SFG3676 REV World Bank Financed --- Hezhou Urban Water Infrastructure and Environment Improvement Project Linked Projects Due Diligence Report TABLE OF CONTENTS Entrusted by: Hezhou Development and Reform Commission Compiled by: Guangxi Guoye Project Management Consultation Co. Ltd. November 2017 2 Due Diligence Report on Linked Projects Contents 1 Introduction .................................................................................................................................... 5 1.1 Background ......................................................................................................................... 5 1.2 Identification of Linked Projects ......................................................................................... 6 1.3 Introduction of Linked Projects .......................................................................................... 2 2 Resettlement Due Diligence Investigation ................................................................................... 11 2.1 Objectives of Due Diligence Investigation ....................................................................... 11 2.2 Methods for Due Diligence Investigation ......................................................................... 11 3 Land Acquisition and Resettlement Activities of Pinggui New City Dike Construction of Hejiang River Rehabilitation Project ............................................................................................................ 16 3.1. Introduction ...................................................................................................................... 16 3.2 Impacts of Land Acquisition and Resettlement ................................................................. 16 3.3 Resettlement Institutional Arrangement ............................................................................ 20 3.4 Resettlement Policies ........................................................................................................ 22 4 Land acquisition and Resettlement of Jiangnan Dike Construction of Hejiang River Rehabilitation Project ............................................................................................................................................. 28 4.1. Introduction ...................................................................................................................... 28 4.2 Impacts of Land Acquisition and House Demolition ........................................................ 28 4.3 Resettlement Institutional Arrangement ............................................................................ 29 4.4 Resettlement Policies ........................................................................................................ 31 4.5 Resettlement of APs .......................................................................................................... 35 5 Public Participation, Grievance Redressing ................................................................................. 40 5.1 Public participation. .......................................................................................................... 40 5.2 Grievances and Appeals of APs ........................................................................................ 41 6 Conclusion ................................................................................................................................... 42 Appendix 1: Sketch Map of the Project .......................................................................................... 44 Appendix 2: Approval of Land Acquisition .................................................................................... 45 Due Diligence Report on Linked Projects Appendix 3：Agreement for Land Acquisition .............................................................................. 48 Appendix 4: Details of Compensation Payment Distribution ......................................................... 57 Appendix 5: Disclosure of the scheme of land acquisition compensation and scheme .................. 58 2 Due Diligence Report on Linked Projects List of Tables Table 1-1 Summary of Identified Linked Projects of the Project ...................................... 7 Table 3-1 Costs for Acquisition of Collective Land of Pinggui New City Dike Project . 17 Table 3-2 Compensation Standards for Demolition of Rural Residential Houses (excluding house site) ..................................................................................................... 23 Table 3-3 Compensation Standards for Land Acquisition ............................................... 25 Table 3-4 Compensation Standards for Ground Crops................................................. 25 Table 4-1 Progress of Land Acquisition and House Demolition of Jiannan Dike Project (September 2017) ............................................................................................................ 28 Table 4-2 Compensation Standards for Demolition of Rural Residential Houses (excluding house site) ..................................................................................................... 32 Table 4-3 Compensation Standards for Land Acquisition ............................................... 33 Table 4-4 Compensation Standards for Ground Crops.................................................... 34 Table 4-5 Costs for Acquisition of Collective Land by Jiangnan Dike Construction Project ......................................................................................................................................... 35 List of Figures Figure1-1 Project Sketch Map .......................................................................................... 6 Figure1-2 Project General Layout and Distribution of Linked Projects ........................... 1 Figure 1-3 Real Estate Certificate of Hezhou Wastewater Treatment Plant ...................... 6 Figure 1- 4 Built Hezhou Wastewater Treatment Plant ..................................................... 7 Figure 1-5 Real Estate Certificate of Hezhou Solid Wastes Landfill ................................ 8 Figure 1-6 Hezhou Sludge Harmless Treatment Project ................................................. 10 Figure 2-1 Public Consultation Meeting with Stakeholders and Representatives of Aps12 Figure 2-2 List of Meeting Participants of District, Street Office and Township ........ 13 Figure 2-3 Consultation Meeting with People of District, Street Office and Township . 14 3 Due Diligence Report on Linked Projects Figure 2-4 Interview with People Affected by Pinggui New City Dike Construction Project ............................................................................................................................. 14 Figure 2-5 Interview with People Affected by Jiangnan Dike Construction Project ... 15 Figure 3-1 Built Pinggui New City Dike ..................................................................... 16 Figure 3-2 Pingggui Liangsuo Relocating Residential Area ........................................ 19 Figure 3-3 Pingggui Liangsuo Relocating Residential Area ........................................ 20 Figure 3-4 Disclosure of Land Measurement Results in Shangsong Village of Xiwan Street Office .................................................................................................................... 22 Figure 4-1 Project Institutional Structure ........................................................................ 30 Figure 4-2 Shantytown Renovation Project in Babu Jiangnan Area ............................... 37 Figure 5-1 Public Consultation Activities of LAR Staff at Site ...................................... 41 4 Due Diligence Report on Linked Projects 1 Introduction 1.1 Background Hezhou City has the jurisdiction of Babu District, Zhongshan County, Zhaoping County and Fuchuan Yao Autonomous County. The total area of the city is 11855km², approximately accounting for 5.01% of the total area of Guangxi Zhuang Autonomous Region, including 4062km² of mountainous area, 1420km² of plain area and 6373km² of hilly area. In recent years, with the social and economic development, the infrastructure construction of the City is increasingly upgraded. However, the infrastructure facilities for flood control are still very weak. Most of the river-side sections have not been built with dikes or protection facilities, and the flood control capacities of the existing embankments are relatively low, indicating a heavy task for flood control. Hezhou City is the last prefecture-level city in Guangxi that has not formed a flood control system. The major drainage system of Hezhou City was built in the 1990’s. Due to the use of combined system, the sewage and wastewater from the urban area are directly discharged into the tributaries, leading the serious pollution, inferior capacity of water self-purification and ultimately the deterioration of water quality. At the same time, due to the great variation of the time and space of water resources, the population density is not corresponding to the distribution of water resources, which leads to the frangibility and instability of the water resources. In addition, the deterioration of the aquatic-ecological system and the decreasing of water environmental bearing capacity result in the increasingly outstanding ecological risks for the social and economic development. Therefore, Hezhou Municipal Government (HMG) applied to the World Bank for a loan to implement Hezhou Urban Water Infrastructure and Environment Improvement Project (the Project). The total investment of the Project is USD 300 million. It is expected that, through implementation of the Project, the high-standard and modern urban infrastructures and public services will be built, aiming to upgrade flood control ability, protect people's life and property, enhance urban wastewater treatment capacity, protect water quality, strengthen institutional capacity and enhance the integrated management capacity for urban water resources. Details refer to Project Sketch Map in Figure 1-1. 