Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC2201 Date ISDS Prepared/Updated: 04/19/2006 I. BASIC INFORMATION A. Basic Project Data Country: Mauritania Project ID: P100078 Project Name: 2nd Mining Sector Cap.Building Supplemental Task Team Leader: Gotthard Walser Estimated Appraisal Date: May 1, 2006 Estimated Board Date: July 6, 2006 Managing Unit: COCPO Lending Instrument: Technical Assistance Loan Sector: Oil and gas (100%) Theme: Environmental policies and institutions (P);Other environment and natural resources management (S) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 5.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.50 Financing Gap 0.00 0.50 B. Project Objectives [from section 2 of PCN] The operation will be prepared in form of an additional component to the existing operation. It matches perfectly the development objectives already set up for the mining sector in PRISM2. Thus, no new development objectives are envisioned. Considering that petroleum is assimilated to a mineral resource, the proposed operation will contribute to all three of the existing PRISM2 objectives: (i) Build up and consolidate the Government long term institutional and technical capacity to manage the country’s mineral resources, including social and environmental management; (ii) Promote private investment in the minerals sector; (iii) Improve mineral sector contribution to national and regional socioeconomic development. C. Project Description [from section 3 of PCN] Page 2 Before negotiations, the GIRM will be requested to prepare a letter of sector policy stating its vision for the oil and gas sector in the medium and long term. Together with the vision the letter should cover the strategic directions the government wants to pursue, which in turn will ensure the coherence of the activities to be part of each one of the sub-components of the proposed Technical Assistance. Sub-component A: Improving the legal, regulatory and contractual framework (US$1 million) The existing legal and fiscal regime applicable to the oil sector was adopted in 1988 and the PSC model in 1994. This framework was prepared before the oil price increase and with the basic idea of promoting areas considered frontier for risk investments. The secondary regulations covering technical, economic and environmental issues are incomplete. Moreover, the exploration and development operations that have already taking place have put in evidence the need for amendments. This sub-component will involve a comparative assessment of the competitiveness of the existing Mauritanian legal and contractual framework vis- à -vis state of the art modern sector legislation and PSCs. Taking into account the adopted sector policy and the results of the comparative assessment a new set of legal instruments will be prepared. Once adopted - either by an Ordonnance or by a new law-, a coherent package of sector secondary legislation and regulations will be prepared. Among the important aspects to be determined under the new regime is a precise regulation on the functions, mandate and organization of the Ministry of Energy and Petroleum and its respective Directions, the SMH, and other sector related agencies. Sub-component B: Capacity building (US$1.1 million) Both the Ministry of Energy and Petroleum and SMH have a serious deficit of qualified staff; thus there is a need to recruit a consultant team that in a coherent way, following a learning program based upon an “on-the-job-training” approach, will perform the task and build capacity in both institutions. The Program should consider the gradual build up of the institutions responsible for sector management in accordance with the adopted sector policy. Funding from the Program should consider other available sources such as the IDB and the funds obtained from the PSC contractors. This component would finance an institutional audit of the Ministry of Petroleum and Energy and use audit results to streamline the Ministry’s organization and sector roles. Sub-component C: Environmental management of the petroleum sector (US$1.5 million) The first activity to be proposed under this sub-component is a Strategic Environmental and Social Assessment (SESA) as a key mean of integrating environment into the sectoral decision making and planning processes at this early stage. Page 3 The Government has already adopted law 2000-45 (Code de l'Environnement) and has prepared a draft Law on the National Park of Banc d'Arguin (a national preservation site, located on the coastline near petroleum exploration areas), but has not yet worked on the required regulations for its enforcement. The SESA will permit to identify the critical areas, the main institutional gaps and the basic missing regulations for the oil industry in the offshore areas. To prepare the terms of reference for the SESA an assessment and scoping mission will be required. This mission will need to contact and consult all existing stakeholders, determine the government counterparts and define the depth, scope of the scope and calendar of work. The methodology, process and evaluation of recommendations and results of the proposed SESA should be defined during project preparation and be closely coordinated with other stakeholders. Following the SESA, there are two areas of work to be considered: (i) the preparation of environmental regulations, and (ii) the training of a core team that will be responsible for the approval, and monitoring of the environmental assessment of oil projects. The experience gained in turn could be used to replicate this knowledge in the neighbor countries of West Africa. To prepare the environmental regulations for offshore oil operations, it would be possible to use as a starting point (i) the procedures for the EIA cycle that have been developed for the mining operations and (ii) the regulations developed in other mature offshore oil basins (i.e Norway). Sub-component D: Data management/petroleum cadastre (US$1,100 million) Oil exploration and production generates a large number of technical, economic, environmental, financial data mostly in digital form that is submitted by the operators to the Government. After due processing, this data from seismic lines, well drilling and production performance conforms a real government asset. At present, lacking the required data bases, including hardware and software, the information from the industry is not properly stored or receiving the appropriate treatment. The creation of a data bank and a related information system is of critical importance for the management of the sector and for valorizing the hydrocarbon resources of the country. The development of the information system and the data bank should be contracted to a specialized cabinet in two steps: (i) an inventory and evaluation of the existing data, a projection of the amount of data to be received in the medium term and the conceptualization of the required system for storage, processing and exploitation of the sector data; and (ii) the design, planning and procurement of the equipments and software including the training of the local staff. Among the most critical parts of the information system there is the cadastre of oil contracted areas and the collection and processing of the cost data reported by the contractors. These are essential inputs for an adequate operational model which is the central tool for the sector policy decisions and negotiations of future acreage. Sub-component E: Sector strategic assessments (US$800,000) Page 4 In addition to the above sub-components the technical assistance funds should be used for preparing a number of strategic assessments, such as: • Protection of the environment and management of the coastal communities • Development of the «local content» • Utilization of natural gas • Strategy for the promotion of exploration in acreage from relinquished blocks. D. Project location (if known) Focus mainly on Technical Assistance in Nouakchott and also in the Mauritania off-shore petroleum-producing zones. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] The Borrower has been successfully implementing the Second Mining Sector Capacity Building Project, PRISM2, which is a follow up to the Mining Sector Capacity Building Project. Environmental and social issues have been an integral part of both project, and the acquired knowledge on environmental/social issues management will be transferred/applied to the oil supplemental implementation. F. Environmental and Social Safeguards Specialists Mr Thomas E. Walton (AFTEG) Ms Salamata Bal (AFTS4) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Petroleum management issues involve environmental management, capacity building and technical assistance. SESA will be done as part of project implementation. Natural Habitats (OP/BP 4.04) X Petroleum exploration/exploitation takes place in off-shore zones near natural parks, and the project will have to take that into account. Assessment will be done as part of project implementation. Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Livelihoods of local populations will be impacted by petroleum development in Mauritania. Also, population trends will have to be considered as other potential petroleum companies move into Mauritania. Assessment to be done as part of project implementation. Page 5 Safeguard Policies Triggered Yes No TBD Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: B - Partial Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: N/A B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: 04/18/2006 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. It was agreed with ASPEN that a petroleum-focused SESA will be done as part of project implementation. An RFT for the SESA will be developed as part of the Scoping Mission. A two-page technical annex on environmental management will be disclosed 30 days prior to Board date. The SMU has agreed to accept transfer of the safeguard responsibilities. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Gotthard Walser 04/18/2006 Approved by: Regional Safeguards Coordinator: Mr Thomas E. Walton 04/19/2006 Comments: Sector Manager: Mr Peter A. van der Veen 04/19/2006 Comments: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 6