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PT Sarana Multi Infrastruktur – Environmental and Social Management

Framework

03 February 2017

Supported by TA 8484 INO: Sustainable Infrastructure Assistance Program

- Technical Assistance Cluster Management facility (Subproject 1) - Asian Development Bank

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Table of Contents

Contents

1. INTRODUCTION ......................................................................................................................................... 1

2. ENVIRONMENTAL AND SOCIAL SAFEGUARD POLICIES AND OBJECTIVES ............................ 3 2.1 ESS POLICY OBJECTIVES .......................................................................................................................................... 3 2.2 OTHER APPLICABLE OPERATIONAL POLICIES AND SCOPE ................................................................................ 4

2.2.1 Indonesian Laws ..................................................................................................................................................... 4 2.2.2 Other Applicable Safeguard Policies ............................................................................................................. 4

2.3 ESMF OBJECTIVES .................................................................................................................................................... 4 2.3.1 ESMF Purpose, Scope and Objectives ............................................................................................................ 4 2.3.2 Safeguard Requirements for Differing Financial Products and Project Components ............ 5 2.3.3 ESS Requirements Governing Preparation and Implementation of Projects ............................. 6 2.3.4 ESS Performance Requirements ...................................................................................................................... 7 2.3.5 Consultation and Disclosure Plan for the ESMF ....................................................................................... 7 2.3.6 Updating and Commissioning of ESMF, Operations Manual ............................................................. 8

3. ENVIRONMENTAL AND SOCIAL SAFEGUARD PRINCIPLES .......................................................... 9 3.1 ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND

IMPACTS (ESS-1) ................................................................................................................................................................. 9 3.2 LABOR AND WORKING CONDITIONS (ESS-2) ....................................................................................... 11 3.3 POLLUTION PREVENTION AND ABATEMENT (ESS-3) ..................................................................... 12 3.4 SAFETY, HEALTH AND SECURITY (ESS-4) .............................................................................................. 14 3.5 LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT (ESS-5)........................................... 16 3.6 BIODIVERSITY CONSERVATION AND NATURAL RESOURCES MANAGEMENT (ESS-6) ...... 21 3.7 INDIGENOUS PEOPLES AND LOCAL COMMUNITIES (ESS -7) ......................................................... 24 3.8 CULTURAL HERITAGE (ESS-8) .................................................................................................................... 28 3.9 ENERGY CONSERVATION AND ENVIRONMENT FRIENDLY ENERGY (ESS-9) ......................... 29 3.10 CONSULTATION AND GRIEVANCE MECHANISM (ESS-10) .............................................................. 30

4. ENVIRONMENTAL AND SOCIAL SAFEGUARD OPERATIONAL PROCEDURES ...................... 32 4.1 ENVIRONMENTAL ASSESSMENT AND REVIEW FRAMEWORK ......................................................................... 32

4.1.1 Assessment Aims and Objectives ................................................................................................................... 32 4.1.2 Loan Application Stage ..................................................................................................................................... 32 4.1.3 Initial Screening and Impact Assessment Procedures ........................................................................ 33 4.1.4 Detailed Project Appraisal .............................................................................................................................. 35 4.1.5 Loan Sanction and Disbursement Stage ................................................................................................... 37 4.1.6 Project Implementation and Monitoring Stage .................................................................................... 38 4.1.7 Project Completion Stage ................................................................................................................................ 39

5. CONSULTATION, PARTICIPATION AND INFORMATION DISCLOSURE .................................. 40 5.1 PUBLIC CONSULTATION PRINCIPLES .................................................................................................................. 40 5.2 COMMUNITY CONSULTATION MECHANISM ....................................................................................................... 40

5.2.1 Consultation Mechanism .................................................................................................................................. 40 5.2.2 Meaningful Consultation .................................................................................................................................. 41

5.3 INDIGENOUS PEOPLE CONSULTATION AND CONSENT PROCEDURES ............................................................ 41 5.3.1 Definition ................................................................................................................................................................. 41 5.3.2 Objective .................................................................................................................................................................. 42 5.3.3 Consent of Affected Indigenous Peoples Communities ....................................................................... 42

5.4 STAKEHOLDER ANALYSIS AND ENGAGEMENT .................................................................................................. 43 5.6 REQUIREMENTS FOR PUBLIC CONSULTATION AND INFORMATION DISCLOSURE........................................ 45

5.6.1 Public Consultation ............................................................................................................................................. 45

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5.7.1 Information Disclosure ..................................................................................................................................... 46

6. GRIEVANCE REDRESS MECHANISM ................................................................................................... 47

7. ORGANIZATION AND RESPONSIBILITIES ....................................................................................... 49 7.1 ORGANIZATIONAL STRUCTURE AND ESS RESPONSIBILITIES ......................................................................... 49

7.1.1 Organizational Structure ................................................................................................................................. 49 7.1.2 Board of Directors ............................................................................................................................................... 49 7.1.3 Risk Management Directorate ...................................................................................................................... 50 7.1.4 Business Directorate .......................................................................................................................................... 53 7.1.5 Financing Facility Control Division (DPFP) ............................................................................................ 53 7.1.6 Advisory and Project Development Support Division (DDPPA) ..................................................... 53

7.2 ORGANIZATIONAL ARRANGEMENTS FOR IMPLEMENTATION AND FUNDING OF ESMF ............................ 53 7.2.1 Consultation and Disclosure Plan for ESMF, Operations Manual ................................................. 53 7.2.2 Plan for Commissioning of ESMF, Operations Manual ....................................................................... 54 7.2.3 Organizational Framework External Stakeholders Engagement ................................................ 54 7.2.4 Assessment of Client’s Capacity to Implement National Laws and ESS Requirements ....... 54 7.2.5 Periodic Updating Assessment of Supporting Indonesian Legal Framework ......................... 54 7.2.6 Monitoring and Evaluation of the Implementation of ESMF, Operations Manual ............... 54 7.2.7 ESMF, Operations Manual Document Control and Update .............................................................. 55 7.2.8 Implementation Procedures, Budgets and Institutional Arrangements.................................... 55

8. CAPACITY BUILDING .............................................................................................................................. 57 8.1 AIMS AND OBJECTIVES .......................................................................................................................................... 57 8.2 OPERATIONAL DOCUMENTS ................................................................................................................................. 57 8.3 STAFFING ................................................................................................................................................................. 57 8.4 OUTSOURCING ........................................................................................................................................................ 57 8.5 TRAINING ................................................................................................................................................................. 57 8.6 CORPORATE RESPONSIBILITY ............................................................................................................................... 59 8.7 FUNDING .................................................................................................................................................................. 59

9. MONITORING, REVIEW AND REPORTING ....................................................................................... 60 9.1 MONITORING, SUPERVISION AND REPORTING OF THE INVESTMENT PROJECTS .......................................... 60 9.2 MONITORING, SUPERVISION AND REPORTING OF THE ESMF IMPLEMENTATION ....................................... 60

10. REFERENCES ............................................................................................................................................. 62

ANNEX 1 – EXCLUSION LIST OF PT SMI ........................................................................................................ 63

ANNEX 2 – APPLICABLE REGULATIONS UNDER INDONESIAN REPUBLIC RELATED TO SOCIAL & ENVIRONMENTAL SAFEGUARDS................................................................................................................ 65

ANNEX 3 – APPLICABLE ASIAN DEVELOPMENT BANK, WORLD BANK & IFC POLICIES ............. 69 Asian Development Bank operational policies ......................................................................................................... 69 World Bank operational policies .................................................................................................................................... 69 International Finance Corporation performance standards............................................................................. 70

ANNEX 4 – EXAMPLE TERMS OF REFERENCE FOR PT SMI SOCIAL AND ENVIRONMENTAL SPECIALIST STAFF .............................................................................................................................................. 73

1 Social and Environment Manager ........................................................................................................................ 73 2 Social Specialist (s) ...................................................................................................................................................... 75 3 Environmental Specialist .......................................................................................................................................... 77

ANNEX 5 – ENVIRONMENTAL & SOCIAL INITIAL SCREENING CHECKLIST ...................................... 79

ANNEX 6 – SOCIAL & ENVIRONMENTAL PROJECT INFORMATION SHEET ...................................... 82

ANNEX 7 – PROJECT INFORMATION REQUEST FORM ............................................................................ 84

ANNEX 8 – SOCIAL & ENVIRONMENTAL SCREENING CATEGORIES OF PROJECTS ........................ 86

ANNEX 9 - CHECKLIST TO DETERMINE THE APPLICABILITY OF PRINCIPLES ............................... 63

ANNEX 10 – ENVIRONMENTAL & SOCIAL ASSESSMENT & TYPES OF FINANCING ........................ 68

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ANNEX 11 - SOCIAL & ENVIRONMENTAL REVIEW FORMAT (MEMO TO THE PT SMI BOARD OF DIRECTORS) .......................................................................................................................................................... 70

ANNEX 12 - SITE VISIT CHECKLIST & RECORD ......................................................................................... 71

ANNEX 13 – OUTLINE OF ENVIRONMENTAL & SOCIAL APPRAISAL / DUE DILIGENCE REPORT ................................................................................................................................................................................... 72

ANNEX 14 – COVENANTS PERTAINING TO ENVIRONMENTAL & SOCIAL SAFEGUARDS FOR INCLUSION IN CONTRACTUAL AGREEMENTS ............................................................................................ 75

ANNEX 15 – OUTLINE TERMS OF REFERENCE FOR ENVIRONMENTAL & SOCIAL IMPACT ASSESSMENT STUDY .......................................................................................................................................... 77

ANNEX 16 - SAMPLE TERMS OF REFERENCE EIA (INFRASTRUCTURE PROJECTS) ....................... 84 Introduction .............................................................................................................................................................................. 84 Scope of Environmental Impact Assessment Report ............................................................................................. 84 Regulatory and Planning Framework .......................................................................................................................... 84 Project Description ................................................................................................................................................................ 85 Baseline Information ............................................................................................................................................................ 86 Impact Identification and Prediction ........................................................................................................................... 87 Environmental Assessment and Cumulative Effects Assessment ..................................................................... 87 Environment Management Plans ................................................................................................................................... 88 Environmental Monitoring ................................................................................................................................................ 89 Public Consultation and Grievance Mechanism Requirements ........................................................................ 89 Institutional strengthening to manage environmental impacts effectively: .............................................. 89

ANNEX 17 – SAMPLE OF TERMS OF REFERENCE FOR PREPARING A LAND ACQUISITION AND RESETTLEMENT PLAN ....................................................................................................................................... 91

Objectives ................................................................................................................................................................................... 91 Time Frame ............................................................................................................................................................................... 91 Personnel.................................................................................................................................................................................... 91 Tasks ............................................................................................................................................................................................ 91

ANNEX 18 – OUTLINE OF AN INITIAL ENVIRONMENTAL EXAMINATION (IEE) REPORT ........... 94

ANNEX 19 – OUTLINE OF AN ENVIRONMENTAL IMPACT ASSESSMENT (EIA) REPORT ............. 96

ANNEX 20 – OUTLINE OF AN ENVIRONMENTAL MANAGEMENT PLAN ......................................... 100 1. Environmental Management Plan ................................................................................................................ 100 2. Mitigation ................................................................................................................................................................. 100 3. Monitoring ................................................................................................................................................................ 100 4. Capacity Development and Training ........................................................................................................... 101 5. Implementation Schedule and Cost Estimates ........................................................................................ 101 6. Integration of EMP with Project .................................................................................................................... 101

ANNEX 21 – GUIDANCE ON THE APPLICATION OF OPERATING PRINCIPLE ON LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT ........................................................................... 102

1. Principles of Land Acquisition and Resettlement Plan (LARP) ........................................................ 102 2. Land Acquisition Procedures for Projects Supported by PT SMI .................................................... 103 3. Land Valuation ....................................................................................................................................................... 107 4. Types of Displaced Persons Eligible for Compensation ....................................................................... 107

ANNEX 22 – OUTLINE OF A RESETTLEMENT ACTION PLAN (LARP) .............................................. 109

ANNEX 23 – OUTLINE OF A RESETTLEMENT FRAMEWORK .............................................................. 113

ANNEX 24 – OUTLINE OF AN INDIGENOUS PEOPLE’S PLAN .............................................................. 115

ANNEX 25 – OUTLINE OF AN INDIGENOUS PEOPLES PLANNING FRAMEWORK ......................... 119

ANNEX 26 - OUTLINE OF CHANCE FINDING PROCEDURES IN RELATION TO THE OPERATING PRINCIPLE ON CULTURAL PROPERTY & HERITAGE ............................................................................ 121

PCR Definition ....................................................................................................................................................................... 121

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Ownership ............................................................................................................................................................................... 121 Recognition ............................................................................................................................................................................ 121 Procedure upon Discovery .............................................................................................................................................. 121 Demarcation of the Discovery Site .............................................................................................................................. 121

ANNEX 27 - MONITORING AND SUPERVISION ....................................................................................... 123

ANNEX 28 - DEVELOPERS ANNUAL ENVIRONMENTAL MONITORING REPORT TO PT SMI .... 126

ANNEX 29 - DEVELOPERS ANNUAL SOCIAL SAFEGUARDS REPORT TO PT SMI.......................... 128

ANNEX 30 - PT SMI ANNUAL SOCIAL & ENVIRONMENTAL PERFORMANCE REPORT TO STRATEGIC INVESTORS.................................................................................................................................. 131

Introduction ........................................................................................................................................................................... 132 Social and Environmental Management .................................................................................................................. 132 Compliance by SMI with the Social and Environmental Requirements (as specified in the shareholders’ agreement) ............................................................................................................................................... 132 Summary of Safety Performance and Any Corrective Actions ....................................................................... 134 Sustainable Development Initiatives and Community Relations .................................................................. 134 Annotated Outline of a Land Acquisition and Resettlement Plan (LARP) for Investee Projects .... 134 Relocation of Housing and Settlements .................................................................................................................... 136 Income Restoration and Rehabilitation ................................................................................................................... 137 Resettlement Budget and Financing Plan ............................................................................................................... 137 Implementation Schedule ............................................................................................................................................... 138 Institutional Framework for Resettlement ............................................................................................................. 138 Monitoring and Evaluation ............................................................................................................................................ 138

ANNEX 31 - PROJECT IMPLEMENTATION / COMPLETION REPORT ............................................... 139

ANNEX 32 – SECTOR-WISE ENVIRONMENTAL REVIEW / APPRAISAL CHECKLISTS ................. 141

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List of Abbreviations

ADB Asian Development Bank

AFD Agence Française de Développement

CAP Corrective Action Plan

EA Environmental Assessment

EARF Environmental Assessment and Review Framework

ESMF Environmental and Social Management Framework

ESDD Environmental and Social Due Diligence

ESS – OM Environmental and Social Safeguards – Operational Manual

ESS Environmental and Social Safeguards

FI Financial Intermediary

FPIC Free, Prior, and Informed Consent

GEF Global Environment Facility

GOI Government of Indonesia

GRM Grievance Redress Mechanism

IFC International Finance Corporation

IFI International Finance Institution

IIF Indonesia Infrastructure Finance

IPF Indigenous People Framework

IPDP Indigenous Peoples Development Plan

IUCN International Union for the Conservation of Nature

JICA Japan International Cooperation Agency

LARP Land Acquisition and Resettlement Plan

LARF Land Acquisition and Resettlement Framework

MFI Multi-Lateral Financing Institution

MFF Multi-Tranche Financing Facilities

NGO Non-government Organization

PT SMI PT Sarana Multi Infrastruktur (Persero)

RAP Resettlement Action Plan

RIDF Regional Infrastructure Development Fund

SECO State Secretariat for Economic Affairs, Government of Switzerland

SOE State Owned Enterprise

WB World Bank

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1. Introduction

1. PT Sarana Multi Infrastruktur (Persero) (PT SMI) is an infrastructure financing company which was established on 26 February 2009, as a State Owned Enterprises (SOE) wholly owned by the Government of Indonesia through the Minister of Finance (MOF). PT SMI plays an active role in facilitating infrastructure financing as well as preparing projects and serving in an advisory role for infrastructure projects in Indonesia. PT SMI carries the duty of supporting the Government’s infrastructure development agenda for Indonesia through partnerships with private and/or multilateral financial institutions in Public-Private Partnership (PPP) projects. PT SMI’s vision is to be a leading catalyst in Indonesia for the acceleration of the national infrastructure development agenda. While the mission of SMI1 to: i) become a strategic partner with value added to develop Indonesia’ infrastructure; ii) establish flexible financing products; and iii) provide quality services which comply with good corporate governance. As part the commitment to good corporate governance, PT SMI has committed to manage its business activities in an environmentally-and-socially-friendly manner, remove or minimise environmentally or socially negative impacts, and enhance environmentally or socially positive impacts, in investment projects. The Company in its financing and investment activities, project development, and consulting services provision for infrastructure projects, adheres to a framework of environmental and social safeguards (ESS) which are both well defined, subject to progressive and periodic reviews, and are well aligned with the related national laws and development procedures of the GoI, and with international standards and best practices.

2. PT SMI bases it’s ESS framework on ten fundamental safeguard principles (expanded in Section 3): i) ESS-1 – The Assessment and Management of Environmental and Social Risks and Impact; ii) ESS-2 – Labour and Working Conditions; iii) ESS-3 – Pollution Prevention and Abatement; iv) ESS-4 – Safety, Health and Security; v) ESS-5 – Land Acquisition and Involuntary Resettlement; vi) ESS-6 – Biodiversity Conservation and Natural Resources Management; vii) ESS-7 – Indigenous Peoples and Local Communities; viii) ESS-8 – Cultural Heritage; ix) ESS-9 – Energy Conservation and Environmentally-Sound Energy; and x) ESS-10 – Consultation and Grievance Mechanisms.

3. To attain a sufficient support for SOEs working within the infrastructure development sector, the Government of Indonesia has issued regulations that allow for direct lending from multi-lateral finance institutions (MFIs) like ADB and World Bank to SOEs2. These regulations allow PT SMI to act as a conduit for direct loans, where PT SMI as a financial intermediary (FI) on-lends to other SOEs that are less than 100% government owned, or to 100% government owned SOEs that affiliate, joint-venture, partner, conglomerate, connect, link, associate or otherwise work in cooperation with either another SOE or private enterprise to develop and accelerate delivery of public infrastructure. These regulations, and the resultant movement towards an increase in MFI infrastructure financing, have exposed PT SMI to the need to align its ESS principles, standards and procedures with the ESS standards of the leading MFI’s, such as ADB, World Bank, IFC and JICA. In such cases, PT SMI will act as an agent for the government undertaking a project due diligence assessment, using a suitable ESS framework, where a MFI is financing direct to an SOE such as State Electricity Company (PT PLN), and the MFI is obtaining a government guarantee. In undertaking the due diligence, PT SMI will be expected to assess the project’s technical, financial, economic and environmental and social safeguard components, and advise the government on the readiness of the project or program.

1 (SMI, 2015) Laporan Tahunan 2015 (Annual Report) - Establishing Strategic Transformation - A Leading Catalyst in Facilitating Indonesia's Infrastructure Development, Jakarta, PT Sarana Multi Indonesia (SMI). 2 Presidential Regulation No. 82 of 2015 (Perpres 82/2015) provides for a government guarantee issued by the Ministry of Finance to the Development Financing Institutions for 100% of the outstanding loan plus interest. To implement Perpres 82/2015, the Minister of Finance (MOF) has issued an implementing regulation (Regulation of Finance Minister (PMK) No. 189/PMK.08/2015), that provides rules for SOEs to apply for guarantees and compliance. In addition the MOF has set up Risk Management protocols to liquidate the guarantee and to account for contingent liabilities. The government is currently seeking support from ADB to strengthen fiscal risk management for accelerated infrastructure delivery.

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4. To assist in the above alignment process, in October 2016, PT SMI has a guiding regulation on the implementation of Environmental and Social Safeguards (ESS) for Multilateral Projects3 (SMI, 2016c), which provides over-arching policy guidance on the implementation of MFI ESS standards as part of the PT SMI project investment and advisory portfolio. Together with the development of this upper-level corporate guidance document, PT SMI has made effort together with the World Bank to prepare the an Environmental and Social Framework (ESMF) for the Indonesian Regional Infrastructure Development Fund4 (RIDF)5. This document, together with a separate ESMF focused upon geo-thermal project investment, has assisted PT SMI to align its corporate ESS with the World Bank and IFC safeguards systems.

5. To enable PT SMI’s lending program, and to further facilitate their due diligence assessment of government guaranteed projects, PT SMI has conducted a program over June – October 2016 to prepare an Environmental and Social Safeguard – Operations Manual (ESS – OM) to guide PT SMI corporate activities, and an Environmental and Social Management Framework (ESMF) to guide PT SMI ESS specialists in their investment project cycle management. This effort also assists MFI’s, such as the Asian Development Bank (ADB), who are assessing if INO CSS is consistent with ADB ESS6, and the World Bank which has made similar past efforts7.

5. The purpose of the current Environmental and Social Management Framework (ESMF) is to detail the Social and Environment safeguard policies, principles, detailed procedures, institutional arrangements and workflows that PT SMI should follow for making all of its investments compatible with the requirements of national laws, stakeholder MFI ESS principles and international best practice standards. PT SMI should use the ESMF to ensure consistent and effective implementation of social and environmental management practices in all its activities, products and services, across the organization as a whole. PT SMI are committed the implementation of the ESMF as part of their commitment to environmental and socially sustainable infrastructure development, as an integral part of ESS implementation at the corporate management level, and as supported by policies and over-arching steps and procedures outlined in the separately developed PT SMI ESS – OM, which provides guidance at the corporate management level.

6. The ESMF consists of:

i) The Environmental and Social Management Framework (ESMF); and

ii) Detailed procedures, process and formats for Social and Environmental Safeguards Management (Annexes).

7. The ESMF is intended for use by PT SMI institution, and by staff of all levels within the organization, as a policy statement document, and It also serves a communications role with the public and potential investors (such as MFIs) to assist external stakeholders to understand the Environmental Social Safeguards (ESS) policies and procedures of PT SMI.

3 (SMI, 2016c) Peraturan Direksi PT Sarana Multi Infrastruktur (Persero) tentang Pedoman Perlindungan Lingkungan dan Sosial (Environmental and Social Safeguards - ESS) Proyek Multilateral, Jakarta, Indonesia, PT Sarana Multi Infrastruktur (Persero). 4 Funded by the Government of Switzerland, State Secretariat for Economic Affairs (SECO), and administered by the World Bank. 5 (World Bank, 2016) Indonesia - Regional Infrastructure Development Fund Project : Environmental and Social Management Framework (ESMF), World Bank; and (SMI, 2016a) Environmental and Social Management Framework Jakarta, Regional Infrastructure Development Fund Project, PT Sarana Multi Indonesia (Persero) - World Bank. 6 ADB.2013. Technical Assistance to Indonesia for Aligning ADB and Country Systems for Improved Project Performance, implemented by ADB and BAPPENAS, commenced by fact finding mission in October – November, 2013, Manila (TA 8548 – INO). The TA aims to improve project performance through (i) promoting the use of CSS for the first time with an ADB developing member country, (ii) initiating the use of the new risk based approach to adopt country procurement systems, and (iii) improving alignment between ADB and government business processes for project preparation and start up. 7 (World Bank, 2005) Piloting the Use of Borrower System to Address Environmental and Social Safeguard Issues in Bank-Supported Projects., Washington DC, World Bank; and (World Bank, 2008) Evaluation of the Initial Phase of the Pilot Program for Use of Country Systems for Environmental and Social Safeguards., Washington DC, World Bank.

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2. Environmental and Social Safeguard Policies and Objectives

2.1 ESS Policy Objectives

8. PT SMI is committed to manage the environmental and social risks and impacts8 which may arise from its businesses. The ESS policies are the rules to promote project sustainability by protecting the people and environment from the project’s adverse impacts. PT SMI is committed to support their clients to develop the capacity to assess and manage the environmental and social risks and project impacts.

9. The ESS Policy objectives of PT SMI are to:

i) Avoid, or where avoidance is not possible, minimize, mitigate, or compensate for adverse impacts, and enhance any positive impacts, of projects and investments upon workers, affected communities, indigenous peoples and the environment;

ii) Mitigate and/or or compensate the adverse social and environmental risks and project impacts in accordance with the ESS, government law and regulations, and to a level acceptable to strategic investors and MFI financiers;

iii) Support efforts to foster sustainable development, the conservation or rehabilitation of natural resources and biodiversity, and the optimum use of energy and water;

iv) Ensure that affected communities are appropriately engaged on issues that could potentially affect them;

v) Ensure that social safeguards, based on the principle of restoration and possible improvement in the economic status of project affected people (PAP) and/or Affected Communities are integrated by developers into the project design prior to its financing and in its implementation during the construction and operational phases;

vi) Promote workers and community health and safety;

vii) Support the clients to develop the capacity to assess and manage the environmental and social risks and project impacts.

10. To achieve the policy objectives, PT SMI will implement the policy principles and carry out the procedures described in the following Sections 4 to 9:

i) Conduct due diligence and review to assess the potential environmental and social risks and project impacts and planning process;

ii) Assist the clients to assess and manage the potential environmental and social risks and projects impact;

iii) Conduct regular monitoring and supervising environmental and social safeguards to confirm the compliance with the ESS policies, and review the performance of environmental and social safeguards management.

8 The impacts and risks may take form of any potential direct, indirect, cumulative, and induced impacts and risks to physical, biological, socioeconomic (including impacts on livelihood through environmental media, health and safety, vulnerable groups, and gender issues), and physical cultural resources in the context of the project’s area of influence.

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2.2 Other Applicable Operational Policies and Scope

2.2.1 Indonesian Laws

11. Indonesian laws are used as the legal basis of this ESMF, with the relevant laws and regulations described, but are not limited to, the list outlined within Annex 29. These laws and regulations apply to all PT SMI business activities, project, investments and advisory services.

2.2.2 Other Applicable Safeguard Policies

12. The PT SMI ESMF overall should also take into account the applicable safeguard policies of the MFI’s with which PT SMI has working relations, namely:

i) The three ADB Safeguard Policies that would be triggered by the PT SMI’s Projects and the ESS requirements provided by the ADB Safeguards Policy Statement (2009)10;

ii) The ten World Bank Safeguard Operational Policies that could be triggered by PT SMI’s Projects, with attention to the current umbrella policy (OP 4.01) on environmental and social protection,

and attention to the Environmental and Social Framework (ESF) 11, which is under current preparation for implementation post 2017; and

iii) . The eight Performance Standards (PS) of the IFC version 201212, which are also utilized by AfD and Equator Principles financial organizations13 in their ESS assessment and management process.

13. A detailed summary of each of the above MFI ESS principles and the safeguard objectives of each principle is provided in Annex 3.

2.3 ESMF Objectives

2.3.1 ESMF Purpose, Scope and Objectives

14. The purpose of the ESMF is to provide the PT SMI ESS managers and development clients with the details the Social and Environment safeguard policies, principles, procedures, institutional arrangements, and workflows that PT SMI follows for making its investments. The PT SMI should use the ESMF to ensure consistent and effective implementation of social and environmental management practices in all its activities, investment and development projects, and also to guide the provision of all advisory services.

15. To achieve the above aim, the ESMF serves the following purposes to:

i) Guide PT SMI to Identify the above risks, hazards and impacts as early as possible in the project cycle, including considerations in the site selection process, the product design process, the engineering planning process for capital application, the demand for engineering work, facility modification authorization, or layout planning and process changes;

9 The regulations outlined are only up to the Government regulation level.. 10 (ADB, 2009) Safeguard Policy Statement, Asian Development Bank, Manila. 11 (World Bank, 2016a) Environmental and Social Framework (ESF) - Setting the Environmental and Social Standards for Investment Project Financing, Washington D.C., World Bank. 12 (IFC, 2012), IFC Performance Standards on Environmental and Social Sustainability, International Finance Corporation - World Bank Group, Washington DC. 13 Equator principles financial institutions are those that have adopted the Equator Principles, a financial industry framework for addressing environmental and social risks in project financing. Adopted in 2003 by 10 of the world’s leading commercial banks, the Equator Principles are an offshoot of the desire of the banks to develop a common and coherent set of environmental and social policies and guidelines to be applied globally and across all industry sectors. Each of the financial institutions declares that it has or will put in place policies or business processes that are consistent with the Equator Principles. They commit not to lend to projects where the borrower will not or cannot comply with its social and environmental requirements (ADB, 2009).

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ii) Guide PT SMI to identify risk possibility and scale based on: a) the nature of the project activities, whether the project will create the significant emissions or effluents, involve the process of hazardous and toxic substances, or disturb landscape hydrology or ambient water or air quality or noise levels; and b) potential consequences to workers, communities, economies or environment when the hazards are not managed properly;

iii) Guide developers to educate workers and surrounding communities in anticipating any accident occurrence, including providing technical and financial resources to avoid or minimize risk, and for effective and safe control of every accident.

2.3.2 Safeguard Procedures for Differing Financial Products and Project Components

16. PT SMI will have three main financial product categories.

i) Advisory Services where PT SMI has been provided funding or instructed (i.e. most often from the Ministry of Finance) to provide project development advisory services, which does not involve any disbursement of PT SMI funds;

ii) Financing and Investment (fund-based products) where PT SMI provided finance and banking services to assist project developments (e.g. senior debt, subordinated debt, mezzanine funding, equity investment, bridge finance, refinancing, securitization)14 - involving actual disbursement of PT SMI funds;

iii) Project Development (fund-based products) where PT SMI manages and prepares the project developments directly in support of the project developer - involving actual disbursement of PT SMI funds.

17. The approach of assessing, managing and monitoring environmental and social impacts will also be different for particular project with different stages of preparedness (Table 2-1).

Table 2-1: Project Categories by Development Stage

Project Type

Development Stage

Type 1 Projects in the early stages of preparation (with sites that have not been selected and design options that are still open) will be subject to the full project ESS review procedure of Chapter 4 will need to be applied. PT SMI will require the Clients to collaborate with the PT SMI ESS Risk Management team to prepare the necessary documents.

Type 2 Projects that have been fully prepared (where construction bids have been invited). PT SMI will conduct detailed appraisal of the ESS documents that are available and will ask the Clients to supplement them or develop and disclose new documents ones, as applicable, prior to the final project appraisal. If appraisal finds there are gaps, PT SMI have be ensure that ESS gaps are addressed, not only in terms of documents produced but in terms of addressing the resulting impacts/risks to avoid or minimize them.

Type 3 Projects with facilities that have already been constructed or for projects which are under construction, PT SMI will carry out a due diligence to confirm that: (a) the project is in compliance with this ESMF; (b) there are no reputational risks for PT SMI and MFI if they are involved; and (c) there are no legacy issues or no pending legal disputes or liabilities. Based on the findings of such an assessment, PT SMI will ask its client to implement remedial measures, as needed, or to mitigate potential reputational risks or to address legacy issues or liabilities, with all ESS documents and instruments to be disclosed prior to the final project appraisal.

14 The first five categories of projects provided with finance - senior debt, subordinated debt, mezzanine funding, equity investment, and bridge finance - all involve financing for new infrastructure. The final two categories of projects provided with finance - refinancing and securitization - involve raising financing on the basis of existing infrastructure (effectively as collateral), for the purpose of building new infrastructure.

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18. The PT SMI infrastructure lending and development business will encompass the fund-based products, and will also require a consideration of the different levels of project preparedness or readiness for implementation as defined by the project types above. Thus, there will be four types of projects that would fall under the PT SMI business process, which will require different types of ESMF review procedures:

i) Type 1 – Projects in the early stages of preparation (with sites that have not been selected and design options that are still open). In addition to other subproject preparation documents (such as FS), the Clients will have to prepare and disclose Environmental and Social Safeguards documents (i.e. EIA, EMP, SIA, LARAP, IPP, etc.), as relevant with the project. At this stage, PT SMI will suggest the Clients to collaborate with the ESS team to prepare the necessary documents;

ii) Type 2 – Projects that have been fully prepared (where construction bids have been invited). PT SMI will review the E&S documents that are available and will ask the Client to supplement them or develop new ones, as applicable. The Clients may seek assistance from the ESS team to prepare or improve the necessary documents. All required documents must be disclosed prior to subproject appraisal.

iii) Type 3 – Projects with facilities that have already been constructed or the projects which is under construction. PT SMI will carry out a due diligence to confirm that: (a) the project is in compliance with this ESMF; (b) there are no reputational risks for PT SMI and/or the supporting MFI; and (c) there are no legacy issues or no pending legal disputes or liabilities. Based on the findings of such an assessment, PT SMI will ask its client to implement remedial measures, as needed, or to mitigate potential reputational risks or to address legacy issues or liabilities. All safeguards instruments will have to be disclosed prior to the subproject appraisal;

iv) Type 4 – Projects provided with advisory services. PT SMI will carry out a due diligence to confirm that: (a) the project is in compliance with this ESMF; and (b) there are no reputational risks for PT SMI and/or the supporting MFI.

19. The ESMF will be applied to projects in each of the above categories. However, the specific activities undertaken in assessing, managing and monitoring environmental and social impacts of a particular project will be different for the advisory services than for the Fund based products.

20. For Fund based products (financing and investment and project development), the standard ESMF steps and procedures outlined in Section 2.3.3 and Chapter 4 will apply. The projects provided with advisory services will need to be assessed differently, and will essentially involve advisory and consulting services to a range of clients such as the Government, private sector developers and regulatory agencies.

21. For all projects provided with advisory services, PT SMI will need to ensure, based on its initial review (refer to Chapter 4.1.3 below), that its recommendations are consistent with the ESS Policy and ESS principles of PT SMI. For this to happen, the Director, Risk Management Committee will need to ensure that the Risk Management Division Head is informed of all advisory service provision assignments.

22. The differences in ESS requirements and procedures among the differing Fund-Based and Advisory Services based types of service provision are described in more detail in Annex 10 which a provides a matrix containing risk exposure, example and approach to ESS risk assessment for different types of PT SMI business procedures.

2.3.3 ESS Requirements Governing Preparation and Implementation of Projects

23. This ESMF is designed to mainstream the ESS into the loan processing cycles for projects seeking funding support from PT SMI. The application of the ESMF procedures begin right from the time of subproject preparation and the loan application to PT SMI and proceeds through steps of: (1) loan application, (2) initial screening, (3) subproject appraisal, (4) contract signing, (5) loan disbursal, and (6) monitoring and evaluation. The ESMF also includes external audit, document update and disclosure norms. The ESMF operational guidance scope covers:

i) Environmental and social risk mitigation tools such as environmental impact assessment (EIA) and environmental management plan (EMP), based on the project risk categorization. The generic ToR

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of EIA and EMP are also provided so that can be used for project preparation studies (pre FS, FS) for PT SMI review activities.

ii) Land acquisition and resettlement policy framework, which includes principles, procedures, requirements and organizational arrangements for involuntary land acquisition and resettlement; comprehensive land acquisition and resettlement plan or abbreviated resettlement action plan based on the project risk categorization.

iii) Indigenous Peoples Planning Framework, which includes principles, procedures, requirements and organizational arrangements to address Indigenous Peoples affected by project; Social Assessment and Indigenous Peoples Plan when Indigenous Peoples are affected.

iv) Grievance redress and stakeholders consultation mechanisms to ensure a participatory and fair approach in evaluating and mitigating project risks.

v) Details on stakeholders and their responsibilities.

vi) Details on human resource strengthening required in PT SMI for implementing the framework.

vii) Guidance on capacity building.

viii) Instructions on the monitoring and update of this document.

24. This ESMF outlines the requirements and procedures for application of the frameworks in the business cycles of PT SMI. The ESMF includes a set of tools such as templates for checklists and appraisal forms, sample terms of reference (ToRs) for preparing documents for safeguards mitigation measures, outlines for various environmental and social safeguards instruments, and a list of mandatory covenants to be included in loan agreements (see Annexes 4 to 32). The ESMF also provides details on how to follow the operating procedures, apply the frameworks, and use the templates, ToRs and outlines of EIA, UKL-UPL, LARAP, SA, and IPP are provided.

25. The details in regard to environmental and social screening, categorization and impact/risk management procedures are elaborated in Chapter 4.

2.3.4 ESS Performance Requirements

26. PT SMI will ensure that all the investments, projects and advisory services are reviewed and evaluated against the following ESS requirements:

i) the Exclusion List (refer to Annex 1);

ii) the applicable national laws on environment, health, safety and social issues (refer to Annex 2); and

iii) the PT SMI Principles (refer to Chapter 3). The Principles are consistent with the requirements of the PT SMI’s Strategic and MFI Investors, as amended from time to time.

2.3.5 Consultation and Disclosure Plan for the ESMF

27. PT SMI under guidance of GoI procedures, and in communication with key MFIs (i.e. ADB, World Bank, IFC, JICA and AfD), will ensure that meaningful consultation will be carried out to review any future revised drafts of the ESMF, and that the consultation processes will be appropriately documented in the revised final ESMF. The ESS operations departments of the MFIs will be also invited to conduct due diligence and review of any future revised ESMF documents, to determine that PT SMI has maintained the requirements for ESMF development.

28. A stakeholder consultation for future revised drafts ESMF, should be conducted with the main purpose to seek inputs for the ESMF revision from the potential client organizations, key central agencies, relevant NGOs and other institutions; and to socialize the PT SMI’s ESMF commitment to follow international best practices in ensuring that financed projects will be environmentally and socially sustainable.

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29. Drafts of any future revised ESMF post-consultation should be disclosed to the public in the PT SMI’s website.

30. Project-specific safeguards instruments (such as LARAP, IPP, IEE, EIA, EMP, AMDAL, UKL / UPL acceptable to PT SMI and related MFI’s) shall be subject to separate consultations and disclosure by the client organizations each time a PT SMI project or investment is developed. The timing for consultations shall be carried out prior to project detailed appraisal by PT SMI. The client organization will disclose the IEE, EIA, EMP, LARAP, IPP, etc. at the planning stage of project preparation, in their websites, a public space accessible to the affected groups, local NGOs and other stakeholders. In addition, PT SMI will also disclose15 such instruments in its website, upon endorsement of the clients getting the loan from PT SMI.

2.3.6 Updating and Commissioning of ESMF, Operations Manual

31. The ESMF is a living document which may be updated by PT SMI from time to time in accordance to the needs, lessons learned during the course of ESS management operations and project development, and to align the ESMF both the PT SMI and stakeholder MFI environment and social safeguards, regulatory requirements, the nature / scale of projects and the status of the environment. The updated ESMF shall be reviewed by the stakeholder MFI’s, approved by the board of management of PT SMI, and will be made available to the stakeholders through PT SMI’s website.

32. Any external review findings / observations, and lessons learnt, should also be incorporated into the ESMF updating revision to ensure its continued suitability and adequacy. The updates should be recorded in the document control revision sheet of the ESMF to preserve the history, scope of review and reasons for changes. The ESSBCM Division environment and social safeguard staff of PT SMI is responsible for updates.

33. The ESMF will also be operational, only after a review and approval process conducted internally by the board of management of PT SMI, and then a further review by stakeholder MFI’s as a peer review process of the PT SMI ESS standards.

15 MFI disclosure requirements should be complied with. E.g. ADB required a 120 disclosure of projects category A for environment on the ADB website before approval.

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3. Environmental and Social Safeguard Principles

34. The application of PT SMI ESS in the loan and project-cycle are guided at top policy level by the PT SMI Environmental and Social Safeguards (ESS) Guideline for Multi-Lateral Projects Fund16. As defined in this ESS framework document, PT SMI base their ESS approach upon a core of ten safeguard principles which are outlined in detail as follows.

3.1 ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS (ESS-1)

35. This first element emphasizes the importance of managing environmental and social aspects in the project implementation. The compliance with environmental and social regulations is a dynamic and ongoing process that begins by the Company -proponent management, Government and Community. The compliance with environmental and social regulations is a must prior to the commencement of a project. This involves environmental permit, location permit, land-use permits and other required permits in accordance with the regulations of the Republic of Indonesia. This compliance nature includes the elements of business process, namely planning, implementation, monitoring and improvement. Its implementation has passed the environmental and social risk and impact studies and assessments. The management and mitigation of any occurring risks have also been prepared.

Objectives

i) To get necessary development permits and social licences as part of the government's efforts to identify, assess and manage the positive or adverse environmental and social risks, impacts and sustainability of the project prior to the project execution.

ii) To Identify and manage the environmental, social, health and safety, and specific local community risks and impacts, with aim to remove or suitably mitigate any negative impacts, and enhance any positive impacts, where possible.

iii) To support the conservation of natural resources and optimal use of energy and water resources.

iv) To ensure transparency and participation in PT SMI’s ESS risk assessment and mitigation process through implementation of proper community involvement, FPIC, public consultation, information disclosure and implementation of grievance mechanisms for affected communities and the public.

v) To conduct regular evaluations to improve quality of environmental and social assessment and reporting, and improve the overall environmental and social performance of projects and Company activities, and to assess the effectiveness of company ESS policies.

Scope of Application

36. This first element is applied to a project having low, medium and high risks with a necessity to obtain necessary permits prior to the project execution. Accordingly, the environmental and social impacts can be managed in a sustainable manner.

Stipulation

36. PT SMI requires environmental assessment (EA) of projects proposed for PT SMI financing to help ensure that they are environmentally sound and sustainable, and thus to improve decision making.

i) EA is a process whose breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the proposed project17. EA evaluates a project's potential

16 (SMI, 2016b) Pedoman Perlindungan Lingkungan dan Sosial (Environmental and Social Safeguard/ESS) Proyek Multilateral (Environmental and Social Safeguard Guideline for Multi-Lateral Projects Fund), which was enacted into regulation in October, 2016. 17 Includes direct, indirect, cumulative, induced impacts.

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environmental risks and impacts in its area of influence; examines project alternatives; identifies ways of improving project selection, siting, planning, design, and implementation by preventing, minimizing, mitigating, or compensating for adverse environmental impacts and enhancing positive impacts; and includes the process of mitigating and managing adverse environmental impacts throughout project implementation. PT SMI favors preventive measures over mitigatory or compensatory measures, whenever feasible.

ii) EA takes into account the physical and natural environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and physical cultural resources) and livelihoods as linked to environmental resources; and trans-boundary and global environmental aspects. EA considers physical, natural and social aspects in an integrated way. It also takes into account the variations in project and country conditions; the findings of country environmental studies; national environmental action plans; the country's overall policy framework, national legislation, and institutional capabilities related to the environment and social aspects; and obligations of the country, pertaining to project activities, under relevant international environmental treaties and agreements.

iii) PT SMI does not finance project activities that would contravene such country obligations, as identified during the EA. EA is initiated as early as possible in project processing and is integrated closely with the economic, financial, institutional, social, and technical analyses of a proposed project.

iv) PT SMI undertakes environmental screening of each proposed project to determine the appropriate extent and type of EA. PT SMI classifies the proposed project into one of four categories, depending on the type, location, sensitivity, and scale of the project and the nature and magnitude of its potential environmental impacts.

v) PT SMI uses a classification system to reflect the significance of a project’s potential environmental impacts. A project’s category is determined by the category of its most environmentally sensitive component, including direct, indirect, cumulative, and induced impacts in the project’s area of influence18. Each proposed project is scrutinized as to its type, location, scale, and sensitivity of the receiving environment and the magnitude of its potential environmental impacts. Projects are assigned to one of the following four categories (see Annex 5 for details )

vi) The EA has to be undertaken based on the screening and classification of the project. The project must have permits as stipulated by the regulations of the Republic of Indonesia prior to the project execution and hand over regular reports to the relevant authorities. It is also a must to extend the validity period if any of the permits is expired or to notify of any changes if this is required under the permit.

vii) If the project is approved to operate, but it requires specific permits in accordance with the regulations, the project shall obtain such permits.

