures to offset environmental impacts, are assumed to be included in the investment costs. Although externalities may be important, they are not considered in this simple calculation of the economic rate of return. With the assumptions shown, the economic rate of return for the project is estimated at 13.18 percent. Table 2.2: Assumptions Plant size 300 MW Investment cost 1,500 US$/kW Resettlement costs Included in construction costs Environmental mitigation Included in construction costs Externalities Not considered Plant load factor 55% Value of power produced 5.5 US cents/kWh Preparation period 2 Years Construction period 5 Years Economic life 30 Years 2.44 The time and cost associated with stakeholder participation in options assessments will vary depending on the circumstances. So far, relatively little data exist from which to draw generalized conclusions. However, a strategic options assessment, built around an extensive screening and ranking (S&R) process with strong stakeholder involvement, was undertaken for the Medium Hydropower Study Project in Nepal (Case Study 2 in Appendix 1). The S&R exercise started with an inventory of 138 potential hydropower projects and resulted in the selection of seven sites for full feasibility and EIA study. The S&R process took 14 months to complete, versus the anticipated 3 months, at a cost of US$1.2 million. Thus, for our example, a conservative assumption is made that the strategic options assessment with full stakeholder participation would be undertaken in about 2 years at a cost of around US$2 million, and that the full cost is allocated to the project. 2.45 Even less data are available on the cost of stakeholder involvement in the assessment of within-project options and in the implementation of resettlement and environmental mitigation measures. In general, however, the incremental costs of stakeholder participation are likely to be relatively modest. For the example, it is assumed 30 Stakeholder Involvement in Options Assessment that stakeholder involvement throughout the planning, construction, and resettlement process will delay the start of construction by two years (due to the strategic options assessment preceding the feasibility/preparation phase) and create an additional "investment" cost of US$9 million.l' Under these assumptions, the economic rate of return in the example declines from 13.18 percent to 12.89 percent. Such a minor reduction in the ERR could easily be made up through improvements in project design or smoother implementation. 2.46 On the other hand, there would have been the same impact on the ERR as the cost of the options assessment and stakeholder involvement if disputes with project- affected people had slowed construction and delayed the filling of the reservoir by four months (from 60 months to 64 months). This slippage is quite small compared to the delays frequently experienced in dam projects." 2.47 These results reflect the fact that delays in the start of construction activities tend to have a much smaller impact on the economic viability of a project than delays that occur after the bulk of investments have been made.'2 2.48 Recent history is replete with examples of projects that have experienced serious and extremely costly delays due to a failure to involve stakeholders in the project preparation and implementation process. * A popular movement against the Sardar Saravor Dam (part of the Narmada Basin development) in India led to fatalities and a court order that halted construction of the dam for five years. The interest on the half-finished dam and other project works, and lost power generation and irrigation benefits appear to exceed US$200 million per year or more than US$1 billion in aggregate. * Filling of the large reservoir of the Yacyreta Hydropower Project'3 on the Parana River between Argentina and Paraguay started in 1994; the reservoir level was supposed to be raised in stages to reach 83 meters in 1998. However, amid controversy over environmental and resettlement issues, the filling of the reservoir was limited in 1995 to a maximum water level of 76 meters. Because of the lower head, the turbine generators are operating at 10 Preparation and design of a hydropower project typically ranges between 5 percent and 10 percent of the total project cost. The assumption ($9 million) regarding the incremental cost of a full options assessment and stakeholder participation through the preparation and implementation stages would amount to 2 percent of the assumed project cost in the illustrative case. 11 A World Bank review (Bacon, et al., 1996) of hydropower projects in its portfolio found that they experienced an average completion delay of 28 percent. 12 In the Nepal case quoted above, the screening and ranking were undertaken up-stream in the planning processes, so stakeholder involvement did not delay the benefits. 3The World Bank and Inter-American Development Bank have in aggregate provided more than US$1.7 billion in support for the project. The Benefits of Stakeholder Involvement in Options Assessment 31 only two-thirds of their capacity. The annual loss in power benefits exceeds US$200 million. 2.49 Thus, apart from a concern for fair and equitable treatment of project- affected people and a desire to properly mitigate environmental impacts, stakeholder involvement at all levels is a relatively low-cost way of minimizing the risk of completion delays. 2.50 Governments are often apprehensive that stakeholders would use their bargaining power to claim an unreasonable share of the project rent. On the whole, it appears that this generally has not been the case. Stakeholder participation during preparation of the 200 MW Bujagali Hydropower Project in Uganda was extensive (Case Study 5 in Appendix 1). The project will displace 101 households (714 individuals) and affect, to some degree, another 2,300 families. The project company will provide US$1.8 million for a Social Responsibility Program during the construction phase and US$250,000 per year for another 30 years as part of the Community Development Action Plan. Going beyond what is required under Ugandan law, the project company will pay some US$18 million in compensation-in cash and kind-to the affected people. Compared to the estimated project cost of US$500 million, these costs related to "project- affected community stakeholders" are modest, and do not have any significant impact on the economic viability of the project. 2.51 The 1,450 MW Ghazi-Barotha Hydropower Project14 in Pakistan had stakeholder participation in the project level options assessment. Because of concerns expressed during the consultation process, major elements of the project were redesigned to minimize archeological, resettlement, and environmental impacts. The additional construction cost resulting from these design changes, which were important in gaining wide acceptance of the project, exceeded US$100 million, or about 5 percent of the overall cost. 2.52 WAPDA, the implementing agency, was however less satisfied with stakeholder involvement in the land acquisition process.15 At the urging of the World Bank, NGOs and a specially appointed panel of social and environmental experts, the government had modified the land acquisition procedures to leave the determination of fair compensation to committees comprising local villagers, government officials, and a nongovernmental organization. Agreed land prices were also published as settlements were reached for each village. Thus, there was a steady creep upwards in the price level. Soon the prices far exceeded WAPDA's budget allocation and the land acquisition process slowed down, with serious impact on the construction of the main canal feeding 14 Ghazi-Barotha is a "run-of-the-river" project relying on regulated releases from the Tarbela Dam. It consists of a barrage on the Indus River some 7 km below Tarbela, a 52 kilometer canal, and a power house where the water is returned to the Indus. 15 Almost 60 percent of the land acquired for the project was used for construction of the canal. Because of the configuration of the project, less than 1,000 people needed to be relocated, but more than 20,000 people lost part of their land. 32 Stakeholder Involvement in Options Assessment the powerhouse. In retrospect, analysis shows that the cost of delaying the project appears to have been significantly higher than the escalation in land acquisition costs.16 Stakeholder Involvement in Private Sector Projects 2.53 Private developers of dam projects and the equity investors in such projects operate under a different set of incentives than governments and publicly owned enterprises. The incentives for private developers largely depend on how risks as well as financial benefits and costs are allocated through the regulatory regime and/or the contractual arrangements. Typically, all expenses and risks during the development stage are borne by the project sponsors. While the risks associated with private infrastructure projects are always highest at the early development stage, this is especially the case with dam projects. Figure 2.2: Percentage of Hydropower and Thermal Generation Private Sector Projects at Different Stages of Implementation 100% - hermal ower Plants 70%z 40% 30% 7 20%- Z' F ~Hydropower Pat 10%_ 0% . Pre-approval In tender/finance Signed 2.54 Figure 2.2, which is based on data prepared for the World Commission on Dams,17 clearly demonstrates how difficult it is to bring dam projects to fruition. At an early stage of preparation, hydropower projects account for some 65 percent of all private power projects (i.e., before any approval has been received from the government). At an advanced stage, hydropower makes up less than one-quarter of the projects (i.e. the government has invited tenders and/or the private sponsors are seeking finance). Hydro 16 The original estimate of land acquisition costs was about US$35 million; the actual cost appears to have roughly doubled. At the same time, the value of the lost power output (calculated conservatively in terms fuel savings for thermal generating plants) appears to have exceeded US$150 million. 17 Background data collected by Manrique Rojas for Thematic Review III.2 on Trends in the Financing of Water and Energy Resources Projects. The Benefits of Stakeholder Involvement in Options Assessment 33 represents only about 7 percent of all private power projects that have reached financial closure (i.e. all relevant agreements have been signed). 2.55 The main concern of project developers is to minimize the risks at the early stages. At the same time, developers will seek to keep costs low (preferably by having the government shoulder as much of the development expenses as possible). Thus, they will encourage the host government to undertake the type of sector options assessment that was done in Nepal. Indeed, government-managed sector options assessments have several benefits to all stakeholders: they introduce transparency in the project selection process, build consensus, and generally smooth subsequent project development. 2.56 Within-project options assessments and stakeholder involvement in project implementation provide a complex set of incentives to project developers. Since the bulk supply tariffs for hydropower projects (and other private dam projects) generally are set on a "cost-plus" basis, 8 the developers will generally recover the direct cost associated with stakeholder participation through additional sales revenues during project operation. 2.57 Similarly, the project agreements generally would give the bulk of the project rent to the government, not to the project company. Thus, if stakeholder involvement leads to increased payments to those who will be resettled, or additional environmental mitigation measures, the cost will usually be borne by the government, the state-owned utility that buys the power, and ultimately the electricity consumers (in the form of higher consumer tariffs). However, the project must start to operate and generate revenues for the developer to be compensated for these costs. That is, it is in the interest of the private developer to minimize risks from stakeholder dissatisfaction and to get the project operational as soon as possible. 2.58 As the example above demonstrated, the impact on the economic or financial viability from delays in the very early stages of a dam project is rather small. Delays when a major part of the capital expenditures have been made, on the other hand, are much more severe. Thus, a private developer has strong incentives to get stakeholder "buy-in" at an early stage in the project development phase-before too much money has been spent on engineering investigations and other project development activities, and certainly before construction starts. 2.59 A private developer would be strongly motivated to avoid stakeholder conflict leading to a halt of construction, as was the case in the Sardar Sarovar project. Given the way private infrastructure projects are financed, such an occurrence might bankrupt the developer and lead to major losses for any lenders. 18 The cost basis would typically include an agreed (i.e. negotiated) return on equity. 34 Stakeholder Involvement in Options Assessment Stakeholder Involvement from a Lender's Perspective 2.60 Lenders to public sector projects typically benefit from a sovereign guarantee. Provided that the concerned government is creditworthy, the lenders face little financial risk in case of stakeholder-related problems. It is becoming clear, however, that not only official development agencies but also export credit agencies and private commercial lenders are increasingly concerned about the social and environmental impacts of controversial dam projects and the consequent reputational risk. 2.61 In theory, commercial banks price their risks through the interest rate they charge for loans to private infrastructure projects. Since such projects typically are financed on a non-recourse basis, the banks have to rely on the cash flow from the project as their only assurance on repayment. Consequently, anything that delays and/or diminishes the revenues generated by a project represents a serious threat to the banks. Indeed, any project that is stopped before it generates revenues will lead to a complete loss for the lenders. Thus, in practice, commercial banks go through an elaborate exercise of risk minimization. 2.62 Commercial risks are, as far as possible, mitigated through elaborate contractual arrangements. Political risks, especially in countries with a credit rating below investment grade,19 are mitigated through partial risk guarantees from one of the multilateral development banks or insurance from export credit agencies. However, these measures do not provide full protection. Given the difficulty that banks have in assessing and mitigating risks associated with the social and economic impacts of dam projects, they typically insist that project developers handle these aspects in accordance with internationally accepted standards. While they might not insist on stakeholder involvement in options assessments and project implementation, they would clearly be in favor since such involvement would reduce project risks-both financial and reputational-at no cost to them. 2.63 Export credit agencies typically look to the World Bank's safeguard policies as the model of what they require from project developers. In the case of the Ilisu Hydroelectric Project in Turkey, the export credit agencies of Austria, Germany, Italy, Portugal, Sweden, Switzerland, the United Kingdom, and the United States imposed four conditions for support of the project: (1) a resettlement program that reflects internationally accepted practice and includes independent monitoring; (2) provision for upstream wastewater treatment plants capable of ensuring that water quality is maintained; (3) assurances that adequate downstream flows will be maintained at all times; and (4) a detailed plan for preservation of the archeological heritage of the area. Their main motivation for imposing these conditions is to improve development outcomes and avoid controversy (i.e. to minimize reputational risk). 19 The lowest "investment grade" rating is BBB- from Standard & Poor's or equivalent from other firms. The Benefits of Stakeholder Involvement in Options Assessment 35 Conclusion 2.64 There is overwhelming evidence that dam projects that are planned and implemented without stakeholder involvement face a much greater risk of disruption and ongoing controversy, which makes it even more difficult for the next project. The potential cost of such disruptions-in terms of delays, cost escalation, and reduced benefits-typically far outweighs the cost of involving the stakeholders. 2.65 Stakeholder participation is a key instrument for identifying and managing risks and uncertainty. Indeed, this is one area where social, economic, and commercial considerations converge. It is in the interest of all concerned parties (governments, developers, lenders, project affected communities, and intended beneficiaries) that issues are resolved early in the project development process. This implies that stakeholders should be involved as far upstream in the decision process as possible and that such assessments should be undertaken by governments well ahead of any specific project interventions. Similarly, when specific projects are funded, stakeholders should be involved in "within-project" options assessments (dealing with basic design issues, social and environmental management plans, etc.) to minimize delays and ensure that the returns from the investment are realized as soon as possible. i i i i i i I Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 3.1 Getting stakeholders involved in decisions about water and energy development projects requires an environment that both legitimizes and promotes their involvement. A recent World Bank review (World Bank, 2002) of environmental assessments concluded that public consultations were weak when the enabling environment was not supportive of consultations. World Bank loan and credit packages, which help governments reform legislation, build the capacity of public institutions, and strengthen community-level organizations contribute toward a more supportive environment for stakeholder involvement in assessing options for water and energy development. 3.2 Legislation that requires the involvement of stakeholders can be a powerful way of legitimizing their role in the eyes of decision makers. They gain "rights" of involvement (see Chapter 4). The Government of Bangladesh has preceded investments for the improvement of water management with the production of guidelines for public participation in water resources management. In South Africa, the Water Services Act (108-1997) and National Water Act (1998) require participatory planning and public consultation as input to all major water management decisions at local, provincial, and national levels. 3.3 Establishing legislation, strengthening public agencies, and forming strong community interest groups takes considerable time. Decisionmakers have to balance the delays inherent in setting up such an environment against the hardship that would occur if addressing water and energy needs were delayed. In such cases of immediate needs, they may decide to proceed with the planning of energy and water sector investments or the development of specific dams without this environment being in place. After all, legislation is not essential for ensuring effective stakeholder involvement, if there is political backing for open and widespread assessment of options. For example, in the Canadian province of British Columbia, the preparation of legally mandated Water Use Plans for all dams and power facilities (Case Study 7) included a participatory process that was jointly developed by BC Hydro, government, and nongovernment stakeholders. 37 38 Stakeholder Involvement in Options Assessment The Policy and Regulatory Framework 3.4 In the water and energy sectors, governments can formalize roles and responsibilities in public decisionmaking through either policies or rules and legislation. Not only does this make the process of decisionmaking more efficient, it also legitimizes the involvement of affected parties. This dimension of the enabling environment can also describe the sector's ground rules for addressing economic, technical, and safety concerns and the rules for relationships with other sectors, such as the environment. 3.5 Funding sources, whether from the private sector, bilateral agencies, or multilateral agencies, will have their own rules for investment that will need to be satisfied before they can commit funds for a project. In the case of the World Bank, the environrmental and social requirements are encapsulated in 10 safeguard policies. For example, resettlement of people displaced by Bank-funded projects is governed by Operational Policy/Bank Procedure 4.12 on Involuntary Resettlement. 3.6 Although stakeholder involvement in aspects of project preparation-such as environmental assessment-is articulated in a number of safeguard policies, their involvement in the assessment of options before a borrowing country makes a decision is not an explicit policy requirement of the Bank. Nevertheless, stakeholder involvement in the assessment of both strategic options and within-project options is regarded as good practice and is encouraged by the Bank. As shown in Chapter 2, their involvement can lead to greater acceptance of the decision and to lower risk and more ready engagement by lending institutions. 3.7 During the 1990s, many countries introduced new enabling legislation and regulatory provisions for water and energy development. These laws and regulations provided opportunities to incorporate provisions related to stakeholder involvement and options assessment. While the form and content of legislation and accompanying regulations depend on the situation in each country, some elements of good practice include the following: * Descriptions of the authorities for decisionmaking for strategic level planning and project level decisions, so that responsibilities are clear. * Procedures for cross-sectoral coordination, including reconciling responsibilities under different legislation. * Legislation or regulations requiring that a diverse set of options for water and energy provision are examined as early in the planning process as possible. * Disclosure policies on information used in public decisionmaking. * Procedures for Environmental and Social Impact Assessments at both strategic and project level decision making. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 39 * Clear descriptions of the rights of project-affected people and the mechanisms for compensating for lost rights (including resettlement if homes and livelihoods are to be destroyed). These rights should include recognition of customary law practices. * A general right to form organizations that represent stakeholder interests. These organizations are especially important when local authorities do not represent specific stakeholders-for example, indigenous groups and minorities-who may need to express their views independently of local authorities. * Procedures for submission and processing of objections, including reasonable time frames for doing so. Clear arbitration procedures for objections and complaints. 3.8 Box 3.1 gives the International Energy Agency's recommendations on the inclusion of options for power generation in national policies and regulations. Box 3.1: IEA Recommendations The International Energy Agency (IEA) has produced generic recommendations on how governments might incorporate the assessment of options in national power sector policies and regulatory frameworks. Nations should develop energy policies that clearly set out objectives regarding the development of power generation options, including hydropower. For example, (a) national energy policies should compare electricity generation options fairly, by "internalizing" or fully accounting for environmental and social costs; (b) comparison of power generation options should be based on a life-cycle analysis, by assessing impacts based on the services provided by each technology; and (c) the social, environmental, and economic tradeoffs required to establish a national energy policy should be supported by public debates and the result of a consensual approach. The IEA Working Group's mandate was hydropower and the environment. It went on to recommend that countries should consider strategic environmental assessments (SEAs) as a planning tool at the national energy policy level. At the national or regional policymaking stage, such assessments help integrate environmental and public concerns into energy policymaking and reconcile development, environmental protection, and community rights. One important objective of a strategic environmental assessment for energy policy would be to reduce uncertainties regarding the potential development of hydropower resources, for example by defining river reaches where hydropower would be environmentally or socially unacceptable. Source: IEA 2000. Hydropower and the Environment (Annex III Working Group) 40 Stakeholder Involvement in Options Assessment 3.9 Box 3.2 illustrates how South Africa and Brazil introduced new legislation to both facilitate participatory planning and consider a wide range of options early in the planning process. In Brazil, new legislation introduced in the early 1990s to create basin management organizations and water user groups has facilitated participation in key decisions. The new regulatory framework for water service provision in South Africa changed the way the city of Cape Town met urgent demands for water supply in the context of drought and water security (Berg River, Case Study 9). A set of demand management and water recycling options were pursued in parallel to the development of the Skuifraam dam to increase water storage capacity for the city and its surrounding municipalities. Case Study 9 suggests that, without the Water Services Act (1997) and its various provisions for participatory planning and early assessment of options, it might have been more difficult to develop such a balanced portfolio of options. Box 3.2: Enabling Policies for Stakeholder Involvement South Africa introduced a new National Water Services Act (1997) and National Water Resources Act (1998) that set out the principles for participatory planning and public consultations on water resource management and water services provision activities. The Water Services Act (1997) specifically required all municipalities to prepare a Water Services Development Plan (WSDP) using collaborative processes. Each WSDP sets out the way in which the water services authority plans to deliver services in its area of jurisdiction. It must describe and analyze the current and future demands; the type of services to be provided to each customer category; the infrastructure requirements; a water balance; organizational and financial arrangements; and an overview of environmental issues. The act requires each Water Authority to take its WSPD plan through a public participation process where the public, other stakeholders, and water services authorities/providers can comment. Each plan provides a process in which stakeholders interact on overall priorities for new supply and demand management initiatives, key aspects of how the facilities are operated, and the quality of the water services delivered. In the 1990s, all states in Brazil introduced fundamental policy, regulatory, and institutional reforms in water management. These involved the creation of Water Management Regions (Regioes Administrativas da Agua) corresponding to major watersheds. This was accompanied by regulations forming new state-level institutions and river basin organizations responsible for integrated water management in the basin, and local water user organizations concerned with allocation and efficient use. Major challenges in implementing this legislation included the legacy of hierarchical decisionmaking structures and a lack of real public participation; difficulties in integrated management of international river basins; and weaknesses in Brazilian water management institutions. The legislation produced a framework for stakeholders to become involved in decisionmaking processes. The Ceara Integrated Water Management Project (Case 3) provides an example of World Bank support to state governments in implementing policy and institutional reforms and supporting capacity building to involve stakeholders in water management decision processes. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 41 3.10 Many governments have adopted procedures for stakeholder involvement and public consultation in their environmental legislation, such as the obligation to publish plans and to allow sufficient time for public queries and objections. New legislation sometimes promotes new institutions. For example, the Kenyan Water Act, passed in late 2002, states that a Water Resources Management Authority should be formed with the responsibility for managing the country's water resources. The existing Ministry will be responsible for policy development and will not have operational responsibilities. It also requires that river basin advisory committees be set up to provide input from a diverse set of stakeholders in decisions on water resources management. It even specifies the types of organizations to be represented on these committtees. 3.11 Policy statements, which are not further elaborated in regulations or legislation, allow for a greater extent of flexibility than policies backed up by legislation. However, the successful implementation of such a policy largely depends on the commitment of the concerned actors and stakeholders to the objectives of the policy. Even if not supported by legislation, policies should be backed up with specific information on how they will be applied in practice. Box 3.3 shows how Brazil's Environment Master Plan (EMP) defined the way in which environment and social regulations would be used for the selection of new power generation options and the development and management of the power infrastructure. Box: 3.3: Brazil's Power Sector Environmental Master Plan (EMP) In 1990, Brazil updated its environmental and social policies for power sector development. Basic principles and guidelines for the planning, implementation, and operation of new and existing power projects were set out in the Environment Master Plan (EMP), jointly produced by the federal Water and Electricity Department (DNAEE) and the federal power company Electrobras. The EMP was consistent with the new National Environmental Policy as well as major changes in the structure of federal agencies and national processes to deal with environment issues and indigenous peoples rights. The first volume of the EMP set out principles and guidelines for population resettlement and environmental assessment for power (hydro and thermal) generation technologies. It reviewed the social and environmental impacts of past projects. Looking ahead to the 1991-2000 period, it forecast 26,000 megawatts of new capacity with the development of 47 new hydropower plants. This was projected to involve relocation of 136,000 people and flooding 13,000 kM2, mostly in the Southeast, Midwest, and South. Procedures were set out for the environmental licensing of projects and the engagement of stakeholders in the planning process. The second volume of the EMP contained more specific principles, guidelines, and criteria for implementing the 10-year generation expansion plan. Source: Electrobras. 1990. The Brazilian Power Sector's Environmental Master Plan (Summary) 42 Stakeholder Involvement in Options Assessment Planning Systems 3.12 Many countries have conducted master planning exercises for their water and power sectors. The framework within which this planning occurs depends on the economic, cultural, and historical aspects of each country. Although there is no single, correct way to undertake these planning studies, there are four principles that lead to more informed decisionmaking, which is based in the assessment of diverse options and the involvement of stakeholders. They are: * Use structured processes * Orient processes to meet broad needs and objectives * Locate options assessments "upstream" in strategic processes * Use iterative and integrated processes. Use Structured Processes 3.13 Structured processes provide clarity on who is the ultimate decisionmaker, on what steps must be taken to reach a decision, on how and when options are assessed, on how and when stakeholder involvement is sought, and on the times required for consultation. 3.14 The broad steps in a structured decisionmaking process include preparing the process; undertaking the consultations and public information activities; formulating the recommendations; and submitting the recommendations to the decisionmaking authority. A design for the process is needed before the stakeholder involvement exercise can commence. The design of the decision making process would normally include both requirements laid down in national policy and legislative frameworks as well as local customs and traditions. 3.15 Case Study 9 (Berg River Project, South Africa) provides an example of a structured process, where legislation required the production of municipal water service development plans through a participatory planning process. Case Study 7 (BC Hydro, Canada) provides an example of a formal process involving 13 steps for developing water use plans for hydropower facilities. This process was developed by the power utility in collaboration with stakeholders, including indigenous people and government agencies. The last four steps were based on legal requirements; the first steps were included to ensure that inputs to the ultimate steps in decisionmaking were sound and acceptable. Box 3.4 illustrates how Norway employs a structured, dual planning system for the development and management of dams and the protection of watercourses. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 43 Box 3.4: Norway's Dual System of a Protection Plan and Master Plan The large number of hydropower projects being sent to the Norwegian Parliament for approval in the postwar period led to political concerns about case-by-case approval without an overall vision of where these decisions were leading, or a structured process to ensure that all interests were being considered. A dual track strategic planning system emerged and was incorporated in national legislation. The legislation called for a Protection Plan to designate which rivers in the country were to be protection against interventions, and a Master Plan for Hydropower Development to identify specific sites eligible for hydropower development on the remaining rivers. The first Protection Plan was passed by Parliament in 1973, giving permanent protection to potential hydropower sites on 95 river reaches and protection for the next 10 years (temporary protection) to sites on other selected rivers. The aim was to reserve especially valuable watercourses, rivers, lakes, and waterfalls for outdoor recreation, and ecosystem functions and long-term nature development interests. Preparation of the Protection Plan involved extensive consultation with national and local stakeholders. The Plan was updated at intervals, with each update cycle taking a few years of consultation, study, and debate before being proposed to Parliament. The last revision was in 1993. All told, 341 river systems are presently protected. For the remaining rivers, a Master Plan exercise was started in the 1980s. This involved preparing a priority list of all the hydropower projects, assigning them to one of two categories: (1) those already approved for licensing (MP-Category 1); and (2) those which the authorities will deal with at a later date (MP-Category 2). Sites were categorized according to their economic and technical merits, as well as environmental-social merits using multi-criteria techniques. Public power utilities were then permitted to apply for licenses to develop Category 2 sites. Both plans are updated in a series of steps with full involvement of national, regional, and local levels of government and civil society NGOs. Before the proposed Plan is submitted for Parliamentary debate and approval, it is subject to extensive public consultation at each stage. Individual projects in the Master Plan are subject to approval by Parliament after full regulatory review. The licensing process has become a cornerstone in the decisionmaking process. There is considerable emphasis on institutional capacity building, knowledge development, public awareness and participation, and efforts to streamline the hydropower licensing process. Source: The Norwegian Institute for Nature Research, The Eastern Norway Research Institute, and the Glommens and Laagens Brukseierforening. 2000. Case Study of the Glomma-Laagen Basin in Norway. Orient Processes to Meet Broad Needs and Objectives 3.16 In the past, planning processes in the water and energy sectors were strongly oriented toward identification and preparation of an investment portfolio that was primarily intended for developing new infrastructure. Thus, planning processes began with a clear, but very limited, idea of the possible outcomes. 3.17 Today, planning processes should be designed to identify all options (not just new infrastructure) that could contribute toward the water and energy needs being addressed by the planning exercise. Thus, planning processes should establish clearly what needs and objectives are to be addressed by the planning outcomes. Open and 44 Stakeholder Involvement in Options Assessment inclusive planning procedures normally help develop a clear and comprehensive statement of the water and energy needs at local, regional, and national levels to guide the subsequent assessment of the possible options for meeting those needs. 3.18 Orienting the planning process to meeting needs and objectives also orients stakeholders toward identifying solutions, in contrast to the traditional approach to planning where stakeholders often only entered the process as opponents of a proposed decision. This occurred with the "decide, announce, defend" approach initially adopted by the San Diego Water Authority in the 1980s, which led to public controversy and the eventual withdrawal of its application for an Environmental Protection Agency (EPA) permit for the Pamo Dam project. Instead, the Authority started again with a comprehensive needs assessment and proceeded to systematically identify, assess, compare, and rank options. Stakeholders, provided with "voice and choice," played a constructive role in this process. (See also box 5.5.) 3.19 The following factors are important when identifying and defining needs and objectives for a planning exercise: * Identify and rank the needs of different groups from the outset, including the needs of those groups upstream and downstream of proposed infrastructure whose livelihoods depend on environmental services. * Account explicitly for immediate needs and ensure they are not compromised by the duration of the planning exercise. That is, the needs of some groups may be so urgent they must be met without undue delay. It is possible to fast track some priority options to meet those needs, provided this is acceptable to all stakeholders. For example, in Case 9 (Berg River, South Africa), a series of water restrictions aimed at high-volume users, and other demand management and wastewater recycling measures were introduced to address water shortages and ensure poorer areas were serviced before approval to proceed with a new dam was given. * Account for broadly defined development needs, including those associated with the Millennium Development targets. Often countries have explicitly stated their long-term objectives in their Country Development Framework, or Five-year Plan. This should include macroeconomic needs such as reducing imports (food or fossil fuel), macroeconomic stability, and foreign exchange balances, but also socioeconomic objectives such as poverty reduction. * Account for development effectiveness. For example, when meeting the need for water services for irrigation, also consider Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 45 options that enhance the likelihood of delivery of other inputs such as seed, fertilizer, labor, and credit. * Include the needs of other sectors in the assessment. This is especially true where multi-function options such as dams are considered, given their broad and systematic impacts and the scale of the investment. * Account for changes in development needs over time. This is especially important when considering assets with long lifetimes. This would, for example, encourage the identification of options that provide flexibility. 3.20 Defining needs and objectives with input from stakeholders provides an important first step in meaningfully involving stakeholders and establishing development partnerships among governments, communities, and the private sector. Discussing development needs and objectives also provides space for a constructive dialogue on options early in the planning process and lays the foundation for some of the difficult decisions on priorities to be made later on. 3.21 The case of the Loess Plateau in China (Case Study 1) shows how farmer and village councils were directly involved in the identification and evaluation of options to introduce sustainable land and water management practices. Their involvement helped ensure that integrated strategies emerged that would improve agriculture productivity and farm incomes, improve ecological conditions in the watershed, and reduce erosion and sediment flow into the Yellow River. Villages and individual farm households were able to choose from a menu of options suited to their particular development needs. Decisions on the design and construction of larger sediment control dams for the catchment were taken jointly, with all levels of local and provincial government taking into account the choices made at the local level. Locate Options Assessments Upstream in Strategic Processes 3.22 The World Commission on Dams showed that many options assessments for broader water and energy development have been included as part of the investigation studies for large dams proposals. That is, a de facto decision had already been taken to develop a dam. Often the options assessment exercise was triggered by the request for external financing support. Many of these options assessment exercises were restricted to a specific sector or were focused just on infrastructure and supply-side options. 3.23 The concept of moving options assessment upstream means that dam and non-dam options should considered as part of a strategic planning process, which should be undertaken before a specific project is considered. It may well emerge that there are good alternatives to meeting the needs, apart from developing dams. 46 Stakeholder Involvement in Options Assessment 3.24 There are a number of advantages in moving options assessment upstream: * Better decisions are likely to emerge, because the assessment is not constrained by sector-specific orientations. * Inappropriate options can be eliminated early in the process. This is particularly important for infrastructure projects, because proponents may spend considerable time and resources on site investigation works, baseline data, monitoring, and studies for projects that are clearly inferior to other options. Early options assessment can also result in the need to develop basic information profiles for a wide range of options. (This is dealt with in chapter 5.) * Governments have more flexibility to address the legitimate interests and concerns of all constituencies. This also helps improve related strategic decisions such as improving the enabling environment, sector financing, and regulatory and institutional reform. * There is better opportunity to "fast track" specific initiatives and projects where consensus is reached early that there are pressing needs that should be met immediately. * Upstream assessment makes subsequent decisionmaking more efficient by avoiding the need to re-open the options debate each time a decision is required for a specific dam. * If a dam does emerge as a preferred option, then it will be as a result of a legitimate, strategic choice among alternatives. This has great advantages in getting public support, acquiring financing for the dam, and avoiding costly delays. 3.25 How to bring the identification and assessment of options "upstream" in the planning process depends on the circumstances in each country. One common starting point is to introduce Strategic Environmental Assessments (SEAs) with appropriate stakeholder involvement. SEAs generally provide a broad assessment of priorities and identify the critical issues likely to surface in subsequent steps of the planning procedure. Where SEAs generally concentrate on the physical environment and sustainable resource use, Social Assessments have a similar role but assess social issues, particularly issues of equity. 3.26 Moving options assessment upstream in the country process would mesh well with moving decisions upstream in the World Bank's procedures. In Zambia (Case Study 6), and in the Kyrgyz Republic in Central Asia (Case Study 10), SEAs were employed to identify rehabilitation options in the power and irrigation sectors respectively. These studies took between 14 months and two years and were conducted by a small team of international and national experts working with sector officials. This Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 47 was followed by stakeholder review of the study outputs before proceeding to project preparation studies. 3.27 In larger countries, the situation often arises where the client country requests World Bank assistance for a dam project that is not specifically included in the Country Assistance Strategy (CAS). Box 3.5 shows the use of a Water Resource Management Plan at basin level to identify a dam for inclusion in a World Bank loan to the state of Bahia in northeastern Brazil. While the dam was not specifically identified in the Brazil CAS, which dealt with national-level priorities, the project was shown to be consistent with the CAS objectives. Box 3.5: Bahia State Water Resources Management (WRM) Project and the Ponto Nova Dam Following extensive political and civil society dialogue on decentralized water management, government officials in the state of Bahia in northeastern Brazil divided the state into 13 "Water Management Regions" (Regioes Administrativas da Agua) corresponding to its major watersheds. Instead of case-by-case approaches, Water Resources Management (WRM) Plans at the river basin level were prepared to identify investment projects and nonstructural policy measures in a more systematic manner. A new Water Resources Directorate (Superintendencia de Recursos Hidricos, SRH) was created and made responsible for water resources planning and management, options assessments (including technical studies, inventory, and cadastre of water users), hydrologic and meteorological monitoring, a hydrologic database, and baseline studies of the major watersheds. Basin and user institutions were created to participate in the development of plans, identification of options, and water management policies. The Bahia State Water Resources Management Project emerged from a request for World Bank support to help implement the new basin plans. The multi-purpose Ponto Novo Reservoir was identified as a key infrastructure project in the Water Resource Management Plan for the Itapicuru River basin. It was designed to service the populated urban centers-including the municipalities of Ponto Novo, Filadelfia, and surrounding towns-with increased water supply, and the rural areas with water for human and animal consumption and irrigation. The project would use the latest technologies for the optimization of water and water infrastructure administration, operation and maintenance, and would develop the capacities of the local and Basin users' associations. The WRM project was not specifically mentioned in the CAS for Brazil. However, the Project Appraisal in 1997 showed that the project strongly supported the CAS objectives, which emphasized poverty alleviation (particularly in the poor northeast states), efficient resource allocation, environmentally sustainable development, and Bank lending directly to the States. Sources: World Bank. 2002. Country Assistance Strategy Progress Report For Brazil, 2002. Washington: World Bank. World Bank. 2002. ProjectAppraisal Documentfor the State of Bahia Water Resources Management Project. Washington: World Bank. 48 Stakeholder Involvement in Options Assessment Use Iterative and Integrated Processes 3.28 Planning is not a linear process. It should involve iteration among different steps of planning as well as the integration of experience from other sectors and disciplines. Iteration can take place between strategic and project-level planning and between different phases of a complex project. Iteration and integration help: * Develop coherence among policies, strategies, and development plans across different sectors, timeframes, and geographic and administrative levels (e.g. community, regional, national, basin, and subcatchment levels). * Expand the quality and range of options, given the multi- dimensional character of water resources problems. Integration across sectors is especially useful for picking out new and innovative options frequently left off the table in sector-specific approaches. * Build consensus on what is an acceptable mix and balance of projects in the portfolio and the priorities for moving each portfolio forward. 3.29 Strategic plans should be reassessed at regular intervals in light of changing demands, lessons learned from monitoring existing projects, changing social preferences, and advances in technology. Projects can then be spawned from these strategic plans in response to needs. Experiences from project plans can also provide valuable information when reviewing strategic plans. Consequently, there needs to be a two-way flow of information between strategic- and project-level planning. 3.30 Integration across different sectors opens up options that are not necessarily apparent with a sector approach. The dimensions of integration are shown in box 3.6. Box 3.6: Seven Dimensions of Integrated Water Management * Integration of land and water management * Integration of surface water and groundwater management * Integration of quantity and quality in water resources management * Integration of water and wastewater management * Integration of "green water' and "blue water" * Integration of freshwater management and coastal zone management * Integration of all stakeholders in the planning and decision process Source: Integrated Water Resources Management, Glol Water Parutep Technical Advisory Committee (TAC), Background Papers No. 4,2000. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 49 3.31 Multistage or phased approaches can be used to aid iteration in complex projects: Phased approaches help address stakeholder concerns about the viability and appropriateness of options, help assess the extent to which options complement one another, and help determine what enabling conditions need to be set in place for the adoption of the options. Box 3.7 illustrates a multistage approach in the Loess Plateau, China (Case Study 1), where new approaches for soil conservation and erosion control that were compatible with sustainable and productive agriculture were developed. The first phase of the project helped to build a diverse portfolio of options from which communities could select the preferred options in the project's second phase. Box 3.7: Multi-Sector and Multi-Stage Approaches for Watershed Rehabilitation on the Loess Plateau in China To address the many dimensions of land-water management in the upper and mid parts of the Yellow River basin, a series of campaigns were mounted by the government in the 1980s to terrace slopes, plant trees and shrubs to improve water retention, and build check dams to intercept sediment in flood runoff. While helpful in combating massive soil erosion, these interventions were not sufficient given the scale of the problem. Moreover, they were not integrated with efforts to raise agricultural productivity and farm incomes and so there was limited local involvement. The interventions were not very effective. By the late 1980s, trial programs were beginning to show that land conservation was compatible with sustainable agriculture, reducing soil erosion and simultaneously raising farm incomes. In 1994, the Loess Plateau Water Rehabilitation Project was implemented in selected small tributary watersheds to test a large number of the options suitable for an integrated program of watershed improvement. The program provided for sediment control, productivity improvement in rainfed agriculture, and water supply and irrigation. It would raise incomes and introduce participatory planning. This approach represented a departure from previous practices that were piecemeal or focused on each sector separately. Based on its success and the demonstration of wide acceptance by local government and farm communities in the region, the effort was scaled-up for wider replication across the three provinces involved and expanded to the autonomous region of Inner Mongolia under Loess II (starting in 1998). The phased approach was necessary to evaluate the technical feasibility, practicality, and farmer acceptance of a combined set of measures and sustainable improvements in institutional arrangements (support services). Capacities for Stakeholder Involvement and Options Assessment 3.32 The groups and institutions involved in options assessment exercises need to have the capacity to take advantage of the policy and regulatory frameworks and the opportunities provided by the planning systems. In particular, the main institutions that are responsible for water and energy management need to be capable of carrying out the exercises, and stakeholder groups need to be capable of identifying, understanding, and 50 Stakeholder Involvement in Options Assessment evaluating specific options and effectively interacting with other groups in assessment exercises. 3.33 In the Indian state of Uttar Pradesh, the government promulgated a State Water Policy that put emphasis on basin-wide water management involving regional agencies and local water user groups. Strengthening and restructuring the UP Irrigation Department is a priority in the World Bank-funded Water Sector Restructuring Project so that it can play a supportive role in this basin-wide approach to water management. 3.34 Box 3.8 (see Case Study 6, Zambia) illustrates how a sector-level Environmental Assessment was used to identify which capacities of the organization responsible for power sector and dam-related planning needed to be strengthened. Creating an Enabling Environment for Stakeholder Involvement and Options Assessment 51 Box 3.8: Capacity Building in Zambia for Environmental Management and Public Consultations in the Power Sector Prior to 1995, environmental studies for major dams and hydro facilities owned and operated by the Zambia Electric Supply Corporation (ZESCO) had largely been undertaken by international consultants. The strengthening of environmental regulations by the government, the call for greater public participation in development planning in Zambia, and the growing awareness of the need for ZESCO to be proactively involved in all dimensions of environment and socioeconomic planning and management meant that it had to build its own capacity for social and environmental assessment. Internal capacity and a corporate focal point was also necessary to enable the utility to coordinate with the new regulatory bodies such as the National Environmental Agency, and with resource management organizations such as the Zimbabwe River Authority and Parks and Wildlife. A Sector Environment Scoping Exercise (1995) was used to do this. The SEA was prepared over 14 months by a small team of international consultants working with ZESCO counterparts. An Action Plan identified three overarching priorities: (1) to establish an Environment and Social Affairs Management Unit (ESU) in ZESCO; (2) to develop in ZESCO a participatory consultation process to ensure involvement of all project-affected peoples and NGOs in project level activities and sector planning; and (3) to complete sub-basin environmental and social evaluations of major watersheds where existing and proposed dams were located to determine environmental and social issues. The SEA team prepared detailed terms of reference for the new ESU, a proposed work program, job descriptions, and training for key staff. Reconnaissance level terms of reference were also prepared for an initial set of projects to be financed by a Power Sector Loan that aimed to introduce environmental and social criteria into rehabilitation of hydro, transmission, and distribution assets. The SEA document with the recommendations was then discussed in workshops with government and nongovernment stakeholders, other agencies involved in water resource management, and donors active in the field. The SEA recommended that ESU should focus initially on developing baseline environmental and socio-economic data on watersheds where projects had been proposed on the Kafue and Zambezi rivers. Two specific programs where the ESU staff gained initial experience in involving stakeholders in assessments of within-project alternatives were the Victoria Falls Power Station Rehabilitation EA Project and the Rehabilitation and Development Program for the Gwembe-Tonga community. Both these initiatives were identified in the SEA process. Source: Sector Environment Scoping and Reconnaissance Study (1995) and the ProjectAppraisal of the Power Sector Rehabilitation Project for Zambia (1997). 3.35 In OECD countries, most stakeholder interests are represented by an organization even before a planning process takes shape. These organizations have the capacity to involve themselves in major planning exercises, even when not invited to do so by the plan proponents. On the other hand, in many developing countries, people affected by an intended development often are not represented by organizations. In these cases, organizational capacity needs to be developed if stakeholder involvement is to be meaningful. However, this takes time. Ideally, the building of capacity in stakeholder 52 Stakeholder Involvement in Options Assessment organizations should commence when strategic planning is being carried out with groups that represent broad interests. These groups can then support and assist affected stakeholders at project level when specific projects are selected from the strategic planning exercise. 3.36 Not all stakeholders (e.g. local beneficiaries and project-affected people) have the training and education to make use of the information that is available. Chapter 4 discusses the need to provide special assistance to disadvantaged stakeholder groups so that they can participate on an equal footing with other groups. 4 Involve All Relevant Stakeholders 4.1 The quality and acceptability of decisions reached in planning exercises for water and energy development depend to a large degree on whether the appropriate stakeholders have been involved in a meaningful manner. This requires: * Identifying all relevant stakeholders * Using appropriate mechanisms to involve stakeholders from early stages in the process * Using participatory techniques appropriate to the stakeholders concerned * Taking sufficient time for stakeholder participation * Enabling poor and marginal people to participate on an equal footing. 4.2 There are two broadly different approaches to involving stakeholders in options assessment exercises. One approach is to have a specialist team consult with different interests separately, incorporate their views, and prepare the options assessment with recommendations. The stakeholders are initially consulted on the scope and terms of reference for the exercise. The draft report is then presented for discussion among all stakeholders before its finalization. After completion of the draft report, there may be workshops with a smaller group of stakeholders, or there may be open public meetings to discuss the recommendations, or both. 4.3 The second approach is to proactively involve a smaller group of stakeholder representatives in each stage of the options exercise, including needs definition, options identification, criteria formulation, and the evaluation and selection process. There may be a pause for public consultation at key stages, but the smaller group of stakeholders plays an active role in arriving at the key recommendations. In certain situations, the stakeholder group may actually be empowered by government to take a decision. 4.4 Task managers and clients need to choose which approach to follow based on the requirements of government and on initial discussions with key representative 53 54 Stakeholder Involvement in Options Assessment stakeholders. The first approach has been widely used for many years and constitutes a minimum requirement for achieving a legitimate outcome. The second approach requires the planning authority to shift from being intimately involved in directing the process to facilitating an options assessment process that is driven by the stakeholders themselves. Unless otherwise stated, the second approach is elaborated in this sourcebook. 4.5 Table 4.1 describes five key groups that may be involved in strategic options assessment and their general roles and function. The titles and functional relationships of these groups will vary according to circumstances and purpose. The nature and scale of the exercise and the degree of controversy would be factors in deciding what groups are needed. For example, in cases where there are strongly divergent views, an external facilitator may be helpful in fostering constructive interactions among Advisory Group participants. In small exercises, a Stakeholder Forum may not be required. Involve All Relevant Stakeholders 55 Table 4.1: Key Groups in Strategic Options Assessment Actor Characteristics / Roles and Functions Process Manager * The unit of the government agency, or other organization, mandated to carry out an options assessment, normally as part of its planning responsibilities. * The process manager would provide the terms of reference for the exercise, and play a managerial role in all steps of the exercise, including the up-front identification and involvement of stakeholders. Advisory Group * The core group of stakeholders interacting with the process manager and/or study team during the exercise. * Advisory Group participants would be representatives of interested and affected parties formally invited to participate, to consult back with their constituencies, and to represent their interests. Membership could include representatives of government departments and agencies, but the overall membership should be a fair reflection of those with a legitimate interest in the outcomes of the decisions, including those often excluded. Often, core government agencies are members of a project- or program steering committee, which reduces the need for their involvement in a stakeholder Advisory Group. * Depending on the autonomy granted by government, the Advisory Group may review and advise on its own composition to ensure that it is representative of all interests. Study Team * A multi-disciplinary team of professionals engaged by the process manager, either on a full or part-time basis. * Staff may be seconded from the process manager, other government agencies, or nongovernment organizations, and may include independent consultants. * The study team would prepare profiles of options, undertake site investigations, surveys, prepare analyses and briefings for the Advisory Group deliberations, and develop and disseminate information packages to wider stakeholder interests and the public, as determined by the process manager and/or the Advisory Group. Facilitator * An independent, professional facilitator engaged by the process manager to guide interactions among participants of the Advisory Group, and possibly the Stakeholder Forum. Stakeholder * A wider forum, representing interested and affected parties, which acts at Forum key decision moments as a sounding board for process manager and Advisory Group. * Depending on the scope and scale of the exercise, this could include government, NGOs, private sector interests, transnational entities, local communities, grassroots advocacy organizations, and specific interest groups whose "rights, risks and responsibilities" are possibly affected by the decision under consideration. 56 Stakeholder Involvement in Options Assessment 4.6 World Bank Safeguard policies call for consultation of stakeholders in environmental assessments for Category A and B (i.e. major environmental or social impacts) projects. The process sponsor would be the project entity (public or private) that operates under the regulatory oversight of the government. The Stakeholder Forum would typically include the local community affected by the project, including upstream and downstream interests affected by the development and may also include off-site groups such as those benefiting from the energy or water. The Advisory Group would typically take the form of a community liaison group that would function during the detailed design and construction stages. Once the project is commissioned and during the management phase of the dam, a permanent consultative committee or group is sometimes constituted to provide feedback on the effects of the dam's operations. Table 4.2 discusses the generic characteristics of community liaison groups and of consultative groups. Involve All Relevant Stakeholders 57 Table 4.2: Key Groups in Options Assessment for Dam Development and Management Actor Characteristics / Roles and Functions Community A temporary group composed of representatives of different interests in the Liaison Group affected communities, established to work with the project entity and to (development: provide input on key decisions that affect them. design and The Liaison Group may include locally elected persons and representatives construction from local government. The Community Liaison Group may coincide with the phase of a dam) groups established for the environment and social management components of the project (e.g. EMP and RAP). The Community Liaison Group may be empowered by the people they represent to negotiate common interests with the project entity. NGO facilitators and legal counsel may be hired to interact directly with project-affected people. The Community Liaison Group either includes stakeholders in upstream and downstream communities and water use interests in the basin that are affected by construction of the project and its proposed operation strategies, or it makes provisions to coordinate with these stakeholders and interest groups. Consultation A permanent group representing different water use interests, such as the dam Group or beneficiaries, the host community for the dam, and communities affected by Committee the dam, both upstream and downstream. The group works with the (management: management of the dam (and reservoir), and ensures that agreements reached operational phase during negotiations at construction time are adhered to. It also participates in of a dam) alternatives assessments that inform key decisions during the operational life of the facility. The function of the group includes (a) responding to annual monitoring reports on the performance and social and environmental impacts of the dam (such as impacts of flow changes on downstream communities); (b) participating in periodic evaluations such as dam safety and performance reviews; and (c) participating in assessments of any significant change in operating strategies, life extension, or decommissioning. Water user groups would be involved in changes in the specific services (e.g. irrigation) that the dam provides, and would typically interact with dam management directly on these aspects. Identifying Stakeholders 4.7 Deciding what groups to directly involve in a planning exercise depends on the legal requirements of the country, political considerations, and the requirements of lenders such as the World Bank. 58 Stakeholder Involvement in Options Assessment 4.8 Experience shows that strategic and project-planning exercises generate different levels of interest and motivate different groups of stakeholders. For example, only a minority of local stakeholders may want to commit their time to debating options during a strategic process. Most prefer to concentrate on projects that are imminent and that clearly will affect them. Instead, representative bodies, such as national councils of indigenous groups, may represent local views during a strategic exercise. Even though local groups may not opt to be involved in strategic exercises, they should be kept fully informed when the options being assessed potentially affect them; for example, when specific dam sites or irrigation developments are being assessed. 