Resettlement Policy framework for the Albania s Improvement of the Management and Conditions of the Secondary and Local Roads Project

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1 Resettlement Policy framework for the Albania s Improvement of the Management and Conditions of the Secondary and Local Roads Project I. Introduction The overall length of the road network in Albania totals about 15,000 km. The network comprises 3,412 km of national roads administered by the Ministry of Public Works, Transport and Telecommunications (MPWTT) and directly managed by the General Roads Department (GRD), and about 12,000 km of local roads. The local road network consists of: (i) 4,411 km of regional roads, which provide rural links of regional importance and are administered and maintained by the regional road departments under the regional councils; (ii) 4,980 km of communal roads, including private access roads, which provide rural links of communal importance and are administered and maintained by commune road departments; and (iii) 2,500 km of urban or municipal roads, which are administered and maintained by the Municipal road departments. All these Local Governments fall under the Ministry of Interior. The priority given to the expansion of the road network in recent years has resulted in inadequate emphasis on maintenance and the neglect of the local road network. The problems facing the local road network are significant, as little of the network is paved, and a recent survey on a sample of the network, found that about 90 per cent is in a poor or very poor condition 1. The decentralization to local governments of the responsibility for managing regional, commune and municipal roads has compounded the problems of inadequate maintenance. Local revenue sources, such as vehicle registration charges, have proved insufficient, and managerial capacity is weak. Only about 40 percent of what is needed in maintenance expenditures is actually expended on the local road network at present, reflecting the scale of the current unfunded mandate created through decentralization. The weak management and planning, generally undertaken without any consideration of the broader regional planning dimension also undermines the efficiency of spending in other sectors 2 ; improving roads potentially realizes savings in education and health budgets through facility centralization. And yet the contribution of an efficient and effective local road network is known and the links to economic development and poverty alleviation are established. Over 1 Butler, Robert (2007) Management and Financing of Local Roads in Albania - A study undertaken for the World Bank 2 World Bank (2006) Public Expenditure and Institutional Review

2 half (57 percent) of the Albanian population lives in rural areas, and over one-third (35 percent) of the rural population is estimated to live in poverty. 3 A qualitative survey of both poverty, and its causes, noted that, after employment and income, the majority of respondents considered infrastructure problems to be the main factors affecting their low standard of living. Rural inhabitants have also acknowledged that poor road access makes it difficult to reach markets, contributes to migration to urban areas, and inhibits the delivery of health and education services 4. Forty-nine (49) percent of rural producers stated that a lack of adequate transportation, primarily good roads, was their biggest marketing problem 5. More recent studies elsewhere have supported these findings and also report positive differences in school enrolment and frequency in use of health services, between areas with and without all-weather roads. 6 The potential contribution of improved local roads in Albania is significant and has been recognized by the authorities. The Albanian authorities recognize the seriousness of these issues, and the importance of the sector to poverty alleviation and economic development. In 2006, the authorities established a task force, headed by the Minister of Public Works, Transport and Telecommunications, to act as a steering committee 7 for a program to asphalt a significant proportion of the network 8 and improve the management and financing of the network. They have requested the assistance of the World Bank, via a Project Preparation Facility, to procure a consultants to prepare a strategy for the rehabilitation of priority sections of the district and local road network and establish a stylized Road Management System in the Client s offices (Phase 1), and prepare, together with the local community representatives and the Client, the detailed engineering design and tender documentation for the defined program (Phase 2). The program would then be implemented in the prospective Local Roads Project, to be financed by the Government the World Bank, and other interested donors. The overall purpose of the project is to improve the living conditions in the rural areas of the country though the improvement of secondary and local roads. The idea of the project is to improve the transport conditions in the rural areas of the country in order to ease the linkages with the markets, health and education services as well as contribute to the economic development through employment and creation of opportunities to develop the rural economy (agriculture and services related). The main activities of the project will be: 1. Update the list of current district and local road network in terms of a functional classification. 3 World Bank (2003) 4 World Bank (2002b) 5 World Bank (2002b,) p.27 6 World Bank (2006) 7 The implementing agency for the assignment and the subsequent project will be the Albania Development Fund (hereafter referred to as the Client), under the guidance of the Steering Committee established in the MPWTT. 8 Prime Ministerial Order no 224, issued on September 19 th 2006.

