RESETTLEMENT ACTION PLAN FOR THE SECTION 3A, 3B AND 3C OF THE ALAT-ASTARA HIGHWAY

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized RESETTLEMENT ACTION PLAN FOR THE SECTION 3A, 3B AND 3C OF THE ALAT-ASTARA HIGHWAY RP359 V4 EXECUTIVE SUMMARY This Resettlement Action Plan (RAP) has been prepared in accordance with the laws and regulations on land acquisition and resettlement in Azerbaijan as well as the Resettlement Policy Framework (RPF) which was prepared as part of the Highway II Project in line with the Involuntary Resettlement Policy (OP4.12) of the World Bank. The Highway II Project will upgrade the M3 highway between Alat and Masalli over 143km. The entire itinerary is divided into three sections. This RAP covers the 62.3km section of the M3 Highway between Shorsulu and South of Masalli (Section 3A, 3B and 3C). In this RAP, negative impacts expected to occur from the construction of Shorsulu South of Masalli Section of the M3 Highway are described, and measures to mitigate the impact, as well as the estimated cost and implementation arrangements, are presented The final alignment as provided by the Design Consultant and approved by the Azerroadservice OJSC (ARS) of the Ministry of Transport was overlaid over the digitized cadastral maps of the area in the State Land and Cartography Committee records. The extent of impact on land and properties for this road section is the result of the scope of works which involves the construction of standard dual carriageways with two lanes each, junctions and interchanges, bridges and underpasses, drainage structures and culverts, offroad service areas, installation of road furniture, signs and markings for traffic safety and control devices and others. The project will affect 1 business and 757 households composed of 3910 persons of which 1832 are males and 2078 are females. 187 affected households are women-headed, All of the affected households will lose part of their privately-owned agricultural lands. A total of ha of various categories of lands, which consists of private (193.23ha), municipal (92.81ha) and state lands (139.71ha), need to be acquired as part of the right of way (ROW) for the construction of the approximately 62.3 km section of the highway itinerary. All of the affected private lands are cultivated mostly to produce cereal and potatoes and other vegetables; in between cultivations these lands are also used to graze livestock of the villages nearby. There are only four structures (two houses, a restaurant, and a stone fence) that will be affected under this section of the road. The RAP provides mitigations and rehabilitation measures to ensure that the livelihood of the affected persons and families will not be lowered as a result of the project. The entitlement matrix provides different measures to address these losses. The RAP provides mitigations and rehabilitation measures to ensure that the livelihood of the affected persons and families will not be lowered as a result of the project. The entitlement matrix provides different measures to address these losses The RAP also provides for mitigating measures for temporary impacts resulting from civil work. Such measures include the following: Provision of temporary access/crossings for pedestrians, livestock and vehicles during the construction activities. Measures for traffic safety and accident prevention. Rehabilitation of affected local roads, pedestrian sidewalks, etc. Relocation of public utilities (electricity lines, irrigation canals, etc). 1

2 Addressing these temporary impacts will be the primary responsibility of the Civil Work Contractor and will be ensured through the inclusion of such provisions in the Civil Work Contract and compliance by the Contractor to these provisions will be duly monitored as part of Environmental Monitoring Plan (EMP). The Land Acquisition Department (LAD) of ARS, is responsible for the implementation of this RAP. Cost of compensation and mitigating measures including information disclosure, public consultation and internal monitoring activities will be part of the Project budget allocated to the ARS. Compensation will be paid to project affected persons (PAP) by the LAD. Additional issues arising from the implementation of this RAP and related Project implementation will be attended to and addressed through a grievance redress mechanism that will be set up as part of the RAP measure. RAP implementation will complete before the start of civil work activities. 2

3 RESETTLEMENT ACTION PLAN FOR THE SECTION 3A, 3B AND 3C OF THE ALAT-ASTARA HIGHWAY 1. INTRODUCTION This Resettlement Action Plan (RAP) has been prepared in accordance with the laws and regulations on land acquisition and resettlement in Azerbaijan as well as the Resettlement Policy Framework (RPF) which was prepared as part of the Highway II Project in line with the Involuntary Resettlement Policy (OP 4.12) of the World Bank. The Highway II Project will upgrade the M3 highway between Alat and Masalli over 143km. The entire itinerary is divided into three sections. This RAP covers the 62.3km section of the M3 Highway between Shorsulu South of Masalli Section (Section 3A, 3B and 3C). RAPs for other sections of the M3 Highway are under development. In this RAP, negative impacts expected to occur from the construction of Shorsulu South of Masalli Section of the M3 Highway are described, and measures to mitigate the impact, as well as the estimated cost and implementation arrangements, are presented. The RAP seeks to ensure that persons and households unavoidably losing land or properties as a result of the Project, after exerting all effort to avoid and/or minimize negative impacts, attain equal if not better standard of living than it would have been without the project. All policies, proposals, compensation and rehabilitation measures included in this RAP are aimed to meet this objective. The Azerroadservice OJSC (ARS) under the Ministry of Transport, which has the lead responsibility for road construction, shall also be responsible for the implementation of the RAP through its Land Acquisition Department (LAD). The RAP for Section 3A, 3B and 3C of Alat Astara Highway has been prepared based on: (i) the Resettlement Policy Framework for Azerbaijan Highway Improvement and Development endorsed by the World Bank (published in (ii) field assessments of the concerned alignment in consonance with the Technical Consultant during the Detailed Design Phase; (iii) verification of the centreline and right of way (ROW) boundaries against the cadastral maps of the area as prepared by the State Land and Cartography Committee; (iv) census/survey of affected parcels and the respective affected persons/households; (v) detailed measurement survey and inventory of the affected plots and assets therein; (vi) socioeconomic survey of a sample affected households; (vii) description of the property valuation methodology used and the estimated compensation value of affected lands, property and other assets; (viii) consultation with the local officials, key informants in the affected villages as well as the project affected persons (PAP); (ix) assessment of potential relocation requirements (x) unit prices determined by the MoF for the affected land and structures; and (xi) secondary data obtained by consultant hired by ARS to verify the unit prices determined by the MoF. Project Description 3

4 Azerbaijan s geographical position makes it an important link between the Black and Caspian Seas and between Russia and Iran. Trade with its neighbours, both transit and bilateral, is an important feature of the economy of Azerbaijan. Economic prospects are bright on the short and middle terms, hinging heavily on the development of the oil and gas sectors. The overall GDP has increased from 8.5 billion USD in 2004 to 43.2 billion USD in 2009, with non oil GDP increasing from 5.7 billion USD in 2004 to 19.6 billion USD in With much of the non-oil trade being small size shipments transported by road to neighbouring countries, access to international markets requires the provision of suitable road transport infrastructure on corridors, ready to meet mid-term strong traffic increase, to replace the presently narrow, low quality roads. The World Bank s Country Partnership Strategy FY07-10 for Azerbaijan identified the importance of transport links and transit corridors as a vital component to the development strategy of the country, particularly for the non-oil sector. Roads and transport network connecting the main regional centres with markets in Baku, neighbouring countries and Europe are crucial. The Bank s assistance to the transport sector targets the rehabilitation and construction of main highway networks connecting Azerbaijan to its neighbours in the region particularly for improving several road segments to the west and south of Baku under the Azerbaijan Motorway Improvement and Development or Highway II Project. The Section under evaluation (Section 3A, 3B and 3C) is part of the main highway (the Alat Astara road under the Highway II Project) proposed to connect the country s capital to its immediate neighbour in the southern border. It aims to improve the transport of goods and services from and to the central capital, Baku with the south border in Astara with Iran. The road to be constructed is a four lane road category with no toll gate, but would allow per design a possible upgrade to a toll way. It is expected that the type of vehicles allowed to access the road will be limited to trucks, cars and motorbike above 125 cm 3. It is also expected that per design, access to the road will only be allowed through the intersections. The newly designed highway will pass through new terrains: in its northern section, the itinerary crosses sparsely populated semi arid area of the Kura flood plains, followed by intensively irrigated farmlands further south and finally reaching the Mahmudchala and the Akhchala Wetlands, then finally again through intensively cultivated agricultural lands in the southern portion of the corridor with a predominantly subtropical characteristic. The highway crosses over numerous channels and rivers of which the predominant is the Kur River, thus requiring the construction of a number of bridges to enable passage. The World Bank is supporting the realization of this itinerary by financing the construction from the beginning of the Section in Alat up to south of Masalli for approximately 143 km stretch, inclusive of the 22-km stretch of the itinerary which was already constructed 1. The southern part of the itinerary from south of Masalli to Astara and the Iranian Border will be implemented with the support of the Asian Development Bank (ADB). On the other hand, the construction of the Section 1B (22 km) which is the northern portion of the Alat to south of Masalli corridor, has already been constructed 1 The TOR of RRI for this current assignment does not include the 22-km stretch. 4