5 Due Diligence Report on Linked Projects Figure1-1 Project Sketch Map 1.2 Identification of Linked Projects Based on the identifications, the linked projects of the Project include: (i) Hejiang River Rehabilitation Project (including construction of Pinggui New City Dike, Jiangbei dike, Jiangnan Dike); (ii) Hezhou Jintai Lake Water Ecological Integrated Rehabilitation Project; (iii) Hezhou Wastewater Treatment Plant; (iv) Hezhou Solid Wastes Landfill; (v) Hezhou Yongfeng Lake Water Ecological Rehabilitation Project; and (vi) Hezhou Sludge Harmless Treatment Project. These projects have linkages to components under the Project in terms of functions or benefits, therefore, are identified as the linked projects for the Project. Details are shown in Table 1-1 and Figure 1-2. 6 Due Diligence Report on Linked Projects Table 1-1 Summary of Identified Linked Projects of the Project Project Components Linked Projects & Linkage Features Contract A-1: Hejiang River Hejiang River Flood Control Project (Dike construction in Pinggui New City: the Rehabilitation (Huangshi linked project remains unchanged, while the Project will construct dike to connect Hydropower Station – Guangming where without.) Bridge) Contract A-2: Hejiang River Hejiang River Flood Control Project (Jiangbei dike: the dike on the northern bank Rehabilitation (Guangming Bridge between Guangming Bridge and Lingfeng Bridge had been built, the Project will Expanding the main – Lingfeng Bridge) heighten this dike, southward expand the river course and construct new dike). river course for Hejiang River Flood Control Project (Jiangbei dike: to heighten the dike which had flood discharge Contract A-3: Hejiang River been built). Rehabilitation (Lingfeng Bridge – Xiadao Hydropower Station) Jiangnan Dike: This dike is under construction, the Project will build dikes respectively on the upper and lower streams to connect it. Contract A-4: East Trunk Channel Hezhou Solid Wastes Landfill: The landfill will receive the de-watered earth-cakes Integrated Rehabilitation and from the dredging component of the Project. Maweihe River Connection Hejiang River Flood Control Project: It belongs to the same river section. The Contract A-8: Hejiang River dredging works under the Project will be conducted in the river course without Dredging Dredging (Huangshi Hydropower changing the current situation of the dikes. component Station - Guangming Bridge) Hezhou Solid Wastes Landfill: The landfill will receive the de-watered earth-cakes from the dredging component of the Project. Rivers and lakes Contract B-3: Lininghe River Hezhou Jintai Lake Water Ecological Integrated Rehabilitation Project: Lininghe connection Rehabilitation River and Changlonghe River are located in the upstream of Jintai Lake. Jintai lake Due Diligence Report on Linked Projects Contract B-4: Changlonghe River serves as the connecting hub for rivers and lakes and has the function of flood storage Rehabilitation. regulation. Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project: Huangtian Branch Channel is in the upstream of Yongfeng Lake. Yongfeng Lake serves as the connecting hub for rivers and lakes and has the function of flood storage regulation. Contract B-5: Huangtian Channel Hezhou Wastewater Treatment Plant: The wastewater collected by the sewage Rehabilitation pipelines will be diverted to Jiangnan WWTP for treatment. Hezhou Solid Wastes Landfill: The landfill will receive the de-watered earth-cakes from the dredging component of the Project. Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project: Guposhan Channel is in the upstream of Yongfeng Lake. Yongfeng Lake serves as the connecting hub for rivers and lakes and has the function of flood storage regulation. Contract B-6: Guposhan Channel Hezhou Wastewater Treatment Plant: The wastewater collected by the sewage Rehabilitation pipelines will be diverted to Jiangnan WWTP for treatment. Hezhou Solid Wastes Landfill: The landfill will receive the de-watered earth-cakes from the dredging component of the Project. Huangansi Channel Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project: Contract C-1: Huangansi Channel Integrated Huangansi river is located in the downstream of Yongfeng lake. Yongfeng lake serves Integrated Upgrading Upgrading as the connecting hub for rivers and lakes and has the function of flood storage regulation. Shizigang Channel Contract C-2: Shizigang Channel Hezhou Wastewater Treatment Plant: The wastewater collected by the sewage Integrated Integrated Upgrading pipelines will be diverted to Jiangnan WWTP for treatment. Upgrading Hezhou Solid Wastes Landfill: The landfill will receive the de-watered earth-cakes 8 Due Diligence Report on Linked Projects from the dredging component of the Project. Contract C-3:Jiangnan Wastewater Complete drainage Hezhou Sludge Harmless Treatment Project: It accepts the sludge from Jiangnan Treatment Plant, associated system WWTP. pipeline network and roads 9 Due Diligence Report on Linked Projects Figure1-2 Project General Layout and Distribution of Linked Projects According to the World Bank policies for involuntary resettlement, the PMO is required to submit a due diligence report on the resettlement activities of the identified completed and on-going linked projects in the past 2-3 years (2013 - 2016), ensuring that the resettlement activities of these linked projects were in line with the relevant laws and regulations of the People's Republic of China, Guangxi Zhuang Autonomous Region and Hezhou City, as well as in consistence with the World Bank's safeguard policies. As indicated by the identification, the linked projects for the Project were categorized into three types. (1) The land acquisition and house demolition of Pinggui New City Dike Construction, a sub-component of Hezhou Urban Flood Control Component under Hejiang River Rehabilitation Project of Guangxi's main tributaries, were completed in September 2017. The resettlement activities for Jiangnan Dike Construction sub- component were expected to be completed in November 2017. According to the World Bank policies for involuntary resettlement, due diligence reports for these linked projects were required to be submitted. (2) The land acquisition and demolition activities of Jiangbei Dike Construction, a sub-component of Hezhou Urban Flood Control Component under Hejiang River Rehabilitation Project of Guangxi’s main tributaries were completed in 2011 along with Due Diligence Report on Linked Projects those of Hezhou Taibai Lake Rehabilitation Project. Hezhou Wastewater Treatment Plan was built within the existing compound of the plant, and the land acquisition and resettlement activities were completed in August 2008. Hezhou Sludge Harmless Treatment Project was conducted on the existing solid wastes landfill, and the land acquisition and demolition activities were completed in August 2006. Due diligence reports were not required. (3) The FSRs respectively of Hezhou Jintai Lake Water Ecological Integrated Rehabilitation Project and Hezhou Yongfeng Lake Water Ecological Rehabilitation Project were approved recently, and the land acquisition and house demolition activities have not yet been started, for which, a resettlement policy framework is prepared according to the World Bank policies on involuntary resettlement. As shown in the Appendix to the RAP. 1.3 Introduction of Linked Projects 1.3.1 Hejiang River Rehabilitation Project of Guangxi’s Main Tributaries The components of A-1, A-2 and A-3 under Hejiang River Rehabilitation Project for river expansion are linked to Hezhou Flood Control Project in Urban Area. 1. Construction scope of Hejiang River Rehabilitation Project and resettlement impacts (1) Pinggui New City Dike. It is located on the right bank of Hejiang River in the section of Pinggui District. The dike starts at the ending point of Fujiang section of Pinggui New City Dike (PG1+080), along Shazhoutou and Xiwanzhai, ends at Shiniudu at the curve downstream of Xiwanzhai, totally 1.07 km. The dike was designed as per dike-road pattern, i.e. planned urban road + dike width 6m + bank protection. The dike was completed in July 2017. According to the information provided by the land administration bureau of Pinggui District of Hezhou City, Pinggui New City Dike Project acquired a total area of 244.094 mu of rural collective land, affecting 313 households with 1256 persons. The project demolished 5162.81 m2 of rural houses, affecting 68 households with 273 persons, 260 m2 of ruual residental house , affecting 3 households with 11 persons.,4902.81 m2 of rural attached houses and temporary shelters, affecting 65 households with 262 persons. The area of demolished urban temporary house is 75 m2. In addition, some infrastructural facilities such as electric wire, wire poles, garbage tanks and wells etc. were also removed by the project. There were no vulnerable groups identified in the project. As of September 2017, all activities of land acquisition and house demolition had been completed, and full amount of compensations had been disbursed to the special account of the village collective. There are still 4% of the villagers who have not withdrawn the compensation money. It is expected that, by end of January 2018, all compensation money will be paid to individual household. The resettlement impacts 2 Due Diligence Report on Linked Projects and resettlement compensation are detailed in Chapter 3. (2) Jiangbei Flood Control Dike: Jiangbei Dike, on the northern bank of Hejiang River, starts from Hejiang Bridge to Wayaotou, being divided into Jiangbei West Dike, Jiangbei Mid Dike and Jiangbei East Dike. The total length is 6.127km, belonging to mixed structures of earth dike / earth-stone dike / mortar stone dike / concrete dike. The design water level was 108.78 - 104.60 m, with 29 docks. Jangbei Dike was completed in October 2016. According to the investigation, it was found that the land acquisition and house demolition of Jiangbei dike construction project was completed in 2011 along with Hezhou Taibai Lake Rehabilitation Project. Because the land acquisition was made long time ago, plus the mobility of the working staff, the concerned documents were lost, and thus unable to quantity the resettlement activities and affected persons. However, the investigating group came to know, through interviews, that the project acquired around 160 mu of rural collective land, affecting around 310 households with 1500 persons, demolished around 2300 m2 of rural houses, affecting 11 households with 55 persons. The total resettlement compensation amount was around RMB 4.1 million, which had been fully paid to the affected households. (3) Jiangnan Flood-control Dike: Jiangnan Dike, on the southern bank of Hejiang River, consists of Hejiang River dike, Banguhe River dikes of both banks and left bank of Huashanhe river. Jiangnan Dike (Hejiang river section) starts from Hejiang Bridge, along Xihuan Road, via Pangu river mouth and ends in Huashan river mouth. The total length is 4.524 km, and the designed water levels are 108.78 - 104.25m, with 20 docks. Jiangnan Dike is under construction and scheduled to be completed in November 2017. According to the materials provided by Jiangnan Land Administration Bureau of Laibin City, this project acquired 219 mu of rural collective land on permanent basis, affecting 433 households with 1948 persons. The total house demolition area was 6140 m2，affecting 44 households with 198 persons, as shown in Table 4-1. In addition, 4520 m of electric poles facilities were removed. By end of October 2017, all activities of land acquisition, house demolition and resettlement had been completed, and the rate of withdrawing compensation money was 90%. All the compensation will be paid to the rural households by end of December. The resettlement impacts and resettlement compensation are detailed in Chapter 4. 