3 2. Undertake a full inventory of the active network of district on communal network of roads. 3. A review of current management capacity of the District and Commune local road networks 4. Identify priority capital investments through participatory consultation to be funded by the project 5. Preparation of detailed standard designs for the roads segments to be rehabilitated 6. The preparation of the tender and safeguard documentation for the defined program. 7. Procurement and financing of the civil works and 8. Capacity development of communes to manage private sector contractors The primary results of the project are expected to include: Generation of employment in the rural areas Develop agriculture and other rural economy through improved, faster links with markets Increased access to education for the rural population Increased access to health services for the rural population Trained regional and communal staff on identification and prioritization of investments Trained regional and communal staff on management of the maintenance The policy framework The purpose of the Resettlement Policy Framework (RPF) is to clarify land acquisition and resettlement principles, organizational arrangements, and design criteria to be applied to secondary and local road investments included under the Albania s Improvement of the Management and Conditions of the Secondary and Local Roads Project. For those sub-projects (specific Road Sections) financed by the Bank, specific resettlement plans consistent with the principles included in this RPF will be submitted to the Bank for approval when specific information about any resettlement or land expropriation becomes available. (i) Components for which land acquisition and resettlement are required The main components of the projects that are expected to involve expropriations of some type are the construction/rehabilitation of the secondary and local roads throughout the country. However, as the exact details or locations of these works is not known yet any specific land acquisition/ resettlement plans that will be required cannot be prepared prior

4 to appraisal. It is expected that most of the civil works to be financed by the project will be entirely within the current public right of way, in those exceptional cases where this is not the case and expropriation is required, a site specific RAP will be prepared in a manner consistent with the tenets of this Resettlement Policy Framework. Any land acquisition and resettlement caused by the activities supported under the Project will be carried out following well-established procedures specified in Albanian laws and policies relating to land purchase and expropriation that comply with World Bank Operational Policy (OP) 4.12 and Bank Procedures (BP) These procedures are further specified in the following sections, which also provide detailed instructions regarding documentation and impact assessments. (ii) Principles and objectives governing resettlement preparation and implementation The premise governing the RPF is that involuntary resettlement and/or loss of land may cause hardship and impoverishment., Therefore, (i) any involuntary resettlement and/or loss of land will be avoided or minimized, particularly by implementing suitable alternative designs, sub-project locations, etc.; and (ii) where it is not feasible to avoid resettlement or loss of land, the affected persons will be meaningfully consulted when preparing the resettlement/compensation plan, and assisted in their efforts to improve or restore their livelihoods and standards of living to the levels prevailing prior to implementing the sub-project. (iii) Legal framework reviewing the fit between Albanian laws and regulations and Bank policy requirements, and measures proposed to bridge any gaps between them Law 8561, dated , On Expropriations and Temporary Takings of Private Property for a Public Interest and four Council of Ministers Decisions 9 define the procedures for expropriation of immovable property in Albania. The expropriation of private properties is done only for reasons of public interest and with fair compensation. Expropriation is completed by a Decision of the Council of Ministers based on the proposal of the Minister heading the Ministry wishing to expropriate the property, who is designated as the competent official under the Law. In general, expropriations may be done for public projects and investments, for the protection of archaeological, historical or cultural monuments and for the protection of public health and security. Law 8561 requires that procedures for direct notification of the intent to expropriate shall begin no more than ten (10) days after the relevant Ministry submits the expropriation request to the Council of Ministers. In addition, it is mandatory for the plan to expropriate the property to be published in a national newspaper for a period of one (1) week during this ten-day period. 9 Decision 126, dated , On the Composition and Work Procedures of the Special Committee for Expropriations; Decision 127, dated , On the Content and Procedures for Applications and Notification of Expropriation; Decision 138, dated , On Technical Criteria of Valuation and Computation for Expropriation; Decision 147, dated , On the Rules and Manner of Functioning of the Special Committee on Expropriation.