5 The design characteristics of the cross section are as follows: Sub-grade width: 27.5 m Number of lanes: 4 Lane width: 3.75 m Carriageway width: 15 m (2 x 2 x 3.75 m) Width of shoulder: 3.75m (2x3.75m); of which 2.5m (2x2.50 m) will be paved Median strip width: 5.0 m (of which 2x1 m will be paved); Carriageway gradient: 2% (where there is no superelevation) Shoulder inclination: 4% (where there is no superelevation) Fencing along the itinerary: New Jersey type crash barriers at the edges of the paved part of the median Embankment slope ratio (v & h): 1:3 up to 2.5m height of embankment slope; 1:2 > 2.5m to 4.0m height of embankment slope; 1;1.5 > 4.0 m height of embankment. For embankments higher than 6.0 m, a berm of 2.0 m width is proposed. The design speed of 120km/h for flat terrain is used for design purpose. Road furniture (e.g. crash barriers, reflective road markers, traffic signs, fencing, lighting and markings will be according to the national standards for a Category I road. It is anticipated that the new highway will be fenced off over its entire length and consequently will separate the areas though which it is passing. For this reason, bridges and underpasses will be built depending on local demands in order to maintain the connectivity of the areas separated by the new highway. The project falls under the responsibility of the ARS of the Ministry of Transport and its implementation is coordinated by the Project Implementation Unit (PIU). The PIU has been established to implement various projects financed by the Bank. The ARS and its various departments and offices particularly the LAD are the main counterpart of the Consultant. Road Section under Evaluation Section 3A, 3B and 3C are the so called the Southern Section Alignment of the proposed Alat Astara Highway. Section 3A starts at km80.6 of the proposed highway. It comes after the planned overpass to the existing road (M3) to Bilasuvar and crosses the Mahmudchala Wetlands for a total length of 29.9km. It ends up at the proposed overpass at Uzuntapa, Jalilabad at km Section 3B, which is approximately 13.9km starts from the proposed Uzuntapa overpass and runs until another proposed overpass over the Masalli railway station. Section 3C starts after that and runs for approximately 18.5 km, crossing another proposed overpass at km136.4 and ends up to connect to the ADB-financed section at km142.9 near the proposed Masalli South Interchange. See project map in Figure 1. 5

6 The Southern Section alignment is characterized by several features: from km80.6, after the proposed interchange over the existing M3 road to Bilasuvar the alignment crosses for the most part the Mahmudchalla Wetlands and begins to converge and run parallel with the existing railway tracks to Masalli for about 28 km; then, nearing the proposed Jalilabad interchange, the alignment starts to diverge a bit to avoid a heavy settlement area. Onward, it starts to converge and then run parallel again with the railway track at Uzuntapa until the proposed Goytapa interchange where it begins to veer away from it crossing several villages to finally end at the proposed interchange south of Masalli which is the beginning of the ADBfinanced portion of the Highway. The 62.3 km section is interspersed with 17 bridges composed of the following: 3 interchanges (Jalilabad, over Masalli Railway Station, and a road overpass within the town of Masalli itself), 7 bridges over the existing highway, 7 bridges over rivers, 14 underpasses and a railway crossing. Installation of rest areas, road furniture, signs and markings for traffic safety and control devices and others as well as drainage culverts and canals will also be undertaken. The issues pertaining to these features present major challenges to the avoidance and mitigating measures for the land acquisition and resettlement resulting in the increase in scale of land acquisition. 6

7 Figure 1: Project Location Map The proposed construction of this Section as part of the entire itinerary is anticipated to lead to the accelerated socioeconomic development of local districts (Bilasuvar, Neftchala, Jalilabad and Masalli as well as immediate areas nearby), with the improved traffic and traffic efficiency resulting in the reduction in congestion and accidents on the existing M3. The construction of the Alat-Astara Highway will provide an efficient and faster road network that is foreseen to have the immediate positive impact of improving international trade. It is likewise anticipated that the road will facilitate the distribution of regional goods thus helping regional economic growth in the long term. Summary of Key Impacts The Project implementation will result in unavoidable impacts both permanent and temporary because of the acquisition of road right of way (ROW). These key impacts resulting from land acquisition and the dismantling of structures and other properties and assets both private and communal, include the will include: Loss of agricultural land and other assets such as standing crops, trees, building structures. Decline in the level of income as a result of the loss of agricultural land Potential displacement of people from their places of residence and livelihood Permanent or temporary disruption in the source of income as a result of the relocation of the commercial enterprise (restaurant). Threat to health and safety. Possible disruption in the community s way of life This RAP covers impact on loss of agricultural land and other assets, decline in the level of income and permanent disruption in the access to basic services. Other impacts are dealt with under the Environmental Monitoring Plan. 7

8 Land Acquisition and Resettlement Objectives While the majority of the lands in this Section are municipal and state-owned, some privately owned lands are going to be affected by the ROW acquisition. The ROW acquisition of public lands which are used as pasture and grazing areas will have negligible impact on the livelihood and living standards of the households utilizing these lands. The primary objective of the RAP for this Project is to ensure the minimization of negative impacts and the institution of mitigating measures for those negatively affected through providing a package of compensation and rehabilitation measures that will allow them to restore pre-project level of livelihood. The RAP aims to accomplish the following: Present a strategy to achieve the objectives of the Resettlement Policy Framework; Provide a plan for the implementation of the stated strategies to ensure timely acquisition of assets, payment of compensation and delivery of other benefits to project affected persons; Ensure that the Plan enables the PAP to improve and/or maintain their income level and living standards from the pre-project level; Define the principles and mechanics for public consultation and information campaign; Estimate resources required to implement the recommended interventions; and Provide a plan for monitoring and supervision of RAP implementation. Options Considered to Minimize Impacts Several approaches were employed to reduce the impacts. These included (i) undertaking a study to examine various alignment options and selecting the one with the least impact; (ii) developing a road cross section design with features to mitigate and enhance access to agricultural lands; (iii) proposing the construction of underpasses to ensure the connectivity of communities both sides of the road; (iv) selecting an interchange design with minimum ROW requirements and ensuring connectivity to existing local roads; (v) fine-tuning final designs to minimize impact; (vi) using the cadastral maps and overlaying the alignment to determine minimum impacts on structures and properties in congested areas, and (vii) proposing the construction of bypasses to avoid impacts on congested areas. Unavoidable Impacts The unavoidable impacts include the acquisition of parcels of land within the required road reserve of 60m wide and the additional ROW requirement for junctions and interchanges to ensure the technical integrity of the design in terms of standard width of pavement and shoulders and heights of embankments as well as the minimum acceptable radius for certain road curvatures and the like. In the course of such acquisition some residential and commercial structures as well as trees and crops and some public infrastructures like local 8

9 roads and irrigation ditches will be affected. Acquisition of small portion of grazing areas will be also required. The public lands which can be used for grazing purposes are abundant in these places and comprise vast areas, especially in the Jalilabad and Neftchala districts. In addition, municipal grazing lands are open areas available for herders free use. All acquired private lands are either agricultural or homestead areas; none of them is used for grazing purposes. The grazing area to be affected is a narrow strip of land at the edge of a big grazing area. In spite of this, relevant mitigation measures, such as construction of underpasses for cattle at the km , km , km , km , km , km , km , km , , , km , km , km and km were included in the Project design 2. Thus, acquisition of a narrow strip of the grazing area, combined with the installment of underpasses will not have significant negative impact on animal husbandry and the livelihood of local people. Moreover, concerns for safety and other social-environmental impacts as well as the temporary impacts brought about by the civil work activities during construction periods may be unavoidable and measures will be instituted to mitigate them as part of the RAP. 2 Local population was consulted for the the appropriate location of underpasses, and their inputs were taken into consideration in the final design. 9

