INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 05/18/2011 Report No.: Basic Project Data Country: Honduras Project ID: P Project Name: Land Administration Program Task Team Leader: Enrique Pantoja Estimated Appraisal Date: May 4, 2009 Estimated Board Date: June 23, 2011 Managing Unit: LCSAR Lending Instrument: Adaptable Program Loan Sector: General agriculture, fishing and forestry sector (55%);Sub-national government administration (25%);Central government administration (20%) Theme: Land administration and management (25%);Personal and property rights (25%);Decentralization (24%);Other rural development (13%);Other urban development (13%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT Environmental Category: B - Partial Assessment Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) [ ] No [] 2. Project Objectives The objective of the broader, long-term program (APL) is to strengthen property rights in Honduras through modernization of the legal framework, institutional strengthening and development of a fully integrated and decentralized National System for Property Administration (SINAP). The Project Development Objective (PDO) for Phase II of the Land Administration Program (PATH) is to provide the population in the Project area with improved, decentralized land administration services, including better access to and more accurate information on property records and transactions. To achieve this objective, PATH will continue to promote the streamlining of the systematic cadastral surveying, titling and registration process and the improvement of land administration services in terms of access and transparency.

2 3. Project Description The second phase of PATH (IDA Credit of US$12.8 million equivalent), will be implemented over a period of three years, and will include five components: (i) Policy and institutional strengthening; (ii) Cadastral surveying and land regularization; (iii) Demarcation of protected areas; (iv) Strengthening of Miskito people s land rights; and (v) Project management and Monitoring & Evaluation (M&E).These components are described below. Component 1: Policy and Institutional Strengthening (US$ million) 1. Sub-Component 1:Supporting the consolidation of land policy and strategy to enhance the governance of land administration, including: (i) consolidation of land policy and strategy, through: (A) workshops and technical assistance on issues within the general framework of land policy and territorial planning; and (B) the preparation of a policy and master plan for the development of the country#s national cadastral system; (ii) strengthening of the transparency of Program implementation, by conducting at least two social audits of relevant Project activities; (iii) development of the normative and procedural framework for municipalities to become associated centers of the IP for cadastre, registry and property regularization purposes. 2. Sub-Component 2: Strengthening the institutional capacity for land administration in the country#s territory, including: (i) strengthening of the IP, through: (A) improvement of its administrative and operational capacity by providing equipment, software and technical assistance to facilitate the implementation of the IP#s organizational development plan and to integrate the Program#s activities into the IP; (B) continuation of the modernization of regional property registries to support regularization processes, including: (1) implementation of SURE in at least one new registry with high transaction volumes; and (2) carrying out of small rehabilitation works in the IP and selected registries (excluding new constructions and additions to existing structures); (C) strengthening of three operational units of the IP: the General Directorate of the Registry (DGR), the General Directorate of Cadastre and Geography (DGCG), and the General Directorate for Parcel Regularization (DGRP); and (D) carrying out of capacity building for alternative conflict resolution mechanisms for cadastral surveying and establishing inter-municipal limits; (ii) carrying out of capacity building for selected municipalities to allow them to function effectively as associated centers of the IP and to implement urban titling activities, territorial planning, including zoning and updating of municipal limits; (iii) carrying out of capacity building for the National Agrarian Institute (INA), focused on rural titling and collective titling of Indigenous Peoples# Lands, including supporting the Inter-Sectoral Commission for Protecting Land Rights of Garífuna and Miskito and building capacity in INA for alternative conflict resolution;