5 The valuation of property is determined by a Valuation Commission that bases the calculation on the average of purchases and sales registered in the Immovable Property Registration System over the last 3-months. For expropriation of property with corresponding cash compensation, the World Bank Guideline OP 4.12 states that payment of cash compensation for lost assets is appropriate, where active markets for land, housing, and labor exist, there is sufficient supply of land and housing, and the affected persons are able to use such markets. In Albania, there are no major legal impediments to the land market that prevent affected persons from purchasing alternative land with the compensation received from the government as a result of the expropriation process. Furthermore, Albania has an increasingly active market in immovable property. A review of recent purchases 10 indicates that current compensation at market value corresponds to the Bank standard of full replacement cost. Notification of the final Decision of the Council of Ministers on expropriation is made directly to the owner(s) of the expropriated property, who have the right to appeal in court within thirty (30) days of receiving notice of the decision. However, the appeal may only be about the amount of compensation specified in the decision, and not about the decision to expropriate. Also, in the event of an appeal the implementation of the decision and the respective procedure for re-registration of the expropriated property will continue as decided. In addition to the Ministry or Ministries involved in an expropriation, there are other institutions that will have relevant information and must be consulted in the process. One of the main institutions is the IPRS. The IPRS administers all spatial and legal ownership data related to immovable property. In addition to ownership information, other real rights are registered in the IPRS as well. For example, mortgages, liens, leases and easements are registered for each property. Also, when the property that is to be expropriated is located in a Cadastral zone that has completed the process of First 11 Registration and the data have been transferred to the IPRS, it holds the records of legal ownership; and the process of expropriation can proceed in a relatively straight forward manner. When a cadastral zone has not completed First Registration, the expropriating entity has to rely on documents issued by the Local Land Commissions. While World Bank OP 4.12 embodies the principle that a lack of legal land title does not disqualify affected people from resettlement assistance, under relevant Albanian legislation, discrepancies with this principle arise. Specifically, according to the 1998 Urban Planning Law, buildings without construction/building permits are considered illegal and can be demolished without having to follow the formal expropriation process and without having to pay compensation. Therefore, within the scope of the Project: Based on transaction information gathered by the Immovable Property Registration System for the years see 2.6

6 1. All sub-project proponents, LGUs and Regions will be encouraged to avoid using sites that are occupied by large illegal settlements or sites that have multiple or competing claims to land. 2. If a sub-project requires the acquisition of land that is occupied by individual encroachers/ squatters who do not have formal legal rights to land, yet have a claim on the land or assets thereon, the affected people will be provided compensation for the value of the property or assets lost, and, in the case of resettlement, assistance as deemed necessary to restore their living standards to levels prevailing prior to the project.(see Sec (ii) above). (iv) Likely categories of affected persons, eligibility criteria for defining the various categories, and compensation package Lack of title/ permits: Where it occurs, expropriation could involve the loss of, land, shelter or other sources of income. Since not all sub-projects and any consequent impacts, are known at project preparation stage, this RPF includes consideration of possible adverse impacts from loss of shelter and relocation, as well as loss of assets and/or income (livelihood). As indicated in (iii) above, the criteria for eligibility to receive compensation will include those people who are occupying or using the affected land, but may not carry documentation indicating formal or recognizable legal rights to the land or permits for buildings. Loss of Income: If less than 10-20% of an individual s land holding is adversely affected by the land acquisition process for a particular sub-project no significant loss of income is expected and impacts can be generally considered to be minor. In these cases, compensation will be provided as detailed in the following table. However, if affected people suffer loss of income through loss of more than 20% of their land holding, income reduction is likely and income restoration assistance will be provided if required. This will take the form of Rehabilitation Assistance meaning assistance comprising job placement, job training, or other forms of support to enable displaced persons, who have lost their source of livelihood as a result of the displacement, to improve or at least restore their income levels and standard of living to pre-project levels. Loss of Structures: It is not expected that there will be any residential or other structures that will need to be acquired in the project site. However, in the event that there are structures (barns, kiosks, small commercial buildings etc.,) that will need to be demolished, depreciation will not be used while calculating the compensation payable for affected structures, and affected people will be able to replace their structures with the compensated amount. The following Entitlement Matrix summarizes the categories of impact that will likely to result from the Project as well as the corresponding mitigation measures:

