The Second Community Led Infrastructure Development Project, JSDFII

Resettlement Policy Framework

May 19, 2011

1Description of the Project

1.1The Project

The Government of Mongolia has taken up the improvement of the quality of life of the urban poor in the informal settlement areas (ger areas) of Ulaanbaatar by providing basic urban services including water supply, sanitation, drainage, laundry and bathhouses, access roads and pathways in a sustainable manner. JSDF2 (Japanese social development fund), financing CLIDP2 (second Community led infrastructure development project) is directly link with the Second Ulaanbaatar Services Improvement Project (UBSIP-2) is financing by the IDA.

The project areas of CLIDP2 is same as UBSIP-2, is limited to 35 khoroos (sub-districts) of 6ger areas. This RPF relates to the 6 project ger areas.

1.2Selected Ger Areas for Development

On the basis of the final needs assessment jointly made by the PMU and Community initiative groups, seven Ger areas and 35 khoroos have been selected for possible inclusion in JSDF2, CLIDP. The names of the Ger areas with the location type, area, population and terrain types are presented below:

Table 1.1: Ger Area Particulars

District / Pop. (2009) / Area (Ha) / Terrain / Location
Bayangol / 29650 / 2.1 / Hilly / Mid tier
Bayanzurkh / 37041 / 15.1 / Steppe & Hilly / Mid tier
Chingeltei / 19210 / 0.5 / Hilly / Mid tier
Songino Khairkhan / 72,870 / 2.1 / Hilly / Mid tier
Sukhbaatar / 19,352 / 0.6 / Steppe / Mid tier
Khan-Uul / 38627 / 0.56 / Steppe / Mid tier
216750 / 20.96

1.3Project Components

The project components are presented below:

  1. Community led Infrastructure Development Component
  2. Health Improvement Component
  3. Community Safety Component
  4. Youth and Adult Component
  5. Training Monitoring and Management Component

These five components consist of the following scope of physical works:

  • Road
  • Small sized drainages
  • Community development center
  • Solid waste collection point
  • Public toilet
  • Upgrading of springs
  • Borewells
  • Bus shelter
  • Monitoring camera
  • Food bridges
  • Model streets
  • Path ways and stairs
  • Drainage /concrete channels
  • Lightening
  • Rest area for elders
  • Greening
  • Community fitness center
  • Play grounds

From above listed scope of works the road and drainage works might require land and trigger resettlement.

1.4Purpose of the Resettlement Policy Framework

The purpose of a resettlement policy framework (RPF) is to ensure that the people adversely affected by a development project are made a part of the development process and that their quality of life is restored to the pre-project level, if not made better, after the project is implemented.

In this context, a resettlement action plan (RAP) is required, according to the World Bank norms, if 200 or more persons are displaced by a development project and their resettlement and rehabilitation (R&R) are required. A RAP contains mitigating measures for retrieving the living standards of the affected persons to the pre-project status, if not better. A census and assets inventory of the project affected persons is the essence of a RAP. A RAP is a “living document” and it would be periodically updated during the life of the project.

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Resettlement Policy Framework

The Second Community Led Infrastructure Development Project, JSDFII

2Legal Framework for Resettlement

2.1The World Bank Guidelines

The World Bank has set out certain mandatory social impact mitigating requirements for its loan projects. The OP/BP 4.12[1] (earlier OD 4.30) describes the Bank policy and procedures for projects that involve involuntary resettlement. This policy aims to improve, or at a minimum, restore the living conditions of the people who will be displaced or otherwise affected because of a development project. This policy also requires that projects minimize the need for involuntary resettlement. Where displacement is unavoidable, resettlement plans should pay particular attention to the vulnerable groups.

2.2The Government of Mongolia Guidelines

Traditionally, land rights have vested in the Government in Mongolia. The country’s transition to the market economy in the 1990s, however, has diluted the State’s absolute rights in land. Land has privatised and the Ulaanbaatar Services Improvement Project-1 is the first project in which the Government, for the first time, has compensated people whose land has been affected due to the project.The following sub-sections describe the Mongolian legislations that relate to the resettlement issues.

2.2.1Legislation on Land with a Bearing on Resettlement

The following laws and regulations of the Government of Mongolia will govern the resettlement aspects of this project.