3 (iv) carrying out of capacity building for the National Institute for Forestry Conservation and Development, Protected Areas and Wildlife (ICF), including technical assistance and technology transfer to ensure that it plays an active role in SINAP implementation; (v) carrying out of capacity building for the Ministry of Planning (SEPLAN), the Honduran Association of Municipalities (AMHON) and selected municipalities to promote gradual incorporation of territorial planning norms into RENOT, including the establishment of at least one departmental council of territorial planning in the Project Area; (vi) consolidation of SINAP, building on the progress made during the first phase of the Program, by supporting the IP, Co-executing Agencies and selected municipalities in the Project Area to gradually strengthen their capacity to operate SINAP and to develop mechanisms to ensure its sustainability; (vii) improvement of the wireless network (Red Metropolitana Inalámbrica) established during the first phase of the Program to facilitate data transmission and interagency communications and to ensure connectivity of SINAP. Component 2: Cadastral Surveying and Land Regularization (US$ million) 3. Sub-Component 1: Carrying out geo-referenced cadastral surveying in the Project Area, identifying the legal status of each property and incorporating the properties in SURE, including: (i) preparatory activities such as declaration of zone under cadastral process (#Zona en Proceso Catastral#) by the DGCG, taking of aerial photography and preparation of digital ortho-photos and purchasing of satellite imagery within the Project Area; (ii) surveying, validation and incorporation in SURE of at least 150,000 urban and rural parcels in the Project Area, geo-referenced surveying of the administrative limits of at least ten selected municipalities. 4. Sub-Component 2: Carrying out the legalization, titling and registration under Folio Real of at least 50,000 parcels in the Project Area, including: (i) the provision of new titles for approximately 35,000 families through the various options provided under the Property Law and in close collaboration with INA, the Municipalities and/or the ICF, as the case may be; and (ii) the legalization of 15,000 parcels with an existing property registry to transfer them into the folio real through a coordinated effort between the three main directorates of the IP (DGR, DGCG, DGRP) to carry out an investigation comparing geographical with legal data. Component 3: Demarcation of Protected Areas (US$0.1514million) (i) Carrying out the delimitation and demarcation of the buffer zone in at least one protected area in the Project Area, including the incorporation of the cadastral

4 information and its link to the ordinances and norms that establish land use into SURE and RENOT, respectively. (ii) carrying out specific activities under the Project#s communication strategy for community outreach to raise awareness among residents in and around the buffer zone demarcated under the Project on the land use designation. (iii) supporting implementation of the Environmental Management Plan (EMP) and the Process Framework. Component4: Strengthening of Miskito People#s Land Rights (US$ 0.411million) (i) Carrying out pilot participatory delimitation, demarcation, collective titling, and registration of Indigenous Peoples# Lands in the department of Gracias a Dios, based on culturally accepted practices and with a focus on at least 25 Participating Miskito Communities; (ii) Providing capacity building and organizational support to Participating Miskito Communities to establish alternative conflict resolution mechanisms during the process of delimitation, demarcation, titling and registration, with the support of the Project#s communication strategy; (iii) Providing technical assistance and capacity building for Participating Miskito Communities, including: (A) territorial planning and resource management; and (B) education to increase legal awareness and help organizational capacity in relation to land tenure; Component 5: Project Management and Monitoring and Evaluation (US$ million) 5. Supporting Project management, including: (i) training and workshops; (ii) technical assistance; (iii) the fiduciary aspects of the Project, including financial management, audits and procurement; (iv) the establishment of the Steering Committee; and (v) the oversight of a communication and a gender strategy for the Project. 6. Supporting Project monitoring and evaluation, including: (i) the integrated financial administration system, which will record the Project#s physical and financial progress; (ii) the semi-annual progress reports measuring periodically Project Indicators based on agreed methodologies; (iii) baseline surveys for the third phase of the Program; (iv) a mid-term review report; and (v) a final Project impact evaluation and implementation completion report. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The second phase will include various activities affecting land in the Project Area, which includes selected municipalities in the departments of Choluteca, Colón, Comayagua, Copán, Cortés, El Paraíso, Francisco Morazán, Gracias a Dios, and Yoro, and any other department that may be agreed upon in the future. Municipalities in these departments have been selected to participate in the Project based on a spatial analysis that considered,

5 inter alia, the correlations between high population density, economic dynamism, and high tenure insecurity. The Project will support the delimitation and demarcation of the buffer zone of El Merendon protected area in the department of Cortes under Component 3. Finally, the Project will finance participatory, collective titling of Miskito communities in Gracias a Dios, as well as legal support and capacity building activities for these communities. 5. Environmental and Social Safeguards Specialists Mr Jason Jacques Paiement (LCSSO) Ms Tuuli Johanna Bernardini (LCSEN) 6. Safeguard Policies Triggered No Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: All of the potential direct and indirect environmental impacts originally identified as part of the Environmental Assessment (EA) carried out in mid-2003, prior to the approval of the PATH Phase I, are still deemed relevant. An analysis of the environmental performance of the Phase I was carried out as a part of its Independent Evaluation. The Project Coordination Unit (PCU) was found to implement the EMP satisfactorily, and no large-scale, significant or irreversible environmental impacts were observed. This had been and continues to be expected, since the physical impacts of demarcation (the physical marking of boundaries) are minor. Some of the main findings of the evaluation were: (1) protected area co-management institutions (including NGOs, Municipalities and ICF) were supported in making field visits to document the boundaries of protected areas; (2) various workshops, open fora (cabildos abiertos), and other activities were conducted with patronatos, private companies and as part of a community education campaign informing local people on the Project activities, including importance of protected areas, their benefits, delimitation, demarcation and applicable sanctions for any tampering with boundary markers; (3)

