POLICY FRAMEWORK FOR COMPENSATION, RESETTLEMENT AND REHABILITATION OF PROJECT AFFECTED PERSONS. November 2000
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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized LAO PDR: AGRICULTURAL DEVELOPMENT PROGRAM RP-59 POLICY FRAMEWORK FOR COMPENSATION, RESETTLEMENT AND REHABILITATION OF PROJECT AFFECTED PERSONS A. The Project November The Lao People's Democratic Republic (Lao PDR) is one of the poorest and least developed countries in East Asia. Rural poverty, found primarily in farming households who live at the subsistence level, is a major concern. At the same time, agriculture remains the major sector of the economy. Against this background, and based on discussions with the Government, the proposed project should be designed to initiate a program of investments and institutional capacity building needed to support agricultural growth, and thereby reduce rural poverty. A strong emphasis on community involvement and participation will be an integral feature of the proposed project. 2. Four provinces - Khammouane, Champasak, Saravane and Attapeu, all located in the southern half of the country - have been proposed by the Government, based on several criteria, for the project. Poverty is widespread in all four provinces; its incidence is particularly high in the latter two. Attapeu, to the extreme south, is difficult to reach, and is isolated due to the lack of good roads. 3. The magnitude of adverse impact from the Project is anticipated to be very marginal (based on available information, no land acquisition and involuntary resettlement is expected) as the infrastructure components will focus on rehabilitation of existing irrigation systems and access tracks and the construction of hand pumps and open wells. However, it is possible that during the course of implementation some land may need to be acquired and some compensation may need to be paid to project affected persons (PAPs). To adequately address the rehabilitation and compensation of the people who could possibly be affected by the acquisition of land under the Project, the Government of the Lao PDR and LADP has adopted this Policy Framework for Land Acquisition, Involuntary Resettlement and Rehabilitation of Project Affected Persons (the Resettlement Policy). It will be implemented by the respective units (e.g., Department of Irrigation for irrigation systems, Department of Transport and Communications for access tracks, and Department of Public Health for water supply) together with the Provincial Project Implementation Office under the coordination of the MAF National Project Office. B. Resettlement Policy 4. The Resettlement Policy will adopt the principles of previous resettlement policies prepared for Bank-assisted projects in the country. The principle objective of the Policy is to ensure that all (PAPs) will be compensated for their losses at replacement costand provided with rehabilitation measures to assist them to improve, or at least maintain, their pre-project living standards and income earning capacity. 1
2 5. The Policy lays down the principles and objectives, eligibility criteria of PAPs, entitlements/compensation, legal and institutional framework, modes of compensation and rehabilitation, peoples participation features and grievances procedures that will guide the compensation, resettlement and rehabilitation of the PAPs. C. Project Affected People 6. The project affected people (PAP) include the following persons to be identified by the baseline information collected for each of the sub-projects where there are land, property or asset acquisition: (a) (b) (c) (d) (e) persons whose houses and other structures are in part or in total affected (temporarily or permanently) by the project; persons whose agricultural/residential and commercial land is in part or in total affected (permanently or temporarily) by the project; persons whose businesses are affected in part or in total (temporarily or permanently) by the project; persons whose crops (annual and perennial) and trees are affected by the Project; and person whose other assets are affected by the project. D. Principles and Objectives 7. The principles outlined in the World Bank's Operational Directives 4.30 on Involuntary Resettlement have been adopted in preparing this Policy framework. In this regard the following principles and objectives would be applied: (a) Acquisition of land and other assets, and resettlement of people will be minimized as much as possible. (b) All PAPs are identified in the project impacted areas as of the date of thebaseline surveys (see paragraph 17). They are entitled to be provided with rehabilitation measures sufficient to assist them to improve or at least maintain their pre-project living standards, income earning capacity and production levels. Lack of legal rights to the assets lost will not bar the PAP from entitlement/compensation to such rehabilitation measures. (c) The rehabilitation measures to be provided are: (i) cash compensation at replacement cost without deduction for depreciation or salvage materials for houses and other structures; (ii) agricultural land for land of equal productive capacity acceptable to the PAP;I (iii) replacement of residential and commercial land of equal size acceptable to the PAP; (iv) and transfer and subsistence allowances. (d) Replacement residential and agricultural land will be as nearby as possible to the land that was lost, and acceptable to the PAP. "Agricultural land for land of equal productive capacity" means that the land provided as compensation should be able to produce the same or better yield the PAP was producing on his/her previous land. The production should be in the planting season inmediately following the land acquisition. It can be for a future period if transitional allowanc equal to the household's previous yield is provided to the PAP household while waiting for the land to get back to the same productivity as the previous land. 2