10 SOCIOECONOMIC BACKGROUND OF THE PROJECT AREA 2.1 National Context Azerbaijan is a lower middle-income country with a gross national income per capita of US$3,830 (Atlas method) in Azerbaijan is rich in mineral resources, mainly in oil and gas. The country also has fertile agricultural land and a well-educated labor force with a strong entrepreneurial tradition. The oil and gas sector contributes approximately one-third of GDP, while agriculture contributes about 9 percent but provides livelihoods to just under half of all households. The impressive GDP growth of the past five years - with an average annual growth rate of 12 percent - was led mainly by oil and gas production. Growth in non-oil output has picked up since 1999 with an average annual growth rate of more than 15 percent. However, oil production is expected to peak in 2011 and decline thereafter in the absence of major new discoveries. Diversified development of the non-oil sector is critical for generating jobs and promoting long-term growth. Despite the country s natural resources, poverty continues to pose a major challenge for Azerbaijan. Notwithstanding the country s substantial poverty reduction over the last two years, in 2009, some 11 percent of the population lived in poverty. There are significant regional variations in poverty rates, with the incidence of income poverty highest in provincial towns. Access to services is limited in rural areas, giving rise to significant rural-urban migration. Part of the strategy to address the pervasive poverty particularly in the rural areas was the stimulation of regional economic development through improved infrastructure and providing closer access of remote areas to the capital and allowing a more efficient exchange of goods and services within and among them. Improved and safer transit and transport systems would help attain the goal. The Baku-Alat-Astara Highway (M2/M3) is a 313 km road which runs from Baku to the Iranian border in a north-south direction. The 4-lane Baku-Kurdamir (M2) Highway and mainly 2-lane Alat-Astara (M3) Highway intersect at Alat. The existing M3 links the district centres of Alat (Garadagh)-Salyan-Bilasuvar-Neftchala-Jalilabad-Masalli-Lankaran-Astara. The new highway financed under the Highway II Project will have a new alignment passing mainly through new terrains over the aforementioned districts. Four of the eight administrative districts (Astara, Lankaran, Masalli and Jalilabad) crossed by the final alignment belong to the Lankaran Economic Region while Bilasuvar, Neftchala and Salyan belongs to Aran Economic Region and Alat settlement of Garadagh is grouped under Baku City which is classified as a separate economic region. The socioeconomic profiles of these districts are diverse and varied. The Lankaran Economic Region, which is climatically and ecologically different from the other regions, constitutes only 7% of the total land area of the country but has about 10% of its total population, while Aran Economic Region has about a quarter of the total land area of the country and only about 20.5% of its total population. Baku City on the other hand has a total land area of 2,130 km 2 or approximately 2.5% of the whole country but has 22.3% of the total population; however, unofficially, it could be higher. 10

11 Lankaran region has harnessed its favourable climate, idyllic topography and fertile soils and abundant springs and mineral water to its competitive advantage in the sector of agriculture, fishery, recreation and tourism. On the other hand, Aran region s rich mineral resources, particularly oil, gas, iodine and bromide ground water as well as aggregates and construction materials fuel its economic growth. Baku City meanwhile remains the driving force of the country where major social, economic, financial, political and administrative decisions emanate. The transport network helps to sustain the vital link and access of these regions to the heart of the country and other regions as well as outside the country. Transport efficiency as translated into reduced cost and improved and safer access and transit could help bolster further regional and local economy. 2.2 Local Context (Subproject profile) Section III will impact 23 villages traversed by the alignment located in four (Bilasuvar, Neftchala, Jalilabad, and Masalli) districts and two economic regions to which these affected districts belong to, namely, Lenkaran and Aran Geography of the Impact Areas The Project area lies within two distinct geographic and topographic zones. Bilasuvar and Neftchala districts are located in an area that is generally flat and are characterized by a semi arid land and sparse vegetation. Hot semi-desert and sub-tropical climate of dry lakes prevails over most of the area during summer. Average temperatures in July is between C while absolute maximum temperature is o C. The annual precipitation is mm which is below the average. Only a few cultivated lands are found in this section of the road; those cultivated are normally planted to grains and hay. Many of the lands are used to graze animals and livestock during the winter season. As one approaches the south to Jalilabad, Masalli and Lenkaran, the topography and geography of the area change. The land is now generally greener and cultivated crops are more varied ranging from grains, root crops, vegetables, to vineyards as well as fruit trees. More villages and settlements are located as the area is more densely populated District and Villages The combined area of the four districts is approximately 4,200 km 2 with Bilasuvar having a total area of 1,358 km 2, Jalilabad about 669 km 2, Neftchala 1,451.7 km 2 and Masalli has 721 km 2 (see Table 1 below). Bilasuvar and Neftchala constitute approximately 67% but with a total population in 2006 that was approximately only 30% of the total for the four districts. Of the 23 villages traversed by the road section, Masalli has the most (18) affected. Table 1: Area and Number of Settlements of the Subproject Districts District Total Land Area (km 2 ) No of villages and settlement # villages traversed Total population (2006) % Male % Female Azerbaijan 86, /239-8,436, Aran ER 21, /37 2 1,731, Bilasuvar 1,358 25/0 State land 81, Neftchala 1, /3 2 74, Lankaran ER 6, / ,300 Jalilabad / , Massali / , TOTAL 4, / , Source: Socioeconomic Assessment, Preliminary Design Phase, RRI GmbH, February

12 As shown in Table 2, the total population of the four districts in 2007 was approximately 538,500 composed of about 124,866 households. Masalli and Jalilabad (combined population of 376,800) are more heavily populated compared to Bilasuvar and Neftchala (combined population of 161,700). Gender composition is about 49% male to 51% female. Majority (74.1%) are rural population. The population is not characterized by ethnic diversity. It is composed mainly by Azerbaijanis. Table 2: Population of the Subproject Districts District Total population (2006) Average density (person/ km 2 ) Total No of HH Average HH Size Male (%) Female (%) Urban (%) Rural (%) Bilasuvar 84, , Neftchala 77, , Jalilabad 186, , Massali 190, , TOTAL 538, Source: Socioeconomic Assessment, Detailed Design Phase, RRI GmbH, February 2008 Of the total 4,200 km 2 of land area in the four districts, approximately 2,941 km 2 or 70% are productive lands. But less than half (approx. 59%) of these so-called productive lands, are cultivated; the rest are either fallow or used as pasture lands as shown in Table 3 below. Table 3: Land Classification and Use in the Project Districts District Name Land Area (km 2 ) Productive Land (km 2 ) Fallow agro-land Pasture lands Cultivated lands Orchard lands Saline lands Bilasuvar 1,358 1, Neftchala 1, Jalilabad Massali TOTAL 4, , , , Source: Socioeconomic Assessment, Preliminary Design Phase, RRI GmbH: February 2008 Since independence, little has been done to maintain the infrastructure for utility provision that was common place during the soviet period. The 1999 survey presents a similar story to that of today. Table 4 below shows the household access to some of the basic utilities in the area. Less than 60 percent (59.8% in Aran and 48.2% in Lankaran) have access to piped water while 39% in Aran and 24.3% in Lankaran have access to gas. Lesser percentages of households in both regions have access to heating system. Electricity is generally available but availability of such utility at the household level is constrained by the current high cost. Table 4: Proportion of Households with Access to Utilities (%) in the Project Regions Indicators Economic Region Aran ER Lenkaran ER Total Households 892, ,142 Electricity Gas Heating System Piped Water Bathroom Sewerage Telephone Source: 2006 National Census, SSC 2007 Although people generally have access to social services (see Table 5) established during the Soviet period, the condition of these facilities is inadequate. This is true of both medical and educational facilities, with buildings and equipment in disrepair, supplies are limited and inadequate and staff underpaid, and had been without adequate training for a long time now. In 2006, there were 726 hospitals in the country of which 18, 9, 7 and 4 are located in Jalilabad, Bilasuvar, Neftchala, and Masalli respectively. There are 81 hospitals beds 12

13 available for every 10,000 population on average at the national level. In the four districts, the average number of person per bed is 187. On the other hand, the national average of the number of doctors available per 10,000 persons is 37; in four districts, only one doctor is available per 724 persons. However, the figure for paramedical staff at the national and regional levels is higher. Table 5a: Availability of Social Welfare Services in the Project Area Number of Number of Paramedical paramedical Number Economic Physicians, physicians staff, staff per of regions person per 10,000 person hospitals population population Number of hospital beds Number of hospital beds per 10,000 population Number of ambulancepolyclinic service organizations Azerbaijan Republic Bilasuvar Neftchala Jalilabad , Massali Source: 2006 data from SSC 2,007 Furthermore, one of the great concerns for the development of Azerbaijan is maintaining the high level and quality of literacy and education attained during the Soviet period. Although the levels of enrolment are being maintained, there is grave concern as to the quality of the schooling. As noted in the statistical reports, the number of libraries, book funds and books had been decreasing since 1995 to present. And this would also appear to be so in the Project area Table 5b: Availability of Facilities and Services in the Project Area No of No of No of preschool Daytime Economic children in students institutions per attendance regions preschool in day time 10,000 persons schools institutions attendance Number of public libraries Book fund (in 000 copies) Average copies per 1,000 population Azerbaijan Republic 1, ,263 4,516 1,528,533 4,021 36, ,310 Bilasuvar ,9 404 Neftchala ,2 483 Jalilabad ,2 319 Massali ,0 235 Source: 2006 data from SSC, 2007 The level of education does not differ significantly by gender. On the other hand, it differs by age groups: 9.2% of aged people have higher education, 15.8% - specialized secondary education and 74.9% - secondary and lower education. At the same time among middle aged people 23.5% have higher education, 27.0% - specialized secondary education and 49.5% - secondary and lower education. It is worth mentioning that according to the data of % of middle aged people had higher education. This can also be explained by intensification of migration processes due to hard social and economic condition existing in rural areas: qualified young people can not apply their knowledge and experience in rural areas, so they are forced to migrate to cities in search of employment. The more educated aged members of the population are left to stay to cope with the responsibility of supporting families. They are also less able to meet the challenges and demands that change entails; moreover, competition in a new environment is more intense. Studies have shown that household members under 15 usually do not work. There are 3.2 persons over 15 in an average household. In particular a household member over 15 spends 46% of time working in his/her own farm, 30% of time is dedicated to household (home) 13