(a)Constitution of Mongolia (Parliament Decree No. 41, 27 October 1990)

This law guarantees the citizen of Mongolia the privilege to enjoy the rights for having private property, safe and peaceful living accommodation and to receive material and financial assistance, etc.

(b)Law on Land (Parliament Decree No. 56, 11 November 1994)

The Article 28 of this legislation specifies that the size of the fenced ger or homestead land that a citizen could possess for his family needs shall not exceed 0.05 hectare (500 m2).

(c)Law on Governance of Administrative and Territorial Unit and its Management

In case the citizens of Mongolia intentionally violated their obligations with regard to the regulations and resolutions issued by the administrative units, they would be sanctioned according to the law on administrative units and their management.

(d)Law on Legal Status of Capital City (Parliament Decree No. 35, 7 July 1997)

Under this legislation, land could be used by the city that is identified in the city master plan and measured and approved by the City Representatives’ Hural for the purpose of city and infrastructure development.

(e)Regulation of Land Ownership and Rent at the Territory of the City (City Representatives’ Khural, Resolution No. 86, Annex 1 and 2, 29 December 1995)

In case a Mongolian citizen possesses land for his family needs exceeding 0.05 hectare in the territory of the city, the size has to be reduced as specified in the law.

(f)Control Charter for Implementation of Land Related Laws and Regulations at Ulaanbaatar City Territory (Resolution of City Representatives’ Khural, No. 19, 20 March 1995)

The rights of the Mongolian people are protected for using the land in accordance with law and regulations on usage and ownership of land.

(g)Land Possession for Municipality and Districts Special Needs (Resolution of City Representatives’ Khural, No. 96, 18 July 2000)

The Municipality and Districts are entitled to take land for special needs with the purpose to develop infrastructure and construction of engineering structure, pipeline, etc.

(h)Law on Allocation of Land to Mongolian Citizens for Ownership (27 June 2002)

Article 40 of this legislation ensures guarantee for the Mongolian citizens’ right to own land when the Government replaces or takes back the land owned by the citizens based on the special needs of the State with compensation. The various sub-sections of this article are reproduced here, which are relevant for resettlement. The most important clause is 40.2, which requires that a citizen be given at least one year’s notice before his land is acquired by the Government.

Activities directed at replacing or taking back the land owned by citizens for compensation based on special needs of the state shall be carried out after implementation of the following measures (Article 40.1):

  • In case of replacing the land owned: land not worse than the previously owned land by its status and quality, based on request of the citizen, shall be allocated for ownership. (Article 40.1.1)
  • In case of the taking back of land: its value shall be paid. (Article 40.1.2)
  • The value of immovable property attached to the land previously owned by the Citizen shall be paid. (Article 40.1.3)
  • Investment made by the owner to the land shall be paid. (Article 40.1.4)
  • Damages to be caused to the owner due to replacement or taking back a land owned by a citizen, based on the special needs of the state. (Article 40.1.5).

The landowner shall be notified in writing not less than one year prior to making the decision on replacing or taking back a land owned by a citizen, based on the special needs of the state. (Article 40.2)

If the term of one year has passed after receiving the note described by paragraph 2 of this Article by the land owner, and if the measures provided by paragraph 1 of this Article have been carried out, the land owned by a Citizen replaced or taken back based on the special needs of the state. (Article 40.3)

Compensations for immovable property built or costs of other measures taken to significantly increase the land value after receiving the note described by paragraph 2 of this Article shall not be paid. (Article 40.4).

(j)Amendment to the Law on Allocation of Land to Mongolian Citizens for Ownership (22 May 2008)

Article 19.1.2 of this legislation ensures guarantee for the every member of the family to own land once for his life free of charge, starting 22 May of 2008.

2.3Resettlement Policy Framework for CLIDP2

As advised by the Bank, the RPF prepared for the USIPII will be used as a model for this CLIDP2.

In the absence of a national policy in Mongolia on the resettlement and rehabilitation of the displaced persons due to development projects, the CLIDP2 proposes to adopt the policy of compensating and assisting the project affected persons/households commensurate with the World Bank’s resettlement principles and policies and the GOM’s regulations. This includes enabling proper resettlement and rehabilitation of all PAPs/PAHs to at least regain their pre-acquisition standard of living and preferably to improve upon it. It is based on the principle that all people who sacrifice some or all of their property and standard of living for the Government’s development initiatives should also be the beneficiaries of the Government interventions.