18 The area of influence is defined in line with ADB SPS 2009 and “encompasses (i) the primary project site(s) and related facilities that the borrower/client (including its contractors) develops or controls, such as power transmission corridors, pipelines, canals, tunnels, access roads, borrow pits and disposal areas, and construction camps; (ii) associated facilities that are not funded as part of the project (funding may be provided separately by the borrower/client or by third parties), and whose viability and existence depend exclusively on the project and whose goods or services are essential for successful operation of the project; (iii) areas and communities potentially affected by cumulative impacts from further planned development of the project, other sources of similar impacts in the geographical area, any existing project or condition, and other project-related developments that are realistically defined at the time the assessment is undertaken; and (iv) areas and communities potentially affected by impacts from unplanned but predictable developments caused by the project that may occur later or at a different location. The area of influence does not include potential impacts that might occur without the project or independently of the project.”

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viii) If the due diligence or monitoring process conducted by either the Environmental and Social Safeguard Specialists or Pool of Experts is recommended to obtain certain permits, the project shall obtain such permits.

ix) If the project does not have the permits relating to the Environmental Permit and Location Permit, the project would not be eligible for financing from PT SMI.

x) Other than that, the project will be asked to consider the following matters, as part of the Environmental and Social Compliance Rules:

1. Organization Capacity and Competency

2. Trainings: a) Emergency situations Response and Preparadness; b) Community Engagement; and c) Monitoring, reviewing, and reporting.

3.2 LABOR AND WORKING CONDITIONS (ESS-2)

37. This second element emphasizes the efforts of economic growth through fair employment and income as the fundamental rights of workers. For all projects, the workforce is a valuable asset and a good relationship between workers and management is one of the keys to the Company’s progress and productivity. The failure to maintain good relations between workers and management can reduce the worker commitment and retention, which in turn can jeopardize the project. By having the constructive management and worker relationship as well as by treating the workers fairly and providing safe and healthy working conditions, the project can win benefits such as operational productivity and efficiency.

Objectives

i) To create, improve, and maintain relationships between the management and workers.

ii) To encourage the fair treatment without discrimination and equal opportunities for workers and efforts to comply with Employment Act.

iii) To protect workers by preventing children labor and forced labor.

iv) To encourage the safe and healthy working and living (if provided by the Company) conditions as well as to protect and promote the worker health.


38. This second element is one of the requirements stipulated by the Company in performing the Environmental and Social assessment as a part of mitigating environmental and social risks, both conducted when the project starts its construction, and during the project operation. This implementation is as a compliance with Employment Act.

39. It is the obligation of the project management to treat workers fairly, either they are Permanent Employees, Contract Employees or Outsourcing Employees. The management should adhere to the wage and minimum wage regulations set by the government.

Stipulation

Human Resource Policies

40. The project should adopt human resources policies by applying a humanist approach to well manage workers in line with appropriate rights and obligations, including the rights to receive remuneration and compensation in accordance with the applicable regulations.

Working Conditions and Terms of Employment

41. The project is required to provide good working conditions both in terms of administration and rules of employment such as working hours, overtime, permission to leave office because of illness, childbirth as well as the protections, namely social insurance and health insurance.

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42. The project should provide a safe, healthy and secure work environment for workers by considering the risks in certain sectors, including the hazards of physics, chemistry, biology, and radiology. The project management should take measures for the prevention of occupational accidents and diseases.

Worker Organization

43. The project management is not allowed to prohibit the workers to join any organizations and workers are entitled to voice their opinions in accordance with the Act of freedom to join any association and to express their opinions in public; however, workers must also comply with the limitations set forth in the applicable regulations in the freedom to join any association and voice opinions in public.

Non-Discrimination and Fair Opportunity

44. The project may not make any employment decisions based on characteristics beyond the inherent occupational requirements. The project management should establish equal opportunity and justice according to the regulations of the Republic of Indonesia in treating workers without discriminating to gender, ethnic groups, religion, political views including in the hiring process, compensation (salaries and allowance), working conditions and type of employment, training, promotion, termination or pension and disciplinary actions.

Termination of Employment

45. The project management should develop a plan to mitigate the adverse impact of termination on workers. Should due to any certain reason, the employment termination has to be done, it should be executed in accordance with applicable regulations and consulted with local employment agencies.

Child Labor and Forced Labor

46. The project should not employ children in for economic interests or that may harm or interfere with the education of these children or do violence to their health or physical, mental, spiritual, moral, or social developments. All workers must be at least 18 years old and must be legally employable under existing government regulations. . The project may not employ forced labors or someone under threat of coercion or punishment.

3.3 POLLUTION PREVENTION AND ABATEMENT (ESS-3)

47. The third element stresses the pollution prevention and reduction in industrial and project activities, namely water, soil, air and noise pollution including greenhouse gas emission that may threaten people and the environment. This element underlines the eco-friendly approach by integrating methods or technologies as far as their uses are technically and feasible and effective in costs in the condition that the project relies on the commercially available expertise and resources.

Objectives

i) To prevent or minimize negative impacts on human health and the environment quality by avoiding or minimizing pollution from project activities.

ii) To encourage the reduction of greenhouse gas emissions which contribute to global warming phenomenon.


48. The application of this element is performed in the Environmental and Social Assessment before the project takes place and during periodic assessments. If any finding occurs, an immediate improvement recommendation should be made as an effort to fix the problem and it should be managed under the project Environmental and Social Management System.

Stipulation

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General Requirements

49. During the project design, construction, operation, and commissioning, the project management should consider ambient conditions and apply both technically and operationally prevention and control of pollution that is most appropriate to avoid or if it is impossible to avoid, the effort to minimize or mitigate negative impacts on human health and the environment should be carried out as long as it is technically and financially feasible as well as cost-effective.

Pollution Prevention and Reduction

50. The project should avoid the release of contaminants or pollutants into soil, water and air. If it is unavoidable, the project should minimize or control the intensity or the amount of released pollutants. Risk assessments need to be carried out in routine and non-routine activities, or in any activities having the potential negative impact on people and the environment by performing the measurably internal steps in operational activities in line with the principles of environmentally friendly operations.

Waste

51. Wherever possible, the project should minimize the Hazardous and Toxic Substances and non-hazardous and toxic by using 1) Reduce Method or reducing the waste production, and 2) Reuse Method or reusing the waste for a beneficial process 3) Recycle Method or recycling the waste. If these are impossible to do, the project should process, destroy, and temporarily store hazardous in such ways that are environmentally friendly and in accordance with the regulations. If the generated waste also includes hazardous and toxic, the project should process, utilize or disposed of, according to the regulations of the Ministry of Environment and Forestry. If the waste disposal is done by third party, the project should use a reputable contractor and approved by the competent authority.

Hazardous Materials

52. The project should do prevention, but if this is impossible to do, the project should minimize the use or control the release of hazardous and toxic materials coming from the production, transportation, handling, storage, and application for project activities. The project should avoid the manufacture, trade and use of chemicals which are not allowed by the government, agreed to be reduced by the government, or required by the international conventions because of the high toxicity to living organisms, environmental resistance, or depletion potential of ozone layer.

Pesticide, Herbicide and Fungicide Use and Management

53. In assisting the projects to manage pests, weeds and fungal infections that affect either agriculture or public health, PT SMI supports a strategy that promotes the use of biological or physical control methods and reduces reliance on synthetic chemical pesticides. In PT SMI-financed projects, the project addresses pest management issues in the context of the project's environmental assessment.

54. In appraising a project that will involve pest management, PT SMI assesses the capacity of the institutions to promote and support safe, effective, and environmentally sound pest management. As necessary, PT SMI and the project incorporate in the project components to strengthen such capacity.

55. PT SMI requires that any pesticides, herbicides or fungicides it finances be manufactured, packaged, labeled, handled, stored, disposed of, and applied according to applicable standards. PT SMI does not finance formulated products that fall in WHO classes IA and IB, or formulations of products in Class II, if (a) the country lacks restrictions on their distribution and use; or (b) they are likely to be used by, or be accessible to, lay personnel, farmers, or others without training, equipment, and facilities to handle, store, and apply these products properly.PT SMI will also not support any pesticide, herbicide or fungicide use on investment or development projects which include chemicals listed as banned or of restricted use under Indonesia Law19 or under the Stockholm Convention (2001) on Persistent Organic Pollutants20.

19 Keputusan Menteri Pertanian (Minister of Farming Decree) No. 434.1/Kpts/TP.270/7/2001. 20 See http://www.pops.int/documents/convtext/convtext_en.pdf

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Ambient conditions

56. To overcome the adverse impact of the project on the ambient conditions, the project should record Environmental Baseline Study and compare the measurements of ambient conditions on a regular basis. If there is any detected significant increase, the project should find the causes and create any necessary action plans. To minimize or reduce the release of pollutants is one of the recommended ways in maintaining the ambient conditions and this is also as a means of reducing the risk of potential changes in ambient conditions.

Greenhouse Gas Emission

57. The project should encourage the reduction of greenhouse gas emission (GHG) coming from the project activities. The project should apply greenhouse gas mitigation actions and estimates potential GHG emission in different project cycles from pre-construction, construction and post construction as well as operational phase. GHG calculation and monitoring should be held each year referring to the methodology set by the government. The emission reduction includes, but not limited to, energy efficiency, use of renewable energy sources, design change process, and the adoption of other financial and technical feasible GHG mitigation measures.

3.4 SAFETY, HEALTH AND SECURITY (ESS-4)

58. This fourth element emphasizes not only on the project activities and infrastructure development that bring benefit to the community in economic development, but also to minimize of the project potential risk exposure and impact on society arising from workplace accidents due to equipment failure, structure failure, hazardous and toxic and hazardous and toxic waste spreading as well as security issues. This element is used as the project obligation to prevent or minimize the risks and impacts on safety, health and security arising from the project activities.

Objectives

i) To prevent or minimize the risks and impacts on health, safety and security of workers and surrounding community both in routine and non-routine activities.

ii) To ensure protection of personnel and property is done properly so as to prevent or minimize risks to the community’s safety and security.


59. The application of this element is done as part of the Social and Environmental Assessment process. The project’s Environmental and Occupational Health and Safety Management System include procedures for the protection of environment, health and work safety to avoid impacts on human health and project safety to anticipate security problems.

Stipulation

Work Health and Safety

60. The project should evaluate the risks and the impact on the safety and health of workers and the affected community during the design, construction, commissioning and operation, of the project and develop preventive measures to overcome it in accordance with the identified risks and impacts. Such measures can support the prevention of risks and impacts through the hazard minimization and reduction.

Infrastructure and Equipment Safety

61. The structural elements or components of the project’s design, construction, commissioning and operation should be in accordance with the applicable regulations and should consider the potential risk to the hazards, especially if the structural elements are accessible by the public or if the structural failures during the construction and operational periods can cause people’s injury. Structural elements must be designed and constructed by qualified and experienced professionals, and certified or approved by the

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government agencies or in other words, by competent professionals. For the project that operates moving equipment on public roads and other infrastructure forms, the project management should seek to prevent incidents and accidents.

Environmental and Natural Resources Issues

62. The project should avoid or minimize the potential for natural disasters such as landslides or floods that may occur due to changes in land use related to the project activities. The project should also prevent or minimize negative impacts due to project activities related to soil, water and other natural resources that are used by the surrounding community.

Adaptation on Climate Change Impact

63. The project should promote different measures related to adaptation on climate change impacts. Those measures aim at minimizing climate change impacts to communities and at reducing vulnerabilities as well as increasing resilience of communities to face different climate change related risks in different sectors.

Disease Exposure to Community

64. The project should avoid or minimize the potential exposure to diseases caused by the project activities. If the diseases in the affected community have endemic nature, the project should monitor and encourage opportunities to improve the healthy environment condition during the project activities so as to reduce the amount of exposure.

Emergency Response and Preparedness

65. The project should assess the potential risk and impact of the project activities and inform the surrounding community about the significant hazards in ways that are appropriate with the local culture. The project can cooperate with the community leaders and local government in the preparation of emergency response so that the emergency treatment can be done effectively. The project should document the activities of emergency response preparedness, tools and equipment, emergency response team and persons in charge in emergency condition as well as convey pertinent information about other relevant action plans or documents to the workers, surrounding community and local government agencies.

Security Personnel

66. The project should hire employees or contractors for the provision of security personnel for the workers and property. The project should also assess the risks within and outside the project site proposed by the security company. In drawing up such arrangements, the project is directed by the principles set out by the police of the Republic of Indonesia in terms of recruitment, training and implementation of security patterns. The management should not order the security officers to take any repressive action. Security Force is used for prevention and security in accordance with the police regulations appropriate with the nature and scope of project security threats. The project should ensure that the safeguarding of personnel and property is carried out in accordance with relevant human rights principles and in a manner that avoids or minimizes risks to the Affected Communities.

Dam Safety

67. When PT SMI finances a project that includes the construction of a new dam, it requires that the dam be designed and its construction supervised by experienced and competent professionals; (i) For dams construction larger than 15 meter in height, the project shall appointed panel of expert consist of 3 or more, (ii) For dams less than 15 meters in height, it should be design by competent experts.

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3.5 LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT (ESS-5)

68. Population relocation includes physical displacement and economic displacement (loss of assets or access that results in loss of income sources or livelihood activities) as a result of land acquisition for the project. The population relocation becomes involuntary if the affected individuals or communities do not have the right to refuse the land acquisition and this will lead to the forced relocation.

69. Involuntary resettlement may result in difficult conditions and long-term poverty on the affected people and communities as well as environmental damage and social pressure on their new area if this issue is not managed cautiously. The involuntary resettlement should be avoided or at least minimized. If this is unavoidable, the steps must be mitigated to reduce the negative impact on the relocated people. The steps should be planned and implemented with caution.

70. This applies to all components of the project that result in involuntary resettlement, regardless of the source of financing. It also applies to other activities resulting in involuntary resettlement that in the judgment of the PT SMI, are:

i) related to the PT SMI-financed projects with low, middle, and high risks;

ii) necessary to achieve its objectives as set forth in the project documents; and

iii) carried out, or planned to be carried out, contemporaneously with the project.

Objectives

71. The objectives of the Involuntary Resettlement safeguards are:

i) To avoid the negative impact or at least minimize the risk of involuntary resettlement.

ii) To mitigate the social and economic impacts of harmful land acquisition on the affected people due to the land use by: (i) providing compensation for loss of assets at replacement cost; and (ii) ensuring the resettlement activities are carried out properly by conducting information disclosure, consultation and participation to those affected.

iii) To improve or at least restore the livelihoods and standards of living of relocated people.


72. The application of this element is carried out in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in the National Regulations relating to land provision that adverse affects the economic, social, or environmental aspects of project activities. Land acquisition creates loss of access to assets or resources or restrictions on land use; thus, those impacts should be avoided, minimized, mitigated, or compensated through a fair process in accordance with a mutual benefit principle.

73. The involuntary resettlement requirements apply to full or partial, permanent or temporary physical displacement (relocation, loss of residential land, or loss of shelter) and economic displacement (loss of land, assets, access to assets, income sources, or means of livelihoods) resulting from (i) involuntary acquisition of land, or (ii) involuntary restrictions on land use or on access to legally designated parks and protected areas. Resettlement is considered involuntary when displaced individuals or communities do not have the right to refuse land acquisition that results in displacement. This occurs in cases where (i) lands are acquired through expropriation based on eminent domain; and (ii) lands are acquired through negotiated settlements, if expropriation process would have resulted upon the failure of negotiation.

74. This element does not apply for voluntary resettlement based on a profitable land transaction.

Stipulation

Project Design

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75. The project should consider alternative technically and financially feasible project designs to avoid or at least minimize the physical or economic displacement by force.

76. A proposed project is assigned to one of the following categories depending on the significance of the probable involuntary resettlement impacts:

(i) Category A: A proposed project is classified as category A if it is likely to have significant involuntary resettlement impacts. A resettlement plan, including assessment of social impacts, is required.

(ii) Category B: A proposed project is classified as category B if it includes involuntary resettlement impacts that are not deemed significant. A resettlement plan, including assessment of social impacts, is required.

(iii) Category C: A proposed project is classified as category C if it has no involuntary resettlement impacts. No further action is required.

(iv) Category FI: A proposed project is classified as category FI if it involves the investment of SMI funds to, or through, a financial intermediary

77. A project involuntary resettlement category is determined by the category of its most sensitive component in terms of involuntary resettlement impacts. The involuntary resettlement impacts of PT SMI project are considered significant if 200 or more persons will experience major impacts, which are defined as (i) being physically displaced from housing, or (ii) losing 10% or more of their productive assets (income generating). The level of detail and comprehensiveness of the resettlement plan are commensurate with the significance of the potential impacts and risks.

Compensation, Assistance, and Benefits for People Involuntary Displaced

78. If the forced displacement is unavoidable, the project should offer to the people or communities who are involuntary relocated the land restitution and compensation for loss of assets at land and building replacement cost, removal cost assistance and other assistance to help them improved or at least restore their life dignity and livelihood.

79. People displaced involuntary in a project area consists of three types: (i) persons with formal legal rights to land lost in its entirety or in part; (ii) persons who lost the land they occupy in its entirety or in part who have no formal legal rights to such land, but who have claims to such lands that are recognized or recognizable under national laws; and (iii) persons who lost the land they occupy in its entirety or in part who have neither formal legal rights nor recognized or recognizable claims to such land. The involuntary resettlement requirements apply to all three types of displaced persons.

80. The project will provide adequate and appropriate replacement land and structures or cash compensation at full replacement cost for lost land and structures, adequate compensation for partially damaged structures, and relocation assistance, if applicable, to those persons described in para. 79(i) and 79(ii) prior to their relocation. For those persons described in para. 79(iii), the borrower/client will compensate them for the loss of assets other than land, such as dwellings, and also for other improvements to the land, at full replacement cost. The entitlements of those under para. 79(iii) is given only if they occupied the land or structures in the project area prior to the cutoff date for eligibility for resettlement assistance.

81. The rate of compensation for acquired housing, land and other assets will be calculated at full replacement costs based on the valuation of independent appraiser. The calculation of full replacement cost will be based on the following elements: (i) fair market value; (ii) transaction costs; (iii) interest accrued; (iv) transitional and restoration costs; and (v) other applicable payments, if any. Where market conditions are absent or in a formative stage, the borrower/client will consult with the people relocated by force and host populations to obtain adequate information about recent land transactions, land value by types, land titles, land use, cropping patterns and crop production, availability of land in the project area and region, and other related information. The borrower/client will also collect baseline data on housing, house types, and construction materials. Qualified and experienced experts will undertake the

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valuation of acquired assets. In applying this method of valuation, depreciation of structures and assets should not be taken into account.

Physical Displacement

82. If people living in the project area must be relocated to another location, the Project should: (i) offer a choice among possible options to those relocated, including appropriate residence substitution or suitable compensation (ii) provide relocation assistance appropriate to the needs of each relocated group of people with special attention to the needy ones with comparable access to employment and production opportunities, and civic infrastructure and community services as required; (iii) transitional support and development assistance, such as land development, credit facilities, training, or employment opportunities; and (iv) opportunities to derive appropriate development benefits from the project.

83. If indigenous peoples must be relocated physically from their indigenous land, the project must comply with the provisions described in Elements of indigenous peoples and local communities.

Economic Displacement

84. If the land acquisition for the project causes loss of income or livelihood, the project should meet the following provisions:

i) To provide economic compensation to those relocated over the loss of assets or access to assets at a full replacement cost.

ii) If the land acquisition affects commercial structures, the compensation should be given to the business owners over the cost of rebuilding commercial activities in other place and cost of equipment removal, factory re-installation, machinery, or other equipment.

iii) To provide land compensation by reference to the full replacement cost wherever possible to the people entitled for the land by showing the legality proof of land, which is approved or can be approved by the National Law.

iv) To give economic compensation to the relocated people who do not have legal claim to the land, such as agriculture, infrastructure and irrigation at a full replacement cost according to the applicable national regulations.

v) To provide additional assistance such as training or employment opportunities as well as opportunities to improve or restore the ability to obtain a proper livelihood.

Social Impact Assessment

85. The project will conduct socioeconomic survey(s) and a census, with appropriate socioeconomic baseline data to identify all persons who will be displaced by the project and to assess the project’s socioeconomic impacts on them. For this purpose, normally a cut-off date will be established by the host government procedures. In the absence of such procedures, the project will establish a cut-off date for eligibility. Information regarding the cut-off date will be documented and disseminated throughout the project area.

86. The social impact assessment (SIA) report will include (i) identified past21, present and future potential social impacts, (ii) an inventory of displaced persons and their assets, (iii) an assessment of their income and livelihoods, and (iv) gender-disaggregated information pertaining to the economic and sociocultural conditions of displaced persons. The project’s potential social impacts and risks will be

21 Identifying past potential social impacts would be used as a reference for predicting the future impacts to appear and how to mitigate the impact. The method would be through a due diligence study and the result is the due diligence report and action plan (Environmental and Social Due Diligence Report and Corrective Action Plans – ESDD – CAP); see annex 13 and 14 of this document.

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assessed against the requirements presented in this document and applicable laws and regulations of the jurisdictions in which the project operates that pertain to involuntary resettlement matters, including obligations under international law.

Resettlement Plan and Implementation

87. The project will prepare a resettlement plan, if involuntary resettlement is unavoidable. The project should conduct a census with Environmental and Social Baseline Study to identify those who should be relocated, to determine those entitled to receive compensation and those who are not. The local government must be included as a part of the land acquisition committee. Those relocated involuntary can be classified as persons: (i) having formal legal rights to the occupied land; (ii) having no formal legal rights, but claiming the land, but approved or can be approved by the law or (iii) having no legal right or claim to the occupied land. In the absence of the government procedures, the project will establish a cut-off date for eligibility. Information regarding the cut-off date will be well documented and disseminated throughout the project area.

88. The objective of a resettlement plan is to ensure that livelihoods and standards of living of displaced persons are improved, or at least restored to pre-project (physical and/or economic) levels and that the standards of living of the displaced poor and other vulnerable groups are improved, not merely restored, by providing adequate housing, security of land tenure and steady income and livelihood sources. The level of detail and comprehensiveness of the resettlement plan will be commensurate with the significance of involuntary resettlement impacts. An outline of resettlement plan is provided in the annex 22 of this document.

89. A resettlement plan will be based on the social impact assessment and the existing of spatial planning to find an alternate location through meaningful consultation with the affected persons. A resettlement plan will include measures to ensure that the displaced persons are (i) informed about their options and entitlements pertaining to compensation, relocation, and rehabilitation; (ii) consulted on resettlement options and choices; and (iii) provided with resettlement alternatives. During the identification of the impacts of resettlement and resettlement planning, and implementation, the project will pay adequate attention to gender concerns, including specific measures addressing the need of female headed households, gender-inclusive consultation, information disclosure, and grievance mechanisms, to ensure that both men and women receive adequate and appropriate compensation for their lost property and resettlement assistance, as well as assistance to restore and improve their incomes and living standards. For projects have affected Indigenous People to be relocated, an Indigenous People Plan (IPP) with a Free, Prior, and Informed Consent (FPIC) of the IPs has to be submitted and implemented by the project.

Livelihood Restoration Planning and Implementation

90. Where affected persons do not accept the compensations offers that meet the requirement of this guideline, and thus, expropriation or other legal procedures are initiated, the project will explore opportunities to collaborate with the responsible governmental agency or involve intermediary organisations like university, NGO or such organization is trusted to stand impartial, whose when permitted, will play active role in the resettlement planning, implementation and monitoring.

91. Resettlement Action Plan and/or Livelihood Restoration Plan implementation is completed when the adverse impacts of the resettlement have been addressed and consistent with the relevant plan as well as the objectives of this guideline. The project will document all transactions to acquire land rights, as well as compensation measures and relocation activities. The project will also establish procedures to monitor and evaluate the implementation of resettlement plans and take corrective action as necessary. A resettlement will be considered complete when the adverse impacts of resettlement have been addressed in a manner that is consistent with the objectives stated in the resettlement plan or framework as well as the objectives of this guideline. The evaluation will include, at a minimum, the following:

i) Review of the totality of mitigation measures implemented by the project;

ii) Comparison of implementation outcomes against agreed objectives; and

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iii) Conclusion as to whether the monitoring process can be concluded.

Vulnerable People and Gender Considerations

92. The project will be asked to pay particular attention to ensure that vulnerable people and women are the recipients of compensation pertaining to and reflecting their full activities. The project will ensure that women who are de-facto household heads are clearly listed as beneficiaries of compensation and rehabilitation proceedings. In order to ensure the above the following actions will be considered:

i) impact assessment will disaggregate the Affected People’s gender-wise (or by vulnerable people if appropriate) and will clearly indicate the number of affected women-headed households (or vulnerable people) and their pre-project socioeconomic status;

ii) women and vulnerable people will be encouraged to actively participate in all land acquisition resettlement-related consultations and negotiations, to be facilitated by women’s’ groups;

iii) when required, special mitigation actions/measures for vulnerable people/ women will be prepared and included in the resettlement plan;

iv) all compensation due to woman-headed families will be given to only the women family head, and;

v) resettlement plan monitoring and evaluation will pay special attention on the impact of resettlement on women and other vulnerable people.

Information Disclosure

93. The project has to submit the following documents to PT SMI for disclosure on the PT SMI’s and the project’s websites: (i) a draft resettlement plan and/or resettlement framework endorsed by the project before project appraisal; (ii) the final resettlement plan endorsed by the project after the census of affected persons has been completed; (iii) a new resettlement plan or an updated resettlement plan, and a corrective action plan prepared during project implementation, if any; and (iv) the resettlement monitoring reports. The project will provide relevant resettlement information, including information from the documents in a timely manner, in an accessible place and in a form and language(s) understandable to affected persons and other stakeholders. For illiterate people, suitable other communication methods will be used.

Consultation

94. The project will conduct meaningful consultation with affected persons, their host communities, and civil society for every project and subproject identified as having involuntary resettlement impacts. Meaningful consultation is a process that (i) begins early in the project preparation stage and is carried out on an ongoing basis throughout the project cycle; (ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people; (iii) is undertaken in an atmosphere free of intimidation or coercion; (iv) is gender inclusive and responsive, and tailored to the needs of disadvantaged and vulnerable groups; and (v) enables the incorporation of all relevant views of affected people and other stakeholders into decision making, such as project design, mitigation measures, the sharing of development benefits and opportunities, and implementation issues. Consultation will be carried out in a manner commensurate with the impacts on affected communities. The borrower/client will pay particular attention to the need of disadvantaged or vulnerable groups, especially those below the poverty line, the landless, the elderly, female-headed households, women and children, Indigenous Peoples, and those without legal title to land.

95. The project management should facilitate the grievance mechanism and open the opportunity to participate in the project for the affected people due to the land acquisition. This also requires the involvement of the local government in the decision-making processes related to the resettlement including the monitoring and evaluation of restitution and other compensation payment.

96. In relation to the resettlement and livelihood restoration processes, the project will apply a decision-making process that includes options and alternatives, where applicable. Project disclosure will continue

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during the implementation, monitoring, and evaluation of compensation payment, livelihood restoration activities and resettlement to achieve outcomes that are consistent with the objectives of this guideline.

Grievance Mechanism

97. The project should establish a mechanism of meetings to accommodate grievance and discuss specific issues about compensation and relocation arising from forcibly displaced people or members of the local community, including settlement mechanism to solve problems, paying particular attention to the impacts on vulnerable groups. The grievance redress mechanism should be scaled to the risks and adverse impacts of the project. It should address affected persons’ concerns and complaints promptly, using an understandable and transparent process that is gender responsive, culturally appropriate, and readily accessible to the affected persons at no costs and without retribution. The mechanism should not impede access to the country’s judicial or administrative remedies. The project will inform affected persons about the mechanism.

Monitoring and Reporting

98. The project will monitor and measure the progress of implementation of the resettlement plan. The extent of monitoring activities will be commensurate with the project’s risks and impacts. In addition to recording the progress in compensation payment and other resettlement activities, the project will prepare monitoring reports to ensure that the implementation of the resettlement plan has produced the desired outcomes. For projects with significant involuntary resettlement impacts, the project will retain qualified and experienced external experts or qualified NGOs to verify the project’s monitoring information. The external experts engaged by the project will advise on safeguard compliance issues, and if any significant involuntary resettlement issues are identified, a corrective action plan will be prepared to address such issues. Until such planning documents are formulated, disclosed and approved, the project will not proceed with implementing the specific project components for which involuntary resettlement impacts are identified.

99. The project will prepare semiannual monitoring reports that describe the progress of the implementation of resettlement activities and any compliance issues and corrective actions. These reports will closely follow the involuntary resettlement monitoring indicators agreed at the time of resettlement plan approval. The costs of internal and external resettlement monitoring requirements will be included in the project budget.

3.6 BIODIVERSITY CONSERVATION AND NATURAL RESOURCES MANAGEMENT (ESS-6)

100. The protection and conservation of biodiversity, the variety of life in various forms, including genetic, species and ecosystem diversity are critical to sustainable development. Biodiversity components comprise of ecosystems and habitats, species and communities. This element stresses on how the project can avoid or mitigate threats to biodiversity that may arise from project operations as well as how to manage the natural resources that aims to conserve biodiversity and to encourage the planned and directed use of natural resources in a sustainable manner.

101. As detailed in the Annex 1 PT SMI investment Exclusion List, PT SMI will not finance projects that cause and involve, or indirectly lead to:

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i) the conversion or degradation of critical22 or natural habitats unless23:

a. for natural habitats

i. No alternatives are available.

ii. A comprehensive analysis demonstrates that the overall benefits from the project will substantially outweigh the project costs, including environmental costs.

iii. Any conversion or degradation is appropriately mitigated.

b. Mitigation measures will be designed to achieve at least no net loss of biodiversity. They may include a combination of actions, such as post-project restoration of habitats, offset of losses through the creation or effective conservation of ecologically comparable areas that are managed for biodiversity while respecting the ongoing use of such biodiversity by Indigenous Peoples or traditional communities, and compensation to direct users of biodiversity.

c. For critical habitats

i. There are no measurable adverse impacts, or likelihood of such, on the critical habitat which could impair its high biodiversity value or the ability to function.

ii. The project is not anticipated to lead to a reduction in the population of any recognized endangered or critically endangered species6 or a loss in area of the habitat concerned such that the persistence of a viable and representative host ecosystem be compromised.

iii. Any lesser impacts are mitigated in accordance with para. B above.

ii) the conversion, clearance, burning or commercial or small-holder logging operations or purchase of logging equipment for use in primary tropical moist forest or old-growth forests, whether within or outside protected areas or forest reserves, or involve the production or trade in wood products from these forests;

iii) the destruction, vegetation-clearance, drainage or burning of deep tropical peat lands (deeper than 3 m by law, and deeper than 2 m to allow buffer to deep peat), or the commercial or small-holder logging, plantation or agricultural developments on deep peat lands (peat deeper than 3 m);

iv) the destruction, vegetation-clearance, drainage or burning of freshwater wetlands;

v) the destruction, vegetation-clearance, drainage or burning of mangrove forests; or

vi) the mining or excavation of live coral, conduct of development which will disturb or degrade live coral habitats.

Objectives

i) To protect and conserve biodiversity.

ii) To encourage sustainable development and natural resources utilization by applying integrated conservation.

22 Critical habitats are defined as any habitat which is essential to support populations of threatened (IUCN red list, national law protected or CITES listed) or endemic animal or plant species, Including also locally or nationally rare and threatened vegetation habitats and habitats which have high value for provision of other ecoystem services (e.g. flood protection, erosion and landslide protection, catchment function support and water resources provision). 23 See ADB SPS 2009

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102. The application of this element is performed in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in State Regulations relating to biodiversity and natural resources conservation.

Stipulation

Habitat

103. Habitat destruction constitutes the main threat to biodiversity. Habitat can be divided into 1/ natural habitat, namely land and water as the biological communities composed by indigenous plant and animal environment without human interference and 2/modified habitat, namely habitat having been transformed with the presence of non-indigenous plant and animal species. Both types of habitat can support diversity at all levels, including endemic or threatened species.

Critical Habitat

104. Critical habitat is a part of natural and modified habitat which requires special attention (see definition in footnote 43 above). The critical habitat covers areas24 with high biodiversity value, including habitat required for the survival of critically endangered or endangered species; areas having special significance for endemic or restricted-range species; sites that are critical for the survival of migratory species; areas supporting globally significant concentrations or numbers of individuals of congregatory species; areas with unique assemblages of species or that are associated with key evolutionary processes or provide key ecosystem services; and areas having biodiversity of significant social, economic, or cultural importance to local communities.

105. In the area of critical habitat, the project should implement project activities considering25:

(i) there are no measurable adverse impacts on the critical habitat that could impair its ability to function, (ii) there is no reduction in the population of any recognized endangered or critically endangered species, and (iii) any lesser impacts are mitigated. If a project is located within a legally protected area, implement additional programs to promote and enhance the conservation aims of the protected area. In an area of natural habitats, there must be no significant conversion or degradation, unless (i) alternatives are not available, (ii) the overall benefits from the project substantially outweigh the environmental costs, and (iii) any conversion or degradation is appropriately mitigated. Use a precautionary approach to the use, development, and management of renewable natural resources.

Area Protected by Law

106. If the project is located in an area protected by law, the project management should meet the following provisions:

i) To act consistently related to the protected area management plan.

ii) To facilitate a forum for communication and consultation between stakeholders (including protected area management) and the community in the area.

iii) To implement additional programs to promote and achieve the objectives of protected conservation area.

iv) Not to deliberately introduce newly non-indigenous species in the project area, unless it gets permission from the authorities.

Natural Forest and Protected Forest

24 See ADB SPS 2009. 25 See ADB SPS 2009.

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107. As detailed in the PT SMI exclusion list outlined above, if the project is located in the area of natural forest within or outside of forest reserves, or a protected forest, the project must obtain permits from the authorities and the project should not cause any conversion or degradation of critical habitat, moist tropical forests, old growth forests, mangrove forests, freshwater wetland forests of any kind, inclusive of peat swamp forest. Additionally, the project must ensure that all natural and protected forest ecosystems and deep peatlands (with peat deeper than 3 m) are not directly or indirectly converted, degraded, burned, drained or developed in any way.

Use of Surface Water and Groundwater

108. The project that requires the use of surface water and ground water should assess the environmental and social issues and mitigate the risks that may arise. All use of surface water and groundwater requires permission from the authorities before using.

3.7 INDIGENOUS PEOPLES AND LOCAL COMMUNITIES (ESS -7)

109. Indigenous peoples and local communities26 are the social groups with identities that may be different from the dominant groups in societies. Their economic, social and legal status is limited to defending their interests and rights on land, natural resources and culture. They also have the limitations to participate in and get benefit from development. They are vulnerable, especially if their land and resources are used by outsiders and degraded significantly. The language, culture, and natural resources as the main pillar of their livelihood can be threatened and exposed to changes by the outer community.

110. The project can open opportunities for the indigenous peoples and local communities to participate and get benefits from the project activities so as to help meet their aspirations for economic and social development. They can also play a role in sustainable development by promoting and managing activities and business as co-development.

111. In projects with adverse impacts on affected communities of Indigenous Peoples, the consultation process will ensure their Free, Prior, and Informed Consent (FPIC) and facilitate their informed participation on matters that affect them directly, such as proposed mitigation measures, the sharing of development benefits and opportunities, and implementation issues.

112. FPIC applies to project design, implementation, and expected outcomes related to impacts the communities of Indigenous Peoples. When any of these circumstances apply, the client will engage external experts to assist in the identification of the project risks and impacts. To achieve FPIC, unanimity is not necessarily required. FPIC can also be achieved when individuals or groups within community explicitly disagree; for some case with have no solution, an intermediary organisations should be involved. The following should be documented: (i) mutually accepted process between the project and Affected Communities; and (ii) agreement evidence between parties as the outcome for the negotiations27.

Objectives

i) To protect and assist indigenous peoples and local communities from the development effects which are not in accordance with their educational, social and cultural levels.

ii) To encourage indigenous and local communities as co-development and get social and economic benefit from the project.


26 Local communities refers as the presence of the inhabitants residing on the impacted project in accordance with the AMDAL definition or other related project studies 27 More detail about FPIC could be found in the Chapter 5, section 5.3 Indigenous People Consultation and Consent Procedures of this document

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113. The application of this element is performed in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in State Regulations relating to the indigenous peoples and local communities.

114. Indigenous Peoples is used in a generic sense to refer to a distinct, vulnerable, social, and cultural group possessing the following four characteristics in varying degrees:

i) self-identification as members of a distinct indigenous cultural group and recognition of this identity by others;

ii) collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories;

iii) customary, cultural, economic, social, or political institutions that are separate from those of the dominant society and culture; and

iv) a distinct language, often different from the official language of the country or region.

Stipulation

Project Design

115. A proposed project is assigned to one of the following categories depending on the significance of the potential impacts on Indigenous Peoples:

(i) Category A. A proposed project is classified as category A if it is likely to have significant impacts on Indigenous Peoples. An Indigenous Peoples plan (IPP), including assessment of social impacts, is required.

(ii) Category B. A proposed project is classified as category B if it is likely to have limited impacts on Indigenous Peoples. An IPP, including assessment of social impacts, is required.

(iii) Category C. A proposed project is classified as category C if it is not expected to have impacts on Indigenous Peoples. No further action is required.

(iv) Category FI. A proposed project is classified as category FI if it involves the investment of ADB funds to, or through, a financial intermediary

(v)

Prevention of Adverse Impacts

116. Through the Social and Environmental Assessment process, the project should identify all indigenous peoples and local communities who may be affected within the project area, as well as the nature and levels of estimated social, cultural and environmental impact on them and prevent negative impacts as best as possible.

117. If the prevention seems impossible, the project management should minimize, mitigate, or compensate for these impacts in accordance with existing local culture wisdom.

Information, Consultation and Participation Notification

118. The project will undertake meaningful consultation with affected Indigenous Peoples to ensure their informed participation in (i) designing, implementing, and monitoring measures to avoid adverse impacts on them or, when avoidance is not possible, to minimize, mitigate, and compensate for such effects; and (ii) tailoring project benefits that accrue to them in a culturally appropriate manner. Meaningful consultation is a process that (i) begins early in the project preparation stage and is carried out on an ongoing basis throughout the project cycle; (ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people; (iii) is undertaken in an atmosphere free of intimidation or coercion; (iv) is gender inclusive and responsive, and tailored to the needs of disadvantaged and vulnerable groups; and (v) enables the incorporation of all relevant views of affected people and other stakeholders into decision making, such as project design, mitigation measures, the sharing of development benefits and opportunities, and implementation issues. Consultation will be

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carried out in a manner commensurate with the impacts on affected communities. The consultation process and its results will be documented and reflected in the Indigenous Peoples plan (IPP).

119. The project should build an ongoing relationship with the affected indigenous peoples or local communities as early as possible during the project planning and operation. The community engagement process must be in accordance with the culture as well as the potential risks and impacts on indigenous peoples. The process includes the following steps:

i) To include the representative body of indigenous peoples, namely associations of village elder, village groups, chieftain and village leaders.

ii) To provide necessary time for indigenous peoples to conduct the Consensus and Democracy process in decision-making.

iii) To facilitate indigenous peoples to express their views in their own culture and language, without any interference, coercion or intimidation.

Social Impact Assessment

120. If screening by PT SMI confirms likely impacts on Indigenous Peoples, the project will retain qualified and experienced experts to carry out a full social impact assessment (SIA), and if impacts on Indigenous Peoples are identified, the project will prepare an IPP in conjunction with the feasibility study. The project’s potential social impacts and risks will be assessed against the requirements presented in this document and applicable laws and regulations of the jurisdictions in which the project operates that pertain to Indigenous Peoples matters, including obligations under international law.

121. Based on the screening, a field-based SIA will be conducted either as part of the feasibility study or as a stand-alone activity. The SIA will, in a gender-sensitive manner, in consultation with Indigenous Peoples communities, identify the project-affected Indigenous Peoples and the potential impacts of the proposed project on them. The SIA will provide a baseline socioeconomic profile of the indigenous groups in the project area and project impact zone; assess their access to and opportunities to avail themselves of basic social and economic services; assess the short- and long-term, direct and indirect, and positive and negative impacts of the project on each group’s social, cultural, and economic status; assess and validate which indigenous groups will trigger the Indigenous Peoples policy principles; and assess the subsequent approaches and resource requirements for addressing the various concerns and issues of projects that affect them.

Indigenous Peoples Planning

122. If the screening and SIA indicate that the proposed project will have impacts, positive and/or negative, on Indigenous Peoples, the project will prepare an IPP in the context of the SIA and through meaningful consultation with the affected Indigenous Peoples communities. The IPP will set out the measures whereby the borrower/client will ensure (i) that affected Indigenous Peoples receive culturally appropriate social and economic benefits; and (ii) that when potential adverse impacts on Indigenous Peoples are identified, these will be avoided to the maximum extent possible. Where this avoidance is proven to be impossible, based on meaningful consultation with indigenous communities, the IPP will outline measures to minimize, mitigate, and compensate for the adverse impacts. An outline of IPP is provided in the annex 24 of this document.

Ancestral Domains and Lands and Related Natural Resources

123. Indigenous Peoples are closely tied to land, forests, water, wildlife, and other natural resources, and therefore special considerations apply if the project affects such ties. In this situation, when carrying out the social impact assessment and preparing the IPP, the project will pay particular attention to the following:

(i) the customary rights of the Indigenous Peoples, both individual and collective, pertaining to ancestral domains, lands, or territories that they traditionally own or customarily use or occupy, and where access to natural resources is vital to the sustainability of their cultures and livelihood

https://www.google.co.id/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0ahUKEwjfkN_K85rLAhVDVY4KHQ0SDQkQFggtMAI&url=http%3A%2F%2Fwww.ide.go.jp%2FEnglish%2FPublish%2FDownload%2FDp%2F308.html&usg=AFQjCNFD5ntSZDU3UrAr9txzGC8YRnoC1A&sig2=6XmaI7r-WNegxXyPOTq05w&bvm=bv.115339255,d.c2E

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systems; (ii) the need to protect such ancestral domains, lands, and resources against illegal intrusion or

encroachment; (iii) the cultural and spiritual values that the Indigenous Peoples attribute to such lands and resources; (iv) the Indigenous Peoples’ natural resources management practices and the long- term sustainability

of such practices; and (v) the need to rehabilitate the livelihood systems of Indigenous Peoples who have been evicted from

their lands.

Impact on the Used Traditional Land or Indigenous Land

124. Indigenous peoples and/or local communities are often associated with traditional or indigenous land. When the land is not legally owned based on the State Law, the land use, which includes the seasonal-basis use by indigenous communities for their lives or for cultural, ceremonial or spiritual purposes by showing their identity and communities, can be justified as a proof and documentation of the land.