14 activities, 2% - to non-agricultural family business, 2% of time as employee in others farms, 10% - employed in non-agricultural field, 5% are dedicated to education and 5% to leisure. In 2006, the national monthly per capita income was about AZN72. In the Aran and Lenkaran regions where the Project districts belong, the average monthly per capita income was only slightly lower at AZN70 and AZN71.5, respectively, than the national average. On the other hand Baku City s per capita income per month was AZN89.7. Income from self-employment and employment substantially contributes to the total income per capita per month in the two economic regions (mainly AZN18.4 and AZN15.6 in Aran and AZN18.8 and AZN18.8 in Lankaran, respectively). Furthermore, the contribution from agriculture was comparatively high in those regions (AZN17.2 in Aran which is approximately 24.6% of total and AZN17.4 or 24.3 of total average in Lankaran). Table 6 shows the share of various sources of income to the total average per concerned economic regions. Table 6: Comparative Income Profile of Aran and Lenkaran Econ Region-AZN, per capita per month Income per capita per month (AZN) Income Sources Aran Lenkaran AZN Share % Share AZN Share % Share Total Income Income from Employment Income from self employment Income from agriculture Income from rent Income from property Current transfers received Pensions Benefits and social contributions Social Transfers in kind Other income Income from other households Money received from abroad Source: Household Budget Survey, SSC 2006 In terms of income sources by gender, there is a significant difference in the income sources for men and women (Table 7). Free professional activity provides most of the work for the men (8.5% in Aran and 8.4% in Lankaran) while work in personal ancillary provides income for the highest proportion of women (19.4% in Aran and 25.8% in Lankaran) out of the total. On the other hand, work in ancillary activity among the men provides income for only 11.1% in Aran and 9.9% in Lenkaran. There are substantially more women (22.3% in Aran and 19.5% in Lankaran) than men (12.9% in Aran and 8.0% in Lankaran) who obtain their income from pension or through dependents. Table 7: Sources of Income in the Project Area in Percent by Gender Category Income Share by Gender Category (%) Income Sources Aran Region Lenkaran Region Male(46.9) Female (53.1) Male(45.7) Female(54.3) Hired work in public sector Hired work in private sector Hired work in agriculture Incomes of business, commerce, craft Work in personal ancillary Free professional activity Work as a private person Unemployment benefit Pensions Study grants Social grants Dependents From outside of the country Others

15 Source: Household Budget Survey, SSC 2006 While the country had made a significant dent in poverty over the years, to date the problem still poses a major challenge to the government and development planners as shown in Table 8. Table 8: Incidence of Poverty in Azerbaijan, Urban-Rural Category ( ) Population Group Poverty level (%) Poor Very Poor All Azerbaijan Urban (Baku) Urban (non-baku) Rural Source: Household Budget Survey, SSC 2007 As the trends show, incidence of income poverty appears to be highest in urban areas (non- Baku) and lowest in Baku itself. Surprisingly, the rural areas have not been doing too badly compared to the urban areas (non-baku) in terms of incidence of extreme income poverty. From 2002 to 2005, the reduction in incidence of poverty had been significantly lower. While Baku had been able to substantially reduce extreme income poverty through targeted specific social interventions, the other urban areas due to inadequate resources may not have been able to do enough. While the poverty rate in Baku is significantly lower, still the concentration of poor population in absolute number in the City is significantly higher due to its share of total population in the country and due to the continuing influx of migrants and IDPs looking for work and other opportunities therein. The Project area is predominantly rural (74% on average). Accordingly, poverty incidence in the area is reflective of the rural situation. The incidence of poverty in the district would be lower than the national average. Attitudes towards poverty are influenced by the reality that recent economic development in the country has been focused in the oil-sector primarily in Baku, and that little development has been distributed to the districts. But more recently, the central government had already instituted several measures to address this imbalance. However, key informant interviews and focus groups discussions in the project area indicate the general sentiment of the people that still there is only minimal improvement; that there is the continued lack of employment opportunities, frequent lack of water for drinking and other basic amenities, rising cost of energy sources, and the poor condition of medical facilities resulting in common illness. People observed that poverty was experienced when there was not enough food and clothes for the family, when they were unable to heat their houses in winter, have clothes for their children to wear to school, or when they could not afford needed medicines. Poverty is experienced most within communities by the elderly, widows or unmarried women, the disabled and IDPs. 15

16 3. POLICY AND LEGAL FRAMEWORK 3.1 Legislation of the Republic of Azerbaijan The Alat Astara Highway Project will have major impacts on the lives and properties of households and communities in the areas traversed by the road. Accordingly, the review of laws and regulations guiding the property ownerships and rights of individuals is necessary. It will provide the framework and rationale to the assessment and bring to fore the basic considerations that must be addressed in the preparation of the RAP. Laws and Regulations: The construction of the Shorsulu-Masalli Section of the Alat-Astara road as well as the implementation of adequate safety measures in the areas adjacent to the road require the partial and/or complete takeover of assets and properties of private individuals by the government for public interest. Therefore, the review of laws and regulations guiding the property ownerships and rights of natural and legal persons is an integral part to the RAP. Article 29 of the Constitution of Azerbaijan (12 November 1995) establishes the right of citizens to possess properties and ensures the protection of such property rights. It also ensures that those dispossessed of land are provided legal recourse and that alienation of properties for state needs shall only be allowed upon fair reimbursement of its value. There are no laws or legislation in Azerbaijan that specifically consider matters of involuntary resettlement. However, a few regulatory instruments exist in the country providing the basis for regulating and managing the acquisition of land, properties and productive assets and for compensation for the loss of these assets. These instruments include (i) Land Code (25 June 1999), (ii) Civil Code (1 December 1998), (iii) Resolution of the Cabinet of Ministers No. 42 (15 March 2000), (iv) Resolution of the Cabinet of Ministers No. 110 (June 1999), (v) Decree on Application of the Road Law (2000), and (vi) Decree on Additional Activities for Regulating the Use of Road Reserves (2004), and Resolution of the Cabinet of Ministers No. 54 (4 April 2009). Among these, the Land Code is a critical one as it (a) provides for compensation principles for the loss of land, established on the basis of the Resolution of the Cabinet of Ministers No. 54 and Standard Code of Azerbaijan No. 158, 1998; (b) allows recourse through courts; and (c) provides the basis for a land-for-land compensation option. The Civil Code and Land Code provide the basis for acquisition of land for projects of national interest and municipal needs while the Cabinet of Ministers Resolution No. 42 outlines procedures for the acquisition. Collectively, these regulations provide options for land acquisition from legal landowners: (i) land-for-land and, (ii) compensation based on market prices. Dispute over compensation is subject to resolution in the courts. Beside these, Resolution of the Cabinet of Ministers No. 54 outlines procedures for valuation of assets which are acquired for State needs. The Decree on the Application of the Road Law and the Decree on Additional Activities for Regulating the Use of Road Reserves designate the Cabinet of Ministers as the agency to approve road reserves and acquisition of affected properties. The current legislation related to the status and control of the road reserves has its foundations in the land laws of the Soviet era. Prohibition of activities in the road reserve is outlined in the 1989 Road Decree, which itself refers to an earlier legal instrument, Decree No. 228 of 3rd July Since independence, a Decree on the Application of the Road Law of 2000 and a recent Decree No. 18 of February 2004 on additional activities aimed at regulated usage of the road reserve have provided greater clarity on the situation of the road reserve. In addition, there is a decree of the President dated 8 July 2008 which defines 16