4.9 If, as part of a strategic exercise, options are assessed that affect local stakeholders, they can be involved during a distinct phase of the strategic options assessment. Initial project-level assessments (such as Rapid Appraisals, Initial Environment Examinations or Environmental Impact Assessments) can be undertaken with local involvement within the framework of the overall strategic options assessment exercise. There may be situations where additional local input is needed on a specific project in a strategic exercise. This can be done through a special hearing of local group interests, or the participants in the strategic process may visit the site and meet with local stakeholders. For example, in the hydropower screening and ranking exercise in Nepal (Case Study 2) that started with an inventory of 138 potential sites, local communities and potentially project-affected groups were involved in social surveys and meetings only at the fine ranking stage, when 22 projects were under consideration. If at the end of a strategic options assessment an option is forwarded to the government for approval, local stakeholders need to be invited to participate in a project-level alternatives assessment consistent with the applicable laws and regulations. Stakeholder Analysis 4.10 The stakeholders to be involved will depend on the scale, scope, and type of the project, including the extent of its environmental, social, and economic "footprint." Stakeholder Analysis is a tool that systematically identifies the groups possibly affected by the outcome of a planning exercise and identifies among these groups the stakeholders that need to be represented in the decisionmaking. There are a number of sources of information and ways of structuring the Stakeholder Analysis, which are discussed below. 4.11 When the project is large or complex with multiple affected groups, stakeholder analysis can start with the identification of a preliminary list of stakeholders, which is then refined during more detailed analysis. Box 4.1 illustrates the guidance that the South African Department of Water Affairs and Forestry (DWAF) issued for identifying a preliminary list of stakeholders in all DWAF projects. This guidance itself was prepared with input from a stakeholder group and in public consultations. In order to ensure compliance with World Bank requirements, country process managers would normally consult with Bank task managers during the production of the preliminary list of stakeholder groups. Involve All Relevant Stakeholders 59 Box 4.1: Questions to Guide Development of A Preliminary List of Stakeholders In South Africa The following questions were offered as guidance to process managers to prepare a preliminary list of stakeholders to engage in planning and project studies. * What is the intention of the initiative and who is responsible? * Who depends on it, who is potentially affected, and who are the representatives of the people affected? * Who is likely to be interested in the project? * Who are the representatives of those potentially interested? * Who is likely to mobilize for, or against the initiative? * Who can contribute human, financial and technical resources? * Who can affect the initiative by not participating? * Whose behavior and attitude has to change for the initiative to succeed? * Who were previously disadvantaged and may require support? * Who are influential figures in the area of the initiative and have local knowledge? * Who are core experts in the area of the expected key issues? Source: South African Department of Water Affairs and Forestry. 2000. South Africa Public Consultation Guidelines Rights, Risks, and Responsibilities 4.12 Whether a preliminary list of stakeholders is drawn up or not, a Rights- Risks-Responsibilities20 (3Rs) framework is a valuable approach to help process managers identify and categorize stakeholders. This would include the voluntary and involuntary "risk takers" and "risk bearers," and marginalized voices that have a legitimate claim to participate in decision processes that affect them. Table 4.3 identifies some of the considerations under each of the 3Rs. 20 The report of the World Commnission on Dams proposes a "rights and risks approach" for the identification of stakeholders. The concept of responsibility is added for two reasons: (1) it identifies additional stakeholders that have a stake in good public decision-making, and (2) it helps select within the wider group of stakeholders those willing to assume responsibility to inform public decision-making. 60 Stakeholder Involvement in Options Assessment Table 4.3: Definitions of Rights, Risks, and Responsibilities Rights The rights of all stakeholders extending from the normative framework of the right to development to the rights expressed in national laws or acknowledged in customary law. The World Bank's Safeguard Policies also reflect a number of rights. In the case of dams, there are two important groups whose rights may be affected: (1) the communities close to the dam; and (2) riparian communities upstream or downstream of the dam. A number of rights potentially come into play. These range from customary and traditional rights of ownership, tenancy, resources access, and livelihood benefit that may not be codified, to formal rights encoded in legislation. Rights may belong to an individual, a household or a family, to a traditional user or neighborhood group, to a community or public body, or to an indigenous people. At the other end of the spectrum are the rights of the beneficiaries, including their access to water and energy services essential to their right to develop, to their welfare, and their livelihood. Risks The extent to which certain groups bear risks from a proposed development. These groups may be the same as those expecting to benefit from the development; in contentious cases, those bearing the risks may not be benefiting at all. Those carrying the risks can expect to be compensated for corresponding losses. Risks generally can be quantified and in certain instances may be a subject of negotiation. Responsibilities The responsibilities of governments for water management and service provision for all citizens, and the responsibilities of all stakeholders to engage in constructive dialogue to facilitate development decisions. This means involvement of appropriate representatives from governments, nongovemment bodies, peoples' action groups, regulators, utilities, financiers, and partnerships. 4.13 The rights and risks dimensions define the affected stakeholders. Urban dwellers may see themselves as possessing a right to reliable power deliveries because of the development of a hydroelectric dam, whereas downstream recession agriculturists may face risks to their livelihood. The responsibility dimension looks at which actors are responsible for representing the affected rights. Environmental action groups may be responsible representatives for environmental values, while indigenous groups may have their own traditional spokespersons. In some countries elected local government may represent affected communities satisfactorily; in other countries communities may wish to represent themselves directly. 4.14 Beneficiaries of irrigation services from dams generally participate fully, because they are directly affected by the within-project alternatives assessment. For example, stakeholder involvement in the command area development of Swaziland's Involve All Relevant Stakeholders 61 Lower Usuthu Dam is scheduled to continue for several years beyond the completion of the dam. This includes developing water user organizations into an apex organization that has the capacity and authority to interact with dam management. Whereas government agencies are invariably identified as stakeholders, it can prove difficult to get them to the table in a meaningful way. Even when agencies agree on the importance of a planning process, they may not send staff members of sufficient authority to represent the agency. 4.15 Box 4.2 provides an example of how an in-depth assessment of rights and entitlements helped process managers in Pakistan identify stakeholders for the Ghazi Barotha dam project. This related not only to resettlement and land compensation questions, but also to the full range of formal and informal, codified and non-codified entitlements that could be transformed or affected by the project. The analysis helped to ensure that all parties to negotiations were equally informed by the prior assessment of their rights and entitlements. Box 4.2: Rights and Legal Entitlements: Identifying and Empowering Stakeholders for Resettlement and Compensation Negotiations The 1,450 MW Ghazi-Barotha Project in Pakistan is a run-of-river hydropower project built about 7 km downstream of the existing Tarbela Dam on the main stem of the Indus River. Approximately 1,000 people were resettled for the 52-km power canal passing through agriculture areas. The process manager, the Water and Power Development Authority (WAPDA), established a community participation unit to work with the local community in selecting and implementing options for the Resettlement Action Program (RAP) for the 1,000 relocated families. WAPDA funded an independent legal task force to review relevant World Bank policies and national legislation to propose the legal basis for rights and entitlements in the RAP; for compensation negotiations; and for designing the employment and enterprise enhancement programs for project-affected and host communities. Field-based reviews were also conducted on existing power projects in Pakistan to incorporate the "lessons learned." The findings of these reviews were made public and distributed to project-affected families through the NGO facilitators of the RAP process (through the community participation unit). The review of rights and entitlements both informed the community participation unit about the identification of the different groups who where eligible for compensation, and provided a basis for more informed negotiations over the choice and selection of measures. 4.16 Using risk as an identifier allows poor and vulnerable groups to participate. The WCD noted that, in the past, many groups who are potentially disadvantaged by a dam development have not had an opportunity to participate in decisions that affect them. Risk should extend beyond traditional engineering, economic, and financial risks, or risk to governments, developers, and financial agencies to include the risks of those affected by a project, and the risks to the environment as a public good. A recent overview of impoverishment risks associated with human displacement includes 62 Stakeholder Involvement in Options Assessment landlessness, joblessness, homelessness, marginalization, food insecurity, increased morbidity, loss of access to common property resources, and community disarticulation.21 4.17 People upstream and downstream of a dam should be represented in within-project assessments because of the risks that they face to their livelihoods, and impacts on their access to water and their cultural heritage and social interactions with rivers and riverine ecosystems. The upstream effects include the potential flooding of productive land, the possible clearance of forested areas, and changes in water-dependent flora and fauna that accompanies the impoundment. The latter changes typically include the exclusion of fish species that used to migrate above the site of the dam for breeding. Downstream effects include changes in natural flow regime, particularly the changes in flooding extent and the impacts of the new flow regime extent-for example, timing of releases and changes in water quality because of the release of anoxic or contaminated bottom waters from the impoundment. The people affected by these changes include upstream and downstream fishermen and boatmen; flood-dependent farming and grazing communities; communities dependent on floodplain plants for food, fodder, and fiber; and communities living in areas identified for inclusion in the impoundment. 4.18 A properly conducted stakeholder analysis will identify the livelihood strategies of indigenous groups. In many cases, groups that are seen as homogeneous in fact face differentiated impacts, and so are really different stakeholders. This is the case for commercial farmers and peasant farmers that are targeted as beneficiaries of the development of an irrigation dam. 4.19 In some cases, women need to be identified separately to men because they can have different livelihood strategies to men. Women often are responsible for specific fields, crops, or elements of the production cycle; obtaining drinking water; and the nutritional balance of the household. This does not mean that women should be automatically be identified as a separate group. Rather, a proper stakeholder analysis should be sensitive to gender differences that may be significant enough for some activities to warrant identifying women within those activities as a separate group. A well-known negative example is the Mahaweli irrigation system, where widespread expansion of irrigated paddy on all lands serviced by the irrigation dam lead to the disappearance of female-managed dryland crops, thereby decreasing women's capacity to ensure the household's nutritional balance. 4.20 Responsibility-the third R-refers to the representation of the stakeholders in the planning process. Industries could be represented through Chambers of Commerce or similar associations. Whereas local government can potentially represent groups affected by a dam, local governments sometimes represent powerful interest groups. If this is the case, direct representation of affected groups is more appropriate. In the planning exercise that helped define social and environmental criteria and approaches for future hydropower development in Brazil, a national body represented indigenous 21 ADB Handbook on Resettlement: A Guide to Good Practice, OESD, Manila, 1998. Involve All Relevant Stakeholders 63 people. In planning exercises for specific dams, indigenous groups had a direct representation in the planning process. The third R is especially relevant for the selection of stakeholders for strategic processes, as the rights and risks dimensions by themselves tend to identify a large number of stakeholders because of the diversity of options being assessed. 4.21 Responsibility also refers to the responsibility for stakeholders themselves to move from confrontational engagement toward constructive dialogue. This combines the responsibility to represent constituent's interests with the responsibility to contribute to good public decisionmaking. 4.22 While not explicitly organized around the 3Rs, the South African procedure for stakeholder analysis incorporates many of the same principles (box 4.3). 64 Stakeholder Involvement in Options Assessment Box 4.3: Procedures for Stakeholder Analysis, DWAF Guidelines, South Africa Use a social profile method to analyze stakeholders according to the following: * Identify the social economic characteristics of the stakeholders, for example jobs and sources of income * Identify social dynamics in the area in terms of its politics, religion, culture, demographics, and quality of life * Identify ethnic, cultural, and geographic diversity of the stakeholders * Assess how stakeholders might be affected by or are interested in the initiative * Understand the relations among stakeholders, including controversial issues or potential conflicts of interest among stakeholders * Identify past projects that involve stakeholders and the outcomes of these * Assess the capacity of different stakeholders to participate. Stakeholders' level of capacity to participate may be determined in terms of: * Access to technology and services (e.g. transport) * Social economic characteristics * Understanding experience with public participation processes and similar initiatives * Being informed or uninformed about the issues * Technical understanding of the issues under discussion . Literacy levels * Language preferences. Stakeholders may then be grouped in terms of: * Geographic location * Capacity to participate * Level of interest in the initiative, which is usually determined by the degree to which the stakeholders are influenced by the initiative. A situation analysis is also important. Here the area of operation needs to be analyzed and fully understood in terms of: * Economic characteristics * Infrastructure, for example roads and facilities and public halls that are available and that influence the local people's capacity to participate * Interest groups such as NGOs, environmental groups and community based organizations that might influence or contribute to the public participation process. Source: DWAF. 2001. Generic Public Participation Guidelines. Involve All Relevant Stakeholders 65 Stakeholder Identification and Assessment Instruments 4.23 Potential stakeholders are also often identified as part of the environmental and social impact assessments that are developed during project preparation. Stakeholder identification can be made part of SEAs or Social Assessments for strategic level options assessments. Stakeholders, such as these, that have been identified through a process that assesses impacts, tend to be those bearing risks (in the 3R formulation). Consequently, an SEA, EIA or SIA will not provide a comprehensive list of stakeholders. Self Identification 4.24 One additional source of input to stakeholder identification is to allow stakeholders to self-identify. Invitations to self-identify are generally taken up by national stakeholders and by well-established organizations, such as international environmental NGOs. Depending on the cultural and governance context, local stakeholders may refrain from self-identification, despite their obvious stake in the decision, because of remoteness and the consequent lack of information about the stakeholder process or because they are habituated to being excluded from decisions. 4.25 Self-identification does not automatically guarantee inclusion. The decision to include a group that self-identifies must be made by the process manager with the advice of the Advisory Group. Standard Lists 4.26 Decisionmaking authorities in developing countries sometimes use standard lists to identify stakeholders. This method is not recommended. These lists are often limited to those groups that already have strong government connections, such as industry representatives, and omit those who don't, such as concerned NGOs, farmer or consumer unions, and local government representatives. In project-level planning, local government officials and community leaders may be included, but specific interest groups such as fisherman are sometimes overlooked. Women-often central to maintaining family livelihoods but excluded from traditional decision making-are frequently overlooked. The Structure for Stakeholder Involvement 4.27 An organizational structure for stakeholder involvement is key to making the best use of their time and reaching a decision efficiently. The structure, shown schematically in Figure 4.1, describes the roles of the actors in the process (see introduction) and the communications among those actors. a 66 Stakeholder Involvement in Options Assessment Figure 4.1: Schematized Structure for Stakeholder Involvement / Wder Public \ 4.8 G lly oder Forum a t assigns / / ~Communities\\ / - | i | l 12 \ ~~~~~recommends prepare recommendations for a decision. The process manager forms an Advisory Group, a study team and possibly a facilitator. The stakeholder interactions can be thought of as a series of concentric groups. Normally, the Advisory Group is closely involved in all steps of a strategic options assessment exercise. Typically, more sensitive or complex exercises also include interaction with a Stakeholder Forum in a strategic exercise, or community meetings in within-project exercises. The Forum allows consensus positions (and in some cases agreements) reached in the Advisory Group to be tested. It also allows the stakeholder community to feel part of the process. The wider public is typically reached through mass media and political processes. The approach to interactions with these different stakeholder groups should be identified in a communication strategy. 4.29 It is the responsibility of the sponsor to decide - usually in consultation with key representative stakeholders and consistent with legal and customary requirements - how to set up this structure. It is a good approach to hold one or more meetings with representatives of the major stakeholders (government, civil society, NGO, industry, private sector, communities, etc.), where the stakeholder identification process, the draft communication plan, and the rules of operation can be discussed. 4.30 The actual structures and mechanisms for stakeholder involvement would differ in different cultural settings and systems of governance. It would also depend on | | - | | | B g X _ X ~~~~~~~ Involve All Relevant Stakeholders 67 whether it was a sector- or project-level exercise, whether it was a first attempt at a multi- stakeholder involvement as an ad hoc exercise, or one that was embedded in an existing planning system. Boxes 4.4 and 4.5 provide examples of the structures and mechanisms employed to involve stakeholders in water projects in different governance contexts in China and Southern Africa. In the context of this discussion, the main limitation was the apparent absence of clear mechanisms for stakeholders, apart from government agencies, to influence the selection of a dam project. The main strength was the evolving steps and progress made to improve stakeholder involvement in the project design and implementation, particularly the social and environmental aspects. Box 4.4: Structures and Mechanisms for Involving Stakeholders in China's Anning Valley Agriculture Development Project The Anning Valley Agriculture Development Project (1999-2004) in China, which was supported with a loan from the World Bank, is a composite water supply and agricultural development project. Physical components of the project include a weir across Anning River at Manshuiwan, with canals to irrigate 14,400 ha and off-takes for municipal and industrial water use. A 68-m high storage dam is under construction at Huangqiao to irrigate 2,700 ha land, and an existing irrigation system and dam at Shengli irrigating 3,000 ha is being rehabilitated. The project includes a number of small hydropower developments. The decision to proceed with the project was based on top-down provincial and national government planning processes. As in most provinces in China, three primary groups of stakeholders are engaged to varying degrees in defining the parameters of the project, and the subsequent design and implementation arrangements. These are: (1) political constituencies consisting of governments at the central, provincial, prefecture, county, township, and villages levels; (2) technical and scientific agencies at various administrative levels; and (3) communities and rural and farm households benefited and adversely affected by the project, including autonomous "mass" organizations that represent different local and professional interests. Procedures for consulting with these three groups are well-established and decisions are made through the existing political and institutional structures. In its formulation stages, the Anning Project was discussed among all three groups. Within the governance framework, specific stakeholder mechanisms included the formation of a Project Leading Group and Project Scientific & Technical Committee and two Advisory Groups broadly representative of different stakeholder groups. Village communities did not have a direct role in deciding the overall physical parameters of the project, but were engaged through village committees in determining the alternative configurations affecting water use (quantity of irrigation water, location of gates, distribution schedule, etc.) and their participation in the agriculture and horticulture components. The special context and concerns of the minority Yi people were identified through a social assessment. 68 Stakeholder Involvement in Options Assessment Box 4.5: Structure and Mechanisms for Involving Stakeholders in the Lesotho Highlands Project The Lesotho Highlands Project is the largest water transfer project in the southern African region. Its is to be developed in five phases over a number of decades, involving a series of dams and tunnels to redirect a portion of the water presently leaving Lesotho in the Senqu/Orange River northward to the Vaal River basin, where it will be utilized for municipal and industrial purposes in the Gauteng Province of the Republic of South Africa (RSA). The scheme was agreed to in a 1988 treaty between the governments. The Lesotho Highlands Development Authority was established shortly afterwards. Phase 1A, which included the Katse Dam, was completed in the mid-1990s. Phase 1B involved construction of the Mohale Dam, tunnels to the Katse Dam, and associated infrastructure to increase water transfers. It was completed recently. After strong criticism from local and international NGOs about what were seen as weak mechanisms for community involvement in the Phase 1A development, LHDA changed its approach to community participation. The Bank also clearly stated that it would not proceed with funding of Phase 1B unless there was satisfactory progress on the social and environmental issues arising from Phase IA early in Phase 1B. LHDA provided funding for an independent consultancy to assess the capacity of local NGOs; recommend measures for improved NGO involvement; and determine their ability and willingness to have implementation and/or monitoring roles. To improve the participatory framework, the LHDA established a Community Participation Unit (CPU) in its headquarters and four field operations teams with community participation officers. Residents of local communities in the Phase IA and IB areas elected representatives to liaise with LHDA on various issues, including compensation, conflict resolution, and local development. Local communities in the Phase IB area were involved through a structured process in the design of resettlement and social impact mitigation strategies, and of EIA,/EAP as a whole. The EIA, EAP, and compensation policies were reviewed in public meetings in Maseru and discussed in various pitsos (local meetings) throughout the Highlands. A People's Involvement Program was introduced in Phase lB and, in consultation with Phase IA stakeholders, they decided to retroactively apply the procedures for Phase IB in the Phase IA communities. LHDA also worked with local NGO partners toward developing a separate fund for NGO capacity building. Local communities were engaged in numerous other aspects of the overall project such as preparation of the Emergency Preparedness Program for dam safety and other dam-induced hazards. With support from consultants starting in 1997, LHDA also adopted a new participatory approach to develop a policy on and monitor environmental flow releases from the dams considering environmental quality indicators. Processes have been established to involve local NGOs and community representatives in monitoring and evaluation, which will be used to adjust operations of the reservoir. Workshops on the socioeconomic impacts of the LHWP and on development measures to address these impacts helped to enhance collaboration with national-level and international NGOs. Notwithstanding the improvement in the structure and mechanisms for involving stakeholders, there is still criticism regarding the actual functioning of these mechanisms; for example, local NGOs have been critical of LHDA's previous level of performance on the social aspects of the project. Involve All Relevant Stakeholders 69 Composition of the Advisory Group 4.31 The composition and size of the Advisory Group needs to be carefully considered on the basis of several factors, including: * A general rule-of-thumb is that effective shared planning best takes place in groups of around 15 participants. Larger group sizes are more suited for consultation, while open public meetings could best be used for information sharing. Should the Advisory Group exceed 15 participants, it may be prudent to form sub-groups or committees. * It is necessary to maintain a balance of interests in order to safeguard the legitimacy of the exercise. If possible, the stakeholder groups should represent a wide range of opinions on the proposed planning exercise. Should major stakeholders be unwilling to participate in the Advisory Group, additional measures to ensure that their views and suggestions are reflected in the planning exercise need to be taken. * The Advisory Group composition may be changed as the exercise progresses in response to new perspectives being considered. 4.32 For example, a strategic planning exercise in San Diego, California evaluated and recommended dams and water transfer options for additional emergency water storage. (see box 5.5.) A 20-member advisory panel was formed. Members were selected to provide a broad spectrum of interests that would be acceptable to the public and provide a balanced perspective. 4.33 The Yacambui-Quibor Water Transfer Project in the State of Lara, Venezuela (described in Chapter 1) provides a good illustration of the dangers of not involving affected groups in more direct advisory capacities. Box 4.6 illustrates the type of community and government interests that ultimately participated on the Consultative Council that was formed on the initiative of the stakeholders. This proved to be a key step in resolving project conflicts, and eventually provided a vehicle for demonstrating public acceptance of the project. 70 Stakeholder Involvement in Options Assessment -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Box 4.6: Consultative Council for the Yacambu-Quibor Water Transfer Project in the State of Lara, Venezuela The factors leading to the cancellation of the Yacambu-Quibor Water Transfer Project by the Govermment of Venezuela are described at the beginning of Chapter 1. In response to lobbying from cross-party interests in the State of Lara, and with the support of many community organizations, the state government established a public entity (SHYQ, C.A. company) to work with the community to reopen work on the project. A multi-stakeholder Board was duly constituted and a competent multi-disciplinary professional team was assembled to support it. The staff set about preparing a stakeholder analysis, conducting public opinion surveys, and held a number of public meetings in various communities in the basins affected by the water transfer. At that stage, the intention was to get all the concerns and issues out in the open for discussion. The process manager (the Director of the new company), with the support of the Board, took the highly unusual step (at that time) of setting up a Consultative Council and advisory group to the Board. The Consultative Council had no powers. Its purpose was to bring a wider range of stakeholders into the debate on the project, provide an opportunity for people to voice their concerns, identify the areas of disagreement, understand the different points of view, and where possible advise the Board on additional ways to resolve differences and improve the project. Members of the Council came from the three regions affected by the project--Quibor Valley, the Yacambui River watershed, and the Barquisimeto metropolitan area. It represented 27 important community organizations, including representatives from public and private universities, civil society groups, several different farming associations (with representatives drawn from both small and large holders), and environmental NGOs. Other members included the Chambers of Commerce (of Construction, Industry, Small and Medium Industry), and the four Mayors of the municipalities directly concerned with the project. The Council also included members of the Parliamentary Group that represented Lara State in the National Congress and the Legislative Assembly of Lara State. Consultative Council members individually played a key role in working with their own constituencies to explain the issues and how their concerns were being resolved. This contributed to public acceptance and the government decision to continue funding the project construction. Rules of Interaction 4.34 It is important to define the rules that apply to interactions within and between groups. The Advisory Group will only be effective if there is mutual trust among the members so that they can comment frankly, and if they all agree to principles of operation that make efficient use of their time. The South African guidelines, referred to in boxes 4.1 and 4.3, also provide 16 principles and practices for effective stakeholder interaction in participatory planning processes, including mutual respect, continuity in participation, transparency, accountability, and commitment. Other principles include confidentiality among participants; having views heard without dismissal; advance notice of meetings and document sharing; inclusive public announcements; and agreements on handling disputes. Involve All Relevant Stakeholders 71 4.35 Options assessment exercises deal with considerable diversity. At the beginning of the exercise, stakeholder interests may be diametrically opposed; stakeholders may have culturally different approaches to decisionmaking; and they may be mistrust among government and nongovemment stakeholders. In order to establish constructive dialogue from the beginning, the process manager can propose rules of behavior for the exercise. Altematively, the advisory group may be asked to do so, often with the help of a facilitator. 4.36 Rules of behavior are often short and simple statements of the obvious: rules for listening and speaking, against interruption, for clarity, and with a focus on the issues under discussion. The real value in establishing rules is not primarily in their content, but in the collective intent to make the best out of the opportunity to interact. Explicit rules provide vulnerable participants a framework to refer to when they want to make themselves heard. Rules also confirm the right-and obligation-of stakeholder representatives to consult with their constituency. The multi-stakeholder advisory panel for the San Diego Emergency Storage Project adopted the rule that new issues brought into a meeting could not be decided upon in that same meeting. This gave members time for reflection with their constituency. Another operational rule stated that participation in the exercise would not necessarily be construed as endorsement of any project under consideration in the exercise. Initially, this was essential to get interest groups to participate. As the discussions matured, interest groups, in fact, modified their positions as they gained more information and understanding about the options. Use of Facilitators 4.37 A professional facilitator may be used when dealing with diverse groups with contradictory positions or where a few stakeholder interests dominate. Facilitators have: * Skills in guiding decisionmaking, using mechanisms for stakeholder involvement that are suited to different situations. This helps decisionmaking proceed efficiently and meets deadlines. * An independent position vis-a-vis the planning exercise, which enables them to gain the trust and confidence of stakeholders. This, in turn, promotes trust among members of the Advisory Group. 4.38 It is not necessary to have facilitators who combine facilitation skills with detailed knowledge of the options under assessment. Facilitators who are experienced in their work will be able to draw from the stakeholder group the content knowledge needed for the discussion. Nevertheless, a facilitator will need at least a good working knowledge of the topics of energy and water planning to be able to follow and structure the discussions. Facilitators with such knowledge may have to be brought in from outside, especially when a diverse set of options is being considered at a strategic level. For project planning exercises, development NGOs may be able to facilitate the involvement of specific stakeholder groups, such as indigenous groups, women, or downstream fishing communities. 72 Stakeholder Involvement in Options Assessment Communications Plan 4.39 The effective involvement of all actors (Advisory Group, Stakeholder Forum, and wider public) requires a deliberate communications strategy. A public communications program is "an integrated, systematic, and comprehensive set of activities the purpose of which is to inform and actively engage key audiences on critical issues that need support."22 Preparation of a communications plan prior to the options assessment exercise should be considered for all major planning exercises. 4.40 The Stakeholder Analysis (discussed previously) provides the basis for the Communications Plan, which sets out the level of stakeholder involvement (Advisory Groug and Forum) and public consultation as well as the steps and methods to achieve this. The Communications Plan recommends the best channels of communication for different stakeholder groups; the stages of the planning process when communications should be carried out; and the level of effort (time, costs, use of special communications skills) to be invested in the communications. These communications must be two-way. For example, the plan may include surveys that inform a strategic process of local perceptions and opinions about the options being considered. 4.41 A communications plan can be a key factor in stakeholder involvement. In the hydropower screening and ranking exercise in Nepal (Case Study 2), the stakeholder communications plan and public consultation plan was prepared based on the formal stakeholder analysis. This defined the forms of communications to NGOs, donors, embassies, central and regional government agencies, political parties, the media, financial institutions, the private sector, and research institutes for each step of the exercise. It also prescribed methods to invite their participation. The communications plan ensured that all stakeholders received timely information on the progress of the project, received notification of the next step for their involvement, and also provided a means to brief the media and demonstrate the commitment of the process manager to involve all stakeholders in a meaningful way. 4.42 The implementation of the communication plan provides a record of the ongoing engagement with different stakeholders. For example, in the Bujagali Hydropower Project (Case Study 5), a list of all meetings and their agendas was made available to the public through the internet and at the project information center as the stakeholder engagement process proceeded. The list included meetings between the project sponsor and stakeholders, including government officials, NGOs, and civil society. 4.43 Box 4.7 shows typical elements of a communications plan for a strategic options assessment exercise. 22 Public Communication Programs for Privatization Projects -A Toolkit for World Bank Task Team Leaders and Clients, Development Communications Division. External Affairs Vice Presidency, World Bank, 2002. 23 Refer to World Bank's Development Communications Division. Involve All Relevant Stakeholders 73 Box 4.7: Communications Plan for the Nepal Hydropower Study For the screening and ranking exercise in Nepal (Case 2), the study team prepared a 3-part report in the inception phase of the exercises that included: * A stakeholder analysis * The government agency and donor agency communications plan * The public information / consultation plan. The Stakeholder Analysis identified two general classes of stakeholders: Primary: persons or groups directly affected by the project or projects, in either a positive or negative manner; and institutions either directly involved in implementation, or those who can significantly influence the outcome of the process. Secondary: persons or groups indirectly affected by the project, and institutions or organizations that may be involved in some aspect of project implementation. The Communications Plan outlined how government agencies and donors would be involved in the exercise and the key strategic messages. The main objective was to build a broad consensus on the process, the selection of projects, and ultimately the implementation. Secondary objectives were defined as: * Seeking input from other agencies on the comprehensiveness of the inventory of projects * Seeking input and consensus on the process and criteria * Ensuring that all stakeholders are informed plus capture ideas and perspectives from other agencies * Establishing areas of cooperation with the main stakeholders required for Phase II work. The communications plan sets out the role and tasks of the process manager and study team in implementing the communications program in detail. For example, it identified and outlined tasks such as holding briefings; sending letters and reports; and identifying when to invite specific input, such as for the assembly of the options inventory and the development of the evaluation criteria. Sample meeting agendas and letters were provided as annexes. The public information / consultation plan similarly elaborated the key messages and strategic objectives for involving primary and secondary stakeholders identified in the stakeholder analysis. It set out the methods for information dissemination and consultation with stakeholder groups individually and collectively. On completion of the options assessment exercise, a full report on the inter-agency and public consultation outcomes was prepared as one of six main volumes for the exercise. Sources: Nepal Electricity Authority and CIWEC. 1996. Phase I - Stakeholder Analysis, HMG Agency and Donor Agency Communication Plan and Public Information / Consultation Plan; Medium Hydropower Study Project (MHSP). Nepal Electricity Authority and CIWEC. 1998. Inter-Agency and Public Consultations, Phase I -Fine Screening and Ranking Report, Volume 6 of 6. 74 Stakeholder Involvement in Options Assessment Techniques for Group Interaction 4.44 Groups with diverse points of view typically progress from stating and defending their specific viewpoints, to listening and properly understanding the viewpoints of others, to (in some cases) reaching consensus. The techniques used for managing interactions within the Advisory Group should promote this progression. The choice of specific technique depends on whether the planning is strategic or project specific; on the stakeholder representation; and on the stage in the options exercise. 4.45 Strategic processes tend to involve well-educated stakeholders who often are specialized or experienced in a relevant discipline. They generally have a clear idea of what they would like to achieve and may express strong advocacy positions. For example, environmental NGOs in the Berg River Project (Case Study 9) were opposed to any further water diversion projects. They advocated a comprehensive package of water conservation, demand management, and water reuse options. Stakeholders in strategic processes are generally able to prepare and review written submissions and to articulate their views in meetings. Formal meetings can be an effective form of stakeholder involvement in strategic exercises. Often a chairperson can be appointed from among the Advisory Group, while the Study Team assumes the role of secretariat. 4.46 Project planning, especially when set in remote rural areas or indigenous territories, generally deals with stakeholders that have varying degrees of access to information and media, little formal education, speak different languages, and may posses unequal political power. It is not surprising that better-educated, more powerful members can dominate the outputs of such diverse groups. Decisions about the design and alignments for flood control and drainage infrastructure in Bangladesh are generally determined by a small but influential segment of the stakeholders. Mechanisms that deal with such diversity include focal group meetings with the less powerful and less articulate groups to ensure that different views are brought to the table. Participatory rapid appraisal (PRA) techniques, which use visualization tools, are often effective in promoting broad participation. 4.47 Many techniques have been developed over the years to generate ideas, foster cooperation, encourage listening and understanding, and build consensus in groups such as Advisory Committees. These techniques include Visualization in Participatory Planning (VIPP); brainstorming; objective trees to analyze needs; and Logical Frameworks to structure goals, objectives, performance indicators, and risks. 4.48 These techniques are less useful when broader stakeholder groups have to be consulted because of the large size of the group. Instead, these groups are typically consulted through community meetings using techniques such as "open floors" to receive reactions to proposals, voting procedures to gauge opinions, idea boxes, and written submissions. Voting is seldom used as a means to achieve closure because it focuses on Involve All Relevant Stakeholders 75 differences rather than on common interests. The aim of participation is to promote discussion and gradual recognition of viewpoints, rather than simply reaching a decision. Advising Decisionmakers 4.49 It is not always possible for consensus to be reached within the Advisory Group itself. Overemphasis on dispute resolution to seek consensus within an Advisory Group can lead to the adoption of sub-optimal policies and projects and fails to inform the decisionmaker of the full array of opinions. An alternative approach to stakeholder involvement is characterized as "decision-aiding."24 It leads to an improved understanding of the views held by different stakeholder groups without necessarily reaching a specific recommendation. The limits on possible options are understood, and there is a growing sense of joint ownership about the recommendations put to the decisionmaking authority. 4.50 The Advisory Group's recommendations should be presented along with the diversity of views among members of the Group. Box 4.8 describes three water resource projects where the degree of consensus on recommendations was recorded and presented to decisionmakers. 24 Gregory, R., T. McDaniels, and D. Fields. 2001. "Decision Aiding, Not Dispute Resolution: Creating Insights through Structured Environment Decisions," Journal of Policy Analysis and Management, Vol. 20, No. 3. 76 Stakeholder Involvement in Options Assessment Box 4.8: Examples of Advising Decisionmakers about Group Opinions Egypt: Water Board Strengthening Egypt is developing the institutional structure for decentralized water management. Pilot Water Boards have been elected that are responsible for all aspects of water management (industrial, agricultural and domestic) in their assigned area. In a three-day exercise to identify and assess options for strengthening these Water Boards, various stakeholders (government, private sector, and water board representatives) were asked to submit their reaction to these options through four semi-structured answers: (1) "I disagree because ... ;" (2) "I disagree unless ... ;" (3) "I agree if ... ;" and (4) "I agree because ...." The exercise resulted in clear support for expanding initiatives on decentralized water management beyond pilot areas. The concerned Ministry now has a good appreciation of the diversity of views as well as the majority opinion. Canada: Operating Strategies for a Reservoir BC Hydro used consultative processes to establish a draft Water Use Plan (WUP) for the Stave River (Case Study 7), which was subject to approval by the Provincial Comptroller of Water. A multi-stakeholder Consultative Committee was set up to recommend the WUP, which defined operating strategies for an existing reservoir with a new hydropower facility. After extensive participation in developing and evaluating alternative strategies, a recommended strategy was prepared. Members of the committee used a three choice vote-endorse, accept, or block-as a means to state their individual positions on the Committee's final recommendation. "Endorse" meant that the member endorsed the proposed alternative, either fully or with minor reservations. "Accept" meant that, in their view, the alternative did not represent the best possible solution, but that their minimum needs were met. "Block" meant that the member could not support the proposed alternative. This procedure resulted in a recommended Water Use Plan, which 80 percent of the Consultative Committee endorsed and the remaining 20 percent accepted (see Case Study 7). The information on the degree of the consensus was then conveyed to the Comptroller, along with the recommendation, to inform subsequent decisionmaking. Turkey: Ex-Post Evaluation of a Multi-Purpose Reservoir A participatory strategic and comprehensive (ex-post) evaluation of the Ceyhan Aslantas multi-purpose dam was conducted in the Ceyhan River Basin in Turkey (Case Study 8). This project had been supported by World Bank funds and was constructed in the late 1970s and early 1980s. The World Commission on Dams (WCD) sponsored the evaluation exercise with the full support of the Government of Turkey. An independent multi-stakeholder team prepared evaluations of the development effectiveness of the dam based on a stakeholder scoping session. They identified 17 lessons for the future development and management of dams in the Ceyhan River Basin. The stakeholder groups registered their opinions about these recommendations using five broad categories (strongly agree, disagree, neutral, disagree, or strongly disagree). These recommendations were passed on to management in Turkey, and the Case Study represented part of Turkey's formal input to the WCD. Involve All Relevant Stakeholders 77 4.51 It is often wise to let members of the Consultative Committee provide advice as well as specific recommendations to decisionmakers. For example, the Consultative Committee recommended that the draft water use plan for the Stave River (Case Study 7) should include a monitoring program because of the uncertainty about some of the ecological impacts of different operating strategies. It also recommended that a full and comprehensive review of the outcome of the monitoring should be conducted after five years. It was further proposed that a permanent Consultative Committee of water use interests be established to oversee the effectiveness of the measures they had proposed. The addition of these recommendations was part of the reason why the Consultative Committee was able to reach unanimity for the proposed operating strategy. Time Requirements for Stakeholder Involvement 4.52 Process managers commonly underestimate the time required for stakeholder participation processes. For fully effective group work, time is needed for members of the Advisory Group to get to know each other; for Advisory Group members to consider information and consult with their constituencies; and for broader consultations with the Stakeholder Forum and general public. Unexpected circumstances can also intervene; for example, governments change, and international circumstances can affect the possible options to be assessed. 4.53 Consultative processes can range from a few months to several years in length. The length is determined by practical considerations regarding the type of activity (strategic/sectoral/project level); overall project timelines and budgets; other resources; and participants' time commitment and decision timeframes. For project level activities, there may also be national laws, often related specifically to EIA processes, that may identify timeframes for public notice, for stakeholder submissions, for responses, and for the announcement of public consultation meetings. For timeframes for public consultation on strategic exercises, the national legislation for ETA processes can be used as a guide. 4.54 The process manager can tailor the length and detail of the stakeholder involvement exercise to a considerable extent within these constraints, although it is difficult to achieve worthwhile outcomes in less than 6 months. There is no substitute for time coupled with a well-developed work plan. Short participatory exercises are likely to result in recommendations that are not widely supported, with dissenting viewpoints accompanying the recommendations. 78 Stakeholder Involvement in Options Assessment Table 4.4: Examples of the Time Requirement for Options Assessment and Stakeholder Involvement in Strategic Planning Exercises Duration Linkage to Project Appraisal Exercise (months) (and level of effort) Zambia: Sector EA and 14 Prior to appraisal Zambia Power Sector Rehabilitation diagnostic study Project. Approximately 20 person-months of international consultants and involvement of ZESCO staff and other sector agencies (Case Study 6) Brazil: Ceara State Regional EA 18 During project preparation of the Ceara Integrated Water Resource Management Project (Case Study 3) Kyrgyz Republic: Irrigation 20 Prior to the appraisal of the emergency irrigation Sector EA rehabilitation project (Case Study 10) Pakistan: National Power Plan 26 To develop a national plan for bulk generation and Exercise transmission. The exercise involved a large team of international consultants working closely with 80 WAPDA planning department staff, also involving capacity development. Canada: Stave River Water Use 18 Deliberation of the consultative committee to Plan establish new operating strategies for an existing dam and new powerhouse (Case Study 7) 4.55 When drawing up a timeline for consultations, the project manager should always be conservative, assuming that the process will actually take considerably longer than the allocated time. Additional time and effort may be required to deal with: * New options or assessment criteria * Delving more deeply into certain issues to satisfy the interests of the Advisory Group * Delays in field surveys and site investigations * Interactions with Stakeholder Forum members. 4.56 Experience shows that stakeholders will bring new information and insights to the table that merit follow-up. The process manager would generally be responsible for extending process time to accommodate new insights. The Nepal Medium Hydropower S&R exercise (Case Study 2) provides an example of underestimating the time needed. While the outcome was highly successful, the strategic screening and ranking exercise that was initially envisaged to take three months was extended to over to 14 months. This was done at the urging of the stakeholders who, once they became engaged, wanted a much larger inventory of options and further analysis before reaching recommendations. Table 4.4 provides some examples of the time required for other strategic planning exercises. Involve All Relevant Stakeholders 79 4.57 The benefits from allowing extra time for processes will eventually be outweighed by the costs. The process manager must be experienced enough to recognize when this point is reached and be able to convince stakeholder participants that the options assessment process needs to be completed and recommendations need to be forwarded to the decisionmakers. 4.58 Good practices in time management include: * Deciding how much time is available for stakeholder involvement within the overall project framework and within the mandate of the exercise to inform ongoing decision processes. * Defining a stakeholder timetable that is realistic and conservative, allows time for discussion between Advisory Group members and their constituents as well as consultations with the Stakeholder Forum, and public consultations (if appropriate) at key decision points. * Clearly communicating progress against the timetable to the stakeholders during the participation process. * For project level activities, ensuring that the timetable conforms to government guidelines and legislation for advance notice, review periods for public review, input, and consultation. * Making allowances for delays to occur in the initial stages of a process as Advisory Group members get to know one another, but progressively increasing observance of the timetable. 4.59 Mild pressure favors reaching closure of the work, while unrealistic deadlines frustrate and de-rail the participatory processes. Time also is different across cultures. It is important that all participating in the planning exercise develop the same sense of time. The subject of time therefore needs to be discussed with stakeholders at an early stage along with the design of the consultation process. Leveling the Playing Field 4.60 Especially in project planning exercises, stakeholder representatives need to be able to participate effectively within the Advisory Group. Indigenous groups may lack standing in the view of other participants, and language barriers may prevent submissions by some. Specific challenges for indigenous groups may include the lack of knowledge on the part of the other stakeholders about indigenous culture, including indigenous procedures for decisionmaking. It is the responsibility of the process manager to reach out to such groups and ensure that these impediments are overcome and that they can fully participate in the exercise. It is difficult to delegate this responsibility to the Advisory Group itself when it is not yet functioning fully. However, it can be delegated to a process facilitator, if one has been appointed. In project planning exercises in areas 80 Stakeholder Involvement in Options Assessment with little formal community organization, development NGOs are sometimes contracted to assist such stakeholder groups make their views known. 4.61 One of the key conditions for participation is having access to information about water and energy resources. Relevant information includes hydrology, water quality, state of the environment, water consumptive use, power generation, and consumption. Box 4.9 describes the regional information base, produced by the Mexican National Water Resources Program, on which catchment councils are to build their plans. Box 4.9: Making Information Accessible for Integrated Water Management The National Water Commission of Mexico is undertaking the "Programa de Modernizaci6n del Manejo del Agua" (PROMMA) with IBRD/IDA funding. The project: * Modernizes information systems for meteorological monitoring, early warning and water quality monitoring * Compiles a water users' register that describes existing water use, rights and responsibilities, in accordance to the National Water Law * Forms decentralized Catchment and Aquifer Councils, which will define future projects that integrate and improve water management. PROMMA supports decentralization of decisionmaking through providing reliable information and instruments for monitoring, evaluation, planning, and management. Based on the information compiled by PROMA, the Catchment and Aquifer Councils are to define future projects that integrate and improve water management. The basis for the development of projects is formed by regional information bulletins. Source: National Water Commission, Technical Evaluation of the Water Management Modernization Program 2000, Mexico, November 2000. 4.62 Poor or otherwise, socially disadvantaged groups may not easily be able to participate either because these groups have become accustomed to being excluded from decisionmaking or do not have the tools with which to participate. Extra efforts are needed to ensure the participation of such groups. These efforts could include ensuring the accessibility of information, adaptation of information to knowledge levels and language skills, advisory services on rights of stakeholders, and coaching of involvement. Good practice in involving poor and marginal groups includes: * Funding NGOs to assist marginalized groups * Providing translation facilities and newsletters or radio broadcasts in all relevant languages. * Sharing information on difficulties in participation with other stakeholders, so that these also may make efforts to accommodate the participation of the weaker groups Involve All Relevant Stakeholders 81 Providing independent legal council (in cases where negotiation of individual entitlements may be involved). 4.63 The extent to which such assistance is provided will depend on the specific project (box 4.10). However, these efforts can be expensive and so need to be anticipated in the project's budget. Rather than being seen as an extra cost, they should be regarded as a necessary part of undertaking a strategic or project level exercise in a fully professional way. Box 4.10: Enabling Poor and Marginalized to Participate * Uganda: Bujagali Hydropower Project. Legal counsel was provided to advise project- affected people on legal issues; all survey and valuation results were crosschecked and signed by village elders and local counselors. * Pakistan: Ghazi Barotha Hydropower Project. Public Information Centers at project sub- center sites provided a focus for interaction and developing the program components, also providing opportunities to register individual grievances about the land acquisition and compensation processes. Legal advice and access to NGO-facilitated legal advisors was provided. * China: Anning Valley Agricultural Development Project (AVADP). The special context and concerns of the minority Yi people were identified through a social assessment. These were factored into the design of the project activities in their areas. 4.64 It has become common in many development projects, to pay stakeholder representatives a daily fee, regardless of their social and economic status, for their attendance at the Advisory Group and other activities. There are pros and cons to these payments. The advantages are that representatives are compensated for foregone incomes and out-of-pocket expenses, leading to greater participation and continuity. The disadvantages are that these fees can come to be seen as a right, irrespective of performance, and can lead to estrangement between the representative and his/her constituents. The decision on whether to provide attendance fees must reside with the process manager after careful consideration of these issues and local regulations. 4.65 When disadvantaged groups are included in the Advisory Group, there is a danger that participatory approaches may mask widely different levels of power and influence, exaggerate the level of agreement reached, and expose disadvantaged groups to manipulation and control by more powerful stakeholders. A professional facilitator may be able to help avoid these outcomes. Box 4.11 shows characteristics that help to eliminate the vulnerability of disadvantaged groups in negotiations. 82 Stakeholder Involvement in Options Assessment Box 4.11: Disadvantaged Groups and Negotiation Edmunds and Wollenberg recommend that practitioners take the following steps to ensure that stakeholders understand the politics at work in negotiations: * Inform participants fully about the organizations to which conveners and facilitators are accountable. * Give disadvantaged groups the option to not participate in negotiations and to not be made more visible to powerful stakeholders. * Create possibilities for disadvantaged groups to use alliances with more powerful groups in negotiations. * Acknowledge the right of disadvantaged groups to identify "non- negotiable" topics, or items they view as inappropriate for discussion in the negotiations. * Acknowledge that each group may not fully and unconditionally support proposed agreements. Encourage stakeholders to express their doubts about agreements. View "consensus" as likely to mask differences in perspective and discount the input of disadvantaged groups. * Assess the likelihood that external events will require revisions in agreements and make provisions for disadvantaged groups to be involved in those revisions. * Prepare disadvantaged groups for the possibility that the goodwill demonstrated among groups in multi-stakeholder forums may not last. * Approach negotiations as one strategy among several that disadvantaged groups may pursue simultaneously. * Assess the legitimacy of processes, decisions, and agreements in terms of the role and implications for disadvantaged groups. Analyze the reasons for participation or non-participation by each group in negotiations, how groups are represented, the roles of convenors and facilitators, and the history of relationships underlying agreements. * View negotiations as a long-term, iterative process and be ready to monitor impacts and adjust strategies to assist disadvantaged groups accordingly. Source: D. Edmunds and E. Wollenberg. 2002. Disadvantaged Groups in Multi Stakeholder Negotiations, CIFOR Programme Report. 4.66 As a further resource on stakeholder involvement, Box 4.12 quotes a checklist for the review and evaluation of public consultation plans and processes that confirms most of the findings in the present chapter. Involve All Relevant Stakeholders 83 Box 4.12: Checklist for Reviewing and Evaluating Public Consultation Plans and Processes Methodology Selection of Participants * Were representatives of the public involved in selecting participants? * Have all potential stakeholders been identified? * Have key stakeholders been given the opportunity to express their views? Selection of Consultation Techniques * Are the chosen techniques suitable for the objective? * Are the techniques appropriate for the objective? * Are the techniques appropriate for the size of the audience? * Are they appropriate for the technical knowledge of participants? * Has sufficient time been allowed for informing participants? * Will suitably qualified staff be involved? Implementation Suitability of Arrangements for Implementation * Is the location of appropriate? * Is the time appropriate? * Can everyone attend who may want to participate? Adequacy of Information Provided to the Public * Has sufficient information been provided for participants to make informed judgments? * Is the technical level of the information suited to participants' background knowledge? * Has appropriate language been used? Information for Decisionmakers * Was a nontechnical summary provided? * Is information clearly and concisely presented? * Has an appropriate language been used? * Was it provided in time to inform decisionmakers? Resources for Participants * Have resources been provided to enable all those who wish to participate to do so? * Were resources distributed fairly? Analysis of Results * Have views of participants been recorded? * Have they been analyzed? * Have suitably qualified staff members been involved? Feedback and Use of Results * Have the results of the consultation been reflected in the decisionmaking process? * Have participants been informed of the outcome on how their input was used? * Has the process resulted in a better decision? Source: European Bank for Reconstruction and Development. 1995. Manual on Public Participation. London: EBRD; adapted by Davis, S.H. and N. Rukuba-Ngaiza. 1998 "Meaningful Consultation in Environmental Assessments," Social Development Notes, Number 39, Washington: World Bank. i ii I I Assess All Options Strategically and Comprehensively 5.1 Six generic steps for undertaking a systematic assessment of options are shown in figure 5.1. The outcome is typically the recommendation of a preferred development plan. Appropriate sensitivity analysis or scenario analysis would also be provided to clearly show the range of circumstances where the recommendations are valid. Alternative plan(s) for significantly different scenarios could also be proposed. The steps are further elaborated later in this chapter. 5.2 The same steps may be used, but in a less extensive way, to assess within- project alternatives during the development and operational phases of a dam. More emphasis is placed here on the discussion of the six steps in a strategic exercise; in these exercises, more options are on the table. 