INO: Regional Roads Development Project

Transcription

1 Land Acquisition and Resettlement Plan October 2011 INO: Regional Roads Development Project East Java (Jolosutro Sendangbiru Road Section) Prepared by Directorate General of Highways, Ministry of Public Works for the Asian Development Bank.

2 CURRENCY EQUIVALENTS (as of 14 October 2011) Currency unit rupiah (Rp) Rp1.00 = $ $1.00 = RP 8,892 ADB AH COI DGH DMS DP EA IOL LAC LARP MPW NJOP PMU PIC RCS ROW RRDP SES SEKDA SPS ABBREVIATIONS Asian Development Bank Affected household Corridor of impact Directorate General of Highways Detailed measurement survey Displaced person Executing agency Inventory of losses Land Acquisition Committee Land Acquisition and Resettlement plan Ministry of Public Works Nilai Jual Obyek Pajak (appraised taxable value of land) Project Management Unit Project Implementing Consultant Replacement cost study Right-of-way Regional Roads Development Project Socioeconomic survey Secretaris Daerah (Kabupaten Malang) Safeguard Policy Statement (ABD) NOTE In this report, "$" refers to US dollars. This land acquisition and resettlement plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

3 Definition of Terms Compensation - This is payment given in cash or in kind to displaced persons (DPs) at replacement cost or at current market value for assets and income sources acquired or adversely affected by the project. Corridor of impact (COI) - This is the area which will be cleared of all structures and obstructions. In the Tambakmulyo-Wawar Road Section, the entire road right-of-way (ROW) is being acquired and cleared. Cut-off date - Refers to the date after which people will NOT be considered eligible for compensation i.e. they are not included in the list of DPs as determined by a census of persons displaced from assets and livelihoods. In this Project, the DGH and the Land Acquisition Committee (LAC) will disclose the cut-off-date to residents and local officials of each affected village which coincides with the conduct of the detailed measurement survey (DMS). Detailed Measurement Survey (DMS) Displaced person (DP) / Affected Household (AH) - With the use of approved detailed engineering drawings, this activity involves the finalization and/or validation of the results of the IOL, severity of impacts, and list of DPs done during the preparation of this resettlement plan (LARP). The final cost of resettlement will be determined after the DMS. - Refers to any person or persons, household, firm, private or public institution that, on account of changes resulting from the Project, will have its (i) standard of living adversely affected; (ii) right, title or interest in any house, land (e.g., residential, commercial, agricultural, and/or grazing land), water resources or any other fixed assets acquired, possessed, restricted or otherwise adversely affected, in full or in part, permanently or temporarily; and/or (iii) business, occupation, place of work or residence or habitat adversely affected, with or without physical displacement. In the case of affected household (AH), it includes all members residing under one roof and operating as a single economic unit, who are adversely affected by the project. Entitlement - Refers to a range of measures, such as compensation in cash or in kind, income restoration support, transfer assistance, livelihood substitution, relocation support, etc., which are provided to the DPs or AHs depending on the type and severity of their losses to restore their economic and social base. Income restoration - This involves re-habilitating the sources of income and livelihoods of severely affected and vulnerable DPs and AHs to supplement compensation received for acquired assets, in order to achieve, at a minimum, full restoration of living standards and quality of life. Inventory of Losses (IOL) - This is the listing of assets as a preliminary record of affected or lost assets during the preparation of the LARP where all fixed assets (i.e., land used for residence, commerce, agriculture; dwelling units; stalls and shops; secondary structures, such as fences, tombs, wells; standing crops and trees with commercial value; etc.) and sources of income and livelihood inside the COI are identified, measured, their owners identified, their exact location pinpointed, and their replacement costs calculated. The severity of impact on the affected assets and the severity of impact on the livelihood and productive capacity of the DPs are likewise determined.

4 Involuntary Resettlement - It is the displacement of people, not of their own volition but involuntarily, from their homes, assets, sources of income and livelihood in the COI in connection with the Project. Land acquisition - Refers to the process whereby a person in the Tambakmulyo- Wawar Road Section is compelled by the government through the LAC and DGH to alienate all or part of the land s/he owns or possesses, to the ownership and possession of the government for the Project in return for compensation at replacement cost. Relocation - This is the physical displacement of a DP from his/her pre-project place of residence and/or business. Replacement cost - Means the amount in cash or in kind needed to replace an asset in its existing condition, without deduction of transaction costs or depreciation and salvageable materials, at prevailing market value, or its nearest equivalent, at the time of compensation payment. Replacement Cost - This refers to the process involved in determining replacement Study costs of affected assets based on empirical data. Resettlement - Refers to various measures provided to DPs or AHs to mitigate any and all adverse social impacts of the project, including compensation, relocation (where relevant), and rehabilitation as needed. Resettlement Plan - This is a time-bound action plan with budget, setting out the resettlement objectives and strategies, entitlements, activities and responsibilities, resettlement monitoring, and resettlement evaluation. Severely affected DPs/AHs - This refers to DPs and AHs who will (i) lose 10% or more of their total productive assets, (ii) have to relocate, and/or (iii) lose 10% or more of their total income sources due to the project. Vulnerable groups - These are distinct groups of people who might suffer disproportionately or face the risk of being further marginalized due to the project and specifically include: (i) households that are headed by women with dependents, (ii) household heads with disabilities, (iii) households falling under the generally accepted indicator for poverty, (iv) elderly households who are landless and with no other means of support, and (v) landless households.

5 EXECUTIVE SUMMARY Project Background. This Resettlement Plan covers (a) due diligence activities for the land that was acquired in the period for the Jolosutro Sendangbiru road and (b) identification of mitigation of affected persons utilizing forestry for agricultural production; and (c) resettlement strategy to address impacts of additional land acquisition expected to be taken place by the end of 2011 to replace the acquired forestry land as per provisions in the Laws No. 41/1999 on Forestry. Due Diligence. Due diligence covers impact of land acquisition conducted in for the 21.3 km of Jolosutro Sendangbiru Road Section. Of the acquired 51.6 hectares land, the 1.6 hectares (16,103 sq.m) was private land owned by 5 households. The said land was acquired in 2004 with total compensation of IDR 240,000,000. The payment was acceptable and there are no outstanding issues raised by the AHs. The 50 hectares of forestry land was also cleared in the period , however, there are no records of who were the users of the forestry land and if compensation were provided. Nonetheless, there were no complaints raised by anybody interviewed in the area. Scope of Resettlement Impact. A total 54 affected households living in 3 villages (Villages of Tumpakrejo, Sindurejo, Gajahrejo) in Gedangan Sub district and 1 villages (Sub district of Gajahmanjingwetan) who are using the forestry land (production forest) will lose 1,822 trees/crops and 136 sq.m of rice field because of the project. No structures will be affected and small portion of land will be required by the Project. Households utilizing the land have other arable land nearby, hence, they will not be severely affected by the Project. Most of the AHs are farmers who have been occupying the land for more than years. Consultation, Disclosure and Grievance. Consultations with the affected households were carried out during the due diligence activities and LARP preparation during Sept and 7 9 October 2011 through various methods. The consultation activities will continue during LARP finalization and implementation. Key information in this LARP has been disclosed to the affected persons during the consultation meetings held with them. A grievance redress mechanism has been established and will be handled through mediation aimed at achieving consensus and can be elevated to a court of law as a last resort. Legal Framework and Resettlement Entitlements. Laws and regulations of Government of Indonesia and ADB Safeguard Policy Statement (2009) will be the legal and policy framework for determining resettlement project policy and entitlements. Payment for land and non-land assets will follow the principle of replacement cost. Assistance to severely affected and vulnerable households will be provided in cash or in-kind in close consultation with them. Households who are considered vulnerable will be provided with, suitable community development programs and priority of the job access for the civil work. Resettlement Budget. The estimated total budget for resettlement is 1,549,500,000 (approximately USD 182,294). The budget will cover compensation costs, allowances, rehabilitation measures, administration costs, and contingency. The DGH will ensure timely provision of counterpart funds for resettlement to meet any unforeseen obligations in excess of the resettlement budget estimates in order to satisfy resettlement requirements and objectives. Implementation Arrangements. The directorate General of Highway (DGH), Ministry of Public Work is the Executing Agency that will have overall responsibility on the project and resettlement. The DGH will establish Project Management Unit (PMU) to implement the responsibilities. While, the project implementation unit (PIU) is Satker (Work Force) of Road and Bridge Construction of East Java. The Malang District through the Land Acquisition