6 demarcated protected areas were incorporated into the Territorial Planning Norms Registry (RENOT) under the National Property Administration System (SINAP) so that they can be placed in the Catalog of Inalienable Public Forestry Heritage; and (4) no resettlement or restrictions of access to protected areas took place. Four main lessons were drawn on the environmental performance of the Phase I: 1. Phase I did not follow up on the implementation of the EMP as much as it could have done. Considering this lesson, an Environmental Specialist will be hired during Phase II to monitor and supervise the implementation of the EMP. In addition, the Project will promote institutional strengthening activities such as workshops on EMPs and safeguards. 2. The only real issue detected through Bank supervision had to do with the improper disposal of the byproducts of the boundary marker construction during demarcation of a protected area. This issue has since been addressed, and any long-term negative consequences avoided. The EMP for the Phase II incorporates this and other lessons learned from the Phase I. 3. The NGO co-managers of protected areas do not have sufficient financial resources necessary to effectively implement management plans; in this respect, the new Project will support the GOH in working with the relevant stakeholders to inform local communities on the importance of the protected areas and the expected consequences of demarcating the buffer zones. 4. Many municipalities do not have a stable set of trained personnel which means that they constantly have to spend resources on training staff. The Project will keep this in mind when dealing with municipalities in order to take care to provide any necessary training and thus minimize demands requiring use of limited municipal counterpart funds. Expected Positive Environmental Impacts Overall, it is expected that the Project will have highly positive environmental impacts. First, it should promote the conservation of forests and other natural habitats through demarcation of the buffer zone of the El Merendon protected area in the department of Cortes. Taking into consideration the lessons from Phase I, this protected area was selected based on the following criteria: (i) the limits of the buffer zone have been legally recognized; (ii) the protected area is on the ICF list of areas that are classified as a priority within the National System of Protected Areas of Honduras (SINAPH); (iii) the protected area is located within the Project area. Moreover, delimitation and demarcation of the buffer zone is required to complete the cadastral process under the Project. The delimitation and legal update of the buffer zone limits will be implemented along with institutional support to ICF, relevant municipalities and, if applicable, NGOs involved in co-management of the protected area. These activities will follow the guidelines of an updated Manual for the Regularization of Protected Areas, based on the Manual that was approved for Phase I. In addition, there are several critical natural habitats in the Project area that are still not included in the SINAPH. These areas are identified in the EA. The Project will not finance any private titling in areas within or adjacent to these natural habitats, unless ICF has made an official decision about their status and the boundaries of

7 such areas have been defined. The PCU will coordinate with ICF prior to the start of fieldwork to ensure that this condition is met. In addition, ICF has identified 98 small watersheds within the Project area that are of importance to the country#s water resources. The Project will coordinate with ICF and SERNA when conducting cadastral and regularization activities in parcels within these watersheds to ensure that the process complies with the required land use norms. In addition, regularization of land tenure is expected to induce mainly positive changes in land-use decisions (in general, a more sustainable management of land and of its resources, motivated by security of tenure), although it will not automatically eliminate choices that may have a harmful effect on the environment. Some of the potentially positive changes in land-use decisions include the following: # Delimitation, demarcation and titling of participating Miskito communities# lands. The Project will help delimit, demarcate and title collective lands of at least 25 Miskito communities in Gracias a Dios. In Honduras, the land use patterns characteristic of indigenous and Afro-descendant peoples are normally more forest-conserving and environmentally friendly than those of most non-indigenous rural peoples. While most Honduran indigenous peoples# livelihoods are based on the forest (including hunting, fishing, forest-products harvesting and small-scale shifting cultivation), the land use pattern of non-indigenous peoples in rural areas is dominated by cattle grazing in deforested areas that are converted into pastures or monoculture areas. Therefore, by demarcating and titling indigenous peoples# lands, the Project will promote land uses that conserve large areas of forest. # Reduced use of deforestation to mark land use and possession. Traditionally in rural Honduras, like elsewhere in Latin America, forest clearing through slash and burn has been used as a means to demonstrate the de facto possession and use of a parcel. As a result, most forest land that is not appropriately demarcated and proactively protected is generally viewed as available for settlement and clearing. Land regularization under the Project will help to curb these practices by giving documented, secure land titles to owners or legal certificates to authorized occupants, thereby reducing the need to demonstrate possession through land clearing. While it is unlikely that regularization alone will lead to extinction of such an ingrained historical practice, nevertheless, it will at least contribute to its reduction. Moreover, the Project is promoting through its activities a cultural shift with respect to these practices. # Long-term land management. It is expected that the increased land tenure security from Project activities will encourage some rural land-owners to invest in reforestation, forest management, agro-forestry, perennial crops, and other land uses with a relatively long-term payoff. These uses are almost always more environmentally friendly than short-term payoff from annual field crops or pastures on deforested lands. # Increased productivity of agricultural land use. Regularization, through titling and registry under the Project, is expected to allow for an increased access to credit, since individual owners will be able to use land as collateral. Altogether, improved tenure security and a greater access to capital are expected to incentivize more intensive use of land, especially of land that has a moderate agricultural potential, is currently undercultivated in form of pastures, provide few employment and a low productivity per acre.