The resettlement and rehabilitation (R&R) principles proposed for this project calls for providing compensation for land and R&R assistance to all project affected persons (including those who are displaced), who are located on the project’s corridor of impact (COI). People living in the ger areas will be affected due to the construction of roads and drainages. However, not many people will be displaced due to these development activities. They will be compensated and assisted according to this RAP, which will be developed after completion of detailed design.

2.4Comparison with the World Bank Policy Objectives

The World Bank’s involuntary resettlement policy (OP/BP 4.12) in general requires an assessment of the existing land acquisition and resettlement policies vis-à-vis the World Bank’s resettlement policy. It is important to note that the World Bank policy covers all categories of affected persons (APs) and requires the borrower (viz., the GOM) to pay for all land and all other assets affected by the Project, together with measures for income restoration. It is accepted that every country has its own framework for land acquisition through eminent domain and other regulatory measures, reflecting historical, social and economic parameters. This framework comprises policies, laws and guidelines. In most countries, this framework defines procedures for land expropriation and for compensation. When comparing these policies to those of the World Bank, it is important to note that the Bank’s policy:

  • Does not distinguish between those who do and do not have formal legal title to their assets. Country land acquisition laws might not recognize the rights of tenants, squatters, vendors, indigenous peoples or tribal people and women without any legal rights as people entitled to compensation and rehabilitation measures.
  • Emphasizes the need for replacement costs for lost assets. This includes the need, not just for compensation at replacement rates to restore lost assets, but also measures to restore living standards and livelihoods so that people are not disadvantaged by resettlement.

A comparison of the World Bank’s policies and those of Mongolia indicates that supplementary actions to achieve the policy objectives are necessary.

2.5Commitments of the Executing Agency on the RPF

2.5.1Broad Principles

These guidelines are prepared to address the issues related to the CLIDP2 for the resettlement and rehabilitation of the project affected persons and households. The guidelines outline the range of assistance in re-establishing their homes and livelihoods in the course of the implementation of the project. The proposed resettlement policies and guidelines, in keeping with the World Bank OP/BP 4.12 and the Government of Mongolia regulations, will include the following:

  • The negative impact on the persons affected by the project would be avoided or minimized, exploring all viable alternative project designs.
  • Where the negative impacts are unavoidable, the project affected persons will be assisted in improving or regaining their standard of living.
  • People’s participation will be undertaken in the planning and implementation of the project.
  • Positive impacts due to the project will be enhanced as far as possible.

2.5.2Detailed Policy Commitment

  1. The project affected households, whose land and/or assets are affected, shall be notified one year before their relocation. However, in case of urgency for a public purpose, the MUB shall consider acquiring the affected properties with less than one year’s notice.
  2. The loss of land and other assets will be compensated at replacement cost. Land for land should be the norm, in the absence of which cash for land would be applicable.
  3. The replacement value of structures will be determined without considering the depreciation value. This provision does not apply in the case of ger structures or even wooden structures, which are moveable.
  4. The cost of registration of the replacement land of the displaced persons will be borne by the project authorities.
  5. Non-titleholders, such as tenants and squatters will not be eligible for compensation of land. They, however, shall receive assistance for shifting and replacement cost of any structures that they may have erected.
  6. The resettlement program will be coordinated during the project implementation with the likely timing of the civil works. The project will provide adequate notification, counselling and assistance to the affected persons so that they are able to move or give up their assets without undue hardship before commencement of the civil works.
  7. The project will strive to pay compensation and assistance to the PAHs in a timely manner and will ensure that civil works are not started before compensation and assistance have been provided.
  8. PAHs falling under the vulnerable groups will be provided targeted support to minimize adverse impacts. The project defines vulnerable groups as including but not limited to the following categories of project affected:

a)Households below the poverty line and absolute poverty line;

b)Women headed households.

  1. The PAPs/PAHs will be allowed to take away any salvage material after their respective properties have been acquired by the project.
  2. The project will provide the following as rehabilitation assistance (if applicable):

a)Economic rehabilitation assistance will be provided to the affected vulnerable households.

b)Transitional allowance (for lost income, if any) will be provided to the affected households as per the R&R entitlement matrix for the project.

c)For those losing incomes, if at all, training for upgrading of skills related to income generation will be provided as part of rehabilitation assistance.