85 86 Stakeholder Involvement in Options Assessment Figure 5.1: Roadmap for Option Assessments 5 S 5.1.1 Goals and Needs Assessment | 5.1 Strategic 14 Plannling iteration |5.1.2 Criteria and Performance Measures | iteration 5.1.3 Assembly of Options Inventory I 4 iteration /Decision \________________I ___ to > 5.1.4 Screening and Ranking of Options | Proceed / iteration |5.1.5 Prepare Altemative Plans 5.2 Project I 4 Development iteration 5.1.6 Recommend a Preferred Plan - ] l 5.3 Management 5.3 Process managers should seek to ensure that: * All options deemed relevant to stakeholders are included in the assessment, so that the exercise is enriched with perspectives that otherwise would not have been included. * Options are evaluated in a fair and transparent manner. The steps in options assessment should address aspects that stakeholders deem important, should be understood by all stakeholders, and should be seen as even-handed. * Reasons for exclusion (and inclusion) of options should be clearly stated. 5.4 In past experience with dam projects, the real or perceived failure to proceed systematically through the evaluation of options before reaching decisions has often created controversy. The WCD recognized the importance of this issue and recommended comprehensive options assessment as the second of its seven strategic priorities (box 5.1). Assess All Options Strategically and Comprehensively 87 Box 5.1: WCD Strategic Priority 2: Comprehensive Options Assessment Alternatives to dams often exist. To explore these alternatives, needs for water, food, and energy are assessed and objectives clearly defined. The appropriate development response is identified from a range of possible options. The selection is based on a comprehensive and participatory assessment of the full range of policy, institutional, and technical options. In the assessment process, social and environmental aspects have the same significance as economic and financial factors. The options assessment process continues through all stages of planning, project development, and operations. Effective implementation of this strategic priority depends on applying these policy principles: * Development needs and objectives are clearly formulated through an open and participatory process before the identification and assessment of options for water and energy resource development. * Planning approaches that take into account the full range of development objectives are used to assess all policy, institutional, management, and technical options before the decision is made to proceed with any program or project. * Social and environmental aspects are given the same significance as technical, economic, and financial factors in assessing options. * Increasing the effectiveness and sustainability of existing water, irrigation, and energy systems is given priority in the options assessment process. If a dam is selected through such a comprehensive options assessment process, social and environmental principles are applied in the review and selection of options throughout the detailed planning, design, construction, and operation phases. Source: The World Commission on Dams. 2000. Dams and Development: A New Framework for Decision-Making, Final Report of the World Commission on Dams. 5.5 To undertake options assessments in the manner envisaged by the WCD, the planning processes must be dynamic and flexible. In practice there are iterations between the steps in figure 5.1, either because the results of one step affect decisions taken earlier, or because information becomes available leading to new understanding of the choices and tradeoffs. For example, as Egypt's National Water Resources Planning exercise neared conclusion of the screening and ranking phase, the outcomes of a separate exercise to define the long-term vision for the Ministry of Water Resources and Irrigation became available. This necessitated adding a portfolio with institutional reform options to the larger options portfolio, and repeating the screening and ranking steps to ensure that all options were aligned. 5.6 The process of assessing options is very much a leaming exercise for the members of the Advisory Group, and they may wish to modify or improve criteria, revisit the importance of different criteria, or incorporate additional options. The important point 88 Stakeholder Involvement in Options Assessment is that all adjustments made within the process need to be transparent so that the assessment is carried out in a fair manner. Options Assessment in a Strategic Planning Exercise 5.7 Strategic plans are typically formulated either as sector plans or as river basin plans that incorporate multiple sectors. The following sections take a closer look at each of these six steps in figure 5.1. Goals and Needs Assessment 5.8 Assessing the need (demand) for water and energy services in different sectors, and the relationship of these needs to wider development goals is an essential step in options assessment. The development goals and needs should be clearly set out and agreed by all stakeholders before proceeding to the identification of the options. Generally, the Study Team would update or prepare the needs assessment, which is then reviewed by the Advisory Group, thus ensuring that stakeholders have input to this important phase of the assessment. 5.9 The needs assessment should not only consist of demand forecasts, but also include required levels of access of different beneficiary groups to water or energy services, and in many cases the levels of service reliability. Needs are not defined simply in terms of growing demand, but also in terms of a society's development objectives. Consequently, the wider impacts of these services should also be included, such as agricultural production, health, equity, and other socioeconomic impacts. 5.10 Sometimes an existing needs assessment (or demand forecast) can simply be reviewed and endorsed by the Advisory Group. In other situations, a new element may have to be added to an existing needs assessment. This would apply, for instance, when a particular beneficiary group has been omitted, or the beneficiaries were not sufficiently differentiated and have different levels of need or priorities. For example, the Low Income Sanitation Technical Assistance Project (PROSANEAR II) water programs in Brazil were targeted to urban poor who lacked access to piped water supply and sanitation services. These groups had been left outside the utility demand projections for a variety of reasons, including low cost recovery, lack of policy, and a limited incentive for water service providers to invest in serving these customers. Part of the program development included preparing needs assessments in collaboration with community groups, local NGOs, and representatives of beneficiaries. A range of supply options were identified, including nonconventional approaches using low-cost appropriate technology and active community participation. 5.11 Surveys are generally used to obtain raw data on the demands for various water and energy services. In rural settings, a community's development needs can be assessed relatively quickly using Participatory Rapid Appraisals (PRA). PRA uses a variety of participatory techniques (such as visualization) that solicit views and information from focal groups. NGOs, because of their closeness to communities, are often engaged to facilitate PRA exercises. Outcomes of PRA exercises are qualitative Assess All Options Strategically and Comprehensively 89 statements of the development needs and priorities of local communities. PRAs would reveal whether the present level of irrigation, drinking water, or power service provision hampers the community's socioeconomic development and whether the communities are actively in favor of improving such services. 5.12 Service-oriented demand forecasts-such as power demand forecasts or projections of municipal water demands-vary from simple projections of past trends to data-intensive, disaggregated modeling exercises. Simple trend-based forecasts are not very robust or reliable for longer time frames. Modeling can improve the accuracy of forecasts and produce scenarios by incorporating assumptions about behavioral responses to changes in price, climate (such as dependence of water or electricity demand on temperature), or technology (such as effective leak detection techniques or energy- efficient household appliances). The drawback is that such models are data intensive and that databases must be constantly updated. Irrigation water use forecasts rely strongly on assumptions about future cropping patterns, commodity prices, and on assumptions about conveyance efficiencies of irrigation systems. Water balance methods, which compare water use trends across sectors, often use the crop evapotranspiration as a balance term; that is, all water that is neither consumed by other sectors nor lost flowing out of the system is attributed to crop evapotranspiration. 5.13 Modeling forecasts prepared by water or power agencies can be very detailed and their outcomes depend strongly on key assumptions and parameters used in the computations. Such assumptions may include overly optimistic forecasts of economic growth and thereby exaggerate the predicted requirement for water and energy services. These forecasts need to be checked carefully since the size of the projected demand is important when deciding the extent to which demand management can meet these forecasts. 5.14 Three instruments-Sector Environmental Assessments, Social Assessments, and Scenario Development and Analysis-can all incorporate needs assessments. 5.15 Sector EAs are part of the larger family of Strategic Environmental Assessments that are undertaken by the World Bank in preparation for loans and credits. The Sector EA typically provides an assessment of sector development priorities and how these development priorities are interdependent with other sector priorities (e.g. environment and social sectors) and so can be used to undertake a needs assessment. 5.16 Sector EAs may contain a generic options assessment. The Sector Environment Assessment that accompanied the Medium Hydropower Screening and Ranking Project in Nepal (Case Study 2) reviewed the potential for all demand and supply options, before focusing on hydropower options for the specific purpose of providing a quality portfolio of medium-scale projects for mid-term domestic grid supply. In the Zambia Power Sector Rehabilitation Project (Case Study 6), the Environment Scoping EA assessed social and environmental needs. As part of preparation for the Ceara State Integrated Water Resources Management Project (Case Study 3), a regional 90 Stakeholder Involvement in Options Assessment EA was undertaken to assess the need for water services for both human and ecological systems and to propose new criteria for managing inter-basin water transfers. This information was then used for the selection, development, and management of new water regulation infrastructure and fed directly into a screening and ranking exercise for dams. 5.17 The second instrument, Social Assessments, are a specific form of social analysis. Social Analysis focuses in a systematic manner on equity and social sustainability and aims to improve social development outcomes. Presently, the World Bank's Social Development Department is developing general guidelines on Social Analysis (including assessments).25 Sector-specific guidelines will be developed in the near future. 5.18 Social Analysis uses five entry points (or dimensions of enquiry) for the study of equity and social sustainability: (1) social diversity and gender; (2) institutions, rules, and behavior; (3) stakeholders; (4) participation; and (5) social risks. Social Assessment is an "upstream" planning approach undertaken by the borrower to incorporate stakeholders' views into project design and to establish a participatory process for implementation and monitoring. The Social Assessment helps identify different beneficiary groups and groups of potentially affected people and links their social development needs and equity concerns to the sector needs assessments. Thus, the Social Assessment during the preparation phase of the El Niiio Emergency Recovery Project in Ecuador argued that the proposed relocation of 1,000 families should include addressing their social and economic development needs. 5.19 Social Assessment is-according to the World Bank's draft Social Analysis Sourcebook-advisable when: * The project is likely to have adverse social impacts, particularly on the vulnerable and the poor * Influential stakeholders contest the project's objectives or design * Social development outcomes are at risk * A knowledge gap about social development in a project or sector makes it impossible for the Bank to endorse the project without further examination. 5.20 Scenario Development and Analysis is also used because needs assessments are based on certain assumptions about future behaviors of people, technologies, and complex hydrological systems. Because of the uncertainty of those assumptions, such assessments usually produce different scenarios. Instead of evaluating a single plan, different plans are developed from these scenarios and are subject to scenario analysis and debate by the Advisory Committee and other actors. 25 Social Analysis Sourcebook: Incorporating Social Dimensions into Bank-Supported Projects, Social Development Department, The World Bank, 2002, Draft. Assess All Options Strategically and Comprehensively 91 5.21 Box 5.2 illustrates the how the Intergovernmental Panel on Climate Change (IPCC) used scenario analysis for climate change adaptation planning. Many stakeholders are calling for more explicit consideration of climate change influences in the assessment of long-life water infrastructure and for water management decisions. Scenario analysis is emerging as a primary tool to identify these options and to prepare adaptation plans that would be merged with ongoing water resource planning and options assessment processes. Box 5.2: Scenario Analysis: Considering Options for Climate Change Adaptation in the Water Sector In its latest report, the IPCC used general circulation climate models to develop a family of scenarios to assess the effects of global warming and how changes in the climate system would impact on precipitation patterns, stream flows, and extremes of flood and drought in different regions of the world. However, the changes were particularly difficult to model with accuracy at the sub-regional level. Here, scenario development and analysis offers a structured means of organizing information and gleaning insight into the selection of options for adaptation plans when precise predictions are uncertain. In its Third Communication to the UNFCCC, the European Union used scenario analysis to evaluate specific adaptation measures under "worst case" and "best case" situations. The EU recommended that water resource managers need to develop better methodological procedures for adopting scenario-based approaches to strategy and scheme management, and to develop adaptive techniques to allow incremental adjustments in water resource systems to climate change over time. The Global Water Partnership similarly calls for the use of scenario building for water demand projections to identify possible ranges of future water demands, to assess effective demand management options by analyzing the behavior of users as they react to water scarce situations, to provide key information vital for determining appropriate pricing policies, and to assess interactions between options. Sources: Intergovernmental Panel on Climate Change (IPCC). 2001.Climate Change: Impact, Vulnerability andAdaptation, Third Assessment Report of the Intergovernmental Panel on Climate Change. The European Commission. 2000. The European ACACIA Project Report 107. Brussels: The European Commission. 5.22 Depending on the scope and boundaries of the exercise, the needs assessment phase may also identify priority short-term needs. This may lead to a decision by the relevant government authorities to fast track options to address those needs, while options to respond to mid-term or longer-range needs are evaluated. Box 5.3 illustrates the use of the Irrigation Sector EA in the Kyrgyz Republic to help define the approach and initial options to address immediate needs in the irrigation sector. More details are provided in Case 10. 92 Stakeholder Involvement in Options Assessment Box 5.3: Irrigation Sector Environmental Assessment in the Kyrgyz Republic: Addressing Immediate Needs In the aftermath of the breakup of the former Soviet Union in 1991, the economy of the newly independent Kyrgyz Republic went into a tailspin. Irrigation water supply infrastructure fell into a state of disrepair following the phasing out of state budget support for O&M and the breakup of former state and collective farms into smaller units as part of land reform. Agricultural production was dropping precipitously, and the social consequences and poverty implications were significant, widespread, and mounting. The government recognized that short-term rehabilitation of its irrigation infrastructure was an immediate need and an essential precondition to the success of the mid- and long-term programs for privatization of state land and its wider agriculture and rural reform programs. A Sector EA (SEA) was prepared over 14 months by a small group of Kyrgyz and FAO experts. This confirmed that restoring water supply to at least pre-1991 levels was a priority. By 1995, flows in the primary and secondary irrigation canals up to the farm gate (at collective farm level) had decreased about 25 percent from pre-1991 levels, due to lack of maintenance that caused unchecked siltation and leakage. Irrigation deliveries to individual farms decreased substantially and agricultural productivity declined sharply. Based on this, a detailed program for rehabilitation of primary and secondary irrigation infrastructure and drainage canals, and priority dam safety measures for irrigation dams was proposed. A screening and ranking exercise was undertaken to identify the priority projects using multi-criteria frameworks. National level NGOs and research institutes were invited to participate in the establishing the criteria. In parallel with the physical rehabilitation works, discussion proceeded on the elements of a National Irrigation Rehabilitation Action Plan (NIRAP) and to formulate an Action Plan for the long-term strategy for recovery and modernization of the agriculture sector. Source: See Case Study 10. Criteria and Performance Measures 5.23 In this step, criteria are defined that will be used to structure screening and ranking of options, and evaluate alternative plans. Options for meeting water and energy needs should be assessed on their social and environmental effects as well as on their technical and economic viability. The criteria should: * Be linked to the needs and objectives of the interest groups identified in the preceding step * Include social and environmental criteria as well as technical and economic criteria * Include criteria that reflect national and regional development objectives and policies * Include criteria that look at impacts of options over their life cycle * For each option, the social and environmental costs should include both mitigation costs and any residual, unmitigated costs. Assess All Options Strategically and Comprehensively 93 5.24 There are different types of criteria and no single classification is best for all circumstances. Criteria can: * Exclude projects-for example, at screening no projects that significantly change flows in protected areas should be considered, or options that cannot deliver services in a certain time frame are excluded * Relate to performance criteria-that is, provide a certain amount of drought security or electrical supply at peak demand * Relate to development objectives-that is, provide an opportunity for regional development, provide a certain minimum portion of benefits to poor people or provide local food security. 5.25 There also may be a hierarchy of criteria. In BC Hydro Stave River Water Use Plan (Case Study 7), both performance objectives (needs) and performance measures (criteria) were formulated. Models with sub-criteria were used to establish the performance measures. In the San Diego Emergency Storage Project (USA), there was a hierarchy of goals, sub-goals, objectives, and quantitative criteria. In Nepal's Medium Hydropower Screening and Ranking Project (Case 2), there were two categories of criteria, environmental-social and technical-economic, which represented the two axes of a preference matrix. Various combinations of criteria were incorporated at successive levels of screening, coarse ranking and fine ranking. 5.26 All criteria should be explicit and, to the extent possible, quantitative. Box 5.4 illustrates how environmental costs were internalized in the National Power Plan in Pakistan. Once these criteria were internalized, separate criteria were then used to evaluate and select options to develop alternative generation expansion plans for different scenarios (for example: load growth and different levels of DSM, all thermal, all hydro, with and without gas import, etc.). 94 Stakeholder Involvement in Options Assessment Box 5.4: Internalization of Environmental Costs in the Pakistan Power Sector Generation Expansion Plans When coal, gas, and oil-fired thermal generation options were considered in the Pakistan National Power Plan (1992-1994), each option needed to conform to Pakistan's national regulations on air emissions (CO2, SO2, NO, etc) for both single-point emissions and incremental additions to the airshed. The assessment was made using emission models, which predicted the concentrations of emissions for different technologies and levels of mitigation, taking into account topography and climate conditions. Similarly, the cooling systems for thermal plant (once-through cooling) were designed so that large volumes of water abstracted from rivers and link canals from irrigation districts were within temperature limits when discharged back into the source. Both atmospheric and riverine emissions were monetarized and expressed as costs for each of these thermal options, through increased operating costs and capital costs (including larger cooling systems, more expensive low-sulfur oil and coal inputs, and scrubbers) that were required to meet national standards. Alternative plans identified the cumulative air shed impact of the thermal options. Hydro options also estimated the cumulative basin impacts, including impacts on ecological processes and services, combined flood storage and mitigations, impacts on sediment and nutrient cycles, bio- diversity impacts, and resettlement Source: WAPDA. 1994. Pakistan National Power Plan (22 Volumes). 5.27 The stakeholders, usually through the Advisory Group, should contribute toward the setting of these criteria. In situations where there are a large number of options, a first pass at screening may employ a small set of criteria, often designed to eliminate obviously infeasible options. For the coarse and fine ranking, criteria are developed that respond to needs and objectives. Between coarse and fine ranking, there may be progressively greater detail in the criteria. 5.28 The role of the Study Team is to design quantitative criteria with a logical structure that reflects the views of the Advisory Group. Even when well-formulated criteria have been defined, it is still likely they will need subsequent modification as the assessment proceeds and the Advisory Group learns more about the implications of their choices. Nevertheless, it is worth making an initial effort to make the criteria as comprehensive and structured as possible. It is a sign of a healthy process if the criteria need modification because of the evolving understanding of the Advisory Group and the Study Team; it is a sign of inefficiency if they need modification because they were not properly thought through at the beginning. When a strategic options exercise is under intense public and media scrutiny, changing criteria mid-stream may be interpreted as a form of manipulation. It is therefore important to record clearly what changes are made to the criteria and who sought those changes. 5.29 Development of logically structured and detailed criteria requires considerable effort. The objectives of the different groups represented on the Advisory Group are revealed at this stage of the exercise, so the time-consuming work of understanding what each group is really seeking (often poorly understood by themselves Assess All Options Strategically and Comprehensively 95 as well as by others) commences at this time. Obviously, the time required to develop these criteria depends on the diversity of views and the complexity of options to be assessed, and it depends whether this is the first exercise of its nature or an update of a previous exercise where criteria can be carried over and updated. However, if it is the first time a participatory sector or basin-level options exercise is undertaken, it may require two or more months for the development of the criteria. In such cases, criteria development for a subsequent stage (e.g. fine ranking) may occur in parallel with other steps such as assembling the options inventory or screening. 5.30 The importance of taking a structured approach with stakeholder involvement in defining the criteria is illustrated in Case 1 on China's Loess Plateau Watershed Rehabilitation Project. Small watersheds were selected for inclusion in the project based on criteria that were decided at the provincial level. These criteria included social, environmental, and financial aspects such as the degree of soil erosion; level of poverty; experience in soil and water conservation; development potential; and the ability of farmers to repay loans. Box 5.5 describes a 4-level hierarchy of criteria that a 20- member Screening Committee developed to evaluate emergency water supply options in California, eventually resulting in a decision to build the Olivehhain dam. The whole exercise took place over a 2-year period. 96 Stakeholder Involvement in Options Assessment Box 5.5: Goals, Sub-goals, and Criteria in San Diego Emergency Storage Project (USA) In 2002, a decision was made to build the Olivehhain dam to improve strategic water storage in the San Diego area. The decision followed the withdrawal of a proposal by the San Diego County Water Authority (SDWA) in the late 1980s to build the Pamo dam, when it became apparent that the Environmental Protection Agency (EPA), which is responsible for environmental licensing, believed less damaging, practical alternatives could be implemented. SDWA subsequently initiated what was called the Emergency Storage Project (ESP), with the objective of finding a publicly acceptable alternative to provide 111 million m3 of emergency water storage for the San Diego Area. The participatory approach to screening and ranking supply-side options was adopted. The preferred option emerging from this would be submitted for regulatory approval. A 20-member Advisory Group (formally called the Screening Panel) was established to represent a broad spectrum of interests. The Panel developed a 4-level hierarchy of goals, sub-goals, objectives, and criteria to assess and compare system options, which were then applied by SDWA planning staff. The five goals it established were to: * Minimize environmental impacts * Minimize social impacts * Maximize system implementability * Maximize operational effectiveness * Minimize overall project costs. These goals were divided into sub-goals, objectives, and eventually 35 independent and measurable criteria. Quantitative measures were identified for each criterion. The Panel members also guided the selection of the analytical models to quantify each criterion. Some criteria were modeled, while others were calculated directly. For example, the goal to minimize social impacts was divided into two sub-goals: land use and community impacts. In turn, community impacts were divided into two objectives: traffic impacts and residential and business impacts. The three criteria for residential and business impacts were agriculture, business, and residential displacement from undersupply of water, measured in terms of dollar volume of business and population. A total of 32 supply schemes were developed. The schemes consisted of various combinations of reservoirs, groundwater storage aquifers, pipelines, and aqueducts. They represented a broad range of options consistent with the regulatory permitting process. Interestingly, in the initial coarse screening, the Pamo Dam that was originally proposed by the SDWA received a low score and was excluded from that point onward. Source: T. Keeler, K. Steele et al,. 2002. "Planning for Large Dams in a Regulatory Environment," Hydropower and Dams, Issue 3. 5.31 A specific set of criteria may be used to identify options that address immediate needs by, for instance, giving priority to poverty alleviation, or by addressing the concerns of specific stakeholder categories. The Power Sector Rehabilitation Project (Zambia, Case Study 6) incorporated distribution rehabilitation programs in townships that aimed to improve service coverage ratios and the quality of supply in low-income areas. Case studies 9 and 10 (South Africa Berg River Water Project and Kyrgyz Assess All Options Strategically and Comprehensively 97 Republic Irrigation Sector Rehabilitation Project) provide examples of taking action to address current needs in parallel with steps to meet long-term needs for municipal water supply and development of the agricultural economy. Assembly of the Options Inventory 5.32 A wide diversity of options for meeting water and energy needs are described in detail in appendix 2. Some principles of good practice to follow when developing options for a particular project include: Involving stakeholders in identifying the options. As illustrated in the San Diego ESP (box 5.5), involving stakeholders helps ensure that a diverse range of options is identified that represent development objectives and the needs assessments. The involvement of the Advisory Group also makes the deletion of infeasible options and the fast tracking of options that meet immediate needs less controversial. Box 5.6 provides an interesting example in which an NGO considerably broadened the set of options under consideration from outside the formal decisionmaking process. * Include options at all scales of intervention. Depending on the type of exercise, options may include initiatives at household scale, community scale, as well as larger infrastructure developments. It may mean using options identified in earlier basin and community- level planning work. * Include options from different time frames and properly recognize lead times. To meet both immediate and future needs, the options inventory should include options that have different time frames. It also requires realistic assessments of the timeframe for implementation of supply projects and for the effects of demand- side measures to occur (such as market penetration and adoption or response to tariff changes). * Include supply-side efficiency options. The improvement of the management of existing water, irrigation, and electricity systems to enhance their effectiveness and sustainability has been the focus of many World Bank projects in recent years. Improved management of existing assets can significantly reduce the need for new infrastructure while improving the quality and access to services at less cost than new infrastructure. * Include demand-side management options. Reductions in demand for water and energy through pricing reforms; improvements in source-, transmission- and end-user efficiency; and educational programs can significantly reduce requirements for new supply 98 Stakeholder Involvement in Options Assessment infrastructure, or take pressure off supply development programs. Where a country has low levels of access to water and energy services, as in many parts of Africa, the benefits from demand management will be limited although they can still play a role alongside new supply development. * Include policy interventions and institutional arrangements. Better- focused policy and more efficient institutional arrangements can help facilitate development of new supply options, increase supply efficiencies, or better manage demand. These policy and institutional options can include cost recovery programs, new tariff structures, privatization, decentralization, and management transfer. * Address remaining social concerns from past projects. Social and environmental problems from past projects can influence public attitudes toward new infrastructure. The WCD global review showed that, in many cases, promises of compensation and sharing of benefits from dams have not been kept. This is a complex subject that does not lend itself to global statements. However, addressing legacy issues may be a sensible option where it will enhance the acceptance by stakeholders of new developments. Case Study 6 (Zambia Power Sector Rehabilitation Project) illustrates how outstanding resettlement problems from the Kariba Dam were addressed 40 years later. In this case, rehabilitation was seen as a rural development opportunity. 5.33 Box 5.6 illustrates an options assessment in Poland to inform a strategic decision on an existing and a proposed new dam. What is unique is that the options assessment was undertaken by a nongovernmental organization and offered as input into a government-led decisionmaking process. It represents what organized and well-funded nongovernmental stakeholders can offer to the options debate today at the strategic level. Assess All Options Strategically and Comprehensively 99 Box 5.6: Poland: Wloclawek and Nieszawa Dam and Options Assessment In 2000, the Government of Poland was considering how to manage problems that had arisen with the operation of the Wloclawek Dam and reservoir located on the lower reaches of the Vistula River. In ecological and cultural heritage terms, it is the most significant river in Poland. The existing Wloclawek Dam (25 meters high) is affected by downstream erosion that has undermined sections of the earth dam. The Ministry of Environment advocated building a new dam-the Nieszawa Dam-downstream to raise the tail water level of the Wloclawek Dam, which in turn would change the hydraulic regime and stop the erosion. The Nieszawa Dam would be the second in a cascade of dams envisaged by hydropower planners. Critics of the Nieszawa Dam argued that rehabilitation of Poland's existing thermal generation assets in the face of reduced power demand-a result of economic restructuring-would be a more prudent investment in the short to medium term. WWF Poland sought to broaden the range of options under consideration. It financed an options assessment that considered three alternatives: (1) full repair, modernization, and refurbishment of the existing Wloclawek dam; (2) construction of the downstream Nieszawa Dam; and (3) decommissioning of the existing Wloclawek Dam. The third option was prepared to a reconnaissance level of study enlisting the support of U.S. water engineers experienced in decommissioning. The government feasibility designs of the first two options were then compared with the decommissioning option. The options assessment study was presented to the government, where it was acknowledged as a vital contribution to political debate on the options. The Polish Government eventually deferred plans to build the Nieszawa Dam indefinitely, in favor of rehabilitation of the Wloclawek Dam and investment in rehabilitation of an existing thermal plant. Source: WWF. 2000. An Options Assessment for the Wloclawek Dam: Threats and Solutions. 5.34 If time and resources permit, it is prudent to undertake a Sector Environmental Assessment (or similar method) to assess the current performance of existing assets and feed that information into the assembly of options (See Case 6, which describes the Zambia Sectoral Environment Assessment Scoping and Reconnaissance Study prepared for the Zambia Power Sector Rehabilitation Program.) 5.35 Typically, water and power utilities have options portfolios (for example, in power supply, a utility may have separate renewable, thermal, nuclear, and hydro portfolios), with new options for each portfolio at various stages of investigation ranging from identification study to full feasibility. Similarly, environmental agencies and advocacy groups may have proposals related to protection and restoration of ecosystems. All too frequently these existing water and energy proposals emphasize supply and infrastructure options. In fact, many options assessment exercises were initiated after stakeholders groups questioned specific projects in the pipeline, or the primary reliance on structural interventions. 5.36 Often it would be practical for the Study Team to assemble an initial inventory of options for review by the Advisory Group. The Study Team would develop a profile for each option, giving a preliminary assessment in relation to the screening 100 Stakeholder Involvement in Options Assessment criteria. During an options assessment exercise, an entirely new portfolio may need to be identified to provide for options that previously were not considered (such as demand management) or supply-side efficiency improvements such as modernization of existing assets or an optimization of operation. At this stage, the Study Team or other group may be asked to develop this portfolio for inclusion in the ongoing process, or a recommendation may be made that such a portfolio be developed for consideration in a next round of strategic planning. In the Berg River Water Project (Case 9), a combination of pressure from high government levels, advocacy NGOs and new legislation resulted in the government deferring approval of a proposed dam until a comprehensive options assessment was carried out, including implementation of a demand management program. Figure 5.2 illustrates some of the richness of the options. 5.37 Demand-side management is a frequently overlooked option in spite of its potential to contribute to water and energy needs at reasonable cost. In the Southern China Strategic Energy Planning Project (1995-98), a package of demand-side management options was shown to be able to meet 20 percent of future electrical needs at a lower cost than supply alternatives. Figure 5.2: Array of Options in an Options Assessment for Cape Town Water Service Delivery and Management Structural Distribution raam Dam leakage reduction | Wastewater Inter-basin | recyclin7g l| transfer I Dean Services Delivery ,3uppevlyPPen Managemen & Management/Dvlomn Improved hydrological forecasting Restrictions ad Catchment Bans management Update tariff Optimal reservoir structure l | management Non, Assess All Options Strategically and Comprehensively 101 Screening and Ranking of Options 5.38 This phase typically consists of two steps: (1) the rapid exclusion of unfavorable options (screening); and (2) the valuing (using either an ordinal or cardinal index) of the remaining options (ranking). The options are assessed against the criteria, so that options that contribute significantly to the needs and objectives set for the exercise are identified. 5.39 Typically, when there are many options, there may be an initial stage where they are screened against coarse criteria and reduced to a more manageable number. This screening may include grouping similar options, as well as eliminating options that perform poorly against the screening criteria. For example, options that contradict provisions in national legislation can be excluded at this stage. In Case Study 2 (Nepal Medium Hydropower Screening and Ranking Project), compliance with the Laws on Conservation Areas required eliminating potential hydropower sites from the project inventory if they were located in protected parks, conservation areas, and buffer zones. In irrigation development, options that would extract water from transboundary rivers beyond quantities agreed in international treaties can be eliminated early. 5.40 The reasons for excluding an option from strategic planning should be recorded. Some excluded options may still be candidates for a later cycle of strategic planning-for example, if they were excluded because of a lack of current information. Screening can help focus efforts toward meeting immediate needs. This means all options are excluded that do not contribute directly to alleviating the immediate need. For an example of screening aimed at identifying priority interventions for irrigation rehabilitation, see Case 10 (Kyrgyz Republic, Irrigation Sector Rehabilitation Project). 5.41 The remaining set of higher quality options is then ranked, usually with a multi-criterion method. Rating-and-weighting is the most widely used of these methods. The elements of rating-and-weighting are as follows: Weighting of Criteria. All rating-and-weighting approaches in some ways rest on the concept of "weights" to be associated with each criterion as an indication of their relative importance in assessing the overall attractiveness of options. Stakeholders typically assign these weights after considerable negotiations. These weights are necessarily exploratory, since they represent multi-faceted measures of importance. These weights are normally adjusted through iteration to test the sensitivity of the screening or ranking process to these weights. Scoring and rating of alternatives against each criterion. Each option is evaluated against each criterion. Because rating-and- weighting methods allow non-commensurate criteria to be used, these ratings must be normalized on a standard scale, typically a 1- 100 scoring scale. One option may be assigned a score of 60 on the criterion of replenishment of the floodplain, whereas another 102 Stakeholder Involvement in Options Assessment design may receive a score of 90 because it provides more extensive and better-timed floods. Clearly, there is a considerable degree of judgment required in assigning these ratings. Rather than seeing this as a weakness of the technique, this should be seen as an opportunity for the stakeholder groups to engage and discuss the pros and cons of a particular design and to explore the implications of different ratings. Comparison of options across all criteria. Each option is then assigned an overall score, obtained by multiplying the rating score of each criterion by the corresponding importance weight for that criterion and then summing these weighted ratings for that option. This overall score describes how well the option meets all the criteria. The options can then be arranged in order of their overall scores to give a preference ranking. * Sensitivity analysis. The preference ranking is usually highly dependent on the importance of the weights used, the choice of criteria, and the scaling method. Discussion of the preference order of the options and what weights and ratings influenced the results will usually lead to changes in the weightings and ratings and a recalculation of the preference order. 5.42 Because of its simplicity and transparency, rating-and-weighting is particularly useful for decisions in the public domain. Rating-and-weighting approaches make choices and considerations explicit and facilitate discussions among stakeholders. In addition, they can be used at various levels of decisionmaking. A group of farmers might use the method in order to establish their own preferences for different development options, while a government agency responsible for sub-catchment management might use the method in order for strategic basin management plans. 5.43 The rating-and-weighting process promotes transparency and communicates the values held by the different stakeholders. Thus, the criterion weights and the ratings give a picture of what different stakeholder groups deem to be important. The use of a wide range of criteria means that divergent views on the importance of one criterion may not strongly affect the overall ranking of the option. 5.44 Obviously, assigning single rating values for each option against each criterion cannot fully replicate the complexity and subtlety of human decisionnmaking. In most cases, the stakeholder groups involved in the decisionmaking will not come to the process with a clear understanding of the consequences of their choices. The decisionmaking process is necessarily one of exploration and learning, and the models and other methods of determining the rating values should be seen as aids that inform a decision process. Consequently, the development of rating values is an iterative process that evolves as the stakeholders refine their understanding of the consequences of each option. Assess All Options Strategically and Comprehensively 103 5.45 Models are often used to measure the performance of options against individual criteria (See box 5.7). Models can be complex or simple. As an example of complex models, the downstream effects of options that change flow regimes and ecological functioning of the rivers are often assessed using a complex hydrological model. Where ecological effects are expected, the hydrological model can be coupled to one or more ecological models of, for example, wetland response to floods and ensuing changes in physical habitats. Box 5.7: Analytical Models Used in Options Assessment The case studies (appendix 1) mostly used a similar approach where both qualitative techniques and quantitative models were employed to score or rate options against each criterion. * The San Diego Emergency Storage Project in California (see box 5.5) used a mix of models and qualitative procedures to rate 30 options against the 35 criteria that were developed under five goals. Water system models and specialist sub-discipline models were used to evaluate engineering criteria (for example, hydraulic pressure and regional storage interdependence, and seismic hazard) and impact scales were employed to score more qualitative criteria (for example, facility licensing / re-licensing requirements, jurisdictional constraints, and impacts on Native American values). * In Nepal (Case Study 2), reconnaissance-level design data-such as cost per kWh, peak power, and average annual energy production-derived from standardized design models and power system models were used along with simple impact scales (for example, number of people resettled, MW/person, land take, cultural sensitivity, length of river impacted) to evaluate and rank 24 options. * In the Stave Water Use Plan (Case Study 7), stakeholders identified 10 performance objectives which were used as criteria. While some of the 10 objectives were value-based or qualitative in nature (for example, protecting First Nation's heritage values), an attempt was made to quantify each criterion. Various models-such as habitat models, operations models, and power value models-were used to establish numeric scores for each performance measure. 5.46 The risks associated with the various options may be included as a criterion. In the San Diego Emergency Storage Project, the Ranking Panel chose seismic risk as a ranking criterion. In Case Study 2 (Nepal Medium Hydropower Screening and Ranking Project), risk parameters were introduced at the fine screening of hydropower sites based on stakeholder suggestions. Qualitative assessments of risk were based on three categories deemed important to the stakeholders: (1) glacial lake outburst flood risk; 104 Stakeholder Involvement in Options Assessment (2) access road risk (from long construction times for access roads in remote mountainous areas); and (3) reservoir sedimentation risk (based on an assessment of the stability of the upper catchment and landslide potential). 5.47 If not specifically included in the screening and ranking criteria, it is wise to include a risk analysis as part of the assessment. Standard techniques include: Qualitative techniques * A logical framework in which the categories of risk and assumptions about managing these risks are elaborated * Risk matrices that show the probability of risk occurrence (as high, medium, low) against the seriousness of the impact, and those impacted * Poverty and vulnerability risk analysis that indicates the risk that a particular option poses to poor and vulnerable groups. Quantitative techniques * Probabilistic analysis that indicates the likelihood of certain goals, such as a specific intemal rate of return being achieved * Spreadsheet-based applications of various kinds. 5.48 The ways in which risks affect different groups in society, particularly the poorest and most vulnerable, should be part of the risk analysis. Distribution Analysis shows how the benefits and costs of an option would be shared across stakeholders, especially poor and vulnerable groups. A review of impoverishment risks (see also chapter 4) identified during the stakeholder analysis may also help address poverty- related concerns. Assessing and Ranking Alternative Plans 5.49 Once the Advisory Group becomes informed about the characteristics of the short-listed options and their ability to meet the needs, the study team can bundle these options into altemative development plans using a combination of quantitative and qualitative analysis. Each alternative development plan consists of a group of options that would meet the specified needs (in one or more scenarios). Figure 5.3 illustrates how different portfolios of options are constructed and combined to form a set of alternative plans, from which the preferred (or recommended) plan is eventually selected. Assess All Options Strategically and Comprehensively 105 Figure 5.3: Combining Options from Diverse Portfolios into Alternative Plans Overall Water Management Service Provision Options Portfolio Options Portfolio Portfolio 4: Ecological Services Portfolio 4: Other Services Portfolio 3: Water Quality Portfolio 3: Electricity Portfolio 2: Water Storage Portfolio 2: Water Supply Portfolio 1: Flood Management Portfolio 1: Irrigation Options Decisions at 2 levels: *What options form each portfolio (quality, completeness, attributes) *Which portfolio(s), and what options from each portfolio go into the preferred plan(s) Altemate plan A Altemate plan B Preferred Plan 5.50 There are different methods and techniques used in each sector to assemble options into a plan. In power sector planning exercises, system optimization and simulation models are typically used to prepare least-cost generation expansion plans for different scenarios. For example, a generation optimization model would show how the 10 highest ranked generation options fit together (that is, which power generation options are selected, in what order, and in what timeframe) under different load forecast scenarios. The system models take into account the unique characteristic of each generation option, such as their suitability for base load, mid-range, and peak power generation, and ancillary benefits such as reactive power generation. In more complex planning exercises, a family of different expansion sequences can be produced for each scenario. For example, the National Power Plan exercise in Pakistan (1992-94) identified expansion sequences for all-hydro, all-thermal, mixed thermal-hydro, different fuel types (imported and domestic), different generation and transmission supply reliability levels, and different demands. Demand-side management alternatives were assessed outside the model and used to produce the different demand scenarios. 5.51 In the irrigation sector, farm household models help construct alternative farm configurations, which provide the required livelihood to the farming community. Plans can differ in the degree of dependence on irrigation, in the degree of specialization, and in the degree of support activities being undertaken, such as credit for farm modernization and input supply. Different farm household models may require different 106 Stakeholder Involvement in Options Assessment amounts of irrigation water supply and hence correspond with different infrastructure options. 5.52 Alternative plans can also be developed qualitatively as a group learning exercise. Coherence between options from different portfolios can be identified. For example, increasing the irrigation water fee may not be an option that ranks highly in a rating-and-weighting analysis, but could be an essential precondition to undertaking a higher ranked option such as rehabilitating of major water infrastructure. 5.53 The Advisory Group, with the assistance of the Study Team, establishes which of the alternative plans it prefers using criteria that may be similar to (or broader than) the criteria applied to assess the individual options. For example, criteria may include the share of benefits and costs between regions, or broader criteria related to national food security, national or regional energy security, and aggregate implications for poverty alleviation and environmental impacts. 5.54 Equity is an important consideration in comparing alternative plans. An analysis of equity impacts shows how the various benefits, cost streams, and risks are distributed among the stakeholders as a proportion of the total expected benefits, costs, and risks. This allows redesign of the intervention in order to arrive at a socially acceptable distribution of costs, benefits, and risks. Often, the assessment of such risks is already done in the evaluation of individual options, but is undertaken again in comparing alternative plans at a deeper level of analysis. 5.55 Box 5.8 shows two examples from Canada that discuss building portfolios and evaluating alternative plans based on these portfolios. They show the contrast between a more comprehensive approach to assessing demand-supply options to build portfolios, and a more generic approach to building and assessing portfolios. The power system in Ontario was nuclear-dominant, but had diversified generation sources. The power system in Quebec, on the other hand, was almost totally hydro, and the provincial utility at the time was seeking to evaluate other renewable options and specifically introduce wind-generation. Assess All Options Strategically and Comprehensively 107 Box 5.8: Building Options Portfolios and Plans: Canadian Examples Over a three-year period starting in the late 1980s, Ontario Hydro undertook a multi-year Demand-Supply Review with an extensive public consultation process. At that time, it relied on nuclear generation for close to 70 percent of supply. The process involved the sequential development of a new load forecast for the Province of Ontario and preparation of a series of portfolios for demand management and supply development. The various options were compared within each portfolio, assembled into a series of portfolio plans and the plans were compared. A demand management plan, an infrastructure rehabilitation and management plan, and plans for each major supply option-including nuclear, hydro, thermal, co-generation, renewables, inter- fuel substitution, and fuel-switching-were developed. Eventually a proposed Demand/Supply plan and three alternative Demand/Supply Plans were prepared and presented to the government. At each step in the process-options identification, evaluation, and portfolio plan formulation- there were extensive public consultations, hearings, and public debate. Ontario Hydro funded submissions from NGOs and civil society based on published criteria. Hydro Quebec, which relied primarily on hydropower generation, used a different approach to engage the public and stakeholders in strategic-level power options assessment. They assessed a series of generic environmental comparisons of power generation options (wind, solar, hydro, cogeneration, tidal power, conventional thermal) against criteria such as life-cycle greenhouse gas emissions, acid precipitation, land requirements, energy payback, and biodiversity impact. They fed these comparisons into the public debate about options. For the key hydropower portfolio, Hydro Quebec introduced a "Triple Bottom Line" - community agreement had to be secured, projects had to be economically feasible, and projects had to be environmentally acceptable. When considering options for its hydropower portfolio, Hydro Quebec introduced a practice where community agreement was simultaneously sought on a number of possible sites that had been studied to a very preliminary level. The normal cycle of preparing project studies to confirm environmental and technical feasibility was commenced only for those sites where community acceptance had been reached. This turned around the usual practice, where economic and environmental studies are undertaken before community agreement is sought. Sources: Ontario Hydro. 1992. Providing the Balance of Power, Demand/Supply Report. Hydro Quebec. 2001. Comparing Environmental Im acts of Power Generation O tions. Recommending a Preferred Plan 5.56 The recommendations to the decisionmaking authority may include: * An overall report on the full exercise explaining the Advisory Group's recommendations * A report on the screening and ranking of options structured so that those responsible for different portfolios can learn from the considerations used in the options assessment exercise; options portfolios should be constantly updated so that high-quality projects are available for the next cycle of strategic decisionmaking 108 Stakeholder Involvement in Options Assessment * A report on the preferred plan, including a description of all agreements that need to be in place between stakeholders to facilitate the implementation of the plan * A report on the alternative plans, so that the decisionmaker knows in what way the preferred plan differs from alternative courses of action * A report of the degree to which stakeholders endorse the options contained in the preferred plan, including a description of the divergent views, if any, to inform decisionmakers of the acceptability of the preferred development plan. Options Assessments during the Development of Dams 5.57 After a decision is taken to build a dam, decisions still need to be made about finalizing the physical components of the project, resettlement, local development issues related to the project, environmental and social mitigation, and management and monitoring activities. For example, alternative assessments are needed to determine: * The location of the dam and its major physical structures and facilities; the location of construction camps and borrow pits for construction materials; and the alignment and routing of access roads, irrigation canals, and transmission corridors. * The size and design of the major structures, such as the dam height (which determines the storage capacity, flooded area, and resettlement requirements), and the specification of structures and equipment (spillway capacities, intakes and bottom flow outlet sizes, and type of power turbines) that will affect the environment and social performance of the dam, as well as its technical performance and safety. * The schedule and timing of construction works that impact on local communities in the immediate vicinity of the project, as well as those upstream and downstream (such as disruption of seasonal activities in farming, livestock rearing, and recreation activities), and other factors such as local labor availability (such as taking into account harvest periods) and the inclusion of community contracts as a way of directing benefits to affected people. * The provisions for compensation and resettlement and local development in the new area or host community, including benefit- sharing arrangements with project-affected people. * The specific provisions for environmental mitigation, monitoring, and management in relation to impacts in the immediate project Assess All Options Strategically and Comprehensively 109 area, in the upper catchment, and in downstream communities, wetlands and ecosystems. * The operating strategies and adjustments to operations that will be made based on the dam commissioning trials. * The choice of alternate compliance mechanisms for agreements reached. 5.58 The project developer (public or private) would carry out these project- level alternative assessments under the regulatory oversight of the government. Dam projects and related activities are often broken down into component plans, in which alternatives are assessed separately. Box 5.9 illustrates the types of plans that may be prepared during the development phase of a dam project. Often, the environmental management plan (EMP) and the resettlement action plan (RAP) are the key tools for project-level options assessment. They deal with the resulting social and environmental management issues and options, and they provide the basis for monitoring and evaluation. Box 5.9: Component Plans Prepared during the Development Phase of a Dam Each dam project may require one or more of the following plans, often under different names. * Land acquisition, compensation, and rehabilitation plans * Resettlement action plan or equivalent relocation plans * Environment mitigation, monitoring and management plans * Local electrification plans (communities near hydroelectric projects) * Labor and skills development plans * Public health and safety plans * Wildlife management plans * Fisheries mitigation and enhancement plans * Community interaction plans * Restoration and re-vegetation plans * Command-area development plans and water users association plans * Water use plans * Institutional capacity development plans 5.59 The choice of methods to identify, evaluate, and select project-level alternatives depends on the issues. Box 5.10 illustrates how alternative strategies to meet environmental flow requirements were developed and evaluated for the Lesotho Highlands Development water transfer scheme. Based on the assessment of alternative 110 Stakeholder Involvement in Options Assessment flow regimes, modifications were made in the design of the intake and outlet structures of the Mohale Dam. Box 5.10: Lesotho Highlands: Assessing Alternatives for Environmental Flow Releases In 1997, the Lesotho Highlands Development Authority (LHDA) engaged a multi-disciplinary team to conduct studies on environmental flow releases (EFRs) associated with the Lesotho Highlands water transfer project, the largest in southern Africa. LHDA assessed downstream biophysical consequences of several possible environmental flow regimes-including the timing, quality, and quantity of water releases. The recommended flow regime took into account provisions for drought and flood cycles, periodic flushing flows in the spring and winter, and occasional flood simulation flows every few years. The exercise was one of the first examples of a participatory process in evaluating environmental flows and was considered to be groundbreaking with respect to the level of study of socioeconomic aspects of flow modifications. Based on stakeholder input, a key aspect was the estimation of potential resource losses to downstream communities; estimation of the costs of compensation for losses of resources (such as fish, vegetables, and wood); and mitigation of increased public and animal health risks. The original 1987 treaty between Lesotho and South Africa provided for releases of 0.5 cubic meter per second (cms) from the Katse Dam and 0.3 cms from the Mohale Dam, with provision for renegotiation. Based on the participatory EFR study, the design of the Mohale Dam was modified to include a multiple-level off-take structure capable of providing 3 to 4 cms. This measure would improve the quality (temperature and dissolved oxygen levels) of releases for downstream ecosystems. The diameter of lower-level outlet structures was also increased to provide capacity to pass water from the reservoir at 57 cms. This provided the flexibility to release occasional flood simulation flows. LHDA is developing a new EFR policy that incorporates full public participation and monitoring to verify that agreed releases are made correctly, to assess whether the river condition targets are being achieved, and to provide data to managers and decisionmakers. LHDA also is making information available to stakeholders concerning review and audit activities, including information disclosure in annual reports, specialist reviews, and biennial audits. Sources: LHDA. 2002. Lesotho Highlands Water Project Phase 1, Draft Policy For Instream Flow Requirements. Hiri, R., and T. Ziegler. 1999. Ensuring Environmental Quality In Water Resource Projects. 5.60 Optimization studies, such as for dam height and location of structures, generally involve establishing a set of technical, economic, social, and environmental criteria and assessing alternatives in relation to these. Establishing these criteria draws on the component plans, such as the environmental management plan and the resettlement action plan. Strong coordination-which may include formal or informal multi-criteria evaluation approaches-among those charged with the different activities related to the development of the dam is essential. For the more significant decisions, the community liaison group may be involved in the full process of establishing criteria and evaluation of alternatives. Because of the visibility and perceived local impacts of dams, recommended options that emerge from this assessment process would normally be made available to Assess All Options Strategically and Comprehensively 111 the wider community and stakeholders for their comment using one of the methods described in Chapter 4. 5.61 When alternative options that are more technical in nature are to be presented to the wider community, it is helpful to include the following information: * Explain the criteria used to identify and assess the alternatives * Explain the reasons for the alternatives under consideration and how the different alternatives may impact people, the environment, and activities in the immediate project impact area, and upstream or downstream * Show how each option and the recommended alternative conform to government regulations and safeguard policies that are applicable * Identify and discuss stakeholder concerns to be accommodated in finalizing the selection and design elements of the alternative * Ensure there are mechanisms to provide feedback about the results and the basis for the final decision. 5.62 NGOs can facilitate negotiations and help provide information to all parties in the negotiation, as discussed in Chapter 4. Box 5.11 below shows the assessment of within-project alternatives through an EIA undertaken during the appraisal phase of the Malawi 4 Power Project in 1995. 112 Stakeholder Involvement in Options Assessment Box 5.11: Within-Project Alternatives for Kipichira Falls Power Project in Malawi The Malawi Power IV Project (1992-2000) was to include the construction of the first phase (50MW) of a hydroelectric power plant at Kapichira Falls, including related transmission facilities for interconnection to the grid. During the EA process, within-project alternatives were assessed against a number of technical, economic, social, and environmental criteria. These alternatives were discussed with stakeholders and local communities. As a result of these discussions and of technical optimization studies undertaken by the engineering team, the power house was relocated to the other side of the river, a long intake canal was eliminated, the size of the reservoir was reduced, the size of the generators was increased, and the number of generation units were reduced. These changes ensured that the land acquisition was reduced and that there was no resettlement associated with the project. Additional provisions were also introduced to: * Reduce health risk to communities in the vicinity of Kapichira Falls due to provision of new service infrastructure for health and water supply * Increase income generation in local communities from participation in the mitigation activities * Increase access to education, health, and potable water services * Introduce a new program to manage the Mejete Wildlife and Game Reserve. The physical changes in the project design resulted in cost savings of about US$48 million. The additional provisions improved the project's value as a local development opportunity, but came at a cost in terms of reduced energy production. Options Assessment during the Management and Operational Phase of Dams 5.63 The economic and physical life of dams often spans several human generations. Demographic and land use changes in the river basin, as well as changes in demand for outputs and services from dams (the agriculture economy, flood control needs, urban water needs, or electricity markets) often lead to shifts in water use priorities. Changing public attitudes in terms of how the public interest is defined and changing values are reflected in ongoing changes in regulations (economic, safety, and environmental), as witnessed by the introduction of new environmental regulations in most countries in the last few decades 5.64 There are over 45,000 large dams in the world and many more medium- and small-scale dams. In the 21st century, one of the major water resource management issues will be the ongoing management of these existing facilities. Already, an increasing percentage of World Bank lending on dams is for existing dams. Assess All Options Strategically and Comprehensively 113 5.65 Apart from ongoing adaptation of reservoir operating strategies to these changing circumstances, options assessments are required to decide on rehabilitation, modernization, and upgrading dams and related facilities. There are many decision points in the life of a dam, where options have to be assessed. Such decisions may include the extension of facilities (such as raising dams, increasing spillway capacities, adding outlets or power houses, etc.,), introducing dam safety and emergency preparedness programs, and eventually making decisions on life extension or decommissioning. Therefore, project-level options assessment exercises can also be used to help make in- service decisions, as represented in figure 5.4. Figure 54: The Life Cycle of Water Infrastructure-Multiple Points Where Options Assessment Can Be Employed to Inform Decisions Plannting Options A ssessm ent Urn Detailed Design I Selection LI i M a i n t e n a n c e / ~ || C o n stru c tion O perationC misong M aintenanceComsing Retrofit Life Extension i Extend/Replace Or Choose Alternative uu Decommissioning 5.66 The triggers for these options assessment exercises during the operational phase of dams are often regulatory. Depending on the country and age of the dam, they might include: * Re-licensing for owners and operators of dams (public or private) * Introduction or changes in environment regulations, such as for environmental releases from existing dams where technically and economically feasible * Regulatory requirements for periodic review of the management and operation of dams and their impacts * Changes in economic regulation, such as restructuring of power markets that prompt changes in the operation of dams * Changes in dam safety regulations. 