1.3.2 Hezhou Jintai Lake Water Ecological Integrated Rehabilitation Project The river and lake under Hezhou Jintai Lake Water Ecological Integrated Rehabilitation Project will connect Jintai Lake under B-3 and B-4 subcomponents of the Project. Construction scope and resettlement impacts. Jintai Lake is located to the south of Zhanqian Avenue, to the east of Aimin Road, to the north of Wanxing Road and to the west of Xiangda Road. The construction contents 3 Due Diligence Report on Linked Projects were: construction of Jintai Lake; 2.379km of Jintai lake bank protection; 1.845 km of Yucaihe river rehabilitation (the downstream of Jintai lake is connected to the existing Guangming Flood Channel through Yucaihe River); construction of 3.69 km of bank protection for Yucaihe River; construction of hydraulic dam on Yucaihe River, with artificial island and urban landscaping facilities. The project is now under preparation, and activities of land acquisition and house demolition have not yet been started and are expected to start in March 2018. According to the materials provided by the implementing agency of the project, the project needs to acquire 615.62 mu of rural collective land, including 539.88 mu cultivated land, 75.738 mu of construction land, affecting 2010 households with 9871. The project also needs to demolish 10100 m2 of rural houses, affecting 51 households with 250 persons. By end of December 2017, totally 115 mu of land had been acquired, affecting 441 households with 2250 persons. By now, all the land compensation money has been paid to the farmers. The demolition activities have not yet been started, and the resettlement is scheduled to be completed by December 2018. 1.3.3 Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project The river and lake under Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project will connect to Yongfeng Lake under B-5, B-6 and C-1 subcomponents of the Project. Construction scope and resettlement impacts Hezhou Yongfeng Lake Water Ecological Integrated Rehabilitation Project is located to the south of Heping road, to the east of Aimin road, to west along Xinhua road to Yucai road along Zhushan road to Guposhan Avenue. The construction contents were: construction of Yongfeng lake; 6.60km of ecological bank of Yongfeng lake; 1.30 km of river rehabilitation of Aimin river (the upstream of Yongfeng Lake is connected with Jintai Lake through Yucai river and Aimin river); construction of 2.60 km of ecological bank for Aimin river; construction of hydraulic dams respectively on Aimin river, Huangansi channel and Shizigang channel; construction of 30m of bridge on Guangming avenue; construction of artificial island and landscaping facilities. The project is now under preparation, and activities of land acquisition and house demolition have not yet been started and are expected to start in March 2018. According to investigation, the land acquisition activities of Hezhou WWTP was started early in July 2008, and the land acquisition and resettlement were completed in August 2010. This project acquired 82.87 mu of rural collective land, including 58 mu belonging to No.19 and No.20 groups of Lingfeng village of Babu substreet, affecting 15 households with 76 persons. No house demolition was involved. All the compensation money had been paid to the special accounts of the affected households 4 Due Diligence Report on Linked Projects by end of December 2010. 1.3.4 Hezhou Wastewater Treatment Plant The wastewaters intercepted and collected by the subcomponents of the Project are conveyed to Hezhou Wastewater Treatment Plant, respectively B-5 Huangtian Channel Rehabilitation, B-6 Guposhan Flood Discharge Channel Rehabilitation, C-1 Huangansi Channel Integrated Upgrading and C-2 Shizigang Channel Integrated Upgrading. 1. Construction scope Hezhou Wastewater Treatment Plant is located on the northern bank of Wayaotou section of Hejiang River at Lingfeng Village of Babu town of Hezhou City. The land use area of the plant is 55274.29m2. It was constructed in two phases. The first phase occupied land area of 46236.69m2, with the capacity of 30000 t/d., service area of about 15 -17 k m2 of the planned central area to the northern bank of Hejiang River, and service population of 175000 people. The first phase mainly treats the domestic wastewater from urban area. The second phase was constructed to the west of the first phase, with the capacity of 30000 t/d. The service area extended to the treatment of wastewater from Babu central group, Taibai Lake area and Rufengzhai Industrial Park etc. 2. Project construction, land use and resettlement impacts The FSR of the first phase of Hezhou WWTP was approved on May 11, 2005 (Ref. GFGTZ 〔2005〕 158), the EIA was approved on December 10, 2007 (Ref. GHGZ 〔2007〕 515). The construction was started September 2008 and completed in September 2009. The plant was commissioned in December 2010. The real estate certificate was approved in 2016, as shown in Figure 1-3. The second phase was constructed on the existing plant and without any additional land acquisition. The construction was started in August 2016 and commissioned in August 2017, as shown in Figure 1-4. According to investigation, the land acquisition activities of Hezhou WWTP was started early in July 2008, and the land acquisition and resettlement were completed in August 2010. This project acquired 82.87 mu of rural collective land, including 58 mu belonging to No.19 and No.20 groups of Lingfeng village of Babu substreet, affecting 15 households with 76 persons. No house demolition was involved. All the compensation money had been paid to the special accounts of the affected households by end of December 2010. 5 Due Diligence Report on Linked Projects Figure 1-3 Real Estate Certificate of Hezhou Wastewater Treatment Plant 6 Due Diligence Report on Linked Projects Figure 1- 4 Built Hezhou Wastewater Treatment Plant 1.3.5 Construction and resettlement impacts of Hezhou Solid Wastes Landfill Hezhou Solid Wastes Landfill is located at Dafachong, west of Jiuniuzhai of Xinyan Village, Liantang town of Hezhou City. The service area mainly covered the urban central area of Hezhou City (including Liantang town, Hejie town) and partial area of Pinggui District. The total area of the landfill is 129114m2. The Landfill occupies 332.18 mu of land. According to the survey, land acquisition was completed in May 2007. The acquired land belonged to barren land, no house demolition was involved. However, because the land acquisition was made long time ago, the concerned documents were lost, and thus the resettlement activities were unknown.. The real estate certificate was issued in 2017, as shown in Figure 1-5. The No.1 section of the Landfill was completed and commissioned in 2008. 7 Due Diligence Report on Linked Projects Figure 1-5 Real Estate Certificate of Hezhou Solid Wastes Landfill 8 Due Diligence Report on Linked Projects 1.3.6 Hezhou Sludge Harmless Treatment Project The sludge produced by Jiangnan Wastewater Treatment Plant will be treated in harmless way by Hezhou Sludge Harmless Treatment Project, for which, the due diligence investigation is shown in the following. 1. Construction contents and scope of Hezhou Sludge Harmless Treatment Project Hezhou Sludge Harmless Treatment Project is located in Jiuniuzhai of Xinyan Village of Liantang town of Hezhou City. The treatment capacity is 100 t/d (as per 80% water content). The land area is 5917.87m2. The total construction area is 1356.97 m2. The total investment was RMB 23.7309. The service area included the de-watered sludge produced by the WWTPs at all levels of Hezhou City, excluding the sludge produced by industrial WWTP. 2. Project construction land use and resettlement impacts Hezhou Sludge Harmless Treatment Project was started in January 2016 and trial commissioned in August. The project was constructed within the compound of Hezhou Solid Wastes Landfill, without any additional activities of land acquisition and house demolition, as shown in Figure 1-6. 9 Due Diligence Report on Linked Projects Figure 1-6 Hezhou Sludge Harmless Treatment Project 10 Due Diligence Report on Linked Projects 2 Resettlement Due Diligence Investigation In order to supervise the resettlement implementation procedures and the resettlement status of the linked projects, thus to ensure the legal rights of the affected people, the Hezhou PMO conducted the due diligence investigation on the land acquisition of the linked projects. 2.1 Objectives of Due Diligence Investigation The objectives of the due diligence investigation are to make full reviews of the land acquisition and resettlement activities of the linked projects. (1) To identify whether or not the land acquisition and resettlement activities of the linked projects were in line with Land Administration Law of the People’s Republic of China, with the laws, regulations and procedures of the Hezhou City on resettlement and compensation, as well as with the World Bank policies for involuntary resettlement, thus to further find out and gaps and propose mitigating measures. (2) To analyze and assess the working procedures, implementation progress, funds management, resettlement effects that were related to the house demolition and resettlement, including the existing status of production and livelihood of the affected people. (3) To analyze and assess the resettlement effects and the satisfaction of the affected people, and propose relevant suggestions. 