  1. The licensed households with documents of property holding affected by the land acquisition will be offered replacement of land and structure or cash compensation for replacement of land and structure.
  2. The replacement cost for the structure of the unlicensed households (squatters) will be calculated on actual basis, without any depreciation of costs.
  3. Shifting assistance will be provided to the owners of structures of residential and/or commercial use and squatter households for shifting their assets.
  4. Anyone moving into the project area after the cut-off date will not be entitled to assistance.
  5. New resettlement sites or site for shopping complexes should be developed, if so opted by at least 10 or more project displaced households or displaced shop owners, as the case may be, at one place preferably in nearby areas but within the parameters of the UB Master Plan.
  6. At the new settlement centres, civic amenities like drinking water, internal and link roads, medical facilities, schools, electricity, etc. will be provided along with any other amenities that the PDHs had at their abandoned place. Any facilities provided by the government and all common resource properties being availed of by the displaced and affected households prior to the project will, as far as possible, be provided/continued at government cost at the place of their resettlement.
  7. The customary rights of the project displaced households shall be protected.

2.5.3Entitlement Matrix

The following entitlement matrix is developed for mitigating the impacts of the CLIDP2 due to land acquisition and displacement of affected persons based on the R&R policy. The matrix and the compensation ratesneed to be thoroughly reviewed for their rationale by the MUB, especially by its Economic and Strategic Policy Department, for their long term financial implications.

Table 3.1: Entitlement Matrix

Type of Loss/Impacts / Definition of Entitled Person/Unit / Definition of Entitlement / Application Guidelines / Amount of Entitlement
1 / 2 / 3 / 4 / 5
I. Residential Land and Structures
1. Loss of housing by owners and tenants.
2. Loss of plot or frontage of structures. / Owner: a person with a certificate of title (title holder).
Renting Occupant: a person or family occupying a structure on payment basis. / 1. The MUB will make an attempt to provide land within the same ger area or as near as possible to the ger area.
2 If 10 or more PAH are to be relocated away from their owned land, a resettlement site will be developed and provided with basic infrastructure and services better or equivalent to the original premises.
3. Assistance to owner/ occupant to transport all material from previous residence to new location. / 1. Replacement land of equivalent size or up to the size permitted by law, when the entire premises are acquired.
2. Proportionate cash compensation when only partial acquisition is made and the PAH is not displaced.
3. Full replacement cost for residential structure, without depreciation;
4. Shifting allowance for owners and tenants included in the compensation.
5. Non-titleholder owners to get assistance for registering their replacement plots. / Tg 16-21 million for loss of brick structure housing (includes shifting cost);
Tg 2 000 000 for wooden structures;
Tg 740 000 for ger and khasha shifting;
Tg 5,200,000 for loss of frontage.
II. Commercial Structures/Establishments
1. Loss of permanent or temporary units;
2. Loss of structure or frontage of small industries. / Affected person or household running a business establishment on property to be acquired. This includes owners and tenants of structure as well as squatters on the corridor of impact. / 1. Alternative location in the vicinity with equivalent land area or land area permitted by law to rehabilitate the business;
2. Compensation for loss of income during the transition period up to 15 days’ income. / The project will provide replacement land and value for structure and transportation cost as for other project displaced households; / Tg 20-30 million for shops (includes shifting costs and temporary loss of income);
Tg 3 million for brick kiosks;
Tg 1,6 million for wooden kiosks.
III. Livelihood
Loss of work days/income by wage employees / Wage employee: a person employed by a shop or other establishment. / Income restoration assistance / 1. Transitional allowance to wage employees, equivalent to one month’s minimum wage;
2. Income restoration assistance, including skills upgrading. / Tg 140,400/- minimum wage;
Tg 90,000/- for skills upgrading training.
IV. Social Infrastructure/Civic Amenities
Loss of existing social infrastructure like religious places, etc. / The local community in general / Replacement of the properties / 1. Reconstruction of the social infrastructure within easy reach of all users;
2. Shifting allowance as appropriate. / Tg 1,5 million as shifting and allied costs.

Note: The amount of entitlement mentioned in the fifth column is only indicative. The actual entitlement of an individual PAP or PAH will be based on the evaluation of the loss of a given property.