17 standards for noise and vibration pollution. Summaries of instructions given in these and other decrees are given in the following sections Road Decree The 1976 Decree refers back to a Russian state construction standard SNIP 467/74 that defined the requirements for a 60 metre wide road reserve 3 for State and Republican Roads and a 25 metre wide road reserve for Local Roads. This decree gives legal standing to the width requirements for road reserves given in the construction standard Road Decree No. 461 The 1989 decree again reinforces the road reserve width requirements given in the 1976 Decree. Article 7 outlines prohibited activities and constructions in the road reserve and assigns rights for the roads authority to evict illegal occupants on 15 days notice, at the conclusion of which, the roads authority may demolish the constructions without compensation and use the resultant materials in the construction of the road. This 1989 decree provides a procedure for the road authority to review and authorise applications for developments within 200 metres of each side of the road centreline in respect of aspects including maintenance of the road reserve and access provisions to the main road Decree on Application of the Road Law One of the main purposes of this decree was to update the 1989 decree, especially in regard to the designation of responsible agencies. Article 14 outlined that the width of road reserves will be confirmed by the Cabinet of Ministers. Processes for inclusion of new areas into the road reserve, and acquisition of affected properties, are described, and it is stated that those permitted to use lands within the road reserve must be notified of the conditions of this use upon agreement of use terms. Article 33 states that commercial enterprise may be undertaken with Roads Authority approval within the road reserve Decree on Additional Activities Aimed at Regulating the Usage of Road Reserves in the Republic of Azerbaijan This recent decree designates responsible agencies for various issues relating to the road reserve and adjacent land use, including the preparation of an inventory of national road reserve to identify illegal and legal occupiers and properties, and for ongoing maintenance and protection of the road reserve. The legal basis of land use and the value of existing properties inside the road reserve must be submitted to the Cabinet of Ministers. Other Legal Instruments Azeri Law has the following instruments, which provide instructions on matters relating to land, land acquisition and compensation for other property losses: The Land Code, 25 June 1999; The Civil Code, 1 December 1998; Resolution of the Cabinet of Ministers No. 54. April 4, 2009; Resolution of the Cabinet of Ministers No. 42, March 15, 2000; 3 The road reserve width is defined as being 30 metres wide on each side of the centre-line, totaling 60 metres. 17

18 Resolution of the Cabinet of Ministers No. 110, June Aspects of these instruments that relate to the use and protection of the road reserve are given in the following sections. Land Code dated 25 June 1999 When land is required for projects of national interest, compensation is initially offered on the basis of valuations made in accordance with a standard code (no. 158 dated 1998). If landowners are unhappy with this valuation, the market price will be used as a basis for valuation. In the event that such agreement cannot be reached, the acquiring authority can process its application for acquisition through the courts, but this is often a long and complex process. The landowner also has an option for seeking recourse through the courts if negotiation fails. The Land Code also allows provision of alternative lands equivalent in value to the land being acquired. Significantly, the Land Code does not allow acquiring agencies to physically and legally acquire land unless every household member of the affected households have signed the legal document certifying the transfer of land to the acquiring agencies. The existing regulation also requires that the acquiring agency must submit the signed agreements with all land owners in order for the budget of land acquisition to be released. Experience from the construction of Tovuz bypass (see page 28) shows that these requirements cause significant delay in land acquisition as many land owners unsatisfied with the amount of compensation offered refuse the sign the agreements, which forces the acquiring agency to increase compensation to the level that is satisfactory to the majority of land owners. Where a relevant local executive authority decides a land case, the decision shall come into force immediately and this decision will not be terminated by the lodgement of a complaint with the relevant court. Articles 110 and 111 describe wilful occupation of land plots, implementation of illegal construction on land plots as violations of the land legislation, and state that these are prohibited acts. The articles state that such land plots will be returned to the relevant authorities without reimbursement of the expenses incurred during the illegal utilization. Rehabilitation of the lands should also be carried out by the illegal occupants, at their own expense. These different decrees are summarized in Table 9. Civil Code dated 1 December 1998 This Civil Code states that any rights to immovable properties must be registered with the State, and that land may be recalled from owners for state or municipal needs as approved by the relevant courts. Resolution of the Cabinet of Ministers No On Some Normative and Legal Acts Relating to the Land Code of the Azerbaijan Republic dated 15 March This resolution outlines procedures for the compulsory acquisition of land for state or municipal needs. Resolution of the Cabinet of Ministers No. 110 On Approval of Regulations for an Inventory Cost estimation of Buildings Owned by Natural Persons dated June This Resolution outlines procedures for acquisition and compensation valuation for affected buildings and immovable properties. It refers to the standard code No. 58 that is to be used for making valuations of land and property to be acquired. These valuations are made on the basis of standard unit rates for different types of construction in different regions of Azerbaijan. Decree of the President dated 26 December 2007 on ensuring the execution of the law No QD dated 7 December 2007 on Amendments and Additions to the Civil Code of the 18

19 Azerbaijan Republic - This decree states that 20% additional compensation should be added to the calculated market price of the acquired property to compensate for the damages resulting from the purchase of property, including lost income and loss connected with the pre-termination of commitments against third parties. Resolution of the Cabinet of Ministers No. 54 on Approval of the Procedures for Calculating the Acquisition Price of Real Property for Public Needs - According to the Resolution, the State Committee on Property Issues (SCPI) has overall responsibilities for land acquisition and resettlement issues. The executive agency in need of land acquisition should submit all necessary documents (including preliminary budget estimate) to the SCPI. SCPI reviews the documents submitted jointly with the Ministries of Finance and Economic Development. Based on the results of this review the Cabinet of Ministers issues a resolution on the acquisition of property for public needs. After the resolution is passed a written notification should be sent to property owners by the Executive Agency within 3 calendar days. The Executive Agency should involve Independent Appraiser in order to value affected assets. The appraiser should meet the minimum qualification requirements set by the State Property Committee with agreement of the Ministry of Finance and Ministry of Economic Development. Calculation of the market price of the acquired property is based on: - market value of the real property in the respective administrative area; or - replacement value of the property and land, if there has not been any real property transaction in that area to formulate a fair price of land or if the land is to be replaced with another parcel of land; or - in case it is impractical to use market or replacement value to formulate a fair and real price of land, any price which is no less that normative price of land; - if more than one method of valuing the land can be used, then the method that formulated the highest price shall be applied. In case the acquired land is swapped with another parcel of land with the agreement of the land owner, the following will also be provided in order to recover the livelihood of land owners after resettlement: - for agricultural land: costs of preparing the land for planting, as well as expected costs of fees and taxes related to transfer of land title; - in the residential areas (towns, suburban, and rural): infrastructure of the same or improved quality, fees and taxes for obtaining and registering property titles. - costs incurred to reinstate land, if not undertaken; - Moving and transportation costs; - salvage materials will be returned to owners with his/her agreement. Upon the receipt of the appraisal report, the Executive Agency shall send a notice to the owner within one day and with all supporting documents attached. Compensation shall be transferred to the bank accounts of physical and legal entities not later than 120 days of submission of the first notice sent to the owner of the property. Table 9: Overview of Existing National Regulatory Framework Related to Social Aspects in Road Sector Azerbaijan Constitution Established the right of individuals to possess property and that such 19

20 (12 November 1995) Article 29 Land Code of Azerbaijan Republic (25 June 1999) Article 70 Article 86 Article 94 Article 95 Article 96 Article 103 Law on Land Market (7 May 1999) Resolution No.42 of On some Normative and Legal Acts Relating to the Land Code of the Azerbaijan Republic (15 March 2000) Cabinet of Ministers DecreeNo.158 on normative Costs of Land (23 July 1998) property rights shall be protected by law; also, establishes that no-one will be dispossessed of land without a decision of court, and that alienation of property for state needs shall only be allowed upon fair reimbursement of its value 1. All lands in use or in rent can be bought for state, municipality or for public needs 3. Lands in use could be taken back by Local Executive Power and Municipalities via the legal enforcement on the basis of the court decision 4. Privately owned land can be forced to be sold if there is planning to locate something for state, municipality or public needs 8. People can be compensated with the same amount and same category of land in other place if the expropriated land is used for state, municipality of public needs 1. Following categories of lands and their rights can be sold: private land, municipality lands, and lands under privatized state property. 4. Foreigners and non-citizens are not allowed to buy land in the Republic of Azerbaijan 2. There are two kinds of values for lands: nominal and market price 1. The nominal price of lands is a value indicator reflecting quality and productivity 2. The nominal price is used as a basic value in the following situations: when lands are expropriated from owners and when the land is sold by owner, and when the lands category is changing 3. Nominal price is indexed by inflation rate and calculated by the District s Executive Power (Local Executive Body) 2. When the privately owned land is purchased by other private individuals the value is calculated by agreement of correspondent sides based on the market price (seller and buyer) 3. When municipality land is sold, market prices must be higher than nominal price and determined by municipality administration 6. When the land is sold for public needs, the price of this land will be determined by independent experts in this process. There must be an agreement by both sides. Disputes about land are solved by the District s Executive Power, Municipalities and Court. Establishes requirements for land transactions such as purchasing and selling of land, mortgages, transferring of rights to other users and lessees, and transfer of land through inheritance; makes recommendations on the nature of land market agreements and contracts; requires registration of all land rights and sets out documentation requirements; and outlines penalties for failure to comply with regulations. Expands on provisions of the Land Code with respect to the following areas: a) procedures for determining payments for agricultural and forestry production losses and damage resulting from restriction of use, or change in land use; b) procedures for resumption of private land for state or public needs; c) procedures for granting leases for grazing and hayfield use; and, d) procedures for allotting land for industrial, transportation, communication and other purposes. Sets out standard or normative values of land for each district in Azerbaijan. For Lankaran-Astara region, which includes the Masalli district, the normative price for 1 ha agricultural land is AZN, while 1 ha of pasture land is specified as AZN. For Jalilabad district normative price of 1 ha agricultural land is AZN, while normative price of 1 ha of pasture land is For Mugan-Salyan region, which includes Bilasuvar and Neftchala districts, normative price of 3 rd category agricultural land is AZN. 20