3 (e) Plans for acquisition of land and other assets and provision of rehabilitation measures will be carried out in consultation with the PAPs, to ensure minimal disturbance. (f) The compensation, resettlement and rehabilitation activities will be satisfactorily completed before a no objection from the World Bank will be provided for award of contract of civil works under each sub-project See section on Institutional Arrangements for responsibilities. (g) The sources of funding for the compensation and rehabilitation of PAPs will be funded as follows: compensation for productive, residential and commercial land will come from the village land through the approval of the Governor's Office; and cash compensation for structures, trees, crops, income loss and rehabilitation assistance will come from the provincial counterpart fund in the Project. (h) The MAF-National Project Office will see that institutional arrangements are in place to ensure effective and timely design, planning, consultation and implementation of the compensation program. E. Partial Resettlement Plan 8. In case where the impact of land and property acquisition by the each sub project 2 component are minor, a partial Resettlement Plan for each such project component will be prepared by the respective Provincial Project Implementation Office (PPIO) and submitted to the World Bank for its concurrence. 9. Each partial Resettlement Plan will include: (a) an inventory; (b) a socioeconomic survey; (c) detailed compensation and entitlement information; (d) payment and rehabilitation schedule; and (e) cost estimate and funding source. The forms are found in the attachments. The implementation arrangements are discussed in paragraph The partial Resettlement Plan will be implemented and compensation completed satisfactorily before an approval can be provided by the NPO for award of civil works contract under each sub-project. F. Full Resettlement Plans 11. In case where the impact of land and property acquisition by the each sub project component are significant3, a full Resettlement Action Plan for each sub project component will be prepared by the respective PPIO in accordance with the provisions of this Policy. The full plan will be submitted by the National Project Office (NPO) to the World Bank for its concurrence. 12. Each Plan will include: (a) an inventory; (b) a socioeconomic survey; (c) detailed compensation and entitlement information; (d) implementation and rehabilitation activities; (e) 2 Impacts are considered minor if no affected people are physically displaced and less than 10 % of their productive assets are lost. Impacts are considered significant if the following conditions apply: * the affected people are physically displaced and more than 10 % of a household's productive assets are lost; or * 200 or more people are affected for each sub-project (as per OD 4.30). 3
4 grievance procedures; (f) arrangements for monitoring and evaluation, (g) implementation schedule and; and (h) cost estimate and funding source. The implementation arrangements are discussed in paragraph The MAF-National Project Office will ensure that the compensation, resettlement and rehabilitation activities will be satisfactorily completed before a no objection from the World Bank will be provided for award of contract of civil works under each sub-project. 14. The sources of funding for compensation and rehabilitation of the PAPs will be funded as follows: compensation for productive, residential and commercial land will come from the village land through the approval of the Governor's Office; and cash compensation for structures, trees, crops, income loss and rehabilitation assistance will come from the provincial counterpart fund in the Project. See paragraph 17 for implementing arrangements. G. Village Investment for the Poor 15. The Project will have a community-driven development component known as Village Investment for the Poor (VIP). This component will have a menu which will include activities related primarily to agricultural production, livestock and livelihood activities. Should a VIP subproject be approved which requires land and/or property acquisition, this policy will apply and the cost will be borne by the proponent group and the village. H. Legal Framework 16. The legal context in Lao PDR has been changing rapidly over the last few years. A constitution was introduced in 1991, forestry and water resources laws in 1996, and land law in While they are subject to interpretation, the various legislative initiatives provide a legal foundation for the consideration of resettlement and compensation. The Constitution (August 14, 1991) Article 8: Article 22: All ethnic groups have the right to protect, preserve and promote their fine customs and culture. All acts of division and discrimination among ethnic groups are prohibited. Lao citizens are all equal before the law. On Forestry, No. 001 (October 11,1996) Article 7: Article 59: Individuals and organizations having received forest and forest land allocations from the State for their preservation and management shall be entitled to compensation and interest, such as the use of wood, gathering of forestry produce, etc. The forest and forestry operations management agencies include the Ministry of Agriculture and Forestry, the Provincial/Municipal Agriculture-Forestry Services, the District Agriculture-Forestry Offices and the Village administrative authorities. 4