6 Committee (LAC) will be responsible in handling land acquisition for the 51,6 hectares of forestry replacement land. Monitoring. The DGH will serve as the Project s internal monitoring body. Quarterly reports will be submitted to ADB starting from the finalization of the LARP and preparation for acquisition of additional land, which coincides with the conduct of the detailed measurement survey. An external monitor will also be engaged to carry out its own monitoring and evaluation and semi annual reports will be submitted to the ADB for web posting. Implementation Schedule. Resettlement activities will be coordinated with the civil works schedule. Land acquisition and resettlement will not commence until the final LARP has been agreed between ADB and the Government. Construction activities in the specific site will not be allowed until all resettlement activities have been completed, agreed rehabilitation assistance is in place and the site is free of all encumbrances. Table ES-1. Indicative Schedule of Resettlement Activities No Activities Schedule 1 Submission of the draft LARP to ADB October ADB s approval on the draft October LARP finalization following location for forestry land replacement December Submission of the Final LARP to ADB January ADB s review and approval January Compensation payment. January 2012 July Delivery of LRP February December Internal monitoring January 2012 June External monitoring January December Civil work 2013

7 I. PROJECT DESCRIPTION A. Project Background 1. The Jolosutro Sendangbiru road section along 21,3 km (28,5 kp 49 kp) is one of the road sections in the southern part of Java. The road sub-project will upgrade an existing road located in Malang District in East Java Province. The road extends 21.5 km has the 24 m ROW, 6.00 m of carriage way. The road is a part of the corridor that connects East Java with Central Java. This link passes through a single District (Malang District) under the three Sub Districts (Bentur Sub District, Gedangan Sub District, and Sumbermanjing WetanSub District.), and 6 villages, namely Sumber Bening, Srigonco, Tumpakrejo, Sindurejo, Gajahrejo, and Sitiarjo. The main income and livelihood of the citizens in the 6 villages is agriculture. The Location of project and road link are shown in Figure 1 Figure 1: Project location 2. The area to be traversed by the proposed road project consists of hilly and sloping terrain with the distance from the coastline ranging 1 14 km with altitude ranging from 20m to 430m above sea level. The road transects a river and streams that drain surface water to the coast. Most of the area has a solid layer of rock limestone that forms the foundation of the road structure. Areas along the road are dominated by shrubs, fields, stands of banana and coffee, plantations, rice fields and some settlements with low density. 3. The section road Kolosutro Sendangbiru serves the needs of coastal tourism to Ngliyep Beach and Sendangbiru Beach. The road extends 21.3 km has been acquired with the 24 m ROW in period of The COI of 24 m along the 6 km of the road length starting from the sta 28,5 to sta 34,175 has been cleared from assets owned by residents. The said sub section is the dirt road located in the forest area. From the sta 34,175 42,125 is the damaged soil and gravel road with lots of houses along the side of the road and trees/crops owned by the residents within the ROW. The remaining sub section from 42, has been asphalted and concreted. Detailed description of the road and social aspects can been seen in the table below

8 Station Table 1: Physical and Social Condition of the Existing Road Physical Condition of Road Section Social aspects Dirt road that has been compacted Deteriorated gravel and soil road Asphalt and concrete, 6,00 m of wide (1.00 m of emergency road) Figure : STA Forestry land, the 24 m ROW is clear and free of all encumbrances. Several villages and houses located along the edge of the road. However, no buildings within the ROW. In many areas, residents are using the land within the ROW for farming. Most of the trees planted in the ROW are the banana trees. Lots of trees planted in the ROW. Figure : STA

9 Figure: B. Land Requirements 4. The total land required for the subproject is 51.6 hectares consisting of 50 hectares of production forest and 1.6 hectares of private land. An additional 50 hectares of land will be required by the Local Government of Malang District by the end of 2011 to replace the 50 hectares of acquired forestry land as per provisions in the law No. 41/1999 on Forestry. C. Status of Resettlement Planning and Implementation 5. The Local Government of Malang District through the Land Acquisition Committee (Panitia Pengadaan Tanah) acquired the private land for the proposed sub project in The forestry land, on the other hand, is still in the process of being granted a land use permit. In reality, the land has been cleared since Since the cleared land had not been maintained properly, some areas are utilized by the residents (sharecroppers) for farming. Therefore, this Land Acquisition and Resettlement Plan (LARP) covers the AHs who have been utilizing the forestry land. In addition the LARP also covers the acquisition of additional land to replace the forest land to be used for the construction of the project road. The replacement land has not been identified and this additional acquisition is planned to be carried out by the end of Any households, private and public organizations, regardless of tenure status, who will be affected by acquisition of replacement land will be covered by the policy and entitlements mentioned in this LARP. D. Methodology 7. Data collection was undertaken on Sept 2011 and 7-9 October 2011 through various methods; i) in-depth interview with related local authorities at village and district level including Land Acquisition Committee (LAC) handling land acquisition for the project section in 2004; ii) stakeholder meetings with participation of national and local governments; iii) census, inventory of losses, socio-economic survey and perception surveys; iv) focus group discussions and consultation meetings with the AHs. Secondary data were also collected from DGH Malang office and other related institutions with regard to land acquisition and

10 compensation payments, forestry permits issued by Ministry of Forestry, and Pricing standard on Plants issued by the Bupati of Malang District, etc. II. DUE DILIGENCE ACTIVITIES A. Methodology 8. This Due Diligence study focused on the land acquired by the Local Government in the period of A series of meetings with the Land Acquisition Committee that handled land acquisition in 2004, local government of Malang District handling for the sub project, the local leaders, and affected persons were carried out on 7-9 October 2011 to capture their information, perceptions, and opinion on land acquisition. B. Due Diligence Findings 9. Land Acquisition and Land Clearing. The total land required for the sub project with the 24 m ROW is 51.6 hectares (516,000 sq.m) consisting of 50 hectares (499,897 sq.m) of production forest and 1.6 hectares (16,103 sq.m) of land which was privately owned. Both the private and forestry lands were acquired in the period as outlined in table 2 below (the forestry land is still in the process of being granted the land use permit. See below for further discussion). Table 2: Status of Land and Period of Acquisition/Clearing No Sub District Village Land Time of Land status Acquisition/land clearing 1 Bentur Sumber Bening Forestry 2004 Srigonco Forestry Gedangan Tumpakrejo Forestry 2004 Private Sindurejo Forestry Sumbermanjing Wetan Gajahrejo Forestry 2004/2005 Sitiarjo Forestry 2004, Private Land. The acquired private land is located in Village of Tumpakrejo. The land was non-irrigated land used for mixed garden production with some of the plots located in the residential area. The land was owned by 5 households with land certificates (legal title). A total 60 sq.m of structure owned by one household was also affected, however, without any associated relocation required. 11. Land Acquisition Committee. As per Indonesian Government regulations on Land acquisition for the Development of Public Purposes, land acquisition in 2004 was implemented by the Land Acquisition Committee (LAC) (Panitia Pengadaan Tanah Untuk Kepentingan Umum) chaired by the Bupati of Malang District. The Head of Bappeda served as a vice chairman with 9 members from relevant institutions including Chief of Sumbermanjing Wetan Sub District and Head of Sitiarjo Village. The tasks of the Committee included, among others: (i) (ii) carried out inventory of losses and confirmed the inventory result to the land and assets owners; conducted the consultation meetings with the land owners and other concerned parties;