21 Law on Land Leases (11 December 1998) Civil Code (1 September 2000) Civil Procedures Code (1 September 2000) Article 360 Land Acquisition (Memorandum of Understanding on Land Acquisition between IDA and the Government of Azerbaijan for Highway Project) Compensation Funds (Memorandum of Understanding on Land Acquisition between IDA and the Government of Azerbaijan for Highway Project) Law of the Protection of Historical and Cultural Monuments Article 10: Cabinet of Ministers Decree No. 42, section I, article 2 Decree of the President (8 July 2008) on standards of noise and vibration pollution Decree of the President dated 26 December 2007 on ensuring the execution of the Law # QD dated 7 December 2007 about Amendments and Additions to the Civil Sets general rules governing leasing of land, procedures for changing lease conditions and establishes the requirement for registration of leases. Defines types of legal interests in property (full ownership, lease, third party); requires proprietary rights and other rights for immovable property, as well as restrictions, formation, assignment or transfer of rights to be registered with the State. Use rights, servitude rights and mortgages must also be registered. Requires that land acquired for state or public needs shall be purchased by an authorized body of the Azerbaijan Republic or municipality, by paying the market price in advance. Provides for people to have the right to register their ownership due to long, actual possession. Sets out procedures and applicable timeframes for actions and appeals through the courts. Court decisions on compulsory acquisition and the basis of any land valuation must be appealed with the higher court within one month of such decision The Memorandum of Understanding on Land Acquisition between the International Development Association (IDA) and the Government of Azerbaijan, which is used in the Baku-Gazakh-Georgia Borders road construction, states which information is collected for compensation applications. This includes (a) the type of land: if sowing land, pasture, garden, dry-farming or irrigated land, (b) buildings, (c) plants already sown or to be sown during the next season and (d) perennial herbs, trees and their age and quantity. This information is collected by the representatives of the District s Executive Power and Azerbaijan State Land and Cartography Committee for compensation which is finally approved and accepted by the Cabinet of Ministers. Although the state is responsible to compensate, there is no permanent and clear compensation system and the accepted compensations are paid from different state funds as the case maybe. For the Tovuz Bypass Project it was recommended that compensations be paid from the Government funds of the IDA loan project and monitored by the RTSD or a supervision consultant engaged in the project. Compensations must be paid immediately after the final road design has been finished and those eligible to compensation are known. Compensations must be completed before any of the construction work starts. Protection of Monuments states that no historical and/or cultural monuments which are declared as such by the Azerbaijan Science Academy, are to be demolished. No such monuments were found in the corridors under study. This decree states that, wherever possible, impacts on agricultural land and forests should be avoided. This law defines norms and standards for noise and vibration pollution. This decree states that 20% additional compensation is added on to calculated market price of the acquired property 21

22 Code of the Azerbaijan Republic Resolution of the Cabinet of Ministers # 54, This resolution defines procedures for LARP valuation and implementation. (Source: IDA Credit 3517 AZ, TECHNICAL ASSISTANCE FOR TOVUZ BYPASS, LAND ACQUISITION PLAN, Finnroad, Baku, May 2005) World Bank Policy The proposed construction of the Shorsulu-South of Masalli Section of the Alat - Astara Highway is being implemented with the financial support of the World Bank and therefore it will comply with the requirements of the World Bank policy documents and regulations, including: The World Bank Operations Manual OP/BP 4.12 Involuntary Resettlement: OPN Management of Cultural Property in Bank-financed Projects: The World Bank Procedures on Information Disclosure The requirement of the World Bank s Policy (WB OP4.12) is to avoid involuntary resettlement whenever possible. Where displacement is unavoidable the following measures shall be ensured: Compensation should be based on the replacement cost; Participation of displaced persons in planning and implementation of the resettlement process; Assistance in their efforts to restore their living standards and income earning at least to their pre-settlement levels; Completion of compensation measures prior to construction activities considered by the project. 3.3 Differences between the Azeri legislation and the World Bank Operational Resettlement Policy and Measures to Bridge the Gap WB OP 4.12 on Involuntary Resettlement Many of the key tenets of the WB s OP 4.12 are covered in full or in part by current Azerbaijan law. These include: The requirement to pay compensation in advance where land is compulsorily acquired (Land Code, article 70.5); The need to compensate based on full market value or through grant of another land plot or building of equal quality, size and value (Land Code articles 8 and 70.5); The need to avoid, wherever possible, impacts on agricultural land and forests (Decree of the Cabinet of Ministers No. 42, section I, article 2); 4 Equivalent Nature Protection Law deals with issues on environmental issues, which are covered under the Environmental Assessment. 22

23 The requirement to compensate for losses, whether temporary or permanent) in production or damage to productive assets and crops (Cabinet of Ministers Decree No. 42, Sections I and II); and Provision for pre-judicial avenues for resolution of disputes and rights of appeal. There are, however, six broad areas where the borrower s obligation under OP 4.12 extends beyond those required under Azerbaijan legislation. These are as follows: Resettlement planning and procedural requirements Public consultation and participation of project affected communities Extent of compensation and types of assistance to be offered Categories of people eligible for compensation Property measurement Income restoration Resettlement Planning and Procedural Requirement There is presently no requirement to prepare a formal Resettlement Action Plan (RAP) under Azerbaijan law, nor to undertake any of the component activities of a resettlement action plan such as, as a census, socio-economic survey, consultation with project affected people, monitoring or reporting. There are no specific references in the legislation to involuntary resettlement. Core WB planning requirements such as the need for community participation in the resettlement planning process and the requirement to improve or enhance project affected people s living standards and income and production levels, are not explicitly addressed in current legislation. While Azerbaijan legislation is silent on involuntary resettlement, previous Azerbaijan government agreements with international companies working in Azerbaijan have stipulated that industry standards and practices comply with international standards and best practice. Measures listed below have been employed to ensure compliance with OP41.2: Consulting with potential project-affected people on feasible measures for resettlement and rehabilitation Drafting and implementing a full public consultation strategy and disclosure plan before construction. Funds will need to be allocated for consultation activities. A scoping study had been carried out to identify the need for Resettlement Action Plan (RAP). PAP have been informed of their rights to assistance with supporting information and material, where appropriate. Public Consultation and Participation OP 4.12 specifies that project affected people should be informed about their options and rights pertaining to resettlement and consulted on, offered choices among, and provided with technically and economically feasible resettlement alternatives; and provided prompt and effective compensation at full replacement (Clause 6, (i), (ii)). Currently there is no explicit consultation requirement in Azeri law. The Resolution of the Cabinet of Ministers No. 54 says that a written notification (its form is attached in Annex 11) should be sent to the property owner by the Executive 23

24 Agency within 3 calendar days after the resolution on property acquisition is passed by the Cabinet of Ministers. The second notification should be sent to the property owner(s) within one working day after the value of the acquired property is submitted to the Executive Agency by Independent Appraiser in order to inform him of compensation amount for the acquired property. Measures listed below have been employed to ensure compliance with OP41.2: Information about the project have been disclosed in an early stage Disclosure of project environmental and social information has been conducted an integral part of the public consultation process, with information being provided about both benefits and disadvantages of the project Information about the project and expected impact have been clearly presented in appropriate local languages and dialects and in modes that are sensitive to local communities Information has been disclosed in locations that are open to the public and that are readily accessible to PAP Compensation Eligibility in Azerbaijan The categories of people who must be compensated under Azerbaijan legislation are narrower than those defined under OP Under the legislation, the only people and entities entitled for compensation are those with registered property rights, for example, registered landowners, leaseholders, users and those with registered third party rights or those who have legally obtained the right to register their title but whom, for some reason, have not completed registration. This potentially precludes many categories of affected people that would be entitled to compensation under WB Group policies. Furthermore, under the existing decree, those who illegally use the existing Right-of-Way (ROW) are required to finance activities necessary to clear the ROW out of their own finance. These categories would include, in Azerbaijan: Users who use land on the basis of an informal agreement often with a relative or extended family member (share croppers, tenant farmers) Owners who occupy land that was transferred by informal agreement from another owner Owners who have not registered a change in ownership following a family death, marriage annulment or similar situation Internally Displaced People (who have no rights to land) People who make use of communal resources to which they have no formal title Informal dwellers Measures listed below have been employed to ensure compliance with OP41.2: All users of land (including those with legal documents and those without) are entitled to compensation for loss of land, structures and livelihoods. For illegal dwellers, ARS will compensate for loss of livelihood and in case of affected structures ARS will provide alternative structures that are agreeable to the owners. Also, they are exempted from any cost that may be necessary to clear the required ROW. All land users have been informed, in a timely and appropriate manner, of their rights. Leaseholders and users are entitled for reasonable compensation subject to evidence of use of the land for 2 years or more. 24