114 Stakeholder Involvement in Options Assessment 5.67 Non-regulatory triggers include decision points in the normal retrofit and maintenance cycles, or the emergence of specific issues such as sedimentation concerns and flood management in the basin. Thanks to advances in hydrology, changes in flood frequency forecasts may also compel revisions of dam management. More recently, climate change has come to the forefront, prompting decisions to enlarge spillway capacities and strengthen monitoring and emergency preparedness programs, modify reservoir-operating practices in extreme events, and introduce better flood warning systems. 5.68 As during the selection and development phases of dams, participatory options assessment exercises during the operational phase help improve the environmental and social performance of the dams in the wider basin and development context. If a permanent consultative group has been set up (Chapter 4) as part of dam operational procedures, then these stakeholder involvement exercises can be carried out fairly readily. 5.69 Two key considerations during these in-service options assessment exercises are: * A new approach to dam management may be considered as a "new supply option" alongside other supply options in the strategic planning process. * Ensure that the assessment is undertaken in an integrated manner and considers improvements and optimization of technical, economic, and social performance, as well as dam safety. 5.70 The actual methods and techniques for in-service options assessment depend on the issue(s) that have triggered the exercise as well as on social and political considerations. Case Study 6 (Zambia, Power Sector Rehabilitation Project) illustrates how options for rehabilitation of power infrastructure were assessed using the benefits achieved in avoiding short-term power deficits and improving environmental and social performance of the infrastructure. In another example, concerns about the riverine environment triggered the Tennessee Valley Authority to undertake public consultations to improve the environmental performance of the Norris Dam. This led to the adoption of management changes, including structural adjustments that helped boost downstream riverine oxygen levels. 5.71 The last phase of the project cycle involves decisions on life extension or decommissioning of dams. Experience shows that the cost of removing a small dam is sometimes less than the cost of repairing or restoring it to present standards, particularly when the services that the dam provides are limited. Changing social values that call for the restoration of river flows and ecological services are all factors that have influenced past decisions to decommission dams. The options for decommissioning depend on the type of dam and the basin context. Broadly, the three main approaches are: Assess All Options Strategically and Comprehensively 115 * Permanently opening gates, accompanied by other minor structural provisions * Partial removal of dams or flow regulation structures * Full removal of the dam. 5.72 There are about 500 examples of partial and full decommissioning of dams in North America and Europe. A full EIA is needed if the decommissioning option is seriously considered, just as for building a dam. Each country has its own regulatory process to assess existing dams and decide whether retrofit, renewal, upgrade, or decommissioning is appropriate. Reach a Decision 6.1 A protracted delay in reaching a decision on water and energy services can sometimes result in considerable hardship for some groups in society, sub-optimal solutions being adopted by default, or even the foreclosure of options that are otherwise desirable. So, while involving stakeholder groups in the assessment of options is time consuming, it should not become a reason for delays that result in inequitable or inefficient decisions. Undertaking options assessment exercises is, after all, an effort to move beyond the paralysis and controversy that increasingly characterize decision- making about large dams in many countries. The Terms of Reference for the Assessment Need to be Clear 6.2 Effective and efficient stakeholder involvement requires clear terms of reference that set the boundary conditions for the options assessment exercise. It is important to ensure that the Advisory Group and their constituencies are clear about the scope of the exercise, what level of autonomy they will enjoy, what their participation implies in terms of group cohesion, and the expected form and nature of the outputs from the exercise. By moving the assessment of options further upstream into strategic planning, the scope of these exercises is likely to widen. Similarly, project-level exercises, where new regulatory frameworks and policies require comprehensively addressing all impacts, are likely to be wider rather than narrower. 6.3 In Zambia, an environmental scoping exercise (based on a Sector EA) helped to establish the scope and boundaries for the Zambian Power Sector Rehabilitation Project (Case Study 6). The exercise served to widen boundaries of the project by suggesting broad objectives, new criteria to evaluate options, and a wide range of possible options to be assessed. The terms of reference recommended by a scoping exercise may need to be revised if the Advisory Group and process manager feel it would improve the quality of the outcome. Box 6.1 provides an example in which clarifying the scope of the screening and ranking of hydropower options in Nepal (Case Study 2) helped define the options assessment exercise, and where stakeholders recommended further modifications to the scope of the exercise. 117 118 Stakeholder Involvement in Options Assessment Box 6.1: Establishing Clear Boundaries for a Strategic Exercise The terms of reference for Nepal's Medium Hydropower Screening and Ranking exercise were established in discussions among the Government, IDA, and the Nepal Electricity Authority. The outcome was to focus on medium-scale (10-300 MW) hydropower schemes suitable for domestic grid supply. The exercise explicitly excluded both large storage projects over 300 MW that were primarily for export, and small micro-hydro options for rural and off-grid development. These options were to be addressed in separate development planning exercises. The terms of reference also stated that the assessment was to be conducted as a participatory process employing a multi- criteria framework. Clarifying the scope of the exercise was important because, at the time, there was an ongoing debate that had become confused about different scales of hydropower development. As a result, it was increasingly difficult to reach decisions that reflected consensus. Nevertheless, there was a consensus view that medium-scale options provided the way forward for grid supply in the medium term, and thus it was important to set aside the debates about other scales of energy production. With this issue resolved, the exercise was able to proceed with all stakeholders willing to engage the process and work toward a well-defined goal. 6.4 Outputs need to be clearly defined. This can mean, for instance, specifying whether the options are to meet immediate or long-term needs, and whether they will provide a single plan or alternative plans for different scenarios. It can also mean resolving how information, reports, and submissions will be maintained for the next cycle of planning, as well as setting out the procedures for access to this information by stakeholders. The process manager should address any differences in understanding or expectations about the intended outputs as early as possible. In a larger exercise, the stakeholder analysis can help verify whether expected outputs are understood and underwritten. In a smaller exercise, this can be checked through group discussion. Well- defined outputs avoid diversions in the assessment and create the conditions for reaching decisions efficiently. 6.5 In some situations, the Terms of Reference (ToR) for options exercises are derived from provisions in the regulatory system. For example, the ToR for the periodic updates of the Protection and Master Plans in Norway-to identify and categorize (a) sites that could be developed with dams and (b) rivers that would be protected from development-is based on a dual planning system defined in legislation. 6.6 Appendix 3 provides generic terms of reference that can serve as a model for defining the scope of a strategic options assessment exercise and the responsibilities of the process managers to set in place mechanisms for stakeholder involvement. Table 6.1 provides further information. Reach a Decision 119 Table 6.1: Defining Authorities and Responsibilities and Setting Clear Boundaries for Exercises Process Specification and Terms of Reference as Defined in Examples Legislative And Regulatory * In South Africa, the Water Services Act (1995) required Approval (a) alternatives assessments be undertaken prior to * Water and energy sector consideration of the Berg River project (SkuifraamDam); legislation: with specific and (b) all municipal water supply authorities to produce a processes, subject matter and Water Services Development Plan in a collaborative stakeholder involvement process that indicated future needs, levels of service, and requirements to be followed investments (Case 9). * Other sector legislation: cross- * B. C. Hydro-in collaboration with other provincial and cutting legislation in other federal agencies, First Nations groups, environmental sectors such as for NGOs, and water users-developed a 13-step structured environmental assessments process for preparing Water Use Plans (WUPs) required for the operating license of hydropower facilities. Steps 1- 9 were voluntarily adopted by BC Hydro; steps 10-13 are a legal requirement (Case Study 7). In the Nepal case, the time periods for advance public notice of meetings and for review of proposals were adopted from those time periods specified in environmental regulations for EIAs. They were not legally required for strategic exercises, but they provided guidance for the process manager that was acceptable to stakeholders (Case Study 2). Sector Level Practice * In Pakistan, the National Power Plan exercise (1992- * Reflecting past practice 1994) built on the previous experience and practices of * Based on generic guidelines the Water and Power Development Authority (Planning Department Power) and sought to broaden and deepen them. New assessments of all demand and supply options were undertaken-such as demand-side management in all sectors; geothermal, oil, gas, and coal development; thermal and hydro siting; and grid and off-grid renewable altematives. A series of reports (each concerning a family of options) were prepared in a format that could be updated as input to subsequent planning cycles. Guidelines for updating these assessments were also produced, and the task of updating options assessments was written into the annual work plan of the Planning Department (Power). In South Africa, the Department of Water Affairs and Forestry (DWAF) issued a set of generic guidelines for public participation in strategic and project-level planning exercises where DWAF was a partner. These guidelines were aimed at process managers of planning exercises, stakeholders, and the general public. 120 Stakeholder Involvement in Options Assessment Terms of Reference for an Options * In many World Bank projects, terms of reference for Exercise options assessment exercises that inform project * Issued by the process manager identification and preparation stages of the project cycle for the overall exercise may be prepared jointly by the mission team and the * Developed within the sponsor sponsoring organization. This is more likely the situation organization when it is the first occasion where rigorous options assessment procedures with broadly based stakeholder participation have been introduced. * Otherwise, the responsible ministry or department prepares the terms of reference based on established sector level guidelines taking into account emerging good practice, and reflecting any provisions in regulatory frameworks. 6.7 The roles of the various actors in the exercise need to be clearly defined. Chapter 4 provides general descriptions of these roles, while the generic terms of reference in Appendix 3 provide additional detail. 6.8 The type of decision being made, the place of the decision in the project cycle, the role of the government in the exercise, the autonomy of the stakeholder Advisory Group, and the extent to which agreements with and between stakeholders are required all need to be defined. In order to reach a decision efficiently, it is important to identify agreed procedures for settling disputes when establishing the assessment exercise, particularly where negotiation is required for resettlement and compensation for project-affected people. Supporting Process Efficiency 6.9 A well-structured process within which stakeholders interact when assessing options is essential to use time effectively and decide on a preferred option that can be forwarded to decision makers in time for them to use it (See Chapter 3). These structured processes should be described in the terms of reference. The process manager can promote the efficiency of the process by providing: * Sufficient resources for the necessary studies and logistical support where required for participants on the advisory group, (or stakeholder forum); and sufficient time for assessment, given the scale, complexity, and controversy associated with the exercise. These resource allocations should be stated in clear schedules and budgets at the beginning of the exercise. * Timely, equal, and sufficient access to information for all participants in order to expedite interactions and keep the focus on outcomes that inform the decisionmakers. Reach a Decision 121 Time, Resources, Technical Assistance 6.10 Allowing sufficient time for groups to interact individually and collectively around specific issues is one of the key points made by the South African stakeholder groups who are reviewing the South African response to the World Commission on Dams report. Process managers often underestimate the time for strategic exercises that involves stakeholders, particularly if it is the first time the approach is used. Apart from time for getting feedback from the Advisory Group, and time for representatives to consult with their constituencies, time may be needed for culturally specific purposes. Thus, in Case Study 7 (Stave River, Canada), time was provided to include a training session in cultural sensitivity for members of the Consultative Committee prior to the First Nations group (indigenous peoples) joining the Consultative Committee. The value-added from time extensions needs to be carefully assessed by the process manager so that the assessment process converges on a decision. 6.11 Assigning competent technical assistance to the Advisory Group will make the process of reaching a decision more efficient. This assistance can be either specific to certain stakeholder interest groups-such as the NGOs assigned to facilitate local communities participation or legal counsel made available for certain groups-or to the overall exercise in the form of a Study Team. In addition, professional facilitation can help the group reach a decision efficiently, particularly if there are conflicting views or if some stakeholders are unclear about their objectives. Timely and Sufficient Information 6.12 Ready access to the best available information moves the discussions forward by facilitating more informed debate and building confidence. Specialist studies may be required to provide the Advisory Group with information, for instance on the expected future needs or on the likely performance of options. If undertaken authoritatively, these studies help speed up convergence and decisionmaking. Sometimes direct funding to the Advisory Group may be made available for them to arrange for a specific study, survey, or presentation or to access independent experts. 6.13 While government and industry stakeholders may have greater experience with the development and management of conventional options, public and community participants have a better understanding of local concerns, as well as knowledge of traditional water and energy options. The sharing of this information considerably improves the breadth and quality of the information available. Ready and unimpeded access to information also helps dissolve any mistrust stakeholders may hold about the process manager and creates confidence and trust for negotiations. 6.14 Apart from the timely provision of information to members of the Advisory Group, it is also important that their constituents receive all the information that they require (within limits of confidentiality) about the work of the Advisory Group. Lack of information leads to distrust which, in turn, leads to objections and protests, and delays in the decision process. Good practice includes: 122 Stakeholder Involvement in Options Assessment * Information has to be accessible in the terminology, format, and language most appropriate to all stakeholders. Visual formats (maps, diagrams, etc) help explain information in a way that is understood by diverse stakeholder groups, while at the same time promoting collective decisionmaking. If possible, Advisory Group members may share the information with their constituencies, although sometimes this is not possible because of commercial or cultural confidentiality. * Study tours, site visits, community-to-community contacts, and other active forms of information sharing are more effective than written reports. * Information on the options, the options assessment process, and modes of participation can be made available through sector-based information networks. * Information should be made available that shows the basis for decisions and covers issues that were debated in stakeholder group sessions. 6.15 The inputs and results of each Advisory Group meeting should be made public if possible, especially if the issues being considered are controversial. However, intense public scrutiny also places pressure on Advisory Group members. Opinions may be quoted out of context, and it becomes more difficult to openly explore issues in a debate. For complex exercises, or exercises where communication across stakeholders is difficult, it is good practice to formulate a communications plan, which guides the stakeholder interaction throughout the exercise. 6.16 In the Ghazi Barotha Hydropower Project in Pakistan, the planning authority (WAPDA) employed a variety of mechanisms to ensure information was available to local stakeholders in a timely way. Independent studies of rights and entitlements for all local groups were prepared in advance of negotiations on compensation and resettlement. To make information further accessible, all relevant documents were translated into Urdu. A variety of other arrangements, including the preparation of booklets describing the land acquisition process and the entitlement packages, ensured information was made available in simple and concise terms. This information was available at information centers at project and sub-center sites and used in day-to-day interaction with the project affected families and communities through the NGO facilitators. Newsletters and bulletins informed a wider circle of interested parties in the project area. Reach a Decision 123 What Will Be Done with the Outcomes? 6.17 Informal and formal agreements at each step in the options assessment exercise are crucial to building confidence and to reducing the possibility of having to backtrack and lose time. Additionally, well-understood agreements help ensure support for the final recommendations. Formalized outcomes from strategic planning exercises also help ensure that the next cycle of planning will be able to build on the achievements of the previous exercise, thus bringing stakeholders to a point of convergence early in the next cycle of planning. 6.18 Formalized outcomes are particularly important during the development of dams and during operations, since there is generally a legal basis to the outcomes, where rights, entitlements, benefit sharing, and compliance monitoring may be involved. For example, the decision on the location of structures will have to be reflected in the land tenure records, as well as in contract and tender documents. In the past, there has been a oor track record in formalizing outcomes, especially relating to social and environment provisions, from options assessments with stakeholders during the development and operation phase of dams. 6.19 As part of reaching a decision, governments and other stakeholders need to be satisfied that once informed decisions are made, all parties will comply with the commitments made. This is especially important for within-project environmental mitigation and social topics such as entitlements, resettlement, compensation, employment, and community development measures. Permanent compliance mechanisms need to be agreed upon because of the long-term nature of project impacts on the community and the need to ensure development effectiveness. With this in mind, the WCD included "ensuring compliance" as one of it seven strategic priorities (Box 6.2). Box 6.2: WCD Strategic Priority 6: Ensuring Compliance Ensuring public trust and confidence requires that governments, developers, regulators, and operators meet all commitments made for the planning, implementation, and operation of dams. Compliance with applicable regulations, criteria and guidelines, and project-specific negotiated agreements is secured at all critical stages in project planning and implementation. A set of mutually reinforcing incentives and mechanisms is required for social, environmental, and technical measures. These should involve an appropriate mix of regulatory and non-regulatory measures, incorporating incentives and sanctions. Regulatory and compliance frameworks use incentives and sanctions to ensure effectiveness where flexibility is needed to accommodate changing circumstances. Effective implementation of this strategic priority depends on applying these policy principles: * A clear, consistent, and common set of criteria and guidelines to ensure compliance is adopted by sponsoring, contracting, and financing institutions; compliance is subject to independent and transparent review. . A compliance plan is prepared for each project prior to commencement, spelling out how compliance will be achieved with relevant criteria and guidelines and specifying binding arrangements for project-specific 124 Stakeholder Involvement in Options Assessment technical, economic, social, and environmental commitments. * Costs for establishing compliance mechanisms and related institutional capacity are built into the project budget. * Corrupt practices are avoided through enforcement of legislation, voluntary integrity pacts, debarment, and other instruments. * Incentives that reward project proponents for abiding by criteria and guidelines are developed. Source: WCD. 2000. Dams and Development: A New Frameworkfor Decision Making 6.20 Box 6.3 provides examples of steps to formalize outcomes for agreements reached on the selection of social measures in project development stages. Box 6.3: Ensuring Compliance in Agreements Reached on Social Arrangements within Projects * Pakistan: Ghazi Barotha Project. NGOs were hired to develop written contracts between the project-affected people and the project authorities after agreement was reached. Each household was issued Certificates of Compensation. At the same time, procedures were established for information disseminated on grievance and appeal mechanisms, and additional transparency mechanisms were introduced for compensation awards. * Uganda, Bujagali Project. Assisted by NGOs and independent consultants, arrangements were made for monitoring the implementation of the compensation and resettlement agreements reached with individual families and the community facilities the project agreed to provide. For compensation arrangements, all the surveys of land boundaries and valuation of land, buildings, and assets were crosschecked and signed by village elders and Local Counselors, who were local NGOs funded by the project authorities and accepted by the communities for this role. * China: Loess Plateau Watershed Rehabilitation Project (Loess II). Where new agriculture land was created by the sediment infill behind warping dams (Case Study 1), new land contracts were signed between farmers and local governments before the decision to construct the dam. All families participating in the allocation of land (for which they made payments) received properly signed, sealed, and registered land contracts that explicitly stated the terms, land use rights, and obligations under which the farmers' interests will be legally protected. Arrangements were made for copies to be held in the township or county registries. A ppendix I Case Studies A. 1.1 This Appendix draws general lessons from 10 case studies of stakeholder involvement in options assessment. The case studies are intended to provide Bank task managers, their country counterparts, and other interested professionals with examples where stakeholder involvement in options assessment led to enhanced development outcomes. The 10 case studies were selected to provide diverse examples of different levels of planning (e.g. sectoral and project level), different sectors, different local needs, and different governance contexts. The cases all differed in the approaches adopted, the structure of the process, the degree of consensus achieved, and the method of reporting. Trends in the Case Studies A. 1.2 A number of trends emerge from this diversity of circumstances and approaches: * In all cases, the options assessment was undertaken early in the planning cycle. While in some situations this was undertaken to meet requirements for a World Bank loan or credit, it was also in response to a growing awareness of the need to assess multiple options in order to produce better decisions. In many cases, it was the first time the country deliberately set out to adopt a systematic approach to options assessment directly involving stakeholders. * In all cases, environmental and social criteria were incorporated in the options assessment. In particular, social and environmental criteria were increasingly used to screen out proposals early in the process. This implies that social and environmental issues, including those addressed by the World Bank's Safeguard policies, were increasingly being addressed upstream in the planning process. * In all cases that featured project-level alternative assessments, project-affected communities and households were able to express their concerns and opinions regarding resettlement and compensation measures. Civil society and nongovernmental 125 126 Stakeholder Involvement in Options Assessment stakeholders were increasingly accepted as legitimate voices and partners in options assessment processes, although the methods for doing this were context-specific, as for example in China. * There was a general progression from single-agency and single- sector domination of the planning processes toward multi-agency and multi-sector involvement, and toward multi-stakeholder participatory approaches. The countries in the case studies were at different stages in this progression. Rapid advances were made where government accepted their role of creating an enabling environment for stakeholder involvement in options assessment. * In most cases, a high degree of acceptance of the ultimate public decision by the stakeholders was achieved. Factors that foster a high degree of acceptance include structured planning processes, political support, sufficient enabling regulations, and the commitment of the stakeholders. Road Map to the Case Studies A. 1.3 The first four cases describe how stakeholders were involved in assessing options in strategic planning exercises in China, Nepal, Brazil, and Central Asia. The objectives of these exercises were to define preferred development plans, incorporate dam and non-dam options in a complementary mix of options, set priorities at the sector level, and identify projects for implementation. Case studies 5-8 illustrate how stakeholders were involved in the assessment of alternatives during the development and operational phases of specific dam projects in Uganda, Zambia, Canada, and Turkey. Cases 9 and 10 look at how options were identified that would meet immediate needs for water supply and irrigation in South Africa and the Kyrgyz Republic. In each of these last two cases, the responses to these immediate needs were integrated into longer-term plans. A. 1.4 Figure A. 1.1 and table A. 1.1 list the case studies and shows what level of development planning-policy, strategy, or project-they refer to. In some cases, a combination of levels was addressed. This reflects the fact that the planning exercise moved toward the project preparation phase as the exercise continued. Appendix 1: Case Studies 127 Figure AI.1: Levels of Planning Case Studies Strategic Assessments 1. China, Loess Plateau Watershed Poti6&". Rehabilitation Project ii _ --2. Nepal, Medium Hydropower _ Screening and Ranking Project *trutegy-~ 5 3. Brazil, Ceara State Integrated Water Resources Management Project __,_____ 4. Central Asia, Aral Sea Basin Multi- * * -- ^ State Water Resource Cooperation g ig ...*w w Project-level Assessment 5. Uganda, Bujagali Hydropower project 6. Zambia, Power Sector Rehabilitation Project 7. Canada, Stave River Water Use Plan (WUP) 8. Turkey, Ceyhan Aslantas Multipurpose Project: Ex-Post Evaluation Immediate Needs 9. South Africa, Berg River Water Project 1O. Kyrgyz Republic, Irrigation Sector Rehabilitation Project A.1.5 Table A. 1.1 provides a synopsis of each case study. The descriptions illustrate the diversity of examples. 128 Stakeholder Involvement in Options Assessment Table A1.1: Synopses of the 10 Case Studies Case Study General Description China Loess Using participatory processes, provinces in the arid Loess Plateau region Plateau evaluated a diverse set of dam and non-dam options for land and water Watershed management in small tributary watersheds of the Yellow River. There were Rehabilitation multiple objectives, such as to raise agricultural productivity and rural incomes, while reducing sediment flow into the Yellow River system. LOESS I helped prepare a menu of options, delivery capacities, and stakeholder acceptance. Its success led to scaling up and wider replication of the program in LOESS II. Over 460 sediment control and water supply dams emerged from involving stakeholders and balancing bottom-up and top-down planning processes. Nepal Medium A participatory, multi-stage screening and ranking exercise to identify Hydropower hydropower sites for medium-term grid supply development with a mix of public Screening and and private sector investment. Stakeholder interactions and public consultations Ranking Project helped to provide transparency, inform identification and evaluation of the options, and promote confidence in the selection process and its outcome. Brazil Ceara Options assessment and stakeholder involvement informed decisions about the State Integrated development of a network of strategic reservoirs and the integrated management Water Resources of inter-basin transfers to improve water storage and supply in the semi-arid State Management of Ceara in northeast Brazil. The state created an enabling environment to move Project to participatory forms of water management involving new organizations at the state, basin, and local levels. Central Asia Illustrates inter-state processes and mechanisms to promote regional water Aral Sea Basin resource cooperation in the Aral Sea Basin after the collapse of the former Soviet Multi-state Union. It shows efforts to broaden the involvement of national stakeholders in Water Resource water management in each country while political and economic transformations Cooperation were under way, and the extent to which national stakeholders began to inform state positions on regional cooperation. Uganda Bujagali Options assessments and associate stakeholder involvement informed the Hydropower selection of the proposed 250 MW Bujagali hydroelectric project in Uganda, and Project the subsequent choice of within-project alternatives to develop the facility and manage resettlement, local development, and environmental issues. The project would be financed as a Build-Own-Operate-Transfer (BOOT) scheme. Appendix 1: Case Studies 129 Zambia Power Strategic and project-level options assessments and stakeholder involvement Sector informed power sector rehabilitation initiatives in Zambia. Through a strategic Rehabilitation environmental assessment, measures for technical efficiency, social rehabilitation, Project environment restoration, and dam safety were incorporated in a sector-wide rehabilitation project. Parallel steps were taken to improve capacities within the power utility to adopt participatory planning processes and improve environment and socioeconomic management of power facilities. Canada Stave A structured process to develop a water use plan for the 90 MW Stave Falls River Water Use hydropower facility in British Columbia. The process involved all water use Plan interests in the basin, through a Consultative Committee and Public Consultations to recommend a new operating strategy for the facility, and propose mechanisms for ongoing stakeholder involvement in performance and impact monitoring, and in informing decisions for the ongoing management of the facility. Turkey Ceyhan National and local stakeholder involvement in a comprehensive and independent Aslantas ex-post evaluation of the Ceyhan Aslantas multi-purpose dam, which was built Multipurpose with World Bank support in the 1970-80 period. The process elicited stakeholder Project: Ex-Post views and evaluated the development effectiveness of the project, and drew a Evaluation series of lessons to inform future development interventions and management of existing dams in the Basin. South Africa Initially, approval of the Berg River (Skuifraam) Dam-proposed to augment Berg River municipal water supply and storage in Cape Town and surrounding Water Project municipalities-was withheld by the national government until demand management and alternative supply options were assessed, as required by new legislation. Subsequently, stakeholder involvement and options assessment were factored into decisionmaking on water security and demand-supply options. Kyrgyz The Kyrgyz Republic addressed immediate needs for rehabilitation of irrigation Republic sector infrastructure as part of a wider program to restore agricultural productivity Irrigation Sector after the collapse of the Soviet Union. A structured approach was set up to define Rehabilitation priority investments to restore water flows in inter-farm canal networks and to Project ensure the safety, capacity and stability of irrigation dams. A.1.6 Table A.1.2 points to good practice elements in each case study. The elements that are listed follow the main points of chapters 3 to 6. The same steps are also reflected in the generic terms of reference in Appendix 3. 130 Stakeholder Involvement in Options Assessment Table A1.2: Good Practices Illustrated by Case Studies Good Practice Provided in Case Study 1 2 3 4 5 6 7 8 9 10 Stakeholder Analysis * * Communication Plan * Structure for Stakeholder Involvement * * * * * * * * o Goals and Needs Assessment * * * * Criteria and Performance Measures Assembly of Options/Alternatives Inventory * * * * * * * * Evaluation of Options/Alternatives Alternative Plans Documentation of Degree of Acceptance * * * Documentation of the Process * * Recording Agreements to Facilitate Compliance * * * Case Study 1: China-Loess Plateau Watershed Rehabilitation Project A.1.7 This case study illustrates how three provinces in the arid Loess Plateau region of northwest China used participatory processes to identify, evaluate, and implement a diverse set of options to improve land and water management in small tributary watersheds of the Yellow River basin. Improved catchment management was a central element of an integrated, multi-sector approach to raise rural incomes by increasing on-farm agricultural productivity, converting marginal lands to agriculture, improving rural water supply, and reducing severe erosion and sediment loss into the Yellow river system. A.1.8 The Loess I Project was initiated in 1994 in selected small tributary watersheds. Based on its success, the effort was scaled-up for wider replication across the three provinces and expanded to the autonomous region of Inner Mongolia under Loess LI in 1998. Over 460 sediment control and water supply dams (mostly from 5 tolS meters high, with some up to 30 meters) emerged from the bottom-up process. The experience gained with the Loess projects (both ongoing) is expected to shape future government efforts to strengthen and promote integrated catchment management in the region. What was the context? A.1.9 The Loess Plateau, located in the upper and middle drainage areas of the Yellow River in northwest China, is one of the poorest areas in the country. Arid to semi- Appendix 1: Case Studies 131 arid conditions and high population pressure combined with unsustainable agricultural practices have resulted in widespread poverty for over 400 million rural people. Figure A.1.2: China-Loess Plateau Watershed Rehabilitation Project II0- II t IOESS PLATEAU 16 6. 11 I8- LOESS PLATEAU 11 PROJECT MONGOLIA ._ ' LOESS PLATEAU I PROJECT L . NE iMONGOL S PROVINCE CAPITALS * NATIONAL CAPITAL j '.tohI$. Beijing INTERNAnONAL BOUNDARIES t { 98> - . 102' J 2 g g_ Tianlin D- 39, % - _ f f ~~~~~Yinchan { 96' 1)02 ,-- -.38'~~~' 38 0yinchuon %~ ~ ~~~~~~ ~~~~ Sh Jihu ng 3n /~~~~~~~~~~~~~~Jt 2003 34-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 IBRD 32534 JULY 2003 A.1.10 Progress in dryland agriculture practiced in the region has lagged well behind advancements in irrigated agriculture in other parts of China. Recognizing its significance for poverty reduction, the government made the improvement of agriculture productivity in rainfed areas a key element of the Ninth 5-Year Plan (1995-2000). A.1.11 The Loess Plateau is also the most erosive area in China. On top of drought and water scarcity, it suffers from short-duration intense rainfall events and floods in the summer months. An average sediment load of 1.6 billion tons enters the Yellow River system each year. As a consequence, the bed level of the lower Yellow River rises above surrounding land with each annual cycle of flood and sediment deposition. To keep pace with this, the flood embankments have been raised at a rate of 1 meter every 10 years to protect the urban, industrial, and agriculture areas in downstream reaches, costing several billion dollars each time. In places, the river is perched 6-7 meters above the surrounding land; at some points, the dike is 20 meters high. A.1.12 Recent floods, including the 1996 and 1998 floods that resulted in huge sociai and economic losses, also underscored the urgency for combined strategies in the 132 Stakeholder Involvement in Options Assessment upper and lower reaches of the basin to cope with challenges.26 The Xiaolandgi Project, a major dam on the mainstem of the Yellow River in Henan Province, is an example of the downstream strategy for flood protection. This reservoir, together with other flood storage reservoirs (such as Guxian, Luhun, and Sanmenxia) is designed to mitigate floods up to once in 10,000 years frec uency, thus reducing the possibility of breaching flood defenses.27 Floods of 45,000 m /s (1:10,000 years) can be reduced to 27,500 m3/s and pass through the lower reaches with a higher probability of safety. In addition, the Xiaolandgi Dam serves to reduce smaller floods in unprotected floodplains. A 12,000 m3/s flood (once in seven years), which would displace about 1.4 million people, would be reduced to about 6,000 m3/s. A.1.13 Improved management of small catchments (under Loess I and II) is part of the upstream strategy. Such measures have an immediate impact on the lives and livelihood of people in the upper catchment areas and mitigate the scale of floods confronting populations in the lower reaches of the Yellow River system. A.1.14 Through the 1980s, the government mounted a series of campaigns to encourage farmers to terrace slopes, require compulsory planting of trees and shrubs to improve water retention, and build check dams to intercept sediment in flood runoff. While helpful in combating massive soil erosion, these interventions were not sufficient for the scale of the problem. Moreover, they were not well integrated with efforts to raise agricultural productivity and farm incomes, which limited local involvement and hence the effectiveness of the interventions. By the late 1980s, trial programs of comprehensive watershed management were starting to show that land conservation was compatible with sustainable agriculture, reducing soil erosion and raising farm incomes. A.1.15 In 1994, the Loess I Project was initiated to identify and evaluate the feasibility and acceptance of a combined set of measures and institutional arrangements (support services), including better cross-sector integration of existing government programs. The approach involved establishing a portfolio of measures for a variety of circumstances that could be selectively tailored to each small watershed and local preferences. 2f Preliminary losses from the 1998 floods nationwide in China were estimated at 248.4 billion yuan ($30 billion) in damage and 3-4 percent of GDP. While they were estimates, it is clear that flood impacts have enormous implications for economic growth and human welfare. (WCD, China Country Study, 2000). 27 In total, over 165 large dams have been constructed for flood management in the Huang he River (Yellow River) system. Appendix 1: Case Studies 133 Table A.1.3: Chronology 1980s IDA financed a number of projects with watershed components (Gansu Province) that generated lessons for the Loess project 1994 Loess I was initiated on nine tributary watersheds of the Yellow River 1996 to Testing and development of the feasibility and integration of options in a small 1998 catchment program 1997 Government request to Bank Group to scale up and expand the Loess Project (extend to more catchments in the Loess 1 area and other tributaries of the Yellow River) 1998 Evaluation (Loess I) and Preparation of Loess II 1999 Appraisal/Approval of Loess II, expanding the program to 12 tributary watersheds in four provinces and Inner Mongolia 2004 Scheduled completion: Loess I and Loess II 2004+ Expected mainstreaming of the options in Govt. Programs A.1.16 In its first three years, Loess I demonstrated the technical viability and combined effectiveness of different mixes of options. New capacities needed for planning, design, and implementation (at the provincial, county, township, and village levels) were also identified, and the incentives that farmers required to engage in the process were identified and tested. At this scale of small catchments under five square kilometers, the focus on integrated watershed rehabilitation required a high degree of cooperation among disciplines in the water resource engineering, forestry, soil and water conservation, agriculture and livestock sectors-not only at higher policy planning levels, but also on the ground where planners and farmers needed to interact. A.1.17 The success of Loess I encouraged the Ministries of Finance and Water Resources (MWR) to request World Bank support to expand the initiative. Preparation of Loess II (1999-2004) started in 1997. 134 Stakeholder Involvement in Options Assessment Box A1.1: Loess I Options Evaluated (examples) Options included a mixture of existing and new practices, set in a more integrated catchment management framework. These included: . Sediment control dams to retain sediment runoff (some providing local flood control and storing runoff for local irrigation and village water supply) * Rainwater harvesting using small surface water diversions and water cisterns to catch runoff from roads for irrigation and water supply * Conjunctive use of surface and groundwater (preventing the rise or decline of the water table) * Cropland improvement measures, including conversion of slope-lands to terraced lands for water retention and erosion control * Slope-land protection measures to increase erosion control capacity with planting and protection of vegetation cover * Groundwater and other small-scale irrigation systems where water tables permitted * A variety of on-farm income-generation programs to diversify income sources. A.1.18 The combined projects (Loess I and Loess II) now cover 19,500 sq. km in 12 silt-laden tributaries of the Yellow River, which include 3,350 administrative villages, 264 townships, 37 counties, and 12 prefectures. The aim is to benefit about 2 million rural poor in three provinces (Shanxi, Shaanxi, and Gansu) and in the autonomous region of Inner Mongolia. Flooding in late 1990s further heightened the urgency in addressing the connected problems of flood, deforestation, erosion, and unsustainable land-use practices. A.1.19 The Yellow River Conservancy Commission (YRCC) is the lead agency. It normally manages joint central-provincial water resource construction and soil and water conservation programs. The mechanisms for coordinating stakeholder involvement included Project Leading Groups (PLGs) and Project Management Offices (PMOs) at the central, provincial, prefecture, and county levels. What Options Assessments Were Carried Out, and by Whom? A.1.20 Box A.1.1 indicates some of the options evaluated in Loess I. Broadly, factors such as topography and soil conditions, local agricultural practices, and local institutional capacities influenced the mix of options that were most effective in a particular catchment. The beneficiaries were also financial partners in the project, taking loans to participate in the options they selected-from provinces and districts down to and including individual farmers. Appendix 1: Case Studies 135 A.1.21 There were also various support services to choose from, including research, training, and institutional capacity building measures. A.1.22 On-farm options. To inform the choices at the farm level, farm model analysis was used to clarify the possible impact on farm incomes for different measures. Because the beneficiaries were poor, loan repayment periods from rural credits offered with each measure were matched to their income stream and projections. Here, farmers realized additional income in different time frames. For example, income from terrace crops came after 3-5 years; commercial trees and fruit trees after 8-13 years; and lastly, income from arbor trees came after 20 years. Choices at the farm-level were thus based on considerations of the benefits, additional income, and loan terms. A.1.23 Multi-function sediment control dams. Choices regarding the system of sediment control structures in each small catchment were made following consultations amongst groups at local, district, and provincial levels. The Loess project team facilitated these discussions. The choices reflected a need to manage sediments for farm and village level benefits, as well as for catchment-wide benefits (especially on the coastal floodplain). A.1.24 In addition to providing sediment interception in gullies and conversion of marginal land to agricultural land, some dams were designed for multiple functions such as localized flood control, or to store water for irrigation and village water supply. The two main types of dams chosen were: * Key dams. These are earth embankment dams (usually 5-15 m. high, with some up to 30 m) to control sediment runoff and floods in drainage basins of 3 to 5 square kilometers. Once filled with sediment, the dam could be raised or the land converted to agriculture. Depending on local conditions, a new upstream dam could be considered and the process repeated to reclaim further land. In Loess II, some 130 key dams are being constructed and 20 existing key dams rehabilitated. * Warping dams. These are earth dams (usually 3-10 m in height) built in gullies to intercept sediment in smaller catchment areas less than 3 square kilometers. The primary purpose of warping dams is to create new agricultural land from marginal land. Some 335 warping dams are being built under Loess II. A.1.25 Loess I showed that it took about three years for land to be ready for farming behind warping dams, and 8-10 years behind key dams. Each dam included an outlet conduit and intake structure designed to accommodate future raising of the dam. Low dykes to stabilize recovered land around warping and key dams were included where needed. In addition, numerous small rock or brushwood check dams were built to slow flows in the gullies and prevent undercutting of the gully sides. 136 Stakeholder Involvement in Options Assessment A.1.26 Loess I involved no land acquisition or involuntary resettlement, largely because the topography allowed flexibility in siting dams to avoid resettlement. Similarly, no resettlement was expected under Loess II. Dams are designed by Provincial Water Resource Bureaus according to standards developed by the Ministry of Water Resources (reviewed and approved by the World Bank). The procedures require multilevel technical reviews and approval of the siting, design, and construction. A.1.27 Selection of small watersheds to participate in Loess I. There was a high degree of interest in participating in the expanded Loess II program. The criteria for inclusion, adopted after discussion at various government levels, included the severity of soil erosion in the catchment; the poverty level; experience in soil and water conservation works; development potential and repayment capacity; presence of leadership and commitment at the local government level; and the proximity to science and research organizations involved in soil and water conservation. A broader aim was to provide a base of experience in different settings where government could further expand the measures in mainstream programs in future. A.1.28 Options excluded from Loess I. During the preparation of Loess II, proposals to include a broader range of rural road, drinking water supply, and social sector investments were considered and rejected. The experience in Loess I showed that integrated land and water resource development was sufficient to raise incomes and reduce sediment inflow to the Yellow River system-the primary aims of the program. Moreover, it was felt the success of Loess I was due in part to its simple design. In addition, there were separate programs available for those other investments. What Other Steps Were Taken to Enhance Stakeholders Involvement in Decisionmaking Processes? A.1.29 During preparation of the Loess II, an EIA was undertaken to assess the conditions in the new watersheds to be supported by the Project. The EIA also served as a mechanism for stakeholders to assess the need for further revision of the range of options being offered, or adjust the implementation arrangements. A.1.30 Loess II Project Preparation. Following the Loess I model, PMOs worked with the villagers through the village committees in new watersheds to select the options for that community. In parallel, PMOs met with local government departments to identify and coordinate government support services for on-farm initiatives and to plan the network of sediment control structures for the catchment. The Provincial Bureau assisted with the evaluation of the key dams and warping dams in each catchment. A.1.31 Other steps were taken to respond to local interest in moving rapidly to implementation and to maximize the benefits and effectiveness of their participation. For example, funds for small watershed land use surveys and to prepare technical designs for certain elements such as fruit storage and irrigation and sediment retention structures were made available during the preparation of Loess II to prepare for rapid implementation, once the Loess II funding was in place. Appendix 1: Case Studies 137 A.1.32 Loess II Project Implementation-Additional measures. Building on the Loess I experience, a number of additional measures were introduced to improve the ability of beneficiaries to participate effectively in Loess II. Among these: * Additional Project Support Services. Ten percent of the Loess II budget was allocated for research and extension, including training and study tours of Loess I sites; monitoring and evaluation; and survey and design. Research included topics in dryland farming techniques, grassland improvement, and forage and grazing management. Training covered a diverse set of topics, including project management; agriculture and forestry techniques; water- saving irrigation; and nursery and grassland management tailored to project managers, technicians, and farmers. * Land contracts for new agriculture land created by dams. Early in Loess I, insecurity of land tenure was shown to be a key disincentive to the long-term improvement of land. To overcome this, all new land created by the key and warping dams under Loess I and II was assigned to specific farmer households. Land contracts signed between farmers and local governments for this land explicitly state the terms, land use rights, and obligations under which farmers could use the land. Farmers received properly signed, sealed, and registered contracts, copies of which were held in the township or county registries. Under Loess I, terms for land contracts varied between 10 years and 30 years, though in practice they were frequently adjusted. Under Loess II, all land contracts were required to be a minimum of 30 years. * Financial participation and cost recovery. Unlike previous initiatives that were largely state-funded, the Loess program was cost-shared with beneficiaries. Village committees collected funds from farmers, and channeled these through the townships and counties to the prefectures. The provinces thus expected to recover 60 percent of the funds disbursed under the project. The fees established for cost recovery at the farm-level were determined based on the farmer's capacity to pay and on the incremental income from participation in each project component. Repayment of loans by the beneficiaries does not begin before the incremental income is realized, and would not exceed 50 percent of their net incremental income. The terms actually vary among components and to some extent between prefectures. 138 Stakeholder Involvement in Options Assessment How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? A.1.33 The strong demand and competition among counties to participate in Loess II was a clear indication that the beneficiaries regarded the menu of options offered as highly desirable. The impacts of the various components exceeded expectations in most respects. A.1.34 The participatory methods engaged planners and farmers in devising successful practices that can be applied to large areas of the Loess Plateau. More sustainable and replicable water and land management practices and dryland agriculture models were successfully introduced * The combination of soil stabilization and check dams far exceeded the effectiveness of one strategy for sediment management in the basin alone. It was estimated that the combined effect of the measures under Loess II would reduce sediment inflow to the Yellow River system by 29 million tons annually * The system of key dams, warping dams, and smaller check dams was able to provide 100 percent control of coarse sediment runoff in small watersheds, and many sites with marginal land were turned into good quality agriculture land * Loess I showed that farm incomes had risen appreciably from the diversification of horticulture and dryland agriculture practices and improved live stock management A.1.35 Loess I/II also demonstrated the commercial viability of the various catchment management measures options associated with increasing agricultural productivity and incomes. In previous projects, farmers and the emerging private sector had been unwilling to cost-share the initiatives. Loess I and II showed that farmers were indeed willing to pay where their critical concerns about drought and changes in farm gate prices were addressed. With important reforms in rural credit and banking under way in China, the project showed that commercial returns for rural credit were possible. A.1.36 For sediment control dams and land reclamation, the timeframe when farmers realize direct benefits is longer, thus limiting the scope for cost recovery from villagers. The financing plans established for key dams in Loess I were subsequently adjusted in Loess II to allow for lower farmer contributions. In Loess II, the county, province, and central governments bore a higher proportion of the costs of the sediment control structures in the catchments. What Lessons Are Offered? A.1.37 In the Loess Plateau context, integrated watershed development is an effective means to address multiple-development concerns and can be promoted on a large scale. The rapid progress and quality of work has confirmed the validity of a Appendix 1: Case Studies 139 strategy that relies on the joint efforts of villagers and government technicians at all levels. A.1.38 Other lessons include: * A diverse set of mutually reinforcing options is needed to address complex water resource management issues. In the rural context, there are clear advantages to be gained by involving beneficiaries and government stakeholders in identifying options, participating in the evaluation of their effectiveness, and linking the choices made at the farm-level to the decisions on catchment-level measures that are undertaken by the government. * The success of initiatives improves when the options offered are clearly tied to the needs of the beneficiaries. For example, in Loess I, it was apparent that planting of grasses to stabilize soils is only attractive to farmers when combined with improved livestock management. * It is important to keep such watershed management initiatives well-structured, simple, and understandable. If they are overly complex, there is higher risk of failure in implementation. * Partnerships are needed to successfully implement strategies and options that are inherently cross-sectoral in nature and require joint actions by beneficiaries and government organizations. * Integrated and participatory approaches to the evaluation of options need to continue through implementation. This can lead to more effective inter-sectoral coordination and development of institutional capacity at all levels of government. Case Study 2: Nepal: Medium Hydropower Study Project-Screening And Ranking Phase A.1.39 This case study illustrates the use of a participatory screening and ranking (S&R) exercise in Nepal to forn a balanced portfolio of high quality, medium-scale hydropower projects suitable for domestic grid supply, and a mixture of public and private sector investment in the power sector. A. 1.40 An inventory of alternative hydropower sites across Nepal (138 sites suitable for 10-300 MW hydropower development schemes on different river systems) was assembled in consultation with stakeholders. A well-structured process using multi- criteria techniques was then employed to select seven of these projects to advance to full feasibility and EIA study. These projects became eligible for financing after environmental clearances. Stakeholder interactions and public consultations commenced early in the S&R process provided transparency, inforned the debate about which sites to 140 Stakeholder Involvement in Options Assessment develop (options identification and evaluation), and helped to build legitimacy and confidence in the selection process and its outcome. The Context A.1.41 Nepal's population of just over 24 million is divided in equal proportion between the flat plains of the Terai in the south of the country, which border India, and the foothills and mountains of the high Himalayan range in the north, which border the high Tibet plateau. The country has one of the lowest per capital incomes and rates of commercial energy use in South Asia. Less than 30 percent of the population has electricity access, and less than 5 percent among rural households.28 A.1.42 With many steep rivers fed by a combination of snowmelt, winter rains and torrential monsoon rains, Nepal's theoretical hydropower potential is vast. The economically feasible potential for hydropower is estimated at upwards of 43,000 MW. Less than 0.3 percent of this potential has been developed. Nepal has no fossil fuel resources. Forests are under intense pressure from population growth and land clearing. Consequently, hydropower development is a central aspect of the national energy strategy. The aim is to develop indigenous hydropower to meet growing commercial energy needs, support the modernization and diversification of the economy, and generate earnings from power exports as a major source of national income. Figure A.1.3: Nepal: Medium Hydropower Study Project 80' 82' 84° 86' 88 J cl LARGE HYDRO PLANTS (PROPOSED) t o SMALL HYDRO PLANS (PROPOSED) -LARGE HYDRO PLANTS (EXISTING AND UNDER CONSTRUCTION) _s_ , t C,ZX/ * SMALL HYDRO PLANTS (EXISnNG AND UNDER CONSTRUCTION) a E - *- E . - ^ * NATIONAL CAPITAL U: s * >, S x - RIVERS I- - INTERNATIONAL BOUNDARIES r ° V 4pa Screening and .' > | ~~Rankidng ..i Public >: i Q* >+' ~~~~~~~~Consultation , E ! o ¢- Public Notice 2 * - _ Fine Screening Pro:A ssLona i 1< ----- ~ and Ranking Groups I 1 454 -- * ~~~~~~~~~Noiice 3 & Public RrScreening Meeting gr - * ~Report & b 1 1 . i ~~Recommendations ._. A.1.50 Essentially the traditional hydropower screening and ranking process was broadened to include a more substantial social and environmental evaluation, site verification of data, standardized designs, and a multi-criteria framework to evaluate and rank options with a mixture of qualitative and quantitative factors. In a major departure from past practice, stakeholders were involved from the outset in identifying options and building an inventory of projects on which to base the assessment, specifying and weighing the evaluation criteria, and reviewing the results at each key stage before proceeding to the next stage. A.1.51 An inter-agency Steering Group was established to lead the process. This included representation at senior levels from eight key sector ministries, including those with responsibility for water and power, environment, social, and regional development and roads programs, and the National Planning Commission. A.1.52 A multi-disciplinary professional Study Team was established to work on behalf of the Steering Group under the supervision of the process manager. The team 144 Stakeholder Involvement in Options Assessment consisted of seconded professionals from NEA (planning, engineering, and environment departments), from other government departments, and from the private sector. Intemational consultants were responsible for technical quality of the study team's work, to introduce new tools and methods and to provide on-the-job training. A.1.53 Initial tasks of the Study Team included the preparation of a stakeholder analysis and communication plan, formulation of screening and ranking criteria and compilation of an inventory of projects. Figure A.1.4 illustrates the framework involving stakeholders and public consultation provided in the communication plan. A. 1.54 Public notices were placed in the local media to explain the purpose of the exercise and schedule of activities. A website and public information office were established to provide access to all S&R documents. In parallel, briefings that provided the methodology and outlined the key decision milestones and the means of input were sent to government departments and regional offices, national NGOs, civil society, professional and private sector organizations in Nepal, and to embassies and resident missions of donors active in the sector. A.1.55 Prior to the start of the S&R, the Electricity Authority had assembled an inventory of 60 potential sites across the country. Once this list was published, there was an immediate call from the stakeholder community to include more site options. This was for three main reasons: to increase the regional spread of sites; to expand the number of sites in the 50-100 MW range, a scale considered most attractive for private financing and within the capacity of domestic engineers to provide engineering services; and, to include more sites with storage and daily peaking capacity to better match Nepal's power system requirements. In response, the Study Team expanded the inventory using basin studies that had been prepared by government agencies, NEA and various donors, and from mapping exercises. Sites identified directly by stakeholders were also included (i.e. submissions received from industry, NGOs, and community and local government interests in response to requests for submissions on options to include). When the extended deadline for submissions was reached, there were 138 optional sites on the table. A.1.56 To efficiently and fairly evaluate this number of sites (double the number originally anticipated), a three-stage process was adopted consisting of sequential steps of screening, coarse ranking, and fine ranking. A.1.57 Screening criteria formulated by the study team in consultation with stakeholders and NEA management were discussed and approved by the Steering Group. These criteria were published before being applied (while detailed information on sites was being gathered) and stakeholder comment was invited. The S&R team did not engage local communities at screening. Rather, estimates of families to be resettled, land take, and cultural sensitivity factors developed for each site were used to apply the social screening criteria. This was a deliberate strategy so as not to create unfulfilled expectations or anxieties in the communities around the 138 sites included in the exercise, which could lead to speculation on land and changes in prices. Appendix 1: Case Studies 145 A.1.58 After debating of the screening analysis results, the Steering Group authorized 44 sites to proceed to coarse ranking. This list (of 44 sites) was published in national and regional newspapers and the screening report was sent directly to key stakeholders, inviting comment in a fixed timeframe. Table A.1.4 illustrates the criteria applied in screening and in the successive stages of coarse and fine ranking. Table A.1.4: Number of Options at Each Stage of the S&R Process and Criteria Applied Options Inventory Screening Coarse Ranking Fine Ranking . . . . . . ~~~~~~~~~Fine ranked 22 sites and Expanded the initial Eliminated 94 sites Coarse ranked 44 selected 7 Proes to inventory of 60 sites from the 138 to base