2.2 Methods for Due Diligence Investigation The Due Diligence Report mainly adopted the following research methods, respectively desk work, consultation meeting and site interview. The desk work mainly referred the collection, review and verification of the files and documents which were relevant to the resettlement of the linked projects. (1) The files and documents during the evaluating activities were: project design documents, project approval documents, land approval, property right certificate, list of people getting compensation, different kinds of agreement related to resettlement. (2) Consultation meeting. The consultation meetings included the such meetings at the levels of municipal, township and village. During the period from September 20 to October 25, 2017, the investigating group had conducted four times of consultation meetings respectively with the staff of Hezhou Land Administration Bureau, the LAR office staff of Hezhou Ecological New City Administration Committee, Hezhou Civil Engineering Bureau, Babu District, Pinggui District, as well as the displaced households. There were totally 25 persons participating (Figure 2-1, Figure 2-2 and Figure 2-3), including 18 males and 7 females. During the consultation, the investigation group inquired about the information of land acquisition and house demolition, reviewed and verified the relevant documents. Special attentions were placed on the situation of vulnerable groups. (3) Site interview. During the period from October 10 - November 5, 2017, the 11 Due Diligence Report on Linked Projects investigating group interviewed the persons who provided the key information, including the working staff of LAR offices, responsible persons in street office and township, villagers, affected households, women and the elderly etc., totally covering 31 persons (Figure 2-4, Figure 2-5), including 23 males and 8 females. The contents consisted of basic information of affected villages and groups, impacts of land acquisition and house demolition, willingness of livelihood restoration of affected population etc., with special attention on the vulnerable groups. Figure 2-1 Public Consultation Meeting with Stakeholders and Representatives of Aps 12 Due Diligence Report on Linked Projects Figure 2-2 List of Meeting Participants of District, Street Office and Township 13 Due Diligence Report on Linked Projects Figure 2-3 Consultation Meeting with People of District, Street Office and Township Figure 2-4 Interview with People Affected by Pinggui New City Dike Construction Project 14 Due Diligence Report on Linked Projects Figure 2-5 Interview with People Affected by Jiangnan Dike Construction Project 15 Due Diligence Report on Linked Projects 3 Land Acquisition and Resettlement Activities of Pinggui New City Dike Construction of Hejiang River Rehabilitation Project 3.1. Introduction Pinggui New City Dike (the section of Hejiang River) has a length of 0.806km, which starts from the Construction Team of Pinggui Mining Bureau and ends at the foot of Shiniudu Hill. This section connects Pinggui New City Dike (the section of Fujiang River) at the upper reaches. The embankment has a total length of 806m and bank protection length of 778.6m, including construction of four new river access platforms. The project was started in January 2016 and completed in July 2017 as shown in Figure 3-1. The Implementing Agency was Pinggui District Power Supply Bureau. Figure 3-1 Built Pinggui New City Dike 3.2 Impacts of Land Acquisition and Resettlement The resettlement impacts of the project included acquisition of 244.094mu of collective land from Shangsong Village and Xiwan Village of Xiwan Street Office, including 206.18mu of Shangsong Village and 37.91mu of Xiwan Village, affecting 313 households with 1256 persons. The total area of demolition of rural houses was 5162.81 m2, including 260m2 in Shangsong Village and Xiwan Village, affecting 3 households with 11 persons; 4902.81 m2 of attached houses and temporary agricultural shelters, affecting 65 households with 262 persons. The total area of demolished storage houses of Pinggui Clinic in Pinggui Mining District was 75 m2. In addition, demolition included some infrastructural facilities such as electric wire, wire poles, garbage tanks and wells. There were no vulnerable groups affected by the project construction, as Due Diligence Report on Linked Projects shown in Table 3-1. By end of September 2017, totally 244.094mu of land had been measured by the project. Totally RMB 15.7985 million of land compensation had been paid, including RMB 12.138465 million for crops and RMB 3.09 million for reserved commercial land. Details are shown in Table 2-1. The total area of house demolition was 5237.81 m2, with total accumulative compensation of RMB 5.516345 million, where compensations for rural attached houses and facilities were made as per Ref. NFF[2004] 36 and the those for clinic demolition as per the assessed prices. According to the survey, the amount of compensations had been directly paid to the individual accounts of the APs from special account of Land and Resources Bureau. So far, 96% of the APs have received the compensation whilst only a few people have not claimed. Table 3-1 Costs for Acquisition of Collective Land of Pinggui New City Dike Project Village s Compensation Type of Land (mu) Subtotal (RMB) Dry land Paddy field Shangsong Total LA 203.3 2.88 206.18 Village Land compensation 48000 56000 standards Land compensation 9758366.4 161280 9919646.4 Cash compensations 3090000 3090000 for commercial land Compensation for 137983.6 137983.6 Crops & Land- attached Facilities Total 13147630 13147630 Xiwan Total LA 32.47 5.45 37.91 Village Land compensation 48000 56000 standards Land compensation 1558545.6 304920 1863465.6 Cash compensations 570000 570000 for commercial land 17 Due Diligence Report on Linked Projects Compensation for 217369.6 217369.6 Crops & Land- attached Facilities Total 2650835 2650835.2 Grand Total LA 235.76 8.33 244.094 total Land acquisition fee 15798465.2 There were two modes of resettlement for rural house demolition: cash compensation or “unified planning and self-construction�. According to survey, the 3 affected households in Shangsong Village preferred self-construction and they have already settled down in Pinggui Liangsuo Relocating Residential Area, as shown in Figure 3-2 and Figure 3-3. According to the planning of Pinggui Planning Bureau, there were 3 options for Liangsuo relocating sites, respectively 40m2, 48m2 or 60m2, confined by the limit of five-story in height. Pinggui Urban Investment Development Company was responsible for the “three supplies, one leveling� and installation of water and electricity to households. The site survey found that the choices of the 3 affected households were respectively: one household chose three patches of 40m2 land, one household chose two patches of 40m2 land, one household chose one patch of 40m2 land. By now, the house construction of these 3 households have been constructed upto 90%. The funds for house construction were all from the compensations, because that all of them got land compensation and house compensation, which they thought would be good enough for re-construction and initial decoration. They supported the project construction and were satisfied with the resettlement. 18 Due Diligence Report on Linked Projects Figure 3-2 Pinggui Liangsuo Relocating Residential Area 19 Due Diligence Report on Linked Projects Figure 3-3 Pinggui Liangsuo Relocating Residential Area The other APs have already received the promptly-paid compensations for land acquisition and demolition of attached houses and other infrastructural facilities and used them for reconstruction. They felt satisfied with the compensations. Details of compensation distribution are referred to Annex. 4 3.3 Resettlement Institutional Arrangement In January 2014, the land acquisition Leading Group of Pinggui New City Dike Project was established in Pinggui Administrative District of Hezhou City. Under the Group, there were the members from the PMO, Land Acquisition Coordinating Group and Project Construction Promoting Group, taking the responsibilities: � PMO (1) Responsible for the arrangement of demolition staff; Dealing with the contradictions and problems aroused by land acquisition and house demolition and promptly report it to the Leading Group; harmonize the relationship between all departments and the Leading Group. (2) Responsible for work report, summary report and other written materials and timely submit to leaders of upper levels. (3) Responsible for the collecting and sorting of demolition data and documents etc. (4) Responsible for procurements and acceptance, food security, medical aids, meeting arrangement, reimbursement and so forth logistics service work. � Land Acquisition Working Group 20 Due Diligence Report on Linked Projects (1) To be responsible for measurement of land and house, confirmation, measurement and computation of ground attachments such as house and crops, computation of land acquisition compensation, collection and sorting of relevant materials relating to land and house expropriation, signing agreements of land acquisition an house demolition. (2) To be responsible for mobilizing the people with expropriation of land and house, acquiring necessary information promptly, handling any accidents and safeguarding the social stability. (3) Accomplish other works assigned by leaders. � Project Construction Promoting Group Timely accomplish project planning, submission for approval, fund raising and project construction as required by the Leading Group and ensure the project completion in time and in high quality. The land acquisition for Pinggui New City Dike was started in July 2014 as follows:  In July 2014, Pinggui Water Resources Administration Bureau applied to Hezhou Land Resources Administration Bureau fir construction land use.  