25 Provisions for Illegal Land Use in Azerbaijan Although the Azeri law does not make provision for people with no legal title, the practice on the ground is often different. Anecdotal information suggest that people with no legal titles to their businesses are given compensation of the value of the business but are not provided with income restoration measures, they are also given assistance with physical relocation. This practice on the ground does adhere to the World Bank OP4.12; but as it is not in law, it is conducted on a discretionary case-bycase basis and is not systematically monitored. Measures listed below are employed to ensure compliance with OP41.2: Adequate rehabilitation assistance will be provided for those who do not have official titles to the land but who use the land for lawful activities, without regard to the legal status; Rehabilitation assistance will be provided including, for example, free house plots or subsidized plots. Property Measurement Under the WB safeguard policies, compensation for lost properties will be calculated based on full replacement cost, in other words, compensation should be equal to what enables the PAP to restore their livelihood at the level prior to the resettlement. Under the Azeri law, compensation must be equal to or above the market value of lost properties law provides that if the state determined normative prices for affected properties are below the market prices, then compensation should be based on market prices. Compensation based on market value may not be sufficient to restore livelihood. Also, PAP may not be able to recover the pre-project level of livelihood if impact is severe. Measures listed below have been employed to ensure compliance with OP41.2: Compensation for losses of assets will be equal to full replacement cost; Severely affected people (who will lose more than 20% of agricultural land) will benefit from rehabilitation measures (i.e., privileged access to employment opportunities under the Civil Works activities which will be stipulated in the Contractor s contract) 25

26 4. SCOPE OF LAND ACQUISITION AND RESETTLEMENT 4.1 Census of Affected Households and Persons The distribution of affected households and persons by villages and districts and by private and public lands is provided in Table 10. Except for one leaseholder of a portion of state forest land in Masalli, on which a restaurant complex had been constructed and operated, all (757) of the affected private landowners are losing portions of their private lands. Of the total 757 households, 624 or 82.4% are from the district of Masalli, 71 or 9.4% are from Neftchala and the rest are from Jalilabad. A portion of the leased state forest land where the restaurant complex is located will be affected. No loss of standing crops is anticipated since the construction schedule will be adjusted so farmers will be able to harvest the annual crops on the affected land. Table 10: Summary of Losses of Affected Persons District/Village Total PAPs losing land Loss of structure Trees/crops loss Business loss PAP # PAPs Total ha # PAPs Type loss # PAPs Type loss # PAPs Type loss Bilasuvar 0 0 Neftchala (2) Qachaqkand Qirmizikand ,0722 Jalilabad (3) Uzuntapa , houses 2 HH Fruit trees Soyudlu ,445 Kazimabad Masalli (18) Takla ,8268 Mollahasanli 89* 88 12, Restaurant complex 1 Food catering Sigincaq ,66 Kelbehuseynli ,5134 Chakhirli ,44 Bala Takla ,6621 Sharafa 7 7 2,82 Agakishibayli ,0747 Seybatin ,2516 Dadva ,5868 Samidkhan ,0837 Samidkhan , Fence ** 1 HH Fruit trees Oncaqala ,011 Musakucha ,6828 Goyachol ,4104 Shixlar 1 1 0,0057 Xil ,7089 Sarcuvar ,8694 Total ,2296 4*** 3 HH 1 Source: Census Result RRI/SLCC: March 2008 * Includes the restaurant owner. ** The fence owner is also an affected land owner; *** Of the 4 PAPs whose structures are affected, 3 are private landowners. 26

27 4.2.1 Socioeconomic Profile of Project Affected Persons (i) Demographic profile The socio-economic survey covered all households directly affected by project implementation. The project will affect 1 business and 757 households of which 187 are women-headed, and composed of 3910 persons of which 1832 are males and 2078 are females. The average size of these households is 5.16 persons. Of the total households, 100% are of Azerbaijani ethnic origin. The survey revealed that the affected population in the project-affected area has the following demographic characteristics: 47% of members of surveyed households are men while 53% are women. Most (82.4%) of the affected households are located in Masalli. Of the total affected households, 187 or 24.6% are women headed. Table 11 below shows the distribution of the households in terms of specific indicators. Table 11: Selected Demographic Data of the PAPs, Section 3 Indicator Number and Percent of PAPs by Location Bilasuvar Nefchala Jalilabad Masalli Total HH total Number Percent Number Percent Number Percent Number Percent Number Percent Total Person Male Female Women headed HH Ethnicity 0 0 Azerbaijani Average size of HH Source: Census Result RRI/SLCC: March 2008 (ii) House and Homestead All of the households own the house and the plot they occupy. Houses are generally built of mud-filled wood frame with cement finish and with tile slates as roof. The affected households own livestock along with the land plots and houses. Ownership of livestock is as follows: 41% of households own big horned animals; 11% small-horned animals and 33% poultry. See Table 12 for details. Table 12: Asset Ownership and Access to Basic Services, Section 3 Number and percent of PAPs by Location Indicator Bilasuvar Neftchala Jalilabad Masalli Total Animal Ownership # % # % # % # % Big Horned Small Horned Poultry Presence of : Electricity Gas Water Car ownership Source: Census Result RRI/SLCC: March 2008 (iii) Basic services Of the total affected households, 100% has access to electricity, only 18% has gas supply, while 64% has access to potable water supply. Of these households, 20% 27

28 reported ownership of car. In case of medical need, the households have reported that more often they availed of the services of the district hospital or local ambulance while some indicated that they avail of the services of a private doctor or private hospital from time to time. Children of the affected households generally go to nearby schools for their elementary education. Very few respondents could name an active non-governmental organization or cooperative society in the affected communities. (iv) Incomes and Expenditures Table 13 below shows the details for the source of income of PAPs. Table 13: Source of Income of the PAPs, Section 3 Number and percent of PAPs by Location Source Bilasuvar Neftchala Jalilabad Masalli Total # % # % # % # % # % Total HHs Salary/wages , , , ,0 State pension ,5 4 6,5 56 9,1 64 8,5 Agriculture , , , Aid from Relative ,0 3 4,8 6 1,0 9 1,2 Other ,5 4 6,5 56 9,1 64 8,5 Source: Census Result RRI/SLCC: March 2008 Some 65% percent of affected households identify agriculture related activities as their main source of income; pensions, state allowances and benefits are the main sources of income for 8.5% of households; salaries and wages are reported by 16% of the affected households as their primary source of income; aid from relative is reported by approximately 1.2% households as their source of primary income while 8.5% of respondents indicated other source of income. Almost all PAP refused to provide information on the amount of household income. Thus, it is difficult to say whether the potential land take will have a significant impact on the quality of life of the PAPs. It is however, worthwhile to note that majority (66%) of the PAPs has indicated that agriculture is their main source of income. Figure 3: Proportion of PAPs in various sources of primary income (2008). Almost all of the lands which will be affected are agricultural lands cultivated mainly to grains and potato. The proportion of PAPs experiencing land take of less than 30% of the cultivated area is approximately 84% of the total; the remaining proportion will experience land take of varying proportions from 30% and above. (v) Attitude toward the project and expectations 28

29 By the time of the survey, all of the affected households had been informed about the project of the construction of the Alat Astara Highway. The primary source of this information is the officials of the Executive Power and the local land offices. Socioeconomic survey questionnaire contained a question about willingness of the PAP to give up their land for the Project, All PAPs consider the project beneficial and they indicated their willingness to give up the land they occupy or cultivate if needed for the purpose of road construction. Monetary compensation is the preferred option for all PAPs to compensate for loss of land. Monetary compensation is also the preferred option as for damages to privately owned buildings, tree plantations, perennials and harvest and suspension of commercial activity. 4.2 Affected Assets The following discussion presents the results of the investigation on the category and types of impacts of the Project on land, structures, businesses, crops and trees and other assets and property as well as the unavoidable temporary impacts on the community particularly during the period of construction. (i) Affected Land Section 3A.3B and 3C will traverse 23 villages in four districts, namely Neftchala, Bilasuvar, Jalillabad and Masalli affecting private, municipal as well as state lands. Because the alignment generally follows new terrain running parallel to the existing railway track and have tried to avoid residential communities, most of the private lands affected are agricultural lands generally used to cultivate grains and animal feeds; only a few residential and commercial structures are affected. However, in municipal land, a number of public infrastructures like local roads and irrigation ditches as well as pasturelands, and public building area will be affected. The total area of the land required as ROW for the alignment of the concerned section is approximately ha composed of state, municipal and private lands in 23 villages within the districts of Bilasuvar, Jalilabad, Neftchala and Masalli, respectively. See Table 14 below for the summary of affected lands of various categories. Table 14: Summary of Impacts on Lands of Various Categories Private land District Village # Village Name No. plots Size (ha) Municipal land (ha) State land (ha) Subtotal Bilasuvar ,0569 Neftchala 1 Qachaqkand 49 29, ,28 51, Qirmizikand 28 21, ,6439 4, ,635 Jalilabad State Reserve Uzuntapa 52 24, ,52 4,28 40, Soyudlu 17 11,445 19,76 4,46 35,665 5 Kazimabad 0 0 0,79 1,46 2,25 Masalli 6 Takla 14 2,8268 2, ,01 24, Mollahasanli 88 12,7093 1,3388 9, , Sigincaq 15 3,66 1,102 0,574 5,336 9 Kelbehuseynli 18 3,5134 0,0945 0,0556 3, Chakhirli 39 9, ,85 16, Bala Takla 20 4,6621 6,4214 0, , Sharafa 7 2, ,45 6,15 13 Agakishibayli 56 8,0746 3,9846 0, ,