5 On Water and Water Resources, No. 006 (October, 1996) Article 28: When resettlement is necessary from the area and vicinity of water sources development projects, project owners shall provide assistance in providing appropriate shelters and livelihoods for the resettled population. The funds used to finance resettlement assistance or compensation to the population shall be included in the projects' investment. Preservation of Cultural Heritage Notice No 943, implementing Article 19 of the Constitution of Lao PDR, Decrees No. 99, 174, 194 of the Prime Minister of Lao PDR (19 December 1992, 13 December 1993 and 12 November 1994 respectively) covers preservation of historic sites, traditional and artistic heritage, traditional architecture and places of worship (more than 50 years old). The regulations prohibit removal, destruction or alteration of these items without authorization of GOL. On Land, No. 001 (April 2, 1997) Article 5: Article 18: Article 21: Article 22: Article 63 Article 70: Article 71: The State protects the legal rights and benefits of those who have effectively received the right to use land including the right to transfer it. The district... may grant the right to use agricultural land within its administration... The State authorizes individuals to use forests lands (defoliated or degraded) not to exceed three hectares per one laborer in a family The district... may grant the right to use forest land within its administration... The right of an individual to use land shall terminate when the State takes back the land in the public interest. When it is necessary to use an individual's land in the public interest, the State must make appropriate compensation for damages. In determining damages, there must be a Committee comprised of representatives of interested parties to determine the value of the damages. I. Institutional Arrangements 17. The responsibility for implementing the Policy and Resettlement Plans are as follows: (a) The National Project Office (NPO) under the MAF has the overall responsibility for implementing the Policy and ensuring that all compensation, resettlement and rehabilitation activities are satisfactorily completed before providing approval for award of civil works contracts in the case of Partial Resettlement Plans or for submitting requests for no objection from the World Bank for award of civil works contracts in the case of full Resettlement Action Plans. 4 4 NPO will be assisted by World Bank staff in review and approval of Partial Resettlement Plans in the first year of the project after which it will take over the responsibility on its own. 5
6 (b) It will facilitate the discussions between the province and the Governor's Office regarding compensation for land acquired for the sub-projects. (c) It will monitor the PPIO's work to ensure that the activitiesare carried out in a satisfactory manner. (d) It will ensure that reports are submitted to the World Bank Office in Vientiane on a regular basis. (e) The Provincial Project implementation Office (PPIO) is responsible for obtaining all relevant completed PAP inventory and socio-economic surveys for the infrastructure subproject in its province. It will prepare the compensation package for PAPs according to the Project's Resettlement Policy and in cooperation with the appropriate provincial agencies and the Governor's Office. (f) It will send a copy of the completed forms (inventory, socio-economic survey and compensation information) to DAFO in the district. It will ensure that the compensation in land or in cash is available for the DAFO to pay the PAPs. (Refer to paragraph 7c for types of compensation). (g) It will monitor the proper implementation of DAFO regarding consultation with PAPs and the payment of compensation and other entitlements. (h) It is also responsible for organizing the orientation and training on this policy for the concemed DAFO staff and the Village Head so that they can carry out the Resettlement Plans, consultation with PAPs and implement the payment of compensation and other rehabilitation entitlement to PAPs in a timely manner and as agreed. (i) The DAFO, under the guidance of the PPIO is responsible for the following activities under the Resettlement Plans: information dissemination about the Project and the Resettlement Policy, consultation with PAPs, payment of compensation and other rehabilitation entitlements to PAPs in a timely manner. (j) It should report to the PPIO if there are any problems with the Resettlement Plans and implementation.. J. Entitlement/Compensation Policy 18. PAPs will be entitled to the following types of compensation and rehabilitation measures: (a) PAPs losing agricultural land and crops i) Compensation of lost agricultural land will be through provision of "land for land" arrangements of equal productive capacity of the lost land and satisfactory to the PAPs. ii) PAPs will be compensated for the loss of standing crops, fruits and trees at market price. iii) PAPs whose land is temporarily taken by the works under the Project will be compensated for their loss of income, standing crops and for the cost of soil 6
