The World Bank Governance of Extractives for Local Development Project (P164271) Appraisal Environmental and Social Review Summary Appraisal Stage (ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 03/26/2020 | Report No: ESRSA00251 Mar 26, 2020 Page 1 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Niger AFRICA P164271 Project Name Governance of Extractives for Local Development Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Governance Investment Project 3/19/2020 5/18/2020 Financing Borrower(s) Implementing Agency(ies) Ministry of Finance Ministry of Planing Proposed Development Objective(s) The project development objective is to strengthen local governments’ capacity and extractive sector management for service delivery in the targeted extractive regions of Agadez, Diffa, Tillabery and Zinder Public Disclosure Financing (in USD Million) Amount Total Project Cost 100.00 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 support Government efforts in strengthen local governments’ (LG) capacity, and improving extractive sector’s public management in the targeted extractive regions. Supporting the deployment of public human and financial resources through deconcentration and decentralization reforms will improve Local Governments (LG) development efforts and access to service delivery outside Niamey. Investing in geo-data and extractive sector’s management will attract investors, mitigate the associated social and environmental risks, foster job creation and boost revenue mobilization. Formalizing Artisanal Scale Mining (ASM) and enhancing oversight capacity will foster the sector as a driver of resilience. Increased transparency and participation in local governance and extractives will contribute to strengthen accountability and state credibility. Mar 26, 2020 Page 2 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) The project will combine Disbursement-Linked Indicators (DLIs, comp. 1.2 and 2.2) and technical assistance to support government reforms on state deployment (Comp. 1.1) and extractive sector development - from legal framework and geo-data to ASM pilot (comp. 2.1). Support at the institutional level on the legal framework and policy formulation will be combined with large-scale capacity-building in the targeted regions (Agadez, Diffa, Tillabery, Zinder). In addition, the government will have a GovTech element by supporting the setting up of (i) information management system to monitor LG performance; (ii) integrated information management system to monitor conflict risk; (iii) integrated information management system for extractive sector. The project will contribute to mitigating risks, by: (i) strengthening a positive presence of the State over the territory through deconcentration and decentralization, improving service delivery in rural areas, enhancing the capacity of the State to monitor and address conflict at the local level and fostering citizen participation; (ii) mitigating environmental and social risks related to extractive industries; (iii) increasing livelihoods of artisanal miners, especially women. D. Environmental and Social Overview D.1. Project location(s) and salient characteristics relevant to the ES assessment [geographic, environmental, social] The exact locations where project activities will take place are not known yet. However, most of the activities of the project consist of policy reforms and capacity building which are not location-specific. The project proposes airborne geological survey covering the areas of Djado, Anou-Arerem, Akokan and Ibl in the region of Agadez; Keita in the Tahoua region, Airlit and Liptako in the Tillaberi region. In addition, there will be a support for artisanal and small- scale mining through targeted geological ground works in designated ASM corridors in the gold, salt, gypsum and gemstone producing areas. The goal is to direct support to artisanal mining in a controlled area to address mercury Public Disclosure pollution and promote sustainable Small-Scale Artisanal Mining (ASM) practice in Niger. D. 2. Borrower’s Institutional Capacity The Borrower has limited capacity to manage social and environmental risks and impacts and therefore one specialist, who covers both environmental and social aspects, will be recruited as part of the PIU. To ensure that environmental aspects are well integrated into the implementation, the project also will recruit technical consultant(s) with expertise in sustainable mining, to assist with the detailed design and implementation of the activities related to artisanal mining and baseline geological studies (Component 2). II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial Environmental Risk Rating Substantial This project was rated substantial not because of the project’s activities, which are largely technical assistance, with very few, if any, civil works, but due to the following: (a) contextual risk in the extractive sector, a sector in Niger that has a high potential for social and environmental grievances and b) longer-term environmental risks that could result from a project that is seeking to increase the number of artisanal mining licenses in a sector that is currently not well controlled by Government. The long term environmental risk is that the project aims to support the Government to increase the number of artisanal mining licenses by up to 25000, without