11 (iii) (iv) (v) determined compensation rate based on negotiation with the land owners and guidance from the central government on the compensation rate; witnessed the delivery of compensation payment and prepared official records for the transfer of acquired land and assets; and resolving any grievances related to land acquisition. 12. Consultation meetings. As mentioned above, a series of consultation and information dissemination meetings with the land owners were conducted by the LAC during the land acquisition process. The consultation meetings covered (i) information dissemination on the project and requirement of land acquisition; (ii) consultation on land measurement and notice of measurement results; and (iii) negotiation of compensation rates and payment mechanism. All land owners were invited to the consultation meetings for project information dissemination and negotiation on the compensation rates. 13. Compensation rate and Payment. In determining compensation, the LAC used various methods and references including (i) guidance from the central government on the compensation rate for land; (ii) information on land price in the project area collected from the local authorities; and (iii) negotiation with the land owners. The final rate was not be higher than the range of the compensation rate guided by the central government. In Tumpakrejo, the compensation rate paid by the LAC for land was IDR This rate included the compensation for the trees/crops on the land. This rate was in the range of the prevailing market rate at the time of compensation payment and much higher than the NJOP rate in 2007 (please see evidence of NJOP in Appendix 1). No deduction for taxes and administrative cost were applied. With regard to the building, the LAC paid compensation based on the standard of the building. 14. Use of Compensation Money and AHs satisfaction. Most of AHs used the compensation money for consumption needs, house construction, and increase business capital. No AHs used the money for buying land since it is difficult to identify private land in the area as it is dominated by forest land with limited private ownership. All the AHs interviewed stated that the compensation rate provided in 2004 reflected the range of the land market rate and therefore the rate was acceptable to the AHs. None of the AHs raised issues related to the compensation. 15. Impact of land acquisition on income and living standards. The land acquisition did not have a significant impact on the affected households since the acquired land represented a small portion of their total land holdings. 16. The 50 hectares of forestry land was also cleared in the period , however, there are no records of who were the users of the forestry land and if compensation were provided. Nonetheless, there were no complaints raised by anybody interviewed in the area. III. SCOPE OF LAND ACQUISITION AND RESETTLEMENT 17. This Resettlement Plan of Jolosutro Sendangbiru Road Section is prepared to address the resettlement impacts of the 54 affected persons utilizing forestry land for agricultural production. The LARP also covers resettlement strategy to address potential impacts of the acquisition of the additional 50 hectares to be undertaken by the end of 2011 to replace the land to be acquired for the road construction. A. Project Impact 18. Forestry Land Clearing and Forestry Permit. In 2009 the Ministry of Forestry issued a principle permit for the hectares of forestry land usage which covers the

12 project area and permit renewed in 2011 which is valid for 2 years (Please see Appendix 2 on the Principle Permit renewal). The permit was proposed by the Malang District Government for the Southern East Java Road corridor along km, where the road section of Jolosutro Sendangbiru is part of the said road length (Please see Appendix 3 on Statement Letters of Governor of East Java and the Bupati of Maland District on the commitment to ensure the availability of land). The principle permit for forestry land use does not permit any construction until such time that the land use permit is issues by the Ministry of Forestry. Considering the complexity of requirements and length of time to obtain a land use permit, the LG of Malang District proposed instead the issuance of a dispensation permit for a temporary period to enable the construction of the project road. Following the principle permit, the Local Government has also proposed the land use permit. The 148,14 hectares comprises 107,09 hectares of production forest and 41,05 hectares of protected forest have been mostly cleared. (Around 20 km remaining road length located in the forest area has not yet been cleared.). 19. Additional land required for forestry land replacement. One of the requirements that should be met by the Local Government to obtain the land use permit is to provide the Ministry of Forestry with land replacement equivalent to the 50 hectares acquired forestry land for the use of road construction. Potential areas for forestry land replacement is being identified by the local government 1 and expected to be completed by November The Local Government of Malang District plans to start acquiring the land by December Budget in the amount of IDR 1,032 million has been allocated in the 2011 fiscal year. 20. Since the replacement land has not yet been identified, the associated social impact assessment and identification of the affected persons has not been carried out. However, the scope of the Resettlement Plan is also to cover this additional land. The final LARP will include resettlement impacts on households due to acquisition of additional land as replacement for the land to be used for the project road. Any households, private and public organizations, regardless of tenure status, who will be affected by acquisition of replacement land will be covered by the policy and entitlements mentioned in this LARP. B. Sources of Data 21. An inventory of losses survey (IOL) was conducted in combination with the socioeconomic survey (SES) and covered all the affected households in the sub-project area. A replacement cost survey (RCS) was also conducted by collecting information from both secondary sources and primary sources. The methodology includes direct interviews with people in the affected area, information from local authority, and relevant national and local regulations. C. Affected Assets 22. A total 1,822 trees/crops will be affected by the project (Please see Appendix 4 on the details of the lost trees/crops per AH). The vast majority of the affected plants are banana trees, followed by corn, cassava, sugar cane, coconut, pete, mango, randu, durian, and cacao. Details of the quantities of trees/crops are outlined in the table below; 1 Some locations have been identified for the proposed land replacement including i) Land of 100 hectares in the Village of Sumberejo, Sub district of Ponco Kusumo; ii) 100 hectares of the land located in the Village of Tamansatria, Sub district of Ampal Gading; and iii) land in the Village of Srigonco, Bentur Sub district. These three areas are located in malang District.

13 Table 3: Estimated Compensation for Trees/Crops No Species Number of Trees/Crops 1 Banana 1,362 2 Coconut 9 3 Pete 5 4 Cacao 1 5 Mango 2 6 Durian 1 7 Randu 2 8 Rice field 136 Sq.m 9 Sugar cain Corn Cassava 150 Total 1,822 trees and 136 sq.m 23. No affected households are expected to be severely affected. No structures are expected to be affected with no required relocation. Those losing loss of land use have other arable land and are not expected to lose 10% or more of productive land. IV. SOCIO ECONOMIC INFORMATION AND AHS PROFILE 24. The socioeconomic survey covered all 54 AHs. The purpose of the socio-economic survey is to provide baseline data on AHs and to assess resettlement impacts as well as to determine appropriate levels of entitlements. 25. The scope of data collected included (i) Household head: name, sex, age, livelihood or occupation, income, education and ethnicity; (ii) Household members: number, livelihood or occupation, school age children and school attendance, and literacy, disaggregated by gender; (iii) Living conditions: access to water, sanitation and energy for cooking and lighting; ownership of durable goods; and (iv) Access to basic services and facilities. 26. Profile of the AHs. The socioeconomic survey presents that all of the households surveyed were headed by men. Among the 54 respondents, 59% (32 people) are between 31 and 50 years old, 18% (9 people) are between 21 and 30 years old, 9% (5 people) are between 51 and 55 years old, and 8 (15%) are older than 55 years.. Table 4.1: Age of Male Respondents No Age Total Percentage a. <20 th 0 0% b. 21 th - 30 th 9 16% c. 31 th - 40 th 14 26% d. 41 th - 50 th 18 33% e. 51 th - 55 th 5 9% f. > 55 th 8 15% Total % 27. With regards to length of occupancy in the project area, 67% (36 people) of respondents confirmed that that they had lived in the project area for years, 20% had lived there for 5-10 years, and 13% had lived there less than 5 years.