125. If the project is located in an area where there are natural resources therein, the project management should appreciate the use of traditional or indigenous land by indigenous peoples and local communities, by performing below steps:

i) To make efforts to avoid or at least minimize the size of land proposed for the project.

ii) To define the use of indigenous lands by involving the government and the village leaders of the affected indigenous peoples.

iii) To inform the rights to land under the State Law to the affected indigenous peoples and local communities, including the State Law that acknowledges the right or use of indigenous land.

iv) To offer at least compensation in the form of land replacement or additional benefits to the affected indigenous peoples and local communities, if possible.

Relocation of Indigenous Peoples from Traditional Land or Ancestor Land

126. The project should consider the feasibly alternative project designs to avoid the relocation of indigenous peoples from their traditional or indigenous land. If the relocation is unavoidable, the project may be carried out after obtaining permission from village leaders or representative of the indigenous people that had been mandated to voice on behalf of the indigenous people through FPIC process.

Information Disclosure

127. The project has to submit the following documents to PT SMI for disclosure on the PT SMI’s and the project’s websites: (i) a draft IPP and/or Indigenous Peoples planning framework, including the social impact assessment, endorsed by the borrower/client, before appraisal; (ii) the final IPP upon completion; (iii) a new or updated IPP and a corrective action plan prepared during implementation, if any; and (iv) the monitoring reports.

Grievance Redress Mechanism

128. The project will establish a mechanism to receive and facilitate resolution of the affected Indigenous Peoples communities’ concerns, complaints, and grievances. The grievance mechanism will be scaled to the impacts of the project. It should address concerns and complaints promptly, using an understandable and transparent process that is culturally appropriate, gender responsive, and accessible to the affected Indigenous Peoples communities at no cost and without retribution. The mechanism should not impede access to the country’s judicial or administrative remedies. The affected Indigenous Peoples communities will be appropriately informed about the mechanism.


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129. The project will monitor and measure the progress of implementation of the IPP. The extent of monitoring activities will be commensurate with the project’s risks and impacts. In addition to recording information to track performance, the borrower/client should use dynamic mechanisms, such as inspections and audits, to verify compliance with requirements and progress toward achieving the desired outcomes. For projects with significant adverse impacts on Indigenous Peoples, the project will retain qualified and experienced external experts or qualified NGOs to verify monitoring information. The external experts engaged by the project will advise on compliance issues, and if any significant Indigenous Peoples issues are found, the project will prepare a corrective action plan or an update to the approved IPP. The project will implement the corrective actions and follow up on these actions to ensure their effectiveness.

3.8 CULTURAL HERITAGE (ESS-8)

130. Culture is passed down for present and future generations. To be in consistent with the Act on Cultural Preserve, which aims to preserve the national cultural heritage, the Company emphasizes social responsibility in its projects and business operations by protecting the cultural heritage.

Objectives

i) To protect cultural heritage from negative impacts of project activities and support its preservation.

ii) To encourage the project management’s responsibility in its business activities by protecting the cultural heritage around the project area.


131. The application of this element is performed in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in State Regulations relating to the Cultural Preserve.

132. The cultural heritage refers to the measured forms, such as the property and location having the archaeological (prehistoric), paleontological, historical, cultural, artistic, and religious values, as well as part of a unique natural environment containing cultural values, such as sacred forest. It also includes traditional lifestyles practiced by indigenous peoples and local communities around the project.

Stipulation

Protection of cultural site

133. If the location of the proposed project is estimated to have a cultural heritage site (whether defined by national law, local authorities site listing or by traditional practice of local and indigenous communities), wherever possible, the project location should be moved to the technically and financially appropriate place. If it is impossible, the project management should implement the working procedures that will not harm and disturb the cultural site and chance finds procedures. Chance finds shall not be disturbed until an assessment by a competent specialist is made and actions consistent with these requirements are identified. The assessment by competent experts or recommendation of the local government and local community traditional leaders (ketua adat) should be obtained if there is still any doubt in doing these safeguards.

Regional Cultural Heritage

134. Most cultural heritage is best protected or preserved in its original location. The project should not relocate or eliminate all forms of cultural heritage, unless there is no other appropriate technical or financial alternative. This can be done after the assessment of experts, consultation with cultural stakeholders of indigenous peoples or local communities and local governments.

Critical Cultural Heritage

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135. Critical cultural heritage consists of (i) cultural practices of indigenous people from generation to generation (ii) legally protected cultural preserve.

136. The project should not significantly alter, damage, or remove various forms of cultural heritage. The legally protected cultural heritage is an important part for the protection and conservation of cultural heritage. If the project is built in an area around the cultural heritage, additional measures are required, including the permits from the government, consultation with the indigenous peoples, also protection measures based on recommendations from the competent experts and implementation of additional appropriate programs to promote and achieve the purpose of the protected area.

Commercial Use of Cultural Heritage

137. If the project uses the cultural resources, insight or practices of local communities having the traditional lifestyles for commercial purposes, the project must inform the communities about: (i) their legally protected rights; (ii) the proposed commercialization scope and nature. The project should not process the commercialization, unless (i) having a decent negotiation with the affected local communities. (ii) obtaining written approval from the indigenous peoples and local government (iii) dividing the fair and equitable result from the commercialization of insight, innovations, or practices of customs and cultural traditions.

3.9 ENERGY CONSERVATION AND ENVIRONMENT FRIENDLY ENERGY (ESS-9)

138. Energy conservation is one of important elements in the environment and social safeguards. Efficient energy use will generate physically and financially profits. The Company also strongly encourages the use of green or environmentally friendly and promotes new and renewable energy projects as part of environmental and social responsibility. Environmentally friendly energy is an important aspect of sustainable development and also one of the important issues in the campaign of climate change and in carbon reduction in accordance with the government regulations.

139. The project should have energy saving policies by conducting the environmental and social assessment that can be done alone or through a competent third party as an effort to increase efficiency and profits by doing overall saving in the project activities. If the energy conservation is impossible in the project activities, the use of energy-saving equipment and an effort to minimize the use of energy are important to be done as a part of reducing emission coming from the project activities. Saving activity is an important part of preventing or mitigating climate change.

Objectives

i) To support energy conservation as a saving effort in the resources use in order to safeguard natural resources and encourage the planned and directed resources use in a sustainable manner.

ii) To encourage the sustainable development and energy use through an integrated application of conservation having the development priorities.

iii) To promote the development of environmentally-friendly green energy facilities which areas an effort to increase new and renewable energy.


140. The application of this element is performed in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in State Regulations relating to energy conservation and environmentally-friendly green as well as new and renewable energy.

Stipulation

Energy Conservation

141. Energy conservation (saving) is the act of reducing the amount of energy usage or optimal use of energy as needed so that the incurred energy costs can be lower. The energy saving can be achieved by

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efficient energy use of which same benefits can be obtained by using less energy, or by reducing the consumption and project activities that use energy. The energy saving can lead to reduced costs as well as increase environmental and social values.

Environment Friendly Energy

142. Energy saving also facilitates the replacement of non-renewable sources with renewable ones. In facing the lack of energy, the energy saving is often the most economical way and a more environment friendly way instead of increasing the energy production. In line with the increasingly limited natural resources, energy crisis and the declining capacity of the environmental support, the demand to develop an environment-friendly industry, known as environment friendly green energy has become an important issue. In addition to the policy efforts to address the increasingly serious energy shortage and the growth of extremely high energy, the development of alternative new and renewable energy sources, which are environmentally friendly is also absolutely to be encouraged.

3.10 CONSULTATION AND GRIEVANCE MECHANISM (ESS-10)

143. Consultation is a procedure of giving information to stakeholders of a project early on in the development process to (i) plan, implement, and monitor steps to avoid negative impacts, or, if it is unavoidable, to minimize, mitigate and compensate for such impacts; and (ii) inform the project benefits to them in a way that is in accordance with the customs and culture of the community. (iii) provide time-bound, understandable, easily accessible, relevant and adequate information to the community; (iv) conduct all these in an atmosphere free from intimidation or coercion; (v) to be inclusive and gender-sensitive and adjusted to the local customs and traditions. The project must respond to the concerns raised by stakeholders.

Objectives

i) To encourage the information transparency and encourage the participation of community and other stakeholders as fair and profitable consulting efforts.

ii) To encourage community participation in sustainable development in the affected area.

iii) As an effort to facilitate the culture of Consensus and Democracy in the project and affected communities as a grievance mechanism.


144. The application of this element is performed in the process of environmental and social assessment to meet the provisions of Environmental and Social Management System stipulated in State Regulations relating to disclosure of information, Consensus and Demography as well as the regulations of freedom to express opinions.

Stipulation

Consultation Mechanism

145. The project forms a consultation mechanism with local governments to respond the grievance of the affected residents or local community. The consultation mechanism should not hamper access to legal or administrative solution in an area. The affected residents or local community will be given proper information about the mechanism. If affected residents or local community have differences of opinion and disagreements about the project, the project management should well negotiate to resolve differences and disagreements through consultation efforts, which could be established and facilitated by the local government.

Grievance Mechanism

146. The project should establish a mechanism to receive and facilitate solutions for problems and grievance of affected residents or local communities, be they environmental or social. Grievance

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mechanism should have a scale comparable to the impact of the project and may address problems and grievance quickly by using an understandable and transparent process in line with the culture and gender sensitivity, and can directly be reached by the affected residents or local communities without any cost. The mechanism should not hamper the access to judicial or administrative solution in an area. The affected local residents or communities will be given information about the proper mechanism.

Disclosure of Information

147. The project will provide relevant information, including information from the project social and environmental management documents in accordance with regulations that apply to the determined places. If the affected local residents or communities and other stakeholders do not have the literacy ability, other proper communication methods can be used.


148. The project should compile periodic monitoring reports on environmental and social management in accordance with applicable regulations as well as submit the compliance issues and corrective actions in a transparent manner.

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4. Environmental and Social Safeguard Operational Procedures

4.1 Environmental Assessment and Review Framework

4.1.1 Assessment Aims and Objectives

149. The operating procedures are the core implementation processes in the ESMF which ensure the project-cycle compliance to social and environmental regulations. These procedures encompass the investment subproject screening, categorization, assessment and planning requirements, with aim to

minimize and manage the environmental and social impacts of the projects supported by PT SMI. The key elements covered by these operating procedures include the guidance for the:

i) safeguard criteria used in selecting projects

ii) screening and categorization steps for projects;

iii) social and environmental assessment steps (the system to explain the anticipated environmental, social and indigenous people impacts and risks of projects, , both positive and negative);

iv) development of social and environmental management programs (a system to manage the environmental and social risks and impacts, with aim to remove or suitably mitigate any negative impacts, and enhance any positive impacts);

v) specified implementation requirements and covenants;

vi) supervision, review, monitoring and reporting procedures; and

vii) emergency preparedness and response procedures.

150. Under the broader operational heading of the overall ESMF, these procedures are variably defined as a Social and Environmental Assessment and Management System (SEMS) by World Bank (SMI, 2016a), social and environmental operating procedures (IIF, 2014), an Environmental and Social Management System (ESMS) (ADB, 2009) and an Environmental Assessment and Review Framework28 (EARF) (ADB, 2012).

151. This chapter outlines the steps and actions that are mandated as per the ESMF, which fall under the above assessment headings, and which are to be followed during the project cycle comprising of the following four stages:

(i) Loan application stage - In this stage, procedures required to determine if a loan application can be made, as compared against an environmental and social exclusion list;

(ii) Preliminary review stage – In this stage, all procedures required before the in-principal approval of the project, are carried out;

(iii) Project appraisal and sanction stage - In this stage, all procedures required before the project is appraised for funding are performed. It includes a detailed appraisal of the project to be funded;

(iv) Post loan signing and Post Operation Monitoring stage - In this stage, all procedures required for project monitoring during implementation as well as at the end of funds disbursement period are performed. Subsequently, these procedures are followed during the project operation cycle until PT SMI exits the investment.

4.1.2 Loan Application Stage Loan Application Stage

152. The screening and categorization of projects begins at the loan application stage, where a project identification stage will be carried out through a dialogue with the private or public sector developer regarding the project, its need and PT SMI’s requirements.

28 The EARF is specifically mandated by ADB to be developed for sector lending, multi-tranche funding facilities (MFFs), emergency assistance loans and loans for projects in conflict areas.

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153. This is the first step in the project life cycle, which will eventually lead to a decision with respect to the acceptance of the new proposal for a detailed appraisal. This is also the first step in the ESS compliance and management process with aim to:

i) Initially assess relevant potential environmental and social impacts and risks associated with the proposed project; and

ii) Initially assess the compliance of the proposed project against applicable PT SMI and MFI requirements and environmental laws and regulations of the jurisdictions in which the project operates.

154. The ESS steps at this opening stage, for type 1 (early stage), type 2 (fully prepared), type 3 (under construction) and type 4 (fee-based advisory services) projects as listed in Section 2.3.3, will include the following activities to be implemented by PT SMI and the developer:

i) Verify that the proposed business activity based on the information provided by the developer is not on the list of prohibited or excluded investments (see ESS – OM Section 4.2 and Annex 1 – Exclusion List);

ii) Request the developer to complete the environmental and social initial screening checklist (see Annex 5 for format); and

iii) Obtain basic project information from the developer from the initial screening checklist and report to ST SMI management (see Annex 6 – Social and Environmental Project Information Sheet for format).

4.1.3 Initial Screening and Impact Assessment Procedures

155. Project preliminary review, screening and categorization are to be undertaken in accordance with PT SMI and MFI requirements, and any applicable national conditions. This is the second step in the ESS compliance and management process with aim to:

i) provide an initial indication of the significance of the project’s potential environmental and social impacts and risks;

ii) further assess and categorize the compliance of the proposed project against applicable PT SMI and MFI requirements and environmental laws and regulations of the jurisdictions in which the project operates;

iii) consider the sensitivity and magnitude of the potential environmental and social impacts as a result of the project type, location, and scale (during construction and operation), and provide an environment category for the proposed project which is determined on the basis of the project’s most environmentally sensitive component;

iv) Identify the type and extent of environmental and social assessment and institutional resources required for environmental assessment and planning, commensurate with the impacts and risks of the project to be financed; and

v) Incorporate impact avoidance and mitigation measures early into the project design process so that they can be easily accommodated.

156. The ESS steps at this preliminary review and initial screening stage will include:

157. For type 1 (early stage of preparation) projects:

i) Perform initial screening of project activities and identify potential environmental and social impacts using the environmental and social checklists for the infrastructure projects (see Annex 32). Also, to assess whether the activities involve land acquisitions, involuntary resettlements, affect indigenous people or ethnic minorities (Screening checklist in Annex 9);

ii) On the basis of this initial assessment, the proposed investment is classified as category A, B, C (refer to Annex 8 for Social and Environmental Screening Categories) and the corresponding level of environmental assessment i.e. Initial Environmental Examination (IEE) (outline shown in Annex

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18), Environmental Impact Assessment (EIA) (outline shown in Annex 19) or Environmental Management Plan (outline shown in Annex 20);

iii) Review of the client/developer and projects compliance with ESS policies and ESMF in regard to organization capacity and competency, requirement for trainings, preparation of emergency situations response and preparedness procedures, plan for community engagement and plan for monitoring, reviewing, and reporting. All procedures and steps requiring to be added to the project EMP;

iv) If the project involves resettlement, ascertain the requirement for a Resettlement Action Plan - RAP (see Principle 5 in Section 3 summary, and Annex 3 MFI principles and objectives). If the project involves impacts on Indigenous People, then ascertain the requirement for an Indigenous People Development Plan - IPDP (see Principle 7 in Section 3 summary, and Annex 3 MFI principles and objectives);

v) Advise and provide guidance to the client or developer on the types of social and environmental management plans that need to be prepared and consultation and disclosure requirements prior to project appraisal; and

vi) If the project qualifies after initial review, submit the proposal to the Director, Risk Management Division - after incorporating the observations based on the preliminary review (see Annex 6 for example social and environmental project information sheet). The Director, Risk Management Division, will then record his/her own observations while signing the Agreement in Principle (AIP)29 with the client or developer, and submit a Memo to the PT SMI Board of Directors (see Annex 11 outline. The Social and Environment Management Unit will follow-up to submit the final revised memo to the PT SMI Board of Directors for final review and approval.

158. For type 2 and 3 (fully prepared or under construction) projects, as specified in Section 2.3.3 above, PT SMI will:

i) Carry out a due diligence of the categorizing, assessments, analyses, design documents, etc., that have been prepared by the client or developer;

ii) Carry out a due diligence to confirm that: (a) the subproject is in compliance with all applicable national environmental and social laws and regulations and the ESMS/EARF; (b) there are no reputational risks for the PT SMI; and (c) there are no legacy issues or no pending legal disputes or liabilities. Based on the findings of such an assessment, the PT SMI will ask its clients to implement remedial measures, if needed, or to mitigate potential reputational risks or to address legacy issues or liabilities; and

iii) Review all available ESS assessment documents. Where gaps exist between existing documents and PT SMI’s ESS requirements, PT SMI will ask its clients or developers to supplement these documents or develop new ones to meet the ESMS/EARF requirements. Depending on the nature of the additional documentation, it will be subject to consultation and disclosure requirements of the GoI and of PT SMI, as set forth in the PT SMI Principle 1 (see Section 3) and any specific requirements associated with the type of documentation in question (refer to Annexes 18,19, 20, 22 and 24).

159. For type 4 (advisory services provided) projects, PT SMI will ensure that all advisory services are provided in a manner that is consistent with the objectives of PT SMI ESS policies.

29 The AIP is an agreement between the PT SMI (Director, Risk Management Division) and the potential client/developer that the proposed project may be proceed with appraisal provided that social and environmental safeguards instruments will be prepared, or corrective actions are carried out prior to appraisal. These documents will be submitted to PT SMI together with other technical, financial, procurement-related documents as one appraisal package documents. The AIP may also contain agreements on what the clients need to prepare or fulfil l the next steps for applying for project funding from PT SMI, which could include technical, financial, and/or procurement-related aspects.

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4.1.4 Detailed Project Appraisal

160. The project detailed appraisal is to be undertaken in accordance with PT SMI and MFI requirements, and any applicable national conditions. This is the third step in the ESS compliance and management process with aim to:

i) provide a detailed indication of the significance of the project’s potential environmental impacts and risks;

ii) conduct the safeguards categorization, detailed environmental and social assessment and planning, and allocate institutional resources as required and as commensurate with the impacts and risks of the project to be financed; and

iii) develop the detailed plans for the impact avoidance and mitigation measures which need to be incorporated into the project detailed design process and implementation schedules.

161. The ESS steps at this detailed project appraisal stage for all projects will include (see Annex 10 for specific assessment for Types 2, 3 and 4 projects):

i) Scoping: identification of significant potential project impacts (environmental and social), and provide a clear focus for the environmental assessment, and outline the content of the assessment report and important studies in the form of terms of reference (see Annexes 15, 16, and 17 for ToR examples for environmental and social assessment studies, EIA and RAP);

ii) Analysis of Alternatives: consideration of all feasible alternatives for improving project implementation and outcomes, taking account of economic, financial, technical, environmental and social factors;

iii) Project Description: summary of the project site (inclusive alternative sites and supporting / temporary construction sites30), design, and operation details to provide an understanding of the project, its activities, and environmental impacts;

iv) Policy, Legal and Administrative Framework: description of the relevant national and local laws, and regulations and policies that the project is subject to, as well as the standards and guidelines that apply, including MFI requirements (see Annex 2 and 3) ;

v) Baseline Environment: description of the current environmental and social conditions, with focus on features that relate to potential project impacts. This description is quantitative, where possible, providing the data required for detailed impact analysis;

vi) Impact and Risk Assessment: analysis in an integrated manner all potential project impacts on physical, biological, socioeconomic and physical cultural resources, and identification and addressing of the risks, inclusive of cumulative impacts across multiple subproject development sites, inclusive of cumulative impacts across multiple subproject development sites, inclusive of selected and alternative subproject sites, inclusive of on-site/direct, adjacent/indirect, downstream/indirect and autonomous development/indirect impacts, including positive and negative impacts. Plus, in terms of institutional capacity and commitment to manage these environmental impacts (see Annex 8 and 9);

vii) Environmental Management Plan (EMP): a detailed outline of the proposed impact mitigation measures for environmental, resettlement, indigenous peoples and social risks, and both positive and negative impacts (as detailed above), management responsibilities, institutional arrangements, monitoring and reporting requirements, emergency response procedures, capacity development and training measures, implementation schedule, cost estimates, and performance indicators (see Annex 20 for standard EMP outline);

30 These are the associated construction facilities and temporary works, e.g. access roads, quarries, sand and other materials collection sites, workers camps, workshops, management offices, construction material storage and lay- down areas, landslip prevention and catchment protection sites.

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viii) Involuntary Resettlement (IR) and Indigenous Peoples (IP) Plans: in the case of significant involuntary resettlement and indigenous peoples impacts, a detailed outline of the proposed RAP and IPDP impact mitigation measures, management responsibilities, institutional arrangements, monitoring and reporting requirements, capacity development and training measures, implementation schedule, cost estimates, and performance indicators;

ix) Information Disclosure: the delivery of information about the project to the general public, affected communities and other stakeholders, starting early during project development and continuing throughout the life of the project (see Chapter 5 for detailed guidance);

x) Consultation and Participation: the carrying out meaningful consultation with affected people and other relevant stakeholders including civil society, and facilitating their informed participation (see Chapter 5 for detailed guidance);

xi) Grievance Redress Mechanism Development: the establishment of a systematic process for receiving, evaluating and addressing affected people’s project-related concerns, complaints, and grievances (see Chapter 6 for detailed guidance);

xii) EMP Implementation: the development of the detailed plan and schedules to implement the management actions set out in the EMP;

xiii) Emergency Preparedness and Response Procedures: the development of the detailed plan and schedules to implement the specific emergency preparedness and response procedures in the case of natural disasters or accidents;

xiv) Monitoring and Reporting: the development of the detailed plan and schedules to monitor the sub-project EMP implementation and its effectiveness, for delivery of documents and reports on monitoring results, including the development and implementation of a corrective action plan where required, and for the monitoring of overall sub-project compliance with the ESS - OM and ESMF (see Chapter 9 for detailed guidance).

162. The ESS steps at this detailed appraisal stage PT SMI will focus upon sub-project detailed review and monitoring procedures, which will include the following activities:

i) Gap Analysis. Conduct a review and validation of the accomplished Information Request Form (see Annex 7 – Project Information Request Form) to determine adequacy of information provided by the developer. If information is inadequate, the Environmental and Social Safeguard Unit Manager requests for additional information;

ii) Obtain, review and investigate information available in the public domain regarding any incidents, adverse impacts on local communities or the environment or adverse environmental or social performance associated with any proposed project;

iii) Conduct site visit by social and environmental specialist and/or consultant. The purpose of the site visit is to verify information provided by the client (see Annex 12 – Site Visit Checklist and Record for report format). Prior to the site visit, the member of Risk Management Division, Environmental and Social Safeguard Unit prepares a site visit plan and ensures that the plan covers the following:

a. Discussion with the company;

b. Visit to the project site including sensitive receptors, if any;

c. Interaction with people to be displaced (if applicable);

d. Visit to the relocation site (if applicable); and

e. Informal interaction with local NGOs and local government administration;

iv) Confirm the initial environmental and social categorization assigned to the project at this stage and also review the scoping done during the preliminary review stage;

v) For projects classified as Financial Intermediary (FI), review the Developer's SEMS;

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vi) The developer will submit all applicable ESS documents – SEMS, EIA & SIA, EMP, RAP, IPDP, Corrective Action Plan, Labor Health and Safety Plan (LHSP), Community Health and Safety Plan (CHSP) for the project along with applicable government consents and permits;

vii) Appoint Lender’s Engineer or Environmental Specialist/Consultant on behalf of PT SMI, if required. The Lender Engineer/Consultant reviews other developmental plans like EIA, IEE, RAP, IPDP, etc. for the project;

viii) Subsequent to the site visit and quality assurance of all information provided by the developer, prepare a Social and Environmental Due Diligence (SEDD) report in the form of memo to the Board of Directors routed through Director RMC with his/her comments and observations for approval of loan. (Outline of SEDD report given in Annex 13);

ix) Communicate the terms and conditions & environmental and social covenants to the developer and obtain their consent;

x) Confirm that the client/developer has obtained all permits, including environmental, as stipulated by the regulations of the Republic of Indonesia prior to the project execution, and obtain agreement that the client/developer will hand over regular reports to the relevant authorities, and extend the validity period if any of the permits which have expired; and

xi) Upon approval, legal documents are signed. The legal documents specifying PT SMI’s terms and conditions, including principles and operational policies requirements.

163. The Risk Management Division, Environmental and Social Safeguard Unit Manager will prepare the applicable documents based on the result of the assessment at this stage. Documents required/ prepared at this stage:

i) Environmental and Social Due Diligence (ESDD) Report (refer to Annex 13);

ii) ESS Corrective Action Plan (CAP) and Loan covenants (see Annex 14 example of Covenants Pertaining to Environmental and Social Safeguards for Inclusion in Contractual Agreements);

iii) Final Draft Memo to President Director routed through Director Risk Management Division for Project Approval (see Annex 11 for example).

164. The outcome of this stage of a project being evaluated will be either a “Rejection Note” or an “Approval of Mandate” along with signing of the agreement.

165. The Project Proponent will disclose project ESS documents (final) such as EA reports, Resettlement Action Plans (RAPs), Indigenous Peoples Development Plans (IPDPs), etc., on PT SM’s website, sponsor website, client or developer’s website, and a public place which is accessible to affected groups, local NGOs and other stakeholders as needed to meet GoI requirements

4.1.5 Loan Sanction and Disbursement Stage

166. The PT SMI Division of Finance and Investment (Divisi Pembiayaan dan Investasi) will carry out the following activities:

Business procedure

i) Loan sanction letter will be sent to the client/developer if the credit committee, and subsequently the PT SMI board of directors, approves the client/investor to borrow for the project. The loan sanction letter contains the necessary loan covenants to ensure compliance with applicable policies and the linkages of the loan disbursement to implementation schedules; and

ii) Loan Agreement - After the client/developer agree with the stipulations in the loan sanction letter, a loan agreement is to be drafted, which includes all applicable covenants.

ESMF application

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i) Prepare environmental and social covenants - every loan sanction letter is required to be accompanied by a list of mandatory environmental and social covenants (refer Annex 14) in addition to any other covenants emerging from the ESS appraisal of the project. These covenants should be prepared by the Risk Management Division, Environmental and Social Safeguard unit, and forwarded to the Finance and Investment Division for inclusion on the loan sanction letter.

ii) Communicate the terms and conditions and environmental and social covenants to the developer and obtain their consent.

iii) ESS disclosure requirements - In addition to conveying its agreement to stipulated loan covenants the client/developer must also submit a certificate of readiness and proof of adherence to disclosure requirements. There must be proof that the final ESS documents (EA reports, RAPs, IPDPs etc.) have been published on PT SMI’s website, published on the client/ developer’s website, and published in a public place which is accessible to affected groups, local NGOs and other stakeholders as needed to meet GoI requirements.

iv) Loan signing upon approval of the loan agreement containing specific PT SMI terms and conditions (above), applicable PT SMI principles and operational policy requirements and client/ developer adherence to disclosure requirements.

v) Loan disbursement requirements - furthermore, the loan disbursement is to be linked to the

disclosure requirement above, and to the land acquisition/resettlement checklist.

4.1.6 Project Implementation and Monitoring Stage

167. This stage will comprise of regular monitoring and auditing of compliance conditions for the investments and corrective action plan proposed as part of the Environmental and Social Due Diligence (ESDD) report. This stage requires that the developers submit regular reports with regard to compliance of social and environmental covenants of the loan.

168. The ESS steps at this post-sanction project operation will focus upon project implementation supervision, review and monitoring procedures, which will include the following activities:

i) Regular compliance monitoring (Monitoring and Supervision Indicators and Format given in Annex 27);

ii) Monitor compliance with loan covenants;

iii) Assess and monitor implementation of Environment and Social Corrective Action Plans (EMP, LARAP and IPDP) and mitigation measures, and check for adherence to ambient standards; monitoring by field visits/ investigations;

iv) Obtain, review and investigate information available in the public domain regarding incidents, adverse impacts, local communities or the environment or adverse environmental or social performance associated with the project;

v) If on review, EMP shows inadequacies and/or inappropriate reflection in project costs, then update and re-do financial appraisal to strengthen EMP and reassess commercial viability of the project. Obtain board approval for the revisions, if any;

vi) Conduct compliance monitoring, and assess effectiveness of the Resettlement Action Plan or Livelihood Restoration Plan or Indigenous Peoples Development Plan, Labor and Community Health and Safety Plans at the defined frequency as per the loan covenants; and

vii) Conduct of monitoring to assess the overall sub-project compliance with the ESS – OM and ESMF.

169. The above will be the responsibility of the Environmental Specialist in the Environmental and Social Safeguard and Business Continuity Management (ESSBCM) Division of PT SMI, in coordination with consultants engaged by ESSBCM for specialized input. ESSBCM will be responsible for the Annual Environmental and Social Performance Report (AESPR) (Annex 30).

170. Reporting:

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i) Report on the compliance of Social and Environmental covenants of financing and implementation of corrective action plan at frequent intervals to be defined in the investment agreement (developer will report quarterly during implementation stage);

ii) Report on the implementation of various mitigation plans including EMP, land acquisition and resettlement/indigenous people plans (LARP/IPDP) at defined frequency (developer will report quarterly);

iii) Prepare reports on its (ESSBCM) performance on environmental and social safeguards and submit to stakeholders/PT SMI board annually.

171. Environmental audit: conduct environmental audits and disclosure to public regularly.

172. Documents at this project operation monitoring stage will include the following:

i) Annual Environmental Monitoring Report (AEMR) (refer to Annex 28) and Annual Social Safeguard Monitoring Report (ASSMR) (refer to Annex 29) to be submitted by the project to PT SMI;

ii) Annual Environmental and Social Performance Report (AESPR) by PT SMI to all Strategic Investors (refer to Annex 30);

iii) Quarterly compliance reports by the client or developer.

4.1.7 Project Completion Stage

173. After completion of the project i.e. at the end of the funds disbursement period, monitoring and evaluation of Social and Environment parameters associated with specific project will continue. It will incorporate the following:

i) Continuous Monitoring and evaluation of Environmental/Social Management Plans;

ii) Preparation of Implementation Completion Report (ICR) (refer to Annex 31);

iii) Reporting of lessons learnt and good practices followed;

iv) Conducting environmental audits and disclosure to public regularly; and

v) Monitoring ESS performance against Environment Guidelines.

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5. Consultation, Participation and Information Disclosure

5.1 Consultation Principles

174. Consultation is an ongoing process that started from the beginning of a project to give and get information to and from stakeholders of a project, to (i) plan, implement, and monitor steps to avoid negative impacts, or, if it is unavoidable, to minimize, mitigate and compensate for such impacts; (ii) inform the project benefits to stakeholders in accordance with the customs and culture of the community; (iii) provide time-bound, understandable, easily accessible, relevant and adequate information to the community; (iv) conduct all these in an atmosphere free from intimidation or coercion; (v) be inclusive and gender-sensitive and adjusted to the local customs and traditions.

175. Public consultation and information disclosure is to be guided by the following general principles:

(i) Information Dissemination. Sufficient information should be provided in accessible and culturally appropriate ways. Providing information about benefits and disadvantages of the project at an early stage allows people time to think about the issues, consider implications, and formulate their views. An informed public will understand the trade-offs; be able to contribute meaningfully to project design; and have greater trust with the project proponent.

(ii) Information solicitation. Asking and listening to the local community, residents, and interested groups about their views and input yield new insights and site- specific information. Past broken promises or mismanagement may have left a legacy of mistrust. Information solicitation provides public’s past experience with authorities and can initiate constructive dialogue.

(iii) Integration. Predicting likely direct and indirect impacts, short-and long-term resource use implications, evaluating their significance and risks, and developing appropriate mitigation and monitoring programs require not only the scientific data collected by sampling and modeling, but must be based on stakeholder’s input and views.

(iv) Coordination. The ability to conduct effective public consultation depends on how individual team members appreciate benefits of consultation, understand their roles, and cooperate with each other. A well-integrated Project Team with well-defined roles and responsibility can facilitate dialogue with the executive agency and gain its commitment to remove any constraints to carry out public consultation throughout the project cycle.

(v) Engaging People in Dialogue. Public consultation involves engaging people in dialogue – a two-way flow of information and ideas between the project proponent and the stakeholders with the opportunity for the stakeholders to express their views and concerns. Ensuring the opportunity to participate in dialogue during the early preparation stage enables to manage expectations and detect any potential serious conflict and help resolve issues before they lead to conflict, reducing financial losses due to delays.

5.2 Community Consultation Mechanism

5.2.1 Consultation Mechanism

176. The project forms a consultation mechanism with local governments to inform and get input from the affected residents or local community in regard of the project. The procedure consultation should include methods to: (i) receive, register and validate consultations and requests for information from the public; (ii) screen and assess the importance of the issue raised and determine how to address it; (iii) provide, track, document and publish responses; and (iv) adjust the management program when appropriate. The consultation mechanism should not hamper access to legal or administrative solution in an area. The affected residents or local community will be given proper information about the mechanism. If affected residents or local community have differences of opinion and disagreements about the project, the project management should well negotiate to resolve differences and

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disagreements through consultation efforts, which could be established and facilitated by the local government.

5.2.2 Meaningful Consultation

177. The following are the characteristics of a meaningful consultation:

i) Continual, with an early start. Meaningful consultation begins early in the project cycle and is carried out on a continual basis throughout the project cycle. Adequately informing the affected persons and host community about the project’s potential adverse impacts and proposed mitigation measures may involve an iterative process with various segments of the community.

ii) Timely disclosure of relevant and adequate information. This means the affected persons and host community should have access to relevant project information that is understandable and acceptable to them prior to any decision-making that will affect them. To be relevant and adequate, information shared with the project-affected persons and host community need to provide sufficient project context and planning to enable them to participate in a meaningful way in project consultations.

iii) No intimidation or coercion. Consultation needs to occur freely and voluntarily where the affected persons and host community can express their views without any external manipulation, interference, or threat of retribution, and must be conducted in an atmosphere of transparency.

iv) Gender-inclusive, tailored to needs of the disadvantaged and vulnerable. Ensuring consultation with and participation of women may require hiring female professionals and technical staff to engage female displaced persons. For other excluded vulnerable groups, separate consultations, without the presence of higher ranked social groups, are usually needed for individuals to feel comfortable to provide a full picture of the needs of the poor and vulnerable.

v) Incorporation of all relevant views in decision-making. The consultation process needs to hear all shades of support or opposition to the project and its proposed activities from the affected persons. It is also important that, commensurate with the nature of the project and the anticipated severity of its effects, all key stakeholders (leaders, average householders, local and regional institutions) from a cross-section of ethnic, gender, and other social groups are included in the consultation and decision making processes such as project design, mitigation measures, the sharing of development benefits and opportunities, and implementation. The project should ensure that the stakeholders attending the consultation represent the affected people to produce a robust consultation result.

5.3 Indigenous People Consultation and Consent Procedures

5.3.1 Definition

178. There is no standard definition of indigenous peoples. Indigenous peoples and local communities can have different terms in various areas. The term of "indigenous peoples" is used generally to refer to different social and cultural groups with below characteristics:

(i) Self-identification as a part of different cultural groups and the appointment of this identity by others;

(ii) As a part of geographically diverse communities or ancestor territories in the project area and natural resources in the area

(iii) Cultural, economic, and social institution, which is traditionally separated from dominant society or culture;

(iv) Different languages, often different from the official language of the country or area; and

(v) Communities that have historically inhabited certain areas.

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5.3.2 Objective

179. The objective of the Indigenous People (IP) consultation and consent procedures is to design and implement projects in a way that fosters full respect for Indigenous Peoples’ identity, dignity, human rights, livelihood systems, and cultural uniqueness as defined by the Indigenous Peoples themselves so that they (i) receive culturally appropriate social and economic benefits, (ii) do not suffer adverse impacts as a result of projects, and (iii) can participate actively in projects that affect them.

5.3.3 Consent of Affected Indigenous Peoples Communities

180. Indigenous peoples and local communities31 are the social groups with identities that may be different from the dominant groups in societies. Their economic, social and legal status is limited to defending their interests and rights on land, natural resources and culture. They also have the limitations to participate in and get benefit from development. They are vulnerable, especially if their land and resources are used by outsiders and degraded significantly. The language, culture, and natural resources as the main pillar of their livelihood can be threatened and exposed to changes by the outer community.

181. Indigenous Peoples may be particularly vulnerable when project activities include: (i) commercial development of the cultural resources and knowledge of Indigenous Peoples; (ii) physical displacement from traditional or customary lands; and (iii) commercial development of natural resources within customary lands under use that that would impact the livelihoods or the cultural, ceremonial, or spiritual uses that define the identity and community of Indigenous Peoples.

182. If such activities occur and the projects has adverse impacts on affected communities of Indigenous Peoples, the client and PT SMI ascertain that the consultation process will ensure the Free, Prior, and Informed Consent (FPIC) of the IPs. The consent of affected Indigenous Peoples communities refers to a collective expression by the affected Indigenous Peoples communities, through individuals and/or their recognized representatives, of broad community support for the project activities. Such broad community support may exist even if some individuals or groups object to the project activities.

183. FPIC applies to project design, implementation, and expected outcomes related to impacts the communities of Indigenous Peoples. When any of these circumstances apply, the client will engage external experts to assist in the identification of the project risks and impacts. To achieve FPIC, unanimity is not necessarily required. FPIC can also be achieved when individuals or groups within community explicitly disagree; for some cases with have no solution, an intermediary organisations should be involved. The following should be documented: (i) mutually accepted process between the project and Affected Communities; and (ii) agreement evidence between parties as the outcome for the negotiations.

184. The client will provide documentation that details the process and outcomes of consultations with Indigenous Peoples and Indigenous Peoples’ organizations, including (i) the findings of the Social Impact Analysis; (ii) the process of meaningful consultation with the affected Indigenous Peoples communities; (iii) the additional measures, including project design modification, that may be required to address adverse impacts on the Indigenous Peoples and to provide them with culturally appropriate project benefits; (iv) the recommendations for meaningful consultation with and participation by Indigenous Peoples communities during project implementation, monitoring, and evaluation; and (v) the content of any formal agreements reached with Indigenous Peoples communities and/or Indigenous Peoples’ organizations.

185. Meanwhile, the project can open opportunities for the indigenous peoples and local communities to participate and get benefits from the project activities so as to help meet their aspirations for economic and social development. They can also play a role in sustainable development by promoting and managing activities and business as co-development.

31 Local communities refers as the presence of the inhabitants residing on the impacted project in accordance with the AMDAL definition or other related project studies

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5.4 Stakeholder Analysis and Engagement

186. Stakeholder analysis is a tool to identify all parties that have direct and indirect interests in the project and its potential impacts on them. Failure to identify the stakeholders and consult with them could impair transparency in decision-making and which, in turn, could lead to conflicts, delaying the project process. Therefore, it is important to identify the stakeholders, the potential project impacts on them, and also to evaluate their concerns and needs, and their ability to understand and influence the decision-making at the project preparation stage.

187. Stakeholders can be defined as individuals, communities, non‐government organisations, private organisations, government agencies, financial community, company workers, suppliers/contractors and others who have an interest or a "stake" in the project and its outcome. Stakeholders may be impacted by, or influence the planning and operations of a project in varying degrees of significance. rally, there are 5 categories of stakeholders: 1) Local communities; 2) Civil society; 3) Government and local government bodies; 4) Private sector bodies; and 5) Other institutions.

188. The ‘primary’ stakeholders are those who are directly affected, whether positively or negatively. Social development specialists will have to generate and share socioeconomic and cultural information in doing the stakeholder analysis. Social analysis techniques and methods could be used in identifying stakeholders, their needs, aspirations, and concerns regarding the project. The type of data and information required to conduct a stakeholder analysis include household level socioeconomic data, information on ethnic mix and interactions, cultural traditions, gender profile in socioeconomic activities, mechanisms for decision-making regarding their environment and experience with similar projects. It is useful to rank the expectations, concerns and needs of different groups of project-affected persons. It is also important to determine how their diverse interests would impact on the project outcome. One basic issue that needs analysis is how different groups and individuals will interact with each other in influencing the project outcome.

189. Systematically engaging with affected communities in the identification and management of the impacts that negatively affect them contributes to building trust, credibility and local support and provides the opportunity to highlight the positive aspects of the company’s presence. This lowers the risk of anti-company sentiments that could lead to costly litigation or disruption of company operation.

190. Consultation with affected communities will be effective if: 1) Start early; 2) Disclose meaningful and accurate information; 3) Use culturally appropriate means to reach them; 4) Provide opportunities for two-way dialogue; 5) Document to keep track of issues raised; and 6) Report back on how their input has been used and considered.

191. The ‘other’ stakeholders are those who are indirectly affected by the operations but may have an interest in what the company does. They can be organizations through which benefits are channeled to primary stakeholders, local, regional and national government, civil society organizations, individuals who live in the vicinity, private sector agencies, and multilateral and bilateral institutions. Although potential project impact on them may be secondary in nature, they also could become primary stakeholders depending on the type of activities, the sectors involved and the institutional capabilities to influence decision-making. Therefore, it is important that social and environmental specialists and project leaders be aware of the indirectly affected stakeholders. Keeping these groups informed and maintaining an open communication channel may lower the risk of negative campaigns that could affect the company’s reputation.

192. The key external stakeholders involved in implementing this ESMF are including but not limited to the list below:

(i) Central and local governments and their various related departments;

(ii) External environment and social consultants and agencies carrying out technical studies environment and social assessments, monitoring activities, training programs etc.; and

(iii) MFI organisations involved in support of PT SMI in ESMF development, implementation and review.

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193. The roles and responsibilities of the key stakeholders in the implementation of the ESMF are as follows:

194. Local governments in Indonesia – The Local Governments will have to play a pivotal role in getting the requirements implemented on the ground and providing feedback/communication on performance. Some of the key activities of the local governments would involve engaging with consultants/agencies for preparing the scope of work related to statutory legal compliance and conformance with environment and social safeguards.

195. External agencies carrying out environment and social studies and assessments – The primary role of the external consultants and agencies will be to conduct the studies, assessments, training programs etc. as specified in their scope of work issued to them and provide quality outputs within the stipulated time periods in consonance with the requirements as specified in the ESMF.

196. MFI Support (such as ADB, World Bank, IFC) – for the first five high-risk projects, the MFI’s will:

(i) Conduct joint appraisal and review together with PT SMI prior to subproject approval. If found to be necessary during project implementation, this joint prior review approach could be extended to additional high-risk projects beyond the first five. As part of regular MFI supervision of project safeguards implementation, for medium and low-risk projects the MFI’s will monitor PT SMI’s operations through post-review to ensure that the ESMF is consistently adhered to, and promptly initiate any corrective action as required;

(ii) Monitoring and providing implementation support to PT SMI in ensuring that the clients / developers fulfill the requirements specified in the ESMF; and

(iii) Strengthening capacity of PT SMI through joint-review, joint-supervision, training, etc. Together with PT SMI, strengthening capacity of the clients / developers as needed.

