25835 - Chuvash Roads Modernization Project

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Environmental & Social Review Summary

Project Number

25835

Company Name

CHUVASHAVTODOR, PAO

Date ESRS Disclosed

Feb 26, 2007

Country

Russian Federation

Region

Europe

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : May 31, 2007
Signed : Jun 18, 2007
Invested : Sep 13, 2007

Sector

Highway Operations (Includes Toll Roads)

Industry

Infrastructure

Department

Regional Industry INF LAC & EUR

Project Description

The proposed investment is a local currency loan of RUR1.3 billion ($49 million equivalent) to Chuvashavtodor, a road development enterprise owned by the Chuvash Republic (the “Republic” or “Chuvashia”). The loan will help finance the first stage of the Republic’s capital expenditures program on roads. The program involves:

- the construction or upgrading of about 550 km of rural roads to connect some 54,000 people in 350 isolated rural communities to the all-weather road network and
- the rehabilitation of priority sections of the major road network that are presently in poor condition (the “Project”).

The Department of Automobile Roads (DAR) of the Ministry of Town Planning and Public Infrastructure is managing the program by awarding contracts to project designers and construction/rehabilitation contractors through tender procedures. Contracts to design more than 200 rural road sub-projects of 0,2-12 km each have been already awarded to 12 companies. After completion of the design stage, DAR will hold a second round of bidding to award road construction and rehabilitation contracts.

The loan will be provided to state company Chuvashavtodor and will be fully guaranteed by the Chuvash Republic. This will be the second subnational finance investment in Chuvashia.

Overview of IFC's Scope of Review

IFC has reviewed the current status of the project and the process followed to assess its environmental and social impacts. IFC’s appraisal consisted of:

- interviewing relevant specialists of the Chuvash Ministry of Town Planning and Public Infrastructure, the Ministry of Natural Resources, the Ministry of Property and Lands, and Chuvashavtodor, a road development enterprise owned by the Chuvash Republic;

- meeting with the local administration and communities of the Batyrevsky district of Chuvash Republic to examine how the process of public consultation and project information disclosure was implemented ;and
- reviewing of sample environmental and social documentation.

E & S Project Categorization and Applicable Standard

Performance standards that are applicable for this investment include:

-PS1: Social and Environmental Assessment and Management Systems
-PS2: Labor and Working Conditions
-PS3: Pollution Prevention and Abatement
-PS4: Community Health, Safety and Security
-PS5: Land Acquisition and Involuntary Resettlement
-PS6: Biodiversity Conservation and Sustainable Natural Resource Management
-PS8: Cultural Heritage

Environmental and Social Mitigation Measures

The Republic has presented plans to address any adverse impacts and to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements – Russian Federation laws and regulations and IFC PS and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow.

- PS1: Social and Environmental Assessment and Management Systems

Under Russian legislation, all new developments are required to be evaluated through environmental impact assessment (EIA) studies. This entails the evaluation of the potential environmental and social risks (E&S risks) associated with the project, including associated facilities; comparison of reasonable alternatives; and development of measures to avoid, minimize, mitigate or compensate for adverse social and environmental impacts. The EIA is the responsibility of the project designers. Public consultations should be carried out as an integral part of the EIA process. Local authorities are responsible for organizing a consultation process with stakeholders affected by road construction. The EIA outcomes are reviewed for E&S compliance with Russian law by Chuvash Review Agency (CRA) under the Ministry of Construction. The positive opinion of CRA is required to get a final permit for land acquisition through long-term lease or sale and the commencement of the construction activities.

National EIA procedure and system of state environmental control provide adequate capacity to manage direct impacts of the Project on environment, health and safety. However, E&S risks associated with the Project are broader and, for instance, include project’s delays due to low quality of the EIA study or non-compliance of contractors (including performance of associated facilities, like construction materials quarries and production plants) with environmental, health and safety requirements. To minimize indirect E&S project risks and facilitate complex management of E&S issues of the Project, DAR will:

Strengthen internal capacity to assess and manage broader environmental and social risks of the Project by providing training to 1-2 employees in social and environmental management and monitoring;

As part of the procedure to select bidders, evaluate (i) the adequacy of human, technical and financial resources of the bidders to carry out an accurate and objective EIA and (ii) the bidders’ environmental, health and safety performance in previous contracts and current activity.

Include contract specifications to ensure effective implementation of Environmental and Social Management Plans through the project cycle;

Determine key performance indicators that will be used to supervise Project performance. Further details are incorporated into the Environmental and Social Action Plan that the Ministry of Town Planning and Public Infrastructure committed to as a condition of IFC participation in the Project.