8 In the Honduran context, inducing more productive agricultural intensification in these already deforested lands would bring environmental benefits by: (i) reducing the quantity of land required to produce a certain amount of food or income; and (ii) creating additional employment to the rural poor, many of whom would likely migrate to forested areas as new settlers, according to current trends. # Reduction of settlements in disaster-prone areas. The Project will likely help slow the expansion of settlements over high disaster risk areas, such as steep slopes and floodprone areas, particularly in municipalities where disaster risk mapping has been completed, in coordination with SEPLAN and the National Disaster Risk Management Agency (COPECO). Potential Adverse Environmental Impacts As stated above, increased security of tenure should in general result in positive changes in land-use choices and/or behaviors. However, there could be negative impacts on the environment. On the whole, it is impossible to forecast what will be the impact of the sum of individual behaviors, due not only to the intangible factors that actually determine these behaviors, and therefore their unpredictability, but also to the agro-ecological and overall socio-economic differences that exist across the Project area, which can also underpin the occurrence of different land-use choices. The Project will therefore monitor environmental impacts in its area of intervention by following up on the implementation of the EMP and coordinating all necessary control measures and interventions that may be necessary throughout the process. Some of the potentially adverse changes in land-use decisions include the following: # Deforestation in Anticipation of Land Titling. A landholder s incentive to clear forest to demonstrate possession and use of a parcel of land should decline after receipt of a secure title made possible through Project activities. However, it is possible that the landholder might accelerate land clearing activity in advance of the arrival of the Project brigades who would measure, map, and register the land parcel in order to demonstrate the largest possible area under "productive use". The Project will seek to discourage this practice through a public information campaign which would emphasize, inter alia, that deforestation is neither necessary nor sufficient to claim possession of a parcel of land. # Increased Land Clearing from Greater Access to Capital. By receiving secure land titles, many landowners would enjoy increased access to capital such as credits, as the titled land may be used as collateral, and from the "wealth effect" due to the greater value of titled versus untitled land. It is reasonable to expect that some landowners would use part of their increased access to capital for clearing the remaining forests on their property to expand their area of pasture or cropland. The Project will promote dissemination of information on environmentally-friendly productive systems and sustainable use of natural resources, emphasizing positive outcomes that a sustainable management of natural resources can bring to production and to the value of a property. # Increased Migration to Forest Frontier Areas. Through greater land tenure security, as well as improved registry and cadastre services, the Project is expected to promote more dynamic land markets due to greater ease in selling and purchasing of lands. As a result of this dynamism, some rural landowners might be more inclined to sell