197. To building a relationship with the stakeholders and develop a stakeholder engagement plan, there are two steps to follow:

1) Mapping the Stakeholders

198. First identify the direct and indirect stakeholders impacted by the project. Then prioritize the different groups based on the nature and severity of the impacts, and the ability of these groups to influence the business. Engagement should be stronger and more frequent with those groups that are more severely affected, as well as with those that have a greater ability to influence the business. By identifying the stakeholders and the issues that may affect or interest them, the communication material and methods to effectively engage with each of them could be developed accordingly.

2) Developing a Stakeholder Engagement Plan

199. The stakeholder engagement plan should be proactive and to address key environmental and social concerns. At a minimum, even if the project does not have adverse impacts on communities or other stakeholders, it should always implement a procedure to receive communications from the public.

200. If it is determined that there are affected communities, there is a need to implement a Grievance Mechanism (see above) and actively engage them in consultation, regularly disclosing clear and meaningful information on both your impacts and potential benefits, and providing communities with opportunities to express their concerns and suggestions.

201. Finally, there should be a periodic report to affected stakeholders on the actions being put in place to address the issues identified through the engagement process. Regular communication with the various stakeholder groups is an excellent way to understand how company operations affect them and to get early warnings of potential problems. In all efforts to reach out to stakeholders, it needs to ensure that the relationship has been built early, and not wait until a crisis arises to act, as it will be more difficult without those relationships in place to manage the problem.

202. The project will provide relevant information, including information from the project social and environmental management documents in accordance with regulations that apply to the determined

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places. If the affected local residents or communities and other stakeholders do not have the literacy ability, other proper communication methods can be used. The relevant project information disclosed to Affected Communities and other stakeholders will help them understand the risks, impacts and opportunities of the project. The client will provide Affected Communities with access to relevant information on: (i) the purpose, nature, and scale of the project; (ii) the duration of proposed project activities; (iii) any risks to and potential impacts on such communities and relevant mitigation measures; (iv) the envisaged stakeholder engagement process; and (v) the grievance mechanism.

203. Disclosure and consultation and participation constitute an integrated process in the preparation and implementation of a project. The clients have to disseminate information to affected persons and other stakeholders, and consult with them in a manner that is commensurate with the anticipated project impacts on the affected communities.

204. The clients are required to inform and consult with the affected persons on project options and to provide them with project-related information during the planning and implementation. Disclosing information should precede consultation. Limiting disclosure may damage the project. The benefits of disclosure are as follow: 1) It leads to greater awareness about the project and its objectives; 2) It helps promote local decision-making and the participatory development strategy; 3) To make stakeholders better informed due to the two-way flow of information between the project sponsors and the affected people and communities; and 4) It enhances ownership of the project by the affected persons.

205. The client must disclose relevant information in a timely manner, in an accessible place, and in a form and language that the affected persons and other stakeholders can understand. This information can be made available as brochures, leaflets, or booklets in local languages. The goal to have relevant project information to be disclosed and consulted is to ensure that adequate and timely information is provided to project affected people and other stakeholders, and that these groups are given sufficient opportunity to voice their opinions and concerns. For illiterate persons, other suitable communications methods may be used, including pictorial messages and announcements in public places, such as a weekly market.

5.6 Requirements for Public Consultation and Information Disclosure

5.6.1 Public Consultation

206. Public consultation is mandatory as part of the preparation process for PT SMI Category A and B projects32. PT SMI will require the public consultation for at an early stage of the planning process. The adequacy of the public consultation and information disclosure is one of the criteria used to determine the project’s compliance with the safeguard policies.

207. For Category A Projects, the public consultation needs to be carried out during the early stage of preparation and throughout the project implementation to address any issues that affect the local communities, NGOs, governments, and other interested parties. For all Category A projects, the public consultation has to be done at least twice: once during the early stages of the field work and once when the draft planning report is available, and prior to project appraisal.

208. For Category B Projects, it is recommended that public consultation be carried out during the early stages of the preparation process and throughout the project implementation to address any issues that affect the local communities, NGOs, governments, and other interested parties.

209. For Category C Projects the public consultation is not required, however, consultation requirements may be set on a case-by-case basis, depending on the nature of the project and the relevant environmental and social issues, and interest level of the public.

210. For Category FI Projects, the loans and equity investment require the financial intermediary have an ESMS for its operation, and adequate public consultation procedures are to be incorporated into the

32 Table 4-5: Environmental, Social and Indigenous Peoples Screening Categories of Projects, PT SMI ESS OM document

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ESMS. Where the financial intermediary projects involve credit lines, PT SMI public consultation requirements for project will apply. That is, the assessment and review framework for project must have procedures for public consultation.

5.7.1 Information Disclosure

211. The requirements for information disclosure are as follows:

212. For Category A Projects, to facilitate the required consultations with the affected groups and local NGOs, the information about the project’s environmental and social issues as well as technical data needs to be transferred into a form and language(s) accessible to those being consulted. The ESIA is made available to the public, and placed on the PT SMI and Client websites no later than 120 days prior to the Board considerations. The full EIA is also made available to interested parties upon request.

213. For Category B Projects, to facilitate the required consultations with affected groups and local NGOs, the information about the project’s environmental and social issues as well as technical data needs to be transferred into a form and language(s) accessible to those being consulted. For projects deemed environmentally sensitive, SIEEs and RP are made available to the public, and placed on the PT SMI and Client websites no later than 120 days prior to the Board considerations. For other category B projects, the environmental analysis and LARP are posted on the PT SMI and Client websites as part of the RRP. The full IEE reports are also made available to the interested parties upon request.

214. Proposed project and exchange views with relevant government institutions and other interested parties to facilitate the dialogue. Information disclosure in the environmental assessment is not required for the category C projects. However, the public can access to the environmental and social safeguards information described in the recommendation to PT SMI Board that is posted on the PT SMI website.

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6. Grievance Redress Mechanism

215. PT SMI requests the client to establish and maintain a grievance redress mechanism (GRM) for each project or FI level that has environmental, involuntary resettlement, and/or Indigenous Peoples impacts. Complains are often about transparency and sufficiency of information on entitlements, adequacy of compensation, service quality at resettlement site, the attitude of resettlement agency staff, and many other issues. Timely redress of grievances is critical to achieving desired results of resettlement and completing a project in a satisfactory manner. The GRM is an arrangement for receiving, evaluating, and facilitating the resolution of affected people’s concerns, complaints, and grievances about the borrower’s social and environmental performance at the level of the project. An aggrieved person can also seek redress through judicial and administrative remedies available in the country system.

216. Good practice incorporates the following principles for establishing and maintaining a project GRM33:

(i) Proportionality. The scope, timing, and form of a GRM should fit the project’s context and needs of a particular project. To scale a GRM to adverse impact on affected persons, the results of project social and environmental impact assessment are used to understand who will be affected and what the impacts on them are likely to be. In large and complex projects with potentially significant impacts, a GRM should be implemented as early as possible in the project preparation phase and maintained in place during construction and operations to the end of the project. To the extent possible, the personnel from the borrower/client investigating complaints and determining the response should be separate from those involving in day-to-day project management. In smaller projects with relatively straightforward issues, the project may consider designating a point of contact, such as a community liaison officer, to whom project-related views and concerns of the affected community can be addressed.

(ii) Involvement. The most successful GRMs involve affected communities in their design, through engaging community representatives in identifying the kinds of disputes that could arise, how affected persons want to raise their concerns, the effectiveness of any existing procedures for resolving complaints, the availability of local resources to resolve conflicts, and other factors that may arise. Suggestion boxes, periodic community meetings, and other consultation and feedback methods may also be helpful in formulating a GRM that will work.

(iii) Accessibility. A GRM includes procedures to receive, record, document, and respond to grievances within a reasonable amount of time. The procedures should be easy for all the diverse groups of affected persons to understand and be made known to them. These groups may include more vulnerable people such as the poor and women. The GRM design normally considers the many facets involved in making the mechanism accessible by the people of affected communities. These include their access to transportation and roads and their literacy and education levels, as well as their access to such communications facilities as telephones, mail, and the internet. The GRM should honor multiple methods of communication where this is seen as important, including face-to-face meetings, written complaints, telephone conversations, and email.

(iv) Cultural appropriateness. A good GRM is designed to take into account cultural attributes and traditional mechanisms for raising and resolving issues. If cultural differences exist within an affected community, the mechanism may need to tailor approaches to ensure that individual groups, especially women and Indigenous Peoples, are fully able to raise their concerns. Members of indigenous communities, for example, often do not avail of formal grievance procedures even when they have complaints. This is particularly true when the differential in social power between the indigenous community and project representatives is great or when affected people are not literate. Good practice finds ways to capture this kind of community sentiment by considering such tools as reporting stations where community liaison officers can collect oral complaints and record them in writing. For individuals reluctant to approach the GRM directly, informal

33 ADB Involuntary Resettlement Safeguards – A Planning and Implementation Good Practice Sourcebook – Draft Working Document, November 2012, P49 – 51

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complaints methods such as phone texting are a possible answer. (v) Responsiveness. The grievances received and responses provided should be documented and

reported back to the affected communities. A good GRM provides regular updates on its activities to local communities, clearly addresses the expectations of what the mechanism does and does not do, presents the results on how the grievances were resolved, and gathers feedback from affected people to improve its redress system.

(vi) Clear Responsibility. A good GRM establishes and maintains the organizational structure with clear authority and responsibilities for community liaison and grievance resolution. Individuals assigned, as access points are most effective if they are trustworthy, trained, knowledgeable, and approachable, regardless of the ethnicity, gender, or religion of a complainant.

(vii) Appropriate protection. It is important that the borrower/client is aware of judicial and administrative remedies available in the country for resolution of disputes so that the project's GRM does not inadvertently impede access to the country’s mechanisms. The GRM also sets up protections for complainants in order that they so not suffer from retribution.

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7. Organization and Responsibilities

7.1 Organizational Structure and ESS Responsibilities

7.1.1 Organizational Structure

193. An outline of the overall organizational structure of PT SMI is provided in Figure 6-1.

Figure 6-1: Organizational Structure of PT SMI

Source: PT SMI Website – Effective 24th March 2016

194. The staff and divisions within PT SMI within its organizational structure responsible for ESS management and input to the ESMF procedures as detailed in the following section.

7.1.2 President Director

195. Responsible under the ESMF management procedures to:

i) establish policies and risk management of ESMF implementation for all projects funded by the Company’s activities;

ii) establish the organizational structure including the clear authority and responsibility related to ESMF implementation for all projects funded under the Company's activities; and

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iii) monitor compliance with ESMF implementation for all projects funded and provide guidance on ESMF management improvement of projects funded under the Company's activities.

7.1.3 Risk Management Directorate

196. The Risk Management Directorate of PT SMI is overall responsible for ESS management and ESMF implementation. The Directorate consists of a Head of the Risk Management Division and the specialist ESS staff of the Environmental Social Safeguard and Business Continuity Management (ESSBCM) Division which includes also Business Continuity Management staff (Figure 6 -2).

Figure 6-2: Organizational Structure of the Risk Management Directorate

197. The ESSBCM Division will be responsible for overseeing the ESS requirements. The ESSBCM Division will function as an extension to the Risk Management Committee. The ESSBCM Division will be headed by a full time Social and Environment Manager (SEM), who will be responsible for all functions of the ESSBCM Division (see a generic job profile and required professional background of staff in Annex 4). The ESSBCM Division will be suitably staffed with Social and Environmental Specialist(s) to assist the SEM in the review and preparation of memos to the PT SMI President Director including other responsibilities described in below.

198. The ESSBCM Division’s main tasks are to oversee the ESS aspects of the investment during their preparation, construction, operation, and handover phases. They are responsible both for ensuring the client/developer projects preparation and also PT SMI projects loan processing and implementation meets the requirements specified in this ESMF. These specialists will ensure that PT SMI implement the detailed procedures, requirements and formats that will comply with the Government of Indonesia’s laws and regulations, the PT SMI’s ESS – OM, MFI safeguards policies, and international labor and occupational health and safety standards.

199. Projects that have significant ESS impacts may require additional expertise and special attention. For such projects, the ESSBCM Division may engage third party ESS Consultants to support the activities listed in the ESMF. The following figure illustrates the structure of the ESSBCM Division.

200. The Risk Management Directorate staff will be specifically responsible, as follows, under the ESMF management procedures to:

Director of Risk Management Directorate:

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i) ensure financing and investment activities, project development, and consulting service provision are in compliance with the provisions as set forth in the regulations, in accordance with the scope of ESMF and PT SMI ESS policies;

ii) establish risk categories of all projects under ESMF management;

iii) approve the Environmental and Social Due Diligence (ESDD) result and Project Appraisal reports and review results of ESDD report prepared by ES Safeguard Specialists;

iv) submit ESDD report to the Financing and Committee for the consideration of financing and investment decisions; and

v) ensure the adequacy of resources related to the implementation of the project ESMF in the Risk Management Directorate.

Division of Environment and Social Safeguards and Business Continuity Management – ESS & BCM Division

Head of Division of ESS & BCM has responsibilities;

i) Ensuring financing and investment activities, project development, and the provision of consulting services are in compliance with the provisions stipulated in the Indonesian Government regulations, and in accordance with the scope of Environmental and social safeguards(ESS) of Multilateral Projects;

ii) Establish risk management category for ESS Multilateral Projects;

iii) Approving Environmental and Social Due Diligence (ESDD) reports and the results of a review of the ESDD report prepared by the ESS Specialist;

iv) Submit ESDD reports to the DPI, DDPPA and Credit and Investment Committee (CIC) for the consideration of financing and investment decisions;

v) Ensuring adequacy of resources related to the implementation of ESS of Multilateral Projects on the Division of ESS & BCM

vi) Oversee implementation of ESMF;

vii) Ensure integration of ESS risk assessment in due diligence and risk management committees;

viii) Submit the memo to Director, Risk Management confirming project compliance with the applicable performance requirements as described in Section 2.3.6 of Chapter 2;

ix) Prepare and include the required S&E covenants in the loan agreements;

x) Finalize corrective actions based on the findings of environmental and social due diligence;

xi) Direct the capacity building initiative to improve quality of environmental and social due-diligence and supervision;

xii) Recruit and manage staff for ESSBCM;

xiii) Update the ESMF as needed to ensure consistency with requirements of the strategic investors (as defined in the Shareholders Agreement) and laws and regulations of the Republic of Indonesia;

xiv) Regular reporting on ESMF Performance to strategic investors and to the management on portfolio ESMF performance and on-going compliance with the Applicable Performance Requirements;

xv) Inform strategic investors of any S&E Claims against PT SMI and/or its clients;

xvi) Interact and consult with investors and co-lenders;

xvii) Develop and provide advisory services to the developers; and

xviii) Provide ESMF inputs in all fee based (type 4 project) assignments and ensure that fee based assignments are carried out in conformity with ESS Policy and Principles.

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Environmental and Social Safeguard Specialists have responsibilities:

i) Evaluate the activity of financing and investment, project development, and the provision of consulting services in compliance with the provisions stipulated in the Indonesian Government’s regulations and the scope of Multilateral Projects ESS;

ii) Propose risk category and management reports of Project ESS;

iii) Conduct site visit and prepare a project report;

iv) Carry out ESDD and prepare ESDD report including recommendations for Corrective Action Plan (CAP);

v) Review ESDD reports if the reports are prepared by Experts (Pool of Expert) - DDPPA or Consultant;

vi) Coordinate with the Business Division for the fulfillment and management of ESS during the project progress;

vii) Conduct periodic project monitoring in accordance with a mutually agreement between the Project and the Company;

viii) Keep and maintain a copy of the ESS document of Multilateral Projects in hardcopy or softcopy.

ix) Conduct compliance reviews to evaluate whether the financing and investment activities, project development, and consulting service provision are already in compliance with the provisions stipulated in the regulations as well as in accordance with the scope of ESMF and PT SMI ESS policies;

x) Conduct field and project site visits, as well as the site visit report;

xi) Perform screening and scoping of all investment projects;

xii) Propose the Project ESMF management report and risk categories;

xiii) Perform Environment and Social Due diligence (ESDD) and prepare ESDD report including recommendation for a IEE, EIA, LARAP or IPDP;

xiv) Or review ESDD report after being compiled by the Pool of Expert–Advisory and Project Development Support Division (DDPPA) or Consultant;

xv) Prepare corrective action plans and propose ESS covenants to be included in investment agreements;

xvi) Prepare progress and performance reports for various investors;

xvii) Monitor and supervise the projects to ensure on-going compliance with applicable ESS performance requirements and implementation of corrective plans;

xviii) Assist in grievance mechanisms, stakeholder engagement including public consultations and disclosures;

xix) Conduct information dissemination and annual learning workshops for PT SMI;

xx) Conduct training, consultation and dissemination of PT SMI’s Principles for project developers;

xxi) Preparation of project specific TORs for EIAs, SIAs, RP, IPDP or other required studies (sample TOR’s are provided in Annexes 15, 16 and 17);

xxii) Hire external qualified ESS consultants as per the requirements;

xxiii) Ensure ESS training to PT SM staff;

xxiv) Coordinate with the Business Division for the fulfillment and management of ESS during the project implementation;

xxv) Conduct periodic monitoring of the project in accordance with a mutually agreed between the Project and the Company; and

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xxvi) Keep and maintain hardcopies or softcopies of Project ESS documents.

7.1.4 Division of Business

201. The Business Directorate is responsible under the ESMF management procedures to:

i) ensure that the project conducted is not included in the Exclusion List;

ii) coordinate with the counterpart client for completing the necessary documents in the Project ESMF management;

iii) coordinate with the Division of ESS and BCM for the fulfillment and management of ESS during the project implementation;

iv) monitor the financing and investment facilities or project development or consultancy services; and

v) keep and maintain hardcopies or softcopies of Project ESS documents.

7.1.5 Division of Financing Facility Control (DPFP)

202. The DPFP are responsible under the ESS - OM management procedures to:

i) monitor the fulfillment of compliance obligations of the parties, including the fulfillment of the EIA/EMP, IEE, LARAP, IPP or Corrective Action Plan, in accordance with the financing and investment agreement;

ii) keep and manage the original Project ESS documents as a part of financing and investment documentation.

7.1.6 Advisory and Project Development Support Division (DDPPA)

203. The DDPPA are responsible under the ESMF management procedures to:

i) monitor the implementation of Project ESS management by the Pool of Expert Advisors and Project Development Support Division (DDPPA) or Consultants;

ii) take care of physical storage and management of original ESS for multilateral projects fund documents as part of the activity documents of project development or consulting service provision;

iii) coordinate with the Division of Risk Management for the fulfillment and management of ESMF during the project progresses.

7.2 Organizational Arrangements for Implementation and Funding of ESMF

7.2.1 Consultation and Disclosure Plan for ESMF, Operations Manual

204. The consultation and disclosure plan for the ESMF is outlined above in Section 2.3.5. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, supported by ESS specialists and consultants provided by the MFI’s, will responsible for implementation of the consultation and disclosure plan for the ESMF.

205. To socialize the PT SMI’s ESMF commitment to follow international best practices in ensure that financed projects will be environmentally and socially sustainable, and to seek technical input and review input interested and relevant stakeholders, the ESMF will be presented in public forums to:

i) potential client organizations (e.g. other BUMN organizations);

ii) key central agencies (such as the Ministry of Forestry and Environment);

iii) relevant environmental and social activist NGOs, and

iv) other institutions as are relevant to the ESMF process.

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7.2.2 Plan for Commissioning of ESMF, Operations Manual

206. The process for commissioning the ESMF is outlined above in Section 2.3.6. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, supported by reviewing ESS specialists and consultants provided by the MFI’s, will responsible for the initiation of the commissioning and periodic review process of the ESMF.

207. The Director of the Risk Management Directorate will be responsible for internal review of the PT SMI ESMF, its supporting policies and procedures and its annual budget.

208. Following PT SMI internal review of the ESMF, as outlined in Section 2.4.3 above, the ESMF will need to be submitted to MFI, for a review by MFI ESS specialists the determine if the ESMF meets national laws and MFI ESS requirements. The MFIs and PT SMI in this case will need to agree beforehand on the arrangement for the ESMF, and on the procedure for subproject review by the MFI’s, before an MFI Board approval will be sought for the ESMF.

209. Following the MFI external review, and MFI board approval the PT SMI ESMF may be submitted to the PT SMI President Director, who will be responsible to approve the commissioning of the ESMF, its policies and procedures and supporting organizational structure, and staff authorities and responsibilities related to ESMF implementation.

210. The PT SMI President Director will then seek an approval from the PT SMI Board of Commissioners for the final approval of PT SMI ESMF commissioning, along with supporting policies and procedures and annual budgets.

7.2.3 Organizational Framework External Stakeholders Engagement

211. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, will be responsible for development of a wider framework for engagement of external stakeholders (MFI’s, government agencies, local government, NGOs and the affected public) in the implementation, review and updating of the ESMF and its procedures.

212. Detailed guidance on the organization and steps required in the stakeholder consultation process is outlined above in Chapter 5, Section 5.2, and the implementation of the grievance mechanism for affected stakeholders is further outlined in Chapter 6, along with the specific engagement steps to be followed for persons affected by involuntary resettlement and indigenous peoples in Chapter 4, Section 4.3 and Chapter 5, Section 5.5.

7.2.4 Assessment of Client’s Capacity to Implement National Laws and ESS Requirements

213. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, will be responsible to conduct updating review of the client / borrower’s capacity to conduct subproject ESS management in suitable compliance with the supporting Indonesian legal framework for ESS management, and PT SMI and MFI safeguard policies and procedures. This review should be undertaken as part of the project management cycle under the Section 4.1.3 Initial Screening Process. ESSBCM Divison may also engage external consultant to assist in this review process.

7.2.5 Periodic Updating Assessment of Supporting Indonesian Legal Framework

214. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, will be responsible to conduct updating review of the supporting Indonesian legal framework for ESS management, at least on a two yearly basis. ESSBCM may also engage external consultant to assist in this process.

7.2.6 Monitoring and Evaluation of the Implementation of ESMF, Operations Manual

215. The staff of the ESSBCM Division, supervised by the Director of the Risk Management Directorate, will be responsible for the monitoring and evaluation of the implementation of the ESMF. This will be

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reviewed by the PT SMI Board of Directors on an annual basis to ensure investment project compliance with the ESS - OM and ESMF.

216. To review the performance of ESMF, supporting MFI’s will regularly review the capacity and performance of PT SMI in implementing the ESMF as part of the implementation support mission, to be undertaken at least twice a year. In addition, a periodic (at least once in two years) review should be carried out by the MFI’s through an external competent review agency that should be appointed on the basis of accepted procurement norms. It should be mandated to conduct the following activities:

i) Review ESMF by examining key documents provided by clients and developers:

a. Review ESMF structure, procedures and formats;

b. Review screening process (exclusion and screening of projects), IEE, EIA, LARAP and IPP guidelines;

c. Check documents / records of projects to establish (with objective evidence) that effective mitigation measures and operational controls have been applied in the projects where the ESMF has been adopted. This will be based on interviews with staff from PT SMI, clients / developers, implementing agencies, contractors, O&M agencies etc.;

d. Conduct the audit process at the PT SMI; all necessary documents should be made available to the auditors;

e. Conduct sample subproject site visits (one day visit for one project site in different regions). The objective of these visits is to review on-ground ESMF implementation on the site limited to the actions / controls identified in the ESMF documents / records and applicable to the particular project.

ii) Based on the above review, the external reviewer should prepare a short report that reflects its opinion on:

a. How and to what extent does the ESMF address environment and social concerns relevant to the projects undertaken?

b. How relevant and comprehensive are the key elements of ESMF and how are they aligned to environment and social safeguards of MFIs and national / state level regulation?

c. Are the institutional arrangements effective and adequate in implementing ESMF at various levels?

7.2.7 ESMF, Operations Manual Document Control and Update

217. The process for control and updating of the ESMF contents is outlined above in Section 2.3.6. The staff of the Environmental Social Safeguard and Advisory Division, supervised by the Director of the Risk Management Directorate, supported by reviewing ESS specialists and consultants provided by the MFI’s, will responsible for the updating at least on a two yearly basis the ESMF, which should be considered to be a living document.

7.2.8 Implementation Procedures, Budgets and Institutional Arrangements

218. The implementation procedures and supporting institutional arrangements for the ESMF are outlined in point form in Section 6.1 above. The technical details of the environmental and social operating procedures are outlined in Chapter 4, for implementation of the consultation process and grievance mechanism in Chapters 5 and 6, for implementation of capacity building initiatives in Chapter 8 and for implementation of monitoring, review and reporting procedures in Chapter 9. Further details of the specific detailed implementations steps associated with the Environmental Assessment Review Framework (EARF), Involuntary Resettlement Framework and Indigenous People’s Development Planning Framework (IPDP), are supporting by the guiding Annexes 13, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27 and 32.

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219. The budgets for operation of the ESMF will be prepared on an annual basis by PT SMI.

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8. Capacity Building

8.1 Aims and Objectives

220. The ESSBCM Division of PT SMI is situated in the Risk Management Division of PT SMI. This ESSBCM Division is chaired by a Division Head. The present capacity of ESSBCM Division at PT SMI will be continuously strengthened to appropriately manage the environmental and social safeguards as per requirements specified in the ESS - OM. In addition to staff recruitment, training for ESS staff will be required to ensure update on knowledge and skills in commensurate with the ESMF requirements.

221. As the project portfolio and pipeline for client/developer borrowing will be continuously growing, there is a need for PT SMI to strengthen its current capacity in managing environmental and social safeguards, particularly the ESSBCM Division under the Risk Management Directorate. The capacity of PT SMI should be strengthened to ensure that all key players are competent to discharge their respective duties as far as environmental and social safeguards management is concerned. In addition to the Risk Management Directorate, PT SMI should also assist and ensure that clients have adequate capacity to meet the requirements specified in the ESS - OM.

222. The ESS - OM envisages a capacity building plan for PT SMI staff and project developers to advance the environmental and social mainstreaming in the project cycle. Training will be conducted for both clients or developers, and the PT SMI staff. Training could be delivered outsourced hired by the PT SMI.

223. The following sections outline a strategy for improving the current capacity of PT SMI in managing environmental and social safeguards.

8.2 Operational Documents

224. PT SMI has elaborated the ESS - OM into an operational document, i.e. the current Environmental and Social Management Framework (ESMF), along with the details of the operational arrangements to guide the ESSBCM Division and clients; and Guidance Notes for sectors/subsectors/environmental management/social safeguards management for the borrowers. The Operations Manual will be made available in first quarter of 2017, and Guidance Notes are planned to be ready later in 2017.

8.3 Staffing

225. Depending on the needs from the growing portfolio and pipeline, PT SMI will increase its staffing for the ESSBCM Division gradually. PT SMI will also utilize the “pool of experts” that are available on call basis.

8.4 Outsourcing

226. PT SMI will hire consulting firms and/or individual environmental and social safeguards specialists, as needed, to assist it in carrying out the review, assessment and environmental and social due diligence (ESDD), and to carry out in-house training for PT SMI ESS staff, and for other units’ staff for awareness training. In addition, PT SMI, as needed, will also outsource monitoring and evaluation of the ESMF implementation at the client/developer level and at the PT SMI level. It is expected that from the outsourcing, PT SMI ESS staff will increase their knowledge and experiences as the consulting firms will work closely with PT SMI ESS staff them during the review, ESDD and monitoring the clients/borrowers.

8.5 Training

227. This capacity building should be accomplished by organizing awareness-raising/sensitization programs, hands-on workshops (on application of ESS - OM and ESMF), training programs (technical and thematic areas related to environment and social issues in PT SMI’s subproject portfolio and pipeline.

228. These programs should be coordinated and anchored through training institutions available in the country and other local, national or international experts experienced in various aspects of the sectoral infrastructure projects. The expertise of MFIs also should be tapped whenever needed for capacity

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building. The capacity building tasks can be out-sourced to reputable international and domestic consulting firms.

229. Training programs should be conducted according to an annual training calendar to impart working skills for implementing ESS - OM and ESMF, to update stakeholders on external changes (legal requirements, safeguards, etc.) and for operational experience-sharing, and to communicate revisions carried out in the ESS - OM and ESMF. The training programmes should clearly designate the intended audience, responsible implementers and estimated costs along with the timing of the activities.

230. Training programs organized for such purposes should typically include topics necessary for carrying out ESMF assessment and those related to the structure of the ESMF. They should be designed to improve knowledge and ability to deliver environmental and social support across projects at all implementation levels.

231. The capacity building initiatives are as follows:

i) Introduction training, training and refresher training for all PT SMI staff on ESS issues of infrastructure projects and ESS Policy, Principles, Procedures and Guidelines including periodic training on emergency preparedness and response;

ii) Awareness workshops for the developers on norms, procedures and PT SMI’s environmental and social review and due-diligence requirements to achieve effective implementation of early steps in preparation of EIA/SIA such as screening and/or scoping and guidelines of PT SMI, as well as preparation of RP and IPDP;

iii) PT SMI will ensure that at least one of its senior representatives receives environmental and social safeguard training under a recognized program;

iv) Training to PT SMI staff may cover guidance on such topics such as analysis of alternatives for a ‘Category A’ project, engaging ESS consultants, adequacy of impact assessment, EMP provisions, and social and environmental covenants in the loan agreement;

v) Provide guidance to clients/developers to adopt and enhance their own ESS – OM and ESMF; and

vi) Subscription of relevant social and environmental publications for knowledge upkeep.

232. Such training programs can also address the following topic areas:

i) Environment and social issues linked to urban and regional infrastructure development in Indonesia

ii) Indonesian legal governance and requirements

iii) Environment and social safeguards and management systems of MFIs

iv) ESS – OM and ESMF structure and objectives

v) Commissioning of ESS – OM and ESMF comprising assessment processes integrated in business cycle through case studies (screening, identifying legal requirements, impact assessment, identifying mitigation measures, categorization)

vi) Monitoring of projects – what to monitor / measure, why and how often

vii) Impact assessment of projects (environmental as well as social)

viii) Internal and external audit (objectives, protocol, reporting, corrective actions)

ix) Document management (update to ESMF policy and procedures based on external and internal changes, revisions in formats for recording information)

233. All of the ESS staff of PT SMI will have to be provided training, which can be in-house training and external training. Each staff will have to take at least one regular and one thematic training, depending on the needs and the interests. Training can be in the form of programmed training, seminar, workshop

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or knowledge forum exchange. The ESS staff will provide regular awareness training and refresher training to all staff of PT SMI, as part of the importance of mainstreaming environmental and social safeguards aspect in the decision making process for lending to the clients / developers.

Stakeholder MFIs will periodically support the capacity building of ESSBCM Division staff on a project-by-project basis by conducting joint review, joint supervision and training.

8.6 Corporate responsibility

234. PT SMI is planning to carry out outreach and training to clients/borrowers on its environmental and social safeguards management principles, as applicable, with the assistance of experts hired by PT SMI. In addition, as needed, PT SMI will also provide training for specific needs to clients/borrowers, such as training for health and safety, training for dam safety, etc. This capacity building for clients/borrowers will be delivered by ESSBCM Division.

8.7 Funding

235. PT SMI will allocate sufficient budget annually to implement the above activities. Institutional strengthening capacity plan will be part of the PT SMI Annual Work Plan, and accordingly budget to implement such plan will be part of the annual budget plan.

236. PT SMI will maintain records of the institutional capacity strengthening, detailing the training programs, agenda comprising topic, duration and trainer, qualifications of the trainer for conduct of training, and attendance sheet of participants. Training content should also be maintained and updated as required. Similar records will have to be maintained for workshop, seminar, outreach and other activities that have been attended by the ESS staff of PT SMI.

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9. Monitoring, Review and Reporting

9.1 Monitoring, supervision and reporting of the Investment Projects

237. Investment projects shall be monitored across their life-cycle to ensure that all the safeguards instruments agreed-upon at the loan approval stage are successfully implemented and complied with. The ESSBCM Division under the Risk Management Division of PT SMI will carry out the monitoring, supervision and reporting of the ESMF implementation.

238. The extent of monitoring, supervision and reporting activities, including their scope and periodicity, will be commensurate with the investment and development project’s risks and impacts, and will be outlined for each investment and development project Within PT SMI total investment portfolio.

239. Further loan fund disbursements shall be linked to continuous compliance by the client/developer. PT SMI, namely the ESSBCM Division, will monitor all projects (during planning, construction and operation and maintenance stages) that it finances to ensure conformity to the requirements specified in this ESMF. The results of the monitoring of environmental and social safeguards implementation will be presented in the implementation/compliance reports as part of quarterly progress reports. The client/developer are expected to make adequate internal arrangements to monitor the implementation of the environmental and social mitigation plan and submit regular progress reports including environmental and social implementation compliance reports to PT SMI.

240. At the level of the respective individual investment and development projects the developers and clients will be required to implement safeguard measures and relevant safeguard plans, as agreed and detailed in the loan legal agreements, and to submit periodic monitoring, surpevision and management reports on their implementation performance to PT SMI. See Annexes 28 and 29 for templates of the required environmental and social monitoring/performance reports required to be submitted by developers to PT SMI. All details relating to these project-level montoring, review and reporting procedures are guided by the PT SMI ESMF document and the relevant annexes (e.g. Annex 27 the framework for monitoring and supervision).

241. The respective project will be required to implement safeguard measures and relevant safeguard plans, as provided in the legal agreements, and to submit an agreed periodic monitoring reports on their implementation performance to PT SMI. The requirements are to:

i) establish and maintain procedures to monitor the progress of implementation of safeguard plans;

ii) verify the compliance with safeguard measures and their progress toward intended outcomes;

iii) document and disclose monitoring results and identify necessary corrective and preventive actions in the periodic monitoring reports;

iv) follow up on these actions to ensure progress toward the desired outcomes;

v) retain qualified and experienced external experts or qualified NGOs to verify monitoring information for projects with significant impacts and risks;

vi) use independent advisory panels to monitor project implementation for highly complex and sensitive projects; and

vii) submit periodic monitoring reports on safeguard measures as agreed.

9.2 Monitoring, supervision and reporting of the ESMF implementation

242. The ESMF monitoring, review and reporting procedures are required for each investment or development project to:

i) establish and maintain procedures to monitor and surpervise the progress of implementation of safeguard plans;

ii) verify the compliance with safeguard measures and their progress toward intended outcomes;

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iii) document and disclose monitoring results and identify necessary corrective and preventive actions in the periodic monitoring reports;

iv) follow up on these actions to ensure progress toward the desired outcomes;

v) retain qualified and experienced external experts or qualified NGOs to verify monitoring and supervision mission information for projects with significant impacts and risks;

vi) use independent advisory panels to monitor project implementation for highly complex and sensitive projects;

vii) summarise the periodic monitoring and supervision reports on safeguard measures for each investment or development project as agreed; and

viii) submit an annual summary report on the above safeguards and compliance steps, and the performance of the ESMF, to PT SMI board of management as agreed (see Annex 30 for a template example of such a report).

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10. References

ADB, 2009. Safeguard Policy Statement, Asian Development Bank, Manila.

ADB, 2012. Environment Safeguards - A Good Practice Sourcebook Draft Working Document, Asian Development Bank, Manila.

IFC, 2012. IFC Performance Standards on Environmental and Social Sustainability, International Finance Corporation - World Bank Group, Washington DC.

IIF, 2014. Social and Environmental Management System - Operations Manual - Volume 1, Jakarta, Indonesia, PT Indonesia Infrastructure Fund (Persero).

SMI, 2015. Laporan Tahunan 2015 (Annual Report) - Establishing Strategic Transformation - A Leading Catalyst in Facilitating Indonesia's Infrastructure Development, Jakarta, PT Sarana Multi Indonesia (SMI).

SMI, 2016a. Environmental and Social Management Framework Jakarta, Regional Infrastructure Development Fund Project, PT Sarana Multi Indonesia (Persero) - World Bank.

SMI, 2016b. Pedoman Perlindungan Lingkungan dan Sosial (Environmental and Social Safeguard / ESS) Proyek Multilateral, Jakarta, PT Sarana Multi Infrastruktur (Persero)

SMI, 2016c. Peraturan Direksi PT Sarana Multi Infrastruktur (Persero) tentang Pedoman Perlindungan Lingkungan dan Sosial (Environmental and Social Safeguards - ESS) Proyek Multilateral, Jakarta, Indonesia, PT Sarana Multi Infrastruktur (Persero).

World Bank, 2005. Piloting the Use of Borrower System to Address Environmental and Social Safeguard Issues in Bank-Supported Projects., Washington DC, World Bank.

World Bank, 2008. Evaluation of the Initial Phase of the Pilot Program for Use of Country Systems for Environmental and Social Safeguards., Washington DC, World Bank.

World Bank, 2016. Indonesia - Regional Infrastructure Development Fund Project : Environmental and Social Management Framework (ESMF), World Bank. Available at: http://documents.worldbank.org/curated/en/2016/07/26577949/indonesia-regional-infrastructure-development-fund-project-environmental-assessment (accessed 26th. July, 2016).

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Annex 1 – Exclusion List of PT SMI

PT SMI will not finance activities that are not eligible for financing by the IFC (yellow shaded from existing PT SMI ESS Appendix III – Exclusion List).

List of Activities that will not be financed by PT SMI include:

1. The production of, trade in or use of radioactive materials, including nuclear reactors and components thereof. Excluding the purchase of medical equipment, quality control (measurement) requirement, and any other equipment where the radioactive source is considered to be trivial or adequately shielded

2. The production, dissemination or sale-and-purchase of or trade in any kinds of product or activities regarded illegal under the State Regulations, country laws or regulations or international conventions and agreements or items which are internationally banned or subject to international phase-outs, such as illegal drugs, pharmaceuticals34, pesticides and herbicides35, ozone-depleting substances36, polychlorinated biphenyls37 (PCBs) and other hazardous chemicals38, wildlife or products regulated under Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)39 or trans-boundary trade in waste or waste products40;

3. Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals;

4. Introduction of genetically engineered organisms;

5. Production of lead paints;

6. Production of, or trade in, tobacco;

7. Production or trade in alcoholic beverages (excluding beer and wine);

8. Production or trade in weapons and munitions, including paramilitary materials;

9. Production of, trade in and/or use of unbounded asbestos fibers. Excluding the purchase or use of cement asbestos sheets bonded with asbestos concentrations of less than 20%.

10. Marine and coastal fishing practices, such as large-scale pelagic drift net fishing (nets longer than 2.5 km) and fine mesh net fishing, harmful to vulnerable and protected species in large numbers and damaging to marine biodiversity and habitats;

11. Conversion or degradation of critical41 natural habitats;

12. Mining or excavation of live coral, or conduct of developments which will disturb or degrade live coral habitats;

34 A list of pharmaceutical products subject to phase-outs or bans is available at http://www.who.int. 35 A list of pesticides and herbicides subject to phase outs or bans is available at http://www.pic.int. 36 A list of the chemical compounds that react with and deplete stratospheric ozone resulting in the widely publicized ozone holes is listed in the Montreal Protocol, together with target reduction and phaseout dates. Information is available at http://www.unep.org/ozone/montreal.shtml. 37 A group of highly toxic chemicals, polychlorinated biphenyls are likely to be found in oil-filled electrical transformers, capacitors, and switchgear dating from 1950 to 1985. 38 A list of hazardous chemicals is available at http://www.pic.int. 39 A list is available at http://www.cites.org. 40 As defined by the Basel Convention; see http://www.basel.int. 41 Critical habitats are defined as any habitat which is essential to support populations of threatened (IUCN red list, national law protected or CITES listed) or endemic animal or plant species, Including also locally or nationally rare and threatened vegetation habitats and habitats which have high value for provision of other ecoystem services (e.g. flood protection, erosion and landslide protection, catchment function support and water resources provision).

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13. Conversion, clearance, burning or commercial logging operations or the purchase of logging equipment for use in primary tropical moist forests or old-growth forests, whether within or outside protected areas or forest reserves, or involve the production or trade in wood products from these forests;

14. Production or trade in wood or other forestry products from other forest habitats, apart from those sustainably managed forests;

15. Destruction, vegetation-clearance, drainage or burning of deep tropical peat lands (deeper than 3m by law, and deeper than 2m to allow buffer to deep peat), or the commercial or small-holder logging, plantation or agricultural developments on deep peat lands (peat deeper than 3m);

16. Destruction, vegetation-clearance, drainage or burning of freshwater wetlands;

17. Destruction, vegetation-clearance, drainage or burning of mangrove forests;

18. Gambling, casinos and equivalent enterprises;

19. Production or activities involving harmful, hazardous or exploitative forms of forced labor42 or child labor43;

20. Production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples, without full documented consent of such peoples;

21. Business activities related to pornography and prostitution;

22. The production and distribution of goods and media having the natures of racist, anti-democratic and/or sentiments of certain groups;

23. The production and distribution of goods and media having the nature of religious radicalism.

42 Forced labor means all work or services not voluntarily performed, that is, extracted from individuals under threat of force or penalty (reference – Appendix 5) (ADB, 2009). 43 Child labor means the employment of children whose age is below the host country’s statutory minimum age of employment or employment of children in contravention of International Labor Organization Convention No. 138 “Minimum Age Convention” (www.ilo.org) (reference – Appendix 5) (ADB, 2009).

http://www.ilo.org/

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Annex 2 – Applicable Regulations under Indonesian Republic Related to Social & Environmental Safeguards

Environmental Laws and Regulations:

Law of the Republic of Indonesia No. 32 Year 2009 on the Environmental Protection and Management

Law of the Republic of Indonesia No. 41 Year 1999 on Forestry (plus Constitutional Court Decision No. 35/PUU-X/2012)

Law of the Republic of Indonesia No. 5 Year 1990 on Conservation of Natural Resources and Ecosystems.

Law of the Republic of Indonesia No. 18 Year 2013 on Prevention and Control of Deforestation (UUP3H)

Law of the Republic of Indonesia No. 6 Year 1994 on the Ratification of the United Nations Guideline Convention on Climate Change

Law of the Republic of Indonesia No. 17 of 2004 on the Ratification of the Kyoto Protocol to the United Nations Guideline Convention on Climate Change

Law of the Republic of Indonesia No.5 Year 1994 on the Ratification of the International Convention on Biological Diversity (United Nations Convention on Biological Diversity)

Law of the Republic of Indonesia No. 37 Year 2014 on Soil and Water Conservation

Law of the Republic of Indonesia No. 32 Year 2014 on Marine

Law of the Republic of Indonesia No. 11 Year 2010 on Cultural Heritage

Government Regulation No. 27 Year 2012 on Environmental Permit

Government Regulation No. 82 Year 2001 on Water Management and Water Pollution Control

Government Regulation No. 41 Year 1999 on Air Pollution Control

Government Regulation No. 74 Year 2001 on Hazardous and Toxic Substances Management

Government Regulation No. 101 Year 2014 on the management of Hazardous and Toxic waste

Government Regulation No. 70 Year 2009 on Energy Conservation

Government Regulation No. 85 Year 1999 on Amendment of Government Regulation No. 18 Year 1999 on the management of Hazardous and Toxic waste

Regulation of the Minister of Environment No. 5 Year 2012 on Types of Business Plan and/or Activities Mandated to Undertake Environmental Impact Assessment (EIA / AMDAL)

Regulation of the Minister of Environment No. 16 Year 2012 on Guidelines for Environmental Document Preparation

Regulation of the Minister of Environment No. 17 Year 2012 on Guidelines for Community Involvement in the Process of Environmental Impact Assessment and Environmental Permit

Regulation of the Minister of Environment No. 18 Year 2009 on Licensing Procedures for Hazardous and Toxic Waste Management

Regulation of the Ministry of Forestry No. P 39 / Menhut-II / Year 2013 on Empowerment of Local Communities through a Forest Partnership

Regulation of the Ministry of Forestry No. P 16 / Menhut-II / Year 2014 on Guidelines for Borrow and Use of Forest Area.

