The World Bank Lao PDR Clean Cook Stove Initiative (P169538) Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 04/02/2019 | Report No: ESRSC00228 Apr 03, 2019 Page 1 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Lao People's Democratic EAST ASIA AND PACIFIC P169538 Republic Project Name Lao PDR Clean Cook Stove Initiative Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Energy & Extractives Investment Project Financing Borrower(s) Implementing Agency(ies) Ministry of Finance The Ministry of Energy and Mines (MEM) Proposed Development Objective(s) Public Disclosure Enhance energy efficiency in cook stoves and reduce carbon emissions from households across three provinces in Lao PDR Financing (in USD Million) Amount Total Project Cost 6.06 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The project will distribute 50,000 forced draft gasifier cookstoves across eight to ten districts in three different provinces: Vientiane Capital, Savannakhet Province, and Champasack Province. These three areas are urban to peri- urban areas and were chosen in collaboration with the Ministry of Energy and Mines based on their high charcoal consumption, carbon emission reduction potential, characteristics of the charcoal market, and the availability of agricultural waste for pellet production. Apr 03, 2019 Page 2 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) D. Environmental and Social Overview D.1. Project location(s) and salient characteristics relevant to the ES assessment [geographic, environmental, social] The project activities will be implemented across eight to ten districts of Vientiane Capital, Savannakhet and Champasack provinces which have a total of 2.5 million people. These three areas are urban to peri-urban and were chosen in collaboration with the Ministry of Energy and Mines (MEM) based on their high charcoal consumption, carbon emission reduction potential, characteristics of the charcoal market, and the availability of agricultural waste for pellet production. Pellets and stoves are expected to be imported. The project area is culturally diverse. The common ethnic groups in Savannakhet Province are Lao, Phou Thay, Angkham Brou (Makong, Mangkong), Tri, Chali, Katang, Pacoh, Ta Oi, or Souay. Ethnic groups in Champasak are Lao, Khmer, Brao (Lavè), Katè, Nya Hoeñ, Jru (Loven), Souay. The ethnic groups from these two provinces fall in Lao-Tai or Mon-Khmer ethno-linguistic group. D. 2. Borrower’s Institutional Capacity The IREP at MEM has worked closely with the World Bank since 2012 to lay a foundation that can spur super clean cooking solutions. In 2015, MEM convened a high-level inter-ministerial taskforce to manage government participation in the multi-sectoral CSI project. The taskforce established Lao PDR’s first national cookstove testing laboratory and released the country’s first Cookstove Guidelines in 2016. IREP has established a Project Implementation Unit (PIU) which consists of three staff dedicated solely to the cookstove work and who will be rolling-out 50,000 cookstoves to the selected households and monitoring the implementation of activity in three provinces. The IREP implemented the first phase of CSI project, which similar set of safeguards issues were well managed. However, as part of environmental and social safeguards implementation, particularly, with the new World Bank Environmental and Social Framework (ESF), IREP staff will continue to receive additional training to ensure adequate capacity to implement all applicable ESSs. The capacity of the project entity remains to be assessed. Public Disclosure II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate Environmental Risk Rating Moderate A - type, location, sensitivity and scale of the Project including the physical considerations of the Project. This type of risk / impact is rated Low. The project will be implemented across eight to ten districts of Vientiane Capital, Savannakhet and Champasack provinces. Project activity is quite straight forward by providing 50,000 cookstoves to target local communities. The environmental conditions in the areas where project activities are planned not sensitive or vulnerable, and the project will have a minimal environmental footprint restricted to areas that are either indoors (cooking stoves) or in existing agricultural / industrial areas (pellet production if applicable). B - nature and magnitude of the potential ES risks and impacts, the nature of the potential risks and impacts (e.g. whether they are irreversible, unprecedented or complex). This type of risk / impact is rated Moderate. During the first phase of the Lao PDR CSI, the project team has engaged (Technical Assistance) with MOIC who promote a local pellet producing market, however, it was not confirmed if pellet can be relied on in the country, and the efforts will continue during phase II of CSI. Although the project will not provide direct support on pellet production but will likely to create a future market for private sector investment. If it is the case, the anticipated risk is on sourcing of raw materials, technology, and the process for pellet production conduct by private sector who may not aware of environmental and social impact and may not put in place a mitigation measure to address the possible risk. The pellets can be produced of organic waste materials such as saw Apr 03, 2019 Page 3 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) dust and wood chips from various sawmills and furniture producers, and rice husk. In general, the process includes drying, size reduction, densification, cooling and dust removal. The potential adverse environmental impacts of the pellet production facilities depend on the technology used and the processes involved. In general, impacts may include pollution of nearby waterbodies by high water with high COD (chemical oxygen demand) leached from the process, improper storage of raw materials, noise pollution, air pollution, and energy consumption in the production process and transportation of the produced pellets to the project areas. If pellet production will be promoted in the country, the