9 their fully titled land and use the proceeds to migrate and clear more land at the forest frontier. However, receiving a secure title is expected to encourage some Project beneficiaries to remain on, and further invest in their current landholdings, thereby reducing their tendency to migrate to new, forested lands. Social Safeguard Issues: Several of the indigenous peoples# issues that were present in Phase I of the Project will remain relevant in Phase II. Because the second phase of PATH includes activities that will directly impact the lands of indigenous peoples, the Indigenous Peoples safeguard policy applies. Carefully implementing the policy s provisions will be a top priority for all those involved in Phase II, given the socio-economic and political vulnerability of indigenous peoples in the department of Gracias a Dios (where Component 4 activities will be carried out), the land tenure insecurity that many of them face, and the pressure that these lands are currently under. Specifically, the second phase will focus on promoting the land rights of Miskito communities, none of which has thus far managed to obtain titles to their lands. The Government has confirmed its interest in pursuing the recognition of the property rights of Miskito communities, and these communities and their organizations have also confirmed their interest in continuing to participate in the Program. Project#s design reflects the lessons learned during Phase I, which experienced an Inspection Panel Investigation related to pilot activities in Garífuna communities. Accordingly, under the second phase, special attention will be paid to implementing a culturally sensitive Communication Strategy, strengthening INA's capacity for carrying out titling activities in La Mosquitia and elsewhere, and developing locally acceptable alternative conflict resolution mechanisms. As required, an updated Social Assessment has been conducted and an Indigenous Peoples Plan (IPP) prepared to reflect the results of consultations with indigenous stakeholders. (See details on consultations below). Given the nature of its activities, PATH will continue to exclude any physical displacement or resettlement. The Involuntary Resettlement policy remains triggered, however, because of the potential restriction of access to natural resources that may occur as a result of the demarcation and stricter enforcement of the buffer zone at El Merendon protected area, a restriction that would affect neighboring communities that more or less rely on these resources. Further consultations with local residents will take place with regards to ongoing economic activities, and in case these may be restricted, the Borrower will implement the methodology established in the Process Framework (PF). In El Meredon protected area, the Project will only finance the delimitation and demarcation of the buffer zone. It will not support other processes such as the internal zoning, the elaboration and implementation of management plans, or the regularization of land within the protected area. The experience of the first phase shows that the demarcation of protected areas effectively contributes to conservation. It has given visibility to their boundaries, which as a result have been more explicitly acknowledged by the communities living near them, cutting down on the potential for encroaching. No

10 conflicts, either related to land tenure or natural resource use, have emerged in these areas throughout the implementation of Phase I. This is in part due to the existence a legal requirement that an occupation census must be completed before the ICF proceeds with the delimitation and regulation of a buffer zone. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: All of the significant environmental and social impacts of land administration projects in general, and the Phases I and II of PATH in particular, are inherently indirect (induced). For example, the production of cadastral maps or issuance of land titles do not have environmental or social impacts per se; rather, the impacts derive from changes in human behavior related to land use, which come in response to increased land tenure security. PATH s environmental impacts are generally expected to be positive and sustainable in the long term. However, it is always possible that adverse environmental impacts could ensue, as described in detail above. In relation to indigenous peoples development, one indirect impact that could result from the titling of indigenous peoples# lands in Gracias a Dios is that, unless it is done in a comprehensive fashion, it could bring those Miskito communities that are not slated for collective land titling right away under even greater pressure from logging and agribusiness interests in the medium term. Given the legal and logistical challenges involved, the Project has little choice but to carry out such titling sequentially. This risk is being partially mitigated through the actions of the Communication Strategy, legal education campaign and strengthening of the National Agrarian Institute staff presence in La Mosquitia (i.e. Puerto Lempira Project office) and understanding of indigenous land rights. Nonetheless, the Project will be able to contribute to the formulation of a more comprehensive policy and strategic framework through a South-South Knowledge Exchange. This exchange will provide capacity building for the formulation of strategy and policy for the recognition of indigenous land tenure systems and rights. Additional capacity building at the community level will be needed to ensure the protection of rights in the form of legal education and organizational strengthening for territorial defense actions, such as the clearer marking and patrolling of boundaries (which may be included in a future phase of PATH or in other Government programs). 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. On the environmental side, the Phase II will concentrate on the demarcation of the buffer zones, which are in general well conserved. Preparation and implementation of management plans require substantial resources, and regularization within the protected areas, which is a challenging activity, could be supported through a specific operation by the Bank or other donors in the future.

11 By supporting the delimitation and demarcation of El Merendon#s buffer zone, Component 3 itself will help protect them against potential impacts from Phase II and other non-project activities. The titling activities included in Component 4 (Strengthening of Miskito People s Land Rights) will also help to minimize adverse impacts by preventing or at least discouraging appropriation of lands and resources upon which Miskito families, among the poorest in the country, depend. Partly in response to experiences during Phase I, for Phase II the decision was taken to move away from a narrow consideration of technical issues in land tenure in this component toward a more integrated, culturally appropriate combination of studies, land titling and capacity building. Such an alternative will help those Miskito communities receiving a title to position themselves to make the best use of land as a productive asset, while at the same time preserving their culturally determined idea of land as a collective resource with intrinsic value. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Environmental Assessment (OP 4.01) The Phase II was classified as Category B and required development, approval, and disclosure of an environmental study but not of a full-scale Environmental Assessment. An Environmental Analysis (EA) including an Environmental Management Plan (EMP) was prepared between December 2008 and January 2009 by a team of local consultants. In accordance with IDA#s Information Disclosure Policy (BP 17.50), the EA and EMP were originally disclosed in-country and in the World Bank#s Infoshop in April Incountry, all safeguard documents are available to the public in Spanish in PATH#s offices in Tegucigalpa (Edificio Educrédito, 2a planta, Colonia Florencia Norte), Project offices in San Pedro Sula and Puerto Lempira, and the Project#s website. As part of the updating of project design in 2011, the Borrower conducted a new participatory process of the EA and its EMP. Further, the key lessons learned during the implementation of the Phase I were incorporated in the document. The revised EA were disclosed in-country and the Wold Bank#s Infoshop by negotiations. As described above, several potential environmental impacts, direct and indirect, positive and negative, were identified and evaluated in the EA. They are especially associated with: (i) the process of promoting the consolidation of the policy and institutional framework; (ii) the regularization of land tenure (which could, for example, result in land use changes); (iii) the demarcation of the buffer zone at El Merendon protected area which is expected to induce mainly positive social and environmental impacts; and (iv) the strengthening of Miskito peoples# land rights and capacity-building (for instance, in the management of natural resources). Some minor environmental impacts could result from the small-scale rehabilitation works in IP and selected registries under Component 1.2, including inter alia, painting, minor remodeling, roof rehabilitation, wiring and installation of air conditioning systems. No new construction or additions to existing structures will be financed by the Project.