Decree of the Minister of Environment No. 05 Year 2014 on Wastewater Quality Standard

Decree of the Minister of Environment No. 112 Year 2003 on Domestic Wastewater Quality Standard

Decree of the Minister of Environment No. KEP-48/MENLH/11/1996 on Noise Level Standard

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Decree of the Minister of Environment No. KEP-49/MENLH/11/1996 on Vibration Level Standard

Decree of the Minister of Environment No. KEP-50/MENLH/11/1996 on Odor Level Standard

Decree of the Minister of Environment No. 45 Year 2005 on Guidelines for Preparation of Implementation Reports of Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL)

Social Safeguards Laws:

Law of the Republic of Indonesia No. 5 Year 1960 on Agrarian Basic Principles

Law (PERPU/Government Regulation in Lieu of law) 51 of 1960 on Prohibition of Land Utilization Without Permission from Owner or Representative

Law of the Republic of Indonesia No. 20 of 1961 on Revocation of Land Rights and Objects on Land

Law of the Republic of Indonesia No. 38 of 2004 on Roads

Law of the Republic of Indonesia No. 11 of 2005 on Ratification of International Covenant on Economic, Social and Cultural Rights (ICESCR)

Law of the Republic of Indonesia No. 7 of 2004 on on Ratification of Convention on the Elimination of All Forms of Discrimination against Women

Law of the Republic of Indonesia No. 14 of 2008 on Public Information Transparency

Law of the Republic of Indonesia No. 11 Year 2009 on Social Well-being

Law of the Republic of Indonesia No. 10 Year 1992 on Demography and Family Welfare

Law of the Republic of Indonesia No. 7 Year 2012 on Social Conflict Treatment

Law of the Republic of Indonesia No. 30 of 2009 on Power (Electricity)

Law of the Republic of Indonesia No. 1 of 2011 on Housing and Settlement Areas

Government Regulations related to the Environmental, Health, Social and Safety Issues for specific sectors, as mentioned in Annex I

Presidential Instruction (INPRES) 9 of 1973 Concerning Implementation of Land Rights Revocation Stipulated by Law 20 of 1961

Presidential Regulation 148 of 2015 Concerning The Fourth Amendment of Perpres 71 of 2012 on Implementing Regulation of Law 2 of 2012 on Land Acquisition for Development of Public Use

Presidential Degree No. 40 of 2016 concerning the Acceleration of the Development of Electricity Infrastructure

Land Use and Development Laws

Law of the Republic of Indonesia No. 24 Year 1992 on Spatial Planning

Law of the Republic of Indonesia No. 2 Year 2012 on Land Procurement for the Development of Facilities for Public Use

Presidential Regulation 30 of 2015 Concerning the Third Amendment of Perpres 71 of 2012 on Implementing Regulation of Law 2 of 2012 on Land Acquisition for Development of Public Use

Presidential Regulation No. 99 of 2014 Concerning the Second Amendment of Perpres 71 of 2012 on Implementing Regulation of Law 2 of 2012 on Land Acquisition for Development of Public Use

Presidential Regulation No. 40 of 2014 Concerning the First Amendment of Perpres 71 of 2012 on Implementing Regulation of Law 2 of 2012 on Land Acquisition for Development of Public UsePresidential Regulation No. 71 of 2012 Concerning Implementing Regulation of Law 2 of 2012 on Land Acquisition for Development of Public Use

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Regulation of the Minister of Land Agency of Land and Spatial Development No. 9 Year 2015 on Procedures to Establish the Land Communal Rights on MHA Land and Community Living in Special Areas

Regulation of the Minister of Finance No. 100/PMK.010/2009 on Company's Infrastructure Financing

Government Financial Services Authority (Otoritas Jasa Keuangan) guidance in Sustainable Finance Roadmap issued by Government Financial Services Authority and Ministry of Environment and Forestry on December 5th, 2014

Articles of Association of PT. Sarana Multi Infrastruktur

Other General Sectoral Laws and Regulations

Law of the Republic of Indonesia No. 1 Year 1970 on Occupational Safety

Law of the Republic of Indonesia No. 39 Year 1999 on on Human Rights

Law of the Republic of Indonesia No. 13 Year 2003 on Employment

Law of the Republic of Indonesia No. 36 Year 2009 on Health Issue

Law of the Republic of Indonesia No. 16 of 2011 on Legal Aid

Law of the Republic of Indonesia No. 9 of 1998 on the the Freedom to Express Opinion in Public

Law of the Republic of Indonesia No. 1 of 2000 on the Ratification of ILO Convention No. 182 of 1999 concerning the Prohibition and Immediate Action for the Elimination of Child Workers

Government Regulation No. 50 Year 2012 on Occupational Health and Safety Management System (SMK3).

Presidential Regulation (Perpres) No 2 of 2015 on National Mid Term Development Plan (RPJMN) 2015-2019

Regulation of the Minister of Manpower No. 2 Year 1992 on the Procedure for Appointment, Duties and Authority of Occupational Safety and Health Expert

Regulation of the Ministry of Home Affairs No. 52 Year 2014 on Guidelines on the Recognition and Protection of MHA

Regulation of the Minister of Manpower No. 3 Year 1998 on Procedures for Accident Reporting and Investigation

Regulation of the Minister of Manpower No. 75 Year 2002 on Implementation of the Indonesia National ELEMENT (SNI) SNI No. 04-0225-2000 regarding the General Requirements for Electrical Installations 2000 (PUIL 2000) in the Workplace

Regulation of the Minister of Manpower and Transmigration No. PER.13/MEN/X/2011 on the Threshold Limit Value of Physical and Chemical Factors in the Workplace

Joint Decree of the Minister of Labour and Minister of Public Works Decree No. 174 Year 1986 No 104/KPTS/1986 on Occupational Safety and Health in Construction Activity Sites

Electricity Sector Laws and Regulations

Regulation of the Minister of Environment No. 08 Year 2009 on Wastewater Quality Standard for Thermal Power Plant Businesses and/or Activities.

Regulation of the Minister of Environment No. 21 Year 2008 on Quality Standard for Stationary Source Emissions for Thermal Power Plant Businesses and/or Activities

Oil, Gas and Geothermal Sector Laws and Regulations

Law of the Republic of Indonesia No. 21 Year 2014 on Geothermal

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Regulation of the Minister of Environment No. 19 Year 2010 on Wastewater Quality Standard for Oil and Gas and Geothermal Businesses and/or Activities

Regulation of the Minister of Environment No. 13 of 2009 on Quality Standard for Stationary Source Emissions for Oil and Gas and Geothermal Businesses and/or Activities

Regulation of the Minister of Environment No. 13 Year 2007 on the Terms and Procedures for the Management of Wastewater for Upstream Businesses and/or Activities of Oil and Gas and Geothermal by Injection Way

Decree of the Minister of Environment No. 51 Year 2004 on Sea Water Quality Standard

Regulation of the Minister of Energy and Mineral Resources No. 20 Year 2008 on the Compulsory Application of ELEMENTS of the Indonesia National Competence in the Oil and Gas Business Sector

Transportation Sector Laws and Regulations

Regulation of the Minister of Environment No. 05 Year 2009 on the Management of Waste in the Port.

Decree of the Minister of Environment No. 51 Year 2004 on Sea Water Quality Standard

Drinking Water Sector Laws and Regulations

Regulation of the Minister of Health No. 492/Menkes/PER/IV/2010 on Drinking Water Quality Requirements

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Annex 3 – Applicable Asian Development Bank, World Bank & IFC Policies

Asian Development Bank (ADB) Operational Policies

The Asian Development Bank has adopted Operations Manual OM/F1 which sets out ADB’s operational procedures, and Safeguards Policy Statement (SPS) (ADB, 2009) on environmental and social protection (Table 6-2).

Table 6-2: Asian Development Bank’s Environmental and Social Safeguard Principles

No. Safeguard Objective

Policy principles on environment, IR and IP

General and specific requirements

This covers the screening and categorization, consultation and participation, DDR, monitoring and reporting, GRM and specific requirements for different modalities

1 Safeguard Requirement 1 - Environment

To ensure the environmental soundness and sustainability of projects and to support the integration of environmental considerations into the project decision-making process.

2

Safeguard Requirement 2 - Involuntary Resettlement

To avoid involuntary resettlement wherever possible; to minimize involuntary resettlement by exploring project and design alternatives; to enhance, or at least restore, the livelihoods of all displaced persons in real terms relative to pre-project levels; and to improve the standards of living of the displaced poor and other vulnerable groups.

3 Safeguard Requirement 3 - Indigenous Peoples

To design and implement projects in a way that fosters full respect for Indigenous Peoples’ identity, dignity, human rights, livelihood systems, and cultural uniqueness as defined by the Indigenous Peoples themselves so that they (i) receive culturally appropriate social and economic benefits, (ii) do not suffer adverse impacts as a result of projects, and (iii) can participate actively in projects that affect them.

To ascertain the consent of affected Indigenous Peoples communities to the following project activities: (i) commercial development of the cultural resources and knowledge of Indigenous Peoples; (ii) physical displacement from traditional or customary lands; and (iii) commercial development of natural resources within customary lands under use that would impact the livelihoods or the cultural, ceremonial, or spiritual uses that define the identity and community of Indigenous Peoples. For the purposes of policy application, the consent of affected Indigenous Peoples communities refers to a collective expression by the affected Indigenous Peoples communities, through individuals and/or their recognized representatives, of broad community support for such project activities. Broad community support may exist even if some individuals or groups object to the project activities.

World Bank Operational Policies

The World Bank has adopted a series of operational procedures that serve as environmental and social safeguards and also adopted an umbrella policy (OP 4.01) on environmental and social protection as a whole (Table 6-3).

Table 6-3: World Bank's Environmental and Social Safeguard Policies

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1 OP 4.01 Environmental Assessment

Help ensure environmental and social soundness and sustainability of projects. Support integration of environmental and social aspects of projects into the decision-making process.

2 OP 4.04 Natural Habitats

Promote environmentally sustainable development by supporting the protection, conservation, maintenance, and rehabilitation of natural habitats and their functions.

3 OP 4.09 Pest Management

Minimize and manage the environmental and health risks associated with pesticide use and promote and support safe, effective, and environmentally sound pest management.

4 OP 4.11 Physical Cultural Resources

Assist in preserving physical cultural resources and in preventing their destruction or damage. Physical cultural resources include resources of archaeological, paleontological, historical, architectural and religious (including graveyards and burial sites), aesthetic, or other cultural significance.

5 OP 4.12 Involuntary Resettlement

Avoid or minimize involuntary resettlement and, where this is not feasible, assist displaced persons in improving or restoring their livelihoods and standards of living in real terms relative to the pre-displacement levels or to levels prevailing prior to the beginning of project, whichever is higher.

6 OP 4.10 Indigenous People

Design and implement projects giving due importance to indigenous people’s dignity, human rights, and cultural uniqueness and ensure that they (1) receive culturally compatible social and economic benefits, and (2) do not suffer during the development process.

7 OP 36 Forests Realize the potential of forests to reduce poverty in a sustainable manner, integrate forests effectively into sustainable economic development, and protect the forest’s vital local and global environmental services.

8 OP 4.37 Safety of Dam

Ensure quality and safety in the design, construction and rehabilitation of dams, and mitigate any adverse impacts arising from the dams.

9 OP 7.50 Projects on International Waterways

Ensure that the international aspects of projects on international waterway are dealt with at the earliest and that the riparians are notified of the proposed project and its details.

10 OP 7.60 Projects in Disputed Areas

Ensure that other claimants to the disputed area have no objection to the project, or ensure that the special circumstances of the case warrant the World Bank’s support of the project notwithstanding any objection or lack of approval by other claimants.

International Finance Corporation Performance Standards

The International Finance Corporation has adopted a series of performance standards to be implemented by the client organizations that serve as environmental and social safeguards. These standards are guided by an umbrella Policy and Performance Standards on Social and Environmental Sustainability (IFC, 2012) on environmental and social protection as a whole (Table 6-4).

Table 6-4: International Finance Corporations Environmental and Social Performance Standards


1

Performance Standard 1 - Assessment and management of

To identify and evaluate environmental and social risks and impacts of the project.

To adopt a mitigation hierarchy to anticipate and avoid, or where avoidance is not possible, minimize, and, where residual impacts remain,

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environmental and social risks and impacts

compensate/offset for risks and impacts to workers, Affected Communities, and the environment.

To promote improved environmental and social performance of clients through the effective use of management systems.

To ensure that grievances from Affected Communities and external communications from other stakeholders are responded to and managed appropriately.

To promote and provide means for adequate engagement with Affected Communities throughout the project cycle on issues that could potentially affect them and to ensure that relevant environmental and social information is disclosed and disseminated.

2

Performance Standard 2 - Labor and working conditions

To promote the fair treatment, nondiscrimination, and equal opportunity of workers.

To establish, maintain, and improve the worker-management relationship.

To promote compliance with national employment and labor laws.

To protect workers, including vulnerable categories of workers such as children, migrant workers, workers engaged by third parties, and workers in the client’s supply chain.

To promote safe and healthy working conditions, and the health of workers.

To avoid the use of forced labor.

3

Performance Standard 3 – Resource use efficiency and pollution prevention and abatement

To avoid or minimize adverse impacts on human health and the environment by avoiding or minimizing pollution from project activities.

To promote more sustainable use of resources, including energy and water.

To reduce project-related GHG emissions.

4

Performance Standard 4 - Community health, safety, and security

To anticipate and avoid adverse impacts on the health and safety of the Affected Community during the project life from both routine and non-routine circumstances.

To ensure that the safeguarding of personnel and property is carried out in accordance with relevant human rights principles and in a manner that avoids or minimizes risks to the Affected Communities.

5

Performance Standard 5 - land acquisition and involuntary resettlement

To avoid, and when avoidance is not possible, minimize displacement by exploring alternative project designs.

To avoid forced eviction.

To anticipate and avoid, or where avoidance is not possible, minimize adverse social and economic impacts from land acquisition or restrictions on land use by (i) providing compensation for loss of assets at replacement cost and (ii) ensuring that resettlement activities are implemented with appropriate disclosure of information, consultation, and the informed participation of those affected.

To improve, or restore, the livelihoods and standards of living of displaced persons.

To improve living conditions among physically displaced persons through the provision of adequate housing with security of tenure at resettlement sites.

6

Performance Standard 6 - Biodiversity conservation and sustainable natural resource

This Performance Standard addresses how clients can sustainably manage and mitigate impacts on biodiversity and ecosystem services throughout the project’s lifecycle.

To protect and conserve biodiversity.

To maintain the benefits from ecosystem services.

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management of living natural resources

To promote the sustainable management of living natural resources through the adoption of practices thatintegrate conservation needs and development priorities.

7 Performance Standard 7 - Indigenous Peoples

To ensure that the development process fosters full respect for the human rights, dignity, aspirations, culture, and natural resource-based livelihoods of Indigenous Peoples.

To anticipate and avoid adverse impacts of projects on communities of Indigenous Peoples, or when avoidance is not possible, to minimize and/or compensate for such impacts.

To promote sustainable development benefits and opportunities for Indigenous Peoples in a culturally appropriate manner.

To establish and maintain an ongoing relationship based on Informed Consultation and Participation (ICP) with the Indigenous Peoples affected by a project throughout the project’s life-cycle.

To ensure the Free, Prior, and Informed Consent (FPIC) of the Affected Communities of Indigenous Peoples when the circumstances described in this Performance Standard are present.

To respect and preserve the culture, knowledge, and practices of Indigenous

Peoples.

8 Performance Standard 8 - Cultural heritage

To protect cultural heritage from the adverse impacts of project activities and support its preservation.

To promote the equitable sharing of benefits from the use of cultural heritage.

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Annex 4 – Example Terms of Reference for PT SMI Social and Environmental Specialist Staff

1 Social and Environment Manager

Title: Social and Environmental Manager

Committee/Unit: Risk Management Department / Social and Environment (S&E) Management Unit

1. IMMEDIATE REPORTING RELATIONSHIPS:

The position reports to: Director, Risk who in turn reports into the Risk Management Committee of the Board of Directors

The following staff positions report to the environment specialist: Social and environment Specialists; Administrative Staff

2. JOB PURPOSE:

Lead the planning, implementation and supervision of the SEU vision, goals, strategies and work plan in support of overall SMI goals. Oversee the quality of work and ensure the achievement of objectives of the unit. Lead and support external and internal relations, coordination and consultation initiatives for the unit. Lead and provide guidance on day-to-day operational issues and compliance with SMI environmental and social Principles. Work with problems and issues that may involve high risk.

3. EXPECTED OUTCOMES:

a. Principles

- Lead, promote and facilitate the implementation of SMI’s Social and Environment (S&E) Principles.

- Oversee the implementation of SMI's Social and Environment Management System (SEMS), report on lessons learned and good practices and recommend enhancements to SMI’s Social & Environment (S&E) Principles.

- As needed, update SMI's Principles to ensure consistency with the requirements of the strategic investors and laws and regulations of the Republic of Indonesia.

b. Guidance and Advisory Function

- Ensure S&E Policy is endorsed and actively communicated internally and externally.

- Ensure S&E contribution and approval in due diligence and risk management committees.

- Submit the memo to Director, Risk Management, confirming project compliance with the application requirements as described in the SEMS, as well as compliance with any related legal and/or contractual obligations and regulatory requirements.

- Monitor and measure the effectiveness of the SEMS program,

- Prepare and include the required S&E covenants in the loan agreements.

- Finalize corrective actions based on the findings of environmental and social due diligence.

- Interact and consult with investors and co-lenders; and

- Develop and provide advisory services to project developers.

c. Knowledge Sharing

- Direct the capacity building initiative to improve quality of environmental and social due-diligence in project development and implementation.

d. Division Operations Management - Lead the effective day-to-day operations of the unit and provide guidance on environmental and social issues and SMI Principles. - Lead and facilitate effective unit coordination and cooperation with other SMI committees, units and other internal stakeholders.

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- Undertake the performance management of the unit, including motivation of staff.

- Manage budget and resource allocation for the unit.

e. Staff Supervision - Recruit and manage staff for SEU and ensure the overall quality of their work. - Manage the performance of staff by providing clear direction and regular monitoring and feedback on performance.

- Provide coaching and mentoring to staff and ensure their on-going learning and development.

4. CORE COMPETENCIES:

Technical Knowledge and Skills

- Applies technical knowledge and skills in managing the unit and efficient use of resources

- Works at the leading edge of own technical specialism to ensure that the unit achieve its goals

- Recognized as SMI's spokesperson in the specialist area

Achieving Results

- Ensures work of own unit contributes to achieving SMI results

- Regularly reviews progress to ensure work of the unit is on target

- Is a role model for output quality

Working Together

- Leads teams in a way that demonstrates the value of diversity in different views, culture, nationality, and gender

- Able to mediate in conflict resolution

Learning and Knowledge Sharing

- Requires others to create learning opportunities for staff and clients

- Communicates an expectation of improvement and innovation

- Initiates and develops knowledge sharing networks

Managing Staff

- Manages the performance of staff fairly and consistently and according to SMI human resources policy

- Plans and implements learning and development of staff

- Allocates work fairly

- Creates an environment where teams benefit from cultural diversity in different views, culture, nationality, and gender

Leadership and Strategic Thinking

- Focuses work of the unit on achieving relevant SMI objectives

- Makes positive contributions to policy development

- Engenders commitment in others to achieving SMI strategic objectives

5. KEY RELATIONSHIPS:

- Supervisor (Director Risk): Work planning, performance feedback, results assessment, and personal development - External Clients: Knowledge sharing and capacity development, development of regional partnerships and external networks - Internal Clients: Support for project identification and development, implementation and compliance monitoring, knowledge sharing and capacity development

6. EDUCATION REQUIREMENTS:

A university degree in engineering, applied science, social sciences; preferably at post-graduate level or its equivalent

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7. RELEVANT EXPERIENCE AND OTHER REQUIREMENTS:

- Suitability to undertake the responsibilities mentioned above at the required level

- At least 7 years of relevant professional experience in project management, environmental

and social assessment; and environmental and social management, planning and implementation.

- A comprehensive knowledge and understanding of relevant Indonesian laws and regulations

- Proven management and leadership qualities

- Excellent oral and written communication skills in English and Bahasa Indonesia

- Knowledge and understanding of multilateral financing institutions environmental and social policies

2 Social Specialist (s)

Title: Social Specialist(s)

Committee/Unit: Risk Management Department/ Social & Environment (S&E) Management Unit


The position reports to: S&E Manager

The following staff positions report to the social specialist: Administrative Staff

2. JOB PURPOSE:

Promoting the implementation of SMI’s Social & Environment (S&E) Principles on social assessment, labour, land acquisition and involuntary resettlement, indigenous peoples and cultural heritage.


a. Principles

- Promote and facilitate the implementation of SMI’s Social & Environment (S&E) Principles on social assessment, labor, land acquisition and involuntary resettlement, indigenous peoples and cultural heritage in close cooperation with project developers.

- Report on lessons learned and good practices and recommend enhancements to SMI’s Social & Environment (S&E) Principles.


- Review social impact assessment reports, Resettlement Action Plans, Indigenous Peoples Development Plans, labour management plans, community development plans, public communications plans, among others, and recommend enhancements to assure compliance with SMI's social policies

- Prepare corrective action plans and propose S&E covenants to be included in investment agreements.

- During project processing, undertake social due diligence, conduct field visits, and assist in public consultations and disclosure activities to support the implementation and ensure compliance with SMI's social Principles.

Monitor and supervise the projects to ensure on-going compliance with applicable S&E performance requirements and implementation of corrective plans.


- Prepare guidelines, handbooks and information materials on social Principles for use by project developers;

- Prepare training programs and conduct annual learning workshops for internal staff and project developers; and

- Undertake project implementation reviews and prepare annual report to Management on performance of various projects with a view to recommend respect to SMI's social Principles.

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- Able to provide solutions to complex problems using technical knowledge and skills in relation to project design and implementation

- Applies a high level of technical expertise in work relating to social dimensions of projects

- Uses technical expertise to advise and support SMI project

Client Orientation

- Focuses own and other efforts on understanding and meeting client needs (e.g., government agencies, private sector parties, non-government organizations)

- Able to work effectively with clients

- Seeks feedback on the quality of service and makes improvements

Achieving Results

- Ensures own work contributes to achieving SMI goals

- Regularly reviews progress to ensure work is on target

- Prioritizes own and others’ work to achieve key results areas

Working Together

- Develops the team skills of team members

- Encourages cooperation within and between teams and promotes the value of diversity in teams, such as in different views, culture, nationality, and gender

- Facilitates conflict resolution within the team

Learning and Knowledge Sharing

- Helps staff to find a variety of ways to learn and develop

- Empowers staff to make improvements

- Encourages the team to learn from each other


Supervisor (S&E Manager): Work planning, performance feedback, results assessment, and personal development

External Clients: Knowledge sharing and capacity development, development of regional partnerships and external networks

Internal Clients: Support for project identification and development, implementation and compliance monitoring, knowledge sharing and capacity development.


A university degree in an applied social science, e.g. sociology, anthropology, economics, development or human geography or other related fields; preferably at post-graduate level or its equivalent



- At least 5 years of relevant professional experience in social impact assessment, social development/resettlement/indigenous peoples planning and implementation

- A comprehensive knowledge and understanding of relevant Indonesian laws and regulations and social and cultural environments and of issues related to land acquisition, involuntary resettlement, labor, indigenous peoples, among others

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- Strong interpersonal, leadership, team, and negotiation skills


- Knowledge and understanding of multilateral financing institutions social policies

3 Environmental Specialist

Title: Environment Specialist(s)

Committee/Unit: Risk Management Department / Social & Environment (S&E) Management Unit


The position reports to: S&E Manager

The following staff positions report to the environment specialist: Administrative Staff

2. JOB PURPOSE:

Promoting the implementation of SMI’s Social & Environment (S&E) Principles on environmental assessment, pollution prevention and abatement, community health, safety and security, biodiversity conservation and sustainable natural resource management.


a. Principles

- Promote and facilitate the implementation of SMI’s Social & Environment (S&E) Principles on environmental assessment, pollution prevention and abatement, community health, safety and security, biodiversity conservation and sustainable natural resource management in close cooperation with project developers.

- Report on lessons learned and good practices and recommend enhancements to SMI’s Social & Environment (S&E) Principles.


- Review environmental assessment reports, environmental management plans, public health action plans, environment, health and safety plans among others, and recommend enhancements to assure compliance with SMI's policies and Principles.

- Prepare corrective action plans and propose S&E covenants to be included in investment agreements.

- During project processing, undertake environmental due diligence, conduct field visits, and assist in public consultations and disclosure activities to support the implementation and ensure compliance with SMI's Principles.

- Monitor and supervise the projects to ensure on-going compliance with applicable S&E performance requirements and implementation of corrective plans.


- Prepare guidelines, handbooks and information materials on environmental Principles for use by project developers

- Prepare training programs and conduct annual learning workshops for internal staff and project developers,

- Undertake project implementation reviews and prepare annual report to Management on performance of various projects with a view to recommend respect to SMI's environmental Principles.



- Able to provide solutions to complex problems using technical knowledge and skills in relation to project design and implementation

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- Applies a high level of technical expertise in work relating to environmental dimensions of projects

- Uses technical expertise to advise and support SMI project

Client Orientation

- Focuses own and other efforts on understanding and meeting client needs (e.g., government agencies, private sector parties, non-government organizations)

- Able to work effectively with clients

- Seeks feedback on the quality of service and makes improvements

Achieving Results

- Ensures own work contributes to achieving SMI goals

- Regularly reviews progress to ensure work is on target

- Prioritizes own and others’ work to achieve key results areas

Working Together

- Develops the team skills of team members

- Encourages cooperation within and between teams and promotes the value of diversity in teams, such as in different views, culture, nationality, and gender

- Facilitates conflict resolution within the team

- Learning and Knowledge Sharing

- Helps staff to find a variety of ways to learn and develop

- Empowers staff to make improvements

- Encourages the team to learn from each other


Supervisor (S&E Manager): Work planning, performance feedback, results assessment, and personal development

External Clients: Knowledge sharing and capacity development, development of regional partnerships and

external networks

Internal Clients: Support for project identification and development, implementation and compliance monitoring, knowledge sharing and capacity development.


A university degree in engineering or applied science (e.g. civil/chemical/mining/sanitary , biology, geology, geography, forestry or other related fields) preferably at post-graduate level or its equivalent



- At least 5 years of relevant professional experience in environmental assessment; environmental, health and safety audit; and environmental management, planning and implementation.

- A comprehensive knowledge and understanding of relevant Indonesian laws and regulations

- Strong interpersonal, leadership, team, and negotiation skills


- Knowledge and understanding of multilateral financing institutions environmental policies

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Annex 5 – Environmental & Social Initial Screening Checklist

Project Summary

Name of Project

Name of Client

Project Location

Does the project in any of the below areas?

Area Description Yes/ No Details

Protected forest area

Water Catchment Area

Beach

River

Lake

Nature reserves

Mangrove forested coastal area

National park

Natural habitats

Private/community/indigenous forest

Germplasm protection area

Coral reefs

SOCIAL ASSESSMENT CHECKLIST

Question Answer

Does the project involve acquisition of private land?

Does the project involve acquisition of Government land?

Number of people to be displaced?

Describe existing land uses on and around the project area (e.g., community facilities, agriculture, tourism, private property)?

Will the project result in loss of access to current livelihoods?

Is the project likely to provide local employment opportunities, including employment opportunities for women?

Is the project being planned with sufficient attention to local poverty alleviation objectives?

Are there socio-cultural groups present in the project area (ethnic communities, minorities, or indigenous communities)?

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Do such groups self-identify as being part of a distinct social and cultural group?

Do such groups maintain cultural, economic, social, and political institutions distinct from the dominant society and culture?

Do such groups speak a distinct language or dialect?

Have such groups been historically, socially and economically marginalized, disempowered, excluded, and/or discriminated against?

Will the project directly or indirectly benefit or target Indigenous Peoples?

Will the project directly or indirectly affect Indigenous Peoples' traditional socio-cultural and belief practices? (E.g. child-rearing, health, education, arts, and governance)?

Will the project affect the livelihood systems of Indigenous Peoples? (e.g., food production system, natural resource management, crafts and trade, employment status)?

Will the project be in an area (land or territory) occupied, owned, or used by Indigenous Peoples, and/or claimed as ancestral domain?

Summary of Potential Impacts of the Project

Environmental Impacts

Social Impacts

What ESMF Risk Category does the project fall in?

Category A

Category B

Category C

Which are the safeguard policies/laws triggered by the Project

Indonesian Laws and Regulations

PT SMI Standards

International-Standard Operating Policies

Have environmental permits been obtained by the applicant?

No. Permit Yes No N/A Details (Number, date of issue, validity date, permit issuing agency)

1 AMDAL/UKL-UPL/SPPL

2 Location permit

3 Hazardous and toxic waste disposal permit

4 Hazardous and Toxic waste temporary storage permit

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5 Groundwater Use Permit

6 Other permits

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Annex 6 – Social & Environmental Project Information Sheet

1. Name of Project:

2. Preliminary risk categorization:

3. Name of the Developer

4. Please provide the name of the responsible person/promoter of the organization.

i. Name:

ii. Designation:

iii. Contact Details:

5. Give brief description of the project:

6. Give location of the project site:

7. Provide information on the scale of the project (e.g. project area, area of plants and buildings, production capacity, amounts of power generation etc.)

8. Are there any environmentally sensitive area(s) shown below in and around project site(s)? (Yes/No)

If “Yes”, please select applicable items below.

1) National parks, protected areas designated by government (e.g. coastal areas, wetlands, habitats of minorities or indigenous populations, heritage sites and deep peatlands)

2) Primeval forests, tropical natural forests

3) Ecologically important habitats (coral reefs, mangrove, tidal flats, nesting areas and habitats for migratrory species )

4) Habitats of endangered species of which protection is required under local laws and international agreements.

5) Areas that have risks of large scale increase in soil salinity or soil erosion

6) Desertification areas

7) Areas with special values from archaeological, historical and/or cultural viewpoints

8) Habitats of minorities, indigenous populations, nomadic people with traditional life style, or areas with special social value

9. Does the project involve following elements? If yes, give details on the scale, predicted impact and effects (positive and negative) on socio economic environment and other related details.

1) Land Acquisition

2) Involuntary Resettlement

3) Deforestation

4) Land reclamation and/or development

5) Labor and working conditions (child labor, women labor, forced labor, third parties, migrant workers, etc.)

10. Give brief description of the likely impacts of the project on air quality, Water quality, noise, Climate, soil, land use and biodiversity.

11. Give status on EIA/AMDAL requirements. Give details. If EIA / AMDAL is already completed and approved by relevant authorities, please specify

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12. Is there any other approval required and taken under Indonesian regulations governing land acquisition, compensation, resettlement and indigenous people? Give details.

13. Whether to be taken up for next stage processing: Yes / No,

14. Date of Decision:

15. Approving Authority (Director Risk)

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Annex 7 – Project Information Request Form

3. Contact Details of the Developer [To be filled by SMI]

i) Reference Number:

ii) Name of the company:

iii) Main postal address, telephone, fax and e-mail details for the company:

4. Characteristics of the Project

i) Brief description of the proposed project.

ii) Reasons for proposing the project.

iii) A plan showing the boundary of the development including any land required temporarily during construction.

iv) The physical form of the development (layout, buildings, other structures, construction materials, etc).

v) Description of the main processes including size, capacity, throughput, input and output.

vi) Any new access arrangements or changes to existing road layout.

vii) A work program for construction, operation and commissioning phases, and restoration and after-use where appropriate.

viii) Construction methods.

ix) Resources used in construction and operation (materials, water, energy, etc.)

x) The relationship with other existing/planned projects.

xi) Information about alternatives being considered.

xii) Information about mitigating measures being considered.

xiii) Other activities that may be required as a consequence of the project (eg new roads, extraction of aggregate, provision of new water supply, generation or transmission of power, increased housing and sewage disposal).

xiv) Details of any other permits required for the project.

5. Location of the Project

i) Maps and photographs showing the location of the project relative to surrounding physical, natural and man-made features.

ii) Existing land-uses on and adjacent to the site and any future planned land uses.

iii) Zoning or land-use policies.

iv) Protected areas or features.

v) Sensitive areas.

vi) Details of any alternative locations, which have been considered.

6. Environmental and Social Information

i) Environmental and socioeconomic impacts of the investment.

ii) Requirements under relevant laws and regulations, S&E safeguards of strategic investors and applicable international agreements, including but not limited to laws and regulations governing land acquisition, compensation, resettlement and indigenous peoples.

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iii) Sustainable development and use of renewable natural resources. Protection of human health, cultural properties, and biodiversity, including endangered species and sensitive ecosystem.

iv) Land acquisition and land use

v) Labor and working conditions

vi) Impact on indigenous peoples/ethnic minorities and communities.

vii) Cumulative social and environmental impacts of existing proposed and anticipated future investments.

viii) Disclosure of impacts and mitigation measures to and participation of affected parties in the design, and review of mitigation and rehabilitation measures.

ix) Consideration of environmentally, socially and economically feasible alternatives.

x) Pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management.

7. Characteristics of the Potential Impacts

A brief description of the likely impacts of the project considering the following factors:

i) Impacts on people, human health, fauna and flora, soils, land use, material assets, water quality and hydrology, air quality, climate, noise and vibration, the landscape and visual environment, historic and cultural heritage resources, and the interactions between them.

ii) Nature of the impacts (i.e. direct, indirect, secondary, cumulative, short, medium and long-term, permanent and temporary, positive and negative).

iii) Extent of the impact (geographical area, size of the affected population/habitat/species).

iv) Magnitude and complexity of the impact.

v) Probability of the impact.

vi) Duration, frequency and reversibility of the impact.

vii) Mitigation incorporated into the project design to reduce, avoid or offset significant adverse impacts.

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Annex 8 – Social & Environmental Screening Categories of Projects

1 High Risk Projects: Category A

For Environmental

Environment Projects with anticipated significant adverse on environment. These include the following types of projects: thermal and hydro power plants; irrigation systems; roads, bridges, tunnels, railways and airports.

Category A requires an adequately prepared - Environmental Impact Assessment (EIA) (outline in Annex 22) with environmental management plan (EMP) and environmental monitoring report (EMR) to obtain environmental clearance.

For Involuntary Resettlement (IR)

Projects with significat impacts, where 200 or more persons experience major impacts, which are defined as (i) being physically displaced from housing, or (ii) losing 10% or more of their productive (income generating) assets

Category A projects requires a resettlement plan (RP), including assessment of social impacts and may require resettlement framework prior to RP (outline in Annex 25).

For Indigenous Peoples (IP)

Projects with significant impacts, where assessment shows that magnitude of impact a is high and Indigenous Peoples (IP) level of vulnerability is also high; or, magnitude of impact is low but IP’s level of vulnerability is high; or, magnitude of impact is high although IP level of vulnerability is low

Category A projects requires an Indigenous Peoples Plan (IPP), including assessment of social impacts, commensurate with significance and may require Indigenous Peoples Planning Framework (IPPF) prior to IPP (outline in Annex 27)

2 Moderate Risks Projects: Category B

For Environmental

Projects with anticipated insignificant adverse impacts on the environment. These include projects with minor environmental impacts, such as transmission lines and substations; rehabilitation projects of power plants, factories, or roads within the same corridor or footprint; and other developments anticipating insignificant adverse impacts. Projects that are located outside of the protected areas and their buffer zones.

Category B projects require the preparation of Initial Environmental Examination (IEE) (outline in Annex 18) with an environmental mitigation and monitoring programs required to obtain environmental clearance.


Projects with no significat impacts, where fewer than 200 people will experience major involuntary resettlement impacts.

Category B projects requires a resettlement plan, including assessment of social impacts and may require resettlement framework prior to resettlement plan (outline in Annex 22).

Indigenous Peoples (IP)

Projects that are expected to have limited impacts on IP/EMs

Category B projects requires an IPP, including assessment of social impacts, commensurate with significance and may require IPPF prior to IPP (outline in Annex 24)

3 Low Risk Projects: C

For Environmental Category C projects require no further impact assessment studies but a due diligence report may be required.

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Projects with no anticipated adverse environmental impacts


Category C: no involuntary resettlement impacts are expected.

Category C projects require no further action and a due diligence report may be required

For Indigenous Peoples (IP)

Category C: no indigenous peoples impacts are expected.

Category C projects require no further action and a due diligence report may be required

4 Category F1 which has potential impacts; to be determined

Tthe Developer/Project Sponsor is required to adopt its own ESS - OM.

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Annex 9 - Checklist to Determine the Applicability of Principles

Category Environmental Item

Main Check Items

Yes No Environmental considerations / Significance of Impact

Environment (PS 3)

Ambient Environment

i. Will the project generate fugitive dust during transportation, unloading, storage of fuel and/or raw materials for processing, and polluted runoff from storage of these fuel and/or materials?

ii. Will the project cause air pollution resulting from emissions of project operation processes or increase in GHGs?

iii. Will the project create noise disturbances during operation due to the proximity of settlements or receptors?

iv. Will the project cause pollution to surface and groundwater bodies from the project’s construction or operations, sanitary sewage, sludge, residues and miscellaneous discharges?

v. Does the project lead to the generation and transport of solid, hazardous and toxic wastes?

vi. Will there be public health and safety hazards from operation (discharge of wastes and due to poor air quality, noise and odour from emissions etc.)?

If Yes, prepare EIA

International trans-boundary Issues

i. If necessary, the impacts to trans-boundary or global issues should be confirmed (e.g., the project includes factors that may cause problems, such as international waterways pollution, trans-boundary pollutants/air pollution, trans-boundary movement of hazardous materials, trans-boundary waste treatment, acid rain, destruction of the ozone layer, GHG emissions, climate change and global warming).

Social Environment (PS 4, 5, 7, 8)

Land Acquisition (PS 5)

i. Will the project require that land (public or private) be acquired (temporarily or permanent for its development? If so:

ii. Will the project result in involuntary displacement of people or economic activities? How many persons will be impacted?

iii. Will the land acquisition result in the temporary or permanent loss of crops, fruit trees or household infrastructure?

iv. Is there a possibility of socio-political issue/ conflict due to acquisition?

v. Has a due diligence environmental audit (site assessment) conducted to determine if hazardous material or contamination are present on the subject property?

If applicable, prepare Resettlement Action Plan (RAP)

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Main Check Items


vi. Has written offer to just compensation made to the property owners? Has general notice of the property owner’s rights and entitlements on the acquisition of their property been provided and an explanation of the relocation assistance & payment entitlements made? Has the notice of relocation eligibility to displaced persons provided?

Involuntary Resettlement (PS 5)

i. Is involuntary resettlement caused by project implementation? If involuntary resettlement is caused, are efforts made to minimize the impacts caused by the resettlement?

ii. Is adequate explanation on relocation and compensation given to affected persons prior to resettlement?

iii. Is the Resettlement Action Plan, including proper compensation, restoration of livelihoods and living standards developed based on socioeconomic studies on resettlement?

iv. Does the Resettlement Action Plan pay particular attention to vulnerable groups or persons, including women, children, the elderly, and people below the poverty line, ethnic minorities, and indigenous peoples?

v. Are agreements with the affected persons obtained prior to resettlement?

vi. Is the organizational framework established to properly implement resettlement? Are the capacity and budget secured to implement the plan?

vii. Is a plan developed to monitor the impacts of resettlement?

viii. If involuntary resettlement impacts are expected :

A. Are local laws and regulations compatible with investor’s resettlement policy?

B. Will the coordination between the private sector sponsor and govt. agencies be required to deal with land acquisition?

C. Does the borrower have sufficient skilled staff to undertake resettlement planning and implementation?

D. Are training and capacity building interventions required prior to resettlement planning and implementation?

If yes , prepare

resettlement plan (RP)

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Main Check Items


Living and livelihood (PS-4)

i. Is there a possibility that the project will adversely affect the living conditions of inhabitants? Are adequate measures considered to reduce the impacts, if necessary?

ii. Is sufficient infrastructure (e.g., hospitals, schools, roads) available for the project implementation? If existing infrastructure is insufficient, is a plan developed to construct new infrastructure or improve existing infrastructure?

iii. Is there a possibility that large vehicle traffic associated with the project will affect road traffic in the surrounding areas? Are adequate measures considered to reduce the impacts on traffic, if necessary?

iv. Is there a possibility that diseases (including communicable diseases, such as HIV) will be introduced due to immigration of workers associated with the project? Are adequate considerations given to public health, if necessary?

If Yes, prepare SIA

Indigenous People(IP) / Ethnic minorities (EM)

(PS7)

i. Is there any indigenous group living within the boundary of, or nearby, the project?

ii. Are there any members of these indigenous groups in the area who could benefit from the project?

iii. Has there an Indigenous peoples plan made? (if yes to above)

iv. Does IPs/EM maintain distinctive customs or economic activities that may make them vulnerable to hardship?

v. Will the project restrict their economic and social activity and make them particularly vulnerable in the context of project/

vi. Will the project change their socio-economic and cultural integrity?

vii. Will the project disrupt their community life?

viii. Will the project positively / negatively affect their health, education, livelihood or social security status?

If yes, prepare IPDP (Developmental Plans)

Heritage &

culture (PS 8)

i. Is there a possibility that the project will damage the local archaeological, historical, cultural, and religious heritage sites? Are adequate measures considered to protect these sites in accordance with the country’s laws?

ii. Is there a possibility of culture loss due to split of community?

If yes prepare EIA

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Main Check Items


Natural Environment (PS 6)

Landscape/ Land use

i. Is there a possibility that the project will adversely affect the local landscape? Are necessary measures taken?

ii. Is the use land that is currently occupied or regularly used for productive purposes (e.g. gardening, farming, pasture, and fishing locations, forests) will be lost? Has there been a plan to compensate for the changed land use pattern?

iii. Will the project cause aesthetic degradation and property value loss due to establishment of plant and ancillary facilities?