In January 2015, the Leading Group of Pinggui New City Dike Project started the baseline survey in Shangsong Village, Xiwan Village, and Cai Village and conducted the initial discussion with the APs.  On June 9 to 17, 2015, the LA Leading Group of Pinggui New City Dike Project released to the public the measurement results of the acquired land in Shangsong Village, Xiwan Village and Cai Village as shown in Figure 3-4.  In October 2015, the LA Leading Group of Pinggui New City Dike Project signed land acquisition agreements with Village Committees in Shangsong Village, Xiwan Village, and Cai Village. As shown in Appendix 3.  In July 2017, the LA Leading Group of Pinggui New City Dike Project has accomplished the measurement of acquisition land and 97% of compensation payments. 21 Due Diligence Report on Linked Projects Figure 3-4 Disclosure of Land Measurement Results in Shangsong Village of Xiwan Street Office 3.4 Resettlement Policies In accordance with the laws and regulations of the State and local governments, as well as the World Bank policies, especially Notice of Hezhou Municipality on Adjusting the Compensation Standards for Land Acquisition and Resettlement for Construction Projects within Urban Planned Areas of Hezhou City (Ref. HZF[2013]36) issued on January 1st, 2013, the PMO formulated the following resettlement policies applicable to the project after full consultation with the affected people and applied them in the land acquisition, house demolition and resettlement activities of the project. 3.4.1 Compensation and Resettlement Policies for House Demolition All the houses to be demolished by the Project were covered by the urban planning of Hezhou City and had been compensated in accordance with the following policies during implementation. � The PMO provided two resettlement options, respectively cash compensation and exchange of house site for the choice of APs at their will. Cash compensation � Compensation for simple house and other attachments were compulsory made at cash compensation. The main house and production house could choose cash compensation. The compensation were made at replacement cost. Details are shown in Table 3-2. � If in the opinion of the APs that the compensation rates were low, the demolishing unit might entrust local resettlement office to negotiate with the APs. In 22 Due Diligence Report on Linked Projects case of failure in negotiation, the local resettlement office and the APs would jointly engage an independent real estate value assessment agency to undertake the assessment. If the APs were still unsatisfied with the assessed results, they could appeal to the arbitration agency for arbitration. The resettlement office would make the compensation to the APs according to the final confirmed results. � The APs choosing cash compensation for main house, the house site for the main house were compensated according to assessed price of the allocated reconstruction land. No reconstruction land was arranged for the demolition of non-residential houses, and the land of the non-residential house was compensated according to the rates of compensation for acquisition of rural house site. Table 3-2 Compensation Standards for Demolition of Rural Residential Houses (excluding house site) Category of Demolition Targets Unit Compensation standards 1. Mix brick structure (full decoration) RMB/m2 1100 2. Mix brick structure (partial RMB/m2 1000 decoration) 3. Mix brick structure (simple RMB/m2 900 decoration) 4. Mix brick structure (without RMB/m2 850 decoration) Notes: House decorations were classified into exterior wall tile or painting, interior floor laying, interior plastering or painting, complete window and door installation etc. The above five were regarded as full decoration; any 3 - 4 items were regarded as partial decoration; any 1-2 items as simple decoration. None of the above 5 items were regarded as without decoration. 5. Red brick, common brick, cement RMB/m2 750 brick (stone) tile structure 6. Full wooden tile roof structure RMB/m2 650 7. Mud (brick) wall tile roof structure RMB/m2 550 8. Mud (brick) wall grasses roof RMB/m2 550 structure 9. Wooden attic RMB/m2 150 Exchange of house site (resettlement with reconstruction site) 23 Due Diligence Report on Linked Projects � Exchange of house site, namely “resettlement with reconstruction site� followed the principle of “unified planning and unified construction� or “unified planning and self-construction�. The house site for reconstruction was included in the project construction land use, where, according to the planning, the allocation of house site was based on the legal area of the main house and the principle of “one for one reconstruction� but limited to a ceiling land area of 150 m2 for one household. The extra legal area exceeding the ceiling area thereof was compensated according to the assessed price of reconstruction land. And, the government was responsible for the “three supplies and one leveling� and provision of water and electricity installation to each household. � The demolished main houses were compensated as per replacement cost at the standards of cash payment. � The compensation for reconstruction transition was made in installments based on the building area of the main house upto 12 months counting from the date of setting- out on reconstruction site after house demolition. The rate of compensation was at RMB 8 / m2 . � Moving subsidies were paid to the APs. The “three subsidies� for house demolition (demolition transport subsidies, moving loss subsidies and work time losing subsidies) were computed according to the construction area of the house to be demolished. The rate of subsidies was RMB 8 / m2. � Whoever signed the demolition and resettlement agreement, vacated and handed over the house within the prescribed time limit were awarded a lump sum bonus of RMB 5000 per household. 3.4.2 Compensation policies for acquisition of collective land � The compensations for permanent expropriation of collective land consisted of land compensation, resettlement subsidies, crops compensation, land attachment compensation etc. and were made according to the relevant laws and regulations of the State. The APs choosing cash compensation were eligible to the all the resettlement subsidies and at least 70% of the land compensation, while the rest 30% of land compensation were, upon the consent of the APs, retained by the Village collective to be used in the public welfare such as improving the local production and living conditions. The utilization of land compensation funds was submitted to the resettlement office at township level for approval and to that at county level for ready reference. During the use of funds, each and every expenditure was disclosed to the public before use under the supervision of the Villagers. Regardless of any means of compensation, all the compensation for crops and land attachments were directly paid to the affected farmers or the property owners. � The government departments of land resources, statistics, finance and agriculture 24 Due Diligence Report on Linked Projects etc. consolidated the factors of regional land price such as the category of land, production value, rural and urban difference, grades of agricultural land, average per capita cultivated land, relationship of land supply and demand, local economic development level as well as the lowest living standard for urban residents etc. , and formulated the local unified AAOV standards as the basis of compensation. The compensation multiples for land adopted 20 multipliers. The compensation standards are shown in Table 3-3. Compensation for land acquisition in the Project included land compensation, resettlement subsidies as well as compensation for standing crops and land-attached structures. Table 3-3 Compensation Standards for Land Acquisition Land Category Land compensation and resettlement subsidies (RMB/mu) Paddy field (incl. Fish pond, lotus 56000 root pond) Agricultural land Dry land 48000 Garden, forestland 45000 Unused Land Barren hill, wasteland 20000 Rural house site, Village side idle Compensation as per the Construction land standards of neighboring land Ditch, road, grave land category. � Crops on the expropriated land, if any, were compensated as per 1 time of the AAOV of the land expropriated. No crops compensation were made for non-utilized lands such barren hill, wasteland and waste beach etc. Tracts of economic forest were compensated as per economic forest, while without crops compensation. The compensation standards are shown in Table 3-4. Table 3-4 Compensation Standards for Ground Crops Compensation Standards Land Category (RMB/mu) Paddy Rice 1800 Lotus root, water-chestnut, taro 2000 Sugar cane, chewing cane 2200 Vegetables (melon, vegetable, bean, mushroom) 2000 25 Due Diligence Report on Linked Projects Other dryland crops (peanut, soybean, mung bean) 1400 3.4.3 Restoration measures for affected ground attachments and infrastructural facilities The ground attachments affected by the Project included fence wall, grave, fruit tree or economic crops, while the facilities affected by the project are the electric and telecommunication facilities. The compensation standards for the fence wall, grave, fruit tree or economic crops were determined on the basis of replacement cost. The damaged infrastructural facilities were resolved through unified resettlement to rebuild or transfer according to the original scope, standard and function. If such, those could not be rebuilt or transferred were compensated according to the confirmed standards, i.e. the compensation standards for the ground attachments such as fruit tree or economic crops (Ref. HZF[2013] 36). An owner against a building expropriation decision made by the people’s government of Hezhou City may apply for the administrative reconsideration within 60 days upon the release of this notice or file an administrative lawsuit according to law within three months. It was found in the investigation that, there would be some impacts on the income of the affected families after land acquisition. However, such impacts would not be substantial. After taking some certain production restoration measures, their incomes would be restored completely. The rural residents expressed that they would support the project and agree to the permanent land expropriation if the land compensation could be fully paid on time. 3.4.4 Conclusions