7 restoration and damaged infrastructure based on the temporarily impacted period. If this period is more than two years, the impact is to be permnanently considered. (b) PAPs losing residential land and structures i) The mechanism for compensating loss of residential land and structures will be: (1) the provision of replacement residential land of equivalent size, satisfactory to the PAPs; and (2) cash compensation reflecting full replacement cost of the structures, without deduction for depreciation or salvage materials. ii) If the impact on residential land and/or structure is minor, cash compensation at replacement cost acceptable to the PAP will be provided.5 iii) If the residential land and/or structure is partially affected by the Project and the remaining residential land is not sufficient to rebuilt the residential structure lost, then at the request of the PAP the entire residential land and structure will be acquired at full replacement cost, without depreciation. The threshold of insufficient remaining residential land is to be determined based on the consultation with PAPs. (c) PAPs losing commercial land, structures and business i) The mechanism for compensating loss of business will be: (I) the provision of alternative business or commercial site of equal size and accessibility to customers, satisfactory to the PAP; (2) cash compensation for lost business structure reflecting full replacement cost of the structures, without depreciation; and (3) cash compensation for the loss of income during the transition period. ii) PAPs will also be provided compensation at full replacement cost, without deduction for depreciation and salvage materials for any other fixed assets affected in part or in total by the Project. K. People's Participation 19. The PAPs will participate throughout the various stages of the planning and implementation of the partial or full Resettlement Plans. For these purposes and prior to the preparation of the Resettlement Plans, the PAP will be informed of the provisions of this Policy at public meetings held by the respective PPIO, DAFO and Village Committees. (See Annex 4 for Steps in Land/Property Acquisition and Compensation). 20. Each household PAP will be fully informed by the relevant DAFO and/or Village Committees of their entitlements/compensation and rehabilitation choices under the Resettlement Plans. After compensation, each PAP household will sign an acceptance letter 21. For the community driven development VIP sub-projects, the community proponent group will, if necessary, plan and decide among themselves how to deal with land and/or property acquisition based on the Policy. The Village Committee will be responsible for informing PAPs of the provisions of this Policy and to ensure that they are satisfied with the outcome. Minor impact on residential land is defined as less than 20% of the total residential land holding and the remaining area is not less than 200 m2. 7
8 22. Provincial monitoring will obtain feedback from PAPs to see if there has been compliance with Resettlement Policy. The World Bank team will also monitor these activities in its regular supervision missions during the period of project implementation; consultation with PAPs and beneficiaries will be conducted. L. Implementation Arrangements Implementation Schedule 23. A detailed implementation schedule of the various activities to be undertaken will be included in each Resettlement Plan. 24. Satisfactory payment of compensation and provision of other rehabilitation entitlements, and relocation if that be the case, will be completed before a no objection from the World Bank can be provided for award of civil works contract under each sub-project. Complaints and Grievances 25. Complaints and grievances related to any aspect of the Resettlement Plans, including the determined quantities and price of the lost assets, will be handled as follows: (a) As a first stage, PAPs will present their complaints and griwvances to the Village Committee, and the Committee will have to provide a written response to the PAP within fifteen calendar days of receiving the complaint. If the PAP is not satisfied with the decision of the village, the PAP may present the case to the DAFO within fifteen calendar days of receiving the written response from the Village Committee. The decision of the District should be rendered within fifteen calendar days of receipt of the PAP's appeal and if the PAP is not satisfied with the decision of district, the PAP may present the case to the PPIO and the same procedure as at the district level will be applied. (b) Another option, after the village and district appeals have been tried, is for the PAP to appeal to the representative of the National Assembly at the provincial level. This representative acts like an ombudsperson and can initiate results quickly. 26. PAPs will be exempted from all taxes, administrative and legal fees. Supervision, Monitoring and Evaluation 27. Implementation of the Resettlement Plans will be regularly supervised and monitored by the respective DAFO and PPIO. The findings will be recorded in quarterly reports to be fumished to NPO. The World Bank team will also monitor these activities in its regular supervision missions during the period of project implementation. M. Costs and Budget 28. Each Resettlement Plan will include detailed cost of compensation and other rehabilitation entitlements and relocation of PAPs, if that be the case, with a breakdown by agricultural land, residential land, business land, houses, other structures, businesses, other assets and cost for compensation or Resettlement Plan implementation. The cost estimates will make adequate provision for contingencies. 8