If yes prepare EIA

Protected areas/ Ecosystem

i. Is the project site located in protected areas designated by the country’s laws or international treaties and conventions? Is there a possibility that the project will affect the protected areas?

ii. Does the project site encompass primeval forests, tropical rain forests, ecologically valuable habitats (e.g., coral reefs, mangroves, or tidal flats)?

iii. Does the project site encompass the protected habitats of endangered species designated by the country’s laws or international treaties and conventions?

iv. If significant ecological impacts are anticipated, are adequate environmental protection measures taken to reduce the impacts on ecosystem?

v. Is there a possibility that the amount of water (e.g., surface water, groundwater) used by the project will adversely affect aquatic environments, such as rivers? Are adequate measures taken to reduce the impacts on aquatic environments, such as aquatic organisms?

If yes , prepare

resettlement plan (RP)

Health, Safety and working conditions (PS 2)

Protection of workers

i. Are vulnerable categories of workers such as children, migrant workers (and members of their families), workers engaged by third parties, and workers in the client’s supply chain considered?

ii. Is protection of workers including fair treatment, non-discrimination, equal opportunity, worker-management relationship, safe and healthy working conditions, and the health of workers considered?

iii. Any forced labour?

iv. Grievance Mechanism?

If yes prepare SIA

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Main Check Items


Health, Safety and working conditions (PS 2)

Construction Activities

v. Are adequate measures considered to reduce impacts during construction for better working condition and health and safety of the workers (e.g., noise, vibrations, turbid water, dust, exhaust gases, and wastes)?

vi. If construction activities adversely affect the social environment, are adequate measures considered to reduce impacts?

vii. If necessary, is health and safety education (e.g., traffic safety, public health) provided for project personnel, including workers?

viii. Will the project cause social conflicts between construction workers from other areas and community workers?

If yes prepare SIA

Accident Prevention

i. Are adequate accident prevention plans and mitigation measures

establishment of safety rules, installation of prevention facilities, and equipment, and safety education for workers? Are adequate measures for emergency response to accidental events considered?

ii. Are adequate accident prevention measures taken for storage and transportation of hazardous materials?

If yes prepare SIA

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Annex 10 – Environmental & Social Assessment & Types of Financing

Financing Definition SMI’s Exposure

Example Approach to S&E risk management

Fund based44

All fund based financing involves actual disbursement of money to the project or company.

Project debt/equity

Project level debt/loans are usually non-recourse loans and are secured by the project assets and paid entirely from project cash flow rather than from the balance sheet of promoters.

To the cash flows of the project.

SMI provides a loan to a Special Purpose Vehicle for constructing and operating a power plant.

E&S risk assessment to be done at the project level as per the applicable requirements.

Corporate debt/equity either directly to the project developer or to another Financial Institution (FI) or a Fund

Corporate debt is usually referred to as ‘Corporate Lending’. It can be secured as well as unsecured.

To the balance sheet of the client.

SMI provides a loan/equity to an infrastructure development company

E&S risk assessment by PT SMI to focus on:

E&S management systems at the corporate /FI/Fund level to undertake and implement projects as per the applicable E&S requirements;

Project level audit against the applicable E&S requirements in case of existing operational assets/projects; and

Assessment of E&S risk in the expected portfolio of assets/projects.

Bridge Finance Bridge financing is usually short term (normally 6 -12 months) and is extended to a company using existing assets as collateral in order to acquire new assets.

To the collateral PT SMI pre-finances purchase of equipment

Screen against the exclusion list and review of collateral to ensure no environmental liabilities

Refinancing Refinancing refers to the replacement of an existing debt obligation with a debt obligation bearing different terms.

Exposure will depend on whether it is a project or a corporate loan that is being replaced

Screen against the exclusion list and review of collateral to ensure no environmental liabilities

44 In case the clients with multisite operations are seeking general corporate finance, working capital, or equity financing from ADB, the SPS 2009 requirements shall be met (see e.g. para 17-20 of ADB SPS 2009 )

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Financing Definition PT SMI’s Exposure Example Approach to S&E risk management

Securitization Securitization is a financial transaction in which assets are pooled and securities representing interests in the pool are issued.

Exposure to the pool of assets

A Financial Institution (FI) that has a significant number of infrastructure loans, pools them together and PT SMI buys the same pool of assets.

A due diligence undertaken by PT SMI of the pool of assets to ensure compliance with E&S requirements.

The due diligence d is based on information provided by the FI:

E&S management systems and capacities at the FI-level with regard to due diligence and supervision of projects as per the applicable E&S requirements

If required (due to high risk potential): Project level audit of pool of assets

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Annex 11 - Social & Environmental Review Format (Memo to the PT SMI Board of Directors)

Head Details Remarks

Project Details - Name of the project

- Reference Number

- Promoter Company Name

- Group Name (if any)

- Date of Approval

- Last date of review

- Location of project

- Scale/size

- Date of construction/operation commencement

Categorisation - Categorisation of the project

- Reasons for the categorisation

Authorisation and Approvals

- Environmental Permission

- Relevant authority for granting the permission

- Conditionality attached to the permission

- Steps taken by the management to fulfil such conditions

- Broad principles of Environment Management followed by the company and the organisation structure to ensure compliance

Anti-Pollutions Measures / Corrective Actions

- Anti-pollution measures planned (depending on the industry this will vary)

- Separate clearances (if any) to be obtained

- Primary, secondary and tertiary treatment commitment of water commitment

- Chimney heights and disposal of waste / ash for power projects

Monitoring mechanism - Organisation structure for monitoring environmental compliance

- Frequency of monitoring

- Non-compliance escalation mechanism and remedial processes

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Annex 12 - Site Visit Checklist & Record

Project Reference Number:

Project Name:

Project Description:

Location/ Address:

Date of Visit:

Item Action Findings Follow-up needed with timelines

Corrective Action Plans Review EMP, RAP/IDPD etc.: Assess the actual scenario by survey

Data collection Field testing/ Investigations and Sample collection of the environmental items like water, soil, air, noise etc. Validate the information given by developer

Visits Site visits to

- Main plant site

- Where labour resides

- Disposal sites (water/ waste)

- To the people affected/relocated

- To the relevant authorities

Meetings - Meeting with the local people, NGOs and other affected people

- Address complaints and grievances

- Record them

Field Report Prepare Field Visit Report

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Annex 13 – Outline of Environmental & Social Appraisal/Due Diligence Report

Background

Objectives

Project Descriptions

1. Project description: title, type of project, location and setting, amount, size (scale, capacity, number of staff.

Scope of Review and Methodology

1. Documents reviewed (e.g., environmental assessment reports, involuntary resettlement plan, Indigenous Peoples plan, or environmental and social compliance audit reports, copies of permits/licenses, etc.).

2. Methodology adopted (e.g. site visit, inspection report, etc.).

Environmental and Social Licensing Status

1. Environmental and social categorization and rationale

2. Applicable Environmental and Social Requirements

Compliance, Liability and Management of Environmental Issues (by relevant safeguard requirements applicable for the specific project, examine environmental and social issues and compliance)

1. Examine issues in terms of environmental, involuntary resettlement and indigenous peoples impacts, mitigation measures to address these issues (or corrective action plan for existing facilities) and compliance status with applicable MFI environmental and social safeguard requirements and national laws, regulations, and standards;

2. Environmental Safeguards

b) appropriate identification of major anticipated environmental impacts and risks;

c) adequacy of environmental assessment (for category A projects, including the adequacy of alternative analysis);

d) compliance status with applicable requirements on (i) information disclosure, (ii) consultation with affected people and other stakeholders,(iii) occupational and community health and safety, biodiversity conservation and sustainable natural resource management, and physical cultural resources;

e) adequacy of mitigation measures and EMP (mitigation measures, monitoring and reporting, institutional arrangement, budget), or corrective action plan for existing facilities, if any; and

f) with specific consideration of pollution related issues such as emission management, water management, hazardous and toxic substances and waster management, liquid waste management, domestic waste management, biodiversity management, energy conservation programs

3. Involuntary Resettlement Safeguards

a) appropriate identification of major anticipated involuntary resettlement impacts and risks (including both physical displacement and economic displacement);

b) adequacy of assessment of social impacts, information disclosure and consultation with affected people and other stakeholders;

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c) adequacy of compensation and benefits for displaced persons

d) adequacy of resettlement plan (measures to enhance or restore the livelihoods of displaced persons, monitoring and reporting, institutional arrangement, budget), or corrective action plan for existing facilities, if any; and

e) Private sector responsibilities under government-manages resettlement

4. Indigenous Peoples Safeguards

(a) appropriate identification of major anticipated impacts on Indigenous Peoples (including potential impacts on traditional or customary lands under use; relocation of Indigenous Peoples from traditional and customary lands, and impacts on cultural resources);

(b) adequacy of information disclosure and meaningful consultation;

(c) broad community support, where applicable;

(d) adequacy of measures to avoid adverse impacts; and

(e) adequacy of Indigenous Peoples plan (benefit sharing, measures to mitigate and minimize adverse impacts, monitoring and reporting, institutional arrangement, budget), or corrective action plan for existing facilities, if any.

5. Social Issue Management

a) Consultation Program and Communication with the Community and Government

b) Corporate Social Responsibility / Community Development Program

6. Adequacy of Grievance Redress Mechanism Arrangements

a) Recommend mitigation measures, or corrective action plans, if gaps are identified

b) For existing facilities including projects under construction, examine whether the project company paid pollution charges or fines/penalties for non-compliance in the last two years in accordance with national laws, whether the project company is exposed to potentially significant liabilities, such as those arising from known or suspected land/groundwater contamination, major accidents and incidents related to the company’s past or ongoing operations, and state further actions required/planned by the project, in particular actions to address any non-compliance problems and liabilities. Also examine whether there are complaints from the public or local communities regarding the project company’s environmental and social performance.

c) State any risk control or mitigation measures to be taken by the project, such as conditions, loan covenants or monitoring and reporting requirements

7. Potential Management of Natural Disasters

a) Landslide

b) Flooding

c) Earthquake

d) Other Potential Natural Disasters

6. Health, Safety and Security Management

a) Occupational Health and Safety Policies and Procedures

b) Implementation of Health and Safety at Work

7. Employment Management

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a) Employment Handing

b) Work Environment Management

Conclusion and Recommendations

Format of Corrective Action Plan

Name of Sub-Project Date of Audit:

Documents reviewed:

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Annex 14 – Covenants Pertaining to Environmental & Social Safeguards for Inclusion in Contractual Agreements

The following clauses should be inserted into the Construction Contractor’s Agreement additionally among others:

a) The contractor shall implement all measures recommended in the Environmental Management Plan

b) The Contractor shall implement the special and general conditions stated in the environmental permits, forest clearance, and wildlife clearance applicable to construction phase of the project.

c) The Contractor shall comply with all applicable regulations with regards to control of pollution and H&S

d) The Contractor shall conduct six monthly environmental monitoring of ambient air quality, water quality and noise levels through approved agencies in consultation with RIDF. These reports shall be submitted to RIDF.

e) The Contractor shall obtain consents for hot mix plant, wet mix plant, crushers, diesel generator sets and batching plant and submit to RIDF.

f) Where the Contractor obtains construction material from third party sources, a copy of the consents of these third party agencies should be obtained by the Contractor and submitted to RIDF.

g) The Contractor shall obtain permits from respective regulatory/ local authority for use of water, borrow pits during construction and submit to RIDF.

h) The Contractor shall furnish to RIDF and respective regulatory authorities immediate notice of any incident or accident relating to the Project and likely to have a highly adverse effect on the environment.

i) The Contractor will bear the cost of damage to any private or government property during construction caused due to negligence or inaction of good construction practices

The following clauses should be inserted into the EPC Contract additionally among others, as applicable:

a) The EPC Contractor shall implement all mitigation measures applicable during pre-construction and construction phase specified in the Environmental Management Plan prepared for the project.

b) The EPC Contractor shall implement all conditions specified in the Environmental Clearance Certificate applicable during pre-construction and construction.

c) The EPC Contractor shall provide amenities and follow health and safety standards for construction labour and staff at all times as per Labour Laws.

d) The EPC Contractor shall obtain required environment, health & safety clearances/ permits/ approvals as required by regulatory authorities.

e) The EPC Contractor shall implement all conditions stated in clearances/ permits/ approvals granted for the project by regulatory authorities.

f) The Contractor shall not indulge in harmful or exploitative forms of forced45labour or child46labour.

45 Forced labour means all work or services not voluntarily performed, that is, extracted from individuals under threat of force or penalty. http://www.ilo.org/ilolex/english/convdisp1.htm (scroll down for Convention No. 29).

46 Child labour means the employment of children whose age is below the host country’s statutory minimum age of employment or employment of children in contravention of International Labour Organization Convention No.

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g) The EPC Contractor shall provide its labour and staff periodic training on environmental protection (housekeeping, preventing spills, wastage etc.) and occupational health & safety practices (use of PPE, harness, safe working practices etc.).

h) The EPC Contractor shall designate person/s to attend to public grievances due to construction.

i) The EPC Contractor shall prepare and implement an emergency preparedness and response plan for the project site under their control during construction. Line of authority should be established for decision making during emergencies and all staff and workers/supervisors should be trained as per their job description.

138 “Minimum Age Convention” http://www.ilo.org/ilolex/english/convdisp1.htm (scroll down for Convention No. 138)

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Annex 15 – Outline Terms of Reference for Environmental & Social Impact Assessment Study

Terms of Reference (ToR) to Conduct Environmental Impact Assessment Studies for Category A Projects

1. Brief Introduction

A brief introduction to the project should be provided in this section

A brief description of the project area / city and salient features of the city such as geographic location, climate, rainfall, soil profile, wind direction, existing drainage system, need for the proposed project, etc. should be given.

2. Project objectives and need

A brief profile of the status of existing infrastructure in the city where the project is proposed, service levels, problems and issues, and salient features and environmental implications of the proposed project should be discussed in this section by covering the following objectives:

establish the environmental baseline in the study area;

identify and assess the adverse environmental impact and provide requisite measures to address the impact;

identify the opportunities for environmental enhancements in the project area and provide requisite guidance/plans in this regard;

Identify and assess the climate change-related aspects of the project;

wherever relevant, integrate the measures (mitigation- and enhancement-related) in project planning and design

develop appropriate management plans and codes of practices for implementing, monitoring and reporting the environmental mitigation and enhancement measures suggested

The EA should be carried out in line with GoI regulations, and to suit the ESMF.

The EA should comprise filling the screening format, environmental screening, project EA, and environmental management plans (EMPs) and mitigation measures. The EA should be carried out in a consultative manner through stakeholder consultations, at various stages, with the affected communities, NGOs, selected government agencies and other stakeholders.

3. Scope of work

Consultants should carry out the following tasks while conducting EA for the project including nature, scale and magnitude of impact on the environment.

Task 1 Description of project

A succinct description of the proposed project should be provided covering: (a) status analysis of existing infrastructure (b) description of each of the proposed components, activities and sub-activities and (c) a description of the alternative project sites and development components considered. It should also bring out the rationale for the proposed project and list out its various benefits. The consultant should also provide necessary maps to scale.

Task 2 Review of previous studies

The consultants should review various earlier studies such as feasibility and detailed project reports, etc., of the project and understand all related aspects. This will provide a base to formulate the environmental surveys necessary for the project and assessing its impact.

Task 3 Legislative and regulatory considerations

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A review of the legal and regulatory provisions applicable to the project should be carried out to bring out the legal and policy issues to be addressed in the project at various stages such as planning, design, execution and operation. In addition to the environmental laws such as EP Act, Water Act, Air Act, EIA notifications etc., the consultants should review applicable operational policies / directives of the EFA.

The review should, thus, provide a complete list of regulatory formalities required for the project and various clearances required from different regulatory agencies including the State Pollution Control Board.

Task 4 Preparation of environmental profile

An environmental profile of the project influence area, including the alternative development sites and associated facilities (e.g. access roads, quarries, sand and other materials collection sites, workers camps, workshops, management offices, construction material storage and lay down areas), should be prepared, based on appropriate primary & secondary surveys and field investigations. Its objective is to establish existing environmental conditions of the project area, in terms of air, water, noise, soil and other environmental parameters, which should form the basis for predicting the impact of the proposed project. As part of this, environmentally sensitive land uses (protected natural areas, areas of ecological value, sensitive receptors like schools, hospitals etc.) would also be identified and plotted on a map to scale.

The extent and duration (at least one season for rapid assessment and the three seasons for full detailed assessment) of surveys should be judiciously decided by the consultant in accordance with the environmental regulations applicable in Indonesia and guidelines of international funding agencies. The need for cumulative environmental impact assessment of all project and associated sites should be assessed and decided. The profile prepared should be adequate enough to predict the impact and / or cumulative impact of the project (including downstream, adjacent and autonomous development indirect impacts) and should cater to the requirements of obtaining necessary environmental clearances from the authorities.

The profile should essentially include all physical, ecological, hydrological and socio-economic components of the project environment and bring out its salient and sensitive features. Important aspects such as reserve forests, national parks, major water bodies, structures of archaeological / historic importance, other environmental resources (if any), the need for involuntary resettlement, potential impacts upon indigenous or vulnerable peoples should be identified and their salient features should be presented.

In addition to the basic environmental profile, the quantity and quality of water supplied by the present water supply system, potential impacts upon catchment function and hydrology, potential points of cross-contamination and health profile of the project area population should also be brought out in detail through appropriate sampling surveys and field investigations.

Task 5 Determination of potential impact

Based on the environmental profile of the project area and the proposed project activities discussed under Activity 1, the consultants should carry out environmental screening to determine the nature of impact and level of EA to be carried out (Section 5.0 provide details).

If the impact is of a low / insignificant level, where an EMP will suffice, the consultant should review the recent versions of generic EMPs available with MPUDC and carry out necessary changes to suit the project requirements.

As part of screening, if impact will be medium to high, requiring a detailed EA and stand-alone EMP, the consultant should carry out a detailed impact analysis. The consultant should predict the environmental impact of the project components, activities and sub-activities on various environmental attributes (bio, geo and physical) through appropriate analytical tools and techniques such as modeling techniques, overlays, etc. Each type of impact – significant or insignificant, permanent or temporary, reversible or irreversible, negative or positive –impact should be categorized separately and presented for each phase of project development.

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Based on the outcome of the screening, if any climate change impact is envisaged in project implementation or during operation then the consultants should collect relevant information and appraise that impact. The consultants should identify the adaptation needs of the project, review the potential for greenhouse gas reduction and identify necessary measures for implementation.

All identified effects should be summarized in an easily understandable format and the magnitude and significance of each impact should be explained in detail.

An analysis of various project alternatives, including the ‘Project’ and ‘No project’ scenario should be brought out and impact analyzed for each scenario. Based on this analysis the best alternative that causes minimum or no impact should be recommended for implementation.

Task 6 Stakeholder consultations and grievance mechanism

The consultants should carry out consultations and implement a grievance mechanism with experts, NGOs, forest department (if applicable) select government agencies and other stakeholders, throughout the subproject development and implemention cycle, to (a) collect baseline information, (b) obtain a better understanding of the potential impact (c) appreciate the perspectives/concerns of the stakeholders, (d) record and address the grievance and concerns of the stakeholder (grievance mechanism) and (f) secure their active stakeholder involvement and participation during subsequent stages of the project as appropriate. For Class A projects, at least two consultations should be conducted, one after screening and the second with the draft final EA / EMP, and require that draft EIA / EMP documents be made publicly accessible for 120 days for review and comment.

Consultations should be preceded by a systematic stakeholder analysis that would (a) identify the individual or stakeholder groups relevant to the project and to environmental issues, (b) include expert opinion and inputs, (c) determine the nature and scope of consultation with each type of stakeholders, and (d) determine the tools to be used in contacting and consulting each type of stakeholder. A systematic consultation plan with attendant schedules should be prepared for subsequent stages of project preparation as well as implementation and operation, as required. Where community consensus is required in respect of proposed mitigation measures for impact on community assets including water bodies, places of worships etc., specific plan for modification/relocation etc. have to be disclosed and consensus obtained.

Task 7 Development of an EMP / determination of mitigation measures

Based on the outcomes in steps detailed above, the consultants should develop an implementable EMP for the project (detailed in Section 5.0).

4. Environmental screening and EA activities to be carried out in detail

4.1 Environment screening

1. Environmental screening should be undertaken to identify the environmental hot spots along and closely adjacent (within 5 km) the project corridors, alternative development sites and associated facility sites (see Task 4 above for listing), project relevance to climate change and determine the level of environmental analysis required for the EA. The consultant should carry out a preliminary analysis to assess the nature, scale and magnitude of the impact that the project is likely to cause on the environment. If the likelihood of significant environmental impact is assessed (may be applicable to the entire project/specific project interventions/specific locations), the consultants should explore possible alternatives to the project and/or project components in a consultative manner. The deliverable at this stage is the Environmental Screening Report.

2. The screening exercise should be supported by secondary and primary information collection and stakeholder consultations on the existing environment scenario. As part of the screening exercise the consultants should:

(a) Identify sensitive locations in the project area including regionally or nationally recognized environmental resources and sensitive manmade locations such as hospitals, schools, etc.

(b) Establish baseline environmental quality with regard to air, water and noise.

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(c) List and map common property resources such as roadside trees; forests, large water bodies; and major physical cultural properties, etc.

(d) Identify human settlement, physical infrastructure and project activities that would result in severance.

(e) The consultants should also assess whether the project has substantial greenhouse gas reduction potential and whether there it would need to be substantially modified to adapt to possible climate change.

4.2 Project EA

1. Existing environment and baseline conditions: Baseline assessment of a project should be carried out based on the outcome of environmental screening. The baseline conditions should be established through detailed primary level field surveys. At this stage, the consultants should prepare detailed maps showing candidate sites for environmental improvements.

2. Data collection: Data should be collected on relevant physical, biological and socioeconomic conditions to establish the current environmental status of the project area and get meaningful information that can help in assessing impact and preparing the management plan.

Broadly, the data categories to be covered (the consultant is also encouraged to use professional judgement and local knowledge in defining other data requirements) include current land uses at the proposed project site and the study area using maps plotted to appropriate scale, covering lakes/ponds and their uses, forests and its classification, ecologically sensitive areas (sanctuaries, national parks, wildlife corridors, identified areas of nesting, mangroves and / or of interest of migratory birds, etc.), prominent land marks, sensitive receptors, community severance, village settlements, agricultural lands, pasture and barren lands, various categories of CRZ areas, if any, etc.

Among physical features, data should be collected related to geology, topography, soils, climate and meteorology (with emphasis on critical season considering water bodies and air quality), ambient air quality, surface and groundwater hydrology, existing sources of air emissions, existing water quality status of water bodies of importance, in addition to:

1. Biological, hydrological and ecological assessment covering rivers, streams, water bodies, wetlands, coastal zones and fauna and flora, ecologically sensitive areas (perceived as well as officially listed).

2. Additional air and noise quality monitoring (based on the outcome of screening report) that may, in future, depict the baseline conditions for EMP monitoring.

Critical areas of environmental importance should be identified while determining the current environmental status of the project site.

1. Impact prediction: The consultant should identify both the positive and negative impact of the proposed project, interpreting “environmental” throughout the EA to include socio-economic impact as well as impact on the natural environment. All project activities during pre-construction, construction and operation phases should be considered to assess the impact. In addition, the impact assessment analysis should necessarily cover the “no action” alternative. The consultants should regularly interact with the project’s technical and social team to share the findings of the impact assessment. The assessment of environmental impact should necessarily cover (but not limited to) the following:

(a) Impact on water bodies, catchment function and river basin hydrology (including, but not limited to the impact on the water source proposed to be developed for the project in case of a water supply scheme)

(b) Impact on topography and surface drainage

(c) Community and cultural severance, identified through consultations

(d) Expected impact on land use patterns at and around the proposed project facilities/components

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(e) Impact on ecologically sensitive features including spawning areas in creeks/estuarine areas, etc

(f) Detailed assessment of impact on receiving water bodies (including source of water bodies and downstream impact on riparian rights)

(g) Assess the change of stream course due to diversion channels to construction intake structures and its impact on downstream users

(h) Socio-economic impact

(i) Noise- and air quality-related impact during construction period on sensitive receptors

(j) Impact on trees, public utilities and other community structures, cross-overs, etc

(k) Any impact that is irreversible and/or cannot be avoided or mitigated

(l) Climate change adaptation (climate proofing) that should ensure that the desired developmental impact of the strategy or measure is not endangered despite the predicted effects of climate change (e.g. inclusive of forest clearance, peat land development and land clearance and burning risks). Moreover, the assessment should analyze whether the capacity for adaptation of the strategy or measure can be increased further. The assessment should cover the expected climate changes and their consequences for the strategy or measure, including both direct effects (e.g., more frequent flooding or drying out of water sources) and indirect effects. The analysis should also examine all possible effects on the project beyond its formal period; on this basis, options should be developed and implemented to increase the capacity of the project to adapt.

(m) Potential for greenhouse gas reduction (climate mitigation) to avoid substantial greenhouse gas emissions. First, the expected development of greenhouse gases in the project area/sector should be assessed; this should be followed by a review of the planned strategies or measures for their contribution to greenhouse gas emissions and an assessment of greenhouse gas reduction potential. On this basis, options for greenhouse gas reduction should be developed, (also taking into account the developmental impact, some MFI’s such as the ADB47 for example require a 100K tons of CO2/year threshold for project emissions).

5. Environmental management plan

The EMP should suggest ways / options to mitigate the negative impact of the project, alternative development sites and associated facility sites (see Task 4 above for listing), on-site and in closely adjacent areas, and the preventive measures necessary. Wherever required, the EMP should reflect community consensus on the mitigation measures proposed. It should identify the means / agency responsible for implementation and recommend a suitable monitoring mechanism for the plan. The EMP should be in the form of contract covenants and should provide detailed cost estimates (converted into BOQ items wherever necessary and applicable for implementation). The consultant should also recommend an appropriate institutional mechanism as per the requirements of EMP.

This should be applicable for both generic EMPs and specific EMPs developed from detailed EAs.

The consultant should prepare a detailed EMP covering the measures to mitigate and/or minimize the negative impact, including the implementation arrangement and a monitoring plan for the same with site specific requirements. The EMP should include:

Management / mitigation / enhancement measures:

(i) The consultant should recommend measures to eliminate or mitigate every significant negative impact. If any impact cannot be avoided, the cost of damage arising from it should be estimated and adequate compensatory measures recommended.

(ii) Consultants should recommend all necessary measures that have to be incorporated in the design to attain energy efficiency, enable reuse of treated water, control water leakage, energy generation etc.

47 As defined in the ADB Safeguards Policy Statement (ADB, 2009).

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(iii) The cost (capital and recurring) of all mitigation measures and the parties responsible for their implementation should be clearly identified; the cost should be translated into BOQ items. Wherever possible, the measures should be drafted as contract clauses that can be incorporated into construction/operational phase agreements

(iv) The mitigation measures should contain conceptual designs wherever necessary. The consultants should also identify neighbourhood committees to supervise effective implementation of the proposed mitigation measures.

Landscape plan: Wherever necessary, the landscaping plan should meet all project-specific requirements and should be prepared keeping in mind the project area as a whole; the EA should provide a conceptual landscape plan for all project components while taking into account special environmental and social needs.

Budget estimates: EMP budget estimates should be prepared for each of the project components and integrated with overall project cost estimates; the relevant costs should be included in the BOQ provisions

Monitoring plan: The consultant should specify the types of monitoring needed for potential environmental impact during construction and operation. As in the case of the mitigation plan, the requirements should be specific as to what is to be monitored, and how and by whom, along with reporting formats and recommendations. Where monitoring reports are to be prepared, the recipient responsible for review and any corrective action should be identified. The monitoring plan should be supplemented with a detailed schedule of implementation of EMP measures.

Institutional arrangement to manage environment impact effectively: The consultants should identify institutional/organizational needs to implement the recommendations of the project EA and propose steps to strengthen or expand, if required. This may extend to new agency functions, inter-sectoral arrangements, management procedures and training, staffing, operation and maintenance, training and budgeting.

6. Public disclosure

The consultants should assist the client in meeting disclosure requirements, which, at the minimum, should meet the EFA's policy on public disclosure. The consultants have to prepare a plan for in-country disclosure, specifying the timing and locations; translate the key documents, such as the EA summary in Bahasa Indonesia; draft the newspaper announcements for disclosure; and help the client to place the EA reports on the client’s website.

The consultants should prepare an executive summary of the draft EA report in both English and Hindi for public disclosure. In addition, for A projects, they should provide, for initial consultation, a summary of the proposed project's objectives, its description, and its potential impact and a summary of the EA's conclusions after the draft EA report is prepared.

7. Inputs to be provided by the client

The client should make available all relevant documents and reports in connection to the project area/study area and enable the consultants to procure data.

8. Outputs and estimated time schedule

The study should be completed within a period of ____ months from date of the contract and the schedule of deliverables should be as specified below.

Inception report - within __ month of date of award of contract; includes initial site assessment

Interim report - within __ months of date of award of contract. Includes baseline parameters, environmental profile and analysis of level of impact, stakeholders’ consultation.

Draft report - within __ months of date of award of contract

This includes detailed EA and/or site-specific EMP climate assessment and adaptation and mitigation measures, and social assessment.

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Final report - within xx months of date of award of contract.

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Annex 16 - Sample Terms of Reference EIA (Infrastructure Projects)

Introduction

The purpose of this ToR is to identify the works that the consultant has to fulfil and give comprehensive information required by PT SMI for an Environmental Impact Assessment (EIA) report. Consultant will prepare and submit an EIA report that examines the environmental and socio-economic effects of the proposed [Infrastructure Project].

Scope of Environmental Impact Assessment Report

Consultant will prepare the EIA report in accordance with these Terms of Reference. The EIA report will:

a. Assist PT SMI in understanding the environmental and socio-economic consequences of the Project’s development and operation plans, and will assist PT SMI in its decision-making process;

b. Address:

i. Project impacts (direct, indirect, cumulative and from triggered autonomous development);

ii. Project on-site, adjacent and downstream impacts at alternative development sites and associated facilities (e.g. access roads, quarries, sand and other materials collection sites, workers camps, workshops, management offices, construction material storage and lay down areas);

iii. Mitigation options; and

iv. Residual effects relevant to the assessment of the Project. As appropriate for the various types of impacts, predictions should be presented in terms of magnitude, frequency, duration, seasonal timing, reversibility and geographic extent.

c) Include a discussion on the possible measures, including established measures and possible improvements based on research and development to:

i. prevent or mitigate social and environmental impacts and, if required, design social mitigation measures (these may include Resettlement Action Plan, Indigenous Peoples Development Plan and other social action plans);

ii. assist in the monitoring of social and environmental safeguards; and

iii. identify residual social and environmental impacts and their significance including cumulative and regional development considerations.

The EIA report will form part of borrower’s application to PT SMI. A summary of the EIA report and social mitigation measures will be included as part of the application.

d) Include a public consultation program and implementation of a grievance mechanism to assist with project scoping and issue identification. The results of these consultations and the implementation of the grievance mechanism, will be documented as part of the EIA report. To meet the public consultation requirements consultant/ borrower must, at a minimum, communicate the project impacts and proposed mitigation measures with the affected people (means people who may be beneficially or adversely affected by the project) and provide them with the opportunity to participate in the social and environmental assessment process.

The final submission will be based upon these Terms of Reference and issues raised during the public consultation process.

Regulatory and Planning Framework

Identify the relevant legislation, policies, and approvals applicable to the review of the Project as well as Principles of PT SMI. Discuss the primary focus of each regulatory requirement, such as resource allocation, environmental safeguards, resettlement and land acquisition, land use development including

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use of land and resources owned by indigenous peoples, and the elements of the Project that are subject to each regulatory requirement.

Address other regulatory approvals including customary laws that exist or will be required for the Project under provincial, municipal and applicable Indonesian government requirements.

Project Description

Provide detailed description of the Project, including the alternative development sites and associated facilities (e.g. access roads, quarries, sand and other materials collection sites, workers camps, workshops, management offices, construction material storage and lay down areas), the key environmental, social, resource management and economic issues that are important for a public-interest decision and the results of the Environmental Assessment. Describe who will be responsible for the development, management and operation of the Project.

Describe the project components including infrastructure and activities at the anticipated development stages (e.g., construction and operations), project schedule and timing of the key construction and operational activities. Discuss the site alternatives considered, the potential effects that activities and infrastructures may have on the environment, the people and the natural resources to be used for the Project.

Review of engineering aspects of project component, both construction method and operation.

Project Need and Alternatives

Discuss the need for the Project, the technical and operating systems considered for the project and the rationale for those ultimately selected for the application. Include a discussion of the implications of not proceeding with the Project or delaying the Project.

Address the following:

An analysis of the alternatives considered for carrying out the Project, including the social and environmental effects of utilizing these alternative, with the criteria and rationale for selecting the proposed option;

The analysis shall cover comparisons in relation to siting, design, technology selection, construction techniques and phasing, and operating and maintenance procedures

Identify whether additional development phases will be considered at this site in the future and how the proposed plans for the Project take this into consideration.

Project Components and Site Selection

Describe the development of the project and alternative sites, and the nature, size, location and duration of the components of the Project including, but not limited to the following:

The project area ;

The design capacities of the Project;

The process components of the development focusing on material inputs and outputs. As appropriate, provide material balances (energy and water), flow diagrams and descriptions of the processes to be used. Indicate any shared facilities with existing developments at the site;

Buildings and infrastructure, transportation, utilities and access routes;

The associated facilities, inclusive of access roads, quarries, sand and other materials collection sites, workers camps and workshops, construction material storage and lay down areas;

Major operational components of the Project and a project layout showing the linkages among these components;

A project development schedule;

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The rationale for selecting the proposed site and how technical, geotechnical and environmental criteria and stakeholder input were considered in decision-making.

Need for land acquisition, changes in land use and restricted access to land, assets and natural resources and the extent of involuntary resettlement impacts (i.e. full or partial, permanent or temporary loss of housing, land, access to land, assets and resources, wages/income from any affected businesses, impacts on non-titled users, women, indigenous/ethnic minority households/communities and vulnerable people).

Presence of indigenous peoples who may be affected by the project (livelihoods, cultural, economic, ecological and social patterns).

Provide maps of appropriate scale showing:

All existing seismic lines, access roads and other linear corridors (e.g., pipelines, utility corridors, etc.);

The location of the development relative to all terrestrial components (e.g., soils, topography, watercourses, vegetation, wildlife habitat, watersheds, wetlands, etc.).

Baseline Information

Provide a comprehensive understanding of existing physical, biological and socio-cultural environment and land use of the project area and in alternative sites and the associated construction support sites. The information should be collected from secondary sources that are relevant to understanding the baseline conditions and mitigation of impacts due to projects as well as enhancement measures.

On physical environment, baseline information on ambient air quality, noise level, water and soil quality of the project area should be delineated. Where relevant, baseline information to assess the visual as well as severance impacts should be provided. The information gaps should be covered from primary data collection survey. Care should be exercised to cover environmentally sensitive locations and locations likely to be significantly impacted during the primary survey. The baseline environmental quality stations should be carefully identified and covered to provide data that can be compared with the data collected during the project construction and operations to assess the actual impacts as well as to assess the efficacy of the mitigations measure.

Baseline surveys:

The Consultants will:

a) Collect data through field surveys/samplings to cover full annual cycle to measure and report the existing environmental conditions at and near the site (including ambient air quality, noise, water quality);

b) Conduct census and socio-economic survey of affected communities

c) Collect information from secondary sources that are relevant to understanding the baseline, as well as design and mitigation of enhancement measures, as pertaining to physical, biological and socio-cultural environments,

d) Carry out site visits and investigations of all environmentally sensitive locations and document them on base maps to identify conflict point with preliminary designs (including verification of these from authentic sources of information, such as from already existing records), and

e) Prepare detailed specific maps showing details of sites for environmental enhancements

Additional baseline surveys:

The Consultants shall collect information on the existing environmental scenario from secondary sources, and identify gaps to be filled, relevant to the environmental screening needs from primary surveys. The Consultants shall survey the environmentally sensitive locations on and along the project, as well as within

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the project’s influence area. All regionally and nationally recognized environmental resources and features within the project’s influence area shall be clearly identified and studied in relation to the activities proposed. Typically, these will include environmental and common property resources such as forests, large water bodies, and major physical cultural properties. All these may be depicted using a line diagram or a strip map.

All surveys will be carried out in compliance with Indonesian standards / guidelines / norms as well as PT SMI Principles. Wherever such guidelines / norms are unavailable, the techniques, tools and samples employed for the surveys shall conform to international practices. Whenever directly relevant secondary data is available, these should be used, while indirectly relevant data should be verified through primary survey. Where feasible, use of satellite data and geo-reference maps should be made to provide a record of environmental information for future reference.

Environmental quality (air, water and noise) monitoring shall include an adequate number of samples, as established on a sampling network, so as to provide a representative sample of the entire project. Additional sample data for sensitive environmental/ecological receptors, if any, shall be collected such as to analyze and predict the possible impacts to a large degree and precision of acceptable professional standards. Further, additional specialized surveys, such as biodiversity assessment survey, and / or hydrological surveys shall be conducted, if and when recommended by environmental scoping. It is recommended that environmental surveys be aligned with social and engineering surveys as far as practical.

Impact Identification and Prediction

The Consultants shall determine the potential impacts due to the project through identification, analysis and evaluation on sensitive areas (natural habitats, wetlands, protected areas, sites of historic, cultural and conservation importance), urban settlements and villages / agricultural areas. The impacts due to project activities on ambient environment (Air, water, soil, wastes, noise etc.), natural environment (biodiversity, protected areas, landscape, historic sites etc.) and socio-economic environment (resettlement, indigenous people, livelihood, working conditions, public health etc.) needs to be predicted and evaluated using various methodologies or models. These should be classified as significant positive and negative impacts, immediate and long-term impacts, and unavoidable and reversible impacts. The impacts should be quantified in terms of its magnitude and significance, wherever possible.

For each impact predicted, feasible and cost-effective mitigation measures shall be identified to reduce potentially significant adverse environmental impacts to acceptable levels. The capital and recurring costs of the measures, and the institutional training and monitoring requirements to effectively implement these measures shall be determined. The Consultants shall explore and recommend environmental enhancements for positive impacts. At this stage, it would be important to identify issues that cannot be dealt with during the project preparation stage, but should be undertaken during the implementation stage.

Note: Where models are used, document any assumptions used in the EIA report to obtain predictions. Clearly identify the data used in the modelling including sources of error and relative accuracy, and identify the limitations of the models and steps taken to improve the accuracy. Describe the applicability and reasons for using a particular model.

Environmental Assessment and Cumulative Effects Assessment

Define assessment scenarios including:

Baseline Case, which includes existing environmental conditions, existing and approved Projects or activities (no project scenario);

An Application Case, which includes the Baseline Case plus the Project; and

Cumulative Effects Assessment (CEA), which includes past studies, existing and anticipated future environmental conditions, existing and approved projects or activities, plus planned and proposed projects or activities.

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Note: For the purposes of defining assessment scenarios, “approved” means approved by any federal, provincial or municipal regulatory authority. “Planned” is considered any project or activity that has been publicly disclosed prior to the issuance of the Terms of Reference or up to six months prior to the submission of the Project Application and EIA report, whichever is submitted sooner.

Basic Information Requirements for the Environmental Assessment

The EIA report will include the following basic environmental information:

Quantitative and qualitative information about the environment and ecological processes in the Study Area(s), including relevant information presented in previous environmental assessments;

Management plans to prevent, minimize or mitigate adverse effects and to monitor and respond to expected or unanticipated conditions; and

A discussion of iterative and residual effects48.

Define and provide the rationale for the spatial and temporal boundaries for the Study Area(s) used for the assessment. Discuss the selection criteria used to determine the Study Area(s), including information sources and assessment methods. The spatial boundaries shall include all areas where measurable changes in the environment may be caused by the Project regardless of any political boundaries.

Cumulative Environmental Effects Assessment

a. Assess and discuss the cumulative environmental effects* that are likely to result from the Project in combination with other existing, approved and planned projects in the region that could reasonably be considered to have a combined effect. Include industrial projects, as well as activities associated with land use and infrastructure.

b) Explain the approach and methods used to identify and assess cumulative effects, including cooperative opportunities and initiatives undertaken to further the collective understanding of cumulative effects.

c) Provide a record of relevant assumptions. Discuss the confidence in the assessment and the basis for this confidence level. Describe deficiencies or limitations in the existing database on environmental components.

Discuss environmental effects on - Air quality, Green house gas emissions, Climate change, Noise, Terrestrial and aquatic ecosystems (geology, soils, terrain, vegetation, wildlife, biodiversity, groundwater, surface water, fisheries and aquatic resources).

Environment Management Plans

Based on the predicted environmental impacts, EMP shall be prepared which consists of Environmental mitigation and enhancement measures.

The EMP shall describe feasible and cost-effective measures to prevent or reduce significant negative impacts to acceptable levels. Apart from mitigation of potential adverse impacts on environmental components, the EMP shall identify opportunities that exist for enhancement of environmental quality because of the Project. Residual impacts from environmental measures shall also be clearly identified. Responsibilities for execution and supervision of each of these mitigation and enhancement measures shall be specified in the EMP. A plan for continued consultation to be conducted during the implementation stage of the project shall also be prepared.

48 The impact assessment is an iterative process, where every development iteration would introduce more mitigation for significant impacts, and the EIA should keep assessing the residual effects until the mitigation brings effect down to insignificant level. The objective of the EIA is not only to assess the existence of an impact, but also to ensure the proposed mitigation is adequate. In some cases the required mitigation may go beyond the typical design and may be prohibitively expensive.

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Environmental Monitoring

The EMP shall specify the environmental supervision, monitoring and auditing requirements. The monitoring program shall specify parameters, reference standards, monitoring methods, frequency, duration, location, reporting responsibilities, and any other necessary inputs (e.g. training). In addition, the program will specify what actions shall be taken and by whom in the event that the proposed mitigation measures fail, either partially or totally, to achieve the level of environmental protection expected. Customized formats for reporting on the progress of EMP activities to different stakeholders shall be prepared and included in the EMP.

Each EMP shall list all mandatory government clearance conditions and the status of procuring the clearances. Additionally, the EMPs shall include as separate attachments, if applicable, Resettlement Action Plan, Indigenous Peoples Development Plan, etc. to satisfy the requirements of PT SMI’s S&E safeguard policy.

Each EMP shall provide a summary description of where and how the recommendations of EA and EMP are made part of the project’s design, construction schedule, and all contract documents.

Public Consultation and Grievance Mechanism Requirements

The Consultants shall undertake community consultation sessions and implement a grievance mechanism at the State, District, Village and Community levels. The objective of these sessions and the grievance mechanism shall be to improve the project’s interventions with regard to environmental management and encourage active stakeholder involvement and participation in project development. At least two rounds of consultations shall be carried out – the first to seek views from the stakeholders on environmental issues and ways that these could be resolved, and the second to provide feedback to stakeholders that their views have been taken into account for the project (when the EMPs are nearly complete). Following this the final feedback received shall be analyzed, and the Consultants shall determine how these shall be addressed in the Final EMP and project designs.