sites and selected 22 selected 7 Projects to to 138 sites ranking on 44 sites for fine ranking proceed to full Ifeasibility/EIA study Stakeholder defined Multi-criteria Multi-criteria analysis framework. criteria and adding screening Stakeholders involved in developing criteria and sites proposed by Stakeholder reviewed criteria weights, project scoring method, and stakeholders criteria and results reviewing ranking results presented in a series of preference matrix for all scales of options. S&R team to add Criteria reflected: Techno-Economic Techno-Economic options and where . congruence with Criteria: Criteria: stakeholders regional * standardized design * reconnaissance layout identified new development parameters * levelized power cost, options: policies * levelized power * power system fit * project scale 10-50 * construction road cost * interalized environment MW, 50-100 MW, transmission access * power system fit and social management and 100-300 MW * hydrology and cost rikalys * regional diversity * watershed E nisk analysis and spread across conditions Environment-Social Environment-Social basins in the Criteria: Criteria: country safeguard policies * Based on rapid * Preliminary EIA-level * miix of run-of- on social and appraisals * 88 impact sub-factors river, peaking, and environment * Biophysical and * 22 enhancement sub- storage options aspects social impact sub- factors * indices (e.g. criterion * consultation with affected persons resettled * Consultations with communities and land take /MW, affected biodiversity communities impact); * current level of study 146 Stakeholder Involvement in Options Assessment A.1.59 At coarse ranking, reconnaissance site visits were undertaken by engineering, environment, and social units of the Study Team. This was to verify and bring the technical information on engineering, environment, and social aspects on each site to a consistent level. At this time, community leaders at the 44 sites were engaged to elicit their views about development of a hydropower scheme in their area and community members participated in socioeconomic baseline surveys. Special provisions were made to engage woman, poor, and marginalized groups. Considerable care was taken also to explain the preliminary nature of the site investigation, and that full consultations with the community would take place during the ELA study phase, if a site in their area were recommended for further study. The surveys revealed that local development impacts were most often seen as positive. Many sites involved limited resettlement. Local people generally regarded the opportunity for local power supplies, particularly the access road, as a major development opportunity. A.1.60 Coarse ranking of sites was based on multi-criteria analysis (see Table A.1.1). A composite environment/social and techno-economic preference rating was established for each project, and the results were plotted in preference matrices for different project size ranges, as noted in the accompanying Figure A.1.5. Stakeholders readily understood this form of graphical presentation. Based on the coarse ranking, the Steering Group approved 22 sites to proceed to fine ranking. The list of projects proceeding to fine screening was then published in national and regional media, and sent to regional NGO and local government offices, also inviting their comment. Figure A.1 .5: S&R Ranking Matrix High S&R Ranldng Preference Matrix 1Q K ,00 50…__ _ _ . _ _ _ _ CC I Low L Technical Preference High (Composite TechnicalEconomic Scott) A.1.61 At fine screening, the Study Team mobilized for further site visits and surveys. The data collected was sufficient to enable the Study Team to prepare Appendix 1: Case Studies 147 reconnaissance level project layouts with standardized methods for design, quantities, and unit rates and to prepare environmental and social impact assessments that were in effect rapid appraisals and initial ETA scoping exercises. A. 1.62 In parallel, meetings and workshops were held with national-level civil society and professional groups to refine the fine screening criteria and weights. Additional criteria such as project risk criteria were introduced. The fine ranking was then completed and new preference matrices were prepared. Also in parallel, these 22 hydropower projects were assessed using generation expansion planning models (simulation and optimization models) to verify the system fit, timing, and sequencing of the projects and least-cost attributes. Preliminary transmission system studies were also carried out to evaluate the transmission facilities and costs associated with their incorporation in the grid. A. 1.63 After the Steering Group reviewed the fine screening analysis, a preliminary recommendation was made for 7 projects and 3 reserve projects. A public consultation meeting was then held to present and discuss the fine screening analysis and preliminary recommendations. Full media coverage was provided. Informed by the results of the public consultation, the Steering Group recommended a final selection of projects. A.1.64 In view of the consensus demonstrated at each step in the process, the government was in a position to give quick approval to proceed to full feasibility and EIA study of the seven recommended projects. The individual projects required final government approval in accordance with national ETA guidelines before being offered to the private sector or developed in the public sector. What Did the New Process Achieve and What Benefits Were Derived? A.1.65 This systematic approach to options assessment incorporating stakeholder involvement and early public consultation was the first of its kind in Nepal and a learning experience for all involved. As a sector-level options assessment, the Nepal S&R exercise contributed to: * Developing Nepal's hydroelectric potential through building a balanced, high quality pipeline of projects selected through an information-sharing and participatory process that recognized technical, economic, financial as well as environmental and social impacts * Improving the regulatory environment for private investment in the power sector and a basis for competitive solicitation to private power developers * Building the capacity of the Nepal engineering and professional community in all disciplines to better position them to participate as partners in future private or public development projects 148 Stakeholder Involvement in Options Assessment Identifying priorities for licensing of additional sites for future development (consisting initially of the 24 sites in the fine screening). A.1.66 The S&R also established a baseline for future options assessments. New sites could be assessed and compared against the projects already ranked, and projects already contained in the S&R framework could be updated. In this respect, the World Bank is currently working with Nepal to establish a Power Development Fund (PDF) as a long-term financing facility to catalyze inflow of private and commercial bank financing into Nepal's power sector. The Medium Hydropower S&R exercise has provided the initial projects for consideration under this facility and a management tool to expand the portfolio. What Lessons Are Offered? A.1.67 One major lesson was that time and resources for participatory processes can be seriously underestimated. Once stakeholders become involved, the concerns they raise and their requests for more information or analysis have to be met. Sufficient time and notice is also needed for people to digest new information, for representatives to consult their constituencies, and for people to form opinions. Otherwise, the legitimacy and the benefits of meaningful participation can be compromised. A.1.68 The Nepal S&R was originally envisaged (by IDA and NEA) as a 3-month exercise. It took close to 14 months. The decision to allocate additional budget and time was made possible by the demonstration of the active interest the process generated among the stakeholders and the commitment of stakeholders (including decision actors) to strive for consensus on the outcome. The final cost of the Nepal S&R of approximately US$1.2 million represented a small portion of the investments it identified. A.1.69 Other lessons included: * Involving stakeholders enriches the number and quality of options. In this case, the number of options more than doubled because of suggestions from stakeholders. The portfolio was improved in terms of scale, regional spread, and project type. * Using a multi-disciplinary study team in a neutral setting should be considered for more complex options assessments processes. Here, the study team was able to respond to stakeholder needs as the process evolved and as stakeholders gained confidence that the process was not dominated by single interests. * National safeguard policies (and those of the World Bank) can be moved upstream in the planning processes; options (projects) that clearly violate safeguards can be eliminated at an early stage. During the S&R, a strong lobby emerged to include potential project sites located either within conservation areas, within their buffer zones, or upstream where adverse alterations in flow Appendix 1: Case Studies 149 regimes in downstream conservation areas would result. Safeguard policies were used to eliminate these sites at an early stage. * Decisionmakers are better informed of the degree of consensus and acceptance of projects than otherwise, and are in a better position to take decisions. Here the decision to simultaneously advance seven projects to full EIA and feasibility study was without precedent in Nepal. It was only possible due to the consensus achieved and visibly demonstrated by involving stakeholders. * Specific steps must be taken to ensure that the databases, spreadsheets, and other tools developed in the options assessment processes are maintained. Toward this aim, seconded staff from the agencies responsible for power development and licensing were included as key members of the study team. A.1.70 Finally, the S&R approach that Nepal adopted provides a successful example of moving options assessment upstream in sector decision processes, thereby lifting the options debate out of project-specific approval processes. The benefits to be realized in future included improved access to project financing, higher quality projects, and public support-with less risk of rejection, delay, or abandonment of projects. Case Study 3: Brazil: Ceara State Integrated Water Resources Management Project A.1.71 This case illustrates how options assessment and stakeholder involvement informed decisions about the ongoing development of a network of strategic dams and reservoirs and the integrated management of inter-basin transfers in Ceara State in northeast Brazil. In the 1990s, the state embarked on progressive reforms to move from highly centralized decisionmaking to participatory forms of water management and adopted new procedures to balance and prioritize demand-side and supply-side interventions. The Context A.1.72 Ceara State is located in the semi-arid region known as the "Drought Polygon" or "Polygono da Seca" in the northeast of Brazil, one of the poorest regions in the country. The mean annual precipitation is around 700 mm, and in some regions, it is less than 300 mm. Historically, the area has been subject to long and severe droughts. Even in average hydrological conditions, the rivers in the seven basins in the state flow intermittently for only three to four months. In the remaining months, riverbeds are dry. 150 Stakeholder Involvement in Options Assessment Figure A.1.6: Brazil: Ceara State Integrated Water Resources Management Project e ~~~~~~3B ATBIN1MC OCEAN / , ' + 3 0 100 m * >JERMUM 6;' * 72Z ;a, - ,6 . KAZAKHSTAN t P@ICAiEDt.C 7. ~ ~ ~ ~ ~ ~ ~ ~~~ ~~SELECTED DAMS --H '.ra/4 - <- - ARAKUM CANAL OFARAlSE | -j , j X l '2 4 X-1960 LEVEL OF ALAL 'EA ,K KYRGYZ REPBUC _.0UZBEKISTAN- TURM ENISTAN -T CHINA "Du t - - DJ. -T CHN S.eaAhg. ct x _ ISLAMIC REP. X OF IRAN ; V. / . RIVERS k. Y * NATIONAL rAPITALS O JO4KWa. 2-->v/ AFGHANISTAN K ---NTERNAT.CNAL 6 FOREST RESERVES 4O-. PROPOSED LINES IBRD 32537 JUlJY ?.003 A.1.135 At the same time, only 3 percent of Ugandan households had an electricity connection. Moreover, development in rural areas was lagging well behind that of urban areas. Less than 1 percent of rural households had electricity services, and rural communities lacked basic infrastructure for productive rural enterprises. Rural electrification now forms an integral part of the wider rural transformation and poverty alleviation strategy of the GOU. The national rural electrification program comprises a combination of conventional grid extensions, decentralized community scale mini-grids, and stand-alone systems. This is supported by the Energy for Rural Transformnation Project, a World Bank project approved in 2001 that supports the first phase of the Energy for Rural Transformation Program. A.1.136 GOU's power development strategy was formalized in the 1999 Electricity Act. The policy is to improve power services in the short-term and position for future power development through restructuring and commercializing power sector institutions, mobilizing private sector expertise, and encouraging foreign and domestic private investment in the electricity industry. A.1.137 Historically, Uganda has relied on hydropower for grid supply needs. It has no indigenous petroleum or coal resources. However, there is potential for 170 Stakeholder Involvement in Options Assessment development of geothermal energy resources. The government considers development of the Bujagali site a logical next step in a series of cascade projects on the Victoria Nile River and a key opportunity to introduce private investment in the sector. After Bujagali, installed generation capacity on the Victoria Nile would rise to 550 MW, including 180 MW from the existing Owen Falls Dam (now called the Nalubaale), and 80 MW from the first-phase of the Owen Falls Extension Power Station (Kiira), where 2 units were commissioned in 2000 and a third 40 MW unit in 2001. The Hydropower Development Master Plan (1997) prepared by the Uganda Electricity Board (UEB) envisages an additional two 40 MW units at Kiira. A.1.138 In the mid 1990s, GOU invited independent power producers to express interest in Uganda's power development program. AES Corporation (AES) of the United States emerged as the main interested party. GOU entered into negotiations with AES to develop the Bujagali site as a BOOT project. Based on the agreements that were reached, a privately owned and operated project company-AES Nile Power Ltd. (AESNP)-was created as a subsidiary of AES. It would be wholly responsible for the Bujagali development costs at its own risk, whether the project proceeded or not. On commissioning of the facility, AESNP would sell the power output to the Uganda Electricity Transmission Company Limited (UETC) under a 30-year Power Purchase Agreement (PPA). The facility would be owned and operated by AESNP for 30 years before transfer to GOU. The transmission facilities would be constructed by AESNP and transferred to UEB on their completion. A.1.139 After 10 months of debate in Parliament, the Uganda Cabinet approved terms of the PPA in 1999. The project appraisal prepared by IFC/IDA was completed in November 2001. The proposed World Bank Group participation includes an IDA partial risk guarantee (up to US$115 million) for a syndicated commercial loan and proposed IFC loans totaling US$100 million, with the private sponsor providing US$111.3 million in equity for the project. A.1.140 Prior to Cabinet approval of the PPA, national debate and international NGO campaigns put a number of divergent opinions on the table for power development in Uganda. Some parties advocated higher spending on rural electrification based on decentralized renewable energy systems, either as an alternative or to complement the investment in Bujagali. Others argued for the development of geothermal power for grid supply. Others questioned the basic rationale of the project, its economic viability, national affordability and impact on tariff levels, as well as the allocation of project risk and environment impacts. For example, some contended the 30-year PPA did not account for possible changes in river flows from climate change. A.1.141 At the international level, debate over these issues intensified when the World Bank Group began to consider the request from Uganda to support the project following the Cabinet decision. The debate was considered in the decision taken by the Appendix 1: Case Studies 171 Board. The proposed project was subsequently subject to an Inspection Panel Review that made a number of findings relevant to options assessments.32 A.1.142 The proposed site for the Bujagali project is on Dumbbell Island, 8 kilometers downstream of the existing Nalubaala Dam near the town of Jinja, where the Victoria Nile divides into two channels. The total project cost is estimated at US$582 million. The major physical components are a 30-meter dam with a small reservoir and associate spillway and outlet works, a 250 MW power station, and about 100 kilometers of transmission lines with sub-stations. The impoundment would flood 80 hectares and displace 101 households (714 individuals). Another 1,000 families would be affected by transmission facilities. What Options and Alternatives Assessments Were Carried Out, and by Whom? A. 1.143 Decisionmaking for the Bujagali project was informed by options assessments carried out at both strategic and project levels. The UEB and the Ministry of Energy and Mineral Development (MEMD), acting on behalf of government, were responsible for the power planning and options studies leading to selection of Bujagali as a preferred project in 1999. IFC/IDA provided financial support to UEB/GOU to engage international and local consultants and involve national and international stakeholders in the subsequent studies that informed the project appraisal. A. 1.144 AESNP was responsible for the within-project alternatives assessments and the associated stakeholder involvement. It acts under Ugandan laws and the regulatory oversight of the GOU, with IFC/IDA advising all parties on compliance with the World Bank's safeguard policies. Strategic Options Assessments-Development Alternatives for Providing Electricity Services and Alternative Sites for Hydropower A.1.145 During the 1990s, Uganda prepared a number of options evaluations as part of its ongoing power and energy sector planning for both grid supply and rural electrification. Apart from hydropower and conventional thermal (based on imported fuels), nonconventional options for grid supply and rural electrification were evaluated in these studies. Nonconventional options included generation from geothermal, biomass, wind, and solar. Cogeneration and connection of captive generation units to the grid (back-up diesels used in industry) were also evaluated as potential grid supply options. A.1.146 The studies found that each option (or group of small-scale options) offered potential as part of the broader supply mix in different circumstances and over different timeframes. For example, the 1999 ESMAP study indicated that decentralized renewable systems could contribute as much as 70 MW to rural electrification by 2010, 32 In the Panel's view, a wider range of load forecasts would have enabled a more robust examination of the risks and rewards associated with the Bujagali Project with respect to both hydrology and timing. More information could have been provided to support the contention that the current data were too uncertain and/or the delays were too long for the geothermal alternative to be a realistic candidate. While a qualitative comparative analysis was undertaken of all the options in the facilities EIAs, a quantified analysis would have provided more certainty, even though not required by OP/BP 4.01 on Environmental Assessment. 172 Stakeholder Involvement in Options Assessment depending on assumptions about external financing and local capacity development. Supply-side efficiency measures, particularly improvements to Uganda's overloaded distribution infrastructure in urban areas, could provide the equivalent of 30 MW on the existing grid. Geothermal was seen as a potentially promising option to complement hydro-based grid supply in the future (there was possibly more than 450MW of unexplored potential in the westem rift valley).33 A.1.147 The assessments broadly pointed to medium- and large-scale hydroelectric development as the most practical and economically viable strategy for grid supply in the short- to medium-term. Information from these assessments was updated and additional studies were undertaken as input to decisionmaking on Bujagali. All stakeholders welcomed the options assessment as a critical input to the debate on Bujagali. Some stakeholders nevertheless criticized findings for not being sufficiently robust or independent. Conclusions were challenged on specific points. For example, international NGOs criticized the development timeframe of 10 years for geothermal options as too pessimistic (as compared to 4 to 5 years for Bujagali). A.1.148 Studies of alternative locations for hydropower were also undertaken both as input to the GOU decision in 1999 and for the project appraisal in 2001. Initially, UEB updated comparative studies of alternative dam sites in its 1997 Hydropower Development Master Plan (1997) and assessed potential compliance of developments at each site with the World Bank's safeguard policies. Bujagali emerged as economically attractive and one of the least environmentally damaging sites. As input to the appraisal, the IFC/IDA sponsored three additional studies to assist the hydropower options assessment: the Generation Alternatives Study, the Victoria Nile Strategic Impact Study, and the Economic Review. A.1.149 The Generation Alternatives Study (May 2000) reviewed the previous options assessments for grid and decentralized rural supply, and reevaluated the six main hydropower sites on the Victoria Nile. This analysis supported the conclusion that hydropower was the most viable option for grid supply. Bujagali was economically attractive and ranked third out of the six hydro sites in terms of capital costs per MW, excluding environmental and social impacts. It was the preferred project after accounting for its lower social and environmental impacts and its ability to generate 250 MW of power. The study confirmed the conclusions reached in the analysis of alternatives undertaken in the 1999 ELA that geothermal was not attractive as the next grid supply increment. This was due to uncertain information on the quality of the geothermal resource, and the need to install gas turbines or diesel generation and import fuels for up to 10 years while a full geothermal exploration, drilling, and plant commissioning program was mounted. 33 ESMAP recommended a program for accelerated exploration of indicated geothermal resources as follow up to the 1992 Geothermal Exploration I Project previously funded by donors (UNDP, the OPEC Fund, and the Governments of Iceland) and Uganda. Appendix 1: Case Studies 173 A. 1.150 A workshop was held with national stakeholders-including representatives from central government, local government, national and local NGOs, development agencies and hydropower developers, and representatives of communities directly affected by Bujagali-on the preliminary findings of the generation alternatives study. While indicating support for the project, stakeholders requested more information on the cumulative environmental impacts, given the planned concentration of hydro development on the Victoria Nile River. A.1.151 In response, a second study, the Victoria Nile Strategic Impact Study (2000), was commissioned. The analysis was then reviewed in a workshop in Kampala with the same stakeholder group. This exercise also aimed to elicit views on the environmental and social criteria appropriate for future developments in the post-Bujagali period. Here the concept of "offset" emerged, where the loss of Bujagali Falls would be offset by protection of a similar cultural and environmentally sensitive area at another location on the river. The eventual outcome was an agreement between IDA and GOU to preserve the Kalagala Falls in perpetuity (one of the six alternative sites). A.1.152 The third study, the Economic Review (2001), provided internal analysis required for the appraisal. The analysis confirmed that the Bujagali project was the least- cost option as the next grid supply increment under various scenarios for future power demand growth and hydrology. Within-Project Alternatives-Assessment of Alternatives for Facilities, Operations, and Social and Environmental Management Activities A.1.153 AESNP began the engineering and EIA assessments of the Bujagali site in 1997-98, after signature of the initial agreements and following procedures set out by the National Environment Management Authority (NEMA). In early 1999, AESPN submitted EIAs for the hydro facilities and transmission facilities to NEMA. The hydropower facility ETA was approved in 1999 after public consultations. Over the next two years, AESNP revised the two EIA reports based on comments received from IFC/IDA and incorporated feedback from local govermment and affected communities in ongoing interactions. Seven new ETA documents were resubmitted to NIEMA and IFC/IDA in March 2001. A. 1.154 The ETA scoping initially identified priority issues that were important to stakeholders, including: * Compensation and involuntary resettlement of affected people at the project site and transmission routes * Effects on cultural properties, including shrines and spirits associated with the Falls; 34 While the findings of the Economic Review (2001) were made available, the entire study was not publicly released because of property right issues over documents held by the Bank but owned by, or jointly with, other parties. 174 Stakeholder Involvement in Options Assessment * Effects on fish and local fisheries in the Nile River and affected tributaries * Effects on tourism and ecotourism, including whitewater rafting * Implications for local and regional development. A. 1.155 Initially, five alternative project configurations identified in earlier studies were considered for a dam near Dumbbell Island. Two additional configurations were added that aimed to avoid the inundation of Bujagali Falls. Technical and economic criteria to decide among the site location alternatives included the cost and time-scale of the Stage 1 diversion, the total project cost, the overall duration of the construction program and the installed capacity. Environmental criteria included permanent loss of land through inundation and permanent works; temporary occupation of land for construction purposes; displacement of the local population; potential inundation of sites of cultural significance; and the relative impacts on tourism and recreation activities. Alternative strategies for filling the dam and operating hydraulic facilities such as spillways and bottom outlets for different hydrology conditions and operating events were also evaluated. Options to decommission the facility after 30 years-when the project was to be handed over to the government-were also presented. All these data were presented in the alternatives analysis section of the Facility EIA, which was subject to public review. A. 1.156 Similarly, four alternative transmission corridors from Bujagali to a new Kampala-area substation north of the city were evaluated. Criteria were published in advance, and a 2-stage process was used: (1) selecting the preferred corridor; and (2) optimizing the routing (within a 1-kilometer width) based on environmental, social, and technical criteria. AESPN and its consultants worked closely with local governments and villages along the alignment to choose the best alignment. The recommended alignment was then presented in the alternative analysis section of the Transmission EIA for public debate and government consideration. A.1.157 After the baseline studies, the social and environment mitigation and management alternatives were identified and evaluated interactively with the affected stakeholders groups. The selected alternatives and the agreements reached between AESPN and communities were identified in the environmental management and monitoring programs and social action programs. These included the Resettlemevnt and Community Development Action Plan (CDAP) for the hydropower facility and the Resettlement Action Plan (RAP) for the transmission facilities. What Additional Steps Were Taken to Involve Stakeholders in Evaluating Strategic Options and Within-Project Alternatives? Informing Strategic Decisions A.1.158 The decision to develop the Bujagali project was taken by the GOU in the context of its national development strategy and power sector plan. At the time of EIA submission in Uganda, AESNP had carried out 240 consultations with over 7,000 local - Appendix 1: Case Studies 175 residents from affected areas, including 49 consultations with 103 representatives of Ugandan cultural institutions; 130 items conveyed via local radio, television, and print media; 235 meetings held with local government representatives; 110 meetings with representatives of the Government of Uganda; 128 meetings with stakeholders; and 87 meetings with environmental and nongovernmental organizations. The debate in Parliament and subsequent Cabinet decision was thus well-informed by open public debate and extensive media coverage, and by formal public consultations during the facilities EIA review. A.1.159 IFC/IDA facilitated meetings with international stakeholders on the additional studies- the Generation Alternatives Study and Victoria Nile Strategic Impact Study-that were used to inform its project appraisal. IFC/IDA also helped to ensure that the various international constituencies and networks had timely access to information, including the new suite of EIA studies released in 2001. Beyond this, the IFC/IDA, GOU, and AESNP engaged in meetings throughout the process and took steps to improve two- way communications with the international constituencies. For example: * IFC and AESNP established websites where project documents and analysis could be accessed; similarly many NGOs established sections on their websites providing their views on the studies and the project overall. * GOU supported a public forum for the Panel of Experts in Uganda in March 2000. * AESNP hosted an open forum at the Bank offices in Washington in June 2000 following the Panel of Experts Forum in Uganda. Primary topics of discussion were the World Bank's power sector support for Uganda and the basis for justifying the project. * IFC/IDA sponsored a second Forum at the World Bank offices in 2001 within two months after the second suite of project EIA studies were submitted to NEMA and IFC/IDA. Informing Within-Project Decisions A. 1.160 The framework established for decisionmaking on within-project alternatives for the Bujagali project included the following mechanisms and groups: * A Steering Committee to promote open discussion of joint decisions required by AESNP and GOU. Project affected groups and local NGOs were represented on the committee. * A Multi-Disciplinary Project Team staffed mainly by Ugandan professionals with access to national and international specialists in various physical, natural, and social science disciplines. 176 Stakeholder Involvement in Options Assessment * An Independent Panel of Experts consisting of international and national experts whose reports were made public and presented in a public consultation meeting. * An Independent NGO Witness acceptable to the stakeholders (paid for by AESNP) to oversee the full process of interaction with the project-affected communities and households. * External Auditors to verify the compliance with agreements reached among AESPN, communities, and individual households. A.1.161 Within the ELAs and social action programs, different techniques were used to provide two-way communications to identify, modify, and select alternatives. Here, regular community meetings, home meetings, surveys, and focus group meetings were emplcyed. Other mechanisms included: * Community liaison officers to proactively work with the community to explain the alternatives, their rights and entitlements, and to facilitate local input on alternatives * Use of community subcommittees to debate wider community concerns, and collectively identify additional measures, how they would be implemented, and cost and benefit sharing arrangements within the community * Site visits such as taking project-affected people to visit the Owen Falls dams and meet with affected communities in those areas to learn from their experience * Special assistance for the elderly, poor, and vulnerable members of the community to participate in meetings and eventually in accessing benefits. * Measures adopted to provide transparent negotiations on resettlement and compensation included: * A census and database-with all socioeconomic data, valuations of property and assets etc.- that was accessible to all stakeholders and provided a basis for settling claims and negotiations * Property survey and valuation where elders and village leaders signed off on the plots' limits and counts, together with the affected person and the AESNP representatives * Independent legal counsel (paid for by AESNP) made available to all affected households to advise on their rights, regulations, and compensation and resettlement matters. A.1.162 A three-stage dispute settlement mechanism was used to resolve matters as early as possible. The steps included (1) resolving disputes through mediation and Appendix 1: Case Studies 177 customary rules; (2) amicable settlement under the auspices of a legal counsel, witness NGO and AESNP; and (3) failing resolution of the dispute in the previous steps, a court appeal under the Constitution and Land Tribunals jurisdiction. A.1.163 AESNP also invested in a pro-active communication strategy to provide objective information and to make the case for the project. These efforts included publishing regular newsletters; having a site information office and visitor centers at Jinja and Kampala; placing feature articles with radio stations, newspapers, and electronic media; disseminating up-to-date website-based information; and ensuring key information and reports were available to all government and nongovernment organizations in Uganda. What Benefits and Value-Added Was Derived from Involving Stakeholders in Option and Within-Project Alternative Assessments? A.1.164 Broadly, the outcomes provide evidence of successful interaction with stakeholders. The project design and the proposed construction and operation arrangements are well matched to community development needs. A. 1.165 There are various indications of the degree of public support that influenced the government decision to develop the project. Public support was expressed at the Jinja public hearing convened by NEMA in 1999 -contingent on the resettlement and compensation package being implemented in the manner proposed. Independent polls undertaken by Ugandan media at the time of the Cabinet's approval of the PPA broadly concluded that while there was some opposition in Uganda, the majority of directly and indirectly affected stakeholders supported the project. A market research firm was retained by AESPN to poll attitudes of 64 NGOs in Uganda and record responses. This poll suggested that the large majority of the NGO organizations (48 out of 50) that responded to interviews either supported or strongly supported the project. Notwithstanding the support for the project expressed by local and national NGOs, several international NGOs remain firmly opposed to the project. What Lessons are Offered? A.1.166 The Bujagali project offers a number of lessons on involving stakeholders in both sector-level options assessments and project-level alternatives assessments. * To have credibility, power options need to be evaluated against a wide range of demand forecasts. When excluding specific options that are important to different stakeholder groups, it is important to clearly state the reasons. * Cumulative impact assessments (as undertaken in Sector Environmental Assessments) are important when evaluating dam options as part of a cascade sequence. * Options assessments are welcome by all stakeholders as an input to public policy decisions if there is open discussion and review of 178 Stakeholder Involvement in Options Assessment the findings. In the Bujagali exercise, all issues and position were put on the table for an open stakeholder debate. Decisionmakers ended up being better informed. * Follow-up to the issues that stakeholders raise in debates is important to maintain trust and credibility. Concerns about options have to be taken seriously and studied, and the results brought back for discussion. * Full consensus in strategic choices about large-scale infrastructure (high risk/high reward) is elusive and often impossible where there is polarized debate. While a structured process for options assessment and stakeholder involvement helps to build consensus, it will not guarantee a consensus. In this case, some international environmental NGOs did not agree to the decision reached by the Uganda Government and World Bank Board-despite the high level of public support the project enjoyed in Uganda. Despite this disagreement, the views of all stakeholders influenced the priorities for future work. * Stakeholders, even those likely to be negatively affected by a project, are more likely to constructively engage in decisionmaking on within-project alternatives if involved through appropriate mechanisms. Affected stakeholders engage most actively when the process is open and understandable; when practical choices are offered (particularly on resettlement, compensation, and restoration issues); where there are formal agreements; and where conflict resolution mechanisms are clearly set out and agreed to in advance. Providing access to legal advice and witness NGOs helps ensure fairness, transparency, and confidence in the process. Case Study 6: Zambia: Power Sector Environment Assessment Scoping and Reconnaissance Study and Power Rehabilitation Project A.1.167 This case study illustrates how strategic and project-level options assessments and stakeholder involvement informed supply-side power sector rehabilitation initiatives in Zambia. Following a sector environmental scoping assessment study (SEA-type exercise), a "package" of technical efficiency, social rehabilitation, environment restoration, and dam safety measures were incorporated in the sector-wide rehabilitation project. The use of an SEA early in the process broadened the range of options thereby improving the overall development performance of existing power infrastructure and reducing detrimental community impacts. Appendix 1: Case Studies 179 Figure A.1.9: Zambia t PROVINCE CAPllALS 28 *-' *A.5,; 32 j * NATIONAL CAPTAL N . INTERNArIONAL BONDARIES V2 02 200 Km I' - DEM RIEP ANGOLA ---* t o e . / *Jc l d., . - -; y . +. -- \ * ISYITi~~~~~~pafti ,-fo4. 4 K.bwiti i > v Z-- PROJECT TRANSMSSION UNES I. - z. t /%EXISTNG HYDRO STATIONS x l .i] Zg | |C1REHABIUTATED HYDRO STATIONS A RESETTLEMENT AREAS ZIMBABWE - EXISTING TRANSMISSION UNES _*-;--_.i Livingslon 2R .......PROPOSED TRANSMISSION LUNES IBRD 32538 JULY 2003 A.1.168 Parallel steps were taken to introduce participatory planning capacities in the power utility (ZESCO) and improve environment and socio-economic management of power facilities. Capacity was also strengthened to coordinate with new regulatory bodies such as the National Environmental Agency and other resource management actors such as the Zimbabwe River Authority and the Parks and Wildlife Authorities. What Was the Context? A.1.169 Zambia derives most of its electrical grid supply from hydropower. The largest generation facilities are the Kafue Gorge power station (900 MW) on the Kafue River built in the 1960's, and the Kariba North power station (600 MW), that was added to the Kariba dam complex on the Zambezi River in 1976. While a large part of the Kariba North output was initially sold to Zimbabwe, Zambia recognized it would eventually need all its own generation for domestic supply. By 1997, exports had declined to about 150 MW. 180 Stakeholder Involvement in Options Assessment Table A.1.9: Chronology 1994 New Energy Act and National Energy Policy 1994 GZR invites Bank support for Power Reform and Rehabilitation 1995 New Electricity Act 1995 Scoping Sector EA completed to broaden the criteria for rehabilitation and dialogue multi-stakeholder national groups and donors initiated 1996 Project Preparation Starts where options are evaluated 1998 Project Appraisal and Loan Approved 2002 Project Completion Scheduled 2003 Revised Completion Date A.1.170 Because of the long lead times, Zambia began to look at new generation sources for grid supply in the early 1990s. Zambia has limited coal reserves, and no gas or oil reserves and so hydropower was regarded as the main option for expanding supply. Demand for electricity services was growing in all sectors. As part of economic reforms in the industry sector, a key aim of government was to attract private capital into the mining sector. The copper industry alone accounted for 80% of Zambia's export earnings and close to 65% of total electricity consumption in the country. Consequently, improving the reliability of power supply was seen as essential to stimulate investment in the country's economic development. A.1.171 The Government (GRZ) was also aware that improvements in the efficiency and management of the existing power supply system could help avoid a short- term power deficit, while new supply options with much longer lead times were pursued. The four-decade old power supply system needed extensive rehabilitation and modernization due to years of under investment in maintenance. There had been no major World Bank involvement in the power sector for 20 years. The copper mines, the major client of the Zambian Electric Supply Corporation (ZESCO), were also increasingly concerned that the deteriorating supply system could lead to higher tariffs and undermine privatization of the sector. A.1.172 In the mid 1990's, GRZ introduced a number of regulatory and institutional and regulatory reforms in the energy and power sectors (Energy Act-1994 and Electricity Act-1996). These initiatives aimed to improve public sector efficiency in the short-term and encourage private investment over the longer-term. As a first step toward its commercialization of the power utility, ZESCO signed a performance efficiency contract with Government requiring it to meet specified financial and technical efficiency targets. Electricity tariffs were also raised to cost recovery levels (about a 50% increase), though not for the mining sector. A.1.173 Concurrently, new policies to expand rural, township, and urban electrification coverage were introduced. The improvement and extension of distribution Appendix 1: Case Studies 181 networks was regarded as a high social priority. Close to 72 percent of Zambia's population of over 8.5 million people (at that time) lived in urban, pari-urban and township areas poorly serviced by distribution networks (about 38 percent of the population) - and overall, less than 10% of the population had access to electricity. A.1.174 The GRZ requested World Bank assistance in restructuring the power sector, with rehabilitation of the supply system being a priority. As an initial step in defining the program, a sector environmental scoping (SEA) exercise was completed in 1995. This produced an Action Plan and reconnaissance level terms of reference for incorporating environment and social considerations in the rehabilitation activities and power sector management more generally. Full EAs were recommended for power facilities where rehabilitation involved more complex social and environment management issues and tradeoffs. Here one recommendation was to assist the Gwembe- Tonga people. An estimated 57,000 of their people (35,000 on the north bank of the Zambezi, now Zambia) who previously lived along the shores of the river had been forced to resettle when the Kariba dam and reservoir was established 40 years earlier (between Northern and Southern Rhodesia during the colonial times) without adequate support for livelihood restoration. They remained in a state of deep poverty . A. 1.175 At this time, Zambia was also developing a new national framework for environment regulation and water management policy. The SEA findings were widely discussed among the national agencies from all sectors and with donors and local and international NGOs. This dialogue put the power sector initiatives in the context of other sector policies and initiatives, and thereby triggered a number of actions including donor financial support for measures contained in the Action Plan. A. 1.176 Studies to elaborate and priorize the power sector rehabilitation measures started in 1996. The main physical components of the project were separated into seven economically distinct sub-projects for evaluation purposes. These involved: three power stations (Kariba North Bank, Kafue Gorge and Victoria Falls); the main interconnected transmission system; and, three distribution networks, one in the capital city Lusaka, and two in mining townships in the Copperbelt (Ndola and Kitwe). What Options Assessments Were Carried Out, and by Whom? A. 1.177 The Sector EA first identified the social and environmental dimensions of rehabilitation and broadened the criteria for establishing the project sub-components. Subsequently, detailed evaluation of the rehabilitation measures were undertaken in the preparation studies that led to the Bank's Appraisal of the Project. Both stages involved the assessment of diverse options. Sector Environment Assessment Scoping and Reconnaissance Study (SEA) A.1.178 The SEA was prepared over 14 months by a small team of international consultants working with ZESCO counterparts. It first looked at the overall development impacts of the power sector in relation to new regulations being introduced in the environment and social sectors nationally, and other land-water resource management 182 Stakeholder Involvement in Options Assessment initiatives in the country. This was not just a passive concern to meet compliance requirements. Rather it was an active attempt to scope out opportunities to improve the overall development performance of existing power infrastructure and help contribute to improved resource management. The SEA also focused on how to integrate environmental and social management elements with the physical and technical rehabilitation works being considered. Reconnaissance level terms of reference were prepared for this, and the measures identified were subsequently factored into the evaluation of rehabilitation options (e.g. in terms of costs, required activities and the stakeholders who needed to be involved). A.1.179 Studies were recommended to decide rehabilitation priorities for two facilities using stakeholder processes. One was to undertake a full EA to consider rehabilitation options for the Victoria Fall power station with formal community involvement under the environment regulations. The second related to support for the Gwembe-Tonga people displaced from the Kariba dam, where it was proposed that the social rehabilitation and development measures would be identified using a beneficiary- driven process. A.1.180 In the latter case, the scoping SEA had reviewed both the outcomes with past resettlement and new resettlement with proposed hydropower projects. It found resettlement from the existing Kariba dam to be the most critical resettlement issue that ZESCO faced, even though it had inherited the legacy. Moreover, three of the medium- term hydropower projects under active study in Southern Province were also in the Tonga people's area (the Lower Kafue, Batoka Gorge, and the Itezhi-Tezhi). It was strategically important to resolve past problems where, apart from attending to an urgent development need for their people, it would improve confidence within communities and demonstrate that equitable and fair treatment could be expected with resettlement at new projects. A.1.181 Beyond the rehabilitation measures, the Action plan set out three overarching priorities to enable ZESCO to involve stakeholders in planning activities and to improve its capacity for environmental and social management in the power sector; namely, * To establish an Environment and Social Affairs Management Unit (ESU) in ZESCO that had internal capacity for environmental and social management; * To develop in ZESCO a participatory consultation process that provided for involvement of all project-affected peoples and NGOs in project level activities and sector planning; * To complete sub-basin environmental and social evaluations of major watersheds (e.g. the Kafue and the Zambezi) where existing and proposed dams were located. This would determine the environmental and social issues to bring into the options assessment and planning in these basins. Appendix 1: Case Studies 183 Options Assessments in the Project Preparation Phase A.1.182 The project preparation studies built on the SEA recommendations (regarding inclusion of environment and social measures) and the core physical rehabilitation works that were identified by GRZ and ZESCO (i.e. power stations, dams, the transmission system and sub-stations, and distribution networks). Additional technical options were also considered. For example, the possibility of raising the Itezhi-Tezhi dam and adding a second powerhouse was evaluated, though eventually rejected due to its high cost. Dam safety assessments for all dams over 15 meters were also carried out. This led to the identification of dam-related rehabilitation measures and to the establishment of dam safety monitoring and training programs, including the development of emergency preparedness plans for the Kariba, Kafue and Itezi-Tezhi dams. A.1.183 The final selection of the seven main physical components of the Project was informed by assessments using accepted project economic, financial and risk analysis procedures, with internalized social and environmental costs. These included calculation of the percentage of net benefits of the total project directly going to lower income groups (assessed at 9 percent). The impact of the rehabilitation options (i.e. improvements in power station output) on the cost and timing of new grid supply was assessed using generation optimization models, evaluating alterative generation expansion sequences. In all cases, the discounted costs of generation expansion decreased by 5 to 10 percent with the inclusion of the rehabilitation components. A.1.184 The Project focused on existing supply-side facilities and not new supply initiatives. Thus, a distribution loss reduction program was included as one of the options in the Project. However, demand-side management was limited to training and capacity development in ZESCO. The Ministry of Energy and Water Development (ESMAP support) in collaboration with ZESCO had been involved in demand management since 1994 and so it was regarded as being already attended to. GRZ was also separately raising funds for a new rural electrification program. The government target was to increasing rural access to 50 percent (today about 60 percent of Zambia's population is rural) by the year 2010. Consequently, rural electrification could be omitted from the scope of the project. Victoria Falls Power Station Rehabilitation EA A.1.185 The Victoria Falls powerhouse complex is located in the Mosi-Oa-Tunya National Park at Victoria Falls, a World Heritage Site. The powerhouse consisted of three stations with a combined capacity of 108 MW. ZESCO initially proposed removing the smaller power station (8 MW) that had been built in the 1930s and rehabilitating the two larger power stations. Some stakeholders called for the removal of all power stations. A. 1.186 Alternative refurbishment designs, operation strategies and environmental management plans for the site were developed in the EA and evaluated in open processes that involved the local community stakeholders to obtain their opinions on the various options (the EA was undertaken by consultants where ZESCO was the process manager, represented by staff designated for the new ESU). Consultation meetings hosted by 184 Stakeholder Involvement in Options Assessment ZESCO included tourism industry representatives, conservation groups and traditional rulers who led discussions and represented the public. The views provided the basis for deciding the power station rehabilitation options and operating strategies for the rehabilitated plant. The preferred option that emerged was to keep all three stations, and to convert the small power station to smaller turbine units and develop it as a tourist visitor center. Gwembe-Tonga Rehabilitation and Development Program A.1.187 International anthropologists had undertaken a 40-year tracking study of the Gwembe-Tonga people who were displaced from the Kariba valley when the Kariba dam was built (1955-59). The availability of these unique data and the associated studies provided a baseline to prepare the program. It was implemented as a rural and regional development project. A.1.188 Options were selected by beneficiaries in discussion with the community leaders and local NGOs. The main components included: upgrading of 365 km of the Bottom Road that connected three districts that had received resettled people; a local water resource program, which included groundwater wells and small dams to improve drinking water supply; land use improvement credits and agriculture extension activities for rainfed and irrigated agriculture, which included cropping on the margins of the Kariba reservoir; and health clinics and schools. Rural electrification was also proposed starting with three larger villages (Chipepo, Gwembe Boma, and Sinazeze) and the area around the reservoir lakeshore. What Steps Were Taken to Enhance Stakeholder Involvement in Decisions on Options and Within-Project Alternatives? A.1.189 Government and non-government stakeholders were consulted at the start and during preparation of the SEA Action Plan. Similarly, when developing the reconnaissance terms of reference for the rehabilitation works, communities living around specific facilities were interviewed to obtain their views on the social and environmental rehabilitation issues they felt needed to be addressed. ZESCO, supported by the government and the World Bank, then actively engaged national-level stakeholders in the review of the draft SEA recommendations. Steps to facilitate this dialogue included holding and series of consultation meetings and joint seminars with the government departments, donors and NGOs and setting up a web site to make the documents available. A.1.190 Subsequently, during the preparation studies for the Project, MEWD and ZESCO, sought to involved other sector agencies, academic institutions, and to a lesser extent, intermediary NGOs and representatives of affected community groups and local government in reviews of the main elements of the Project. A.1.191 Consultations were also held on focus topics. For example, ZESCO sponsored a workshop in Lusaka to draw on international, Africa regional and Zambian Appendix 1: Case Studies 185 experience in designing, implementing and operating township electrification programs and modalities for financing lost-cost distribution improvement projects. A.1.192 ZESCO also set up a Project Management Unit (PMU) at Siavonga with other site offices for the Gwembe-Tonga project, based on the requirements of participants. The PMU reported to a steering committee chaired by the Pennanent Secretary of the MEWD. This steering committee included elders and representatives of the local communities and representatives of the other involved ministries (e.g. agriculture, health, transport), and local government. However, as mentioned below, there were some problems in implementation. How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? A.1.193 Involving stakeholders in the review of the scoping SEA helped to confirm the appropriateness and acceptance of the steps contained in the Action Plan, simulate interest in the sub-projects, and pave the way for partnerships that formed to implement various elements of the rehabilitation Project, including the financial participation of nine other donors. A.1.194 For ZESCO, the external linkages established during the scoping SEA between its newly formed environment group and the outside organizations such as the Parks Department, the new Environment Department, proved to be very important for other ZESCO initiatives. A.1.195 The dialogue on the SEA Action Plan contributed to a number of other emerging national and donor supported initiatives concerning environment and water resource management in Zambia, particularly the regulatory, institutional and capacity building aspects. Today donor co-funded activities now include a range of wetland conservation and resource utilization studies and databases to foster integrated water management of the Zambezi basin. The SEA dialogue contributed to the consensus on how those programs should proceed and strengthened ZESCO's role as a key player, in view of its dam portfolio and role in water management. A.1.196 The engagement of stakeholders in each sub-project also helped ZESCO adopt more sustainable practices in managing power sector assets. For example, the stakeholder interactions during the Victoria Falls EA helped ZESCO staff reach three new understandings. The first was an understanding of the importance of integrating the local community into development activities around power facilities. The second was inclusion of broader economic development aims beyond power objectives through the integration of tourism and heritage resources. The third understanding was a greater appreciation within the utility of the complex mix of values associated with management of the Kafue River. A.1.197 This helped ZESCO to start working with stakeholders in practical ways to manage the environment and social impacts of its operations in the Kafue basin. For example, a warning system was installed for downstream fishermen when water was to 186 Stakeholder Involvement in Options Assessment be released from Itezhi-Tezhi. The management of Kafue Gorge facility was modified to avoid flooding and economic hardship in the Kafue town district, and contingency plans were established for times when flooding was unavoidable. A.1.198 Although ZESCO had adopted an environmental policy, the Company had not adopted a parallel social policy on land acquisition and involuntary resettlement at the time the SEA was prepared. Social practices that were regarded as international standards elsewhere, were slow to be codified in company policy. The social and resettlement issues from past projects were addressed in the rehabilitation program because of the SEA recommendations. A.1.199 While the inclusion of the Gwembe-Tonga Rehabilitation and Development project was a major step forward for ZESCO, the progress in implementing the initiative was mixed. Clearing land mines left after previous armed conflict in the area led to a delayed project start-up. While many of sub-components identified by the beneficiaries are now underway, other components are not, notably the rehabilitation of the Bottom Road which was seen as fundamental to the sustainable economic development of the Gwembe Tonga. Here, difficulties also arose over the suitability of a commercial loan for what was perceived by ZESCO to be a non-commercial project (financed by the Development Bank of South Africa). Along with slow progress on this activity, additional concerns emerged over the arrangements for the longer-term funding and future sustainability of the Gwembe-Tonga program, beyond the immediate rehabilitation with power sector funds. What Lessons Are Offered? The experience of this Project indicates that investment in new supply may be deferred when options such as efficiency improvements in the generation, transmission and distribution are considered. These alternatives are likely to be attractive when regular investment in modernization has not occurred and they can provide a high return on investment. In this case, the total project investment of $US223 million had an ERR of 29 percent. Some components such as the Kariba North station involving civil and electrical rehabilitation had an ERR over 50 percent. * Rehabilitation options are less controversial than new supply options and are generally supported by most stakeholders. The ability of these options to replace or defer the need for new supply nevertheless needs to be quantified and made more explicit. * A Sector EA (in this case a scoping and reconnaissance exercise) is a valuable, low-cost instrument to identify rehabilitation opportunities and engage stakeholders in discussion of these priorities across the sector. It can be used to set the stage for subsequent work, such as providing terms of reference for critical Appendix 1: Case Studies 187 project-level assessments, and building the confidence of stakeholders for engagement in subsequent project-level exercises. * Rehabilitation, like the development of new infrastructure, should be pursued as an integrated package of technical, social and environmental measures. Social and environment performance improvements can be part of the overall improvement in the development effectiveness of the facilities. * Whether to include legacy issues on a particular assessment is a case-by-case decision. As the road component of the Gwembe- Tonga Rehabilitation and Development project showed, difficulty can arise where commercial funding is allocated to the social rehabilitation work components of power sector rehabilitation projects. In general, this difficulty needs to be anticipated and may be avoided by ensuring funds with the best terms are allocated to the social components. Similarly, the boundaries need to be clearly defined (and division of financial responsibility) between the power sector responsibility for social rehabilitation and that of ongoing regional development to sustain these initiatives. Case Study 7: Canada: BC Hydro Stave River Water Use Plan (WUP) A.1.200 This case study illustrates a well-structured, collaborative process to develop a water use plan (WUP) for the new 90 MW Stave Falls hydropower facility on the Stave River in British Columbia, Canada. The process explicitly involved all water use interests in the basin in developing a new operating strategy for the facility, and proposing mechanisms for subsequent stakeholder involvement in performance and impact monitoring programs that informed decisions about the ongoing management of the facility. What Was the Context? A.1.201 British Columbia currently derives 90 percent of its power supply from 30 hydroelectric facilities on 27 watersheds. In the mid-1990's, a new planning process was introduced that called for development of a formal Water Use Plan (WUP) for each hydro facility operated by the provincial-owned power utility, BC Hydro. A WUP is a technical document that specifies the boundaries of operations, and is used by the operating engineers in managing water at dams and power facilities on a day-to-day and month-to- month basis. 188 Stakeholder Involvement in Options Assessment Figure A.1.10: Canada-BC Hydro Stave River - DAMS - _ - ' RISER3 - - 1.iAIN RCADS Kenvon I Lake' Salisbury - Sayres loke Devs I - Lake - X -- J ~~Stav hRs I1 -~ - A Km IBRD 32541 JULY 2003 A.1.202 The program was designed collaboratively by BC Hydro, the Canadian fisheries agency and various provincial agencies, with input from First Nations (indigenous Indian tribes), the public and environmental groups. BC Hydro agreed to develop WUPs for the priority facilities within three years, and to develop WUPs for the remaining facilities within five years. The model of cooperation and partnership established during the development of the program was also an important element in the program's implementation. A.1.203 The provincial government subsequently extended the WUP system to all new water control and regulation facilities in the Province (including the review of existing operating licenses). The overall goal was to ensure regulation of rivers flows were made in a socially, environmentally and economically acceptable manner- including water allocation for municipal water supply, fish and wildlife, recreation, flood management, logging, electrical generation, and First Nations heritage interests. A.1.204 The 13 steps of the WUP planning process are noted in box A.1.2. There is a degree of flexibility and choice within these steps to enable the process to be adapted to each facility and situation. The steps recognize that tradeoffs among multiple objectives are required, that the program operates within existing provincial and federal Appendix 1: Case Studies 189 regulations, and that a collaborative review and revision involving affected interests is an important component. Box A.1.2: 13 Steps in the WUP Process Initiating, Developing, Approving, Monitoring, and Reviewing 1. Initiate a WUP process for a facility and notify the public 2. Scope the water use issues and interests 3. Determine the consultative process to be followed and initiate it 4. Confirm issues and interests in terms of specific WUP objectives 5. Gather additional information on impacts of water flows on each objective 6. Create operating alternatives for regulating water use to meet different interests. 