14 Table 4.2. Years of Residency in Road Area No Duration of living Number Percentage a. <5 th 7 13% b. 5 th - 10 th 11 20% c. 11 th - 15 th 36 67% d. >15 th 0 0% Total % 28. Regarding places of origin, 98% came from East of Java, and the remaining 2 % come from Jogyakarta. Most of households are from Malang District and are landless. They left their villages for a better life in the project area. 29. Most of the affected households derive their income from farming (51 families or 98%), while one household head is working as a driver. These conditions are affected by their education level. Most of the AHs just graduated from elementary school and the others graduated from secondary school which means that most of them are working in the informal sector by doing business as small farmers. 30. Most of the heads of households stated that they just have elementary school education level (94%), and only one family (2%) has junior high school education, one family (2%) have senior high school education, while one family never obtained an education. 31. Most of the affected households (87%) have an income of Rp. 500,000 to Rp. 1,000,000 per month, followed by 7 AHs (13%) that stated their income as being more than Rp. 1,000,000 per month. For these households their children give support regularly every month and according to the site investigation their houses are in average/similar condition to the other houses and therefore they are not categorized as poor households. During the survey many respondents frequently declare lower than actual income levels which clearly affects the survey results. Table 4.3. Income Levels for Affected Households No Level Income (Rp) Number Percentage a. <Rp ,- 0 0% Rp ,- s.d Rp , % b. c. >Rp ,- 7 13% Total % 32. Access to Clean water and public facilities. There are no AHs who have well or water pump at their houses area. They take the water for domestic needs from the natural water resources located around 300 1,000 meters from their houses. However, all AHs have latrines. There is no electricity connection from the government, the AHs get electricity access from local small private electricity business operators in the neighbourhood who have diesel generators. Households typically pay IDR 15,000 per month to run a 10 W lamp. The AHs wish that the government would provide them with electricity following the road development. The distance to the public facilities is quite far. The distance to the school is around 3 5 km, while for health care it is around 7 km. Only a few AHs have motor vehicles, even many AHs have no bicycle. 33. Perception of the Project and Potential Impacts. The survey indicated that all the AHs are in agreement with the project despite this being the first time they received

15 information about the project. All the AHs interviewed said that they were happy to hear that the road will be developed/improved. They believe that the project will have positive impacts to their economic situations and social life including increased local incomes, local tourism around the project area, lower transport costs, etc. However, perceived potential negative impacts included possibility of traffic accidents, criminal actions, and threat of livestock theft. Detailed information on the project potential impacts and the AHs view on the project and compensation scheme can be seen in the table under the sub chapter below. 34. Perception on the compensation. All the 54 AHs are aware that they are occupying forestry land, so they do not expect to receive compensation for land. The AHs expect that the government will provide them with the productive seedlings, not timber seeds as per the government s offer since the people are not allowed to have timbers in the forest area. Some productive seedlings recommended by them are mango, avocado, sawo manila (sapodilla manila), and petai. V. CONSULTATION, DISCLOSURE AND PARTICIPATION 35. Involvement of the AHs and concerned parties is vital in planning and implementing the Resettlement Plan to get their views and to ensure their acceptance of the actions planned under the project including the compensation scheme and grievance handling mechanism. A series of consultation meetings with the relevant local government agencies were held in September and October 2011 to gain an understanding of the land acquisition process in the project area in 2004, progress of land use permit for forestry land, government commitment to provide compensation to the 54 AHs utilizing ROW for farming, LG s plan to acquire the additional land to replace the acquired forestry land, and LARP finalization accommodating the additional land acquisition for forestry land. 36. Consultation meetings with the affected persons were conducted in all affected villages in October 2011, including Villages of Sindurejo, Tumpakrejo, and Gajahrejo in Gedangan Subdistrict and Village of Sitiarjo, Sumbermanjingwetan Sub district. The consultations meetings were attended by the AHs and other residents living along the road who are not directly affected. Please see below, the summary of the consultation meetings FGD in Sinduharjo Village I 9 October 2011, at 15, p.m No Topic Opinion and Suggestion 1 Opinion on the project 2 Potential impacts Most of residents do not know the project plan, but some local leaders knew the project plan from the consultant during the survey for resettlement in September All the residents living along the southern East Java corridor are happy and support for the project. This will be the second road construction after the first construction in 2004/2005. No compensation for the lost trees/crops was provided by the government for the first construction. Potential positive impacts: Transport cost will be cheaper and mobility of citizens will be easier. Will improve the local economic production and trading. Citizens are no longer dependent on collector of agricultural produce and can market the produce to the city by themselves. Citizens especially women can sell agricultural produce such

16 No Topic Opinion and Suggestion as corn, cassavas in front of their houses. The rate of land use transfer will increase. Since 2004, the land use transfer rate has risen from IDR 300,000 to IDR 5,000,000 for 150 sq.m. Local citizens access for jobs during the civil works Some households will bring their families (children) to live permanently in Sindurejo Village. Access to get electricity since the government will pay attention for the areas that have good road. 3 Consultation process Potential negative impact: Potential livestock theft Worried that the Perum Perhutani will evict them from the land and use the land for commercial purposes. No prior consultation meetings had been carried out by the project or the local government for the project plan. The consultation conducted in October 2011 was the first meeting in the village level. The most strategic consultation is through meetings at farmer groups secretariat. 4 Compensation Citizens do not expect to receive compensation for lost trees/crops planted in the ROW. However, the residents will be grateful if the government/project provide them with compensation. Compensation can be provided in the form of productive plant seedlings. Mango tree seedlings is the most expected and followed by avocado and sour soap. 5 Grievance redress mechanism If there any complaints, citizens can bring the case to the farmer group for resolution. There are two farmer groups in Sinduharhasa and they meet regularly. All citizens living around the project area are members of the farmer group. If no solution at farmer group, the chair of farmer group will bring the case to the village office. If the grievance is still unresolved, the complaint can be brought to Camat and higher level. However, mostly the case can be resolved at farmer group level. 6 Others All residents attending the meeting are living on the forestry land (state land). They are farmers utilizing the forestry land for farming. Despite this, there are many transactions of land use among the local people. In Tumpakrejo Village, a resident just purchased a 500 sq.m of land use with the price of IDR 2,500,000,-. Most of households have been living in the project area since Citizens expect that the project will provide days advance notice for people to clear the land prior land clearing by the project. The average land occupied by a household for farming is 2,500 sq.m of rice field and 1 hectare for non-irrigated land. Just a few people will lose their productive land and this represent very minor impacts.

17 FGD in Gajahrejo and Sitiarjo Village 9 October 2011, at 11:00 am nn No Topic View and Suggestion 1 Opinion on the project 2 Potential impacts Most of citizens did not know of the government s plan to improve the road. Yet, citizens will provide support for the development. A few of village office staff knew the project plan from the people doing the land measurement for the road design. Potential positive impacts: More people will travel along the road which will increase economic income for the villagers. Citizens can sell the product in front of their houses. Improved potential for people to get electricity and clean water access as the government will more pay attention to areas with good road infrastructure. Will support the development of beach tourism in Sendangbiru and this will increase the local economic growth. 3 Consultation process Potential negative impact: More traffic with greater potential for accidents. Will lose income from the productive plants from the acquired land. First consultation on the project conducted during this LARP preparation. Farmer group meeting is viewed as the most strategic way for public consultation since all households are members of the farmer group. Women are not active in the meetings. 4 Compensation Will accept whatever compensation is provided by the government. However, if the government will provide seedlings, they do not want to receive timber seedling since these will end up belonging to the forestry and would not benefit the affected people. The villagers expect to get productive fruit trees such as mango, avocado, durian, and sawo manila. 5 Grievance redress mechanism If there any grievances, citizens prefer to bring the case to the farmer group for resolution. Residents rarely bring the case to the village office for resolution. Most of AHs do not have citizen card identity (KTP), so it s difficult to deal with the village office. 6 Others Residents expect to get clean water program from the government/project as the project benefit. All residents now take water from natural water sources which is usually around 1 km from the house. Citizens have no wells because they are very expensive to construct at around IDR 4 6 millions.