12 The EMP and Operational Manual will provide contractually-binding guidance to contractors on environmentally-friendly and worker health and safety practices to be observed during the execution of these works. The EMP will also provide guidance on any environmental permits that may be necessary for these small works. All potential environmental impacts, be they positive or negative, will be monitored under the Project through the implementation of the EMP and Land Regularization Manual, inclusive of their annexes. Natural Habitats (OP 4.04) and Forests (OP 4.36) Both safeguards are triggered as land regularization in rural and urban areas may potentially have adverse impacts on critical natural habitats that include forests. The Project Area represents about 16 percent of the total land surface of Honduras, and some of the selected municipalities are known to have forests. In order to safeguard these habitats, the PATH Phase II will monitor the implementation of the EMP, and delimit and demarcate the buffer zone of El Merendon. In addition, the Project will not title any land within zones that have been identified as ecologically important. With respect to forest areas, the ICF will have to be duly involved in the cadastral process relevant to these areas. Such mechanisms are fundamental to prevent negative impacts, though the Project is expected to contribute positively to conservation of these critical natural habitats. The Phase I was found to be in compliance with the OP 4.36 by the Independent Evaluation, as 1) co-execution agreements were reached under the regularization activities on forested lands; 2) an Environmental Management Unit was formed within the PCU; 3) a Manual for the Regularization of Forested Areas was adopted; and 4) various training/institutional strengthening activities among the project beneficiaries took place. The Project will not finance elaboration of the Management Plan of the Protected Area as such work would go beyond the Project s scope and available resources. However, communities in and around the protected area will receive ample information about Project activities and opportunities to participate in the demarcation process. Physical Cultural Resources (OP 4.11) The Honduran Institute of Anthropology and History (IHAH) will continue to be one of the advisory agencies during the PATH Phase II. The usual #chance find# procedures contained in the EA will apply to the entire Project. The Project will support conservation of all cultural and archeological physical resources within the Project area by delimiting such undeclared sites and thus avoid private titling in these areas. If, during the surveying and regularization, private or public lands are found to contain valuable cultural resources, the IHAH will be informed; no regularization will be carried out within or in the vicinity of identified sites until IHAH issues a proper authorization.

13 Indigenous Peoples OP/BP 4.10 To address the requirements of the Indigenous Peoples policy, the Strengthening of Miskito People s Land Rights was included in the Project as a free-standing component. This component will provide for the demarcation and titling of indigenous peoples lands in a participatory and culturally acceptable manner, so it can be consistent with the communities views with respect to the communal use of land and natural resources. An Indigenous Peoples Plan (IPP), based on a fully updated Social Assessment, has been prepared. This Plan incorporates the results of recent consultations with MASTA, which is recognized throughout La Mosquitia as the main organization representing Miskito interests and aspirations with regards to land rights, as well as with other Miskito federations representing the communities that will be titled under component 4. As such, it confirms that the titling activities proposed enjoy the broad support of the communities involved. The Plan also outlines mechanisms for an ongoing process of free, prior, and informed consultation, meaningful stakeholder participation, and land-related conflict resolution. Involuntary Resettlement OP/BP 4.12 As the demarcation, and potentially better enforcement, of limits of the buffer zone at El Merendon protected area may potentially lead to restrictions of access to natural resources, a Process Framework is needed to outline the participatory process for the identification, monitoring, and mitigation of the impacts of such restrictions. The Process Framework that was prepared under Phase I has been updated to ensure compatibility with activities proposed under Phase II. This Framework will be implemented as needed in the forthcoming phase, although one of its aims is to refer to the multiple ways by which such potential restrictions might be avoided, and it stresses the desirability of doing so. The Project will also continue supporting the regularization of informal settlements through a process called #regularization based on public need# (Regularización por Necesidad Pública). To be eligible, among other criteria, these settlements must be located in private lands whose legal ownership is under dispute by several parties. As was the case during the first phase, this process will be closely monitored to ensure that participating households, which are largely poor, continue to benefit from land regularization. The process falls under the exception set forth in footnote 8 of OP 4.12, specifically the second part that states that the policy does not apply to disputes between private parties in land titling projects. The monitoring that will take place (similar to the one implemented under Phase I) applies the good practice recommended therein. The Project will also include at least two social audits of relevant activities, including this process. b) Capacity to plan and implement the measures: During the Phase I, capacity to implement safeguards among the various implementing bodies varied. Following the Inspection Panel investigation, a concerted effort was made to improve in-country understanding of and capacity to deal with the applicable safeguard