necessarily requiring environmental training for these recipients. Current law also does not require any type of environmental/sustainability training to receive an Mar 26, 2020 Page 3 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) artisanal mining licenses. The risk therefore, is that the project finances the conversion of informal artisanal miners to legal/formal miners, without improving their impact on the environment. It is for this reason in particular, that the project has a substantial rating. Social Risk Rating Substantial On the social side, the risk is also Substantial because the Mining sector in general and the SMA sub-sector in Niger is a fertile ground for health hazards, gender-based violence, and abuse and exploitation of women, children and migrant workers. The project will not generate social adverse impacts such as land acquisition or involuntary resettlement. The project activities will require inclusive stakeholder mobilization and a robust information sharing system. Alternatively, the proposed project will generate positive impacts, such as : (i) increasing extractives revenue mobilization and hence mitigating the impact on service delivery of a potential fiscal crunch related to security challenges; (ii) supporting rural development and service delivery and hence easing potential frictions and contributing to stability; and (iii) helping improve local livelihoods and jobs in mining communities, creating alternative income streams, including for destitute youth who may otherwise feel compelled to radicalize for economic gains. 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 Public Disclosure Overview of the relevance of the Standard for the Project: ESS1 is relevant for component 2, which focuses on increasing the revenues of the extractive sector to local development through increasing training and licensing miners in the extractive sector, and through geological studies that will help to identify potential mining sites. Many of the impacts are long-term, and may not necessary be felt during the project period, and for that reason, should be anticipated now, and mitigation measured applied, as early as possible. For example, a potential environmental risk is associated with the project's aim to increase the number of licenses in a sector that is currently not well controlled by Government. The licensing of artisanal miners could potentially increase environmental risk if licensing were based on payment for the license, as in the current design, although a small proportion artisanal miners would also receive training in better mining practices. The SESA for the project does not fully mitigate the risk of artisanal miners receiving formal licenses without formal training in better mine practices because this action will be an action by Government and beyond the project's control. Nevertheless, the project will initiate dialogue with Government to impress upon them the recommendation that licenses be given to artisanal miners who have received some type of training in better mining practices. Other long term risks are related to the soil/geology studies financed by the project. These studies are often the first step in further extractive investigations, and as such, in a weak capacity climate, should be accompanied by an environmental analysis of these potential sites. Short-term, more direct impacts are minimal for this TA project. However, under Component 2, the project will pilot of model mining sites for a subset of artisanal miners. The pilot sites, even though they are modeling sustainable practices, may require some installation of equipment, use of gold extracting chemicals, along with other minor Mar 26, 2020 Page 4 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) installations. A screening will be done for each pilot to assess its impact, and where necessary, an ESMP will be completed. The social issues, particularly related to legacy grievance issues around compensation, will need to be identified as social risks in the project, with accompanying mitigation measures. In addition, there are a number of legacy environmental governance issues related to the mining sector that could result in grievances expressed by local communities in the mining zones, as well as local government representatives. These grievances may be related to radioactive pollution, water resource depletion and pollution, work-related diseases for mine workers, the appropriation of land and water resources, including legally enshrined common land property regimes and so on. To fully assess the risks and impacts associated with this project, a comprehensive SESA completed in 2018 has been further updated (December, 2019) to ensure relevance to the current project. The SESA outlines the social and environmental risks and impacts associated with this project as well as outlines mitigation measures, and opportunities within the sector. The SESA will be consulted and disclosed prior to appraisal. A Stakeholder Engagement Plan (SEP) with Grievance Mechanism has also been prepared (draft) and consulted and will be approved and disclosed prior to appraisal. In addition, during the first three months of implementation, the project will also prepare a communication plan that ensures that communities and the public remain clear about the intention of the project and are aware of opportunities