18 FGD in Sindurejo Village 9 October 2011, at p.m No Topic View and Suggestion 1 Opinion on the project 2 Potential impacts Some residents received project information from the previous consultant doing the survey for LARP preparation Happy that the road will be developed since the existing road is very damaged and detrimental to the local economic development and living standards. Potential positive impacts: Transport cost will be more economical and motor vehicle will not be easily damaged due to the road. Minimize dust, especially during the dried session More people will travel on the road and more traffic. Expedite travel time to school. Most of the students (elementary school and secondary schools) take around 2 hours to travel to school by riding motorbike or on foot. Expedite travel time to health center. Potential negative impact: Could not identify any negative impacts 3 Consultation process No previous consultations conducted by the local government/the project, except the consultation undertaken by the consultant during the LARP preparation. They prefer meetings to be conducted at Mushola. Women should participate in the meetings 4 Compensation Wish to receive compensation in the form of fruit trees seedling such as mango and petai. The price of corns is IDR per kg or IDR 7,000 10,000 per stem. 5 Grievance redress mechanism All the complaints are expected to be resolved through farmer groups or community meetings at Mushola (payer place) 6 Others Expect that women will be invited to subsequent consultation meetings Expect to get clean water access program from the government as they have to take the water from the natural water resources which is around meters from their houses. 37. Consultations and discussions will continue to be carried out with the affected households during finalization of the LARP and implementation. With regard disclosure, copies of this LARP endorsed by DGH to ADB will be made available in provincial, district, sub-district, and village offices in Bahasa Indonesia. 38. The draft resettlement plan has been disclosed to the affected households through public information and consultation sessions conducted in October In addition, public information leaflets, also in Bahasa Indonesia, will be provided to the DPs in October The draft LARP will be uploaded on the ADB website. For the additional land acquisition, the LAC will ensure that the Project information leaflets are distributed to the DPs. The Project

19 information leaflet will include the following information: (i) description of the road Project, its adverse social impacts, and LARP finalization, (ii) measures to avoid impacts, including entitlements of DPs, (iii) consultation and grievance procedures, (iv) schedule of delivery of compensation and assistance, (v) displacement schedule, and (vi) officials to contact for any queries (see Appendix 4 for the Project information leaflet). 39. Following the conduct of the DMS and prior to the submission of the final LARP to ADB, the DGH through the LAC will disclose to the DPs the salient points of the Final LARP which will include (i) DMS results, (ii) relocation and rehabilitation options, (iii) entitlements, (iv) grievance redress procedures, (vi) timing of delivery of compensation and assistance, and (vii) displacement schedule. Copies of the Final LARP in Bahasa Indonesia will again be made available in relevant local government offices. Said LARP will be uploaded on the ADB website. Social monitoring reports will also be made available to the DPs and will be uploaded on the ADB website during LARP implementation. VI. GRIEVANCE REDRESS MECHANISM 40. Grievances related to any aspects of the Project will be handled through negotiation aimed at achieving consensus. Depending on the nature of the complaints, the following procedures outline the manner by which grievances will be addressed in the Project. A. Related to the Inventory of Affected Assets a. An aggrieved DP may appeal the result of the DMS on affected land and other assets found on the affected land (buildings, plants, other objects) with the district Land Acquisition Committee (LAC). b. If the grievance/complaint has merits, LAC will make necessary revisions/corrections in the DMS. c. If the grievance/complaint concerns ownership/control of land and/or other assets found on the affected land, the LAC will seek a settlement with contending parties through consultation. d. If the consultation does not produce a settlement, the LAC will advise the DPs to resolve the case through the court. e. The LAC keeps record of complaints and disputes handled. B. Related to Other Aspects of Land Acquisition and Resettlement 1. First Stage (i) (ii) (iii) (iv) An aggrieved DP may bring the grievance/complaint directly to District LAC or through the local leaders and village chief who will submit it to the LAC either in writing or relay it verbally. The LAC together with the village chief and local leader will attempt to seek consensus to achieve an acceptable settlement with the aggrieved DP. If the aggrieved DP does not accept the proffered compensation, the LAC will deposit the compensation money with the court. The LAC is responsible for recording and keeping file of all complaints that it handles.

20 2. Second Stage (i) If the aggrieved DP is not satisfied with the decision of the LAC, the DP may bring the grievance, either in writing or verbally to the Regent of the district (Bupati) accompanied by an explanation on the causes and reasons for the objection within a period of 14 days from the issuance of the decision of the LAC in the First stage. (ii) The Bupati will decide on the complaint within a period of 30 days. (iii) Before deciding on the case, the Bupati may request for opinions/wishes from (i) the aggrieved D; (i) the LAC; and (iii) the DGH. (iv) The Bupati decision will be delivered to the aggrieved DP, the DGH, and District LAC. (v) The Bupati s office is responsible in documenting and keeping file of all complaints that it handles. 3. Third Stage (i) (ii) (iii) (iv) (v) If after 30 days, no decision to the complaint is made or if the aggrieved DP is not satisfied with the decision taken by the Bupati, the DP may bring the complaint/case to the governor. The Governor will decide on the complaint within a period of 30 days. The Governor, before making decision or settlement, may request the opinions/wishes of (i) the aggrieved DP, (i) the LAC, and (iii) DGH. The Governor s decision on the complaint will be delivered to the aggrieved DP, the DGH, and district LAC. The Governor s office is responsible in documenting and keeping file of all complaints that it handles 41. If after 30 days, no decision to the complaint is made or if the aggrieved DP is not satisfied with the decision taken by the Governor, the DP may bring the complaint/case to the court for adjudication. VII. LEGAL AND POLICY FRAMEWORK A. Relevant Laws and Regulations in Indonesia 42. The key legal instruments currently in force in Indonesia that are most relevant to involuntary resettlement are Presidential Regulation No. 36/2005, entitled Provision of Land for Realizing the Development for Public Interests, as amended by Presidential Regulation No. 65/2006, entitled On Land Acquisition for Development Purposes in the Public Interest, and National Land Agency (BPN) Regulation No. 3/2007 on Land Acquisition Implementation Guideline for Presidential Decrees 65/2006 and 36/2005. Superseding Presidential Decree No. 36/2005 that earlier amended Presidential Decree No. 55/1993, the 2006 Presidential Regulation provides for various forms of compensation for private assets needed to pursue Government development projects. 43. The Presidential Decrees and the National Land Agency (BPN) Regulation No. 3/2007 mandates that land acquisition, including determining levels of compensation, for public development projects would be carried out by the Land Acquisition Committee (LAC) of the district or city with the issuance of a decree by the regent or mayor. Where such authority crosses district boundaries within a single province, land acquisition would be carried out by the provincial government. Additionally, the BPN Regulation No. 3/2007 provides further detail on the membership of the committee and scope of works in land acquisition including conducting inventory of losses, consultation meetings, determining compensation rate, and recording the land acquisition process.. Other laws and regulations