Pinggui New City Dike Construction Project strictly complied with the relevant laws and regulations of the State, Guangxi land Hezhou City, and the processing of land use, land compensation and resettlement were in line with relevant laws and regulations. The procedures of land acquisition and compensation not only met with the laws and regulations, but also got the recognition of affected units and individuals. All these were in line with the World Bank safeguard policies. It was found in the investigation that, there were some impacts on the income of the affected families after land acquisition. However, such impacts were not substantial. After taking some certain production restoration measures, their incomes were restored 26 Due Diligence Report on Linked Projects completely. The rural residents expressed that they would support the project and agree to the permanent land expropriation if the land compensation were fully paid on time. 27 Due Diligence Report on Linked Projects 4 Land acquisition and Resettlement of Jiangnan Dike Construction of Hejiang River Rehabilitation Project 4.1. Introduction Jiangnan Dike (Hejiang river section) started from Hejiang Bridge, along Xihuan Road, via Pangu river mouth and ends in Huashan river mouth. In April 2016, the project was approved the land use pre-checking (Ref. GGTZYS[2016]23) as shown Appendix 2. In June 2016, the project obtained the approval of feasibility study report (Ref. GFGNJ[2016]564). The project was started in April 2016 and expected to complete in November 2017. Hezhou Ecological New City Development Co. Ltd was the project implementing agency. 4.2 Impacts of Land Acquisition and House Demolition The project acquired a total area of 219 mu of rural collective land, including 90 mu of farmland (inclusive of cultivated land), 87.1 mu of construction land and 42.15 mu of non-utilized land, affecting 433 households with 1948 persons. In Xialiang Village of Jiangnan Street Office of Babu District, total land acquisition was 100 mu, affecting 213 households with 958 persons; in Xiadao Village of Etang Town of Pinggui District, the land acquisition was 119 mu, affecting 220 households with 900 persons. The demolition house was 6140 m2，affecting 44 households with 198 persons, as shown in Table 4-1. The removed wire poles and other facilities of were 4520 m. Data differences would occur while dividing data of each sub-component because the land acquisition and house demolition were carried out along with the “two-bank� projects as a whole. Table 4-1 Progress of Land Acquisition and House Demolition of Jiangnan Dike Project (September 2017) Land acquisition (mu) House demolition (m2) Affected Planned the APs the APs Planned Village s land (household/person) (household/person) completed houses completed acquisition Household Persons demolished household Persons (mu) Xialiang Village of 100 100 213 958 3000 3020 24 108 Jiangnan Street Office of Due Diligence Report on Linked Projects Babu District Xiadao Village of Etang 119 119 220 990 2980 3120 20 90 Town of Pinggui District Total 219 219 433 1948 5980 6140 44 198 4.3 Resettlement Institutional Arrangement The institutions related to land acquisition and resettlement Hejiang River Rehabilitation Project included: Hezhou Municipal Government (HMG) was responsible for leading, organizing and coordinating all land acquisition and resettlement activities of the Project, including the formulation of resettlement policies and internal monitoring. Hezhou Land Resources Administration Bureau (HLRB) was responsible for pre-checking, approving and allocating of land use. Pinggui District Government (PDG) was responsible for leading, organizing and coordinating all land acquisition and resettlement activities of Pinggui New City Dike construction including the formulation of resettlement policies and internal monitoring. Babu District Government (BDG) was responsible for leading, organizing and coordinating all land acquisition and resettlement activities of Jiangbei dike and Jiangnan Dike construction including the formulation of resettlement policies and internal monitoring. Land administration of Chengdong Street Office of Babu District was responsible for land acquisition and resettlement survey, formulation of the scheme for land acquisition and communication with the APs. Land administration of Jiangnan Street Office of Babu District was responsible for land acquisition and resettlement survey, formulation of the scheme for land acquisition and communication with the APs. Land Acquisition Sector of Land Resources Administration of Pinggui District was responsible for land acquisition and resettlement survey, formulation of the scheme for land acquisition and communication with the APs. Hezhou Ecological New City Development Co. Ltd was the applicant of land acquisition of Jiangbei Dike and Jiangnan Dike Project. 29 Due Diligence Report on Linked Projects The affected Village Committees, coordinated the LA Office to conduct in-kind investigation and confirmation, discussed the compensation schemes and started land acquisition on behalf of their Villagers and collectives. The institutional structure of the Subproject is shown in Figure 4-1. Figure 4-1 Project Institutional Structure Land acquisition activities:  On March 21, 2017, the construction land use of Jiangnan Dike construction, a sub-component of Hezhou Urban Flood Control Component under Hejiang River Rehabilitation Project of Guangxi’s main tributaries was approved by The People’s Government of Guangxi Zhuang Autonomous Region.  In early April 2017, LAJSOBD and LASLRAPD started the baseline survey in Xialiang Village of Jiangnan Street Office and Xiadao Village of Etang Town, and conducted the initial discussion with the APs.  On April 20, 2017, Hezhou Land Resources Administration Bureau released Announcement of Land Acquisition, as shown in Annex 2.  On May 20, 2017, Hezhou Land Resources Administration Bureau released Announcement of compensation resettlement, as shown in Annex 5. In order to ensure the smooth implementation of the construction, all institutions were equipped with special working staff to form an efficient information exchange network. The staffs consisted of managerial and technical people who had professional quality and rich management experiences in land acquisition, house demolition and resettlement. 30 Due Diligence Report on Linked Projects 4.4 Resettlement Policies In accordance with the laws and regulations of the State and local governments, the World Bank policies, as well as the actual conditions of the project areas, the land administration department of Hezhou Municipal Government, in line with the issuance of the new-round unified AAOV standards for Guangxi, promptly adjusted the land and resettlement compensation standards for the urban planned area. On December 31, 2016, Hezhou Municipal Government issued Notice of Hezhou Municipality on Adjusting the Compensation Standards for Land Acquisition and Resettlement for Construction Projects within Urban Planned Areas of Hezhou City (Ref. HZF[2016]48). Accordingly, based on full consultation with the affected people, the PMO formulated the following resettlement policies applicable to the project. 4.4.1 Compensation and resettlement policies for house demolition All the houses to be demolished by the Project were covered by the urban planning of Hezhou City and were compensated in accordance with the following policies during implementation. � The PMO provided two resettlement options, respectively cash compensation and exchange of house site for the choice of APs at their will. Cash compensation � Compensations for simple house and other attachments were compulsory made at cash compensation. The main house and production house could choose cash compensation. The compensations were made at replacement cost. Details are shown in Table 4-2. � If in the opinion of the APs that the compensation rates were low, the demolishing unit would entrust local resettlement office to negotiate with the APs. In case of failure in negotiation, the local resettlement office and the APs might jointly engage an independent real estate value assessment agency to undertake the assessment. If the APs were still unsatisfied the assessed results, they would appeal to the arbitration agency for arbitration. The resettlement office would make the compensation to the APs according to the final confirmed results. � The APs choosing cash compensation for main house, the house site for the main house were compensated according to assessed price of the allocated reconstruction land. No reconstruction land was arranged for the demolition of non-residential houses, and the land of the non-residential house were compensated according to the rates of compensation for acquisition of rural house site. 31 Due Diligence Report on Linked Projects Table 4-2 Compensation Standards for Demolition of Rural Residential Houses (excluding house site) Category of Demolition Targets Unit Compensation standards 1. Mix brick structure (full decoration) RMB/m2 1300 2. Mix brick structure (partial decoration) RMB/m2 1200 3. Mix brick structure (simple decoration) RMB/m2 1100 4. Mix brick structure (without decoration) RMB/m2 1000 Notes: House decorations were classified into exterior wall tile or painting, interior floor laying, interior plastering or painting, complete window and door installation etc. The above five were regarded as full decoration; any 3 - 4 items were regarded as partial decoration; any 1-2 items as simple decoration. None of the above 5 items were regarded as without decoration. 