government (IREP) will need to review of future availability of raw materials and supply chains, as well as water and energy required. It is important that the IREP coordinates with MoNRE and MOIC to make sure that those future pellets production facilities and process meet national and international environmental and social standards. C - capacity and commitment of the Borrower to manage risks and impacts in a manner consistent with the ESSs. An assessment on the capacity of IREP and other related entities to implement the Bank’s risks management system will be necessary. As part of environmental safeguards implementation, particularly, with the World Bank Environmental and Social Framework (ESF), IREP staff will continue to receive additional trainings to ensure adequate capacity to implement all applicable Environmental and Social Standards (ESSs). D - other areas of risk that may be relevant. No other relevant risks were identified. Social Risk Rating Low The social risk is categorized as “Low”. The pellets and stoves are expected to be imported. The project is not expected to involve significant adverse or irreversible social impacts as a result of distribution of 50 000 stoves, and Public Disclosure the anticipated risks of labour and working conditions, and community health and safety can be mitigated. Positive health impacts are expected for those households benefitting from the clean stoves. All communities are expected to benefit and enhancement measures through project design and effective stakeholder engagement should address inclusive approaches to ethnic minority groups. Some effort will be required to assess and build the capacity of IREP and other related entities, including beneficiaries, to manage measures as required by the World Bank’s Environmental and Social Framework (ESF). B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: Potential environmental risks and impact: The project will procure 50,000 Tier 4 cookstoves through a competitive process and will be imported. The pellets will also be imported from Indonesia and Thailand. From the nature and scale of project’s activities, there will not be substantial concerns related environmental aspect. Some issues to be considered are related to road safety during the transportation of cookstoves and pellets, and the hazardous and electric waste generated from the used cookstoves. The IREP will ensure that the imported pellets are from the sustainable resources. Regarding the road safety, the Borrower will make sure that the suppliers of cookstoves and pellets comply with country’s trafic regulations such as Land Transport Law and Law on Public Roads, and other Apr 03, 2019 Page 4 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) applicable laws and regulations. A certified transport enterprise which are qualified for transport service providing domestic, international or cross-border transport should be chosen. A term of reference (TOR) will be debeloped amd cleared by the Bank before comencement of procurement process. For the electronic waste derived from the used batteries and solar panels which are part of the cookstoves, the IREP will ensure that the Project Entity to prepare and implement a solid waste management plan, and provide an after sell services to collect and dispose electronic waste induced by project’s cookstoves. The timeline for development of TOR and weste management plan will be provided in the Environmental and Social Commitment Plan (ESCP). If pellet production will be promoted in the country, the government will need to review of future availability of raw materials and supply chains, as well as water and energy required. It is important that the IREP coordinates with MoNRE and MOIC to make sure that those future pellets production facilities and process meet national and international environmental and social standards. Potential social risks and impacts include: If not sustainably sourced, labour, safety and working conditions related with the production, transportation and distribution of the imported cookstoves and the pellets. Pellets are expected to be sourced from Thailand and Indonesia; Household-level safety issues related with the use and storage of the cookstoves and the pellets; Minor potential impacts expected on small local markets of wood and coal selling, affected by the introduction of the new biomass pellets; Low-income households including low-income ethnic groups in project areas might be excluded from accessing project benefits, considering that a minimum investment of 45 USD is needed to purchase a cookstove plus additional expenses for the necessary pellets; Risks related with the need of ensuring culturally-appropriate information sharing when engaging with households from different ethnic groups; Potential social risks related to stakeholder engagement in order to ensure transparency in the definition of the eligibility criteria and final selection of the 50,000 beneficiary households of the project. To address some of above- mentioned risks and impacts, stakeholder engagement plan will be key. Measures will be developed, and Public Disclosure arrangements will be made, as part of project design, to ensure that imports of pellets and stoves meet international procurement standards such as IOS 20400 or Bank’s own sustainable procurement guidelines. Ensuring the scope of planned Impact Evaluation (IE) under component 4 to inform inclusion and the needs of different groups, including any disadvantaged and vulnerable groups and ethnic groups, will also help in addressing risks as well as ensuring equity in benefits. There will be 4 main criteria for households to receive the stove at the reduced price: (1) they must replace one charcoal stove, (2) be able and willing to pay the reduced price of $45 for the stove, (3) Agree to use the stove at least 75% of the time, (4) agree to stringent MRV and monitoring for the project period. To address health and safety risks to project beneficiaries a Community Health and Safety Management Plan (CHSMP) will need to be developed taking into account the diverse needs of the communities. An