21 that have bearing on resettlement are Land National Agency circulation letter No. 3127/ /VII/2009, which determines the compensation rate; National Land Agency Regulation No. 1/2010, which regulates the timeframe for the certification of the remaining land after compensation payment; Road Law No. 38/2004, which recognizes people occupying State land (Tanah Negara),including squatters; and Act No. 9/2009 on Food Security, which requires any party acquiring productive land to provide land replacement three times bigger than the acquired productive land. B. ADB Policies 44. The new ADB Safeguard Policy Statement (2009) consolidates three existing safeguard policies: involuntary resettlement (IR), indigenous peoples (IP), and environment. The objectives of the IR policy are to (i) avoid involuntary resettlement, (ii) explore alternatives to avoid, (iii) restore livelihoods and (iv) improve living standards of poor and vulnerable households. The IP policy objectives are to (i) design and implement projects that fosters full respect for IP's identity, dignity, human rights, livelihoods systems, and cultural uniqueness as defined by IP themselves and (ii) ensure that IPs receive culturally appropriate social and economic benefits, do not suffer adverse impacts as a result of projects, and can participate actively in projects that affect them. The policy on environment is discussed in a separate environment report. 45. The ADB Policy on Gender and Development (1998) adopts gender mainstreaming as a key strategy for promoting gender equity, and for ensuring that women participate in, and that their needs are explicitly addressed in the decision-making process for, development activities. The new safeguard policy also reiterates the importance of including gender issues in the preparation of safeguards documents at all stages to ensure that gender concerns are incorporated, including gender-specific consultation and information disclosure. This includes special attention to guarantee women s assets, property, and land-use rights and restoration/improvement of their living standards; and to ensure that women will receive project benefits. Other policies of the ADB that have bearing on resettlement planning and implementation are the (i) Public Communications Policy (March 2005), and (ii) Accountability Mechanism (2003). C. Gaps Analysis and Project Principles 46. The main limitation of Presidential Decree No. 65/2006, the applicable provisions of Presidential Decree No. 36/2005 and The National Land Agency Regulation No. 3/2007 lies on the fact that they have not been conceived and planned to address involuntary resettlement. Said regulations are concerned, more than anything else, with acquiring in the most expeditious way properties needed for the right-of-way (ROW) of government projects. But as acquisition and/or clearing of project ROW may involve displacement of people from both material and non-material assets, these people, most of whom are already poor to begin with, are at risk of further impoverishment in the form of landlessness, joblessness, homelessness, economic marginalization, increased morbidity and mortality, food insecurity, loss of access to common property, and disintegration of community and social ties and organizations. Certainly, existing laws and policies on land acquisition cannot address these risks. 47. With regard comparison of Indonesian Law and regulations and ADB policies, to begin with, the two are not similar. Indonesian laws and regulations on property acquisition for ROW are principally an exercise of the State power of eminent domain. In the acquisition process, government agencies invoking the State power of eminent domain are guided by other laws and regulations pertaining to ownership over the acquired assets and the level of compensation to be provided. Existing financial and auditing procedures must be followed, notwithstanding the fact that the affected property is not being acquired by Government on a

22 willing seller willing buyer situation. Moreover, the focus of the acquisition activity is the object to be acquired; the social situation of the person to be dispossessed of an asset is not considered in the whole transaction. 48. On the other hand, the focus of ADB Safeguard Policy Statement is the person or household who face socioeconomic and/or physical displacement. Concerns are raised on whether or not acquiring an asset for the project ROW, regardless of the tenure status of the household, would adversely impact the DP s current living standards. Questions on whether such acquisition would put the DP at risk of impoverishment and on whether it would bring in an opportunity for the DP to improve its present status are asked. Thus, ADB Safeguard Policy Statement seeks to restore the pre-project living standard of the DP through the replacement of lost assets in conjunction with other measures that are all aimed at improving the socioeconomic conditions of the poor and vulnerable households. 49. Table below lists down the gaps between existing Indonesian laws and regulations and ADB Safeguard Policy Statement and how these gaps could be addressed. Table 6: Gap Analysis Government ADB Policy Project Policy Provision on calculation basis for compensation of land does not clearly refer to the principle of replacement cost. Presidential Regulation states that the land price refers to the NJOP (Nilai Jual Obyek Pajak or the appraised taxable value of the land) or market price by considering the current NJOP which is often lower than prevailing market price. Thus, many local governments pay compensation for land in accordance with the NJOP price or in between NJOP and market price. Also, current laws do not require the acquiring government agency to shoulder transaction costs in the acquisition of private land. Government auditing policies compel Executing Agencies not to compensate at replacement rates for affected fixed assets, such as buildings. The value of the affected asset, even if lost involuntarily, is depreciated based on the condition of the asset Severely affected and relocating households, poor and vulnerable households and households on government land affected due to loss of land, loss of income or shelter are The rate of compensation will be calculated at full replacement cost. Qualified and experienced experts will undertake the valuation of acquired assets. The rate of compensation will be calculated at full replacement cost. Qualified and experienced experts will undertake the valuation of acquired assets. Ensure that displaced persons without titles to land or any recognizable legal rights to land are eligible for resettlement assistance and compensation for loss of non-land assets. The Project will engage a qualified appraiser to ensure that price of land are based on the principle of replacement cost. Qualified and experienced experts will undertake the valuation of acquired assets. Compensation at full replacement cost for structures. There will be no depreciation and deduction of salvageable materials. Qualified and experienced experts will undertake the valuation of acquired assets. Poor and vulnerable groups have been identified; impacts and their vulnerability have been identified and will be mitigated in this LARP. The Project will ensure their participation in

23 Government ADB Policy Project Policy provided assistance on a caseby case basis. D. Project Resettlement Policy Pay particular attention to the needs of vulnerable groups, especially those below the poverty line, the landless, the elderly, women and children, and indigenous peoples. consultations. 50. The core principle of the Project Resettlement Policy is anchored on the philosophy that ADB safeguards policies and Government development projects must serve the public good and that, in the design and implementation of such projects, all efforts will be exerted to help ensure that DPs are not worse off. Moreover, the Project should provide an opportunity for the local population to derive benefits from it. Likewise, the Project should serve as an occasion for the local population to participate in its planning and implementation, thereby engendering a sense of ownership over the Project, subprojects and other components. Towards this end, the Project Executing Agency will endeavour to carry out the Project and any of its components based on the following principles: a. Involuntary resettlement and impacts on land, structures and other fixed assets will be minimized where possible by exploring all alternative options. b. Compensation will be based on replacement cost and DPs are entitled to be compensated at market prices prevailing at the time of compensation. c. DPs without title or any recognizable legal rights to land are eligible for resettlement assistance, in addition to compensation for non-land assets at replacement cost. d. Meaningful consultation will be carried out with the affected households and concerned groups to ensure their participation during Project planning up to implementation. The comments and suggestions of the DPs and communities will be taken into account. e. Grievance mechanism will be established to address concerns and issues raised by the DPs. f. Improve, if not restore, the livelihoods of DPs through various income restoration strategies and prompt replacement of acquired assets. g. Provide physically and economically displaced persons with needed assistance, including the following: (i) if there is relocation, secured tenure to relocation land, better housing at resettlement sites with comparable access to employment and production opportunities, integration of resettled persons economically and socially into their host communities, and extension of project benefits to host communities; (ii) transitional support and development assistance, such as land development, credit facilities, training, or employment opportunities; and (iii) civic infrastructure and community services, as required. h. Provide special assistance to the poor and vulnerable households such as legal and affordable access to land and resources, appropriate income sources and legal and affordable access to adequate housing. i. A set of procedures on transparency and consistency will be adopted if land acquisition will be done through negotiated settlement to ensure that DPs will be able to maintain the same or better socioeconomic status.

24 j. The draft and final LARP, and any subsequent updated version, will be disclosed to the DPs and indigenous households in a form and language(s) understandable to them prior to submission to ADB. k. Resettlement identification, planning and monitoring will ensure that gender concerns are incorporated. l. Special measures will be incorporated in the LARP to protect socially and economically vulnerable groups such as indigenous households, households headed by women, children, disabled, the elderly, landless and people living below the generally accepted poverty line. m. Existing cultural and religious practices will be respected and, to the maximum extent practical, preserved. This includes the host population. n. Culturally appropriate and gender-sensitive social impact assessment, planning, and monitoring will be carried out in various stages of the project. o. The PMU will not award a civil works contract until the Bupati has officially confirmed in writing that (i) payment has been fully disbursed to the DPs and rehabilitation measures are in place as per Final LARP agreed between DGH and ADB; (ii) already-compensated DPs have cleared the area in a timely manner; and (iii) the area is free from any encumbrances. No site clearing will be done until and after the Final LARP has been agreed between DGH and ADB and implemented. VIII. PROJECT ENTITLEMENTS 51. The cut-off-date of eligibility refers to the date prior to which the occupation or use of the project corridor of impact (i.e., area that will be cleared of all obstructions) makes residents/users of the same eligible to be categorized as DP and be eligible to Project entitlements. DGH and the Land Acquisition Committee (LAC) will disclose the cut-off-date to residents and local officials of each affected village. The establishment of the cut-off date for eligibility to Project entitlements is intended to prevent the influx of ineligible non-residents who might take advantage of Project entitlements. For this Project, official announcement on the cut-off date will coincide with the start of the DMS. The local residents and village governments will be informed about this through the mass media and through the holding of socialisasi (public meetings). 52. The entitlements below are based on potential resettlement impacts of the 54 households using forest land for productive purposes. Since replacement land has yet to be identified, the entitlements below will cover any households, private and public organizations, regardless of tenure status, who will be affected by acquisition of replacement land. The entitlement matrix of this draft LARP was adopted from the Central Java Tambak-Mulyo Wawar road section prepared for the Project. The entitlements may be revised, as needed, to better respond to the needs of the DPs but the standards set in this LARP entitlement matrix cannot be lowered when the resettlement plan is finalized. Resettlement implementation will not commence until DGH and ADB have agreed on the final LARP Category of Impacts/Losses Permanent loss of land: agricultural, residential, or commercial Table 7.1: Entitlement Matrix Entitled persons Impact on Land Those who have formal legal rights (certificate) or those whose claim over the land is recognized as a full title (customary rights) Project entitlements Cash or in kind compensation at replacement cost which is based on a valuation of independent appraiser. The land appraisal will only be valid for a year.