9 29. The Resettlement Plans will also include information on how the funds will flow and the compensation schedule. 30. It will clearly state from where the sources of fund will come. For the infrastructure components, compensation for productive, residential and commercial land will come from the village land through the approval of the Governor's Office. Cash compensation for structures, trees, crops, income loss and rehabilitation assistance will come from the provincial counterpart fund of the Project. 31. For VIP sub-projects, all compensation will be the responsibility of the proponent community group and the village. ANNEX 1. Steps in Land/Property Acquisition and Compensation FORMS: I. Inventory (Census) of Project Affected People 2. Socio-Economic Household Data of Project Affected People 3. Compensation/Entitlements of Project Affected People 9
10 ANNEX 1: STEPS IN LAND/PROPERTY ACQUISITION AND COMPENSATION For Each Sub-Project Involving Land and Property Acquisition Activity Responsible When Orientation and training the Compensation, Resettlement NPO and PPIO Introduction of Project and Rehabilitation policy and procedures will be provided to districts and communes 1. District works with villagers to select and prioritize development VDC, DDC and DAFO During planning period activities including infrastructure for construction and/or improvement 2. VDC consults and discuss potential land and structure VDC During planning period acquisition impact with affected head of household 3. Provincial and District engineers design infrastructure and Provincial and District During start of finalizes exact amount of land and structure to be affected Engineers implementation 4. Complete inventory and socio-economic survey of affected Provincial and District During start of households Engineers and DAFO implementation 5. Hold another consultation with affected households and agrees DAFO and VDC During start of on compensation and provide contact names and address for implementation grievance/complaints 6. Complete entitlement form and set schedule and funding PPIO and DAFO. During start of source for payment implementation 7. PPIO submits all completed forms to NPO for review PPIO Three months before award of contract for construction 8. NPO reviews and approves Partial Resettlement Plans and NPO Three months before submits full Resettlement Action Plan to World Bank award of contract for construction 9. World Bank reviews and approves Full Resettlement Action World Bank Three months before Plans award of contract for construction 10. PPIO pays cash compensation to affected households from PPIO One month before provincial budget for affected structures, trees, crops and award of contract for rehabilitation assistance. construction for Partial Village provides compensation for affected agricultural and and Full Resettlement roductive land from village land bank. Action Plans 11. World Bank provide 'no objection letter (NOL) for award of World Bank contract for construction work in the case of sub-projects with full RAP. VDC DDC DAFO PPIO NPO - Village Development Committee - District Development Committee - District Agriculture and Forestry Office - Provincial Project Implementation Office - National Project Office 10
11 Form I LAO PDR: AGRICULTURAL DEVELOPMENT PROJECT Inventory of Project Affected People Province: District: Village: Survey Name of Head No. of Total Land- Land to be Land Use Loss as Loss of No. of Household Persons holding of Acquired Type * % of Total Loss of Assets Loss of Crops Other Other Losses in Hhold Hhold-M 2 (M 2 ) Assets Structures Structures Area of Fruitrees Eg., permanent temporary residential land lost Type Paddy area Other graveyards, Residence Business Income (M2) (M2) lost and Number (M2) (Specify) wells, etc. (rented) Lost Loss (M2) (Type& No.) *Land Types are as follows (change land type as appropriate for the Dstrict): 1. Irrigated rice land 4. Forest land 7. Garden land 2. Rainfed rice land 5. Wasteland Dry land (foothills) for cultivation 6. Residential land
12 Form 2 Socio-Economic Household Data of Project Affected People LAO PDR: AGRICULTURAL DEVELOPMENT PROJECT Province:. District: Village: Name of Household Member Sex A Ethn Edti Occupation and EmEstimated Survey Address of (please put name of Head of Household first) ge mc ucation Sources of mployment Total Income No. Household up Income per Year (KIP) 12
13 Form 3 LAO PDR: AGRICULTURAL DEVELOPMENT PROJECT Entitlements of Project Affected People Province: District: Village: Name of Compensation for Land Compensation for Structures Compensation for Crops & Trees Compensation for Other Assets Survey Head of CmestofrLadand Losses No. Household (e.g., graveyards, wells, businesses, etc.) Quantity Unit Price Entitlement Quantity Unit Price Entitlement Quantity Unit Price Entitlement Quantity Unit Price Entitlement (M 2 ) (KIP per (KIP) (M 2 ) (KIP per (KIP) Unit (KIP) (KIP) Unit (KIP) (KIP) M 2 ) M 2 ). Total (KIP) 13
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