5. Red brick, common brick, cement brick RMB/m2 850 (stone) tile structure 6. Full wooden tile roof structure RMB/m2 750 7. Mud (brick) wall tile roof structure RMB/m2 750 8. Mud (brick) wall grasses roof structure RMB/m2 650 9. Wooden attic RMB/m2 2000 Exchange of house site (resettlement with reconstruction site) � Exchange of house site resettlement, i.e. reconstruction site resettlement, was also divided into two types: (i) “unified planning and unified construction�; (ii) “unified planning and self-construction�. Regardless of “unified planning and unified construction� or “unified planning and self-construction�, the house site for reconstruction had been included in the project construction land use, where, according to the planning, the allocation of house site were based on the legal area of the main house and the principle of “one for one reconstruction� but limited to a ceiling land area of 120 m2 for one household. The extra legal area exceeding the ceiling area thereof was compensated according to the assessed price of reconstruction land. And, the government was responsible for the “three supplies and one leveling� and provision of water and electricity installation to each household. � The demolished main houses were compensated as per replacement cost at the standards of cash payment. � The compensations for reconstruction transition were made in installments based on the building area of the main house upto 12 months counting from the date of setting-out on reconstruction site after house demolition. The rate of compensation was at RMB 10 / m2. 32 Due Diligence Report on Linked Projects � Moving subsidies were paid to the APs. The “three subsidies� for house demolition (demolition transport subsidies, moving loss subsidies and work time losing subsidies) were computed according to the construction area of the house to be demolished. The rate of subsidies was RMB 10 / m2. � Whoever signed the demolition and resettlement agreement, vacated and handed over the house within the prescribed time limit would be awarded a lump sum bonus of RMB 5000 per household. 4.4.2 Compensation policies for acquisition of collective land � The compensation for permanent expropriation of collective land included land compensation, resettlement subsidies, crops compensation, land attachment compensation etc. and were made according to the relevant laws and regulations of the State. The APs choosing cash compensation were eligible to the all the resettlement subsidies and at least 70% of the land compensation, while the rest 30% of land compensation were, upon the consent of the APs, retained by the Village collective to be used in the public welfare such as improving the local production and living conditions. The utilization of land compensation funds were submitted to the resettlement office at township level for approval and to that at county level for ready reference. During the use of funds, each and every expenditure was disclosed to the public before use and accepted the supervision of the Villagers. Regardless of any means of compensation, all the compensation for crops and land attachments were directly paid to the affected farmers or the property owners. � The government departments of land resources, statistics, finance and agriculture etc. consolidated the factors of regional land price such as the category of land, production value, rural and urban difference, grades of agricultural land, average per capita cultivated land, relationship of land supply and demand, local economic development level as well as the lowest living standard for urban residents etc. , and formulated the local unified AAOV standards as the basis of compensation. The compensation multiples for land adopted 20 multipliers. The compensation standards are shown in Table 4-3. Compensation for land acquisition in the Project included land compensation, resettlement subsidies as well as compensation for standing crops and land-attached structures. Table 4-3 Compensation Standards for Land Acquisition Land Category Land compensation and resettlement subsidies (RMB/mu) 33 Due Diligence Report on Linked Projects Paddy field (incl. Fish pond, lotus 60500 root pond) Agricultural land Dry land 51800 Garden, forestland 47000 Unused Land Barren hill, wasteland 21000 Rural house site, Village side idle Compensation as per the Construction land standards of neighboring land land Ditch, road, grave category. � Crops on the expropriated land, if any, were compensated as per 1 time of the AAOV of the land expropriated. No crops compensation were made for non-utilized lands such barren hill, wasteland and waste beach etc. Tracts of economic forest were compensated as per economic forest, while without crops compensation. The compensation standards are shown in Table 4-4. Table 4-4 Compensation Standards for Ground Crops Compensation Standards Land Category (RMB/mu) Paddy Rice 2100 Lotus root, water-chestnut, taro 2200 Sugar cane, chewing cane 2400 Vegetables (melon, vegetable, bean, mushroom) 2200 Other dryland crops (peanut, soybean, mung bean) 1600 4.4.3 Restoration Measures for Affected Ground Attachments and Infrastructural Facilities The ground attachments affected by the Project include fence wall, grave, fruit tree or economic crops, while the facilities affected by the Project were the electric and telecommunication facilities. The compensation standards for the fence wall, grave, fruit tree or economic crops were determined on the basis of replacement cost. The damaged infrastructural facilities were resolved through unified resettlement to rebuild or transfer according to the original scope, standard and function. If such, those could not be rebuilt or transferred were compensated according to the confirmed standards, i.e. the compensation standards for the ground attachments such as fruit tree or 34 Due Diligence Report on Linked Projects economic crops (Ref. HZF[2016] 48). An owner against a building expropriation decision made by the people’s government of Hezhou City could apply for the administrative reconsideration within 60 days upon the release of this notice or file an administrative lawsuit according to law within three months. It was found in the investigation that, there would be some impacts on the income of the affected families after land acquisition. However, such impacts were not substantial. After taking some certain production restoration measures, their incomes were restored completely. The rural residents expressed that they supported the project and agreed to the permanent land expropriation if the land compensation could be fully paid on time. 4.5 Resettlement of APs Land acquisition and house demolition activities of Jiangnan Dike construction component under Hejiang River Rehabilitation Project were started on April 1, 2017. By September 30, 2017, land acquisition measurement had been accomplished, house demolition had accomplished by 97%, and expected to thoroughly complete on November 10, 2017. Compensations have been paid by 95%. Costs for acquisition of collective land by Jiangnan Dike project are shown in Table 4-5 . Table 4-5 Costs for Acquisition of Collective Land by Jiangnan Dike Construction Project Village Type of Land (mu) Subtotal Compensation (RMB) s Dry land Paddy field Total LA 65 35 100 LA compensation standards 48000 56000 Land compensation 3120000 1960000 5080000 Xialiang Cash compensations for Village 1500000 1500000 commercial land Compensation for Crops & 107899.5 107899.5 Land-attached Facilities Total 6687899.5 6687899.5 Xiadao Total LA 80 39 119 Village LA compensation standards 48000 56000 35 Due Diligence Report on Linked Projects Land compensation 384000 2184000 6024000 Cash compensations for 178500 178500 commercial land Compensation for Crops & 150089.86 150089.86 Land-attached Facilities Total 6352589.86 6352589.86 Grand Total LA 145 74 219 total Land acquisition fee 13040489.36 The project acquired a total area of 219 mu of rural collective land, including100 mu in Xialiang Village of Jiangnan Street Office of Babu District, affecting 213 households with 958 persons; 119 mu in Xiadao Village of Etang Town of Pinggui District, affecting 220 households with 900 persons. The demolition house was 6140 m2，affecting 44 households with 198 persons, as shown in Figure 3-1. The removed wire poles and other facilities were 4520 m. There were no vulnerable groups affected by this project construction. According to survey, out of 44 affected households, 28 households selected the relocating site at Babu Jiangnan Area Shantytown Renovation Project in the mode of “unified planning and unified construction�, as shown in Figure 4 -2. Ten households selected relocating sites at Babu Jiangnan Area in the mode of “unified planning and self-construction�. Six households selected cash compensation because they have other shelters in the Village and they wanted to do business with the compensation cash. 36 Due Diligence Report on Linked Projects Figure 4-2 Shantytown Renovation Project in Babu Jiangnan Area Location of Shantytown Renovation Project in Babu Jiangnan Area in mode of “Unified planning and unified construction� (1) Under unified planning and unified construction. The project land use was obtained through public bidding. The funds sources included source of government’s platform company and bank loans. For example, the resettlement project of the Ecological New City was sponsored by Hezhou Ecological New City Development Co. Ltd (a platform company under the Committee) for implementation. The actual schemes were: construct detach and single-row buildings (rough housing, area: 360 m2), the facade was decorated in a unified planning, indoor was at rough standards, with supporting facilities, belonging to frame structure. After completion of the relocating houses, the relocated households got the land certificate in form of land allocation. (2) Buy back relocating house. This was to follow the principle of “whoever signs the agreement has the priority in selecting houses�. In this project, the residential houses to be demolished had the legal formalities of land use and construction. The APs were eligible to select houses if they signed the demotion agreement and took compensation payment within the specified time period. (3) Price for buying back relocating house. The buy-back prices for the relocating houses were computed as per: deduct the costs for greening, road, supporting facilities, other charges (including construction management fee, transitional resettlement fee, preparation stage charges, design fee etc., excluding the charges for construction land), public land use fee and reimbursement of land transfer fee. The APs choosing “building with land and sky� resettlement mode followed the principle of “one household, one building�. 