25 Category of Impacts/Losses Loss of main structures (houses, offices, independent shops) and secondary structures (fences, wells) Public infrastructure and facilities including entities. Entitled persons government Non Land Assets Building owners regardless of land tenure and whether or not the affected structure is covered with a building permit. Government, enterprise, owners state communal Project entitlements No deduction for taxes and any administrative costs. Financial assistance for the updating of land ownership documents (certificate and land documents recognized as a full title) for the residual area of the DPs land. If the remaining land is no longer viable, i.e., no economic value, the Project will acquire the entire land at replacement cost. Land replacement for agricultural land as per provisions in the Law No. 41/2009 on Agricultural Land for Sustainable Food Protection and Law No. 41/1999 on Forestry Compensation at replacement cost based on prevailing (i.e., at the time of delivery of compensation) market prices of materials and cost of labor for dismantling, transferring and rebuilding. No depreciation will be applied and the value of salvageable materials will not be deducted from the full replacement cost of the acquired structure. If the impact on main structure is more than 50%, the entire structure will be acquired at full replacement cost. If the impact on the main structure is less than 50% but will compromise the stability of the main structure, i.e., no longer intact, then the Project will acquire the entire structure at full replacement cost. At least 90 days advance notice for DPs to demolish the buildings before the start of land clearing. Electricity and telephone installation will be compensated based on removal cost and new installation. Rebuild the facilities based on agreement by both parties

26 Category of Impacts/Losses Crops and trees Relocation of DPs and shop owners due to the entire loss of building Impact due to relocation of shop/house-cum shop Loss of resources basis Temporarily loss of agricultural, residential, and commercial land for construction Entitled persons Owners without legal rights 54 AHs identified. Assistances to Relocating DPs Owners of entirely affected buildings Assistance to Owners of Entirely Affected Shops Owners of shops/housecum shops regardless land tenure. High Risk of Impoverishment Those who loss more than 10% of total assets or sources of income. Poor and vulnerable AHs, regardless of severity of impacts Impacts during Construction Those who have formal legal rights (certificate) or those whose claim over the land recognized as a full title. Project entitlements Annual crops: if standing crops are destroyed or cannot be harvested, compensation based at prevailing market rates. Perennial crops: compensation at replacement cost taking into account their productivity. Compensation will be provided in the form of productive fruit seedlings equivalent to the losses 90 days advance notice to harvest/cut trees/crops/timbers prior to land clearance. Project to provide the use of trucks or other transport means to haul belongings to new place. Transition subsistence allowance in the form of rice equivalent to 10 kg of milled rice per person in the household per month multiplied by 3 months Participate in the livelihood restoration program Transition subsistence allowance in the form of rice equivalent to 10 kg of milled rice per person in the household for 1 month. Participate in the livelihood restoration program Participate in the livelihood restoration program such as water access program and economic development. Priority for employment of a household member on a projectrelated job. Rental payment by Contractor for residential land based on prevailing rental cost and based on agreement with land owners. For productive land, rental fee will not be less than net income obtained from productive land. Compensation for acquired nonland asset (trees/crops, buildings) will be provided at replacement cost

27 Category of Impacts/Losses Entitled persons Those who have no formal legal rights (certificate) and recognizable as full title (informal dwellers, sharecroppers) Project entitlements Land will be restored to pre- Project condition or even better 60 days advance notice No rental fee for land for the period of impact Land will be restored to pre- Project condition or even better Compensation for affected nonland assets (trees/crops, buildings) at replacement cost IX. INCOME RESTORATION AND REHABILITATION 53. The Malang District Government has an allocated budget of IDR 220,000,000 for livelihood restoration assistance to affected households. The programs are geared to restore, if not improve, the socio-economic conditions of affected households, including vulnerable households. Programs include clean water access program and economic income development. 54. Women will participate during the detailed measurement survey, consultation meetings, and payment delivery. On the community development programs, the Project will ensure active participation of women during the design, implementation and monitoring. Resettlement monitoring will be disaggregated by gender. X. RESETTLEMENT BUDGET AND FINANCING PLAN 55. Determining valuation. As per Indonesian government regulations, the government will use an independent appraiser to value the land for the public development purposes. The appraiser will consider the land status, land location, and economic and social value of the land in valuing the land. No deduction of taxes and administrative cost will be applied and the government will also finance the land ownership updating cost. Compensation rate for buildings will refer to the Bupati Decree on the pricing standard on Structure. The principle of no depreciation for the structures and no deduction for salvageable materials will apply. In case the local regulation requires the depreciation for building, the project will provide additional cash allowance to fill the gaps. The pricing standard on plants will consider productivity of trees. 56. There is no practice of selling plants such as coconut trees, avocado trees, sawo kecik, sugar cain, durian trees, etc in the project area. However transaction of agricultural product such banana, mango, durian, cassava, is common. Information on pricing standard on trees issued by the Bupati only cover seedlings and exotic flowers. Considering this limited information, the unit rate of the plant is determined by considering information on the unit rate obtained from other village with similar characteristics. Table 7.2: Market rate of Affected Trees/Crops No Species Market Price (Rp/each) 1 Banana Coconut Pete Cacao Mango

28 No Species Market Price (Rp/each) 6 Durian Randu Rice field 750,000/500 m2 9 Sugar cain 5, Corn 10, Cassava 4, Entitlements to Compensation and Assistance. The ADB policy requires compensation for lost assets at the current replacement value to both titled and non titled holders and resettlement assistance for lost income and livelihoods. In the Bale Kambang- Sendang Biru Sub Project, the absence of formal titles will not constitute a bar to relocation and livelihood restoration assistance. 58. The following is an estimate of cost for affected trees/crops. No Table 7.3: Estimates of Compensation for Affected Plants Species Number of Trees/Crops Rate (IDR) Total Compensation (IDR) 1 Banana 1,362 Units ,290,000 2 Coconut 9 Units ,700,000 3 Pete 5 Units ,250,000 4 Cacao 1 Units ,000 5 Mango 2 Units ,000 6 Durian 1 Units ,000 7 Randu 2 Units ,000 8 Rice field 136 M2 200,000/140 sq.m 200,000 9 Sugar cain 50 Units 5, , Corn 240 Units ,400,000 Units 600, Casava 150 4,000 Total 69,690, The Malang District Government has also allocated a budget of IDR 1,032,000,000 for additional land (replacement forest land) expected to be acquired by the end of The land will be transferred to the Ministry of Forestry as a replacement of the acquired forestry land. 60. The budget for land acquisition and the resettlement plan will be come from the Malang District and the DGH (for external monitoring). The budget breakdown is shown in the following table