Describe the following:

a. the public consultation process and grievance mechanism to implemented for the Project development cycle including the involvement of local residents, and other key stakeholders;

b. the methods by which information was provided to the public, the type of information provided, and the nature of responses received including:

i. where and when public meetings were held and, to the extent possible, list attendees;

ii. how concerns and ideas were brought to the attention of consultant and the actions taken to address the concerns;

iii. how concerns and ideas were recorded and addressed by the consultant through implementation of the grievance mechanism;

iv. how issues and resolution of concerns were incorporated into the project development, impact mitigation and monitoring;

Institutional strengthening to manage environmental impacts effectively:

The Consultants shall identify institutional and organizational needs to implement the recommendations of the Project’s EA, and to propose steps to strengthen / expand them if needed. This may extend to new agency functions, inter-sectoral arrangements, management procedures and training, staffing, operation and maintenance, training and budgeting.

Training of staff: The Consultants shall develop and implement a plan for training the client’s staff. This plan must specify types of training, participants for each type, number of sessions, duration of each session and when they should be conducted. At the end of the training, when the draft EMPs are ready, brief reports shall be prepared on the training conducted and observations relevant for future training, if any.

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Capacity Building: The Consultant shall describe the implementation arrangement for the project, especially the capacity building proposals including the staffing of the environmental unit (as and when recommended) to implement the environmental mitigation and enhancement measures. For each staff position recommended to be created, detailed job responsibilities will be defined. Equipment and resources required for the environmental unit shall be specified, and bill of quantities be prepared.

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Annex 17 – Sample of Terms of Reference for Preparing a Land Acquisition and Resettlement Plan

Objectives

The study objective is to prepare a Land Acquisition and Resettlement Plan (LARP), which sets out strategies to mitigate adverse effects and to maintain living standards of those affected by land acquisition and any other resettlement effects. It will set the parameters for the entitlements package for those affected, the institutional framework, mechanisms for consultation and grievance resolution, the timeframe and cost estimates.

The agreed entitlements package will include both compensation and measures to restore the economic and social base for those affected. It will address the relevant policy and Principles of PT SMI and of the Indonesian government regulations covering for land acquisition and resettlement.

Time Frame

A total of three person-months is allocated for the preparation of the RAP.

Personnel

The study requires a resettlement specialist together with local assistants for survey work. The consultants will work in close cooperation with the Developer's Project Team.

Tasks

1. Review all documents related to social safeguards and social development of the project (draft LARP and other social safeguards reports) as well as other relevant agencies. Review and identify potential resettlement issues in project components, including potential land acquisition, relocation, affected structures and plants, affected income business and livelihood losses, affected land and affected productive agriculture land for food security and requirements for acquisition.

2. Identify and document any steps taken to reduce land acquisition and resettlement impacts through changes in the alignment or scope of project components. Prepare options for discussion with other team members to minimize resettlement effects through modifying the preliminary and final technical designs.

3. Review the prevailing law and regulations both national and local level, and best practices related to resettlement (involuntary resettlement and negotiated land acquisition). Review and consult with relevant agencies to determine which law and regulations (the land acquisition law and its implementation regulations or the negotiated land acquisition regulations) are to be applied for land acquisition of the proposed project.

4. 4. Conduct participatory rapid appraisal (PRA) in the area. Identify key stakeholders and consult closely with them on their views about the project and resettlement effects, including the people likely to experience resettlement effects. Identify any vulnerable groups (for example the very poor, those without formal title, pastoralists, households headed by women, indigenous peoples, isolated groups, the disabled) who might require special assistance and consult with them. Decide whether a process of social preparation is required for some or all of the people affected in order to build their capacity to address resettlement issues. If so, design a social preparation phase as part of the LARP preparation. If not, choose methods to foster the participation of all key stakeholders in the process of resettlement planning and implementation. Prepare mechanisms for the resolution of grievances and an appeals procedure in accordance with government law and regulation and clients guidelines and practices while considering the local context.

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5. Assist the clients for the public disclosure of the draft LARP prior to the submission to ADB for approval. Prepare the draft public information booklet (PIB) and consult with the clients prior to the disclosure

6. Conduct a census of all of the people potentially affected and their losses to determine the scope and magnitude of likely resettlement effects. The cencus includes loss of physical displacement (relocation, loss of residential land, or loss of home/shelter) and economic displacement (loss of land, access to assets, income sources, or means of livelihood) caused by acquisition of land both temporarily and permanently. Discuss with the clients and local authorities to decide on a cut-off date for entitlements and the mechanism to officially announce the agreed cut-off-date

7. Conduct a socioeconomic survey of a sample of 20 percent of the people affected or more. Establish a baseline of incomes and expenditures, occupational and livelihood patterns, use of resources, arrangements for use of common property, social organization, leadership patterns, community organizations, and cultural parameters.

8. Identify the socio-economic conditions, needs and priorities of women, poor and other vulnerable households and propose measures to ensure that the process of resettlement does not disadvantage them.

9. Consult with the agencies responsible for land acquisition and resettlement on the relevant PT SMI policy and Principles. Review the laws, regulations and directives of the government that apply to land acquisition and resettlement to determine whether they would allow full restoration of living standards and livelihoods, including for those without formal title. In this review, consider the scope of the power of eminent domain, the method for valuing assets, the timing and method for paying compensation, the legal and administrative procedures applicable, land titling and registration procedures, and the framework for environmental protection.

10. Prepare an entitlements matrix listing all likely effects, both of permanent and of temporary land acquisition. Establish criteria for the resettlement eligibility of affected households. Prepare standards for compensation and restoration of the social and economic base of the people affected to replace all types of loss. Prepare a formula for setting replacement values for assets lost, including land. Establish options for culturally acceptable replacements for lost services, cultural sites, common property or access to resources for subsistence, income or cultural activities.

11. Prepare options for relocation and for income restoration, which build upon the existing social, economic and cultural parameters both of the people affected and of any host populations. Make special provision for any vulnerable groups, including those without legal title to assets. Provide for relocation costs, lost income and income support during transition. Where appropriate, prepare relocation plans including selection and preparation of relocation sites. Make provisions for landownership, tenure and transfer, and access to resources. Where incomes must be restored, provide for needs assessment, employment generation and credit disbursement. Where affected people are to change their occupation, provide for training and vocational support mechanisms. Review the likely environmental impact of the resettlement process, and build in plans to mitigate any adverse environmental effects.

12. Prepare affected persons participation plan, the finalization of project component designs, entitlements and the implementation of land acquisition and resettlement. Prepare special measures for consultation with any vulnerable groups. Specify mechanisms for the resolution of grievances and an appeals procedure.

13. Prepare an institutional framework that designates responsibilities to prepare the detailed assets inventories, provide compensation, undertake relocation work, take responsibility for income restoration, supervise, manage and monitor the implementation of land acquisition and resettlement. This includes the environmental management and monitoring for the resettlement process. Recommend an institutional strengthening strategy and or formation and training of the Developer's resettlement unit, if required.

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14. Prepare a monitoring and evaluation plan, identifying the responsibilities, time frame and some key indicators. This will include ongoing monitoring by key agencies supplemented by an independent evaluation. Specify the time frame for monitoring and reporting.

15. Prepare a time frame and implementation schedule for land acquisition and resettlement in conjunction with the agreed implementation schedule for project components, showing how affected people will be provided for before demolition begins.

16. Prepare an indicative budget. Identify indicative land acquisition and resettlement costs. Prepare budgetary allocation and timing. Specify sources of funding and approval process. Prepare an annual budget estimate for resettlement by major category of expenditure.

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Annex 18 – Outline of an Initial Environmental Examination (IEE) Report

1. Introduction

This section usually includes the following:

a) Purpose of the report, including: (a) identification of the project and project proponent; (b) brief description of the nature, size, and location of the project (including alternative developments sites considered) and of its importance to the country; and (c) any other pertinent background information; and

b) Extent of the IEE study: scope of study, magnitude of effort, person or agency performing the study, and acknowledgement.

2. Description of the Project

Furnish sufficient details to give a brief but clear picture of the following (include only applicable items):

i) Type of project;

ii) Category of project;

iii) Need for project;

iv) Description of the selected Project site, alternative development sites and all associated facilities (e.g. access roads, quarries, sand and materials collection sites, workers camps, workshops, management offices, construction material storage and lay down areas);

v) Location (use maps showing general location, specific location, and project site);

vi) Size or magnitude of operation;

vii) Proposed schedule for implementation; and

viii) Descriptions of the project, including drawings showing project layout, and project components.

This information should be of the same type and extent as is included in feasibility reports for proposed projects to give a clear picture of the project and its operations.

3. Description of the Environment

Furnish sufficient information to give a brief but clear picture of the existing environmental resources in the area affected by the project, including the following (to the extent applicable):

i) Physical resources (e.g.): atmosphere (e.g. air quality and climate), topography and soils, surface water, groundwater, catchment hydrology, geology / seismology;

ii) Ecological resources (e.g.): fisheries, aquatic biology, wildlife, forests, rare or endangered species, protected areas, coastal resources

iii) Economic development (e.g.): industries; infrastructure facilities (e.g. water supply, sewerage, flood control); transportation (roads, harbors, airports, and navigation); land use (e.g. dedicated area uses); power sources and transmission; agricultural development, mineral development, and tourism facilities; and

iv) Social and cultural resources (e.g.): population and communities (e.g. numbers, locations, composition, employment); health facilities; education facilities; socio-economic conditions (e.g. community structure, family structure, social well being); physical or cultural heritage; current use of lands and resources for traditional purposes by Indigenous Peoples; structures or sites that are of historical, archaeological, paleontological, or architectural significance.

4. Screening of Potential Environmental Impacts and Mitigation Measures

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Using the checklist of environmental parameters for different sector projects, this section will screen out “no significant impacts” from those with significant adverse impact by reviewing each relevant parameter in the EA checklist. The possibility of cumulative environmental impacts across multiple development sites should be considered. Mitigation measures, where appropriate, will also be recommended to address environmental problems arising due to project location, and related to project design, construction, and operations. Potential environmental enhancement measures and additional considerations will also be covered.

5. Institutional Requirements and Environmental Monitoring Plan

This section should state the impacts to be mitigated, and activities to implement the mitigation measures, including how, when, and where they will be implemented. Institutional arrangements for implementation should be described. The environmental monitoring plan will describe the impacts to be monitored, and when and where monitoring activities will be carried out, and who will carry them out. The environmental management and monitoring costs should also be described.

6. Public Consultation, Grievance Mechanism and Information Disclosure

This section will describe the process undertaken to involve the public in project design and recommended measures for continuing public participation; implementation of an grievance mechanism; summarize major comments received from beneficiaries, local officials, community leaders, NGOs, and others, and describe how these comments were addressed; list milestones in public involvement such as dates, attendance, and topics of public meetings; list recipients of this document and other project-related documents; describe compliance with relevant regulatory requirements for public participation; and summarize other related materials or activities, such as press releases and notifications. This section will provide a summary of information disclosed to-date, and procedures for future disclosure.

7. Findings and Recommendations

This section will include an evaluation of the screening process and recommendation will be provided whether significant environmental impacts exist needing further detailed study or EIA. If there is no need for further study, the IEE itself, which at times may need to be supplemented by a special study in view of limited but significant impacts, becomes the completed environmental assessment for the project and no follow-up EIA will be needed. If an EIA is needed, then this section will include a brief terms of reference (TOR) for the needed follow-up EIA, including approximate descriptions of work tasks, professional skills required, time required, and estimated costs.

8. Conclusions

This section will discuss the result of the IEE and justification, if any, of the need for additional study or EIA. If an IEE, or an IEE supplemented by a special study, is sufficient for the project, then the IEE with the recommended institutional and monitoring program becomes the completed EIA.

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Annex 19 – Outline of an Environmental Impact Assessment (EIA) Report

1. Introduction

This section usually includes the following:

i) Purpose of the report, including: (a) identification of the project and its proponent; (b) brief description of the nature, size, and location of the project, inclusive of alternative development sites and all associated temporary construction facilities, and its importance to the country; and (c) any other pertinent background information;

ii) Stage of project preparation (i.e. pre-feasibility study, feasibility study, detailed engineering design preparation, etc.);

iii) Extent of the environmental impact assessment (EIA) study, including the scope of the study, magnitude of effort, and persons/expertise or agency performing the study and corresponding person-months; and

iv) Brief outline of the contents of the report, including any special techniques or methods used for identifying issues, assessing impacts, and designing environmental protection measures.

2. Policy, legal, and administrative framework.

Discusses the policy, legal, and administrative framework within which the EA is carried out. Also details environmental needs of the co-financiers. Identifies relevant international environmental agreements to which the country is a party.

3. Description of the Project

The project should be described in terms of its basic activities, location, layout, and schedule (in terms of the project cycle). This section of the EIA report should provide sufficient details on the following:

i) Type of project;

ii) Need for project;

iii) Description of the selected Project site, alternative development sites and all associated / temporary construction facilities (e.g. access roads, quarries, sand and materials collection sites, workers camps, workshops, management offices, construction material storage and lay down areas);

iv) Location (use maps showing general location, specific location, project boundary and project site layout);

v) Size or magnitude of operation, including any associated activities required by or for the project;

vi) Proposed schedule for approval and implementation; and

vii) Description of the project including drawings showing project layout, components of project, etc.

This information should be of the same type and extent as is included in feasibility reports for proposed projects, in order to give a clear picture of the project and its operations.

4. Description of the Environment

This section contains a description of the study area to provide a clear picture of the existing environmental resources and values within which the impacts must be considered. Detailed methodology to gather information, including data sources, should also be briefly described. As much as possible, the baseline information should be presented in maps, figures, and tables. The baseline environmental information area should include:

i) Physical resources (e.g.): atmosphere (e.g. air quality and climate), topography and soils, surface water, groundwater, geology/ seismology;

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ii) Ecological resources (e.g.): fisheries, aquatic biology, wildlife, forests, rare or endangered species, protected areas, coastal resources

iii) Economic development (e.g.): industries; infrastructure facilities (e.g. water supply, sewerage, flood control); transportation (roads, harbours, airports, and navigation); land use (e.g. dedicated area uses); power sources and transmission; agricultural development, mineral development, and tourism facilities; and

iv) Social and cultural resources (e.g.): population and communities (e.g. numbers, locations, composition, employment); health facilities; education facilities; socio-economic conditions (e.g. community structure, family structure, social well-being); physical or cultural heritage; current use of lands and resources for traditional purposes by Indigenous Peoples; structures or sites that are of historical, archaeological, paleontological, or architectural significance.

5. Alternatives

The consideration of alternatives is one of the more proactive aspects of environmental assessment - enhancing the project design through examining options instead of only focusing on the more defensive task of reducing adverse impacts of a single design. This calls for the systematic comparison of feasible alternatives for the proposed project site, technology, and operational alternatives. Alternatives should be compared in terms of their potential environmental impacts, capital and recurrent costs, suitability under local conditions, and institutional, training and monitoring requirements. For each alternative, the environmental costs and benefits should be quantified to the extent possible, economic values should be attached where feasible, and the basis for the selected alternative should be stated.

Examining alternative means of carrying out a project involves answering the following three questions: (i) what are the alternatives?; (ii) what are the environmental impacts associated with each alternative?; and (iii) what is the rationale for selecting the preferred alternative? For example, a road connecting two points can follow a number of different routes. In this case, the EIA report must describe the process taken to select the most appropriate route based on a set of pre-determined criteria. The consideration of alternatives and the selection criteria used to identify the preferred alternatives must include environmental factors. The information going into the decision and the decision-making process must be documented in the EIA report. For example, if "alternative means" refers to site selection for a large hydroelectric dam, the location of each alternative would have to be described, the environmental impacts of each alternative defined and the criteria and analysis of site selection presented.

Since the selection of alternatives can involve detailed technical analysis that includes more than just environmental factors, it may be preferable to present the details of this analysis as an appendix and include only the results and summary of this selection process in the body of the report. For example, a table listing the alternatives on one axis, and the criteria, such as reliability, cost, performance, inherent environmental effects, and necessary mitigation measures, on the other axis may provide an effective summary.

Alternatives to the project. In some instances it will be necessary to consider “alternatives to” the project. The EIA report should describe how the project fits into this larger strategic planning context. This context helps justify the project and demonstrates the requirements that may constrain the alternatives that are feasible or permitted.

However, in the case of potentially controversial projects, there may be public concern that the project does not represent the best way to achieve stated development objectives. In addition, segments of the public may react negatively if they perceive that the EIA report has not considered alternatives to the project, or the preferred alternative is proceeding based on flawed assumptions. Therefore, if controversy is expected surrounding the fundamental reasons for the project, the EIA report should include a discussion of alternatives to the project.

One alternative that should receive special attention is the "no action" alternative. In some cases, this may be the only alternative to the project that can be realistically considered. This involves projecting what is likely to occur if proposed investment projects are not undertaken. It provides the means to compare the environmental, social, and economic impacts of various project alternatives with those of a

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scenario in which the project is not implemented. In evaluating the no-action alternative, it is important to take into account all probable public and private actions which are likely to occur in the absence of the project.

6. Anticipated Environmental Impacts and Mitigation Measures

Review characteristics of each environmental impact and consider the possibility of cumulative environmental impacts. This section will evaluate the project’s expected impacts (in as quantified terms as possible) on each resource or value, and applicable sectoral environmental guidelines wherever any significant impact is expected (including environmental risk assessment, where appropriate). Environmental impacts to be investigated will include those: (i) due to project location; (ii) caused by possible accidents; (iii) related to design; and (iv) during construction, regular operations, and final decommissioning or rehabilitation of a completed project. Where adverse effects are indicated, discuss measures for minimizing and/or offsetting these, and opportunities for enhancing natural environmental values will be explored. Both direct and indirect effects will be considered, and the region of influence indicated. This analysis is the key presentation in the report and if not sufficiently completed it may be necessary to delay the project until the analysis can be completed. It is necessary to present a reasonably complete picture of both the human use and quality of life gains to result from the project due to the utilization, alteration, and impairment of the natural resources affected by the project, so that fair evaluation of the net worth of the project could be made.

Mitigating adverse effects. For each significant adverse environmental impact, the report will carefully explain how the project plan/design minimizes the adverse effects and in addition how the project plan/design, to the extent feasible, includes provision for offsetting or compensating of adverse effects and for positive enhancement of benefits or environmental quality. Where substantial cost of mitigation measures is involved, alternative measures and costs will be explored.

Irreversible and irretrievable impacts. The EIA report will identify the extent to which the proposed project would irreversibly curtail the potential uses of the environment. For example, highways that cut through stream corridors, wetlands, or a natural estuary can result in irretrievable damage to those sensitive ecosystems. Other impacts that may be irreversible include alteration of historic sites, and expenditure of construction materials and fuels. Also, projects through estuaries, marshes, etc., may permanently impair the area’s natural ecology; or elimination of recreation areas and parklands can precipitate drastic changes in the project area’s social and economic character.

Temporary effects during project construction. In the event the construction phase of the project involves special environmental impacts (to be terminated on completion of construction), these will be separately discussed including proposed remedial measures.

7. Economic Assessment

16. This section may be drawn from the economic analysis conducted as part of the project feasibility study. It should include the following elements which should be integrated into the overall economic analysis of the project: (i) costs and benefits of environmental impacts; (ii) costs, benefits, and cost-effectiveness of mitigation measures; and (iii) discussion of impacts that have not been expressed in monetary values, in quantitative terms where possible (e.g. weight of volume estimates of pollutants).

8. Environmental Management Plan

Covers mitigation measures, monitoring, and institutional strengthening; see outline in Annex H2.

9. Public Consultation and Information Disclosure

This section will: (i) describe the process undertaken to involve the public in project design and recommended measures for continuing public participation; (ii) summarize major comments received from beneficiaries, local officials, community leaders, NGOs, and others, and describe how these comments were addressed; (iii) list milestones in public involvement (e.g. dates, attendance, topics of public meetings), and recipients of the report and other project-related documents; (iv) describe compliance with relevant regulatory requirements for public participation; (v) if possible summarize public acceptance or opinion on the proposed project; and (vi) describe other related materials or

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activities (e.g. press releases, notifications, etc.) as part of the effort to gain public participation. This section will provide a summary of information disclosed to-date, and procedures for future disclosure.

10. Conclusions

The EIA report will present the conclusions of the study including: (i) gains which justify project implementation; (ii) explanation of how adverse effects could be minimized or offset, and compensated to make these impacts acceptable; (iii) explanation of use of any irreplaceable resources; and (iv) provisions for follow-up surveillance and monitoring.

11. Appendixes

i) List of EA report preparers--individuals and organizations.

ii) References--written materials both published and unpublished, used in study preparation.

iii) Record of interagency and consultation meetings, including consultations for obtaining the informed views of the affected people and local nongovernmental organizations (NGOs). The record specifies any means other than consultations (e.g., surveys) that were used to obtain the views of affected groups and local NGOs.

iv) Tables presenting the relevant data referred to or summarized in the main text.

v) List of associated reports (e.g., Resettlement Action Plan or Indigenous Peoples Development Plan).

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Annex 20 – Outline of an Environmental Management Plan

1. Environmental Management Plan

A project's environmental management plan (EMP) consists of the set of mitigation, monitoring, and institutional measures to be taken during implementation and operation to eliminate adverse social and environmental impacts, offset them, or reduce them to acceptable levels. The plan also includes the actions needed to implement these measures49. Management plans are essential elements of EA reports for Category A projects; for many Category B projects, the EA may result in a management plan only. To prepare a management plan, the borrower and its EA design team (a) identify the set of responses to potentially adverse impacts; (b) determine requirements for ensuring that those responses are made effectively and in a timely manner; and (c) describe the means for meeting those requirements50 inclusive of the budgets to be provided for mitigation and monitoring activities. More specifically, the EMP includes the following components.

2. Mitigation

The EMP identifies feasible and cost-effective measures that may reduce potentially significant adverse environmental impacts to acceptable levels. The plan includes compensatory measures if mitigation measures are not feasible, cost-effective, or sufficient. Specifically, the EMP:

a) identifies and summarizes all anticipated significant adverse environmental impacts (including those involving indigenous people or involuntary resettlement);

b) describes--with technical details--each mitigation measure, including the type of impact to which it relates and the conditions under which it is required (e.g., continuously or in the event of contingencies), together with designs, equipment descriptions, and operating procedures, as appropriate;

c) estimates any potential environmental impacts of these measures; and

d) provide linkages with any other mitigation plans (e.g., for involuntary resettlement, indigenous peoples, or cultural property) required for the project.

3. Monitoring

Environmental monitoring during project implementation provides information about key environmental aspects of the project, particularly the environmental impacts of the project and the effectiveness of mitigation measures. Such information enables the borrower and the SMI to evaluate the success of mitigation as part of project supervision, and allows corrective action to be taken when needed. Therefore, the EMP identifies monitoring objectives and specifies the type of monitoring, with linkages to the impacts assessed in the EA report and the mitigation measures described in the

EMP. Specifically, the monitoring section of the EMP provides(a) a specific description, and technical details, of monitoring measures, including the parameters to be measured, methods to be used, sampling locations, frequency of measurements, detection limits (where appropriate), and definition of thresholds that will signal the need for corrective actions; and (b) monitoring and reporting procedures to (i) ensure early detection of conditions that necessitate particular mitigation measures, and (ii) furnish information on the progress and results of mitigation.

49 The management plan is sometimes known as an "action plan." The EMP may be presented as two or three separate plans covering mitigation, monitoring, and institutional aspects, depending on borrowing country requirements. 50 For projects involving rehabilitation, upgrading, expansion, or privatization of existing facilities, remediation of existing environmental problems may be more important than mitigation and monitoring of expected impacts. For such projects, the management plan focuses on cost-effective measures to remediate and manage these problems.

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4. Capacity Development and Training

To support timely and effective implementation of environmental project components and mitigation measures, the EMP draws on the EA's assessment of the existence, role, and capability of environmental units on site or at the agency and ministry level.3. If necessary, the EMP recommends the establishment or expansion of such units, and the training of staff, to allow implementation of EA recommendations. Specifically, the EMP provides a specific description of institutional arrangements – who is responsible for carrying out the mitigatory and monitoring measures (e.g., for operation, supervision, enforcement, monitoring of implementation, remedial action, financing, reporting, and staff training). To strengthen environmental management capability in the agencies responsible for implementation, most EMPs cover one or more of the following additional topics: (a) technical assistance programs, (b) procurement of equipment and supplies, and (c) organizational changes.

5. Implementation Schedule and Cost Estimates

For all three aspects (mitigation, monitoring, and capacity development), the EMP provides (a) an implementation schedule for measures that must be carried out as part of the project, showing phasing and coordination with overall project implementation plans; and (b) the capital and recurrent cost estimates and sources of funds for implementing the EMP. These figures are also integrated into the total project cost tables.

6. Integration of EMP with Project

The borrower's decision to proceed with a project, and the SMI's decision to support it are predicated in part on the expectation that the EMP will be executed effectively. Consequently, the SMI expects the plan to be specific in its description of the individual mitigation and monitoring measures and its assignment of institutional responsibilities, and it must be integrated into the project's overall planning, design, budget, and implementation. Such integration is achieved by establishing the EMP within the project so that the plan will receive funding and supervision along with the other components.

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Annex 21 – Guidance on the Application of Operating Principle on Land Acquisition and Involuntary Resettlement

This Annex provides guidance on the application of Principle 5 - Involuntary Resettlement (see Section 3). This guidance applies to Type 1, 2, and 3 project categories.

1. Principles of Land Acquisition and Resettlement Plan (LARP)

The following principles and policies will be applied to land acquisition and resettlement to Projects financed by PT SMI (also refers to PT SMI ESS 5):

1. Screen the project early on to identify past, present, and future involuntary resettlement impacts and risks. Determine the scope of resettlement planning through a survey and/or census of displaced persons, including a gender analysis, specifically related to resettlement impacts and risks.

2. Carry out meaningful consultations with affected persons, host communities, and concerned nongovernment organizations. Inform all displaced persons of their entitlements and resettlement options. Ensure their participation in planning, implementation, and monitoring and evaluation of resettlement programs. Pay particular attention to the needs of vulnerable groups, especially those below the poverty line, the landless, the elderly, women and children, and Indigenous Peoples, and those without legal title to land, and ensure their participation in consultations. Establish a grievance redress mechanism to receive and facilitate resolution of the affected persons’ concerns. Support the social and cultural institutions of displaced persons and their host population. Where involuntary resettlement impacts and risks are highly complex and sensitive, compensation and resettlement decisions should be preceded by a social preparation phase.

3. Improve, or at least restore, the livelihoods of all displaced persons through (i) land-based resettlement strategies when affected livelihoods are land based where possible or cash compensation at replacement value for land when the loss of land does not undermine livelihoods, (ii) prompt replacement of assets with access to assets of equal or higher value, (iii) prompt compensation at full replacement cost for assets that cannot be restored, and (iv) additional revenues and services through benefit sharing schemes where possible.

4. Provide physically and economically displaced persons with needed assistance, including the following: (i) if there is relocation, secured tenure to relocation land, better housing at resettlement sites with comparable access to employment and production opportunities, integration of resettled persons economically and socially into their host communities, and extension of project benefits to host communities; (ii) transitional support and development assistance, such as land development, credit facilities, training, or employment opportunities; and (iii) civic infrastructure and community services, as required.

5. Improve the standards of living of the displaced poor and other vulnerable groups, including women, to at least national minimum standards. In rural areas provide them with legal and affordable access to land and resources, and in urban areas provide them with appropriate income sources and legal and affordable access to adequate housing.

6. Develop procedures in a transparent, consistent, and equitable manner if land acquisition is through negotiated settlement to ensure that those people who enter into negotiated settlements will maintain the same or better income and livelihood status.

7. Ensure that displaced persons without titles to land or any recognizable legal rights to land are eligible for resettlement assistance and compensation for loss of non-land assets.

8. Prepare a resettlement plan elaborating on displaced persons’ entitlements, the income and livelihood restoration strategy, institutional arrangements, monitoring and reporting framework, budget, and time-bound implementation schedule.

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9. Disclose a draft resettlement plan, including documentation of the consultation process in a timely manner, before project appraisal, in an accessible place and a form and language(s) understandable to affected persons and other stakeholders. Disclose the final resettlement plan and its updates to affected persons and other stakeholders.

10. Conceive and execute involuntary resettlement as part of a development project or program. Include the full costs of resettlement in the presentation of project’s costs and benefits. For a project with significant involuntary resettlement impacts, consider implementing the involuntary resettlement component of the project as a stand-alone operation.

11. Pay compensation and provide other resettlement entitlements before physical or economic displacement. Implement the resettlement plan under close supervision throughout project implementation.

12. Monitor and assess resettlement outcomes, their impacts on the standards of living of displaced persons, and whether the objectives of the resettlement plan have been achieved by taking into account the baseline conditions and the results of resettlement monitoring. Disclose monitoring reports.

2. Land Acquisition Procedures for Projects Supported by PT SMI

2.a. Land Acquisition Using Law 2 of 2012 about Land Acquisition for Public Interest

Land for an SMI project can be acquired with government assistance and through procedures defined by Indonesian Regulations if two conditions are met: (1) the project is considered to be in the public interest and (2) the area to be acquired is larger than five hectare.

The following projects are considered in the public interest according to Law 2 of 2012 about Land Acquisition for Public Interest:

i) the national defense and security; ii) public roads, toll roads, tunnels, rail lines, railway stations, and railway operating facilities; iii) reservoirs, dams, dikes, irrigation, drinking water mains, drainage and sanitation, and other

irrigation structures; iv) seaports, airports, and terminals; v) infrastructure of oil, gas, and geothermal energy; vi) power plants, transmission, substations, grids, and distribution of electricity; vii) Government’s telecommunication and informatics networks; viii) landfills and waste treatment sites; ix) Government/Local Government’s hospitals; x) public safety facilities; xi) Government/Local Government’s public cemeteries; xii) social facilities, public facilities, and public green open space; xiii) nature reserves and cultural sites; xiv) Government/Local Governments/villages offices; xv) urban slum planning and/or land consolidation, and rented low-income earner housing; xvi) Government/Local Government’s educational infrastructure or schools; xvii) Government/Local Government’s sport infrastructure; and xviii) public market places and public parking spaces.

Projects that are not classified as projects in the public interest, or require an area that is smaller than five hectare, must be acquired directly from the owner through a purchase, trade, or other voluntary method,.

Land Acquisition Procedures Following Existing Regulations

The procedures that must be followed to acquire land for public purposes are described in the Law No 2 of 2012 and its implementation regulations. As specified in Law No.2/2012 of Land Acquisition for Public Interest and its implementation rules, there are some important institutions having respective authority and responsibility in each stage of land acquisition process for public interest as detailed below:

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1) Planning Stage

In this stage, the agency need land is the responsible institution. They shall make a Plan of Land Acquisition in the Public Interest in accordance with the laws and regulations. The Plan shall refer to the Regional Planning, Spatial Planning, and the development priority as stated in the Medium-Term Development Plan, Strategic Plan, and the Working Plan of the relevant agencies.

The Land Acquisition Plan in the Public Interest Document should contain: (i) objectives and purpose of the development plan; (ii) consistency with the Regional Spatial Planning and the National or Regional Development Plan; (iii) location of the proposed land; (iv) size of the land needed by the project; (v) general description of the land status; (vi) estimated period of the implementation of land acquisition; (vii) estimated period of the implementation of construction; (viii) estimated land value; and (ix) budget plan. The Plan shall be prepared under a feasibility study made in accordance with the laws and regulations. The last step of the stage is submission of the Land Acquisition Plan in the Public Interest Document to the head of provincial government with the complete supporting documents.

The agency needs land will be responsible for allocating budget needed as specified in the approved LARAP for land acquisition, assistance and livelihood restorations.

2) Preparation Stage

In the preparation stage, the responsible stakeholders for the activities are the agency that needs the land and the local government. After the agency submits the document, the governor would develop a preparation team for the land acquisition of the project. The preparation team under governor instruction has to accomplish the preparation stage, the output of which is the Penetapan Lokasi. The steps of this stage are: (i) giving information about the planned development; (ii) collection of initial data of the planned development; (iii) public consultation concerning the planned development; (iv) development of study team; (v) determination of location (Penetapan Lokasi Pembangunan); (vi) disclosure of the Penetapan Lokasi Pembangunan: printed and placed at the Kelurahan office announced in local paper and electronic media; and (vii) State administrative lawsuit.

3) Implementation Stage

The provincial land office is the responsible agency for the land acquisition activities in this stage. This responsibility might be delegated to the district land office.51 An individual or group of independent appraisers will be assigned to carry out the valuation of compensation during this stage. The output of this stage is the compensation payment and the Land Release to the land office. The steps of this stage are: (i) the development of land acquisition implementation team; (ii) delegation to the local land office; (iii) development of the implementation team at local land office; (iv) inventory and identification; (v) disclosure of inventory and identification result; (vi) filing the objection; (vii) verification; (viii) appraiser determination; (ix) valuation of compensation; (x) discussion of compensation; (xi) validation; (xii) the lawsuit of the compensation; (xiii) compensation payment; (xiv) court-administered Trust Account (Konsinyasi); (xv) data documentation; and (xvi) valuation of compensation.

4) Submission of the Land Acquisition Result Stage

In this stage, the responsible stakeholder for the activities is the provincial land office. They have to develop minutes of meetings of the payment, which budget has been prepared by the agency needs land to the affected peoples, and land certificate application. Once the two steps finished, they submit the result to the agency that needs the land.

The time frame to implement each activity in the land acquisition process in accordance with the law is as below (Table A21 -1).

Table A24–1: Land Acquisition Stages in Indonesia

51 Per the Head of Land Office Decree 2 of 2013 on the Delegation of Authority for Land Rights and Land Registration Activities.

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No Steps of Activities Time Frame52 (days)

I Planning phase 1 Preparation of land acquisition and submission it to

Governor No time frame

II Preparatory Phase 1 Establishment of land preparatory team by Governor,

Delegation of authority to Regent/mayor and establishment of preparatory team

2 10

2 Notice of development plan, preliminary identification of land acquisition objects

33

3 Consultations and re consultation if any complaint/disagreement

60 – 90

4 Grievance handling by Governor 3 5 Issuance location determination and announcement 7 III Implementation Phase 1 Establishment land acquisition implementation team (LAIT),

delegation of authority for land acquisition, establishment of task force in LAIT

4

2 Inventory of loss (land acquisition objects), announcement, data verification, mobilization of appraiser, valuation by appraiser

104 – 132

3 Invitation and implementation of deliberation/consultation 32 4 Complaint handling 88 5 Compensation payment, release of land rights 14 IV Submission of the Land Acquisition Result Stage 1 Handover of acquired 3 2 Certification 30

In accordance with the implementation of the LARP, PT SMI would make sure that besides following the stages required following the Law 2 of 2012, the client has to ensure that:

(i) Relocated persons and host communities are provided integration assistance, and project benefits are extended to host communities:

(ii) Physically and economically displaced persons are provided transitional support and development assistance, such as land development, credit facilities, training, or employment opportunities.

(iii) The land acquisition plan require the income and livelihood restoration strategy

(iv) The project will monitor and assess resettlement outcomes, their impacts on the standards of living of displaced persons, and whether the objectives of the resettlement plan have been achieved by taking into account the baseline conditions and the results of resettlement monitoring.

(v) For projects likely to cause significant involuntary resettlement impacts, consider implementing the involuntary resettlement component of the project as a stand-alone operation.

2.b. Other Potential Schemes of Land Acquisition

If the compulsory land acquisition is not applicable, the land should be acquired either through donation from the landowner or mutual negotiation (willing-buyer willing-seller) between the landowners and the project. This guidance specifies requirements to ensure that the landowners are not exploited under the premise of voluntary land donation, and landowners have the rights to refuse donating their land or to sell their land in the case of a willing-buyer willing-seller, and that the project will not force the landowners in acquiring the land. Voluntary land donation and willing-buyer willing-seller activities have to be recorded and well documented by the projects and these will be part of the application package for project appraisal.

52 in Accordance with Perpres 148 of 2015 concerning Implementation of Land Acquisition for Public Interest

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Voluntary land donation

Voluntary land donation will be accepted if the following indicators are met:

i) The infrastructure, to be set up on the donated land, must not be site specific

ii) The impact of voluntary donations are marginal (land donated not more than 10% of the total land assets owned by household owner);

iii) Impacts do not result in displacement of households or cause loss of household’s incomes and livelihood;

iv) Households making voluntary donations are direct beneficiaries of the project;

v) Donated land is free from any dispute on ownership or any other encumbrances;

vi) Consultations with entitled parties is conducted in transparent manner with no coercion;

vii) Land transactions are supported by transfer of titles;

viii) Proper documentation of consultation meetings, grievances and actions taken to address such grievances is well documented

The process and results of Voluntary Land Donation will have to be documented and submitted to PT SMI.

Willing-buyer willing-seller Scheme

As per the provision under the Presidential Regulation No. 40/2014, acquisition of land less than 5 hectares will be undertaken through transaction, exchange, or other means acceptable by landowners and parties that need the land. The following principles has to be applied in undertaking land acquisition through willing-buyer willing-seller scheme:

i) Compensation is paid at replacement value, which takes into account the prevalent market prices as determined by a Licenced Independent Appraiser(s). No administrative cost will be deducted and tax obligations will be covered by the negotiated transaction;

ii) All negotiations with the landowners and users, if any, will be carried out in an accessible location, in an open and consultative manner without any coercion and with sufficient time for consideration of offers;

iii) The documents pertaining to the land acquisition such as map, land registries, sales written records, consultation records, decision records, law and policies for the negotiations and development plans are to be disclosed to the entitled parties involved in the negotiated land acquisition or settlement;

iv) Adequate and fair price for land and/or other assets will be offered. If negotiations fail, an alternative way will be sought and the process begins again, which will follow the Law 2/2012 requirements;

v) The negotiated amount will be paid immediately to landowners after all necessary documents required for the land acquisition processes have been completed by land owners;

vi) Negotiation and other consultation proceedings will be documented and the land sale and purchase agreement will be signed by the negotiating parties in the presence of a land deed official (notary);

vii) Grievance mechanism will be established or using the existing one to receive and facilitate resolution of the entitled parties concerns; and

viii) PT SMI will not award a civil works contract until (a) payment has been fully provided to the entitled parties and rehabilitation measures are implemented if any; (b) already-compensated entitled parties have cleared the area in a timely manner; and (c) the area is free from any encumbrances.

The willing-buyer-willing seller process and results will have to be documented and shared to PT SMI.

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3. Land Valuation

In accordance with Law 2 of 2012 on Land Acquisition for Public Purpose, the land valuation/appraisal has to be done by licensed appraisers, which is assigned by the Land Office (Badan Pertanahan Negara – BPN) in accordance with the national procurement regulations. The valuation will be carried out based on the MAPPI53 Standards as specified in the MAPPI Guidelines. The result of the appraisal would be used by the Land Office as the base of the BPN to negotiating the form of the compensation.54

The scope of valuation in general is consisting of physical and non-physical values. The detail objects of valuation is as follow55:

1) Physical values, includes: land; space above ground and underground; building; plants and crops; objects related to the land, such as utilities and facilities complementary building.

2) Non-physical values, include:

i) Compensation on disposal rights of landowners, which will be given a premium, and is measured in terms of money under the provisions of the legislation in force. These substitutions may include matters relating to: i) loss of a job or the loss of business, including change of the profession; ii) emotional loss (solassium), an intangible losses associated with the acquisition of land use as the residence of the owner;

ii) The cost of the transaction may include moving expenses and corresponding taxes;

iii) Compensation of waiting period, the number of funds that considered as a substitute for the time difference between the valuation date by the estimated payment date;

iv) Loss of the remaining land, is the decline in the value of land as a result of retrieval most of the ground plane. In terms of the remaining of the land can no longer be functioned as intended, it can be calculated over the entire land value;

v) Physical damage, such parts of the building were cut off as a result of land acquisition so costly repairs in order to function properly

The project has to develop an entitlement matrix consist of the range of measures comprising cash or kind compensation, relocation cost, income rehabilitation assistance, transfer assistance, income substitution/business restoration, which are due to affected peoples, depending on the type, extent and nature of their losses, and which suffice to restore their social and economic base as a section of the LARAP.

4. Types of Displaced Persons Eligible for Compensation

The ESS – 5 Land Acquisition and Involuntary Resettlement can apply to three types of displaced persons: (i) persons with formal legal rights to land and/or structures lost entirely or in part, (ii) persons who have no formal legal rights to land and/or structures lost wholly or in part but who have claims to such lands that are recognized or recognizable under national law, and (iii) persons who lost the land they occupy in entirety or in part who have neither formal legal rights nor recognized or recognizable claims to such land. However, compensation varies according to the type of displaced persons.

Meanwhile according to Law No 2 of 2012 followed by the Presidential Decree No 71 of 2012, there are some different types of persons or entities eligible for compensation:

i) Land owner, which confers full ownership rights over land; 53 Indonesian Society of Appraisers or ISA 54 According to Law 2 of 2012, the function of the appraisal is for negotiating form and amount of compensation; meanwhile the derivative regulations of the law, i.e. Presidential Regulation No.71/2012 and Head of BPN Regulation No.5/2012 rule that the function of the appraisal is for negotiating form of compensation 55 Indonesia Valuation Standards 306 (SPI 306), Land Acquisition Assessment For Development for the Public Interest, Code of Ethics Indonesia Appraisers and Indonesia Standard 2013, Jakarta, Gelora Karya Bharata, 2013.

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ii) Right to build title (hak pengelolaan, pihak yang menguasai tanah negara dengan itikad baik, pemegang dasar penguasaan atas tanah), which confers the right to construct and own buildings on state-owned land;

iii) Recipient (nadzir) for donated wakaf land; iv) Right to cultivate title (bekas milik adat) which confers the right to use state-owned land for

agricultural purposes; v) Community with traditional land rights (hak ulayat); and individuals with traditional rights (hak

adat); and/or vi) Owners of buildings, crops and plants and other affected non-land asset

The Law No 2 of 2012 rules that all holders of land rights affected by a Project are entitled to compensation for loss of land and other assets on the land. In a proposed projects, holders of land rights are also entitled to relocation assistance (if they must relocate as a result of land acquisition for the project) and rehabilitation support (if they suffer losses of income and/or livelihoods).

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Annex 22 – Outline of a Resettlement Action Plan (LARP)

A resettlement plan is required for all projects with involuntary resettlement impacts. Its level of detail and comprehensiveness is commensurate with the significance of potential involuntary resettlement impacts and risks. The substantive aspects of the outline will guide the preparation of the resettlement plans, although not necessarily in the order shown.

A. Executive Summary

This section provides a concise statement of project scope, key survey findings, entitlements and recommended actions.

B. Project Description

This section provides a general description of the project, discusses project components that result in land acquisition, involuntary resettlement, or both and identify the project area. It also describes the alternatives considered to avoid or minimize resettlement. Include a table with quantified data and provide a rationale for the final decision.

C. Scope of Land Acquisition and Resettlement

This section:

i) discusses the project’s potential impacts, and includes maps of the areas or zone of impact of

project components or activities;

ii) describes the scope of land acquisition (provide maps) and explains why it is necessary for the

main investment project;

iii) summarizes the key effects in terms of assets acquired and displaced persons; and

iv) provides details of any common property resources that will be acquired.