14 policies, a process that coincided with enhanced, integrated supervision by the Bank in general, and with more active oversight by social and environmental safeguards specialists in particular. The participation of numerous PCU technical staff in the preparation and updating of safeguards-related manuals and instruments, such as the Protected Areas Regularization Manual on the environment side, and the Indigenous Peoples Plan on the social side, has led to greatly strengthened capacity for safeguards management. During the Phase II, these improvements will be built upon and extended to key entities such as the IP and National Agrarian Institute (INA). For example, staff in INA will receive training not only in areas that are directly related to its responsibilities under the Program (e.g. in the titling of lands for Miskito communities), but also in associated areas with which they have less experience (e.g. the promotion of alternative conflict resolution mechanisms). Such activities will be provided for under Component 1. Capacity for Safeguards Implementation will be ensured by including in the PCU a Social Specialist and an Environmental Specialist, both of whom will monitor and supervise the implementation of the agreed-upon EMP, IPP and Gender Strategy. In addition, there will be a Liaison and facilitators in La Mosquitia working directly with the participating communities. This group will work in close coordination with the Communication Specialist. Additional social and/or environmental specialists, and facilitators, will be contracted if considered necessary to help follow up on the implementation of the EMP and IPP. Based on the Phase I experience, Phase II will include several measures to ensure greater attention to monitoring progress of the EMP and IPP. Such measures will include the afore-mentioned technical and logistical resources such as workshops on Bank safeguards, EMPs, regularization and protected area management, as well as the contracting of the additional specialists when needed. Also, the Project#s Technical Committee will follow up on the EMP, providing an additional layer of oversight and support for compliance with it. Finally, the social and environmental specialists will prepare quarterly reports on safeguard implementation progress. Project-related grievances will be channeled through IP#s grievance redress system. An IDF Grant for institutional strengthening (P115007) has helped to develop a system for receiving, tracking, and monitoring grievances, including a Procedural Manual that specifies responsibilities and expected response times. The system will have a wide variety of uptake points including: telephone, internet, #complaints boxes# in IP#s regional property registry offices, and in Project offices in San Pedro Sula and La Mosquitia. Specialized staff will categorize, assign priority, and route the grievances to the appropriate entity within IP or the Project. Users will have the option of receiving paper or digital notification of the results of their complaints or inquiries. The system will report on grievances data and trends for monitoring and evaluation. In addition to the dedicated grievance redress mechanism, the Project will include other channels for the population to request information, provide suggestions and report grievances. These other channels are mainstreamed into Project activities, and many are