The Environmental and Social Action Plan (ESAP), which is attached to the ESRS, contains specific tasks that DAR will undertake to mitigate perceived risks and impacts from the project, and to ensure compliance with IFC’s Performance Standards.

- PS2: Labor and Working Conditions

Occupational health and safety (OHS) impacts associated with the construction and operation of roads primarily include noise and physical and chemical hazards. Through appropriate tender selection criteria, contract specifications and OHS accident statistics monitoring, DAR will set a goal of a zero accidents among Project workers (whether directly employed or subcontracted), especially accidents that could result in lost work time, different levels of disability, or even fatalities.

-Performance Standard 3: Pollution Prevention and Abatement

Potential environmental impacts during the construction and operation of roads mainly include disruption of terrestrial and aquatic habitats; increased rate of surface water runoff; generation of solid waste; air emissions; and traffic and heavy equipment noise. Potential impacts on the environment are evaluated through the EIA process prior to the final site selection and detailed design development. In addition, the EIA study develops a Plan to minimize adverse social and environmental impacts to appropriate levels. Implementation of mitigation measures is supervised by the relevant republican and federal services/agencies, e.g., Rostechnadzor, Rosprirodnadzor and the Chuvash Ministry of Natural Resources. Through contract specifications and monitoring DAR will ensure effective implementation of the Environmental Management Plans for subprojects through the entire project cycle. In addition, DAR will minimize broader environmental and social risks associated with the Project through appropriate tender selection criteria.

The project is not likely to cause significant adverse environmental impact due to small scale of subprojects and low traffic flow in rural areas.

- PS4: Community Health, Safety and Security

Significant community health and safety issues associated with road projects include dust and noise generation, pedestrian safety, traffic safety and emergency preparedness. Potential risks to community health, safety and security are evaluated in the EIA and reviewed by CRA. Sanitary compliance (e.g., ambient air and water quality) is reviewed by the Department of Federal Consumer Rights Protection and Human Welfare Supervision Service (RosPotrebNadzor) of the Chuvash Republic. Traffic safety compliance (including proper design of roads and installation and maintenance of all signs, signals, marking and other devices to regulate traffic) is reviewed by the State Inspection of Traffic Safety.

- PS5: Land Acquisition and Involuntary Resettlement

Rural road construction and rehabilitation will not result in the physical displacement of people. The Project requires the acquisition of agricultural land from collective and private farmers. The land taken for the Project will represent a small fraction of the affected property and the residual land will remain economically viable. The Land Code of RF and supplementing legislation accord with IFC PS 5 requirements. People and entities with registered property rights are entitled to compensation in cases of compulsory sales of land. Compensation can be paid in cash, based on the market value of land, or can consist of replacement land of equal or greater value and productive potential, plus the cost of preparation. DAR will monitor judicial and administrative processes and practices of the responsible local governmental agencies and, if needed, will facilitate aspects of the process (for example, disclosure of information, informed participation of affected persons in consultations, alternative routing or compensation negotiations, etc.) and will participate in the decision-making process to achieve outcomes that are consistent with the objectives of PS 5.

- PS6: Biodiversity Conservation and Sustainable Natural Resource Management

Most rural roads are being constructed in developed agricultural areas and, hence, are not likely to cause adverse impact on biodiversity. Nonetheless, all sub-projects are the subject to an Environmental Impact Assessment (EIA) process. Under Russian Law, issues regarding biodiversity and natural resource management form an integral part of the ESIA process.

- PS8: Cultural Heritage

Russian Law recognizes the need to preserve and protect cultural heritage. The ESIA process should address potential adverse impacts to cultural heritage. Relevant government authorities are working closely with project developers by providing baseline information on the areas where cultural heritage is expected to be found. All contractors are required by Russian law to develop a Chance Find Procedure that outlines what will happen if previously unknown heritage resources, particularly archeological resources, are encountered during project construction. As most of the rural roads are being constructed in developed agricultural areas and utilize the existing transport corridors, the likelihood of adverse impact on cultural heritage is low.

Stakeholder Engagement

In accordance with Russian Law, the information on rural roads construction and rehabilitiation is subject to local disclosure and consultations with the affected stakeholders. Local Administrations are responsible for organizing prior, free and informed participation of the affected stakeholders in consultation process.

IFC reviewed evidence of information disclosure and consultation with local communities and concluded that community engagement process is commensurate with the Project’s anticipated risks and impacts. The level of Project’s support by local communities is high as they will benefit significantly from the improved road access. As the Project is not likely to cause adverse environmental/social impacts and the ESAP is mainly aimed at enhancing positive project impacts, no additional local disclosure is required.

Client Documentation

File Name	Actions
Chuvash Roads_ESAP.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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