37 Due Diligence Report on Linked Projects (4) House property certificate. The resettlement office would assist the APs to apply for the house property certificate. It was found in the survey that: price for buying back relocating house was RMB1700/m2, the apartments of 360m2 would need RMB 61,200. The house compensations for the 38 affected households ranged from RMB 850,000 to RMB 1,600,000. The APs selecting relocation were satisfied with the clean living environment and the house compensation could be also used for house decoration, which would rapidly promote their living condition. Some villagers deposited their money into the bank or invested on business. Interview 1: Mr. Ou, aged 55, living in Xialiang Village, having 5 family members. House demolition area was 112 m2, having other shelters. My total house compensation was RMB 638,000. I selected cash compensation for the reason that my sons had their own houses in the downtown and occasionally returned home on public holidays. Therefore, I needed no more house. I used the compensation to renew the old house and buy some new furniture. I put remaining amounts into bank. I was satisfied with the compensation. Interview 2: Mr. Wen, aged 65, living in Xiadao Village, having 4 family members. House demolition area was 265 m2 with house compensation of RMB 1,350,000. I selected relocating sites and wanted to have better living environment. My old house was not equipped with sewer pipeline, and it was dirty. I had two cars but I was very much annoyed that the narrow Village road often caused traffic jam. My sons and daughters were more willing to live in new residential zone. We all agreed that self-built house would be much cheaper, but I was not sure of the house quality. Moreover, self- construction requires management. We had not time and energy to do it. To select relocating sites cost more, but it was worthy. I was satisfied with the compensation. Location of Shantytown Renovation Project in Babu Jiangnan Area in mode of “Unified planning and self-construction� (I) Under unified planning and unified design. Hezhou Planning Bureau was responsible for unified planning. The implementing agency recruited the design institute through bidding to determine house type, architectural style and height. The design charges were borne by the implementing agency. (II) The design institute had fully solicited the views of the APs design several house types, including the size, architectural style etc. The facade decoration was in a unified way. (III) The infrastructures were provided by the government upto the boundary edge of the relocating area, and the infrastructure costs within the relocating site were borne 38 Due Diligence Report on Linked Projects by the APs. (IV) Self construction by APs (V) Handling the formalities for property certificate. The resettlement office assisted the APs to apply for the house property certificate. The formalities for the equal demolished area were exempted from all fees. The fees for the extra area were shared by the implementing agency and the APs respectively in accordance with the resettlement conditions. Interview 3: Mr. Hou, aged 58, living in Liang Village of Babu District, having 6 family members. House demolition area was 234.67 m2 with house compensation of RMB 928,900. The agreement is shown in Appendix 3. I had more family members and I had been working as a building laborer for years, so I preferred low-cost self-built houses and the building materials were more reliable. I supported project construction and was satisfied with compensation and better living condition. 39 Due Diligence Report on Linked Projects 5 Public Participation, Grievance Redressing 5.1 Public participation. According to Hezhou News, during 2013 - 2015, with the implementation of the new round of unified AAOV standards in Guangxi, the land administration department of Hezhou City promptly adjusted the compensation standards for land acquisition and resettlement within the urban planned area. In order to extensively solicit the public opinions and ensure the rights of the public to know, participate, express and supervise. The whole procedures from preparation, public solicitation to legal review and group discussions etc. had adequately considered the participation of the public, attended to the comments of the public and dealt with the problems of the public. In the process of drafting resettlement compensation standards, the Hezhou municipal government convened a special discussion and coordination meeting with the participants of the municipal government (committee) and all relevant departments to analyze and discuss the resettlement policies and compensation standards. In combination with relevant laws and regulations, policies and the opinions of various departments, the government organized a “Public Hearing for Land Compensation and Resettlement Standards within Urban Planned Area of Hezhou City�. There were totally 52 persons participating in the hearing, respectively from villages, township (street), township land administration offices, district government (committee), municipal land bureau, housing and construction, agriculture, forest, human resources, civil affairs, legislation, fruits etc. In the hearing, the staffs of land department introduced the reasons and basis of adjustment, and the relevant representatives fully expressed their opinions. Specially, many reasonable opinions were adopted, while those not adopted were explained in the documents submitted to the government. Figure 5-1 showed that the land and house appropriation department and the IAs were discussing the resettlement compensation scheme at site with the affected people. 40 Due Diligence Report on Linked Projects Figure 5-1 Public Consultation Activities of LAR Staff at Site On December 31, 2016, Hezhou Municipality issued Notice of Hezhou Municipality on Adjusting the Compensation Standards for Land Acquisition and Resettlement for Construction Projects within Urban Planned Areas of Hezhou City (Ref. HZF[2016]48. According to this Document, the compensation standards respectively for land acquisition, crops, house demolition, fruits, grave moving etc. were increased. In addition, the policies for house site compensation and allocation of commercial land for farmers were also adjusted. The new "Standards" are more practical to Hezhou reality, more beneficial to the protection of the rights and interests of affected people, and more conducive to the restoration of production and livelihood of the affected people. 5.2 Grievances and Appeals of APs The linked projects have established transparent and effective channels for grievance redress during implementation. Hezhou Land Resources Administration Bureau was responsible for explaining to the APs all related issues to the land acquisition, and also informed that the APs might appeal to the Village Committees, the LA Office of Jiangnan Street Office of Babu District, LA Section Land Resources Administration Bureau of Pinggui District, the Petition Office of Babu District Government, the Petition Office of Pinggui District Government, Hezhou Land Resources Administration Bureau, the Petition Office of Hezhou People’s Government or even to the court for arbitration if they had any problems or complaints. At the same time, all the resettlement policies and compensation standards had been also disclosed to the APs. According to the investigation, no grievances had been received. During the whole process of resettlement implementation, no judicial case related to resettlement occurred. 41 Due Diligence Report on Linked Projects 6 Conclusion During the period from September to November, 2017, the investigating group conducted the due diligence investigation of the linkage projects. After reviewing land acquisition and house demolition activities (2014-2017) of Pinggui New City Dike construction and Jiangnan Dike construction, sub-components of Hezhou Urban Flood Control Component under Hejiang River Rehabilitation Project of Guangxi's main tributaries, plus the site survey and interviews, we can draw the conclusions that: Pinggui New City Dike: 1. The land acquisition and house demolition policies were strictly in compliance with the relevant laws and regulations of the People's Republic of China, Guangxi Zhuang Autonomous Region and Hezhou City without any violation of relevant laws and regulations. 2. Land acquisition and resettlement activities were implemented in a legal manner. All the affected persons participated in the whole process and have been well relocated without causing any social unsteadiness. 3. The resettlement of affected persons have been completed and their living standards have been improved in a substantial way. Jiangnan Dike: 1. The land acquisition and house demolition policies were strictly in line with the relevant laws and regulations of the People's Republic of China, Guangxi Zhuang Autonomous Region and Hezhou City. 2. Land acquisition and compensation activities were open, transparent and legal. All the affected persons were are satisfied and no disputes were found. Due Diligence Report on Linked Projects 43 Due Diligence Report on Linked Projects Appendix 1: Sketch Map of the Project (1) General Plan of Pinggui New City Dike (2) Sketch Map of Land Acquisition of Taibai Lake of Jiangbei Dike Construction Project 44 Due Diligence Report on Linked Projects Appendix 2: Approval of Land Acquisition (1) Land acquisition pre-check approval and land acquisition announcement of Jiangnan Dike project 45 Due Diligence Report on Linked Projects (2) Land acquisition announcement of Jiangnan Dike Construction Project 46 Due Diligence Report on Linked Projects 47 Due Diligence Report on Linked Projects Appendix 3：Agreement for Land Acquisition (1) Compensation Agreement of Pinggui New City Dike 48 Due Diligence Report on Linked Projects 49 Due Diligence Report on Linked Projects 50 Due Diligence Report on Linked Projects (2) Compensation Agreement of Jiangnan Dike 51 Due Diligence Report on Linked Projects 52 Due Diligence Report on Linked Projects 53 Due Diligence Report on Linked Projects 54 Due Diligence Report on Linked Projects 55 Due Diligence Report on Linked Projects 56 Due Diligence Report on Linked Projects Appendix 4: Details of Compensation Payment Distribution (1) Evidence of compensation distribution of land acquisition of Pinggui New City Dike (2) Evidence of Compensation Withdrawal by Villagers of Jiangnan Dike. 57 Due Diligence Report on Linked Projects Appendix 5: Disclosure of the scheme of land acquisition compensation and scheme 58 Due Diligence Report on Linked Projects 59