15 part of the legal framework. For example, the Property Law requires the establishment of regularization tables (mesas de regularization), conciliatory audiences, and meetings for public display of survey data (vistas publicas administrativas). These instances are participatory in nature and provide the space for grievance redress during the cadastral and regularization process. For the delimitation and demarcation of protected areas, the Project will carry out consultations through the local consultation councils for forestry, protected areas, and wildlife providing an opportunity for local governments and civil society to express concerns. For activities in La Mosquitia, the Project will carry out consultations through the federations of the Miskito providing culturally-sensitive channels for grievance redress. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The delimitation and demarcation of the buffer zone will require carrying out of workshops with relevant stakeholders. These will include the buffer zone occupants and people living outside of it, as well as the relevant municipalities and patronatos. As successfully implemented during Phase I, people living in or around the demarcated buffer zone will be informed and invited to participate in the proposed demarcation activities. Phase II will include revamped consultation mechanisms as means of soliciting stakeholder views directly and consistently, thereby diminishing the possibility of conflicts in the Project. Two of the proposed mechanisms will be formal. The first is the Inter-Sectoral Commission for the Protection of the Land Rights of Garífuna and Miskito Communities, a multi-stakeholder, central decision-making body that has proven to be effective during Phase I, which will remain active. The Commission can establish task forces for specific issues such as the titling of Miskito lands under the Project. Garífuna and Miskito stakeholders will continue to have a say in the way the land rights of indigenous and afro-honduran peoples are strengthened, and how land policy and programs that may affect them are being implemented through their organizations OFRANEH, ODECO and MASTA. The PCU will also work to convene regular community meetings and fora designed to serve as an open platform for consultation and participation of indigenous communities and their representatives. These meetings will not be designed to produce statements or decisions, but will rather provide a means for PATH and other Government institutions to bring indigenous participants up to date on Project activities, and to solicit feedback on the course of Project implementation. The regional committees (Mesas Regionales), which were set up under Phase I to serve this purpose, will no longer remain active under Phase II. A special meeting will be organized on an annual basis specifically to identify lessons learned, address any implementation issues and reconfirm broad support for the Project from MASTA and participating communities. Procedure-specific consultation mechanisms, such as the Vistas Públicas Administrativas that are an important feedback mechanism for validating parcel information during the cadastral process (under Component 2), will continue to be

16 employed. Such mechanisms are spelled out in the relevant annexes of the Operational Manual. IP, through the PCU, has held consultations with various stakeholders and concerned groups on the Project and its environmental and social aspects including indigenous groups, environmental NGOs, Government agencies, municipalities and civil society. These include, among others, the Zamarano Panamerican School of Agriculture, MASTA, Lempira Indigenous Council, National Coordinator of Honduran Communal Organizations, the National Council of Patronatos, the Fonseca Gulf Committee for the Defense and Development of the Flora and Fauna, and the Friends of the Tiger. As part of a continuous consultation process during the preparation of the Phase II, a series of site-specific consultations have been held with a range of interested stakeholders. Additionally, in workshops conducted during the second half of 2008, the activities planned for each Project component were shared with potential beneficiaries. The overall process has been complemented and enriched by the findings of related studies and diagnostics. Among others, the following specific consultations have been held: 1. A Roundtable Discussion and Workshop with PATH co-executors for the Mid-Term Evaluation and Phase II on April 25, 2008 in Tegucigalpa. The following institutions participated: ICF, IP, GTZ-Río Plátano Biosphere Project, SEFIN, Ministerio de la Presidencia, World Bank Resident Mission, AMHON, INA and SGJ. 2. The Development of the Logical Framework for Phase II held May 29-30, 2008 in Tegucigalpa. In addition to the other institutions that participated in the April Roundtable Workshop, SERNA participated. 3. A consultation on the Project's EA and EMP was conducted on March 11, Subsequent consultations on the EA and EMP were conducted in 2011 on the following dates:march 17 in Yoro,March 18 in San Pedro Sula, March 23 in Danli, and March in Tegucigalpa. Participants included representatives of ICF, IHAH, municipal governments, and community associations. 4. Consultations with representatives of Miskito indigenous federation, local churches, the Puerto Lempira mayor's office, and the Miskito Consejo de Ancianos in Gracias a Dios on April 16-17, A subsequent consultation was conducted on March 16-17, 2011 with the same group of stakeholders in Gracias a Dios. The most recent consultation event took place on May 16, 2011 in Tegucigalpa with representatives of MASTA. Among other things, this most recent of recurring consultations with indigenous leaders and other key stakeholders in La Mosquitia resulted in a statement reaffirming their broad support for proposed Component 4 activities. 5. Consultations with representatives of the Federation of icaques Tribes of Yoro (FETRIY)#a federation representing the Tolupanes#in the city of Olanchito,

17 Department of Yoro. The first consultation event took place on April 29, 2009, and the most recent events took place on March 17 and April 2, B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Date of receipt by the Bank 05/13/2011 Date of "in-country" disclosure 05/18/2011 Date of submission to InfoShop 05/18/2011 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank 05/17/2011 Date of "in-country" disclosure 05/18/2011 Date of submission to InfoShop 05/18/2011 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank 05/13/2011 Date of "in-country" disclosure 05/18/2011 Date of submission to InfoShop 05/18/2011 Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP Environment Assessment Does the project require a stand-alone EA (including EMP) report? If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the credit/loan? OP/BP Natural Habitats