7. Address tradeoffs 8. Determine and document areas of consensus and disagreement 9. Prepare a draft WUP and submit to the Provincial Comptroller for regulatory review 10. Provincial Review and decision to authorize WUP 11. Federal Review of the authorized WUP and decision 12. Monitor compliance with authorize WUP 13. Review the plan on a periodic and ongoing basis A.1.205 Steps 10 to 13 are required by legislation, while the first 9 steps represent the consensus reached between BC Hydro, other government agencies and stakeholders on how to draw up a WUP. The provincial government who controlled tariff levels also set a financial limit on the costs of the program. A.1.206 The primary vehicle for involving stakeholders (steps 1 to 9) is a Consultative Committee (CC), with participants drawn from all water use and local community interests, including all levels of government and BC Hydro. The activities of the CC are then linked to a wider consultation processes with the affected constituencies and public. The process sponsor and manager (BC Hydro) provides the CC with administrative support, access to the best available technical resources, information systems and modeling tools and, when needed, an independent facilitator. A.1.207 The CC's mandate is to represent the diverse interest of the stakeholders when deciding on the allocation and pattern of regulation of water resources. The CC also produces a Consultative Committee Report, which documents the analysis, discussions, areas of agreement and disagreement within the Committee, and provides its recommendations. BC Hydro is required to prepare and submit a draft Water Use Plan, 190 Stakeholder Involvement in Options Assessment based on the report, to the Comptroller of Water Rights for the Province, accompanied by the CC Report. The draft WUP is evaluated by an inter-departmental review for compliance with federal and provincial laws, such as the federal Fisheries Act and the provincial Water Act. The plan then becomes effective after operating boundaries and other provisions of the WUP are written into BC Hydro's water license to operate the facility. A.1.208 The Stave River flows south from the Coast Mountains in British Columbia through the Stave and Hayward Reservoirs onto the Fraser River. A decision informed by a public consultation process was taken in 1995 to replace the old Stave Falls power plant that was built between 1911 and 1925. The decision was essentially taken on financial grounds-it was cheaper to install a new power station than renovate the old plant. A.1.209 The Stave Reservoir covers 61.4 square kilometers and provides the main storage for the new Stave Falls (90 MW) and Ruskin (105.6 MW) power plants. All of the Stave River facilities are located on Kwantlen First Nations traditional territory. The replacement project involved building a new intake, two power tunnels, a powerhouse, a tailrace channel, a tailrace berm, and a switchyard A.1.210 The Stave River WUP process was announced in September 1997. The bulk of the work of the CC was undertaken in an 18-month period starting from the spring of 1998. The Report of the Consultative Committee was produced in October 1999 and submitted to BC Hydro as a consensus report. Provincial authorization of the draft WUP is nevertheless still pending (reportedly the Stave River WUP is being used to resolve a number of license issues common to all BC Hydro facilities), although it is anticipated that future WUPs would be approved on a six-month timeframe. A.1.211 The replacement power station was completed in 2000 and the plant and reservoir are currently being operated under the previous strategies as an interim measure, until the WUP is authorized and a revised license is issued to BC Hydro. What Options Assessments Were Carried Out, and by Whom? A.1.212 The first steps in WUP process (1 to 3 in box A.1.2) were undertaken by BC Hydro staff engaging local stakeholder groups, government agencies and First Nations representatives to identify the impacted stakeholders and interested parties. Representatives of these interest groups were then invited to participate on the Consultative Committee. Some interested parties provided a representative, others (due to time commitments) elected to receive meeting minutes only and participate as observers at the stages of greatest interest. The CC finally consisted of 24 active members and 6 observers. A.1.213 The CC eventually formulated eight main performance objectives to guide the operation of the power facilities. These were to: Appendix 1: Case Studies 191 * Avoid disruption to industry operations (in the reservoir and avoiding downstream flooding); * Support recreational opportunities (in the reservoirs and downstream); * Support viable wildlife populations (with reservoir stability, downstream water level stability and periodic flushing of riparian areas); * Protect First Nations heritage values (preserve access and protect sites, and for recovery of artifacts); * Avoid cost increases in electricity production; * Support viability of fish populations (with increase spawning and rearing capacity, reducing stranding, water quality, and increased reservoir productivity); * Provide maximum flexibility (to respond to change and to maximize resilience and ability to respond to market volatility, scientific uncertainties, etc.); and * To continuously improve knowledge about the systems and impacts (about key uncertainties affecting decisionmaking). A.1.214 These objectives represented the interests of the stakeholders (e.g. fisheries, recreation, power production, First Nations heritage sites, industrial operations and wildlife management). A.1.215 For each objective, performance measures were identified, which specified how each operating alternative was to be evaluated. The performance measures were measured quantitatively, wherever possible. For example, the recreation performance measures included the weighted average number of days from May to October that Stave Reservoir was between certain levels. A.1.216 The CC (through technical subcommittees) initially identified 12 operating alternatives. A first assessment of the impact of each alternative on each objective was then made using the performance measures. The 12 alternatives were then progressively screened and refined by seeking improvements in their performance across all objectives. It required a certain degree of creativity to find combinations of measures that could satisfy all eight objectives. Two distinctly different operating strategies that contained a combination of the alternatives eventually emerged. The choice between them depended mainly on the value tradeoff among the objectives related to First Nations heritage, recreation reservoir target levels and reservoir productivity (for fish). A.1.217 After detailed evaluation and discussion within the CC, one option was selected as the preferred alternative. Apart from documenting the steps in reaching its 192 Stakeholder Involvement in Options Assessment conclusions and setting out technical details on the recommended operating strategy, the Report of the CC Committee incorporated additional recommendations on: * An on-going management plan related specifically to the proposed WUP monitoring program (which emphasized monitoring, mitigation and on-going management activities to improved decision-making for future VWUP reviews considering fisheries, water quality and First Nations interests); * A multi-stakeholder management committee to assess the extent to which the WUP met the long-term expectations of the CC. The propose mandate of the management committee included preparing annual update reports, scientific studies and conducting an interim review after five years to ensure the new operations did not result in any unforeseen detrimental impacts, that studies were meeting their scientific objectives, and the suitability of budgets for future monitoring activities. What Other Steps Were Taken to Enhance the Involvement of Stakeholders in Drafting the Water Use Plan? A.1.218 Suggestions on how to conduct CC meetings and engage the wider community were provided by BC Hydro and the provincial government. BC Hydro also published general material to inform local governments, First Nations, key interested parties and the public on how to participate in the WUP plan process. However, once the assessment process starts, the CC was empowered to introduce additional measures. Consultative Committee Structure and Interactions A.1.219 In the Stave River case, the CC decided to streamline the process by creating a number of smaller sub-groups and Technical Committees who deliberated over specific issues and later reported to the main group. A.1.220 Figure A.1.11 (from the CC Report) illustrates the structure the Stave River CC decided to adopt for its interactions. These sub-groups were technical in nature, providing analysis, impact information and professional judgment; they were not charged with making value trade-offs or recommending operating regimes. Appendix 1: Case Studies 193 Figure Al.1 1: Consultative Committee Structure and Interactions A,, i Km-ntlen Fi~rstNfauion| C;ElisulL]ui Committee | | F~~~oeishnes Te-chnical S T X I G~~~~~~~~omrnittee I Industry Sub-Group RecrejUcii Sub- Group (SHRAC) Fisheries Sub-Group PoaNer Sub-Group A.1.221 Specialists from, or brought in by, the process sponsor worked with each sub-committee. Performance measures were developed through discussion. Subsequently, various analytical and simulation models were used to assess and predict the impacts of alternative operating strategies on the objectives and performance measures (e.g. using a habitat model, power values model, operations model, and performance measures model). A.1.222 When requested by the CC, independent expert professional advice and peer reviewers funded by BC Hydro were made available to the sub-committees. For example, peer reviewers were requested by the Modeling Technical Committee for independent advice on whether the methods used to model BC Hydro operations and power production and results, adequately represented what the CC was asking. This quality assurance provision, while it did not lead to changes in the results, improved the CC's understanding of the assumptions and the confidence of participants in the analysis on which they based their recommendations. Endorse? Accept? or Block? A.1.223 At the suggestion of the facilitator, the technique the CC ultimately adopted to indicate their agreement, or disagreement with the final two alternatives was a choice of: endorse, accept or block. A.1.224 Endorse: meant the CC member endorsed the proposed alternative either fully or with minor reservations; Accept: meant the member accepted the proposed alternative. They might disagree that the alternative represents the best possible solution, but their minimum needs are met. They may want their views formerly recorded, but they acceptance and support the decision of the group. Block: meant the member could not support the proposed alternative. Their minimum needs are not met. 194 Stakeholder Involvement in Options Assessment A.1.225 In this system, endorse and accept were both taken to constitute consensus. The proportion of people in the 'accept' and 'endorse' categories measured the strength of the consensus. If any member in the group found it necessary to block, then consensus was not achieved. In the end, 80% of the Consultative Committee endorsed the draft WUP and 20% accepted it. The CC was thus able to issue their Report as a consensus recommendation. Consulting with Local Constituencies and the Public A.1.226 During the 18 months the CC was deliberating, a number of newsletters, articles, and open houses were used to communicate progress on the draft plan development to interested constituencies and the public. In Stave River case, the CC and sub-committee meetings were also open to observers. The rules of conduct, determined by the CC members themselves, were that observers could not interrupt discussions and could only address the CC by scheduling a presentation or when invited to speak. Alternatively, they could speak to a CC representative during session breaks. The level of interest in observer status depended on the issue being discussed and there were sessions for open public debate at key intervals. A.1.227 Consultations with local First Nations began during the early stages of the project to replace the Stave Falls powerplant. This resulted in building relationships and identifying key concerns related to the watershed and BC Hydro activities in general. Agreements associated with training and employment opportunities specifically related to archaeological investigations had already been undertaken and were in progress when the consultation for the WUP began. Historical grievances associated with the original construction of the Stave and Ruskin powerplants were reviewed through a separate consultation process. A.1.228 First Nations were initially reluctant to engage directly in multi- stakeholder processes because of what they felt was a lack of sensitivity to their unique situation and their special status with the province and federal governments. Therefore, starting early in the WUP process, consultations with the Kwantlen's First Nations representatives were conducted in parallel to the main CC process involving BC Hydro and the independent facilitator. A number of meetings were held to clarify Kwantlen's objectives, to establish performance measures and identify key information gaps. At the Kwantlen's request, studies were conducted in the spring/summer of 1998 to examine the impact of reservoir-induced erosion on heritage sites. The Kwantlen also sat on several working groups and sub-committees of the main Consultative Committee. After a cross- cultural training session for WUP participants in February of 1999, Kwantlen joined the main table of the Consultative Committee and participated in all discussions leading to the consensus agreement of June 24, 1999. How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? A.1.229 Through interest-based discussion and collaborative learning, a consensus agreement was reached which balanced the water use interests reflected in the eight Appendix 1: Case Studies 195 objectives. All the CC participants supported the agreement. The CC Report noted that the recommended operating strategy provided gains in all eight objectives, over the current operations of the Stave reservoir and the old powerhouse. It is very unlikely that such a widely beneficial solution could have been achieved without the active involvement of the stakeholders. A.1.230 BC Hydro estimated the operating regime set out in the draft WUP would provide a net gain of US$ 0.12 million per year, the difference between the annual gains in power generation ($ 0.5 million) and annual costs of implementing the management plan ($0.39 million). This included the benefit of replacing the powerhouse. A.1.231 When the original WUP process was set up it was acknowledged that there was a limit to the funds and time available to conduct scientific research and that the CC recommendations would be made on the best available knowledge. Despite the consensus recommendation, some members of the CC felt that there were key scientific uncertainties and information gaps that needed further study. As a result, the consensus agreement on the new operating strategy was contingent on further analysis and scientific study. This included a monitoring plan to address key biophysical uncertainties and steps to ensure that improved information was available for the next review of the WUP. Thus, the detailed analytical process had clarified the specific items of information that needed to be discovered through scientific investigation. What Lessons Are Offered? A.1.232 At present, draft WUPs for all 10 priority BC Hydro facilities have been completed. There was a high degree of consensus (8 of the 10 CC reports were consensus reports), and improvements in all priority environmental and social interests were achieved. In four WUP plans, consensus recommendations led to an increase in power production from the existing facilities, while satisfying other performance objectives. A.1.233 A number of lessons emerged from the Stave River WUP that also reflect the experiences in developing WUPs for other BC Hydro facilities. These include: * The interest of local communities in participating proactively in alternative assessments varies from community to community. The willingness to engage depends on factors such as the size of the facility, the number of stakeholders who believe operations can be improved to better manage environmental and social impacts, and the range of interests affected. In general, many local communities are vitally interested in having a voice in how tradeoffs are made in operating dam and reservoir. * Stakeholders represent a creative resource to identify issues and finding new ways to improve the management and overall development performance of dams and hydropower facilities. Here, a certain degree of creativity and innovation was needed to 196 Stakeholder Involvement in Options Assessment find operating strategies that all stakeholders could accept, and this creativity was generated in the dialogue processes. * Structured processes are essential to facilitate consensus and reach a decision. The structure not only helps stay on track and move step-by-step toward a defined product, but also provides a framework within which information can be successfully assimilated and new ideas can be explored. Shortcuts can be dangerous, not only in undermining consensus, but also in creating premature consensus. The process manager must ensure sufficient and timely provision of independent facilitation, technical support, and access to independent peer review where appropriate. * An early agreement for all parties in the CC to listen openly to others points of view and to treat others with respect was central to the success of the CC. This attitude was one of the factors that persuaded the First Nations to join the CC rather than to maintain their special status outside of it. A.1.234 A general underlying perspective was that consensus is a desired outcome of local consultations; however, it should not be seen as a requirement to achieve sustainable management of the resource. Over-emphasis on dispute resolution in the search of a consensus outcome in local interest-based negotiations can lead to premature and possibly suboptimal recommendations. In the absence of full consensus, it is important to document key areas of agreement and disagreement. This information provides better insight on the views of all the interests, and thereby enables more informed and transparent decisions. Case Study 8: Turkey: Ex-Post Evaluation of the Ceyhan Aslantas Multipurpose Project A.1.235 This case study illustrates the process and methods used to involve local and national stakeholders in a comprehensive, ex-post evaluation of the Atlantas multi- purpose dam project on the Ceyhan River in Turkey. This multi-purpose irrigation, power supply and flood management project was developed by the national agency responsible for public sector dams in Turkey, the DSI (State Hydraulics Works) with the financial support of the World Bank. It was commissioned in 1985. A.1.236 The ex-post evaluation was completed in 14-months (1999-2000). It looked at the original decision to proceed with the project in 1974, and how the subsequent operation and management decisions responded to the evolving social, economic and political context in the basin. Stakeholder views were elicited to assess the development effectiveness of the project since it's commissioning, and the ways to improve it through adaptive management. Lessons were also drawn to inform the development and management of other dams in the basin. Appendix 1: Case Studies 197 What Was the Context? A.1.237 The Ceyhan River Basin is located in the eastern Mediterranean region of Turkey. The Ceyhan-Aslantas Multipurpose Project (CAP) was initially conceived in a basin master planning study in 1966 prepared by consultants for DSI. The study identified the Aslantas site as one of five potential sites for multi-purpose reservoir projects on the main stem of the Ceyhan River. At that time, Government emphasized the improvement and extension of surface irrigation facilities in its development planning. Agriculture accounted for a third of Turkey's national GDP and 60 percent of its employment. In the Ceyhan basin, the aim was to introduce water storage schemes to replace the existing run-of-river irrigation diversion works that were seen to have limited capacity and offered little security against drought. Figure A.1.12: Ceyhan Aslantas Project ~~ } 36- ¢2 t 36 Asiantas KarrepeU Q,kurkopu \' . Kad,d. obuIIre Reservo,, Cukurk o-, 'P., 1, 0 1OKm - L I I( - v - ; CeCey C'detvdeiye -. . - Di~~~~~~~~~~version 37° / PROPOSED PROJEcr IRRIGA1IN AREA EXIST.NG 100 YEAR FLOODPLAJN - EXISTING ROOD CONTROL EMBANKMENTS 4- M ,s, PROPOSED FLOOD CONTROL EMBANKMENTS _}4 * IV / ~-- PROPOSEDIRRIGA1K)N CANALS .....-. .. PROPCSED DRAINS / A4edirerTanean * EAxisnNG PUjMPING STATONS s Sea sa PROPOSED PIJMPING STAIIGNS IBRD 325A0 JULY 2003 A.1.238 After further evaluation studies, the CAP project was proposed as the first storage scheme in the basin. Government subsequently sought and received a World Bank loan for 23 percent of the total project cost, which was estimated to be $US 327 million (in US$ 1973). 198 Stakeholder Involvement in Options Assessment Figure A.1.13: Study Process Project approwvd by WCO Comn_s onm WCD rmqrsts cooparation of IlN111 in .g. agrees d rosponsble Mlinrgy nominates contact WCD appobnts local pan or reg.onal consultant ConsuRant piepares Scophig Sudy WCD irvilts stsdakberWs to airm conquiltfte meeng WCD Owpnarhi. tat 1st sukehol4r meing, *co.gSag discussion of protedure & VtICD ~~p~~Iuem Conftent Soop4ng Stucdy VWCD supervises ~ Locath4aoonal actual Case StudV cornsukamt carries out Z1 c"ffie aiz P|Came Stud Draft Final Report I Oalt Flnal Report wi _ ~~~to dakaeAdems VUDairgnizas 2na t:khddr ieedn a 2rWtakehoidat msenrg, _ ~~~dlecu**lon odate aXnd esrkduaor FRe Fkaport, and Summary Report to vMD Comn"ionea Source: WCD Case Studies, 2000 A.1.239 As developed, the CAP Project provides irrigation ;and drainage for 97,000 ha, flood protection dykes for a third of this irrigated area, and generates 500 GWh annually from a 138 MW power station. Physical components of the project include the 78m dam with 1,190 MM3 gross storage plus flood storage of 650 Mm3, gravity and pumped irrigation systems, drainage networks and feeder roads. Cotton was expected to be the main crop, but shifts in the markets resulted in wheat and soybeans being the major crops. A.1.240 In 1999, the World Commission on Dams (WCD) selected Turkey for a case study to profile dam-related experience in the eastern Mediterranean region. After lengthy discussion on the purpose of the case study, the Government of Turkey agreed to participate. The assessment, carried out by an independent study team using multi- stakeholder processes, was the first of its kind in Turkey. A.1.241 Figure A.1.13 shows the major steps in the process that was followed. In effect, the WCD and DSI were joint sponsors. A.1.242 An important aspect was the findings would not be those of the WCD or DSI, rather they would be established by the stakeholders, informed by the analysis prepared by an independent, multi-disciplinary study team consisting of Turkish professionals. Appendix 1: Case Studies 199 A.1.243 Similar to an EIA, the ex-post evaluation exercise was divided into two phases. A small team consisting of four local professionals was appointed (by the WCD) for the initial scoping phase. The scoping team's task was to prepare a stakeholder analysis, assemble a stakeholder group (forum) and prepare a draft scoping report on which to initiate stakeholder dialogue. The evaluation methodology was based on a detailed terms of reference provided by the WCD Secretariat, common to all case studies the WCD sponsored. A.1.244 After the first stakeholder meeting on the draft scoping report was completed, the full study team, consisting of 17 Turkish professionals, was formed. Members worked on a full or part time basis. This team prepared a draft report following the methodology provided by the WCD, but adapted to the CAP situation as defined in the scoping report. This study phase activities included parallel steps of data collection and verification, structured interviews, enquiries and invitation of submissions from interested parties and analysis, undertaken over 8 months. The draft report was the basis for a second 2-day stakeholder meeting. Based on this dialogue, the Study team finalized the report capturing the lessons learned on each stage of the project cycle (i.e. planning, design, construction and operation), the convergent and divergent views on each lesson, and the development effectiveness of the CAP project. What Options Assessments Were Carried Out, and by Whom? A.1.245 Six central questions were used to structure information collection and the assessment of development effectiveness and to identify the lessons (recommendations). These were: * What were the projected vs actual benefits, costs and impacts? * What were the unexpected impacts? * What was the distribution of costs and benefits - who gained and who lost? * lHow were decisions made? * Did the project comply with the criteria and guidelines of the day? * What lessons can be learned for today's context? A.1.246 The response to the fourth question (how were decisions made?) considered the extent to which options assessment had informed the original selection of the CAP Project. A.1.247 When the Aslantas dam was identified in the 1966 Basin Plan, increasing the area of agriculture under irrigation was a primary agriculture development objective in Turkey. According to the ex-post evaluation of the Study team, there had been no consideration of other supply options for irrigating the lower Ceyhan plains, such as groundwater supply, and no alternatives to the flood control system. Consequently, the options assessment undertaken at the time largely centered on locating and comparing 200 Stakeholder Involvement in Options Assessment sites for dams, that is those with suitable geology and topography to support construction of a dam with largest possible reservoir and in close proximity to agriculture areas. Minimizing resettlement and agriculture land-take were cited as explicit considerations taken into account in selecting these sites. A.1.248 When the CAP scheme was subsequently appraised by the Bank (in 1973), the Project was evaluated based on its economic attractiveness. In that Appraisal, the consideration of alternatives was restricted to comparing the hydropower component to an equivalent thermal power station. Here, power systems studies conclude that the hydropower component of the project scheme was more attractive than a thermal option, despite the irregular monthly distribution in power output (i.e. power generation followed the irrigation release schedules and not power demand schedules). A.1.249 The limited consideration of non-dam alternatives for increasing agriculture output was typical of the narrow focus of options assessment in the 1960's and 1770's, not only in Turkey but internationally. Similarly, environmental Impact Assessments (EIAs) were not prepared at the time and so there was no provision in the CAP project for issues such as fish passage. Since 1993, EIAs that specify options assessments are compulsory in Turkey for dams with a reservoir area of more than 15 kM2. A.1.250 In the ex-post evaluation exercise in 2000, stakeholders were asked to identify the main lessons to draw from the study team's analysis and response to the six case study questions. Many of these lessons had direct and indirect implications for deciding measures to improve adaptive management of the CAP project and for options assessments in other basin planning initiatives. A.1.251 In the WCD methodology, the role of the dam within the wider range of water uses in the basin was a central consideration. How other developments in the basin were managed was also important to stakeholders participating in the case study, and DSI was particularly interested in getting stakeholder perspectives on what they regarded to be the key issues for basin development. Of the other four major dams identified in the 1966 Basin study, the Menzelet and Sir dams had been completed in 1991, and the Kilavuzlu and Berke dams were under construction. A further 12 small and medium sized dams identified in the 1966 Basin plan on tributaries of the Ceyhan River were are either built, were under construction, or were planned. Therefore, both development and management issues were of interest to stakeholders in the basin. What Steps Were Taken to Enhance Stakeholders Involvement in the Ex-Post Evaluation? A.1.252 Local and national stakeholders were involved throughout the entire ex- post evaluation process in Turkey, as were international stakeholders through the WCD's global network. Appendix 1: Case Studies 201 Involving Local and National Stakeholders A.1.253 Early in the scoping phase, the CAP scoping team worked closely with DSI and the WCD Secretariat to identify a representative group of stakeholders through a combination of open solicitation of interest, media advertising and direct approaches to different water use interests in the CAP project area. Relevant government departments at all levels were also contacted through DSI or by the scoping team directly. To guide these efforts the Study Team had prepared a stakeholder analysis based on the model provided by the WCD. The group that was eventually formed included farmers, fisherman, members of formerly resettled families, academics, government officials from various departments, consultants from various disciplines the private sector and local municipal government officials. A.1.254 The scoping report was distributed to these members. It set the context, mapped out the issues and how to respond to the six questions in the case study, and identified available data sources. It also identified how the views of different interest groups would be incorporated during the development of the draft report. The scoping report was sent to other government departments, academic institutions, environmental and social discipline non-government bodies and water user groups who preferred to be informed of progress rather than attending meetings. The scoping meeting was held as a one-day session where approximately 50 persons attended. A.1.255 Once the study was underway, the interactions between the full study team and the stakeholders were maintained by various means. For example, meetings were held with all the constituencies associated with the development and management of the Aslantas dam and the CAP project, farmers, resettled people and with environmental and social organizations active in the basin. The various municipal government and DSI officials were also contacted. A.1.256 A series of structured interviews were also held with the representative stakeholder interests (e.g. farmers, displaced farmers and resettlees, the private sector (artisans and business men, chambers of commerce), govermment officials, and community based organizations). They were asked a series of sub-questions relating to the six main questions for the case study. As an illustration, questions in their most simple forms included: * How did the construction of the project affect you? * Overall, would you say the project affected you positively or negatively? * What other groups were affected by the project? Would you say they were positively or negatively affected? * Considering the project as a whole, do you feel that the project's negative impacts are acceptable given the benefits generated by the project? 202 Stakeholder Involvement in Options Assessment * Do you feel that major project decisions were made in an equitable manner? * To the best of your knowledge, did the project comply with applicable policies and laws in force of the day? * In your opinion, what are the major lessons that we can leam from looking back on the Project? A.1.257 After the draft report was completed, packages of information were sent to stakeholder groups to enable them to prepare for the 2-day meeting. These packages included the draft reports, additional questionnaires to evaluate responses to the report and preliminary recommendations. Logistical support (travel and per diem) was provided for those who needed it. Facilitation of External Stakeholders A.1.258 Through the WCD network, external stakeholders helped develop the case study method. All materials were posted on the WCD website as they became available. These included the Scoping TOR, the draft Scoping report, the revised work plan and study team composition, and the draft and final reports. In addition, minutes of stakeholder meetings were posted. Written comments received from external stakeholders were placed on the WCD web site and made available to the local stakeholders in Turkey. For example, one external criticism of the exercise was that a large number of government stakeholders were involved. All external stakeholder opinions and comments that were received were incorporated as an Annex in the final report. Reporting on Convergent and Divergent Views of Stakeholders A.1.259 Over 77 participants attended the 2-day meeting to review the draft report in January 2000. Members of the Study Team presented the key findings in response to the six questions. This was followed by an open discussion of the tentative conclusions drawn by the study team based on their analysis and consultations with stakeholders individually. Box A.1.3: Stakeholder Assessment of the Development Effectiveness of CAP * The agriculture production increase created by CAP raised income and welfare levels in the region. * More people benefited from electricity . With the new roads constructed in the region, transportation was improved. * Better health facilities * CAP stimulated technological change in agriculture systems with the transformation to irrigated agriculture Appendix 1: Case Studies 203 A.1.260 Facilitators were engaged for the second phase of the meeting, where 3 subgroups of 25 persons debated 3 main issues, namely: * the distribution of benefits and costs - who gained and who lost? * the development effectiveness - how was this defined and how did the group assess this? * the lessons learned-for different stages of the project cycle (planning, implementation and operations). Box A1.4: Methods to Evaluate Lessons Learned A list of 17 provisional lessons was distributed to the participants. They were given 15 minutes to fill in forms that indicated the extent they agreed or disagreed. Participants were then paired and they exchanged forms with the person sitting across. The items were discussed one-by-one to understand the response. The responses were then signed and the tally posted on pasteboard. Group discussions then focused on lessons with divergent views to see if differences could be narrowed. Participants were also requested to write any additional lessons on their questionnaire forms. A.1.261 The facilitators identified areas of agreement and disagreement. The discussion was focused on narrowing areas of disagreement. After sufficient discussion, (as judged by the facilitator) any remaining areas of divergent views were recorded. A.1.262 To elicit views on the distribution of benefits and costs from the CAP project, the participants were asked to identify which groups were gainers and losers; and why. The groups so identified were then classified, and the points of discussion on who won or lost - where agreement was not reached, were recorded. A.1.263 To elicit views on development effectiveness participants were asked to indicate what they understood to be a measure of development effectiveness, and what was not. Box A.1.3 shows the conclusions reached in one of the three sub-groups. A.1.264 The seventeen lessons proposed by the study team were then explained to the stakeholders and discussed (box A.1.4). The lessons were reformulated and the convergent and divergent views around each of the 17 reformulated lessons were the recorded. The method of recording the positions of the stakeholder interests and the degree of consensus reached was a simple matrix of strongly agree, agree, neutral and disagree and strongly disagree. Participants also formulated a further eight lessons, or recommendations emerging from their discussions. How Did Stakeholder Involvement Improve the Outcome of the Exercise and Contribute to Better Development Outcomes in Future? A.1.265 The ex-post evaluation was the first multi-stakeholder process of its kind undertaken in Turkey. It produced lessons related to the planning, design, construction 204 Stakeholder Involvement in Options Assessment and operation phases of the CAP project, showing the convergent and divergent views and range of perspectives of water users, civil society, NGO's, academic and professional groups, business interests and the government agencies. Apart from providing a model to prepare a comprehensive assessment on ways to improve the performance of an existing dam, it also provided recommendations on the future development and management of dams in the Ceyhan basin. Many of the CAP recommendations and certainly the process were also seen as transferable to other basins in Turkey, where DSI could enhance stakeholder involvement in dam related planning. A.1.266 Many lessons also can be used to develop criteria for options assessments. For example, recommendations at the planning stage included: design studies should be more comprehensive estimations of physical as well as price contingencies should be done more accurately rather than employing simple constant coefficients for all cost components; and, the (cumulative) effects of the upstream dams must be taken into account in planning stage. An example recommendation for the operation phase was: a specific M&E program is essential to learn lessons, review progress and monitor whether predicted benefits are being met and negative impacts are mitigated.35 A.1.267 More broadly, the ex-post evaluation exercise provided an opportunity to take a step back and look at the development performance of the dam in light of the changing context in the basin and evolving planning practices. It provided fresh insights for the adaptive management of dam, and brought out what stakeholders perceived to be important, and how they could be constructively involved in decisions processes to improve development performance and mitigate adverse impacts on the host community, this as new information and awareness became available. There was no other equivalent mechanism for this function. The ex-post evaluation also provided some insight as to the benefits to be derived from regulations that would require routine (periodic) consultations with communities hosting a dam and basin-level stakeholders in future, such as during renewal of operating licenses for dams-should that step be taken in Turkey. A.1.268 The general conclusion was that group interactions during the exercise provided valuable feedback on what DSI and other authorities needed to take into account in adaptive management. It also improved the collective understanding of the different water use interests in the basin of required improvements in basin-level planning, including options assessments aspects. What Lessons Are Offered? * Ex-post or periodic evaluations of existing dams that involve all groups of stakeholders can provide valuable insights into the ongoing operation of dams that are not apparent when a dam is planned and constructed, on how to address unanticipated events, and on how to adaptively manage dams to adjust to changing 35 The full list of lessons is provided in the WCD Case study report of the Aslantas Dam on the Ceyhan River in Turkey, available at http://www.dams.org. Appendix 1: Case Studies 205 circumstances as the development of the basin and water management practices evolve. * These assessments can also serve to open up lines of communication and breakdown institutional barriers between water users, managers of facilities and government departments and non- government organizations working in the community. These barriers can develop even when there has been extensive stakeholder involvement during the implementation phase of a dam project. In turn, dialogue on the management of existing dams can improve the confidence, trust and stakeholder interest in planning exercises that concern new developments and water management strategies in the basin. * Multi-stakeholder assessments of existing dams are unlikely to take place unless they are required in regulations or operating licenses of dams. Based in the experience in the CAP evaluation, DSI indicated that they found this exercise to be valuable for other dams and basins in Turkey. However, there was no legal requirement for such multi-stakeholder assessments and so they would not be likely occur in other energy planning exercises unless there was a specific reason. * Stakeholders and governments are more comfortable looking at potentially controversial issues by interacting in structured process, such as where studies are available to inform the debate that takes place, where there are rules of behavior for participants are set, and where the views and positions of all participants are respected. Case Study 9: South Africa Berg Water Project (Skuifraam Dam) A.1.269 This case illustrates how stakeholder involvement and options assessments informed government decisions to meet immediate needs for water supply to the City of Cape Town in the Western Cape Region of South Africa between 1998 and 2002, in parallel with the preparation of longer-term programs to ensure a secure municipal water supply. A.1.270 Approval of the Skuifraam Dam36 (a core element of the Berg Water Project) supported by the City of Cape Town was withheld by the national government until water conservation, demand management, and alternative supply options were assessed and debated. While these processes proceeded, local water authorities were required to respond to drought-induced water shortages and demonstrate capacity for efficient management of existing supply across all sectors. 36 The name "Skuifraam" is used here as it has had a long historical usage. The term is no longer used officially and a new name for the dam is being considered. 206 Stakeholder Involvement in Options Assessment The Context A.1.271 The water system for the City of Cape Town (CCT) and surrounding municipalities is supplied from five large storage dams forming the Western Cape Water System (WCWS) plus a number of smaller dams, augrnented by groundwater from two aquifers. The WCWS also supplies water to the agricultural (irrigation) sector, as well as to other urban/industrial users in the lower Berg River. Water availability is heavily dependent on year-to-year winter rainfall patterns. Figure A.1.14: Skuifraam Dam WeinmerAh.ek Resevoir --- PO E PLNS RIVER a ~ 9PROPOED PIM AIN SEODR ROD Rlthfso~sal ~pmomf Proposed 6' v^ Balaa DaPROPO SED MN/ IBRD 32542 JULY 2003 A.1.272 Water is also transferred into the Berg Water Management Area (Berg WMA)-in which the CCT is the dominant consumer-from rivers located in the adjacent Breede WMA area through the Riviersonderend-Berg River tunnel system. The total supply that can be mobilized with existing supply and inter-basin transfer arrangements in average rainfall conditions is about 364 million m3/year. This compares to projected unrestrained needs of between 507-912 million m3 /year by 2020. Bulk demand growth through the 1990s was 3-4 percent per annum, roughly in step with demographic growth. A.1.273 In 1998, the Cape Metropolitan Council (CMC, later to become the CCT) supported building the Skuifraam Dam to augment storage on the system by a further 18 percent, and sought the approval of the national government. The Department of Water Appendix 1: Case Studies 207 Affairs and Forestry (DWAF) had previously studied the scheme as a possible supply measure for the Berg WMA. The Berg River is one of the last free flowing rivers in the region, and the project was strongly opposed by a coalition of environmental communities and water recreation interests. A.1.274 The Skuifraam proposal came just after completion of a major transformation of legislation governing water management policies and practices in South Africa. The 1998 National Water Act introduced legal requirements for environmental reserves in the regulation of river flows. Relevant to the Skuifraam question, the 1997 Water Services Act required that alternatives to dams be given priority over the construction of new dams. New legislation introduced in the water resources and environment management fields also required, or reinforced, participatory planning and public consultation as input to all major water management decisions at local, provincial, and national levels. A.1.275 The Skuifraam proposal, in effect, became a first major test of the workings of the new legislation in the Western Cape Province. It also triggered a much wider debate about water management policy in the CCT and Berg WMA, and prompted calls for a fundamental rethinking of the approach to demand and supply management. Also at this time, water use restrictions were first imposed by CCT on the agricultural sector (1999-2000) due to the drought and resultant water scarcity. A.1.276 After the former CMC requested national approval to proceed with the dam, the minister responsible advised Parliament that any decision to augment water supply in CCT should be predicated on three factors. These included (1) a review of the demand projections; (2) a clear indication of the commitment of the former CMC and relevant Transitional Local Councils and District Councils to demand management; and (3) provision of better technical information on demand management potential, with more detail of the budgetary support for related demand management programs. A.1.277 The CCT's position was that new supply was needed on top of demand management. Skuifraam was regarded as the most feasible new supply alternative, but it could not be completed before 2006-07. As a result, an aggressive program of demand management, water reuse, and water conservation was required to meet immediate needs and sustain the city until then. In response to the minister's direction (and the drought shortly after), the CCT strengthened its water demand management activities with awareness and information programs during 1999-2001. Water tariffs were restructured, and bans and restrictions were introduced on nonessential water uses. 208 Stakeholder Involvement in Options Assessment Table A.1.10: Chronology-Key Events 1989-1985 Western Cape System Analysis: Study of current and future water needs, available resources and augmentation options by DWAF. 1995-1996 DWAF public consultation on options. Task team short-listed BWP (Skuifraam) and water demand management for further study. Draft ELA report presented for public comment. 1997 Water Services Act (108) 1994 National Water Act, National Environment Management Act 1998 Skuifraam Dam recommended for approval by CMC, endorsed by DWAF. 1998 Minister defers decision until CCT water authorities show progress in managing water demand. 1999 Drought and restrictions introduced in water use; initiation of accelerated DSM program by CTC. 1998-2001 Options studies and public debate on options in 3 parallel processes (Municipal WSPD, Berg WMA Planning, and ELA of the Skuifraam Dam). September 2001 Approval in principle of the Skuifraam Dam by the minister. May 2002 Cabinet decision to proceed with Berg Project. 2007 Scheduled commissioning of the BWP and dam. A.1.278 The immediate need was also for more equitable allocation and expanded service to poor areas that were often the first to suffer from water shortages. A.1.279 Stakeholders opposed to the Skuifraam Dam argued that a dam option was unnecessary, costly, and environmentally damaging; instead, a package of water recovery and recycling measures could be mobilized to provide new supply for immediate and future needs. They argued that the demand management measures introduced by the CTC were not aggressive and were limited in scope, pointing to achievements of smaller water-stressed municipalities in the region that had mounted programs to reduce peak water demands. Further, they argued that building the Skuifraam Dam would not change the inequities of water use prevalent in the Western Cape, while paying for it would impose high water charges on low-income consumers. A.1.280 After an extensive program of studies, consultations, open debate, and public hearings organized around the three separate processes (new Municipal level Water Service Development Plan (WSPD), the Berg WMA plan process, and the Skuifraam Dam EIA), the minister gave approval in principle to proceed with the project in 2001. The dam would go hand-in-hand with a more aggressive water management program. The minister noted also that the reduction in water demand resulting from the initial series of demand management measures (in the 1999-2001 period) had delayed the need for additional water augmentation schemes. After subsequent Parliamentary Appendix 1: Case Studies 209 subcommittee debate, in May 2002 the Cabinet authorized the Berg Water Project to proceed. A. 1.281 The site for the 70-meter high Skuifraam Dam is on the upper reaches of the Berg River near Franschhoek about 70 kilometers from Cape Town. It will create a reservoir with a gross storage capacity of 126.4 million m3. No resettlement is involved. The Berg River estuary is a biologically significant and diverse wetland. The EIA showed that changing flow regimes would affect downstream wetlands and coastal fisheries. A.1.282 The scheme is expected to cost about US$150 million (at 2002 price levels and exchange rates). The parastatal Trans-Caledon Tunnel Authority (TCTA) will implement the project and raise the funds from the private sector without a government guarantee. In April 2003, two agreements were signed between DWAF and CCT relating to bulk water supply and between DWAF and TCTA relating to implementation that includes the transfer to TCTA of revenue from water sales for the project. The Water Services Act requires full cost recovery where possible; thus, water users will pay for the scheme through what is called the Berg Water Capital Charge on the bulk tariff. What Options Assessments Were Carried Out, and by Whom? A.1.283 Information and analysis on options was exchanged between the three parallel processes that were looking at ways to meet immediate and future needs for water services. Many of the same parties were involved in each process. The CCT set about evaluating options for water service provision as part of its municipal plan (WSPD), which, under the new Water Services Act, each Municipality was required to develop. Parallel evaluations of water supply and management alternatives for the wider Berg WMA were undertaken in national DWAF-led processes, and the ETA of the Skuifraam Dam followed steps for within-project options assessment prescribed in the 1989 Environmental Conservation Act and the new 1998 National Environment Management Act (NEMA). Municipal Water Service Development Plan (WSDP) for Cape Town A.1.284 As prescribed in legislation, each WSDP had to incorporate new water demand projections, identify infrastructure requirements, provide a water balance, and review the environmental management issues associated with current and future water service provision. While it introduced an initial set of conservation measures and restrictions to address the immediate water shortage, the CCT commissioned an Integrated Water Resource Planning Study. Its purpose was to evaluate the principle demand management and supply alternatives for the Council area in the medium and longer term. A. 1.285 The Integrated study recommended three "packages" of options, in addition to the Skuifraam dam: Package 1: Pressure control, removal of automatic flushing urinals, user education, tariffs metering, credit control, and leakage repair. 210 Stakeholder Involvement in Options Assessment * Package 2: Private boreholes (for irrigation users), water efficient fittings, and grey water recycling. * Package 3: Voelvlei Augmentation Scheme and the Table Mountain Group Aquifer pilot study. A.1.286 Based on the studies, CCT's water demand management policy and strategy was projected to reduce overall, projected demand for water by 20 percent by the year 2010.37 A.1.287 Various committees of locally elected officials, expert working group meetings, consultations with interest groups, and public hearings discussing the separate studies were part of the WSDP process. In these engagements, pressure from stakeholders arguing in favor of non-dam options helped to ensure that the scope of options assessment studies stayed broad, and reflected what the Water Services Act had envisaged. Proponents of non-dam options felt the CMC needed to look more closely at the experience of other (smaller) local authorities and emulate their approach, such as the small seaside holiday town of Hermanus where a 12-point water demand management program had achieved 30 percent reductions in peak water demands. They advocated intensified and accelerated water recycling programs, introducing by-laws on grey water reuse and recycling of the City's treated sewage water (at that time pumped out to sea). Other proposals were for a series of drought management measures with staged restrictions on water use that reflected the severity of the drought. Berg WMA Options-Led by DWAF A.1.288 The DWAF-led study process considered alternative supply options for the Berg WMA in the context of overall demand-supply balances and inter-basin water transfers between the WMAs. Supply options assessed included the possibility of deep groundwater supply from the Table Mountain Group (TMG) aquifers, further transfer of water into the Berg WMA from the Breede River, and desalination of seawater. The study team also considered increasing storage capacity by raising the height of the five existing dams. The criteria used for evaluation of options for supply augmentation broadly included economic, environment, social factors, as well as risk and reliability factors. The DWAF studies also took into account the new requirement to provide ecological reserves from existing and potential surface water regulations. These studies were prepared in collaborative processes with public review, as set out in the new guidelines for public consultation guidelines. 38 A.1.289 The Skuifraam Dam emerged as the preferred supply scheme to meet the Berg WMA requirements, in combination with water conservation and water demand management. In addition to the dam, the Berg Water Project included pumping stations to supply pipelines connected to the Riviersonderend-Berg River tunnel system, and 37 See www.capetown.gov.za/water/wsdp 38 Generic Public Consultation Guidelines, DWAF, Sept 2001 Appendix 1: Case Studies 211 separate facilities to transfer water from downstream tributaries entering the Berg River back up into the Skuifraam Reservoir for storage. Skuifraam Dam EIA Alternatives Assessment A.1.290 Within-project alternatives for the Skuifraam Dam were assessed in the EIA process, involving issues such as the design and siting of major structures, construction schedules, and environmental mitigation, management, and monitoring provisions. Environmental stakeholders were concerned about the impacts on downstream wetlands and downstream coastal fisheries, so the EIA evaluated instream flow requirements (IFR) downstream of the proposed dam site. Provisions were made in the design of the dam to provide for both low-flow and flood releases in normal, wet and dry years. What Other Steps Were Taken to Enhance Stakeholder Involvement in the Decisionmaking Processes? A.1.291 The framework and mechanisms for stakeholder involvement reflected the legislation and regulations governing each of the three options evaluations. For example, the Water Services Act required the WSPD to be taken through a full public participation process, with the public, stakeholders, and water services authorities/providers given an opportunity to comment at each step in the plan formulation. DWAF responded to provisions in the National Water Act (1998), which required stakeholder involvement in the Berg WMA analysis as well as an extensive public participation process in connection with the National Water Resource Strategy. A.1.292 In addition to the government-led processes, different stakeholder interests launched advocacy campaigns to focus public attention on specific issues arising from the options being considered. For example, those opposed to the Skuifraam Dam initially called for suspension of planning until "the CMC conformed with the demand-side management requirements of South African Law." A.1.293 Media interest in the Skuifraam debate was high and there was extensive local coverage at key decision points. This increased public awareness of the issues under debate. The open debate in the media provided one input to the decision reached by the CMC to include the Berg Water Project in the draft WSDP that was submitted to the national government for approval. How Did the Options Assessments and Stakeholder Involvement Improve Development Outcomes? A.1.294 Options assessment figured prominently in the debate on how to meet immediate needs for water supply and were a central aspect of decisionmaking to meet medium-term needs. A.1.295 An immediate benefit from the options assessment was that Cape Town adopted a more aggressive demand management program and achieved greater (short- term) water security. While the legislation required options assessment and priorization of demand management, it did not specify the level of effort. The explicit political 212 Stakeholder Involvement in Options Assessment support for demand management and the debate this prompted on the actual measures and their effectiveness resulted in more resources being directed by the Water Authorities to demand management, water recycling, and non-conventional supply options. A.1.296 Involving stakeholders in identifying, assessing, and debating options contributed to a number of other positive outcomes. For instance, it provided: * Increased awareness among the general public and water users of the water situation they faced, future water supply issues, and the rationale underlying the public decisions on the management of water demand and supply * Greater public acceptance of the higher water tariffs (the Berg Water Capital Charge), which over the medium-term would also make water conservation more effective * Foundations for ongoing collaboration among key stakeholder groups about key water services provision issues for the Cape Town area. A.1.297 Not all interests accepted the Cabinet decision to proceed with the Skuifraam Dam. There is continuing debate and concern raised by the environmental community about the estuary impacts of the Berg Project. For example, with lower flows and a future scenario of intensified withdrawals downstream of the dam (when those areas develop), the salinity of river water may increase and require expensive treatment before use. On the other hand, DWAF contends that mitigation measures identified in the EIA will address this problem by simulating the rivers pre-dam natural flow during winter rains, and in the dry summer the downstream sections of the Berg River would be periodically flushed with water from other systems. These debates are ongoing. What Lessons Are Offered? A.1.298 While longer-term options are pursued, the case study shows that immediate needs for water services can be met by a mixture of voluntary conservation measures and restrictions on water use. The case study also demonstrates that, in this situation, while demand management could meet immediate needs, new sources of water supply would eventually be needed. In retrospect, the integrated and comprehensive options studies (as required under the Water Services Act) exposed the vulnerability of narrowly based options studies conducted in the past. A.1.299 Broader lessons include: * Legislative and regulatory provisions requiring that alternatives be prioritized before new dams can be approved were a catalyst for the options exercise to occur. They provided a foundation for political support to implement demand management measures that helped meet immediate needs. The legislation also helped move Appendix 1: Case Studies 213 options assessment "upstream" in the planning process and institutionalize this practice on a regular basis. * Involvement (and pressure) from civil society and nongovernment stakeholders helped to expand the range of options evaluated. Civil society should be seen by traditional water resource management interests as a source of new ideas, approaches, and information- not as an impediment to solutions. * Trials can reduce the uncertainty over the impact of demand management measures in the short and longer term. Early and serious efforts in demand-side management can reduce disruptions to water supply and help avoid the worst conflicts. * A participatory approach and comprehensive options assessment does not alter the need to make choices that may be unpopular among specific interest groups. However, the decisionmakers are better informed about the views of different stakeholders and are able to make decisions that are more defensible. Case Study 10: Kyrgyz Republic Irrigation Rehabilitation Project A.1.300 This case study illustrates how options assessment and stakeholder involvement informed decisions on the rehabilitation of irrigation infrastructure to meet urgent needs of agricultural communities in the Kyrgyz Republic in Central Asia. A.1.301 By the mid-1990s, the country's rural economy was in a state of near collapse in the aftermath of the breakup of the former Soviet Union. Initial steps were taken to restore water flows in inter-farm canal networks (up to the farm gate) and improve the safety and optimize the performance of irrigation dams. These actions played a key role in stabilizing the agricultural situation and meeting the immediate needs of communities. They also were the first steps in a longer-term transition to a more efficient and sustainable agriculture sector. The Context A.1.302 During the height of the Soviet era, industrialization in the Kyrgyz Republic was 40 percent of GDP. However, a large portion of this industry was geared to producing goods whose markets disappeared after the breakup of the Soviet Union. A.1.303 Notwithstanding its industrial base, Kyrgyzstan was a relatively poor country in 1991, even by Central Asian standards. There were large inequalities in income distribution. About 60 people of its people lived in rural areas, many deriving their livelihood from farming. By 1992, at least one-third of the population fell below the poverty line-especially those in agriculture. By 1995, agriculture and agrobusiness accounted for 47 percent of the shrinking GDP and half the national employment. The ongoing political, economic, and social transitions severely disrupted agriculture and irrigation sector performance. 214 Stakeholder Involvement in Options Assessment Figure A.1.15: Water Reservoirs and Dams in the Kyrgyz Republic 70~ 75~ i80- 0 150Km. KAZAKHSTAN I A. e , ' ,_.it a , - {tae 'A aTabs - = - 15-K&. Karo INi *- I N&~~~- rt-T*g -WUZBEKISTAN L_ n .. Iii--- -- / r 40CH ,-I ._; .- ' _ 0 .............................. > \ .. \ @ PROJECT IRRIGATION SCHEMES I] PROJECT DAMS FOR REHABIUTATION TAJIKISTAN,-. -- - RIVERS 0 OBLAST CAPITALS f-T Amu i NATIONAL CAPITAL -' Dar ' O' -. 7 INTERNATIONAL BOUNDARIES 70_i7 .