to engage. Public Disclosure ESS10 Stakeholder Engagement and Information Disclosure Stakeholder engagement is a critical tool for social and environmental risk management, project sustainability and success. With assistance from the Bank, the Government of Niger (GoN) has a draft SEP and will implement an inclusive Stakeholder Engagement Plan (SEP) proportional to the nature and scale of the project and associated risks and impacts. The draft of the SEP including a GRM has been prepared and will be publicly disclosed as early as possible and prior to project Appraisal. The client will seek stakeholder feedback and opportunities for proposed future engagement, ensuring that all consultations are inclusive and accessible (both in format and location) and through channels that are suitable in the local context. If major changes are made to the SEP, a revised SEP should be publicly redisclosed. The borrower will engage in meaningful consultations with all stakeholders throughout the project life cycle paying particular attention to the inclusion of vulnerable and disadvantaged groups, including women, village chiefs, businessmen, youth, local political leaders, security agencies, NGOs, CBOs, and media. Key concerns include health and safety, governance and gender, and gender based violence. The GoN will provide stakeholders with timely, relevant, understandable and accessible information, and consult with them in a culturally appropriate manner, which is free of manipulation, interference, coercion, discrimination and intimidation. Mar 26, 2020 Page 5 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) During the finalization of the SESA update, the GoN will maintain and disclose a documented record of stakeholder engagement, including a description of the stakeholders consulted, a summary of the feedback received and a brief explanation of how the feedback was taken into account, or the reasons why it was not. 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 relevance of this standard will be clearly defined during project implementation and mainly when the project institutional arrangement will be fully defined with the composition of the PIU. The PIU includes a number of direct workers: a coordinator, procurement specialist, a financial management specialist, an environmentalist/social safeguards specialist and two assistants will be hired. Operating costs for civil servants in targeted ministries (Mines and Decentralization) will be covered by project funds in relation with DLIs. Recruitment of workers or staff under the project will be done in accordance with national law and procedures the requirements of ESS 2. The employment of project workers will be based on: the principle of equal opportunity and fair treatment, non-discrimination with respect to any aspects of the employment relationship, such as recruitment and hiring; fair compensation (including wages and benefits); proper working conditions and terms of employment; access to training; fair opportunities for job assignment and promotion; and proper procedures for the termination of employment, retirement, or disciplinary practices. The labor management procedures (LMP) will be prepared if necessary to set out measures to prevent and address harassment, intimidation and/or exploitation, as well as ensuring that there is no child or forced labor, and that OHS measures are in place. The GRM of the project will encompass issues related to hiring strategies, Public Disclosure non-discrimination and equal opportunity access project-related opportunities (jobs and procurement) at the PIU level. The revised SESA will cover more broadly the mining sector labor and working conditions. It will include relevant measures to address inconsistencies or deficiencies. ESS3 Resource Efficiency and Pollution Prevention and Management The project will not engage in any civil works and will not generate any pollutants with impacts on air, water, and land, except, minimally, when it demonstrates, as pilots, the sustainable methods of mining, which could involve the use of specific chemicals used to extract gold ore. However, this will be done as a demonstration, and all potential pollutants will be properly contained. Each pilot will also be screened, and an ESMP developed as necessary. The project's aim is to improve the sustainability of the mining sector by building capacity in technical areas that include environmental management. In this regard, the project will provide support for EHSGs awareness training and pollution prevention sessions for mining companies, a subset of artisanal miners and local government authorities, as part of its activities. In addition, some of the project's key outputs such as studies on uranium mine closings, will focus specifically on pollution containment and management. ESS4 Community Health and Safety The only activity that may impact communities is the piloting activities that seek to highlight best practices in artisanal mining. It is likely that the sites used will be already active sites or sites deliberately prepared for teaching Mar 26, 2020 Page 6 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) purposes. It would be important to ensure community safety during these pilot activities. The SESA outlines general mitigation measures to ensure that the community, and workers are protected while project activities are ongoing. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The project implementation will not involve land acquisition and involuntary resettlement. Nevertheless land acquisition, restrictions on land use and involuntary resettlement will be key issues in the mining sector that will be addressed during the revised mining sector SESA. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources The project focuses on technical assistance and therefore does not finance any activities in natural, critical or modified habitats. However, this project may, in the long-term, due to the geological surveys and studies, result in more mining licenses which may impact biodiversity in the long term. As such, environmental considerations, including biodiversity considerations, will be a key component of the set of studies financed under the project, particularly the geological studies. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities There are no IP/SSAHUTLCs implicated in the project. Public Disclosure ESS8 Cultural Heritage This standard is not relevant because there are no physical works envisioned and therefore no soil excavation. Furthermore, the project is not located near a cultural heritage site, nor is it designed to support the conservation, management and use of cultural heritage resources. ESS9 Financial Intermediaries This project will not use FIs. B.3 Other Relevant Project Risks Poor governance in the mining and extractive sector and transparency and disclosure issues in mining revenues remain key issues that could have a negative impact in the decision-making process during the project implementation primarily because a) Government would need to commit to long term legal and policy reforms that lead to sustainable mining given that currently, the project will support the licensing of 25000 without being able to train all of them in sustainable mining, a task which the Government could be asked to continue; b) the insecurity situation in Niger could also affect project implementation due to the delays in data collection or lack of motivation of international firms to undertake studies in the country, particularly in mining areas. Mar 26, 2020 Page 7 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No III. BORROWER’S ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) DELIVERABLES against MEASURES AND ACTIONs IDENTIFIED TIMELINE ESS 1 Assessment and Management of Environmental and Social Risks and Impacts Draft SESA prepared, consulted and disclosed before project appraisal 12/2019 Recruitment of an environment/social specialist 04/2020 Environmental and Social Reports- quarterly 08/2020 ESS 10 Stakeholder Engagement and Information Disclosure Stakeholder Engagement Plan prepared and disclosed before project appraisal 12/2019 Public Disclosure Communication Plan due in the first 3 months of project implementation to outline how the project 08/2020 will seek to engage miners, and other stakeholders, at all phases in the process. ESS 2 Labor and Working Conditions Labor Management Procedure (LMP) 01/2020 ESS 3 Resource Efficiency and Pollution Prevention and Management Pilot projects are screened for environmental risks and impacts and the relevant environmental 08/2020 documents prepared, as needed. ESS 4 Community Health and Safety The Government outlines a licensing process for artisanal miners which outlines some commitment to 12/2022 environmental and other mining sustainability training or requirements ESS 5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement No specific measures are needed ESS 6 Biodiversity Conservation and Sustainable Management of Living Natural Resources Mar 26, 2020 Page 8 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) The Government assesses whether the firm producing the geological aerial survey maps could also provide aerial surveys of accompanying tree cover at a relevant scale to obtain baseline 06/2022 environmental data for the surveyed areas. ESS 7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities ESS 8 Cultural Heritage ESS 9 Financial Intermediaries B.3. Reliance on Borrower’s policy, legal and institutional framework, relevant to the Project risks and impacts Is this project being prepared for use of Borrower Framework? No Areas where “Use of Borrower Framework” is being considered: The operation will not use the Borrower’s E&S Framework. IV. CONTACT POINTS World Bank Public Disclosure Contact: Kirsten Lori Hund Title: Sr Mining Spec. Telephone No: +1-202-458-0 Email: khund@worldbank.org Contact: Abel Paul Basile Bove Title: Senior Governance Specialist Telephone No: +1-202-473-3 Email: above@worldbank.org Contact: Ragnvald Michel Maellberg Title: Senior Public Sector Specialist Telephone No: +1-202-458-1 Email: mmallberg@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance Implementing Agency(ies) Implementing Agency: Ministry of Planing V. FOR MORE INFORMATION CONTACT Mar 26, 2020 Page 9 of 10 The World Bank Governance of Extractives for Local Development Project (P164271) 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): Kirsten Lori Hund, Abel Paul Basile Bove, Ragnvald Michel Maellberg Practice Manager (ENR/Social) Maria Sarraf Cleared on 10-Jan-2020 at 19:38:53 EST Safeguards Advisor ESSA Maria Sarraf (SAESSA) Concurred on 26-Mar-2020 at 13:49:47 EDT Public Disclosure Mar 26, 2020 Page 10 of 10