7 ASSET ACQUIRED LAND TYPE OF IMPACT Less than 80% of total land holding affected, The remaining land remains economically viable More than 80% of land holding affected and remaining land is not viable ENTITLED PERSON User of land without title COMPENSATION ENTITLEMENT Cash compensation for affected land equivalent to the market value of the property sufficient to replace the lost assets and cover transaction costs. Cash compensation for the assets plus Rehabilitation Assistance comprising job placement, or job training Rehabilitation Assistance in rental/lease of alternative land/property to re-establish use such as grazing BUILDINGS STANDING CROPS TREES TEMPORARY ACQUISITION Entire/ partial structure affected Crops affected by land acquisition or temporary acquisition Trees lost Temporary acquisition Cash compensation for entire or partially affected structure and other fixed assets without depreciation Right to salvage materials without deduction from compensation Rehabilitation assistance if required (assistance with job placement, skills training) Cash compensation equivalent to the market value for the affected crops Cash compensation based on type, age and productive value of affected trees Replacement of assets affected (e.g. boundary wall demolished, trees removed) (v) Mechanisms for consultations In addition to documenting the expropriation procedures indicated above, once the tentative arrangement of the civil works is identified, each sub-project proponent, (Communes or Regions) will hold public consultations to discuss the expropriation and its implications. All those whose ownership or occupation of land that will be affected by the expropriation will be invited to these consultations, in which they will be offered choices about their options and rights pertaining to compensation, and resettlement if required, and provided with technically and economically feasible alternatives. Their views will be sought and the content and results of the consultations will be recorded in minutes that will be maintained in the sub-project files and made available to the ADF and the Bank.

8 (vi) Description of the implementation process The implementation of expropriation activities will be linked to the implementation of the sub-projects, to ensure that loss of assets and/or and displacement does not occur before the necessary mitigation measures and resources are in place. In particular, land and related assets will be taken only after compensation has been paid. (vii) Arrangements for funding resettlement The overall responsibility for resettlement and expropriation for the Project is under the Council of Ministers. The subproject proponents under the active support of ADF, will determine if a site-specific RAP needs to be developed, and if so, will develop the RAP as per policies and procedures set out under The financial responsibility for the expropriation procedures, including the compensation to be paid, resettlement costs, etc., lies with the Ministry of Finance (MoF), working with the expropriating LGU. The Council of Ministers is responsible for issuing the expropriation decision and authorizing the funds required. The ADF in cooperation with the Ministry of Finance, is therefore responsible for ensuring that the responsible Ministry submits the expropriation dossier required by the Law On Expropriation to the Council of Ministers and following up and ensuring conclusion of the compensation procedures by the LGUs,. The land acquisition transfer must be fully completed, and payment made, before any Works can be executed on the expropriated property. (viii) Responsible Institutions and/or Agencies The following agencies and institution are responsible for the coordination and delivery of each activity in the land entitlement policy: Immovable Property Registration Office for each District in the Project area,, under the authority of the Central Registration Office, which are responsible for identifying and verifying property boundaries and ownership Land Administration and Protection Offices (formerly Cadastre Offices) under the Qark, which will clarify land allotment certificates for agricultural land that has not been formally registered and transferred to the Immovable Property Registration Offices. The Communes, Qarks and the Municipalities -, will be responsible for the coordination of the implementing procedures and execution of the compensation. (ix) Grievance Redress mechanisms The Expropriation Law provides for an appeals process against the proposed award for compensation. In addition, the Urban Planning and Construction Police laws allow for administrative appeals against a decision for demolitions of illegal construction. Further appeals can be made to the district courts. The Office of the Ombudsman in Tirana

9 receives complaints from citizens against government actions that affect their rights. ADF staff will also play a role in resolving grievances. In addition to the formal procedures, grievances related to land acquisition impacts should be pursued at the municipality/ commune level with facilitation by ADF staff together with design consultants in order to find technical solutions that avoid or further minimize the need for land acquisition. Solutions to grievances related to compensation amounts, delays in compensation payments should be pursued directly by the designated authorities in liaison with ADF staff. ADF will maintain a record of grievances received, and the result of attempts to resolve them. This information will be entered into the Management Information System (MIS) and be included in the regular progress reporting. (x) Process for preparing and approving resettlement plans and arrangements for monitoring The design consultant must report to ADF about the existence of ownership problems. For the intended civil works, where resettlement action plans will be needed, the expropriation authority assisted by ADF will prepare a Resettlement Plan for any expropriation required, and execute it prior to commencing physical works on the expropriated property. The Plan will include details about steps already taken, such as notification or consultation with owners, and a description of the land acquisition process. It should also include the following: an estimate of the amount of land that will be acquired, baseline census and socio-economic survey information for the affected persons; the specific compensation rates and standards; entitlements that are to be provided, related to impacts identified through the census or survey; description(s) of the land to be provided and/or the resettlement sites; the implementation schedule for the compensation/resettlement activities; and a detailed cost estimate. This will be reviewed by the ADF and submitted to the Bank for review and no objection before it is sent to the Council of Ministers for its decision. The ADF, and Bank supervision missions, will monitor the implementation and resettlement plans and their outcomes.