~ 75, I / * -- I IBRD 32539 JULY 2003 A.1.304 Faced with these problems, the Kyrgyz Republic undertook major reforms to its productive sectors, even before it joined the World Bank in 1993. The large collective farm system inherited from the Soviet era was abandoned as part of the combined agriculture and land reform program. These former state farms and cooperatives (up to 5,000 ha in size) relied on surface irrigation, primarily from rivers regulated by 13 large irrigation reservoirs and smaller dams. The farms were broken up into smaller units to prepare for privatization and individual ownership of farm plots. However, the physical water distribution system and institutional framework was not suited to the new situation. By 1995, flows in the primary and secondary irrigation canals up to the farm gate (at collective farm level) had decreased about 25 percent from pre- 1991 levels, primarily because of lack of maintenance, which resulted in unchecked siltation and leakage. Irrigation deliveries to individual farms decreased substantially, and agricultural productivity declined sharply. A.1.305 The social consequences and poverty implications were significant and widespread. For example, fodder was increasingly replaced by wheat as a barter commodity to replace the lack of income, thus diminishing local food security. Conflicts arising over land that had better access to irrigated water supply also aggravated ethnic tensions in some locations, such as the Ferghana Valley. A.1.306 Local stakeholders from farmers to local authorities increasingly voiced concern over the deteriorating state of irrigation infrastructure to the Ministry of Agriculture and Water Resources, which in Soviet times has centrally managed and Appendix 1: Case Studies 215 maintained inter-farm irrigation systems. Some of the most immediate issues concerned dam safety. Lack of maintenance led to growing concerns about whether gates, spillways, and outlets were in good working order, and whether safety was assured. A.1.307 The government recognized that irrigation sector rehabilitation was an essential precondition to the success of the mid- and long-term programs for privatization of state land and its wider agricultural and rural reform programs. It sought external assistance. Among the donors, it was agreed that IDA would take the lead in supporting agriculture sector reform. A.1.308 Within the framework of the first Country Assistance Strategy (CAS) prepared in 1995, discussions started with the World Bank on immediate rehabilitation needs and the parallel development of a long-term strategy to achieve sustainability of the irrigation-sub sector. An irrigation rehabilitation project emerged as the first step in a flexible lending program. A.1.309 The main elements of the strategy to increase the productivity of irrigated agriculture through improved water supply were elaborated in a Sector Environment Assessment in 1997. Table A.1.11: Chronology 1991 Independence of the Kyrgyz Republic 1992 The Kyrgyz Republic became a Member of the World Bank 1993 First Constitution of the new Republic 1993 Dialogue initiated with Donors about Multi-Sector Reforms and Priorities 1995 First CAS. Agreement among donors for IDA to assuming a lead role in the agriculture sector 1996 Project Concept Document for the Irrigation Sector Rehabilitation 1997 Sector Environmental Assessment and Project Preparation activities (involving evaluation and selection of immediate rehabilitation measures and an Action Program for longer-term measures) 1998 Project Appraisal and Loan Approval 2000 Preparation of a Second Project for Intra-farm Irrigation Rehabilitation and water use efficiency 2004 Scheduled Completion of the Inter-Farm Infrastructure Rehabilitation Project A.1.310 The rehabilitation project had three main components. The first component focused on emergency repairs and selective low-cost rehabilitation of inter- farm irrigation infrastructure to restore flows in the inter-farrn canal networks (to the 216 Stakeholder Involvement in Options Assessment farm gate) and improve drainage.39 A second component involved rehabilitation and completion of dams, and improvement of monitoring systems of dams to address safety and performance concerns. A third component involved temporary financing of maintenance contracts for inter-farm irrigation infrastructure included in the sub-projects, which was intended to foster private sector capacities and replace public sector practices that still followed the Soviet era model. A.1.311 The rehabilitation project was the first step in a series of agriculture sector reform and modernization projects. Projects in the pipeline included an on-farm irrigation project to help rehabilitate on-farm irrigation facilities (that is, the network below the farm gate between private holdings) and introduce measures for water use efficiency. Other initiatives included projects involving agricultural support services and rural credit. These were planned after land ownership reforms and processes to establish water user associations-as a mechanism for stakeholder involvement-had evolved further. A.1.312 The Ministry of Agriculture and Water Resources (MOAWR) was responsible for implementation of the rehabilitation project (1998 to 2004). Sub- programs are being implemented through a system of six "oblast" offices covering the country, each with 5 to 10 "rayon" offices responsible for primary and secondary irrigation systems. In parallel with the physical rehabilitation works, discussions proceeded on the elements of the National Irrigation Rehabilitation Action Plan (NIRAP). The Action Plan sets out the government's vision for irrigated agriculture, a longer-term program for inter-farm and intra-farm rehabilitation, a future program for O&M financing, and steps to establish water user associations, which would assume a key role in irrigation management and decisionmaking at the local level. A.1.313 The Kyrgyz Republic is also one of five newly independent states cooperating in the Aral Sea Basin Development Program (see Case Study 4). Its mountainous terrain is the headwaters of the Syr Darya, one of the major rivers feeding the Aral Sea. Thus, the water resource development strategy (and the irrigation sub- component) pursued in the Kyrgyz Republic has regional significance. Under water sharing agreements among the Aral Sea Basin States (following Soviet period allocations), the Kyrgyz Republic is allocated 25 percent of the water originating in its territory. What Options Assessments Were Carried Out, and by Whom? A.1.314 The Sector Environmental Assessment (SEA) was prepared by a small team of Kyrgyz and FAO experts drawn from the government and university sector working with central, provincial, and local government agencies, mainly MOAWR and the Ministry of Environment (MOE). Involvement of nongovernment stakeholders included consultations with emerging civil society, NGOs, and farm communities. The 39 It should be noted that the farm gate is the intake located at the head of the area covered formerly by the collective farm. Below this farm gate, distribution to individual (private) farms takes place. Appendix 1: Case Studies 217 SEA looked at the institutional, environmental, and legal issues and specific issues to do with planned investments, environmental degradation, and environmental compliance. A.1.315 A multi-disciplinary team similar to that assembled for the SEA was established to screen and rank sites for rehabilitation of inter-farm canal systems and to schedule priority investments according to immediate needs. As a first step, the project office requested and received proposals from the regional and local offices of MOAWR for rehabilitation of 250 sites. Initially, 126 of these were selected by screening. Sites were rejected if they required new works or expansion of existing irrigation systems instead of rehabilitation. Oblasts and Rayons were requested to provide additional information on the 126 potential sites. Based on this information, two subsequent screening assessments led to 83 schemes being retained for detailed ranking. The aim was to rank the schemes and fund the highest ranked schemes within the available budget. A.1.316 The team used a two-stage ranking system. The criteria were defined by the team in consultations with representative stakeholders at the national level (discussed later). The ranking resulted in the selection of 67 schemes in 48 command areas located throughout the six oblasts of the country. Twelve schemes were then selected for detailed study and design in the first year of the program, with the remaining projects to be taken up subsequently. Table A. 1.12 illustrates the sequential screening and ranking steps. Table A.1.12: Process for Screening and Ranking of Project Areas: Project Preparations 1996-1997 Options received from First Second Third sites (oblasts Screening Screening Screening Coarse or rayons) Assessment Assessment Assessment ranking Fine ranking 250 126 Sub- 93 Sub- 83 Sub-projects 67 sub- Recommended 12 projects projects screened projects in sub-projects in 48 screened screened 48 command areas command areas Stakeholder Multi- Multi-criteria Criteria for selection included economic viability, defined criteria options simplicity of works, responsiveness to farming criteria options assessment community requests, quality of local institutions, and assessment needs of environmental protection. A.1.317 At the same time, safety assessments were undertaken for the country's 13 irrigation dams of over 15 meters in height.40 Possible remedial works for each facility (civil and mechanical/electrical and monitoring) were assessed and priorities were 40 Kyrgyz has 14 large dams and water reservoirs, and 200 artificial water reservoirs. Eight dams have reservoirs more 50 MCM; four dams 10-50 MCM; and seven dams 1-10 MCM. 218 Stakeholder Involvement in Options Assessment assigned based on risk assessments. All dams but one dam fell in the high risk category (using the ICOLD risk classification), taking into account updated hydrology assessments and the degree of vulnerability of downstream communities in the event of a dam failure. Small spillway capacities were a common deficiency when assessed against ICOLD standards. A.1.318 The Karabura Dam required the most urgent and extensive works. Construction of this dam had been abandoned during the Soviet break-up. Here two options were evaluated. One option was to keep the dam at its current height and install a spillway to secure its safety. The second option was to raise the dam to its planned height. This would increase the storage capacity nine-fold, which in turn would allow expansion of the existing irrigation area and provide water to increase yields in the existing command areas by an estimated 10 percent. The latter option was selected because its EIRR was 20.8 percent. A.1.319 The assessment of rehabilitation options at Orto Tokoy Dam similarly identified the opportunity to create more storage and improve irrigation supply. This dam was constructed in the late 1950s, but due to the lack of a spillway the reservoir had never been completely filled. When the outlet was rehabilitated and the spillway completed in 2001, an additional 25 million m3 was available (5.5 percent of the reservoir volume) to increase irrigation flows in the Chui Valley. What Steps Were Taken to Enhance the Involvement of Stakeholders in the Selection of Options to Meet Immediate Needs and to Develop Longer-Term Strategies? A.1.320 Because no Water User Groups existed at the start of the process, stakeholder engagements were organized around meetings with emerging civil society and NGO groups in the agriculture and environment fields, with scientific and government agencies, and with a limited number of farm communities and beneficiaries at the oblast level. The government selected the priority schemes on recommendations from the study team, but these selections were informed by stakeholder input at different stages of the process. A.1.321 During the preparation of the Sector Environment Assessment, environmental NGOs were contacted for their views on the project and the Action Plan. At that time, there were many small NGO groups working at the local level and only a handful at the national level. "Aleyne" and "Tabiat," the key national environmental NGOs, had academically trained staff who participated. In these sessions, no objections were raised to the rehabilitation works proposed under the project. Rather, the main concern was about broader land-water environmental management issues, such as mitigation of agro-chemical pollution and surface water contamination from pesticides and fertilizers use. Such pollution was expected to increase with the development and growth of programs for agricultural development. NGOs asked that these and other concerns be thoroughly addressed in the sector reform and offered their services to assist with necessary studies. They also proposed additional measures to combat soil erosion, Appendix 1: Case Studies 219 and to strengthen monitoring of impacts of current agricultural practices on aquatic habitats and downstream ecosystems in order to establish baselines for mitigation programs. A.1.322 This opportunity for interaction among government, local environmental NGOs, and the Academy of Science was unprecedented. It broke down a number of barriers to communications on the formulation of development initiatives. Governmental agencies-together with local environmental NGOs, the Research Institute for Irrigation, and the Institute of Water Problems and Hydropower (National Academy of Science)- began to look at the economic costs and benefits, the environmental impacts, the social costs and equity implications, and the viability of alternatives. A.1.323 Under the umbrella of the Action Plan (NIRAP), a series of workshops were also held at the oblast level (provincial level) in June 1997 with stakeholders from all six oblasts. The aim was to raise awareness of the rehabilitation project and its relationship to the long-term sector reform program. Oblast and Rayon DWR staff, NGOs, Research Institute staff, O&M staff for irrigation dams, farm managers, and contractors attended each workshop. The project itself was not overly controversial; it enjoyed wide support from the agriculture community. The main concerns expressed related to the level of anticipated water user fees and the sustainability of O&M for the rehabilitated schemes. Another topic of interest was the procurement procedures for civil works under the project to encourage private sector participation in O&M. What Value Did Options Assessment and Stakeholder Involvement Add and What Benefits Were Derived? A.1.324 This was the first time that stakeholders had been invited to participate in mainstream development planning for the irrigation sector in the Kyrgyz Republic. The project helped to restore water flow in the primary and secondary irrigation canal systems to at least pre-1991 levels, and secure the safety of dams. This was expected to result in crop yield increases of about 10 percent (over a 4-year period) following completion of the rehabilitation works. A further 17,000 ha would be returned to production. By 2000, there was a growth in gross production of agricultural crops that surpassed the 1992 level of agricultural production of major crops, such as wheat and potatoes. A.1.325 In terms of meeting immediate needs, these improvements in water supply came at a critical stage in the land reform process. Since private ownership of land was introduced in 1998, most of the 504 collective farming enterprises have been restructured and almost 2.7 million people have obtained plots of land and ownership certificates under a separate World Bank-supported land registration project. A.1.326 Stakeholder involvement provided a higher degree of consensus for the irrigation schemes that were selected, and a demonstration that the selection was fair. The process thus avoided choices that were driven purely by politics. A.1.327 The options selected for the project also targeted the provinces with the highest poverty rate. The inclusion of dams in the southern provinces in the Ferghana 220 Stakeholder Involvement in Options Assessment Valley, and Jalalabad and Osh, helped reduce water-related tension complicated by interethnic relationships. This was an important outcome to stakeholders in these areas. Environmental specialists and NGOs also thought that the project would reduce water losses and soil salinization, improve dam safety, and improve fish migration. Their inputs in the development of the screening and ranking criteria helped to build confidence that the interests of the environmental community would be incorporated in future water resource planning initiatives, and they would have a role to play in establishing development priorities. A.1.328 The project also catalyzed a shift from the command and control approach of the Soviet era toward a stakeholder-driven approach to the design of irrigation policy and initiatives. At present, more than 100 water users associations (WUAs) in each oblast (province) have been set up, and the devolution of O&M responsibility is proceeding. Village councils have transferred the right to operate and maintain (intra farm) distribution systems to these associations. What Lessons Were Offered? A.1.329 One key lesson was the importance of meeting immediate needs with initiatives that have broad support and consensus, and not to delay action while the framework to meet longer-term needs is sorted out and put in place. Here the immediate needs were to stabilize and reverse the decline in agricultural output and to overcome the most immediate dam safety issues. At the same time, this course of action needed to be consistent with the longer term-strategy. In this case, meeting these immediate needs actually helped the government prepare the ground for a more comprehensive restructuring of the sector by developing the capacities of stakeholders to assume active roles in development planning. A.1.330 In addition: * The involvement of stakeholders in the options assessment helped to make institutions that were responsible for service provision more aware and responsive to the needs of the beneficiaries. The prevailing view had been that qualified specialists in central government agencies should make decisions, and that there was little value to be added from involving farmers and nongovernment stakeholders. Although the involvement of these groups in this project was tentative, it helped to demonstrate to officials the considerable appetite for participation in decisions that affected these stakeholder interests, particularly in light of the privatization of land ownership. * Many of the nongovernment interests that had been consulted for the first time wanted a more concrete follow-up to the recommendations they had made in sessions with officials. This would help maintain confidence in the value and effectiveness of their participation. For example, environmental NGOs felt that the Appendix 1: Case Studies 221 findings of environmental and social assessments prepared by independent or multi-disciplinary teams should be better integrated in programs. It was apparent also there was a need for a clear description of the new decision processes, including stakeholder engagement in these processes, and sharing of information. Improving the role of the media in reporting on options assessment and the planning context was also a central issue. Due to the land privatization program, all issues related to irrigation and water cost have become important in public discussions. Nevertheless, media coverage was not considered coherent and helpful. In addition, newspapers were not delivered well to remote rural areas and much of the rural population had little information about new reforms and projects initiated in the capital. In the Kyrgyz Republic, extensive irrigation, land use reforms, and private ownership require building the capacity of water user organizations to become an essential voice and partner in development and assume their new roles in the market economy. Government can never finance the intra-farm network O&M; it needs to see WUGs as partners in this endeavor and in the key decisions, particularly as they will henceforth pay fees for the services provided. A ppendix 2 Global Options Portfolio-Expanding Choice, Innovation and Flexibility to Meet Current and Future Needs The Context A.2.1 The purpose of this appendix is to highlight the diversity of the portfolio of interventions that can help meet water and energy needs, and to discuss some of the issues that can arise in sectoral and project-specific options assessments. A.2.2 An increasing number of new technical options are available today due to technological advancement, innovation and intensified efforts at local adaptation. Similarly, experience is growing in applying a broader range of policy instruments and undertaking regulatory and institutional reforms to improve overall water management and service provision in different settings. Increasing complexity is also a factor. Many countries must respond to growing water competition, scarcity and resource degradation, and find new and more innovative ways to provide for the billions of people who currently lack access to basic water and electricity services. Taking action is no longer a matter of strict economic efficiency, but a blend of factors such as poverty alleviation, public acceptance, sustainability, and risk management to safeguard interests of all stakeholders. These factors have to be balanced at regional, sectoral, and project-specific planning levels when choosing options. A.2.3 The vision statements of the World Water Council and those of many intergovernmental and nongovernmental organizations make it clear that developing new sources of freshwater will not be sufficient by itself to meet future needs, especially in water-stressed regions. New supply developments (including nonconventional and traditional sources) will have to be coupled with wiser use of existing stocks of water through efficiency and water conservation measures, water reuse, and conjunctive use of surface and groundwater. Classification of Options A.2.4 As discussed in Chapter 1, options can be classified in terms of demand- side management and supply development options, and classified further as structural and 223 224 Stakeholder Involvement in Options Assessment non-structural interventions. This is illustrated in figure A.2.1. Within a specific sub- sector, most options for service provision (for example, drinking water or irrigation services) fit into one of the four quadrants of figure A.2.1. Figure A.2.1: Demand-Side Management and Supply Options Stzhtural Demanid pti ort Supply Managenieri f Water & Energy Delopmreit Senvces MNan Stiuctural A.2.5 Water resource management options to ensure an overall sustainable supply of freshwater for all water-dependent sectors to share-including policies on water allocation and water quality, and measures for flood management and watershed management-can be classed in a similar manner. A.2.6 Once a dam has been selected as a preferred option, choices about within- project alternatives arise during the construction and development of the dam, and subsequently at different points over the lifecycle of the facility and operation of the reservoir. The choices between these alternatives influence the development performance of a dam. The table below illustrates some examples of within-project alternatives. Table A.2.1: Within-Project Alternatives Alternatives during dam development Alternatives during dam management * Alternative designs and location of structures * Change of reservoir operation strategy and * Social and environmental mitigation and release patterns management * Retrofit, rehabilitation, and extension for . Risk allocation and benefit sharing facilities . Life extension or decommnissioning A.2.7 The next section discusses broader water resource management options. This is followed by a section that highlights options for irrigation services, municipal and Appendix 2: Global Options Portfolio 225 industrial water supply services and electricity services. A third section looks at within- project alternatives in the development and management of dams. Water Resource Management Options A.2.8 Integrated water resource management (IWRM) is a process that promotes the coordinated development and management of water, land, and related resources. It aims to maximize economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.41 IWRM also provides an integrating concept for options assessment and a perspective to ensure that social, economic, environmental, and technical dimensions are balanced. A.2.9 Water resource management is fundamentally concerned with improving water availability and water allocation to competing uses in the basin while maintaining water quality (including water rights and access). Based on this lager framework, service providers and water users in each consuming sector (e.g. irrigation and drinking water supply) are responsible for choosing and managing service provision options to achieve equitable, efficient, and sustainable water use within their sector. Service provisions options pursued in one particular sub-sector also impact on other sectors. For example, an improvement in irrigation water-use efficiency could free water to allocate to sustain downstream wetlands. A.2.10 The relationship between overall and sector water management is illustrated in Figure A.2.2 below. Figure A.2.2: Integrated Water Resource Management Concept other uwes Source: Global Water Partnership, Report TAC-4, 2000 Policy Options for Overall Water Management A.2.11 Policy options that establish the enabling environment for IWRM and the range of management instruments that can be employed in each sub-sector include: 41 Integrated Water Resources Management, Technical Advisory Committee (TAC) TAC Background Papers No. 4, 2000, Global Water Partnership. 226 Stakeholder Involvement in Options Assessment * Direct controls-such as water use licenses and permits-and economic instruments-such as bulk water tariff levels, fees, and transferable rights-to influence rates and methods of abstraction of surface or groundwater. * Specific policy measures for particular aspects of water management, in areas such as- o Groundwater management, including well spacing regulations, well drilling prohibitions, well metering, and pumping restrictions o Watershed and sub-catchment management, including soil stabilization, land use regulation, and runoff control policies o Water quality management-including water quality standards, rules for point and non-point pollution sources and policies for water treatment, monitoring, and enforcement-in order to extend the quantity of water that is suitable for high quality uses such as potable supply o The protection of riverine and coastal wetlands, including prohibiting draining, clearing, encroachment, and establishing minimum ecological flows and flood regimes. * Flood and drought preparedness policies and programs to adapt to hydrological variability and extreme events. For example, in drought-prone areas, moving to increased water storage, better predictive capability, and improved transportation. This would be backed by longer-term policy measures to reduce vulnerability and maladaptive practices. Flood preparedness could include land zoning; forest retention and catchment management; identification of areas as flood storage reservoirs; and flood insurance schemes. A.2.12 Investments in information gathering and monitoring can improve the quality and timeliness of information available to water management agencies and all water users; examples include real-time water quality and hydrometric monitoring systems, forecasting, and early warning systems. Institutional Options For Overall Water Management A.2.13 The organizations and institutional arrangements that are needed to achieve good integrated water management depend on the country's social structure and history. Devolution of responsibility to those involved in the management and use of water and energy-through organizations such as river basin organizations (RBOs) and water user groups-has generally led to improvements in water resource management. However, the extent of devolution and the structures to achieve it vary from country to Appendix 2: Global Options Portfolio 227 country. The institutional structure of a country can also be modified to improve service delivery, enforcement of regulations, and provision of policy advice to govenment. Box A.2.1: Dublin Principles (1992) Economic good principle. Water is a scarce resource; greater use needs to be made of incentives and economic principles in improving allocation and enhancing water quality. Ecological principle. Independent management of water by different water-using sectors is not appropriate. The river basin must become the unit of analysis. Land and water need to be managed together, and much greater attention needs to be paid to the environment. Institutional principle. Water resources management is best done when all stakeholders participate, including the state, the private sector and civil society. Women need to be included. Resource management should respect the principle of subsidiary, with actions taken at the lowest appropriate level. A.2.14 Where good integrated water resources management is present, common features are: * A robust and flexible institutional framework, supported by enabling legislation and an integrated policy framework. * Planning and management systems that are knowledge-driven. Strategic assessment of water and related resources receives priority, and includes the systematic generation of strategically focused information and knowledge that is accessible to stakeholders. * Integration is built into institutions, resource management, and policy. Strategic functions, such as generation of information and formulation of policies, are shared with water sector stakeholders. * Transparency and community participation is built into all processes and functions of the organizations. A.2.15 Institutional reform measures need to complement policy reforms and technical measures. Unclear or flawed demarcation of responsibilities between actors; jurisdictional gaps or overlaps; inadequate co-ordination mechanisms; and the failure to balance responsibilities with authority reduce (or even negate) the effectiveness of policy and technical measures. As noted in box A.2.1, the principle of subsidiary advanced as part of the 1992 Dublin Principles states that water resource management actions should be taken at the lowest appropriate level. A.2.16 Structural options for water management broadly relate to storage, diversion and regulation of surface water resources, including the use of flood protection structures. The need to balance and integrate structural and nonstructural options to 228 Stakeholder Involvement in Options Assessment achieve a particular water management objective is illustrated in the following discussion of flood management options. Flood Control and Management-Balancing Structural and Nonstructural Options A.2.17 In the aftermath of major flood events around the world-including coastal flooding in 1953 in the Netherlands, the 1988/89 floods in Bangladesh, and the 1998 flood in China-many countries moved away from a strict focus on flood control objectives toward basin-wide flood management approaches. These approaches recognize the need to manage floods for multiple objectives and to use structural and nonstructural techniques. A.2.18 Although floods are commonly seen as entirely destructive, they also play an important role in maintaining a productive riverine ecosystem and sustaining ecosystem services.42 They renew soils of the floodplain, recharge local aquifers, trigger biological processes, and move organic matter between the floodplain and the river. A.2.19 Whereas one of the roles of dams has been to dampen out natural hydrological diversity to control the effects of flooding on downstream communities, the focus has now shifted toward combining this benefit with the maintenance of sufficient flooding to maintain healthy floodplain ecosystems that support diverse livelihoods. The distribution of benefits between those dependent on downstream ecosystems, those affected by the flooding of upstream reservoirs, and those gaining from the provision of services from dams (such as drinking water supply and electricity in urban areas) must be assessed consciously throughout the planning phases from country-level to project-level analyses. A.2.20 Detrimental impacts of floods can be minimized through both structural and nonstructural measures with three principle objectives in mind, as noted in table A.2.2 below. Table A.2.2: Representative Flood Management Options Reducing the scale of flood Isolating the threat Increasing coping capacity Through: Through: Through: * Better catchment management * Flood embankments * Emergency planning * Controlling runoff * Flood proofing * Flood forecasting * Detention basins * Relocation * Warnings * Dams * Limiting floodplain * Evacuation . Wetlands development * Compensation Source: WCD Thematic Study, Flood Management Options (2000) 42 Davis, R. and R. Hiri (eds). 2003. Environmental Flows: Flood flows. Technical Note C.3. Washington: World Bank. Appendix 2: Global Options Portfolio 229 A.2.21 Nonstructural approaches aim to enable communities to adapt to destructive floods in a variety of ways, generally, by moving people away from floods, reducing the scale of threat by slowing and dispersing runoff, or increasing coping capacity. Planning controls may be needed to restrict new settlement in vulnerable areas and ensure that new buildings and other infrastructures are flood proofed. Flood proofing also builds upon indigenous flood adaptation approaches. If the threat from floods is too great to be managed, then entire communities (or parts of communities) may have to be moved permanently from flood-prone land. In China, about 1 million people were moved from the middle and lower reaches of the Yangtze River after the 1998 flood. A.2.22 A dam is most likely to form part of the appropriate management strategy when: * The major part of the runoff comes from a small, steep catchment immediately above the area at risk * The time to concentration is short (such as in Japan) * Multiple tributaries contribute to the local flood problem, and it is possible to prevent the flood crests from the different tributaries being synchronized (coincident peaks) * The ratio of flow in an extreme flood to the flow of the annual flood is high * The floodplain is heavily developed or under pressure (that is, characterized by high population density or intensive land development). A.2.23 How dams are designed and reservoirs are operated is recognized as an increasingly important issue in flood management today. Improved hydrological monitoring capacities and early warning systems help to provide better and safer operation of reservoirs in advance of floods. A.2.24 There are also new concerns about the possibility of changing hydrology and the frequency of occurrence of extreme flood events. More sophisticated hydrological analyses indicate that high floods are likely to occur more frequently. A.2.25 Table A.2.3 shows an example from Australia where PMF and peak flow estimates have been changed upwards (and downwards) by over 100 percent over a 15- year period due to changes in the methods used.43 This was amid concerns over increased hydrological variability in the future and the safety of existing dams. 43 Crichton, A., et. Al. 2001. Flood Passing Capacity Upgrade Considerations for the Wivenhoe Dam, paper presented at the NZSOLD/ANCOLD 2001 Conference on Dams, Australia. 230 Stakeholder Involvement in Options Assessment Table A.2.3: Illustration of Changes in PMF Estimates Since the Original Design of the Wivenhoe Dam in Australia Date of PMF Estimates Duration Peak Inflow (m3/s) Volume (ML) 1977 3 days 15,000 4,210,000 1983 2 days 42,973 6,170,000 1983 7 days 47,800 10,260,000 1992 2 days 30,670 5,333,920 Source: see text A.2.26 As a consequence of the growing body of analysis, dam owners in many jurisdictions in the United States and Europe are optimizing procedures for flood operation and increasing the flood capacity of their dams by: * Raising dams to contain the higher water level * Improving data collection methods to give advanced warning of adverse conditions and to monitor the response of the dam * Lowering operating levels to increase flood storage * Lowering, or the construction of additional (secondary) spillways * Modifying catchment flood characteristics by constructing flood detention devices or even an upstream dam * Managing artificial flood releases. A.2.27 Increasing hydrological extremes and variability will have a direct influence on the assessment and selection of nonstructural options for flood management. Certain flood management decisions-the area of hazard zoning, where to apply land use restriction, etc.-are typically based on flood risk assessments. For example, hazard zoning is typically tied to the 100-year event in rural areas, or the 200-year flood in more heavily developed basins. Small embankment dams, and lower hazard categories of dams, are generally assessed against more frequent (and smaller) flood flows. Nonstructural measures will need to be designed for these more frequent and larger flood events. Irrigation Services A.2.28 Irrigation is by far the largest user of water, accounting for more than 75 percent of all water use in developing countries. Increasing water scarcity, competing demands of other sectors, pressing environmental concerns, and the high cost of investment pose challenges to reforms in water supply and efficiency in existing food production systems. Appendix 2: Global Options Portfolio 231 A.2.29 In many regions, the expansion of irrigated areas (both surface and groundwater) has led to land-water resource degradation, including waterlogging and salinization, reductions in water quality from drainage discharges, and declining water tables from overpumping of aquifers. Irrigation development also caused indirect negative effects; in some cases, for example, irrigation development in the floodplains increased vulnerability to downstream flooding, or land clearing for irrigation caused substantial soil erosion in areas susceptible to drought. Unrestrained abstractions have also led to water allocation impacts on wetlands, fisheries, coastal and marine ecosystems, and the riverine populations that depend on these flows. A.2.30 The assessment of options for improving yields and food production from irrigated agriculture must therefore include the prevention or, at least, minimization of these externalities.44 A.2.31 Strategic options assessments for irrigation should take into account the different objectives for food production-such as improving national food security and local self-sufficiency, reducing rural poverty levels, and increasing national export income. Irrigation options must be evaluated within the context of the irrigation system, the wider agricultural system, the rural socioeconomic system, and other priorities for water. A.2.32 Table A.2.4 illustrates the wide scope and range of options for policy and institutional reform that impact on agriculture practices, as well as the array of technical alternatives for irrigation water supply and its efficient use. 44 Davis, R. and R. Hirji (eds), 2003. Irrigation and Drainage: Development, Technical Note E.1. Washington: World Bank; Davis, R. and R. Hirji (eds), 2003. Irrigation and Drainage: Rehabilitation, Technical Note E.2. Washington: World Bank; Davis, R. and R. Hirji (eds), 2003. Water Conservation: Irrigation, Technical Note F.2. Washington: World Bank. 232 Stakeholder Involvement in Options Assessment Table A.2.4: Representative Options in the Agriculture and Irrigation Sub-Sector Agriculture / Irrigation Policy Options Policy Options Agriculture Practice * Charging for water-irrigation and * Reducing post harvest losses groundwater fees (saving water) * Crop and variety selection on salinity and * Water rights and land tenure drought tolerance and earlier maturing * Commodity pricing (financial return) * Cultivation techniques (more infiltration, less * Performance-based maintenance and evaporation) operation * Crop diversification (less water intensive) * Agency reform and irrigation management * Bio-engineered crops transfer for improving control. * Enhancement of rainfed agriculture versus (or prior to) expansion of irrigation services into the area. Irrigation Sub-Sector - Technical Options Supply Side Demand Side * New surface storage and river diversions * Main system maintenance and management * Deep groundwater development (reducing losses) * Aquifer recharge * Drainage provision (controlling water logging, * Rainwater harvesting and storage salinity, and alkalinity) * Wastewater reuse (treated municipal * More efficient irrigation application techniques, wastewater) including pressurized systems (drip, sprinkler * Interbasin water transfer etc., both low-technology and high-technology systems) • Desalination and recycling of drainage water. sLnlevpl * Land leveling and optimization of plot size * Recycling of drainage water and conjunctive use of shallow groundwater * Night storage in reservoirs or main canals . Rotation and distribution schedules aimed to optimize efficiency. Note: Recycling of drainage water, municipal wastewater is sometimes classed either as a supply or efficiency option. Policy and Institutional Options and Changes in Agriculture Practices Influencing the Demand for Irrigation Services A.2.33 Analyzing the different options based on the country needs and agricultural policy requires a change in approach to irrigation investment. Some elements of this change include: * Making a transition from the era of expansion and construction to an era of intensification and management * Increasing the productivity of water and infrastructure and irrigation systems Appendix 2: Global Options Portfolio 233 * Increasing emphasis on drainage for productive and environmental reasons * Increasing attention to basin-wide efficiency * Using water pricing that better reflects the inherent cost of water provision * Modernizing formal irrigation institutions and the framework in which they operate * Supporting partnerships between irrigators and government agencies. A.2.34 Experience shows that technical solutions rarely succeed on their own; policy and institutional changes that support the technical options are needed. Policy options and associated legal and regulatory reforms have direct bearing on water use. Examples of reforms that affect water use are: * Water rights and water charges * Investment and cost recovery policies * Incentives and disincentives for agriculture through subsidies, pricing, taxation, and rules for cropping patterns * Factors that affect the export and import of agricultural produce * The sectoral allocation of water * Devolution of management to the private sector and to water user organizations. A.2.35 When assessing options for irrigated agricultural water demand, strategies for nonirrigated land should also be evaluated. For example, rainfed agriculture occupies approximately 80 percent of all agricultural land, with yields around 50 percent that of irrigated lands. Local water-related solutions to enhance rainfed production such as rainwater harvesting, surface water harvesting, and groundwater harvesting can act as an alternative to expansion of irrigated land. Irrigation Demand Management -Technical Options A.2.36 Managing the demand for water for irrigation is a complementary strategy to irrigation supply development. A large proportion of irrigation water may be lost through evaporation and through percolation. Modern farm-scale technologies-such as sprinklers, drip irrigation, piped systems, and micro-irrigation-allow better control over irrigation input, improve irrigation-distribution uniformity, and reduce water loss. Other options, such as canal lining and advanced control technologies, can be applied in the 234 Stakeholder Involvement in Options Assessment main water conveyance.45 There is technical potential for significant saving of water by improving the operation of distribution systems and on-farm management, including better maintenance and the introduction of improved crop varieties. A.2.37 However, the successful adoption of these improved technologies at farm level is largely dependent on improvements in the operation of the distribution system, resources, and capacities. In many developing countries, farmers either receive water on a fixed rotation basis, whether they actually need it or not, or else are faced with highly unreliable water supply. In either case, there is a strong incentive to use the water inefficiently. Improvements in the operation of the distribution system, even without the introduction of on-farm water saving technologies, are likely to improve water use efficiencies. A.2.38 Improved water use efficiency may not, by itself, lead to reduced irrigation water use and reduced demand. Unless other measures are taken, the "saved" water may simply be applied to expansion of production and increases in yields. Irrigation Supply Management-Technical Options A.2.39 Supply options that should be considered when planning for increased irrigation include conventional ground and surface water schemes; maintenance of storage volume through sediment management; conjunctive use of surface and groundwater; recycling of wastewater; water harvesting at all scales; inter-basin transfer of water; and desalination. A.2.40 Accessibility close to the point of demand is a major attraction of groundwater for irrigators, even though in many cases abstraction costs are higher than those charged for surface irrigation. Groundwater is a viable option where overextraction is not a concern and pumping costs are acceptable. However, groundwater depletion is a major concern in many regions. For example, in the 3-H Plain (Huai, Huang, and Hai rivers) in China, groundwater was first used in the 1960s on a large scale for irrigation and urban uses. Abstractions now exceed sustainable yields and water levels have dropped up to 30 meters, further reducing water availability and increasing pumping costs. While considerable interest has been shown in the potential of artificial aquifer recharge in agriculture, little experience is available. A.2.41 Conventional surface storage is the primary supply option. Close to 50 percent of all 45,000 large dams in the world-and countless more smaller embankment dams-provide irrigation services with storage or diversions of surface water. However, it is becoming increasingly costly to develop more surface storage for irrigation. A.2.42 In its 2002 state of the environment report, the United Nations Environment Programme (UNEP) singled out the loss of reservoir storage capacity to sediment as a significant, emerging issue for many regions of the world. Sediment 45 Davis, R. and R. HirJi (eds). 2003. Water Conservation: Irrigation, Technical Note F.2. Washington: World Bank. Appendix 2: Global Options Portfolio 235 reduces storage capacity for irrigation, the reliability of water supply and hydropower generation, and flood control effectiveness.46 About 1 percent of existing storage of some 6,000 km3 is estimated to be lost to siltation annually, mostly in smaller irrigation embankment dams. These losses from sedimentation are comparable to the projected global increases in demand for irrigation water. Rates of sediment yield from large catchments with high induced erosion rates, which are prevalent in arid and semi-arid southern parts of the Mediterranean, are projected to increase in response to the effects of elevated temperatures from climate change. A.2.43 New dams can be designed for sediment flushing by incorporating larger bottom outlets. Measures for sediment management in reservoirs are thus important to consider as part of the broader mix of supply options to improve water availability for irrigation services. A.2.44 Conjunctive use of surface and groundwater offers considerable potential for augmenting water supply. Where conditions are suitable, it is a sustainable means of combining surface irrigation and groundwater recharge. The excess surface water can be either pumped to groundwater or allowed to percolate if the soils are porous enough. Thus, conjunctive use increases water use efficiencies, whereby a larger share of the original water is directed to beneficial crop evapotranspiration, and the amount of tail-end drainage is reduced. The Indus River basin provides an example of recharge of the alluvial aquifers and reuse, providing water with much higher value to most Pakistani irrigators. 7 Tubewells were installed in large areas of the basin because surface water supplies were not adequate for the desired extent of irrigation. The overall basin efficiency is estimated at about 64 percent, about 60 percent higher than the combined efficiency of the surface system at about 40 percent. The field efficiency is very high because of under-irrigation and the amount of water recycled through the tubewells. A.2.45 The reuse of both irrigation drainage water and municipal wastewater is a useful means of augmenting water supply. In Israel, 275 million cubic meters of treated urban wastewater are used for irrigation annually. This is approximately 22 percent of total agricultural use of water. Similarly, in Jordan, the demand for water is high and sources are limited. Consequently, wastewater reuse is a central part of national water policy. The use of wastewater is growing rapidly from 4 percent of total water supply in 1990 to 6.5 percent in 1995, and is projected to increase to 16 percent in 2020. Groundwater abstractions will be reduced during this period to eliminate overabstraction and protect some aquifers from salinization. A.2.46 Many inter-basin transfer schemes have been developed in arid and semi- arid regions around the world. In the best-known example, a variety of state and local inter-basin water transfers were developed in California over the past 85 years to meet 46 The State of the Environment: Past, Present, Future - Hard Facts: Tough Choices, UNEP Global Environment Outlook, May 2002. 47 Davis, R. and R. Hirji (eds). 2003. Water Conservation: Irrigation Technical Note F.2. Washington: World Bank. 236 Stakeholder Involvement in Options Assessment irrigation and municipal water supply demands. Case Study 3 illustrates another example, where Ceara State in northeast Brazil developed a network of reservoirs and conveyance systems to move water between surplus and deficit areas to meet water supply and irrigation needs. The impacts of such transfers are increasingly controversial because of the need to manage the effects of the withdrawals on the supply basin, and the potential for transferring biological and chemical contaminants between basins. Municipal and Industrial Water Supply Services A.2.47 Worldwide, municipal water supply for industrial and household use is the second largest water use after agriculture. About 23 percent of global water withdrawals meet the demands of industry and energy and about 8 percent meet domestic or household uses. Given the rapid rates of growth of urban areas in the developing world, this sector is likely to experience rapidly increasing demand over the next 20 years, particularly because improvement of water supply and sanitation is directly related to poverty reduction and the UN Millennium Development Goals for improved water service and sanitation. A.2.48 In developed countries with relatively high levels of consumption, increased demand can be met by improving water distribution and end-use efficiency, as well as by reducing demand though pricing and educational measures.; investing in additional storage reservoirs can usually be deferred. In developing countries, there are two additional issues: (1) the poor performance of existing water supply systems, particularly in terms of skewed distribution and supply losses; and (2) the rapid growth and high levels of urban and rural poor. A.2.49 Table A.2.5 illustrates the range of physical, administrative, and technical measures to improve municipal water services through supply augmentation, increased delivery efficiency, and increased end-use efficiency. Appendix 2: Global Options Portfolio 237 Table A.2.5: Representative Range of Urban Water Service Options Policy Instruments, Administrative and Institutional Options Supply and Service Provision End user Demand-side Management * Reform of water utility operations * Volumetric or progressive block tariff structures * Regulation of service providers on * Direct regulation/restriction in water use investment, efficient operation, and * Drought programs with bans on certain water uses delivery efficiency and emergency reallocations during drought * Public and private sector modes of water episodes service delivery * Appliance rebate, exchange and audit programs * Legislation / incentives for service (especially for washing machines, dishwashers, providers (including provisions in WCs) concessions) to extend service delivery to . Consumer information and awareness programs poor consumers * Bylaw requiring water-saving technology in new * Service connection, cost recovery, and buildings (or retrofitting) subsidy policy * Manufacture and sales taxes, and direct subsidy to * Bylaws on industrial water reuse consumers to buy water saving devices . Appliance and equipment manufacturing standards Technical Options Supply Side Demand Side * Distribution system leakage reduction * Low-flow water use devices (low-volume shower programs, including leak detection and heads, banning power showers, low-flush or dual- charging for unpaid use of water flush toilets, composting toilets, waterless urinals, * Domestic-scale rainwater harvesting spray taps, self-closing taps, and timing devices) * Industrial/commercial-scale rainwater * Bulk metering for large consumers harvesting * Industrial water recycling technology * Matching water quality more closely with * Domestic and commercial graywater recovery and water use needs recycling * Groundwater use and recharge * Metering per household to charge for amounts * Reservoir storage actually used * Ocean water and brackish groundwater desalination Policy, Administrative, and Institutional Options A.2.50 Policy and administrative measures can improve water services in urban areas without new supply development and without affecting existing demand patterns. Commitment to improving the legal, regulatory, and administrative framework is essential to achieve efficient water use. 238 Stakeholder Involvement in Options Assessment A.2.51 Generally: * Effective regulatory mechanisms need to be in place, whether water is managed by public or private service providers in order to control externalities and to safeguard access to water by the urban poor. * Improving the management efficiency of service providers is fundamental to improving the maintenance of assets, the efficiency of service delivery, and the provision of essential service extensions. * The private sector can improve cost recovery and mobilize new sources of finance, bring technical and managerial expertise to the sector, and provide greater efficiency in the use of capital. However, private sector involvement is not a panacea; the advantages and disadvantages must be examined carefully in each instance. A.2.52 Regulations that require a formal and systematic process for urban water planning help to ensure that a thorough, unbiased evaluation of policy options and institutional frameworks takes place, and to ensure that these are well matched to service delivery options. For example, in 1997 South Africa introduced a new Water Services Act that required all municipal water services authorities in the country to prepare a Water Services Development Plan (WSDP). Each WSDP had to set out how the authority planned to deliver services to individuals and businesses in its service area. Regulations required an analysis and discussion of current and future demands; a consumer profile; all supply and delivery policies; the type of services to be provided; infrastructure requirements; the water balance; the organizational and financial arrangements to be used; and an assessment of the viability of the approach (evaluation of alternatives) with an overview of the environmental issues associated with each option. Case Study 9 shows how the preparation and approval of the WSPD in Cape Town led to the decision to develop a new storage facility. A.2.53 Other policy options that can open the way to new solutions and actions by large water users include inter-sector transfers, bylaws on water recycling, and policies on matching water quality more closely with water use. To ensure water-use efficiency is improved, regulatory authorities in a number of countries have stipulated that water suppliers may only tap new water resources once they have satisfactorily demonstrated exploration of all other demand-side and water-efficiency options. For example, regulations in the United Kingdom, United States, and South Africa mandate exploration of all economically justifiable demand-management initiatives before a license for new abstraction can be granted. A.2.54 Urban water demand may be reduced (or the rate of demand growth reduced) through a mix of technological improvements and policies such as pricing reforms, tax rebates for responsible water users, compulsory installation of water-saving Appendix 2: Global Options Portfolio 239 devices in new buildings and retrofitting in old ones, correct metering, and informative billing and educational programs. These various elements normally support one another and so are packed into integrated demand management programs. Experience also shows that pricing reform will only be successful if educational activities explain the purpose of the program to consumers and if water-saving technologies are made available to offset increasing unit prices for water. Demand Side-Technical Options A.2.55 Water demand management extends the use of existing resources and so defers the need for investment in infrastructure. Demand management includes emergency, short-term conservation measures-such as imposing bans and restrictions during drought periods-as part of a broader drought management plan. A.2.56 To be effective, an audit of water usage should be carried out before demand management measures are introduced. These measures include low-flow water use devices, progressive tariffs, bulk metering for large consumers, industrial water recycling technology, and domestic and commercial graywater recovery and recycling. There are numerous constrains that need to be addressed. For example, metering is an expensive option in some countries and meters may be tampered with or malfunction. A pilot metering study in Karachi, (where the level of metering stood at 0.3 percent of domestic properties in 1992) showed that some of the difficulties included the high cost of meters, incorrect reading by meter readers, the high cost of meter repair, and unavailability of high-quality tamper-proof meters. A.2.57 For urban systems at their hydrological limits, more innovative policies toward water use beyond these demand management measures are needed. For example, water supply needs to become an explicit factor in all major land use, regional development, and industrial and municipal zoning and development decisions. Supply Side Efficiency-Technical Options A.2.58 Typically, 30 to 50 percent of piped urban water supply is lost through leaks in the distribution systems in developing countries. Given the financial and environmental costs of tapping new sources of water supply, it is often economically viable to reduce the extent of leakage. In Singapore, where new sources are only available at very high cost, it was economically efficient to bring levels of unaccounted- for water down to just 6 percent in order to provide water for new consumers. New Supply-Technical Options A.2.59 There are a range of water-source options and technologies that vary in scale. The extent to which each option can contribute to the overall water supply mix depends on the condition of the existing water delivery systems and on water resource availability. In addition to conventional surface water supply (river and lake abstractions, storage dams) and groundwater supply (shallow and deep aquifers), there are non- conventional options such as domestic-scale rainwater harvesting, industrial/commercial- 240 Stakeholder Involvement in Options Assessment scale rainwater harvesting, groundwater recharge, and desalination of ocean water and brackish groundwater A.2.60 Desalination now contributes to water supply in 120 countries, with 60 percent of the 11,000 desalination plants located in the water-scarce Middle East. Though costs have been reduced dramatically, desalination is still expensive and energy intensive. A major cost and technology breakthrough is required to increase desalination's global contribution significantly. Brackish groundwater desalination is considerably cheaper than seawater desalination, provided the aquifer is located close to the demand. Thus, coastal resorts in Egypt are beginning to consider brackish groundwater as an option for their water supply. A.2.61 The policy of matching water quality to the demand can also extend water sources. In Spain, recycled and treated municipal wastewater is used on golf course, which under new legislation are required to provide an independent water supply to ensure that local water tables are not drawn down. Rural Water Supply A.2.62 Nearly three-quarters of the world's poor live in rural areas, and a large part of this population does not have access to clean water and safe sanitation facilities. The policy environment for rural water supply is important. Government must play a facilitative role, setting clear national policies and strategies, encouraging broad stakeholder consultation, and facilitating capacity building and learning. An enabling environment is needed for the participation of a wide range of providers of goods, services, and technical assistance to communities, including the private sector and nongovernmental organizations. Further, an adequate flow of information to the community is needed to facilitate collective decisions. A.2.63 The technology options themselves are site-specific. Apart from small storage dams supporting local supply networks or the extension of piped systems into rural areas where feasible, they include: * Improved shallow wells * Boreholes equipped with hand pumps * Spring protection * Mechanized boreholes connected to standpipes or household connections * Surface water catchments linked to a piped system. A.2.64 The relevant issues to examine in assessing options include (a) the extent to which communities have choices for service delivery; (b) how these options are discussed with the communities (are they fully understood? do they cover operations and maintenance? Are gender aspects considered?); and (c) the extent to which technical norms and standards exist and are enforced within the country. Appendix 2: Global Options Portfolio 241 Electricity Services A.2.65 Figure A.2.3 illustrates the large variation in per capita electricity use across developed and developing countries. Demand in OECD countries is beginning to level off, due to a combination of zero population growth, less intensive industry structures, market penetration of more efficient end-use technologies, and electricity conservation behavior. There is strong electricity demand growth in transitional and developing countries, which are diversifying and modernizing their economies and providing new services that require electricity to a larger proportion of the population. Figure A.2.3: Variations in Electricity Consumption Per Capita by World Regions (1 996)* 8000 - 7000 a 6000 1! 4000- 4 3000 6 2000 - 1000 * u u~~ 0 C)~~~~~ *Per capita figures mask variations in the distribution and number of people in a particular society with access to electricity; as well as use per person, household or industry. Source: LEA energy data. A.2.66 The choice of power generation options depends to a large degree on the resource base (that is, the availability and quality of hydro, wind, solar, biomass, ocean energy, and fissile and fossil fuels); possibilities for import of fossil fuels for thermal- based generation (petroleum products, coal, gas pipelines); and opportunities for electricity import through regional grids. A.2.67 The simple schematic below provides a representation of the range of technology options for generation, transmission, distribution, and end-use components of power systems. Three general ways to improve the delivery of electricity services are through: Demand-side management, which focuses on how consumers can use electricity more efficiently 242 Stakeholder Involvement in Options Assessment * Supply-side efficiency measures, concerned with how efficiently the electricity is generated by the supplier and conveyed to the user * New supply options. Figure A-2.4: Power Supply Options Electricity Demand onveyanc supply Main Isolated Home Grid Network Systems tariff structure loss reduction power plants power plants in - solar home load management and improvement - thermal mini-grid systems interruptable loads system reliability (coal, oil, gas) - diesel - micro turbines end-use efficiency - transmission - nuclear - small hydro - fuel cells - distributon - hydro - biomass (storage, run-of-river, - wind pumped storage) - co-generation - wind - solar - biomass - co-generation increase or restore efficiency and reliability, extend life by rehabilitation, test prototypes of new technologies A.2.68 New supply options also include small isolated mini grids and stand-alone supplies to individual customers and home systems. A.2.69 The power sector in most countries has entered a period of structural change, with the introduction of competition in energy and electricity markets. Amid these transitions, two contrasting but complementary structural trends in improving electricity services are taking place: (1) the rapid expansion of grid interconnection and regional power pools; and (2) the emergence of decentralized systems based on conventional and renewable power technologies. A.2.70 The motivations for regional interconnection of power grids and for power pool arrangements include improving opportunities for power exchange and export revenues; promoting complementary operation of grids to improve power stability, emergency power, and diversity; and generally reducing overall investment in new power plants by sharing reserves. Interconnection of regional grids also enables large units to take advantage of economies of scale, and to some extent facilitates entry of renewable options (hydro and wind generation primarily) by providing larger markets to absorb intermittent power sources. Appendix 2: Global Options Portfolio 243 A.2.71 Gas and oil delivery networks have also been expanding nationally and regionally, making gas-based thermal generation the preferred choice of utilities for grid supply expansion in many situations. A.2.72 Many small-scale power technologies based on renewable energy sources and conventional fuels are increasingly available and effective. This trend is expected to accelerate when the "horizon technologies"-such as hydrogen fuel cells or photovoltaic systems integrated into house roofing material-become practical for widespread distribution to meet power needs for home use. Policy and Institutional Options A.2.73 Since the 1990s, many vertically integrated state monopolies (production, transmission, and distribution) have been replaced by more open industry structures that permit greater diversity in ownership and management of assets and public and private sector financing roles. Policy and regulatory reform measures pave the way for efficiency and adoption of a range of innovations, such as market entry of renewable and more efficient conventional technologies, consumer-oriented energy services, and new forms of project finance. A.2.74 Options assessments concerning grid-generation need to take account of energy policies. These policies broadly include: * Diversity in energy resource utilization for power generation * Targets for use of specific energy resources in the total electricity generation mix * Targets on the degree of reliance on imported energy sources for power generation * Targets on the reliance on import of power through regional grid connections. A.2.75 Where markets are liberalized, governments focus on regulation measures-such as ease of market entry and exit-and ensure that barriers are removed for socially preferred conversion technologies and supply efficiency measures. A.2.76 It is important in options assessment exercises to assess the extent to which institutional arrangements (centralized or decentralized service delivery) influence the power technology selected. For example, the institutional capacities of a utility may be geared more toward conventional grid extension for rural electrification rather than decentralized systems or stand-alone home systems. Other institutional options and capacities may be needed to promote and implement a more diversified rural electrification strategy. 244 Stakeholder Involvement in Options Assessment Demand-Side Management (DSM)-Technical Options A.2.77 Demand-side efficiency approaches include the use of legislated standards to remove low efficiency equipment (such as lighting, appliances, and motors48) from the market; support for innovative market driven approaches to finance high energy efficiency projects from future savings, and the use of performance-based regulations to encourage utilities to undertake DSM in restructured electricity markets. A.2.78 Significant efficiency improvements can be obtained by replacing inefficient appliances with more efficient ones. The actual gains and the timeframe over which these can be achieved depends on a number of factors such as the replacement cycle of the appliance, the comparative cost and availability of the more efficient appliance, consumer awareness, and income and ability to afford the new appliance. Demand side management and conservation behavior also depends on tariff levels and structures, the legislation and standards for the manufacture, sale and import of efficient appliances, provision of consumer information and appliance labeling programs, incentives to recycle inefficient appliances and changing building codes which affect electricity demand requirements for space cooling and heating needs. A.2.79 In developing economies-including parts of China, India, Brazil, and Southeast Asia-industry usually has a much higher share of electricity demand than in developed countries. In this type of economy, DSM can play a major role in tempering new demand and deferring new supply. In an analysis of DSM potential in southern China, it was estimated that future demand for new electricity supply facilities could be reduced by 20 percent using DSM. Such programs should target all sectors, but industrial sectors such as motors and process electricity are key sectors. In high-growth economies, it is far cheaper to mandate efficient electricity use in new equipment than it is to improve the efficiency of existing equipment. A.2.80 In the state of Haryana in India, electricity use for irrigation at highly subsidized rates accounts for 45 percent of all electricity. A study of a cost-shared agricultural pumpset DSM program in India showed that agricultural power losses and inefficiencies could be cut by over 50 percent, thus saving about 25 percent of current 49 electricity use. A.2.81 Barriers need to be removed to make DSM effective. These barriers include lack of information and knowledge about energy-efficiency; financial considerations such as affordability of replacement equipment; and access to financing and energy efficient equipment. Together, these barriers lead to real or perceived transaction costs that discourage DSM investment even when it is-cost effective to do so. Barriers-such as lack of sufficient financial incentives because of deregulation and 48 Electric motors (industrial, commercial and appliances) alone represent 60 to 80 percent of all electricity demand in societies- for example, 65 percent in the United States and 80 percent in Pakistan. 49 Haryana State Power Sector Reform Project. Agricultural Pumpset DSM Program Cost/Benefit Study. World Bank, Washington, 1999. Appendix 2: Global Options Portfolio 245 restructuring; hidden subsidies for other options; and lack of expertise and infrastructure to deliver DSM programs-can also prevent electrical utilities from undertaking DSM programs. Supply-Side Efficiency-Grid Options A.2.82 Governments generally recognize the need for supply-side efficiency in the power sector to reduce the requirements for new electricity generation capacity and, in countries with power deficits, the economic losses associated with load shedding. Supply-side efficiency approaches include the rehabilitation and modernization of older inefficient power plants, expansion of capacity at existing power stations when feasible, loss reduction in transmission as technology evolves (particularly in the EHV areas), and relief of overburdened distribution systems. A.2.83 Transmission losses can be as high as 35 to 40 percent in some countries. In some states in India, for example, 35 percent of electricity generated is lost in the transmission and distribution system before reaching the consumer. It is considered feasible to reduce these losses through technical solutions to around 15 percent. Where revenue collection systems have broken down, the losses can be even higher because of illegal connections. Consequently, making existing transmission and distribution systems work more efficiently can often be a cheaper supply-side option than developing new sources of electricity. New Supply Options-Grid and Decentralized Systems A.2.84 Coal, oil, natural gas, nuclear, biomass, wind, solar, geothermal, hydropower, and ocean energy sources can all be used as the source for electricity generation for distribution via grids. Numerous technical criteria influence the choice of source, including the specific role of the source in the electrical supply system (peak, base, reserve, or intermittent supply). Other considerations include the comparative cost, reliability, flexibility, efficiency, and availability of the source, as well as the experience and familiarity of the utility with the technology and its ability to meet environmental and social regulations. A.2.85 Renewable options (hydropower, geothermal, photovoltaic, solar thermal, and wind power) provide a spectrum of duties in power generation. Geothermal plants operate in a similar way to conventional steam generators (that is, they meet base- and intermediate-load needs). Because of their intermittent nature, the other options (PV solar, thermal, and wind) are suitable for fuel displacement; they do not by themselves provide firm capacity. Consequently, renewable options need to be operated as part of hybrid systems, with other sources of generation (using fossil fuels or hydro) to provide firm capacity. A.2.86 The options for distributed systems (not connected to a grid) include cogeneration systems, fuel cells, biofuels and waste incineration generation, on-site thermal, solar, wind, and energy storage systems. Small-scale wind turbines, solar- electric roofing tiles, and hydrogen fuel cells are also suitable, and micro turbines for gas 246 Stakeholder Involvement in Options Assessment and bio-fuelled generation are advancing rapidly. Over time, renewable resources (solar, wind, micro hydro, and others) are expected to gain prominence in decentralized systems. Rural Electrification-Technology Options A.2.87 Rural electrification technology systems can also be centralized or decentralized. Centralized options are connected to the national grid, while decentralized or off-grid systems have their own power source, such as diesel generating sets, small steam-turbines (biomass), micro-hydro units, windmills coupled to generators, modified engines using biogas, or gasohol-type biofuels coupled with generators and photovoltaic systems. The development of decentralized grid systems requires setting up local generation capacity and the permanent presence of operating and maintenance staff at the plant. The cost of investment per connected household and the annual cost of operation and maintenance are therefore usually higher than for grid extension projects. A.2.88 In rural settings, decentralized options can expand services in the short- term to medium-term, in anticipation of the central electricity grid being connected into the area. The availability of decentralized alternatives in the rural setting (both conventional and renewable power technologies) means that people can obtain electricity more quickly than if they wait for extensions of the electricity grid. ,& ppendix3 Sample Terms of Reference for a Strategic Options Assessment Exercise The following is a generic terms of reference for an options assessment exercise to inform strategic decisionmaking in energy and water resources development. A process manager would typically be responsible for the exercise. This responsibility would include assembling the stakeholder groups, seconding staff or hiring and appointing consultants and defining sub-tasks, and managing internal and external communication processes. An independent institution or consultant may be contracted for some aspects of this role, but the overall exercise remains under the direction and responsibility of the process manager. This mandate is overseen by a sector sponsoring organization. These Terms of Reference are written as a contract between the sponsoring organization and the process manager. Where the options assessment exercise is part of the preparation process of programs and projects that are likely to draw on World Bank funding, these terms of reference may form part of the agreed documents between the World Bank and the client country. This ToR is also the basis for development of separate terms of reference for organizations responsible for specific aspects of the options assessment exercise. Notes in brackets are items to be filled in by a process manager. Background A.3.1 In its Country Development Framework, the government seeks to promote sustainable water management practices and improve efficiencies and capacities to meet current and future needs for water and electricity services. The Country Development Framework calls for a broad-based program of collaborative action to improve the enabling environment for investment; to enhance public, private sector, and local capacity; to improve equity in access to services; and to increase the diversity and quality of options available for public and private investment in the sector. The Country Development Framework seeks to develop integrated water resources management, based on coordinated actions in flood management, power generation, irrigation and drainage, and watershed management. 