ESCP will be developed before project appraisal to define and recommend the type of assessment, mitigation plans, timeframe and resources to implement in order to avoid and minimize possible negative impacts induce by project activities. Areas where reliance on the Borrower’s E&S Framework may be considered: The client's E&S Framework is not proposed to be relied on for the Project, in whole or in part. ESS10 Stakeholder Engagement and Information Disclosure The project will involve different stakeholder groups: private investment sectors, government officials from central, provincial and district levels, and local residences of Vientiane Capital, Savannakhet and Champasak Provinces. The project will require stakeholder engagement throughout the project cycle. The project entity and IREP will need to engage in meaningful consultations with all interests and affected stakeholders commencing at the early stage of the project development process, including through disclosure of the project related information. The pre-identified stakeholders for this project (to be confirmed by the Stakeholder Analysis) are: Government stakeholders such as Apr 03, 2019 Page 5 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) Ministry of Energy and Mines, Ministry of Industry Commerce, and other development partners at the central level; The targeted communities of Vientiane Capital, Savannakhet and Champasak Provinces; Charcoal, pellet and traditional cookstove producers; Suppliers in particular of stoves and pellets; Local civil society organizations such as representatives of ethnic groups, Lao Business Women’s Association (LBWA) and other organizations; and Project beneficiaries and their households. A Stakeholder Engagement Plan (SEP) will be developed by IREP early in project preparation to inform engagement to address key risks and develop communication and engagement strategies and materials to effectively reach out to affected and interested stakeholders to ensure accessibility and culturally- appropriateness. The approach to engagement activities will take into account of the needs of ethnic groups, vulnerability, language and literacy to ensure not only risks are managed but benefits are accessible to all. The SEP will be implemented and, as required, updated throughout the project life cycle. A project specific Grievance Mechanism (GM), proportionate to the potential risks and impacts of the project, will be established. Participatory activities included in the SEP and complaints received and resolved under the project’s GM will be reviewed during the implementation support missions. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions The risks related to this standard are expected to relate to the provisioning of stoves and pellets including transportation of these. The pellets are expected to be imported from Thailand and Indonesia. To manage these risks measures will be developed, and arrangements will be made, as part of project design, to ensure that these imports Public Disclosure meet international procurement standards such as IOS 20400 or Bank’s own sustainable procurement guidelines. In addition to environmental protections of GHG, sustainable forest management, soil, water and air, the social protections that would need to be met include: health and safety and labour and working conditions. If the above is not possible then it is expected that a due-diligence against national requirement and that of ESS2 will be needed of suppliers providing pellets and stoves. The Labour Management Plan (LMP) and associated procedures will need to reflect the findings from the due diligence. The LMP will need to set out the way in which all categories of project workers (direct, contracted, primary supply and community workers), where applicable, will be managed in accordance with the requirements of national law and ESS2. A worker grievance mechanism will also need to be in place. ESS3 Resource Efficiency and Pollution Prevention and Management If pellet production will be promoted in the country, the government will need to review of future availability of raw materials and supply chains, as well as water and energy required. It is important that the IREP coordinates with MoNRE and MOIC in order to make sure that those future pellets production facilities and process meet national and international environmental and social standards. The IREP and MOIC will need to ensure that the raw materials gathering for the pellets productions are from sustainable resources. For the electronic waste derived from the used batteries and solar panels which are part of the cookstoves, the IREP will ensure that the Project Entity to prepare and implement a solid waste management plan, and provide an agreement with the beneficiaries for the after sell services to collect and dispose electronic waste induced by project’s cookstoves. The project entity will provide as part of wate management plan a mechanism for an after sell service or similar incentive scheme to recollect the used Apr 03, 2019 Page 6 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) batteries and solar panels which can be then sent back to the proper recyclers or hazardous waste disposal sites. Timeline and resources should be provided in the plan for effective management and monitoring during project period. ESS4 Community Health and Safety As mentioned above, the project may include pellets production locally. When this activity is involved, there will be potential risks to community health as a result of pollution of air and nearby waterbody and resource. However, the level of risk may vary depending on the production technology used. The borrower will need to develop as part of the project’s ESMP, a CHSMP in accordance with ESS4 and the plan should include mitigation measures of the possible risks. The CHSMP will further assess and include mitigation measures (including guidance on communication to cover needs of all groups in terms of language, literacy and cultural appropriateness) at household-level to address potential safety risks related with the use and storage of the cookstoves and the pellets, including risks of fires, explosions, burn safety, among others. The CHSMP will be prepared once the PE is in place and prior to the purchase and distribution of cookstoves. The nature of the project will result in positive health impacts for those households who will benefit from a clean stove and pellets designed for those stoves. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The procurement and distribution of 50,000 stoves together with pellets to be used with the stoves is not expected to require land, conversion of land nor restrict access to land or other resources. The stoves and pellets are expected to Public Disclosure be sourced from outside of Lao PDR. It is recommended that stoves and pellets are sustainably procured for this project, in line with GIIP which also protects against the taking of land, restrictions to land-use and ecosystems services and livelihoods dependent on those. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources During the project period, pellets will be imported from neighboring country, IREP will ensure that the imported pellets are from sustainable sources. If pellet production will be promoted in the country, the government will need to review of future availability of raw materials and supply chains, as well as water and energy required. It is important that the IREP coordinates with MoNRE and MOIC to make sure that those future pellets production facilities and process meet national and international environmental and social standards. The IREP and MOIC will need to ensure that the raw materials gathering for the pellets productions are from sustainable resources. All sourcing of biomass as raw material for pellets will be from agricultural and forestry byproducts only. The pellets will not be sourced from forests (except by-products or waste from the timber industry, such as saw mill) or natural habitats. The IREP will develop an evaluation system and verification practices to ensure the by-products come from facilities demonstrated that the original material derives from sustainable sources. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities The project area is culturally diverse: common ethnic groups in Savannakhet province are Lao, Phou Thay, Angkham Brou (Makong, Mangkong), Tri, Chali, Katang, Pacoh, Ta Oi, or Souay. Ethnic groups in Champasak are Lao, Khmer, Brao (Lavè), Katè, Nya Hoeñ, Jru (Loven), Souay. The ethnic groups from these two provinces fall in Lao-Tai or Mon- Apr 03, 2019 Page 7 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) Khmer ethno-linguistic group. Even if this project is not expected to result in adverse impacts on ethnic groups, there is a need to ensure that groups are not excluded from any benefits and there is equity in the benefits. In order to ensure opportunities to benefit from the project activities the SEP, the ESMP and the planned IE (component 4) will have to pay special attention to the needs of these groups including ensuring translations of key documents in the relevant languages. Special attention will be paid to ensure the active participation of the different resident ethnic groups and representatives in the project’s stakeholder engagement activities and to ensure that any information shared is sensitive to cultural needs. ESS8 Cultural Heritage The procurement and distribution of 50,000 stoves together with pellets to be used with the stoves is not expected to adversely impact on tangible or intangible cultural heritage. ESS9 Financial Intermediaries The procurement and distribution of 50,000 stoves together with pellets to be used with the stoves is not expected to make use of Financial Intermediary. B.3 Other Relevant Project Risks All the potential risks have been described against the standards. Public Disclosure C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No This policy is not relevant to the project as it will not impact on any water resources. OP 7.60 Projects in Disputed Areas No The project will not be located in an area under legal or international dispute nor competing territorial claims. III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners Carbon Initiative Financing Development and Energy Sector Management Assistance Program. The Bank Environmental and Social Framework is applied. B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: Stakeholder Analysis and Stakeholder Engagement Plan including Grievance Procedure; Environmental and Social Commitment Plan (ESCP). Apr 03, 2019 Page 8 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): An Environment Screening Process and procedure to address possible impact induced by the importing and distributing of 50,000 cookstoves and pellets; Stakeholder Analysis and Stakeholder Engagement Plan including Grievance Procedure (to be updated once the PE in onboard); Waste Management Plan (for hazardous and electronic waste from the used cookstoves); Impact Evaluation (IE) proposed by the project to include social aspects as presented under the standards; Sustainable Procurement; Labour Management Plan (LMP) and Procedures including Worker Grievance Mechanism; Community Health and Safety Management Plan (CHSMP). C. Timing Tentative target date for preparing the Appraisal Stage ESRS 09-Apr-2019 IV. CONTACT POINTS World Bank Contact: Alkadevi Morarji Patel Title: Senior Social Development Specialist Public Disclosure Telephone No: 5784+6242 / Email: apatel5@worldbank.org Contact: Khine Thwe Wynn Title: Environmental Specialist Telephone No: 5274+3134 / Email: kwynn@worldbank.org Contact: Viengkeo Phetnavongxay Title: Senior Environmental Specialist Telephone No: 5784+6229 Email: vphetnavongxay@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance Implementing Agency(ies) Implementing Agency: The Ministry of Energy and Mines (MEM) V. FOR MORE INFORMATION CONTACT Apr 03, 2019 Page 9 of 10 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Rutu Dave Safeguards Advisor ESSA Svend E. Jensby (SAESSA) Cleared on 28-Feb-2019 at 12:30:32 Practice Manager Julia M. Fraser (PMGR) Concurred on 02-Apr-2019 at 23:42:26 Public Disclosure Apr 03, 2019 Page 10 of 10