D. Socioeconomic Information and Profile

This section outlines the results of the social impact assessment, the census survey, and other studies, with information and/or data disaggregated by gender, vulnerability, and other social groupings, including:

i) define, identify, and enumerate the people and communities to be affected;

ii) describe the likely impacts of land and asset acquisition on the people and communities affected

taking social, cultural, and economic parameters into account;

iii) discuss the project’s impacts on the poor, indigenous and/or ethnic minorities, and other

vulnerable groups; and

iv) identify the gender and resettlement impacts, and the socioeconomic situation, impacts,

needs, and priorities of women.

E. Information Disclosure, Consultation, and Participation

This section:

i) identifies project stakeholders, especially primary stakeholders;

ii) describes the consultation and participation mechanisms to be used during the different stages of the project cycle;

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iii) describes the activities undertaken to disseminate project and resettlement information during project design and preparation for engaging stakeholders;

iv) summarizes the results of consultations with affected persons (including host communities), and discusses how concerns raised and recommendations made were addressed in the resettlement plan;

v) confirms disclosure of the draft resettlement plan to affected persons and includes arrangements to disclose any subsequent plans; and

vi) describes the planned information disclosure measures (including the type of information to be disseminated and the method of dissemination) and the process for consultation with affected persons during project implementation.

F. Grievance Redress Mechanisms

This section describes mechanisms to receive and facilitate the resolution of affected persons’ concerns and grievances. It explains how the procedures are accessible to affected persons and gender sensitive.

G. Legal Framework

This section:

i) describes national and local laws and regulations that apply to the project and identify gaps

between local laws and ADB's policy requirements; and discuss how any gaps will be addressed.

ii) describes the legal and policy commitments from the executing agency for all types of displaced

persons;

iii) outlines the principles and methodologies used for determining valuations and compensation

rates at replacement cost for assets, incomes, and livelihoods; and set out the compensation and assistance eligibility criteria and how and when compensation and assistance will be provided.

iv) describes the land acquisition process and prepare a schedule for meeting key procedural requirements.

H. Entitlements, Assistance and Benefits

This section:

i) defines displaced persons’ entitlements and eligibility, and describes all resettlement assistance

measures (includes an entitlement matrix);

ii) specifies assistance to vulnerable groups, including women, and other special groups; and.

iii) outlines opportunities for affected persons to derive appropriate development benefits from

the project.

I. Relocation of Housing and Settlements

This section:

i) describes options for relocating housing and other structures, including replacement housing,

replacement cash compensation, and/or self-selection (ensure that gender concerns and

support to vulnerable groups are identified);

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ii) describes alternative relocation sites considered; community consultations conducted; and

justification for selected sites, including details about location, environmental assessment of

sites, and development needs;

iii) provides timetables for site preparation and transfer;

iv) describes the legal arrangements to regularize tenure and transfer titles to resettled persons;

v) outlines measures to assist displaced persons with their transfer and establishment at new sites;

vi) describes plans to provide civic infrastructure; and

vii) explains how integration with host populations will be carried out.

J. Income Restoration and Rehabilitation

This section:

i) identifies livelihood risks and prepare disaggregated tables based on demographic data and livelihood sources;

ii) describes income restoration programs, including multiple options for restoring all types of livelihoods (examples include project benefit sharing, revenue sharing arrangements, joint stock for equity contributions such as land, discuss sustainability and safety nets);

iii) outlines measures to provide social safety net through social insurance and/or project special funds;

iv) describes special measures to support vulnerable groups;

v) explains gender considerations; and

vi) describes training programs.

K. Resettlement Budget and Financing Plan

This section:

i) provides an itemized budget for all resettlement activities, including for the resettlement unit, staff training, monitoring and evaluation, and preparation of resettlement plans during loan implementation.

ii) describes the flow of funds (the annual resettlement budget should show the budget-scheduled expenditure for key items).

iii) includes a justification for all assumptions made in calculating compensation rates and other cost estimates (taking into account both physical and cost contingencies), plus replacement costs.

iv) includes information about the source of funding for the resettlement plan budget.

L. Institutional Arrangements

This section:

i) describes institutional arrangement responsibilities and mechanisms for carrying out the measures of the resettlement plan;

ii) includes institutional capacity building program, including technical assistance, if required;

iii) describes role of NGOs, if involved, and organizations of affected persons in resettlement planning and management; and

iv) describes how women’s groups will be involved in resettlement planning and management,

M. Implementation Schedule

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This section includes a detailed, time bound, implementation schedule for all key resettlement and rehabilitation activities. The implementation schedule should cover all aspects of resettlement activities synchronized with the project schedule of civil works construction, and provide land acquisition process and timeline.

N. Monitoring and Reporting

This section describes the mechanisms and benchmarks appropriate to the project for monitoring and evaluating the implementation of the resettlement plan. It specifies arrangements for participation of affected persons in the monitoring process. This section will also describe reporting procedures.

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Annex 23 – Outline of a Resettlement Framework

A. Introduction

This section briefly describes the project, its subprojects, and/or its components and any anticipated involuntary resettlement resulting from the subprojects and/or components to be financed under the proposed project; and explains why the resettlement plans of some subprojects cannot be prepared before project appraisal.

B. Objectives, Policy Framework, and Entitlements

This section:

i) lays out the principles and objectives governing the preparation and implementation of the resettlement plan are consistent with the PT SMI’s policy requirements; and compares applicable national laws and regulations and the safeguard policy statement and delineates measures to fill gaps, if any;

ii) describes the criteria for screening and selecting subprojects and/or components, including measures to avoid and minimize involuntary resettlement;

iii) estimates the number of affected persons and the likely categories of physically and economically displaced persons; and

iv) describes the eligibility criteria for defining the three types of displaced persons.

C. Socioeconomic Information

This section:

i) describes the methodologies to be used for socioeconomic surveys, censuses, inventories of losses, and assessments of land losses;

ii) explains the methods for valuing affected assets; and

iii) describes the methods for determining replacement costs of acquired assets.

D. Consultation, Participation, and Disclosure

This section:

i) outlines the mechanisms that will be adopted for conducting meaningful consultation with affected persons and for enabling their informed participation in preparing, implementing, and monitoring resettlement plans;

ii) outlines institutional responsibilities; and

iii) describes disclosure arrangements, such as the information to be disseminated and the method of dissemination.

E. Compensation, Income Restoration, and Relocation

This section:

i) describes the measures proposed for income restoration, including compensation and special measures to help vulnerable households improve their living standards;

ii) explains measures to provide replacement land, if planned; and

iii) describes support to be provided for host populations.

F. Grievance Redress Mechanisms

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This section discusses measures to establish grievance redress mechanisms at the local level; and outline the composition, areas of jurisdiction, consultation arrangements, record keeping, and information dissemination methods of the mechanism.

G. Institutional Arrangements and Implementation

This section:

i) provides a comprehensive assessment of institutional capacity and resource capability for

preparing, implementing, and monitoring resettlement activities, and describes additional measures necessary to enhance institutional capacity, including their costs;

ii) describes the organizational procedures for delivering entitlements; and

iii) describes the implementation process, including how resettlement preparation, approval, and

implementation will be linked to contract awards and the start of the project’s civil works.

H. Budget and Financing

This section provides indicative budget, including flow of funds; and identifies funding sources and responsibilities for allocating, approving, and delivering funds, including contingency arrangements.

I. Monitoring and Reporting

This section identifies steps to establish internal and external monitoring and evaluation of resettlement; and provides monitoring indicators for internal monitoring and external monitoring.

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Annex 24 – Outline of an Indigenous People’s Plan

An Indigenous Peoples plan (IPP) is required for all projects with impacts on Indigenous Peoples. Its level of detail and comprehensiveness is commensurate with the significance of potential impacts on Indigenous Peoples. The substantive aspects of this outline will guide the preparation of IPPs, although not necessarily in the order shown.

A. Executive Summary of the Indigenous Peoples Plan

This section concisely describes the critical facts, significant findings, and recommended actions.

B. Description of the Project

This section provides a general description of the project; discusses project components and activities that may bring impacts on Indigenous Peoples; and identify project area.

C. Social Impact Assessment

This section:

a) reviews the legal and institutional framework applicable to Indigenous Peoples in project context. b) provides baseline information on the demographic, social, cultural, and political characteristics of

the affected Indigenous Peoples communities; the land and territories that they have traditionally owned or customarily used or occupied; and the natural resources on which they depend.

c) identifies key project stakeholders and elaborate a culturally appropriate and gender-sensitive process for meaningful consultation with Indigenous Peoples at each stage of project preparation and implementation, taking the review and baseline information into account.

d) assesses, based on meaningful consultation with the affected Indigenous Peoples communities, the potential adverse and positive effects of the project. Critical to the determination of potential adverse impacts is a gender-sensitive analysis of the relative vulnerability of, and risks to, the affected Indigenous Peoples communities given their particular circumstances and close ties to land and natural resources, as well as their lack of access to opportunities relative to those available to other social groups in the communities, regions, or national societies in which they live.

e) includes a gender-sensitive assessment of the affected Indigenous Peoples’ perceptions about the project and its impact on their social, economic, and cultural status.

f) identifies and recommends, based on meaningful consultation with the affected Indigenous Peoples communities, the measures necessary to avoid adverse effects or, if such measures are not possible, identifies measures to minimize, mitigate, and/or compensate for such effects and to ensure that the Indigenous Peoples receive culturally appropriate benefits under the project.

D. Information Disclosure, Consultation and Participation

This section:

i. describes the information disclosure, consultation and participation process with the affected

Indigenous Peoples communities that was carried out during project preparation;

ii. summarizes their comments on the results of the social impact assessment and identifies

concerns raised during consultation and how these have been addressed in project design;

iii. in the case of project activities requiring broad community support, documents the process and outcome of consultations with affected Indigenous Peoples communities and any agreement resulting from such consultations for the project activities and safeguard measures addressing the impacts of such activities;

iv. describes consultation and participation mechanisms to be used during implementation to ensure Indigenous Peoples participation during implementation; and

v. confirms disclosure of the draft and final IPP to the affected Indigenous Peoples communities.

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E. Beneficial Measures

This section specifies the measures to ensure that the Indigenous Peoples receive social and economic benefits that are culturally appropriate, and gender responsive.

F. Mitigative Measures

This section specifies the measures to avoid adverse impacts on Indigenous Peoples; and where the avoidance is impossible, specifies the measures to minimize, mitigate and compensate for identified unavoidable adverse impacts for each affected Indigenous Peoples groups.

G. Capacity Building

This section provides measures to strengthen the social, legal, and technical capabilities of (a) government institutions to address Indigenous Peoples issues in the project area; and (b) Indigenous Peoples organizations in the project area to enable them to represent the affected Indigenous Peoples more effectively.

H. Grievance Redress Mechanism

This section describes the procedures to redress grievances by affected Indigenous Peoples communities. It also explains how the procedures are accessible to Indigenous Peoples and culturally appropriate and gender sensitive.

I. Monitoring, Reporting and Evaluation

This section describes the mechanisms and benchmarks appropriate to the project for monitoring, and evaluating the implementation of the IPP. It also specifies arrangements for participation of affected Indigenous Peoples in the preparation and validation of monitoring, and evaluation reports.

J. Institutional Arrangement

This section describes institutional arrangement responsibilities and mechanisms for carrying out the various measures of the IPP. It also describes the process of including relevant local organizations and NGOs in carrying out the measures of the IPP.

K. Budget and Financing

This section provides an itemized budget for all activities described in the IPP.

The following template presents the outline of an IPP. The template can be further developed based on field conditions and as per characteristics of the Project Activity.

Title of Chapter/Sub-Chapter

Content/Remarks

1. Description of The Project

Summary Description of Project Activity (concerning area boundary, location, type of occupation, area size, area of influence, etc.)

2. Summary of Social Assessment

2.1.Baseline Data on IPs

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Content/Remarks

Baseline information on the demographic, social, cultural, and political characteristic of the IPs community, the land and territories traditionally owned or customarily used or occupied and the natural resources that they depend

Identification of key project stakeholders and elaboration of culturally appropriate process for consulting with the IPs at each stage of project cycle

2.2. Summary of results of the free, prior, and informed consultations with the affected Indigenous Peoples’ communities that was carried out during Project Activity’s preparation and led to broad community support for the Project Activity

Identification of potential adverse and positive effects of Project Activity of the affected IPs within the Project Activity’s area of influence

Development of measures necessary to avoid adverse effects or identification of measures to minimize, mitigate, or compensate for such effects and ensure that IPs receive culturally appropriate benefits from the Project Activity

Mechanism to prepare and implement the public consultation with the Indigenous People (consultation concerning the draft Project Activity plan, etc. as relevant), to include: determination of location and schedule of consultation, information dissemination /invitation, etc.

Public consultation process

Result/resolution and mutual agreement obtained during consultation meeting.

Number and representative of organization/institution presented by participants in the said consultation meeting.

2.3. A framework for ensuring the free, prior, and informed consultations with the affected IPs communities during project implementation

3. Action Plan (inputs from the results of the social assessment)

3.1. Activities for IPs to receive social and economic benefits

3.2. Activities to avoid, minimize, mitigate, or compensate for adverse effects

3.3. Measures to Enhance the Capacity of the Project Management

3.4. Consultation with the affected IPs on the Draft IPP

4. Cost Estimate and Financing Plan

In form of table containing information about: type of activity, party in charge, timeline/milestones, cost, funding source, and remarks.

5. Institutional Arrangement to Implement IPP

Agencies responsible for managing the implementation of the Indigenous Peoples Plan

Agencies responsible for reporting and monitoring on the implementation of the Indigenous Peoples Plan

Arrangements for monitoring of the implementation of the Indigenous Peoples Plan by the affected IPs

6. Grievance Redress Mechanism Accessible To The Affected IPs

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Content/Remarks

Mechanism for managing grievances as suggested by the results of the Social Assessment results

7. Project Monitoring, Evaluation, and Reporting of IPP Implementation

Includes arrangement for free, prior, and informed consultation with the affected IPs

Explaining the Work Plan for monitoring implementation of IPs and Reporting Mechanism.

Monitoring on progress implementation of IPP

Monitoring on process implementation of IPP

Reporting on implementation of (report to whom, which format to use, and deadline for submission of the report).

ATTACHMENT

Attach original or copy of documents as relevant to IPP, for example:

Information about the Project Activity (Map)

Table containing Baseline Data of IPs

Minutes of Dissemination and Consultation Meetings

Minutes of Agreement on Compensation Plan (if any) based on the consultations

Other relevant documentation

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Annex 25 – Outline of an Indigenous Peoples Planning Framework

A. Introduction

This section briefly describes the project and its subprojects and/or components likely to be proposed for financing and explains why the Indigenous Peoples plans of some subprojects cannot be prepared before project appraisal.

B. Objectives and Policy Framework

This section:

i. clarifies the principles and objectives governing the preparation and implementation of

Indigenous Peoples plans, and demonstrates how they are consistent with ESS – 7 requirements; ii. compares applicable national laws and regulations and the ESS, and describes measures to fill

gaps, if any; and

iii. describes the criteria for screening and selecting components, projects, and/or subprojects.

C. Identification of Affected Indigenous Peoples

This section:

i. describes how the ADB SPS criteria for identifying groups that are considered Indigenous Peoples will be applied in the project;

ii. provides information on the Indigenous Peoples most likely to be affected by the project or subprojects; and

iii. delineates the potential positive and adverse effects of the project or subprojects on Indigenous Peoples.

D. Social Impact Assessment and IPP for Subprojects and/or Components

This section sets out a plan for carrying out a social impact assessment for subprojects and/or components (see Annex 25), and requirements and schedules for (i) screening and classification; and (ii) preparation of an IPP.

E. Consultation and Participation

This section outlines the mechanisms and strategy that will be adopted to conduct meaningful consultation with the affected Indigenous Peoples at each stage of subproject preparation and implementation. For project activities requiring broad community support, this section will also outline the mechanisms and procedure for documentation of the consultation process that ascertains such broad support from affected Indigenous Peoples communities.

F. Disclosure

The section outlines disclosure arrangements, such as the information to be disseminated and the method and form of dissemination, to both affected Indigenous Peoples and the public.

G. Grievance Redress Mechanism

This section discusses measures to establish culturally appropriate and gender-sensitive grievance redress mechanisms for affected Indigenous Peoples.

H. Institutional and Implementation Arrangements

This section describes institutional arrangements, including capacity building where necessary for screening and categorization, social impact assessment and preparation of IPPs, and monitoring.

I. Monitoring and Reporting Arrangements

This section identifies the steps taken to establish mechanisms and benchmarks appropriate for monitoring and reporting.

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J. Budget and Financing

This section provides an indicative budget, and identifies funding sources and responsibilities for allocating, approving, and delivering funds, including contingency arrangement.

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Annex 26 - Outline of Chance Finding Procedures in Relation to the Operating Principle on Cultural Property & Heritage

PCR Definition

This section should define the types of PCR covered by the procedures. In some cases the Chance-Finds procedure is confined to archaeological finds; more commonly it covers all types of PCR. In the absence of any other definition from the local cultural authorities, the following definition could be used: “movable or immovable objects, sites, structures or groups of structures having archaeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance”.

Ownership

This paragraph should state the identity of the owner of the artifacts found. Depending on the circumstances, the owner could typically be, for example, the state, the government, a religious institution, the land owner, or could be left for later determination by the concerned authorities.

Recognition

This is the most difficult aspect to cover. As noted above, in PCR-sensitive areas, the procedure may require the contractor to be accompanied by a specialist. In other cases, the procedures may not specify how the contractor will recognize a PCR, and a clause may be requested by the contractor disclaiming liability.

Procedure upon Discovery

Suspension of Work

This paragraph may state that if a PCR comes to light during the execution of the works, the contractor shall stop the works. However, it should specify whether all works should be stopped, or only the works immediately involved in the discovery, or, in some cases where large buried structures may be expected, all works may be stopped within a specified distance (for example, 50 metres) of the discovery. A qualified archaeologist should inform this issue.

After stopping work, the contractor must immediately report the discovery to the Resident Engineer.

The contractor may not be entitled to claim compensation for work suspension during this period.

The Resident Engineer may be entitled to suspend work and to request from the contractor some excavations at the contractor’s expense if he thinks that a discovery was made and not reported.

Demarcation of the Discovery Site

With the approval of the Resident Engineer, the contractor is then required to temporarily demarcate, and limit access to, the site.

Non-Suspension of Work

48. The procedure may empower the Resident Engineer to decide whether the PCR can be removed and for the work to continue, for example in cases where the find is one coin.

Chance Find Report

The contractor should then, at the request of the Resident Engineer, and within a specified time period, make a Chance Find Report, recording:

Date and time of discovery;

Location of the discovery;

Description of the PCR;

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Estimated weight and dimensions of the PCR;

Temporary protection implemented.

The Chance Find Report should be submitted to the Resident Engineer, and other concerned parties as agreed with the cultural authority, and in accordance with national legislation.

The Resident Engineer, or other party as agreed, is required to inform the cultural authority accordingly.

Arrival and Actions of Cultural Authority

The cultural authority undertakes to ensure that a representative will arrive at the discovery site within an agreed time such as 24 hours, and determine the action to be taken. Such actions may include, but not be limited to:

Removal of PCR deemed to be of significance;

Execution of further excavation within a specified distance of the discovery point;

Extension or reduction of the area demarcated by the contractor.

These actions should be taken within a specified period, for example, 7 days.

The contractor may or may not be entitled to claim compensation for work suspension during this period.

If the cultural authority fails to arrive within the stipulated period (for example, 24 hours), the Resident Engineer may have the authority to extend the period by a further stipulated time.

If the cultural authority fails to arrive after the extension period, the Resident Engineer may have the authority to instruct the contractor to remove the PCR or undertake other mitigating measures and resume work. Such additional works can be charged to the contract. However, the contractor may not be entitled to claim compensation for work suspension during this period.

Further Suspension of Work

During this 7-day period, the Cultural authority may be entitled to request the temporary suspension of the work at or in the vicinity of the discovery site for an additional period of up to, for example, 30 days. The contractor may, or may not be, entitled to claim compensation for work suspension during this period. However, the contractor will be entitled to establish an agreement with the cultural authority for additional services or resources during this further period under a separate contract with the cultural authority

Some example of flow charts for chance findings follows.

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Annex 27 - Monitoring and Supervision

Table 24.1: Monitoring indicators

Monitoring Indicator Proposed Actions Frequency Responsibility

Corrective Action Plan’s performance

Site visits and data collection to verify performance of

- EMP

- RAP

- IPDP, Etc.

Quarterly SEU

Compliance with ambient Standards

Analysis of data collected from periodic reports submitted by developer

- Air Quality

- Water Quality

- Noise

- Odor

- Waste

According to phases of project (To be decided by SEU)

Developer collects the data and SEU analyses it.

Effects on natural & Socio-economic Environment

Surveys done to judge the effects on -

- Ecosystem

- Landscape

- Per capita Income

- Public Health

- Working Conditions, Supply Chain, Etc.

Annual SEU

Financial Implications Assess the impact on cost of corrective measures and cost of over runs if any

Half Yearly SEU

Periodic Reporting Submission of:

- Progress Report on

RAP

IPDP

compliance with covenants

- Annual Monitoring

report

- Project specific

Supervision Report

Quarterly

Annual

Annual

Developer

SEU

SEU

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Table 24.2: Monitoring Format for Corrective Action Plan

Monitoring Item ‘Measures’ as prescribed in the agreed Plans

Remarks on its performance/ compliance

EMP

Resettlement Action Plan

Indigenous People Development Plan

Others....

Table 24.3: Monitoring Format for Financial appraisal

Activities Estimated Cost Actual cost Cost overruns Reasons

Civil Works

Compensation

Cost of resettlement

Additional Cost of revised plans

Others....

Table 24.4: Monitoring Format for Ambient Standards

Monitoring Item Parameters Measured value Standards as per local regulatory authority

Remarks (Sampling Point, Frequency, Method etc.)

Air Quality SO2

NOx

CO

O2

Soot & Dust

SPM

Water Quality pH

Suspended Solids

BOD

COD

DO

Total Nitrogen

Total Phosphorus

Heavy Metals

Hydrocarbons

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Phenols

Cyanide

Faecal Coliforms

Temperature

Noise Noise level

Vibration level

Table 24.5: Monitoring Format for Natural & Socio-economic environment

Monitoring Item Monitoring result during Report Period

Waste

Odour

Valuable species

Public Health

Per capita Income

Others.....

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Annex 28 - Developers Environmental Monitoring Report to PT SMI





- Date of Approval


- Location of project

i. Scale/size

ii. Date of construction/operation commencement

Financial Details - Total Project Cost

- Cost financed by PT SMI

- Terms of the financing

- Other lenders to the project and proportion if any

Environmental clearance particulars

- Details of the relevant government agency authorised to issue the clearance

- Date of clearance and validity time period

- Terms of issue in terms of steps to be taken for environmental protection of the project

- Renewal details and terms

- Any change in renewal terms expected and if so, what are the cost implications

This is both a tabulation as well as an evaluation of the project risk factors both from an operational and financial stand point

Compliance Track Record - List down conditions as stipulated in the clearance and the extent of compliance against the same

- Extent of non-compliance and reasons for the same

- Safety fallout on account of the non-compliance

- No. of incidents of violation and recorded dates

- Adverse public reaction and records of the same

The compliance track record should be viewed as a twin reflection of management adherence to agreed

norms and conditions as well as the future operational risks for the project

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Accident Log - Incident recorded dates,

- Scale of damage and injury (if any)

- Reason for the accident and whether the cause has been rectified

- Authorities in charge of investigation/recording

- Media or community reactions (if any)

The more frequent such accidents, it is to be viewed negatively as this may lead to

- Penalties and fines

- Bad publicity and fall out

- Costs on account of damages / compensation

Environmental Capacity - Degree of awareness and sensitivity towards

- Environmental management

- Health and safety

- Environmental laws and regulations

- Staff capacities in environmental management (as relevant)

- Training programs and

- Periodic needs assessment and steps taken to address gaps

The assessment of this section should be done with a clear view to assess the people who can implemen

Stakeholder Consultation - Details of consultation with the concerned agencies

- Environmental consultants and advisors that the company employs to advise on key policies and practise

Stakeholder Consultation

Compliance Issues Compliance with Environmental Qualities and Standards (national and international, as relevant)

- Air

- Water (surface and ground water)

- Waste generation and management

- Noise and vibration

- Other

Compliance Issues

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Annex 29 - Developers Social Safeguards Report to PT SMI





- Date of Approval


Financial Details - Total Project Cost

- Cost financed by PT SMI

- Terms of the financing

- Other lenders to the project and proportion if any

Physical Progress - Land Acquisition status

- Acquisition of machinery

- Status of construction

Whether in line LAPRF (input to be provided by the SEMU

Financial Progress - Amount of actual investment

- Break up of investment

- Break-up of the funding of the investment

- Cost escalation if any

- Amount spent on land acquisition and resettlement

Ethnic Minority Issues - Project components with resettlement and ethnic minority issues

- Actual implementation of resettlement and ethnic minority

- Actual Impact assessment on ethnic minority and indigenous people – Quantitative and qualitative

- No. Of people affected

- Extent rehabilitated

- Economic cost of livelihood

- Provision of alternates

- Compensation on account of the provision of alternates

- Comparison of actual vs. What was envisaged during project conceptualisation stage ( Please correlate with Indigenous People

Across each of these parameters please compare it with the original plan as envisaged and clearly specify variances,

reasons and plans to correct negative variances along with timelines

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Development Plan (IPDP) / Ethnic Minority Development Plan (EMDP)

- Analyze variances between the plans and the actual and provide reasons for the same

- Plan of action for tackling any adverse variance and measurement criteria

Institutional Arrangements - Ownership of the IPDP/EMDP implementation – developer / government / government body

- Extent of actual co-ordination and service delivery amongst the organisations and effectiveness of the same

- Responsibilities of the various agencies involved

- Specific implementation arrangements for EMs

If there is any perceived gap in the delivery, there should be immediate steps taken to strengthen the agency involved or change the service delivery mechanism

Land acquisition and Resettlement compensation details

- Land compensation – rate per unit, no. Of units acquired, no. Of units planned, status of non-acquired land

- Rate of compensation for standing corps, trees and other value creating assets

- Compensation for building and other structures

- Resettlement budget – segregated into number of families / units, compensation for land and additional compensation for other land centric assets

- Actual utilisation of funds and details of beneficiaries in terms of number of project affected people (PAPs)

- Payment delivery mechanism in terms of authority, flow of funds and extent of utilisation and protection against leakage

- Difference between the resettlement funds utilised – both process and amount - compared to the plan and reasons for the same

Across each of these parameters please compare it with the original plan as envisaged and clearly specify variances, reasons and plans to correct negative variances along with timelines

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Status Update on the Land

Acquisition, Resettlement and

Reconstruction process

- Extent of agricultural land

- Extent of commercial land

- Provision for replacement of the

above

- If any public infrastructure was

affected, status of restoration and

costs of the same

- Status of housing relocation and

reconstruction

- Support for income earning

activities and agencies employed in

the same and their success

- Support to vulnerable groups

Across each of these parameters

please compare it with the original

plan as envisaged and clearly

specify variances, reasons and plans

to correct negative variances along

with timelines

Consultation, Communication and

Grievance Procedures

- Specific consultative steps /

processes followed with IPs/EMs

on the project and its impact and

the assistance provided

- Consultations on the financial

aspects such as compensation, fees,

relocation options

- Grievance process followed and

number of cases solved after

receiving a complaint

Across each of these parameters

please compare it with the original

plan as envisaged and clearly

specify variances, reasons and plans

to correct negative variances along

with timelines

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Annex 30 - PT SMI Social & Environmental Performance Report to Strategic Investors

ANNUAL SOCIAL AND ENVIRONMENTAL PERFORMANCE REPORT

FOR

PT SARANA MULTI INDONESIA

Reporting Period: (month/year) through (month/year)

Report Completion Date: (month/day/year)

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Introduction

Fund’s investment profile and description of sub-project(s)/activity(ies) financed.

The purpose of the Social and environmental Performance Report (ESPR) is to report on implementation of the agreed Social and Environmental Management System (SEMS) and applicable environmental management practices for sub-project(s)/activity(ies). The annual ESPR encompasses implementation by (name of fund) of all phases of the sub-project(s)/activity(ies). It includes:

i) Contact information for responsible individuals;

ii) Compliance by (fund) with applicable environmental requirements for the sub-project(s)/activity(ies);

iii) Social and environmental aspects of sub-project(s)/activity(ies) under implementation;

iv) Occupational health and safety performance and significant incidents; and

v) Sustainable development initiatives and community relations.

Social and Environmental Management

ESPR Preparer

Report prepared by: (name and title)

Telephone: E-mail:

Signature: Signature:

Social and Environmental Responsibility

The individual(s) below hold responsibility for social and environmental performance in the sub-project(s)/activity(ies) financed by the Fund:

(Senior) Manager(s) with responsibility for environment and social matters (name and title)

Organization structure of the department

Roles and responsibilities of the officials / functionaries of the department.

Capability / skill adequacy of the operating people to perform the task.

Hierarchy within the unit

Band width available and the adequacy of capacity to manage on – going projects as well as supervise projects with current exposure by PT SMI.

Process clarity and channels of authority and communication within the unit.

Compliance by SMI with the Social and Environmental Requirements (as specified in the shareholders’ agreement)

Compliance with Country Requirements

Level / complexity and number of on-going projects

Compliance with local and international health and safety laws and regulations

Compliance with occupational health regulations

Extent of oversight of the on – going projects;

Level of personnel and the documentation and feedback mechanism for the same;

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Frequency of inspection of projects;

Instances where PT SMI has noticed non-compliance and significant adverse regulatory impact on account of fines and penalties / extreme cases of operation closure or other restrictive action

Changes in regulation at the national or international level

Impact of such changes on the projects financed by the PT SMI and the extent of such impact

Preparedness of PT SMI clients to face / comply with such regulatory changes, the costs and the social impact of such actions

Compliance with SMI’s Safeguards Requirements

Ability of the project to fit in with the minimum requirement as prescribed by the SEMS of PT SMI

Specific projects in sensitive sectors and the level of exposure of PT SMI to such projects

Public issues that may have been raised due to non-compliance on certain projects and corrective steps taken to mitigate the risks

Progress of On-going Projects/Activities

Investment Pipeline

List of on-going projects that are being evaluated for investment and wherein the approval has been given but disbursement has not taken place

Out of this projects that may have an:

Environment impact;

Involuntary Resettlement issues;

Indigenous people / ethnic minority impact

Extent of Social and Environment Issues addressed in terms of:

Resettlement plans

Environment impact mitigation measures

Where projects came to PT SMI after land acquisition and resettlement phase, compliance with PT SMI standards and open issues if any;

If non-compliant with PT SMI policies, extent of gaps and steps being taken to reduce the gaps

Interim risks (both operational and reputational) to PT SMI.

Active Investments

Environmental Progress

Provide a summary of the progress of implementation of the project including description, status, and completion timetable for environment-related items. Describe the status of permits and approvals. Summary information should include:

i) Overview of the sub-project(s)/ activity (ies), including progress against schedule;

ii) Design changes to the sub-project(s)/ activity (ies) adopted during the reporting period and reasons for those changes;

iii) Environmental issues and complaints arising during the reporting period;

iv) Information on any unanticipated environmental impacts, and remedial actions that have been taken;

v) Any unresolved environmental issues or grievances; and

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vi) Status of compliance with environmental requirements (national, local, PT SMI or instances of non-compliance.

Social Progress

Provide a summary of the progress of implementation of the sub-project(s)/activity(ies), including description, status, and completion timetable for social-related items. Summary information should include:

i) Overview of the sub-project(s)/activity(ies) including progress against schedule;

ii) Alternative designs considered to avoid or minimize involuntary resettlement impacts and impacts to indigenous peoples/ethnic minorities;

iii) Social issues and complaints arising during the reporting period;

iv) Information on any unanticipated impacts, and remedial actions that have been taken;

v) Any unresolved social issues or grievances; and

vi) Status of compliance with social requirements (national, local, Strategic Investors’) or instances of non-compliance.

Summary of Safety Performance and Any Corrective Actions

Provide a summary for the overall sub-project(s)/activity(ies) of the following:

(i) Worker health and occupational safety: describe status of worker health and safety programs and training, any work-related accidents at the sub-project(s)/activity(ies) sites, actions taken to reduce accidents, etc.

(ii) Accidents, fires, and other emergencies: provide a summary of any significant accidents, fires, or explosions, or major accidental releases to the environment. Include response measures taken and any improvements made to equipment or procedures as a result.]

Sustainable Development Initiatives and Community Relations

Describe any initiatives undertaken by the Fund Manager to improve environmental performance in its activities or at the corporate level. Describe progress in formulating and implementing sustainable development initiatives in its operations. Describe any outreach or cooperative programs with the community, NGOs, etc. in the sub-project(s)/activity(ies) areas.

Annotated Outline of a Land Acquisition and Resettlement Plan (LARP) for Investee Projects

Executive Summary

An executive summary is a succinct report on the key aspects of the LARP. It should cover the salient points in the Resettlement Action Plan.

Project Description

i) General description of the project, discussion of project components that result in land acquisition or involuntary resettlement or both, and identification of the project area.

ii) Description of alternatives considered to avoid or minimize resettlement. Include a table with quantified data and provide a rationale for the final decision and why remaining effects are unavoidable.

iii) State the main objectives of the LARP.

iv) For clarity, please also indicate whether the project is based on a feasibility study and state the arrangements for updating the RAP after detailed technical/engineering design and detailed measurement survey and submission to PT SMI for review and approval.

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Scope of Land Acquisition and Resettlement

i) Discuss the potential impacts of the project. Include maps of the areas or zone of impact of such components or activities.

ii) Describe scope of land acquisition (use maps), and why it is necessary for the main investment project.

iii) Summarize the key effects in terms of assets acquired and affected persons, including a table.

iv) Provide details of any common property resources.

v) Describe the consultation process with agencies responsible for land acquisition and resettlement.

vi) Briefly discuss the national legal framework for land acquisition including an overview of the laws, regulations and guidelines that apply to land acquisition and resettlement. Include procedural requirements, and timelines.

vii) Core tables to be prepared for this section:

viii) Summary of land acquisition requirements and involuntary resettlement impacts of all project components

ix) Summary of affected persons by category and severity of impacts:

i) Affected persons: total number of households and total population

ii) Type of impacts: loss of land, structure, businesses, crops and trees, community property resources, and other categories of losses

iii) Severity of impacts: permanent or temporary; full or partial loss of structures/land, including number of people requiring relocation; summary of affected lands by tenure status and land use type (agricultural, commercial, residential, communal forest, etc.)

iv) Summary of affected structures: land tenure status, and structure type / materials / size

Socioeconomic Information/Profile

The socioeconomic survey, while providing data, should be accompanied by a careful analysis/impact assessment disaggregated by gender, vulnerability, and other social groups.

i) Define, identify and enumerate the people to be affected.

ii) Describe the likely impact of land and asset acquisition on the people affected, taking into account social, cultural and economic parameters; prepare disaggregated tables.

iii) Discuss project impacts on the poor, indigenous/ethnic minorities, and other vulnerable groups.

iv) Identify gender and resettlement impacts. Identify the socio-economic situation, impacts, needs, and priorities of women

v) Core tables to be prepared for this section:

a) Socioeconomic profile of the affected persons disaggregated by gender

b) Vulnerability and risk analysis

Information Dissemination, Consultation, Participatory Approaches, and Disclosure Requirements

i) Identify project stakeholders, specifically primary stakeholders.

ii) Describe the mechanisms for consultation to be conducted during the different stages of the project cycle.

iii) Describe the activities undertaken to disseminate information.

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iv) Summarize the results of consultations with affected persons (including host communities) and discuss how concerns raised and recommendations made were addressed in the RAP.

v) Confirm disclosure of draft Resettlement Action Plan to affected people and include arrangements to disclose any subsequent plans.

vi) Core tables to be prepared for this section

a) Public consultation and disclosure plan

b) Summary of concerns raised and recommendations made during consultations disaggregated by stakeholder groups

Grievance Redress Mechanisms

i) Mechanisms for resolution of conflicts and appeals procedures for affected communities and workers.

ii) Describe the grievance redress framework (informal and formal channels) that will be put in place by the project proponent setting out the time frame and mechanisms for resolution of complaints, which should follow the principle of effective Grievance Mechanism

Policy and Legal Framework

i) Describe the national and local laws and policies that apply to the project and prepare a gap analysis indicating how the gaps will be addressed.

ii) Describe the principles, legal and policy commitments from the project sponsor for different categories of project impacts.

iii) Describe the principles and methodologies used for determining valuation and compensation rates at replacement costs for assets, incomes and livelihoods.

iv) Describe compensation and assistance eligibility criteria, and how and when compensation will be paid.

v) Describe the land acquisition process and prepare a schedule for meeting key procedural requirements.

vi) Core tables/ Flow charts to be prepared for this section

a) Legislative gap analysis: comparison of ADB's Involuntary Resettlement Policy and country legal frameworks and proposed measures to bridge the gap

b) Flowchart of the Land Acquisition Process with outputs and timelines

Entitlements

i) Define entitlement and eligibility of affected persons. Ensure all resettlement assistance, including transaction costs, are included.

ii) Assistance to vulnerable groups and other special groups should be included.

iii) Core Table to be prepared for this section – entitlement matrix

Relocation of Housing and Settlements

i) Description of options for relocation of housing and other structures, including replacement housing, replacement cash compensation, and/or self-selection. Ensure gender concerns and support to vulnerable groups are identified and integrated when preparing replacement housing programs.

ii) Description of the alternative relocation sites considered, community consultations conducted, and justification for selected sites, including details on location, environmental assessment of site, and development needs.

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iii) Timetables for site preparation and transfer. Measures to assist with transfer and establishment at new sites.

iv) Legal arrangements to regularize tenure and transferring titles to resettlers, including provision of joint titles as well as plot allocation to adult children as relevant.

v) Transition housing should be avoided.

vi) Ensure location-specific considerations to protect livelihood access to public services, etc.

vii) Plans to provide civic infrastructure.

viii) Integration with host populations.

Income Restoration and Rehabilitation

i) Identify livelihood risks, prepare disaggregated tables based on demographic data and sources of livelihood.

ii) Description of income restoration programs; include multiple options to restore all types of livelihoods. A few examples include:

iii) Project benefit-sharing

iv) Revenue sharing arrangements

v) Joint-stock for equity contributions such as land

vi) Discuss sustainability and safety nets.

vii) Social safety net through social insurance / project special funds.

viii) Special measures to support vulnerable groups.

ix) Gender considerations.

x) Training programs should be supported by skills analysis and needs assessment.

xi) Core tables to be prepared for this section:

xii) Livelihood restoration plans with itemized budgets and multiple options

xiii) List of training programs and affected persons' preferences

xiv) Employment opportunities

Resettlement Budget and Financing Plan

i) Itemized budget for all resettlement activities, including budget for resettlement unit, staff training, monitoring and evaluation, and preparation of RAPs during investment implementation.

ii) Describe the flow of funds. The annual resettlement budget should show the budget-scheduled expenditure for key items.

iii) Include a justification for all assumptions made in calculating compensation rates and other cost estimates (taking into account both physical and cost contingencies), plus replacement value.

iv) Include information about the source of funding for the RAP budget.

v) Core tables to be prepared for this section:

a) Detailed cost estimate and budget for all resettlement activities

b) Flowchart: flow of funds showing source of financing and timing, particularly in the context of legal requirements

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Implementation Schedule

i) Include a detailed, time-bound, implementation schedule for all key resettlement and rehabilitation activities. (The schedule should be synchronized with the project’s schedule of civil works construction).

ii) Core tables to be prepared for this section:

a) Implementation schedule covering all aspects of resettlement activities synchronized with civil works awards construction

b) Land acquisition process and timeline: Gantt chart

Institutional Framework for Resettlement

i) Main tasks and responsibilities of the groups responsible for resettlement preparation, implementation and monitoring should be described, including skills and number of staff.

ii) Assessment of the institutional capacity of such agencies. Arrangements to build, including technical assistance, if required. Availability of logistics, finance, staff, and other necessary hardware.

iii) Role of NGOs, if involved, and organizations of affected persons in resettlement planning and management. Involvement of women’s groups in resettlement planning, management and operations, job creation and income generation. Arrangements to hire female staff by the resettlement agency to work with and assist women in all aspects of resettlement activities, including planning and implementation of income restoration programs.

iv) Core table to be prepared for this section:

a) matrix of roles and responsibilities of government agencies and other organizations involved in resettlement planning and implementation

Monitoring and Evaluation

i) Internal monitoring and evaluation: Arrangements to monitor resettlement implementation. Describe institutional arrangements, logistics, staff, skills, timelines, and budget allocated.

ii) External monitoring and evaluation: Arrangements to hire an external monitor. Ensure participation of affected people in internal and external monitoring and evaluation. Describe competencies, reporting arrangements, and timelines.

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Annex 31 - Project Implementation / Completion Report

A. Basic Project Data

Project Number/Code

Project Name

Sector

Approval date

Signing date

Project start date

Project completion date

Total Project Cost

Project Officers

Validators

B. Project Description.

Rationale for the project

Impact of the project

Objective of the project

Revised objective if any

C. Evaluation of Development Design and implementation

Relevance of Design and Formulation

Project Outputs

Project Costs, Disbursements, project schedule, borrower contributions and conformance to schedule (as relevant to project performance)

Implementation arrangements, conditions and covenants, related technical assistance and procurement and consultant’s performance

D. Evaluation of performance

Relevance

Effectiveness in achieving outcomes

Efficiency in achieving outcomes and outputs

Sustainability

Other Impacts (intended and unintended)

Performance of the Borrower

E. Lessons Learned

Positive

Negative

F. Rating

Relevance: Satisfactory/Partly satisfactory/Not satisfactory

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Effectiveness in achieving outcomes: Satisfactory/Partly satisfactory/Not satisfactory

Efficiency in achieving outcomes and outputs: Satisfactory/Partly satisfactory/Not satisfactory

Sustainability: Satisfactory/Partly satisfactory/Not satisfactory

Borrower Performance: Satisfactory/Partly satisfactory/Not satisfactory

Other Impacts: Satisfactory/Partly satisfactory/Not satisfactory

Overall Assessment: Satisfactory/Partly satisfactory/Not satisfactory

Quality of PCR: Satisfactory/Partly satisfactory/Not satisfactory

G. Recommendations and Follow up action

Overall Assessment

Lessons

Recommendation

H. Data Sources for validation

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Annex 32 – Sector-wise Environmental Review / Appraisal Checklists

To be completed when PT SMI and ADB confirm which sectors below are applicable, or whether there is a need for these checklists in the ESMF document

- Thermal Power Plants

- Highways & Roads

- Ports & Harbours

- Airports

- Water Supply Projects

- Sewerage & Sanitation

- Urban Development

- Dams, Reservoirs & Hydro-Power

- Power Transmission Lines

- Oil & Gas Distribution Lines

- Industrial Projects

- Fertiliser Industry

- Health Care Facilities

- Irrigation Projects

- Fisheries & Aquaculture

- Coastal Zone Management

- Watershed Development

- Forestry Projects

- Land Clearing & Rehabilitation

- Waste management

- Hazardous & Toxic Waste

- Road Access

- Housing & Education buildings

- Ambient Conditions

- Occupational Health and Safety Management System (OHSMS)

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