247 248 Stakeholder Involvement in Options Assessment A.3.2 The government now seeks to define strategic programs of immediate, short- and medium-term actions, while at the same time being responsive to specific immediate development needs in the country. A.3.3 Expanding the portfolio of high-quality options to meet current and future needs for water and energy services is a key element of the strategy. To better inform decisionmaking processes on such water development strategies, the concerned ministry intends to identify, evaluate, and rank options through a participatory process that involves key stakeholders at local and national levels. This exercise would recommend the best options to meet the expected water and energy demand taking into account economic, technical, environmental, and social considerations and the views and concerns of the stakeholders. This will assist the government in determining national water development policies, strategies, and investment priorities that reflect consensus among concerned stakeholders. A.3.4 Developing the water resource potential of the country raises a number of issues, including potential controversies over future policies and projects, the competitiveness of alternatives, and getting the most from the management of existing infrastructure, institutional arrangements, and modes of public and private sector service delivery. Undertaking a comprehensive options assessment-using participatory approaches at the early stages of strategic planning and project identification-can improve development outcomes and public acceptance. Drawing on a wider and more diverse range of options can lead to a lesser overall cost for new developments, improved access to project financing and reduced risks and environmental impacts. In addition, it provides an opportunity to assess water resource development programs in relation to other sector development policies and initiatives. A.3.5 Given the significant benefits that are expected from placing the comprehensive assessment of options by stakeholders at an early stage in planning processes, the present exercise is not only aimed at options identification, but also at putting in place a new planning and information system to facilitate continuous cycles of planning. The intention is that in future, government decisionmaking on options for water development is systematically informed by a structured and interactive process of options assessment that reflects the concerns and views of key stakeholders. [Insert context (i.e. basin or sector) specific information] A.3.6 The options assessment would consider a full range of policy, institutional, and technical options for demand-side management and supply development, including opportunities to improve the efficiency and performance of existing supply and delivery systems. The identification of the inventory of options and the criteria applied at each step in the process would be developed in consultation with the stakeholders. The exercise will build on current plans and information on options available with the ministry's planning department. A multi-disciplinary study team drawing from government and nongovernment organizations and the consulting community will be established to prepare and implement a communications strategy for the exercise, as well Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise 249 as to carry out the necessary fieldwork, surveys, options evaluation, analysis, and report preparation. A.3.7 The government intends to seek World Bank assistance both during the options assessment exercise. In view of this intended collaboration, the options assessment exercise should take into consideration the relevant World Bank operational directives and safeguard policies. Objectives A.3.8 The Strategic Options Assessment Exercise will provide the government with sectoral water development strategies within its national objectives, informed by stakeholder perspectives on priority needs and the range of options most suitable to promote sustainable water management practices. Outputs A.3.9 The results of the Strategic Options Assessment Exercise are: A preferred development plan-consisting of a combination of policy measures, demand and supply options, and infrastructure development and management activities-recommended for further study and development by an advisory group representing wide stakeholder interests. This includes descriptions of the options contained within the plan, as well as of the views expressed by the stakeholders about the included options. * A quality portfolio of pipeline projects for private and public sector development, including profiles of options and actions to further prepare these options for consideration in further rounds of planning. * A description of the approach to be used in future rounds of strategic planning, including recommendations for developing capacity and other measures aimed at institutionalizing early and comprehensive options assessment and stakeholder involvement. Scope Of Work A.3.10 To achieve these objectives, the work is divided into four main areas: 1. Preparing a stakeholder analysis and a communications plan to identify the relevant stakeholders and to guide interaction with them during the strategic options assessment exercise through appropriate mechanisms. a. Consulting with key representatives of stakeholder interests and working with a professional communication planner, prepare a stakeholder analysis and a draft communication plan. Seek approval from the sponsoring organization to 250 Stakeholder Involvement in Options Assessment establish an advisory group reflecting the stakeholder community. Appoint or hire a study team manager and finalize the communication plan in consultation with the advisory group. b. Assemble the study team and the stakeholder forum. c. Undertake an initial round of communications with the study team and the advisory group to inform them of the exercise, timeframes, scope and objectives, and means of input and interaction with stakeholders as identified in the communications plan. A further discussion of the composition of the advisory group, forum, and study team is provided in Attachment 1, while further details on stakeholder analysis and a communications plan are provided in Attachment 2. 2. Conduct a systematic step-wise evaluation leading to a recommended set of options employing a process similar to that indicated below. The steps would be refined and modified by the study team, with the advisory group providing overall direction. a. Goals and needs assessment * Preparing a needs assessment, identifying target beneficiaries, timeframes, and service levels to be achieved * Clarifying the scope and boundaries of the options assessment exercise in terms of the type of options included or excluded * Obtaining agreement on the needs and goals from the advisory group * Specifying different future scenarios with corresponding needs and goals (e.g. economic conditions, demand and service levels, hydrological conditions). b. Criteria and performance measures * Based on the above goals and needs, defining criteria or performance indicators for the identification and evaluation of options and their inclusion in the preferred plan * Specifying the option sets to be used for screening and ranking Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise 251 * Defining the criteria for evaluating alternative plans for scenarios identified in step a * Confirming the same with the advisory group. c. Assembly of options inventory * Collecting options put forward from existing planning portfolios * Collecting options forwarded by stakeholders and by members of the advisory group * Identifying any additional options that are relevant to the scope of the exercise * Preparing profiles for each option based on the criteria and performance indicators. d. Screening and ranking of options * Using a screening and ranking approach, eliminate unfavorable options, identify options that should undergo further study, and prioritize options for inclusion in alternative development plans * Undertake additional field survey, investigations, data collection and analysis as required to ensure options are well described * Confirm the outcomes of the screening and ranking at intermediate and final stages with the advisory group * Document the outcomes for all options indicating the reasons why some are included and some are excluded. e. Preparation of alternative development plans * Develop alternative packages of complementary options that respond to the needs and scenarios identified in step a * Examine alternative development plans through analysis of their effects against the criteria defined in step b with the advisory group. f. Recommendation of a preferred plan and options * Select a preferred development plan, with corresponding options with the advisory group 252 Stakeholder Involvement in Options Assessment * Describe the degree of acceptance of this development plan and its constituent options * Document advisory group member and stakeholder group views on the preferred plan and supporting recommendations, including the degree of endorsement. 3. With approval from the sponsoring agency, communicate planning and (interim) outcomes of the options assessment exercise to stakeholders and the general public in a way that optimizes their involvement in the exercise. a. Prepare reports and briefings at each step in the process b. Prepare tailor-made messages for different audiences at different stages in the exercise, including clear instructions for how they can contribute to the ongoing process (e.g. public notice in media, letters, and briefings to key stakeholder interests) c. Ensure access to the documentation of the exercise through appropriate public disclosure (web-based but also using information centers) d. Document all steps in the options assessment exercise for use in later rounds of strategic planning e. Prepare a final report that reflects both the approach followed as well as the outcomes of the process duly qualified by different stakeholder views f. Incorporate and document written public comment and reactions from stakeholders on any material or reports produced g. [If appropriate, incorporate public consultation meetings at key stages of the exercises and obtain public comment on the alternative development plans]. 4. Develop data and information for future cycles and updates of the options assessment exercise and transfer these to the planning unit of the sponsoring organization. a. Prepare a recommended plan for future rounds of strategic options assessment b. Prepare a database of the options that have been reviewed and transfer the same to the planning unit Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise 253 c. Document the methodologies used for screening and ranking d. Involve key staff of the planning unit in all stages of the options assessment exercise. Special care should be taken in respect to [include the specific concerns relevant to the exercise, e.g. environment criteria should take account of the cumulative environmental impacts of options and national environment standards. The period for public review and input should reflect notice periods for public consultation as specified in national EIA regulations. The stakeholder involvement will give voice to the minority groups likely to be affected by intended developments]. Role A.3. 11 The process manager is responsible for ensuring process efficiency of the options assessment exercise. The manager does so by allocating appropriate resources and time, and by providing the study team, the advisory group, and stakeholders with access to information. A.3.12 Management decisions by the process manager are informed by regular reporting throughout the options exercise. Reporting is described in the next section. Reporting A.3.13 During the exercise, a number of interim reports will be produced. Specific reports and materials are also required for discussion and presentation in advisory group meetings, stakeholder forum meetings, workshops and public consultations meetings, and for the management of the sponsoring agency. A.3.14 A series of interim outputs will be produced for review at key decision points, leading to a final report providing recommendations on the preferred development strategy. A.3.15 The interim outputs would include reports and appropriate documentation of: * The stakeholder analysis and communication plan * The needs assessment (or confirmation of existing demand) * The list of criteria and procedures for evaluating individual options * The options inventory, including options profiles * The screening and ranking of options * The method and results of comparative analysis of options * The reaction from stakeholders at the public at each stage in the process 254 Stakeholder Involvement in Options Assessment * Reports on advisory group and forum meetings, and public consultations. A.3.16 The final report should include: * An executive summary * An explanation of the methodology * A summary of the comparative analysis of options * Recommendations on preferred options and plan * Conclusions and recommendations for future rounds of planning * Stakeholder and public reactions. A.3.17 The final report should contain the views expressed by the participants on the recommended options. The process manager and study task leader (or members of the study team as required) will present the interim and final reports to the forum and in public consultations meetings as specified by the communications plan. Timeframe A.3.18 The exercise will deliver its work according to the following timetable [context specific]: Month 1: Prepare the stakeholder analysis and draft communication plan Month 2: Establish stakeholder groups Month 4: Assemble and finalize the options inventory Month 7: Evaluate the options Month 10: Prepare and evaluate the alternative development plans Month 12: Present the final report recommendations Month 14: Transfer resources to the sponsoring agency (additional training if required). A.3.19 The above timeframe would incorporate features (and be adjusted as required) to provide for the necessary public notice and time period for receipt of comment as specified in national EA regulations or EIAs (or equivalent). Attachment 1: Advisory Group, Stakeholder Forum, and Study Team Composition and Functions A.3.20 To carry out the exercise, an advisory group, stakeholder forum (optional), and a study team will be formed under the guidance of the process manager. Advisory Group A.3.21 A small group of stakeholder representatives will be formed and be involved in each stage of the options exercise, including needs definition, criteria formulation, options identification, and the evaluation and selection process. The Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise 255 advisory group is formed early in the process and meets regularly as required to participate meaningfully in each step of the exercise. A.3.22 Advisory group participants would be identified and selected by the process manager based on the stakeholder analysis report. The mix of participants should be a fair reflection of the total stakeholder community, including those often excluded from such exercises and who may be partners in development. The number of participants should be limited to 10-15 members to allow effective group interaction. Working groups may be formed that also include outside participants, but the main advisory group has a continuous membership with no substitutions unless agreed to by other participants. A.3.23 Participation on the advisory group would include but not be limited to: * Representatives of parties interested in or affected by the possible outcomes of the options exercise * Representatives of government departments and agencies * Representatives of nongovemment organizations and civil society * Private sector interests. A.3.24 The participants are formally invited and are responsible to consult their constituencies and to represent those interests. Stakeholder Forum A.3.25 A wider forum representing interested and affected parties acts at key decision moments as a sounding board for both the process manager and the advisory group. The forum would have a broad representation, including: * Government officials * Nongovernment organizations and civil society groups * Private sector representatives * Media * Research and academic institutions * Leaders in business and finance * The general public. Study Team A.3.26 A multi-disciplinary team of professionals appointed or engaged by the process manager serves either on a full or part-time basis. Staff may be seconded from the government departments or nongovemment organizations, and may include independent consultants as staff or on subcontracts for specific tasks. A study team leader 256 Stakeholder Involvement in Options Assessment (or manager) would be appointed. He or she is involved at an early stage and works closely with the process manager and advisory group to assemble the study team. A.3.27 The study team would minimally be responsible for: * Assemble the options inventory and prepare profiles of options * Propose to the advisory group criteria to be used in different stages in the screening and ranking process * Undertake any necessary site investigations and surveys * Prepare comparative analysis and evaluations of options * Prepare and evaluate alternative development plans incorporating ranked options and any scenario analysis * Prepare analysis and briefings for the advisory group deliberations * Develop and disseminate information packages to wider stakeholder interests and the public, as set out in the communications plan. A.3.28 A communications advisor would be part of the study team (or be sub- contracted) and would support the process manager and study team leader by preparing the stakeholder analysis and the communication plan early in the exercise, as outlined in Attachment 2. A.3.29 Based on the recommendations contained in the communication plan and based on the views of the advisory group, an independent facilitator may be engaged to assist the interactions of the advisory group and facilitate interactions between the advisory group and the study team. The responsibility of the independent facilitator is to enhance the quality of the interactive process in the advisory group. His/her role and function would be determined in the communications plan and include consideration of: * Team building in the advisory group * Facilitating group interaction and ensuring views of all stakeholders are heard * Introducing techniques that help move from polarized positions toward common interests and needs * Resolving conflicts within the advisory group * Applying participatory techniques for identification of options and criteria, for the identification of preferred options, and for the formulation of a preferred plan with sufficient and qualified consensus. Appendix 3: Sample Terms of Reference for a Strategic Options Assessment Exercise 257 Attachment 2: Stakeholder Analysis and Communication Plan A.3.30 Public and stakeholder communication about the options assessment exercise-and information exchange between the key actors-will be guided by a communications plan. A communications expert will be engaged for the plan formulation and preferably also for its implementation. Formulation of the communications plan should be based on a stakeholder analysis. A.3.31 The stakeholder analysis is a four-step process, including (1) identifying key stakeholders; (2) assessing stakeholder interests in the exercise; (3) assessing stakeholder influence and importance to a successful outcome of the exercise; and (4) outlining a stakeholder communication strategy. The first three steps would make use of the 3-R framework (Chapter 4) of identifying rights, risks, and responsibilities. A.3.32 Based on the results of the stakeholder analysis, a communication plan for all stages of the exercise will be developed. This will cover the interactions between those participating directly in the exercise, organizations active in the sector (public agencies, nongovernment and civil society organizations, private sector organizations and media), and necessary public consultations. The process manager and the advisory group will approve the final version. A.3.33 The aims of the stakeholder analysis and communication plan are to: * Identify all relevant stakeholders * Define appropriate mechanisms to involve different categories of stakeholders from early stages of the process up to its closure * Define techniques for interaction with different stakeholder categories (appropriate to the stakeholders concerned) * Include mechanisms and techniques that enable poor and marginal stakeholders to participate on an equal footing. A.3.34 The communications plan will assist the process manager and at minimum identify and recommend: * Stakeholder involvement mechanisms: advisory group, stakeholder forum, wider public * Draft proposals for consultation and interaction rules in the advisory group and the stakeholder forum for confirmation by the same * The contents, form, and frequency of information messages * Effective techniques for interaction with stakeholder groups, including methods to solicit stakeholder inputs * A strategy on how to deal with media support for the exercise. 258 Stakeholder Involvement in Options Assessment A.3.35 The information messages will include explaining the rationale for the options assessment exercise, its role in informing decisions, and the road map of the decisionmaking process. The criteria for options assessment and the reasons for inclusion and exclusion of options will also be communicated. .A ppendix4 Further References and Resources A.4.1 This appendix lists a number of information sources that provide in-depth information on evolving practices in options assessment and stakeholder involvement. On Dams and Development A.4.2 There are hundreds of reports and publications on dams in the context of water and energy resource development. Some of the principal reports are: World Commission on Dams (2000), Dams and Development: A New Framework for Decision-Making, Earthscan, London. This is the final report of the Word Commission on Dams (1998-2000). It provides the most comprehensive compilation of information on dams and development. It calls for action to establish a new and more participatory framework for decision-making, which takes into consideration all available options for water and energy services development. This publication and a compilation of reports made for the WCD are available on CD-ROM, and can be downloaded from www.dams.org and www.unep-dams.org. World Wildlife Fund, 2000, A Place for Dams in the 21st Century, International Discussion Paper, web published. The main objective of this Discussion Paper is to provide up-to-date, accurate information to begin a constructive debate within WWF. It starts with the fundamental assumption that dams damage the environment, contribute to the loss of biodiversity and disrupt human settlements. A conscious effort is made to explore new dimensions and directions. The report can be downloaded from: http://www.panda.org/downloads/freshwater/Damsrep.doc World Wildlife Fund, 2003, An Investors Guide to Dams, DamRight! WWF's Dams Initiative, Gland, 2003. Provides a review of the risks to investors involved in the development of dams and urges caution in making the decision to finance a dam. Download available through http://www.panda.orgldownloads/freshwater/investorsguidedams.pdf IUCN - World Conservation Union, 1997, Large Dams: Learning from the Past, Looking to the Future. 259 260 Stakeholder Involvement in Options Assessment In April 1997, IUCN and the World Bank Group jointly hosted a two-day workshop in Gland, Switzerland to discuss the findings of an internal World Bank review of 50 large dams. The workshop broke new ground by setting in motion a process to establish the World Commission on Dams. The proceedings contain a series of overview papers commissioned for the workshop on four key topics: engineering and economics, social and stakeholder issues, environmental sustainability, and future challenges facing the hydro industry. On World Bank Group Policies, Strategies, and Sourcebooks A.4.3 The World Bank has produced a number of publications that are relevant to the topic of this sourcebook. Relevant publications include: World Bank, 2001, Consultations with Civil Society Organizations: A Sourcebook, Washington. Since the early 1990s much progress has been made in consulting with civil society organizations (CSOs) in Bank projects and policy work. The primary objective of consultations is to improve the quality of decisions by capturing the experience of specialized non governmental agencies, by tapping the knowledge of CSOs that work at the community level, by giving voice to the poor by consulting with CSOs whose membership comprise poor people, and by giving sustainability for proposed reforms beyond any one government administration. Civil society consultation is a complex process that the Bank and client governments must handle sensitively. These guidelines reflect the advice and good practices distilled from experience. World Bank, 2002, Public Communication Programs for Privatization Projects-A Toolkit for World Bank Task Team Leaders and Clients, Washington. Public communications programs are needed to promote long-term changes in social and political behaviors. A communications strategy is based on a stakeholder analysis, a scan of available information channels and a clear program design. A communication strategy is designed using a five-part management decision tool. The document also includes Terms of references for the various stages of a communications strategy. World Bank, 1991, Environmental Assessment Sourcebook: Volume 1: Policies, Procedures, and Cross-Sectoral Issues, Washington. World Bank, 1991, Environmental Assessment Sourcebook: Volume 2: Sectoral Guidelines, Washington. World Bank, 1991, Environmental Assessment Sourcebook: Volume 3: Guidelines for Environmental Assessment of Energy and Industry Projects, Washington. The sourcebook is designed to assist all those involved in environmental assessment (EA). This sourcebook provides assistance for discussions of fundamental environmental considerations with borrowing countries; summaries of relevant Bank policies; and analyses of other topics that affect project Appendix 4: Further References and Resuorces 261 implementation. The sourcebook focuses on those operations with major potential for negative environmental impact, such as new infrastructure, dams and highways. World Bank, 2002, Public Consultation in Environmental Assessments 1997-2000: findings from the Third Environmental Assessment Review, Washington Public consultations have increasingly become a standard part of the environmental assessment process in Bank operations. However, the current challenge for Bank operations focuses on the quality of public consultations and the extent to which they influence project design and affect project impact. In an attempt to evaluate how projects were meeting this challenge, the Third Review assessed whether qualitative and quantitative improvements in EA public consultations had taken place for Category A and B Bank-financed projects. IFC, 2000, Investing in People: Sustaining Communities through Improved Business Practice-A Community Development Resource Guide for Companies, Washington. The International Finance Corporation (IFC) has prepared this Community Development Resource Guide, which provides concrete examples where corporations have dealt with complex environmental and social impacts in an innovative and successful manner. World Bank 2001, Making Sustainable Commitments: An Environment Strategy for the World Bank, Washington. The Strategy aims at improving the quality of life, improving the quality of growth and protecting the quality of regional and global commons. It is directed at mainstreaming environmental considerations in decision-making, from the early stages onward. The Strategy proposes a number of actions: Strengthening analytical and advisory activities - in order to ensure that environmental considerations enter 'upstream' in planning processes, country level environmental analyses and strategic environmental assessments are proposed. These help define policy priorities, reflecting environmental concerns, early- on in planning processes * Addressing environmental priorities through projects and programs-by better planning and monitoring, both of investments and of policy reforms. * Improving the safeguard system - to ensure that bank funded projects and programs meet minimum standards. This calls for moving safeguard policies upstream in World Bank procedures. World Bank 2003, The World Bank Water Resources Sector Strategy, Washington. Water resources management and development is central to sustainable growth and poverty reduction and therefore of central importance to the mission of the World Bank. Most developing countries need to be active in both management 262 Stakeholder Involvement in Options Assessment and development of water resources infrastructure. The strategy argues that the World Bank has a role to play in the development of high-risk/high-returns infrastructure (such as major dams) and that the Bank should not shy away from this role because of the complexity of decision-making for major infrastructure. The World Bank is perceived by many to have a major comparative advantage in the water sector. There is, accordingly, a strong demand for World Bank services, and a strong demand that the World Bank engage. However, involvement in water resources infrastructure must be undertaken in a highly professional way, including full consultation and assessment of all options. World Bank, 1996, The World Bank Participation Sourcebook, Washington This sourcebook summarizes Bank experience in participatory approaches to decision making. Chapter 1 brings together key themes and common elements on participation. Chapter 2 contains examples of how World Bank staff used, or helped others use, participatory approaches in Bank-supported operations. Chapter 3 guides the reader through the various steps of participatory planning and decisionmaking. Chapter 4 presents the experience of Bank staff and their government counterparts, and shares approaches to strengthening the financial and organizational capacities of the poor. It also discusses ways of creating an enabling environment for the participation of all stakeholders, including the poor. A.4.4 Most of these documents can be accessed in PDF format through the World Bank's web-site or from the World Bank's 'Info Shop' at http://publications.worldbank.orglecommerce/. On Organizations Concerned with Dams, Options Assessment and Stakeholder Involvement A.4.5 The following are examples of international organizations involved in the debate on options assessment and stakeholder involvement for water and energy development, including large dams. Entries are placed in alphabetical order. Name, Description, Web Address Dams and Development Project (DDP) DDP's goal is to promote a dialogue on improving decision-making, planning and management of dams and their alternatives based on the World Commission on Dams (WCD) core values and strategic priorities. The objectives are to: * Support country-level, regional and global dialogues on the WCD report and the issues it addresses with the aim of engaging all stakeholders with emphasis on those not currently involved; * Strengthen interaction and networking among participants in the dams debate; Appendix 4: Further References and Resuorces 263 * Support the widespread dissemination of the WCD report and the report of the Third WCD Forum, and make available other stakeholders'responses; and * Facilitate the flow of information and advice concerning initiatives relevant to dams and development. http://www.unep-dams.org Global Water Partnership (GWP) The mission of the Global Water Partnership is to support countries in the sustainable management of their water resources. The Global Water Partnership is a working partnership among all those involved in water management and committed to the Dublin-Rio principles. It provides a constant stream of information, toolkits and resources on the latest practices and experience in IWRM around the world including on options assessment and stakeholder questions. http://www.gwpforum.orglservlet/PSP International Association for Impact Assessment (IAL4) IAIA is a forum for advancing innovation, development and communication of best practice in impact assessment. Its international membership promotes development of local and global capacity for the application of environmental assessment in which sound science and full public participation provide a foundation for equitable and sustainable development. http://www.iaia.org International Commission on Irrigation and Drainage (ICID The Commission is dedicated to enhancing the worldwide supply of food and fiber for all people by improving water and land management and the productivity of irrigated and drained lands through appropriate management of water, environment and application of irrigation, drainage and flood management techniques. ICID provides a range of research and case studies on options and methods for irrigation water supply and efficiency improvement in developing countries. http://www.icid.orgl International Commission on Large Dams (ICOLD) Provides a range of up-to-date technical guidelines, research, case studies and advice on development of dam options around the world. In the options assessment area it reports on recent policy dialogue (in relation to dams) and advances in assessment methodologies and practices that apply to all stages of the life cycle of dams. http://www.icold-cigb.org International Energy Agency (IEA) The IEA is the energy forum for 26 Member countries. IEA Member governments are committed to taking joint measures to meet oil supply emergencies. They have also agreed to share energy information, to co-ordinate their energy policies and to co-operate in the development of rational energy programs. http://www.iea.org 264 Stakeholder Involvement in Options Assessment International Hydropower Association (IHA) The IHA tackles technical, social, environmental, economic, financial and administrative aspects of hydropower development and operation. Its mission is to assess and promote good practice within its membership, and to increase general awareness of the integrated role of hydropower in the sustainable supply of water and electricity. http://www.hydropower.org IUCN-The World Conservation Union The IUCN wants to influence, encourage and assist societies throughout the world conserve the integrity and diversity of nature and to ensure that any use of natural resources is equitable and ecologically sustainable. The IUCN focuses in particular on species and biodiversity conservation and the management of habitats and natural resources. http://www.iucn.org World Wildlife Fund (WWF) International WWF is believes there are often alternative better solutions than large dams that extend power and water services to the poor. WWF's Dams Initiative (DamRight!) is challenging financial institutions to ensure, post WCD, that investment in dams and other large infrastructure projects become more financially viable, as well as environmentally responsible and socially sustainable. General: http://www.wwf.org. DamRight! (WWF's Dams' Initiative): http://www.panda.orgldams A ppendix 5 Bibliography Chapter 1 Intergovernmental Panel on Climate Change (IPCC). 2001. Climate Change: Impacts, Adaptation and Vulnerability, Edited by James J. McCarthy, Osvaldo F. Canziani, Neil A. Leary, David J. Dokken and Kasey S. White, Available on line at http://www.ipcc.ch/index.html. Raskin, P., G. Gallapin, P. Gutman, A. Hammond, R. Swart. 1998. Bending the Curve: Towards Global Sustainability. Stockholm: Stockholm Environment Institute, quoted in World Commission on Dams. 2000. United Nations. 2000. World Energy Assessment. New York: United Nations. World Bank. 2003. World Development Indicators. Available online at www.worldbank.org/data/onlinedatabases/onlinedatabases. World Bank. 2001. Energy Business Renewal Strategy. Washington: World Bank. World Commission on Dams. 2000. Dams and Development: A New Framework for Decision-Making. London: Earthscan. Chapter 2 Essay 1: References Arnstein, S.R. 1969. "A Ladder of Citizen Participation." American Institute of Planners Journal, 35: 216-224. Lawrence, R., S. Daniels, and G. Stankey. 1997. "Procedural Justice and Public Involvement in Natural Resource Decision-Making." Society and Natural Resources, 10: 577-589. McCreddin, J., G. Syme, B. Nancarrow, and D. George. 1996. Developing Fair and Equitable Land and Water Allocation in Near Urban Locations: Principles, Processes and Decision-making. Perth: CSIRO, Division of Water Resources, Consultancy Report 96/60. 265 266 Stakeholder Involvement in Options Assessment Nancarrow, B. and G. Syme. 2001. "Challenges in implementing justice research in the allocation of natural resources." Social Justice Research, 14, 441-452. Rasinski, K. 1987. "What's fair or is it? Values differences underlying public views about social justice." Journal of Personality and Social Psychology, 53: 201-211. Royal Government of Bhutan, 1995. Community Irrigation training Project, Irrigation Section, Impact of the National Irrigation Policy on Maintenance of Irrigation Canals in Trashigang District. Royal Government of Bhutan. Thimphu: November 1995. Smith, P. and M. McDonough. 2001. "Beyond public participation: Fairness in natural resource decision-making." Society and Natural Resources, 14: 239-249. Syme, G. and D. Fenton. 1993. "Perceptions of equity and procedural preferences for water allocation decisions." Society and Natural Resources, 6: 347-360. Syme, G. and B. Nancarrow. 2002. "Evaluation of Public Involvement Programs: Measuring Justice and Process Criteria." Water, 29: 18-24. Syme,G., B. Nancarrow, and J. McCreddin. 1999. "Defining the components of fairness in the allocation of water to environmental and human uses." Journal of Environmental Management, 57: 51-70. Tyler, T. and S. Blader. 2000. Cooperation in Groups: Procedural Justice, Social Identity, and Behavioural Engagement. Philadelphia: Psychology Press. Wenz, P. 1988. Environmental Justice. Albany: State University of New York Press. Essay 2: References Bacon, E., J. Besant-Jones, and J. Heidarian. 1996. Estimating Construction Costs and Schedules: Experience with Power Generation Projects in Developing Countries. World Bank Technical Paper 325, Energy Series. Washington, DC: World Bank. Mitchell, Robert Cameron and Richard T Carson. 1989. Using Surveys to Value Public Goods: The Contingent Valuation Method. Washington, DC: Resources for the Future. Squire, L. and H. van der Tak. 1975. Economic Analysis of Projects. Washington, DC: World Bank. Trembath., B. 2001. Sharing of Benefits and Rents Arising from Hydropower Plants. Washington, DC: World Bank. Chapter 3 World Bank, 2002. The Third Environmental Assessment Review. Washington: World Bank. Appendix 1 Case Study 6 Appendix 4: Further References and Resuorces 267 World Commission on Dams, WCD Case Study of the Kariba Dam - Zambia and Zimbabwe, Final Report, November 2000. I Joint UNDP/World Bank ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) LIST OF REPORTS ON COMPLETED ACTIVITIES Region/Country Activity/Report Title Date Number SUB-SAHARAN AFRICA (AFR) Africa Regional Anglophone Africa Household Energy Workshop (English) 07/88 085/88 Regional Power Seminar on Reducing Electric Power System Losses in Africa (English) 08/88 087/88 Institutional Evaluation of EGL (English) 02/89 098/89 Biomass Mapping Regional Workshops (English) 05/89 -- Francophone Household Energy Workshop (French) 08/89 -- Interafrican Electrical Engineering College: Proposals for Short- and Long-Term Development (English) 03/90 112/90 Biomass Assessment and Mapping (English) 03/90 -- Symiposium on Power Sector Reform and Efficiency Imnprovement in Sub-Saharan Africa (English) 06/96 182/96 Commercialization of Marginal Gas Fields (English) 12/97 201/97 Conmuercilizing Natural Gas: Lessons from the Seminar in Nairobi for Sub-Saharan Africa and Beyond 01/00 225/00 Africa Gas Initiative - Main Report: Volume I 02/01 240/01 First World Bank Workshop on the Petroleum Products Sector in Sub-Saharan Africa 09/01 245/01 Ministerial Workshop on Women in Energy 10/01 250/01 Angola Energy Assessment (English and Portuguese) 05/89 4708-ANG Power Rehabilitation and Technical Assistance (English) 10/91 142/91 Africa Gas Initiative - Angola: Volume II 02/01 240/01 Benin Energy Assessment (English and French) 06/85 5222-BEN Botswana Energy Assessment (English) 09/84 4998-BT Pump Electrification Prefeasibility Study (English) 01/86 047/86 Review of Electricity Service Connection Policy (English) 07/87 071/87 Tuli Block Farms Electrification Study (English) 07/87 072/87 Household Energy Issues Study (English) 02/88 -- Urban Household Energy Strategy Study (English) 05/91 132/91 Burkina Faso Energy Assessment (English and French) 01/86 5730-BUJR Technical Assistance Program (English) 03/86 052/86 Urban Household Energy Strategy Study (English and French) 06/91 134/91 Burundi Energy Assessment (English) 06/82 3778-BU Petroleum Supply Management (English) 01/84 012/84 Status Report (English and French) 02/84 011/84 Presentation of Energy Projects for the Fourth Five-Year Plan (1983-1987) (English and French) 05/85 036/85 Improved Charcoal Cookstove Strategy (English and French) 09/85 042/85 Peat Utilization Project (English) 11/85 046/85 Energy Assessment (English and French) 01/92 9215-BU Cameroon Africa Gas Initiative - Cameroon: Volume III 02/01 240/01 Cape Verde Energy Assessment (English and Portuguese) 08/84 5073-CV Household Energy Strategy Study (English) 02/90 110/90 Central African Republic Energy Assessement (French) 08/92 9898-CAR Chad Elements of Strategy for Urban Household Energy The Case of N'djamena (French) 12/93 160/94 Region/Country Activity/Report Title Date Number Comoros Energy Assessment (English and French) 01/88 7104-COM In Search of Better Ways to Develop Solar Markets: The Case of Comoros 05/00 230/00 Congo Energy Assessment (English) 01/88 6420-COB Power Development Plan (English and French) 03/90 106/90 Africa Gas Initiative - Congo: Volume IV 02/01 240/01 C6te d'Ivoire Energy Assessment (English and French) 04/85 5250-IVC Improved Biomass Utilization (English and French) 04/87 069/87 Power System Efficiency Study (English) 12/87 -- Power Sector Efficiency Study (French) 02/92 140/91 Project of Energy Efficiency in Buildings (English) 09/95 175/95 Africa Gas Initiative - C6te d'Ivoire: Volume V 02/01 240/01 Ethiopia Energy Assessment (English) 07/84 4741-ET Power System Efficiency Study (English) 10/85 045/85 Agricultural Residue Briquetting Pilot Project (English) 12/86 062/86 Bagasse Study (English) 12/86 063/86 Cooking Efficiency Project (English) 12/87 -- Energy Assessment (English) 02/96 179/96 Gabon Energy Assessment (English) 07/88 6915-GA Africa Gas Initiative - Gabon: Volume VI 02/01 240/01 The Gambia Energy Assessment (English) 11/83 4743-GM Solar Water Heating Retrofit Project (English) 02/85 030/85 Solar Photovoltaic Applications (English) 03/85 032/85 Petroleum Supply Management Assistance (English) 04/85 035/85 Ghana Energy Assessment (English) 11/86 6234-GH Energy Rationalization in the Industrial Sector (English) 06/88 084/88 Sawmill Residues Utilization Study (English) 11/88 074/87 Industrial Energy Efficiency (English) 11/92 148/92 Guinea Energy Assessment (English) 11/86 6137-GUI Household Energy Strategy (English and French) 01/94 163/94 Guinea-Bissau Energy Assessment (English and Portuguese) 08/84 5083-GUB Recommended Technical Assistance Projects (English & Portuguese) 04/85 033/85 Management Options for the Electric Power and Water Supply Subsectors (English) 02/90 100/90 Power and Water Institutional Restructuring (French) 04/91 118/91 Kenya Energy Assessment (English) 05/82 3800-KE Power System Efficiency Study (English) 03/84 014/84 Status Report (English) 05/84 016/84 Coal Conversion Action Plan (English) 02/87 -- Solar Water Heating Study (English) 02/87 066/87 Peri-Urban Woodfuel Development (English) 10/87 076/87 Power Master Plan (English) 11/87 -- Power Loss Reduction Study (English) 09/96 186/96 Implementation Manual: Financing Mechanisms for Solar Electric Equipment 07/00 231/00 Lesotho Energy Assessment (English) 01/84 4676-LSO Liberia Energy Assessment (English) 12/84 5279-LBR Recommended Technical Assistance Projects (English) 06/85 038/85 Power System Efficiency Study (English) 12/87 081/87 Madagascar Energy Assessment (English) 01/87 5700-MAG Power System Efficiency Study (English and French) 12/87 075/87 Madagascar Environmental Impact of Woodfuels (French) 10/95 176/95 2 Region/Country Activity/Report Tide Date Number Malawi Energy Assessment (English) 08/82 3903-MAL Technical Assistance to Improve the Efficiency of Fuelwood Use in the Tobacco Industry (English) 11/83 009/83 Status Report (English) 01/84 013/84 Mali Energy Assessment (English and French) 11/91 8423-MLI Household Energy Strategy (English and French) 03/92 147/92 Islamic Republic of Mauritania Energy Assessment (English and French) 04/85 5224-MAU Household Energy Strategy Study (English and French) 07/90 123/90 Mauritius Energy Assessment (English) 12/81 3510-MAS Status Report (English) 10/83 008/83 Power System Efficiency Audit (English) 05/87 070/87 Bagasse Power Potential (English) 10/87 077/87 Energy Sector Review (English) 12/94 3643-MAS Mozambique Energy Assessment (English) 01/87 6128-MOZ Household Electricity Utilization Study (English) 03/90 113/90 Electricity Tariffs Study (English) 06/96 181/96 Sample Survey of Low Voltage Electricity Customers 06/97 195/97 Namibia Energy Assessment (English) 03/93 11320-NAM Niger Energy Assessment (French) 05/84 4642-NIR Status Report (English and French) 02/86 051/86 Improved Stoves Project (English and French) 12/87 080/87 Household Energy Conservation and Substitution (English and French) 01/88 082/88 Nigeria Energy Assessment (English) 08/83 4440-UNI Energy Assessment (English) 07/93 11672-UNI Rwanda Energy Assessment (English) 06/82 3779-RW Status Report (English and French) 05/84 017/84 Inproved Charcoal Cookstove Strategy (English and French) 08/86 059/86 Improved Charcoal Production Techniques (English and French) 02/87 065/87 Energy Assessment (English and French) 07/91 8017-RW Commercialization of Improved Charcoal Stoves and Carbonization Techniques Mid-Term Progress Report (English and French) 12/91 141/91 SADC SADC Regional Power Interconnection Study, Vols. I-IV (English) 12/93 - SADCC SADCC Regional Sector: Regional Capacity-Building Program for Energy Surveys and Policy Analysis (English) 11/91 - Sao Tome and Principe Energy Assessment (English) 10/85 5803-STP Senegal Energy Assessment (English) 07/83 4182-SE Status Report (English and French) 10/84 025/84 Industrial Energy Conservation Study (English) 05/85 037/85 Preparatory Assistance for Donor Meeting (English and French) 04/86 056/86 Urban Household Energy Strategy (English) 02/89 096/89 Industrial Energy Conservation Program (English) 05/94 165/94 Seychelles Energy Assessment (English) 01/84 4693-SEY Electric Power System Efficiency Study (English) 08/84 021/84 Sierra Leone Energy Assessment (English) 10/87 6597-SL Somalia Energy Assessment (English) 12/85 5796-SO Republic of South Africa Options for the Structure and Regulation of Natural Gas Industry (English) 05/95 172/95 Sudan Management Assistance to the Ministry of Energy and Mining 05/83 003/83 Energy Assessment (English) 07/83 4511-SU Power System Efficiency Study (English) 06/84 018/84 3 Region/Country Activity/Report Title Date Number Status Report (English) 11/84 026/84 Wood Energy/Forestry Feasibility (English) 07/87 073/87 Swaziland Energy Assessment (English) 02/87 6262-SW Household Energy Strategy Study 10/97 198/97 Tanzania Energy Assessment (English) 11/84 4969-TA Peri-Urban Woodfuels Feasibility Study (English) 08/88 086/88 Tobacco Curing Efficiency Study (English) 05/89 102/89 Remote Sensing and Mapping of Woodlands (English) 06/90 - Industrial Energy Efficiency Technical Assistance (English) 08/90 122/90 Power Loss Reduction Volume 1: Transmission and Distribution SystemTechnical Loss Reduction and Network Development (English) 06/98 204A/98 Power Loss Reduction Volume 2: Reduction of Non-Technical Losses (English) 06/98 204B/98 Togo Energy Assessment (English) 06/85 5221-TO Wood Recovery in the Nangbeto Lake (English and French) 04/86 055/86 Power Efficiency Improvement (English and French) 12/87 078/87 Uganda Energy Assessment (English) 07/83 4453-UG Status Report (English) 08/84 020/84 Institutional Review of the Energy Sector (English) 01/85 029/85 Energy Efficiency in Tobacco Curing Industry (English) 02/86 049/86 Fuelwood/Forestry Feasibility Study (English) 03/86 053/86 Power System Efficiency Study (English) 12/88 092/88 Energy Efficiency Imnprovement in the Brick and Tile Industry (English) 02/89 097/89 Tobacco Curing Pilot Project (English) 03/89 UNDP Terr Report Energy Assessment (English) 12/96 193/96 Rural Electrification Strategy Study 09/99 221/99 Zaire Energy Assessment (English) 05/86 5837-ZR Zambia Energy Assessment (English) 01/83 4110-ZA Status Report (English) 08/85 039/85 Energy Sector Institutional Review (English) 11/86 060/86 Power Subsector Efficiency Study (English) 02/89 093/88 Energy Strategy Study (English) 02/89 094/88 Urban Household Energy Strategy Study (English) 08/90 121/90 Zimbabwe Energy Assessment (English) 06/82 3765-ZIM Power System Efficiency Study (English) 06/83 005/83 Status Report (English) 08/84 019/84 Power Sector Management Assistance Project (English) 04/85 034/85 Power Sector Management Institution Building (English) 09/89 -- Petroleum Management Assistance (English) 12/89 109/89 Charcoal Utilization Prefeasibility Study (English) 06/90 119/90 Integrated Energy Strategy Evaluation (English) 01/92 8768-ZIM Energy Efficiency Technical Assistance Project: Strategic Framework for a National Energy Efficiency Improvement Program (English) 04/94 -- Capacity Building for the National Energy Efficiency Improvement Progranmne (NEEIP) (English) 12/94 Zimbabwe Rural Electrification Study 03/00 228/00 4 Region/Countiy Activity/Report Title Date Number EAST ASIA AND PACIFIC (EAP) Asia Regional Pacific Household and Rural Energy Seminar (English) 11/90 - China County-Level Rural Energy Assessments (English) 05/89 101/89 Fuelwood Forestry Preinvestment Study (English) 12/89 105/89 Strategic Options for Power Sector Reform in China (English) 07/93 156/93 Energy Efficiency and Pollution Control in Township and Village Enterprises (TVE) Industry (English) 11/94 168/94 Energy for Rural Development in China: An Assessment Based on a Joint Chinese/ESMAP Study in Six Counties (English) 06/96 183/96 Improving the Technical Efficiency of Decentralized Power Companies 09/99 222/99 Fiji Energy Assessment (English) 06/83 4462-FIJ Indonesia Energy Assessment (English) 11/81 3543-IND Status Report (English) 09/84 022/84 Power Generation Efficiency Study (English) 02/86 050/86 Energy Efficiency in the Brick, Tile and Lime Industries (English) 04/87 067/87 Diesel Generating Plant Efficiency Study (English) 12/88 095/88 Urban Household Energy Strategy Study (English) 02/90 107/90 Biomass Gasifier Preinvestment Study Vols. I & II (English) 12/90 124/90 Prospects for Biomass Power Generation with Emphasis on Palm Oil, Sugar, Rubberwood and Plywood Residues (English) 11/94 167/94 Lao PDR Urban Electricity Demand Assessment Study (English) 03/93 154/93 Institutional Development for Off-Grid Electrification 06/99 215/99 Malaysia Sabah Power System Efficiency Study (English) 03/87 068/87 Gas Utilization Study (English) 09/91 9645-MA Mongolia Energy Efficiency in the Electricity and District Heating Sectors 10/01 247/01 Improved Space Heating Stoves for Ulaanbaatar 03/02 254/02 Myanmar Energy Assessment (English) 06/85 5416-BA Papua New Guinea Energy Assessment (English) 06/82 3882-PNG Status Report (English) 07/83 006/83 Institutional Review in the Energy Sector (English) 10/84 023/84 Power Tariff Study (English) 10/84 024/84 Philippines Commnercial Potential for Power Production from Agricultural Residues (English) 12/93 157/93 Energy Conservation Study (English) 08/94 -- Strengthening the Non-Conventional and Rural Energy Development Program in the Philippines: A Policy Framework and Action Plan 08/01 243/01 Rural Electrification and Development in the Philippines: Measuring the Social and Economic Benefits 05/02 255/02 Solomon Islands Energy Assessment (English) 06/83 4404-SOL Energy Assessment (English) 01/92 979-SOL South Pacific Petroleum Transport in the South Pacific (English) 05/86 - Thailand Energy Assessment (English) 09/85 5793-TH Rural Energy Issues and Options (English) 09/85 044/85 Thailand Accelerated Dissemination of Improved Stoves and Charcoal Kilns (English) 09/87 079/87 Northeast Region Village Forestry and Woodfuels Preinvestment Study (English) 02/88 083/88 Impact of Lower Oil Prices (English) 08/88 - 5 Region/Country Activity/Report Title Date Number Coal Development and Utilization Study (English) 10/89 -- Tonga Energy Assessment (English) 06/85 5498-TON Vanuatu Energy Assessment (English) 06/85 5577-VA Vietnam Rural and Household Energy-Issues and Options (English) 01/94 161/94 Power Sector Reform and Restructuring in Vietnam: Final Report to the Steering Committee (English and Vietnamese) 09/95 174/95 Household Energy Technical Assistance: Improved Coal Briquetting and Commercialized Dissemination of Higher Efficiency Biomass and Coal Stoves (English) 01/96 178/96 Petroleum Fiscal Issues and Policies for Fluctuating Oil Prices In Vietnam 02/01 236/01 An Overnight Success: Vietnam's Switch to Unleaded Gasoline 08/02 257/02 The Electricity Law for Vietnam-Status and Policy Issues- The Socialist Republic of Vietnam 08/02 259/02 Western Samoa Energy Assessment (English) 06/85 5497-WSO SOUTH ASIA (SAS) Bangladesh Energy Assessment (English) 10/82 3873-BD Priority Investment Program (English) 05/83 002/83 Status Report (English) 04/84 015/84 Power System Efficiency Study (English) 02/85 031/85 Small Scale Uses of Gas Prefeasibility Study (English) 12/88 -- Reducing Emnissions from Baby-Taxis in Dhaka 01/02 253/02 India Opportunities for Commercialization of Nonconventional Energy Systems (English) 11/88 091/88 Maharashtra Bagasse Energy Efficiency Project (English) 07/90 120/90 Mini-Hydro Development on Irrigation Dams and Canal Drops Vols. I, II and III (English) 07/91 139/91 WindFarm Pre-Investment Study (English) 12/92 150/92 Power Sector Reform Seminar (English) 04/94 166/94 Environmental Issues in the Power Sector (English) 06/98 205/98 Environmental Issues in the Power Sector: Manual for Environmental Decision Making (English) 06/99 213/99 Household Energy Strategies for Urban India: The Case of Hyderabad 06/99 214/99 Greenhouse Gas Mitigation In the Power Sector: Case Studies From India 02/01 237/01 Energy Strategies for Rural India: Evidence from Six States 08/02 258/02 Household Energy, Indoor Air Pollution, and Health 11/02 261/02 Access of the Poor to Clean Household Fuels 07/03 263/03 Nepal Energy Assessment (English) 08/83 4474-NEP Status Report (English) 01/85 028/84 Energy Efficiency & Fuel Substitution in Industries (English) 06/93 158/93 Palistan Household Energy Assessment (English) 05/88 -- Assessment of Photovoltaic Programs, Applications, and Markets (English) 10/89 103/89 Pakistan National Household Energy Survey and Strategy Formulation Study: Project Terminal Report (English) 03/94 -- Managing the Energy Transition (English) 10/94 Lighting Efficiency Inprovement Program Phase 1: Commercial Buildings Five Year Plan (English) 10/94 Clean Fuels 10/01 246/01 6 Region/Country Activity/Report Title Date Number Sri Lanka Energy Assessment (English) 05/82 3792-CE Power System Loss Reduction Study (English) 07/83 007/83 Status Report (English) 01/84 010/84 Industrial Energy Conservation Study (English) 03/86 054/86 Sustainable Transport Options for Sri Lanka: Vol. I 02/03 262/03 Greenhouse Gas Mitigation Options in the Sri Lanka Power Sector: Vol. II 02/03 262/03 Sri Lanka Electric Power Technology Assessment (SLEPTA): Vol. III 02/03 262/03 EUROPE AND CENTRAL ASIA (ECA) Bulgaria Natural Gas Policies and Issues (English) 10/96 188/96 Energy Environment Review 10/02 260/02 Central Asia and The Caucasus Cleaner Transport Fuels in Central Asia and the Caucasus 08/01 242/01 Central and Eastern Europe Power Sector Reform in Selected Countries 07/97 196/97 Increasing the Efficiency of Heating Systems in Central and Eastem Europe and the Former Soviet Union (English and Russian) 08/00 234/00 The Future of Natural Gas in Eastern Europe (English) 08/92 149/92 Kazakhstan Natural Gas Investmnent Study, Volumes 1, 2 & 3 12/97 199/97 Kazakhstan & Kyrgyzstan Opportunities for Renewable Energy Development 11/97 16855-KAZ Poland Energy Sector Restructuring Program Vols. I-V (English) 01/93 153/93 Natural Gas Upstream Policy (English and Polish) 08/98 206/98 Energy Sector Restructuring Program: Establishing the Energy Regulation Authority 10/98 208/98 Portugal Energy Assessment (English) 04/84 4824-PO Romania Natural Gas Development Strategy (English) 12/96 192/96 Slovenia Workshop on Private Participation in the Power Sector (English) 02/99 211/99 Turkey Energy Assessment (English) 03/83 3877-TU Energy and the Environment: Issues and Options Paper 04/00 229/00 MIDDLE EAST AND NORTH AFRICA (MNA) Arab Republic of Egypt Energy Assessment (English) 10/96 189/96 Energy Assessment (English and French) 03/84 4157-MOR Status Report (English and French) 01/86 048/86 Morocco Energy Sector Institutional Development Study (English and French) 07/95 173/95 Natural Gas Pricing Study (French) 10/98 209/98 Gas Development Plan Phase II (French) 02/99 210/99 Syria Energy Assessment (English) 05/86 5822-SYR Electric Power Efficiency Study (English) 09/88 089/88 Energy Efficiency Inprovement in the Cement Sector (English) 04/89 099/89 Energy Efficiency Improvement in the Fertilizer Sector (English) 06/90 115/90 Tunisia Fuel Substitution (English and French) 03/90 -- Tunisia Power Efficiency Study (English and French) 02/92 136/91 Energy Management Strategy in the Residential and Tertiary Sectors (English) 04/92 146/92 7 Region/Country Activity/Report Title Date Number Renewable Energy Strategy Study, Volume I (French) 11/96 190A/96 Renewable Energy Strategy Study, Volume II (French) 11/96 190B/96 Yemen Energy Assessment (English) 12/84 4892-YAR Energy Investment Priorities (English) 02/87 6376-YAR Household Energy Strategy Study Phase I (English) 03/91 126/91 LATIN AMERICA AND THE CARIBBEAN (LAC) LAC Regional Regional Seminar on Electric Power System Loss Reduction in the Caribbean (English) 07/89 -- Elimination of Lead in Gasoline in Latin America and the Caribbean (English and Spanish) 04/97 194/97 Elimination of Lead in Gasoline in Latin America and the Caribbean - Status Report (English and Spanish) 12/97 200/97 Harmonization of Fuels Specifications in Latin America and the Caribbean (English and Spanish) 06/98 203/98 Bolivia Energy Assessment (English) 04/83 4213-BO National Energy Plan (English) 12/87 -- La Paz Private Power Technical Assistance (English) 11/90 111/90 Prefeasibility Evaluation Rural Electrification and Demand Assessment (English and Spanish) 04/91 129/91 National Energy Plan (Spanish) 08/91 131/91 Private Power Generation and Transmission (English) 01/92 137/91 Natural Gas Distribution: Economics and Regulation (English) 03/92 125/92 Natural Gas Sector Policies and Issues (English and Spanish) 12/93 164/93 Household Rural Energy Strategy (English and Spanish) 01/94 162/94 Preparation of Capitalization of the Hydrocarbon Sector 12/96 191/96 Introducing Competition into the Electricity Supply Industry in Developing Countries: Lessons from Bolivia 08/00 233/00 Final Report on Operational Activities Rural Energy and Energy Efficiency 08/00 235/00 Oil Industry Training for Indigenous People: The Bolivian Experience (English and Spanish) 09/01 244/01 Brazil Energy Efficiency & Conservation: Strategic Partnership for Energy Efficiency in Brazil (English) 01/95 170/95 Hydro and Thermal Power Sector Study 09/97 197/97 Rural Electrification with Renewable Energy Systems in the Northeast: A Preinvestment Study 07/00 232/00 Reducing Energy Costs in Municipal Water Supply Operations 07/03 265/03 "Learning-while-doing" Energy M&T on the Brazilian Frontlines Chile Energy Sector Review (English) 08/88 7129-CH Colombia Energy Strategy Paper (English) 12/86 - Power Sector Restructuring (English) 11/94 169/94 Colombia Energy Efficiency Report for the Comrnercial and Public Sector (English) 06/96 184/96 Costa Rica Energy Assessment (English and Spanish) 01/84 4655-CR Recommended Technical Assistance Projects (English) 11/84 027/84 Forest Residues Utilization Study (English and Spanish) 02/90 108/90 Dominican Republic Energy Assessment (English) 05/91 8234-DO Ecuador Energy Assessment (Spanish) 12/85 5865-EC Energy Strategy Phase I (Spanish) 07/88 -- Energy Strategy (English) 04/91 -- 8 Region/Country Activity/Report Title Date Number Private Minihydropower Development Study (English) 11/92 -- Energy Pricing Subsidies and Interfuel Substitution (English) 08/94 11798-EC Energy Pricing, Poverty and Social Mitigation (English) 08/94 12831 -EC Guatemala Issues and Options in the Energy Sector (English) 09/93 12160-GU Haiti Energy Assessment (English and French) 06/82 3672-HA Status Report (English and French) 08/85 041/85 Household Energy Strategy (English and French) 12/91 143/91 Honduras Energy Assessment (English) 08/87 6476-HO Petroleum Supply Management (English) 03/91 128/91 Jamaica Energy Assessment (English) 04/85 5466-JM Petroleum Procurement, Refining, and Distribution Study (English) 11/86 061/86 Energy Efficiency Building Code Phase I (English) 03/88 -- Energy Efficiency Standards and Labels Phase I (English) 03/88 -- Management Information System Phase I (English) 03/88 -- Charcoal Production Project (English) 09/88 090/88 FIDCO Sawmill Residues Utilization Study (English) 09/88 088/88 Energy Sector Strategy and Investment Planning Study (English) 07/92 135/92 Mexico Improved Charcoal Production Within Forest Management for the State of Veracruz (English and Spanish) 08/91 138/91 Energy Efficiency Management Technical Assistance to the Comision Nacional para el Ahorro de Energia (CONAE) (English) 04/96 180/96 Energy Environment Review 05/01 241/01 Nicaragua Modernizing the Fuelwood Sector in Managua and Le6n 12/01 252/01 Panama Power System Efficiency Study (English) 06/83 004/83 Paraguay Energy Assessment (English) 10/84 5145-PA Recommended Technical Assistance Projects (English) 09/85 - Status Report (English and Spanish) 09/85 043/85 Peru Energy Assessment (English) 01/84 4677-PE Status Report (English) 08/85 040/85 Proposal for a Stove Dissemination Program in the Sierra (English and Spanish) 02/87 064/87 Energy Strategy (English and Spanish) 12/90 -- Study of Energy Taxation and Liberalization of the Hydrocarbons Sector (English and Spanish) 120/93 159/93 Reform and Privatization in the Hydrocarbon Sector (English and Spanish) 07/99 216/99 Rural Electrification 02/01 238/01 Saint Lucia Energy Assessment (English) 09/84 5111 -SLU St. Vincent and the Grenadines Energy Assessment (English) 09/84 5103-STV Sub Andean Environmental and Social Regulation of Oil and Gas Operations in Sensitive Areas of the Sub-Andean Basin (English and Spanish) 07/99 217/99 Trinidad and Tobago Energy Assessment (English) 12/85 5930-TR GLOBAL Energy End Use Efficiency: Research and Strategy (English) 11/89 Women and Energy--A Resource Guide The International Network: Policies and Experience (English) 04/90 Guidelines for Utility Customer Management and 9 Region/Country Activity/Report Title Date Number Metering (English and Spanish) 07/91 - Assessment of Personal Computer Models for Energy Planning in Developing Countries (English) 10/91 - Long-Term Gas Contracts Principles and Applications (English) 02/93 152/93 Comparative Behavior of Firms Under Public and Private Ownership (English) 05/93 155/93 Development of Regional Electric Power Networks (English) 10/94 -- Roundtable on Energy Efficiency (English) 02/95 171/95 Assessing Pollution Abatement Policies with a Case Study of Ankara (English) 11/95 177/95 A Synopsis of the Third Annual Roundtable on Independent Power Projects: Rhetoric and Reality (English) 08/96 187/96 Rural Energy and Development Roundtable (English) 05/98 202/98 A Synopsis of the Second Roundtable on Energy Efficiency: Institutional and Financial Delivery Mechanisms (English) 09/98 207/98 The Effect of a Shadow Price on Carbon Emission in the Energy Portfolio of the World Bank: A Carbon Backcasting Exercise (English) 02/99 212/99 Increasing the Efficiency of Gas Distribution Phase 1: Case Studies and Thematic Data Sheets 07/99 218/99 Global Energy Sector Reform in Developing Countries: A Scorecard 07/99 219/99 Global Lighting Services for the Poor Phase II: Text Marketing of Smnall "Solar" Batteries for Rural Electrification Purposes 08/99 220/99 A Review of the Renewable Energy Activities of the UNDP/ World Bank Energy Sector Management Assistance Programnme 1993 to 1998 11/99 223/99 Energy, Transportation and Environment: Policy Options for Environmental Improvement 12/99 224/99 Privatization, Competition and Regulation in the British Electricity Industry, With Implications for Developing Countries 02/00 226/00 Reducing the Cost of Grid Extension for Rural Electrification 02/00 227/00 Undeveloped Oil and Gas Fields in the Industrializing World 02/01 239/01 Best Practice Manual: Promoting Decentralized Electrification Investment 10/01 248/01 Peri-Urban Electricity Consumers-A Forgotten but Important Group: What Can We Do to Electrify Them? 10/01 249/01 Village Power 2000: Empowering People and Transformiing Markets 10/01 251/01 Private Financing for Conuunity Infrastructure 05/02 256/02 Stakeholder Involvement in Options Assessment: 07/03 264/03 Promoting Dialogue in Meeting Water and Energy Needs: A Sourcebook 10 The World Bank 1818 H Street, NW Washington, DC 20433 USA Tel.: 1.202.458.2321 Fax.: 1.202.522.3018 Internet: www.worldbank.org/esmap Email: esmap@worldbank.org F.- ___ ___ ___ . r v It - 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