While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the Project will have impacts which must be managed in a manner consistent with the following Performance Standards: PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement Project activities with potential impacts will be conducted on already existing roads and no project-related land acquisition or involuntary resettlement is expected and no cultural heritage has been identified in the project’s area of influence. However the ESHS Management Plans will include abbreviated procedures in line with PS5 (Land Acquisition and Involuntary Resettlement) and “chance find procedures” as per PS8 (Cultural Heritage), AMCD’s ESHS Manual for Construction Works and local regulations (Ley para la Protección del Patrimonio Cultural de la Nación - PPCN - del Decreto 220-97, Art. 22). No impacts on the health and safety of surrounding communities are expected. No protected areas or sensitive natural habitats are anticipated to be impacted by the Project. There are no indigenous peoples’ traditional or customary lands in the Project’s direct areas of influence. Hence, PS4 (Community Health, Safety and Security), PS6 (Biodiversity Conservation) and PS7 (Indigenous Peoples) do not apply for the purpose of this review.

This is a Category B project because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Works will be conducted on already existing roads and no project-related land acquisition or involuntary resettlement is expected. The AMDC has experience in managing ESHS issues related to this type of projects and will have in place procedures and management plans to ensure the proper management of risks and impacts from the works.

The Alcaldía Municipal del Distrito Central (AMDC) has experience in the management of construction of urban infrastructure projects, including two recent grade-separated junctions completed in 2009. Key among the most relevant prevention and mitigation measures during construction and operation of the works covered under this operation are: (i) minimization of impacts during design stage, and (ii) implementation of ESHS procedures for civil works. Upon implementation of specific agreed measures, the project will comply with IFC Performance Standards on Social and Environmental Sustainability. PS1 - Social and Environmental Assessment and Management Systems: Environmental sustainability and social development are integral part of the AMDC’s mission, vision, and urban development strategy. The AMDC’s Environmental Management Unit (UGA) has been progressively improving its systems and procedures, and it has in place an environmental policy and an Environmental Management System based on ISO14001:2004. Key selection criteria for the proposed works include the minimization of environmental and social impacts such as removal of vegetation, land acquisition or restriction of access for commerce and houses. Based on an initial environmental screening, and in accordance with national regulations and AMDC’s procedures, the proposed grade-separated junctions have been characterized as Environmental Category II (equivalent to IFC’s Category B), and therefore each one must develop a Qualitative Environmental Diagnostic (QED) including a ESHS Management Plan (ESHS-MP) in accordance to specific terms of reference (Forma DECA-005) in order to obtain an Environmental License prior to construction. The development of the QED and corresponding ESHS-MP will also follow the principles and procedures included in AMCD’s ESHS Manual for Construction Works and IFC’s EHS Guidelines for Toll Roads. The ESHS-MP for each one of the grade-separated junctions will cover, among other, the following issues: accumulation, storage and disposal of construction site and excavation waste; stormwater runoff and erosion controls; fuel spill prevention; occupational health and safety; installation and maintenance of traffic and pedestrian safety signage and barriers; condition and safety of machinery; community engagement and grievance redress; chance find procedure; controls for noise and air emissions (i.e. dust control); and construction site reinstatement, among others. Contractors are required to engage a part-time environmental coordinator to monitor implementation of the ESHS MPs. Contractors in charge of other works with minor impacts that do not require a QED and ESHS MP, such as maintenance of road network and community projects delivering basic infrastructure, are required to comply with AMDC’s ESHS Manual for Construction Works, which cover the key issues described above. The Independent Supervision Engineer of each work front will be in charge of supervising civil works being conducted by the Municipality and its contractors to ensure compliance with all technical and ESHS requirements. As part of the design of the grade-separated junctions and other relevant infrastructure included in this operation, the AMDC will adopt generally recognized design criteria aimed at ensuring vehicular and pedestrian safety, such as: sidewalks, pedestrian crossings, ped signals, and adequate signaling, among other. Additionally, where applicable, these designs will ensure that the areas intervened constitutes safe and obstacle-free environment and that they have adequate accessibility and safety features for disabled people. PS-2 Labor and Working Conditions: Honduras has ratified the core ILO Conventions on freedom of association, discrimination, child labor and forced labor and related provisions are reflected in the Honduran Labor Code. Civil works to be financed under this Project will require a workforce of approximately 700 people who will be hired locally by construction contractors. These contractors and their subcontractors will be contractually required to comply with national labor laws, and ensure that all workers are covered by health and accident insurance and that no child labor is used. The AMDC will ensure that, upon hiring, all workers are informed in writing about their rights and obligations. The AMDC and its contractors will follow health and safety provisions included in the ESHS-MP. The relevant sections of the ESHS-MP will include, among other, the following provisions: reporting, documentation and investigation of incidents; use of personal protective equipment (PPE) such as reflective vests for night work; management of construction site; traffic plans and pedestrian safety, among others. PS-3 Pollution Prevention and Abatement: Pollution prevention measures for the construction phase of civil works considered under this operation will be implemented following local requirements and the ESHS-MPs as described under PS-1 above. Key impacts related road rehabilitation and construction of the grade-separated junctions that will be addressed, include: controlling dust and noise, protection of the quality of water and soil resources through sediment and erosion control, managing the storage and disposal of construction and demolition debris, and managing hazardous materials and other wastes such as used oil and tires generated from construction equipment maintenance. Any sites to be used for temporary or permanent storage and/or disposal of construction debris must be approved by the AMDC’s Environmental Unit.

The AMDC has in place channels aimed at continuously communicating its activities to the public, including information regarding civil works. Project-related information, including specific ESHS-MPs related to this project and grievance redress mechanisms will be accessible through AMDC’s Public Information Center and at: http://www.lacapitaldehonduras.com/infraestructura.htm. AMDC also maintains an office dedicated to the attention of public inquiries and complaints through a widely publicized phone number through a web portal at: http://www.lacapitaldehonduras.com/denuncias.htm  As per local regulations, as a condition for obtaining an environmental permit, a public notice must be published in newspapers of national circulation and provide a period of 20 days for comments. For the grade separated junctions, the ESHS-MPs will include a community engagement section describing all activities aimed at ensuring that communities in close proximity of the works are informed and have access to effective grievance redress mechanisms. Additionally, for all construction activities included in this operation, contractors will be required to install visible signs at the construction sites with information about the activity, its duration and contact information for comments and grievances from the community.

Relevant ESHS information related to this operation will be posted in AMDC’s website and will be made publicly available at: Ing. Franklin Amaya Gerente de la UGA Alcaldia Municipal del Distrito Central (AMDC) Barrio Morazán, Contiguo a Plantel de los Bomberos Tegucigalpa, Honduras Teléfono (504) 239-3694 E-mail: fgam196@yahoo.com.ar