29 Table 8.1: Land Acquisition and Resettlement Budget Particulars/Items Estimated Budget (Rp) 1 Cost for compensation of trees/crops to be 70,000,000 provided to the 54 AHs in the form of seedling distribution. Livelihood restoration program to be delivered 220,000,000 to the 54 AHs and can also be accessed by other community members living along the road 3 Protection of acquired land (signage) 10,000,000 4 External monitoring 150,000,000 Sub total 450,000,000 Contingencies and administrative cost (15%) 67,500,000 Total 517,500,000 Cost for additional land acquisition 1,032,000,000 (replacement forest land) 3 Grand Total 1,549,500,000 The grand total of Rp1,549,500,000 is equivalent to approximately USD182, The LAC will ensure that adjustments are made to compensation rates and to other cash entitlements to reflect current market rates at the time of payment of compensation. XI. INSTITUTIONAL ARRANGEMENTS A. Directorate General of Highways 62. The Directorate General of Highways of the Ministry of Public Works is the Executing Agency for this Project, while the project implementation unit (PIU) is Satker (Work Force) of Road and Bridge Construction of Central Java. DGH will establish a project management unit (PMU) headed by a manager (PMU head) with experience in externally financed projects. PMU will be responsible for the day-to-day implementation of the Project and will be accountable for technical, safeguards, and financial reporting. DGH has an office responsible for social and environment called Sub-directorate of Technical Affairs. The Sub-directorate of Technical Affairs will closely work with the PMU and PIU on matters and activities pertaining to safeguards requirements. B. District Government 63. As per Regulation of the Head the National Land Agency No.3/2007 on Implementation Guidelines for Perpres No. 36/2005 and Perpres 65/2006, land acquisition and resettlement is carried out by the Land Acquisition Committee (LAC) established by the District Government (Bupati). Since the road project traverses more than one district, the LAC at the provincial level had to be established by the provincial Governor. 64. The Office of the Bupati will provide the main workforce in the preparation and implementation of the LARP. The Bupati will have the following functions: (i) organize the committee for resettlement by way of a Decree; (ii) issue a local regulation on the unit costs of affected assets based on replacement cost and/or market rates; (iii) issue a local regulation with regard to assistance to informal settlers on ROW or state land; (iv) manage and disburse funds for compensation, assistance and administration costs; and (v) assist in the expeditious and judicious resolution of complaints of DPs. The office of the Bupati will work closely with the PMU staff.

30 C. PROJECT SUPERVISION CONSULTANTS 65. The Project Supervision Consultants (PSC) will be composed of one international resettlement consultant and a team of domestic resettlement consultants to assist DGH and local authorities in the finalization and implementation of the Final LARP. The PSC resettlement consultants will also assess the capacity of the implementing agencies and provide the necessary capacity building interventions (such as orientation, workshops, onthe-job training). XII. IMPLEMENTATION SCHEDULE 66. Finalization of the LARP. As additional land for land replacement has not been completely identified and approved by the Forestry, the information on social and resettlement impacts has not been presented this LARP. During loan implementation, this LARP needs to be finalized based on the final determination of the land location and final impact assessment. Census and detailed measurement survey will be carried out during finalization of the LARP. As mentioned in the earlier sections of the LARP, the unit rates will be updated and finalized based on the replacement cost survey. Table below shows the information required during DMS and RCS. Table 13: Detailed Measurement Survey and Replacement Cost Survey Detailed The census and detailed measurement survey (DMS) of lost assets will collect Measurement data on the affected assets from 100% of APs following detailed engineering design. Survey (DMS) The data collected during the DMS will constitute the formal basis for determining AP entitlements and levels of compensation. For each AP, the scope of the data will include: Total and affected areas of land, by type of land assets; Total and affected areas of structures, by type of structure (main or secondary); Legal status of affected land and structure assets, and duration of tenure and ownership; Quantity and types of affected crops and trees; Quantity of other losses, e.g., business or other income, jobs or other productive assets; estimated daily net income from informal shops; Quantity/area of affected common property, community or public assets, by type; Summary data on households, by ethnicity, gender of head of household, household size, primary and secondary source of household income viz-a-viz poverty line, income level, whether household is headed by women, elderly, disabled, poor or indigenous peoples; Identify whether affected land or source of income is primary source of income; and AP knowledge of the subproject and preferences for compensation and, as required, relocation sites and rehabilitation measures. Replacement Cost Survey The replacement cost survey (RCS) will be done in parallel with DMS and SES activities by collecting information from both secondary sources and primary sources (direct interviews with people in the affected area, material suppliers, house contractors), and from both those affected and those not affected. The government rates will be adjusted, as necessary, based on the findings of a RCS. Compensation rates will be continuously updated to ensure that APs receive compensation at replacement cost at the time of compensation payment. 78. The summary on tentative schedule of Resettlement Plan is outlined in the table below.

31 Table Indicative Schedule of Resettlement Activities No Activities Schedule 1 Submission of the draft LARP to ADB October ADB s approval on the draft October LARP finalization following location for forestry land replacement December Submission on the Final LARP to ADB January ADB s review and approval January Compensation payment. January 2012 July Delivery of LRP February December Internal monitoring January 2012 June External monitoring January December Civil work 2013 XIII. MONITORING AND REPORTING A. Internal Monitoring 67. The PMU will serve as the Project internal monitoring body. Quarterly reports will be submitted to DGH starting from the commencement of LARP finalization, which coincides with the conduct of the DMS. The PMU will include updates on resettlement in its regular progress reports to ADB. These progress reports will be submitted to ADB for web posting. 68. Internal monitoring and supervision will look into the following concerns: (i) (ii) (iii) (iv) (v) (vi) Compensation and other entitlements are provided as per agreed Final LARP, with no discrimination according to gender, vulnerability, or any other factor; Income restoration measures are designed and implemented including modifications in the programs and provision of additional cash and in-kind assistance to the participating affected households as and when necessary; Public information, public consultation and grievance redress procedures are followed as described in the agreed Final LARP; Ability of DPs to re-establish their livelihoods and living standards. Special attention given to severely affected and vulnerable households. Affected public facilities and infrastructure are restored promptly; and The transition between relocation or site clearing and commencement of civil works is smooth and that sites are not handed over for civil works until the affected households have been satisfactorily compensated, assisted and relocated. B. External Monitoring and Evaluation 69. An external monitoring and evaluation agency will be mobilized one month prior to commencement of DMS activities. The EMA will come from a reputable and experienced research or consulting agency, university, or a development NGO with relevant experience in similar activities and are not involved in project implementation and supervision. 70. The main objective of external monitoring is to provide an independent periodic review and assessment of (i) achievement of resettlement objectives; (ii) changes in income, living standards and livelihoods of DPs; (iii) restoration and/or improvement of the economic and social base of the DPs; (iv) effectiveness and sustainability of entitlements; and (v) the need for further mitigation measures.

32 71. Strategic lessons for future policy formulation and planning will also be drawn from the monitoring and evaluation of resettlement. This is possible through a Post-Resettlement Implementation Evaluation Study that will be carried out 6-12 months following completion of all resettlement activities. 72. Relative to compliance monitoring during resettlement implementation, the main activities of the external monitor will revolve around the following: (i) review existing baseline data and gather additional socioeconomic information, as necessary, on sample affected households; (ii) monitor preparation and implementation of the LARP; (iii) identify any discrepancy between policy requirements and actual implementation of resettlement; (iv) monitor the resolution of complaints and grievances of affected households; (v) provide recommendations for improving resettlement preparation and implementation; (vi) review compliance with regard to use funds for land acquisition and resettlement; (vii) assess whether resettlement objectives have been met and, specifically, whether livelihoods and living standards have been restored or enhanced; and (viii) advise on safeguard compliance issues identified during monitoring and how to resolve them. 73. The external monitoring activities will be conducted on a semi-annual basis and semiannual reports will be submitted to the PMU and ADB. All monitoring reports will be uploaded on the ADB website. The cost of monitoring activities is included in the Project cost. *****

33 APPENDIX I Copy of Appraised taxable value of the land (NJOP of the land)

34 APPENDIX II Forestry Principle Permit Renewal

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39 APPENDIX III Statement Letters of Governor of East Java and the Bupati of Malang District on the Commitment to Ensure the Availability of Land.

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43 APPENDIX IV