30 14 Seybatin 45 6,2516 1,1817 0,1187 7, Dadva 47 3,5868 0, , Samidkhan-1 2 0,0837 0, , Samidkhan-2 7 0,3265 2, , Oncaqala 12 3,011 0, , Musakucha ,6828 0,8803 1, , Goyachol 78 16, ,71 19, Shixlar 1 0,0057 0,4064 0,28 0, Xil 52 10,7089 3, , Sarcuvar 11 0,8694 0, ,7092 Total Source: DMS and SES Data, RRI International and SLCC, March 2008 Affected Private Land The affected private land used to be part of the communal plots used to cultivate various crops and grazing crops during the soviet times which have been parcelled and transferred to individual families as a result of the privatization process during the late 1990 s. Currently, the plots are mostly cultivated for grains and livestock feeds or potatoes; some are merely left fallow to be used as grazing area. Toward the Masalli area, these plots are generally used to cultivate root crops, wheat, barley and some patches of vegetables during spring and early summer season but left mostly fallow during the height of summer and autumn due to insufficient irrigation. The road alignment is designed so it will traverse these plots in such a way as it will affect small portion of their area. But because of the configuration of land parcels against the proposed road alignment (diagonal rather than parallel), a substantial number (779 plots owned by 757 private individuals) is affected. Table 15 below provides the summary of private land take in Section 3. A sample of this land cadastral pattern is shown in Figure 3 below. Table 15: Summary of Private Land Take in the concerned districts of Section 3 Affected Private Location and Size (ha) Total Land Bilasuvar Neftchala Jalilabad Masalli (ha) Size No of Plots No of HHs DMS Results, RRI: March 2008 Figure 3: Sample of Cadastral Lot Pattern in the Project Area As can be seen, some land plots are inevitably divided into two pieces by the project road. If the remaining part(s) of the divided land plot is less than or equal to 0.04 ha, the part will also 30

31 be acquired and duly compensated to the owner based on the same market price as the acquired portion. Underpasses or overpasses are deliberately designed, based on the consultation with local population, to minimize disruption in mobility between both sides of the road. Affected Municipal Lands Table 16 below presents the various categories of affected municipal lands. Table 16: Summary of municipal land affected by Section 3 alignment Land Classification of affected Location and Size Total Municipal Land Neftchala Jalilabad Masalli (ha) Local Road Unusable Irrigation Ditch Pasture Agricultural ,2361 Municipal Reserve Prospective Expansion Area TOTAL DMS Results, RRI: March 2008 Approximately ha of municipal lands are affected in the Section III alignment in Neftchala, Jalilabad and Masalli districts. The biggest impact is in municipal lands utilized as grazing area, followed by municipal reserve area, cultivated area and local roads. Acquisition of grazing areas as ROW will not result in income loss to the shepherds who occasionally use these parcels as grazing area for their animals. The total area used for occasional grazing which will be acquired as ROW is so insignificant in size compared to thousands of hectares available for open grazing around the community. Although some municipal lands in official land cadastral documents are classified as agricultural, it was established during the inventory that these lands are not cultivated for agricultural purposes and in fact maintained as municipal reserve lands. Municipalities will get compensation based on normative price. Affected State Land Reserve Table 17 shows the summary of the state land reserve in the different districts that will need to be acquired for Section III alignment. Table17: Summary of State Land Reserve affected by Section 3 alignment Location and Size (ha) Bilasuvar Neftchala Jalilabad Masalli State land DMS Results, RRI: March 2008 The acquisition of state land of approximately 139 ha indicated as pasture area will not result in the income loss of occasional users. The affected land runs on several thousand kilometers wide open spaces of grass- and marshland belonging to the state which serve as occasional grazing area for livestock of communities nearby. Total (ha) 31

32 In summary, a total of ha of various categories of land had been identified as required for the right of way of the final alignment for Section 3A, 3B and 3C, which consists of ha (45.38%) of private plots, ha (21.8%) of municipal plots and ha (32.82%) of state lands. (iii) Impacts on Buildings and Structures Even though the alignment was carefully selected to avoid affecting buildings and structures and minimize dislocation and impact on residential and commercial establishments, still a group of structures (two residential houses (one with animal stable), one restaurant complex and one residential fence) will be affected by the proposed road construction. These structures are located in three villages (2 in Masalli and 1 in Jalilabad) as shown in Table 18. All of the affected structures are privately owned. Table 18 Category and Number of Affected Structures by Location Land Type of Components Dimension of Location Category structure structure Uzuntapa, Jalilabad Uzuntapa, Jalilabad Mollahasanli, Masalli Located on private plot Located on private plot Located on leased plot of state forest land area Residential house with animal stable Residential House Restaurant complex Materials used 1 house m 2 Mud filled wood frame, cement finished, roof slate 1 animal stable m 2 Mud filled wood frame, cement finished, roof slate 1 threshing m 2. Roofing slates with wooden poles barn 1 bath house 6.72 m 2 Mud filled wood frame, cement finished, roof slate/tile 1 water tank 6 m 3 Brick, cement 1 shed m 2 Roofing slates on iron poles 1 house 160 m 2 Mud filled wood frame, cement finished, roof slate Main building m 2 Wood, roof slates, iron, brick Kiosks (2) m 2 x 2 Wood, roof slates, iron, brick Kitchen m 2 Wood, roof slates, iron, brick Toilet 2.25 m 2 Brick, cement Water tank (1) 1.68 m 3 Brick, cement Sewerage tank 4.5 m 3 x 2 Brick, cement (2) Samidkhan 2, Masalli Located in private plot Fence Fence 2000 bricks Brick and cement Source: DMS and SES Data, RRI International and SLCC, March 2008 Residential House 1. The first residential house is located in Uzuntapa village of Jalilabad district and belongs to a family of four members (parents and their 2 school-age sons). The head of the family works as a driver in Baku. The family also owns a herd of sheep and about 1.5 ha of agricultural land (this land is not affected by the project). The family prefers to receive cash compensation as the head of the household has a job in Baku and the family plans to purchase a property closer to the place of work. According to the agreement reached between the family and ARS, the latter will provide cash compensation for the structures. In addition, the family has expressed interest to benefit from the land swap option, and local government agreed to provide alternative land plot of the same size and quality. 32

33 Affected Residential House (1) in Uzuntapa village of Jalilabad district Residential House 2.The second residential house is also located in Uzuntapa village of Jalilabad district. The woman-headed household is comprised of the head of the family and three sons (ages between 18-25). The family owns about 2 ha of agricultural land used for cultivation of potato (this land is not affected by the project). Another income source of the family is cattle breading. Part of the house and land plot falls under the ROW. The distance between the house and future road is about 15 meters. Given the limited impact, ARS has offered to the owner an option to keep the house as it is and acquire only small affected portion of the land. However, the owner has prefered to receive cash compensation for the entire property and relocate to the district center, and ARS has agreed with this request. Meanwhile, as a woman-headed household, the family will also benefit from provisions for severely affected people specified in the RAP. Affected Residential House (2) in Uzuntapa village of Jalilabad district Restaurant Complex. The affected restaurant complex is located in Mollahasanli village of Masallli district. It includes main restaurant building, 2 separate kiosks, a separate restaurant kitchen, toilet, water tank and two sewerage tanks. The owner/operator prefers cash compensation and plans to relocate the business across the other side of the road not affected by the alignment. Agreement was reached that ARS will provide cash compensation for the affected structure and state forestry office (the regional office of the Ministry of Ecology and Natural Resources) will provide the owner of the restaurant with relevant land plot from the state reserve to relocate his business. 33