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SOCIALISTREPUBLIC OF VIETNAM
Independence - Freedom - Happiness
------No. /HD-TCIII
Draft
GUIDANCE ON
Assessment and Supervision of Environmental Impactsof Sub-projects
borrowing from the Second Rural Finance Project Financed by the World Bank
-Pursuant to the Law on Environmental Protection dated November 29, 2006;
-Pursuant to Decree No.80/2006/ND-CP dated August 9, 2007 of the Government on specifically stipulating and guiding the implementing of the Law on Environmental Protection;
-Pursuant to Circular No.08/2006/TT-BTNMT dated September 08, 2007 issued by Ministry of Resouce and Environment guiding Strategy Environment assessment, Environment Impact Assessment and Environment Protection Commitment;
-Pursuant to The WB’s general policy on Environment Protection under the WB financed projects and specific regulations on Environmental protection set forth in the Credit Development Agreement No.3648-VN signed on September 9, 2002 between the Socialist Republic of Vietnam and the World Bank as well as those in Policy Manuals of Rural Finance Project II;
-Pursuant to Decision No. 285/QD-TTg dated April 18, 2002 of the Prime Minister on the Investment of the Second Rural Finance Project financed by the World Bank;
-Pursuant to the Charter on Organization and Operations of the Bank for Investment and Development of Vietnam (BIDV) promulgated in conjunction with Decision No.54/QD-HDQT dated August 12, 2002 approved by the SBV Governor according to the Decision No.936/2002/QD-NHNN dated September 3, 2002;
-Pursuant to the Aide Memoire dated November 16, 2006 between WB’s mission and BIDV;
-Pursuant to Missive No. of Ministry of Resouce and Environment;
The Bank for Investment and Development of Vietnam, as the Project Owner, hereby issues the guidance on assessment and supervision of environmental aspects of sub-projects borrowing from the Second Rural Finance Project (RFP II - Credit No. 3648-VN) financed by the WB (hereinafter referred to as the Rural Finance Project II).
- GENERAL PROVISIONS
- Objectives and Content
This Guidance aims to provide staff of BIDV and PFIs involved in management and implementation of the Rural Finance Project II with the following major contents:
a) Environmental screening mechanism for sub-projects financed under the Rural Finance Project II.
b) Measures to avoid or minimize adverse environmental impacts that might happen during implementation of sub-projects
c)Requirements of monitoring and supervision of sub-projects to ensure that relevant parties will strictly implement measures of environment protection as committed in the environment protection agreement.
- Governing Scope
This document provides PFIs with guidance on screening and supervision of environmental impacts of sub-projects borrowing from Rural Finance Project II funded by the World Bank.
- Applicable Objects
- Financial Institutions accredited to participate in RFPII Fund to finance eligible sub-projects.
- Sub-projects owners apply for borrowing from Financial Institutions using the RFPII.
- Term Definition
In this Guidance, the below-cited terms shall have the following meanings:
a)Participating Financial Institutions (hereinafter called the financial institutions and abbreviated to PFIs): mean the financial institutions accredited by The WB and BIDV to participate in the projects according to accreditation criteria set forth in Policy Manual of Fund under RFPII.
b)Credit Officer: means the officer who directly carries out activities from the time receiving loan application until completion of credit agreement between the Financial Institution and the sub-borrower.
c)Sub-project: means projects or business plan which is eligible for financing in accordance with regulations of the RFPII.
d)Sub-borrower: means the project owner who has eligible sub-project financed by the RFP II Funds.
e)Term relating to the Environment cited according to Article 3, Chapter I, Law on Environmental Protection dated November 29, 2005, including:
- Environment: comprises natural and man-made physical factors that surround human beings and affect life, production, the existence and development of human beings and living organisms.
- Environmental protection activities mean activities of keeping the environment sound, clean and beautiful; preventing and restricting adverse impacts on the environment, responding to environmental incidents; remedying environmental pollution and degradation, rehabilitating and improving the environment; rationally and economically exploiting and using natural resources; and protecting biodiversity.
- Environmental standards mean allowable limits of parameters of the quality of ambient environment, the content of pollutants in wastes set by competent state agencies as a basis for environment management and protection.
- Environmental pollution means the status that environmental components have been changed to the extend beyond environmental standards and adversely affect human beings and living organisms.
- Pollutants mean substances of physical factors that cause environmental pollution when they are present in the environment.
- Wastes mean materials in the solid, liquid or gaseous forms discharged from production, business, service, daily life or other activities.
- Hazardous wastes mean wastes containing elements that are toxic, radioactive, inflammable, explosive, abrasive, contagious, poisonous or otherwise harmful.
- Waste management means activities of sorting, collecting, transporting, minimizing, reusing, reprocessing, treating, destroying and discarding wastes.
- Scraps mean products and materials discarded during the process of production or consumption which are recovered for use as production materials.
- Environmental impact assessment (EIA) means analysis and forecast of impacts on the environment to be exerted by specific projects to as to work out measures to protect the environment when such projects are carried out.
- SPECIFIC PROVISIONS
- Applying measures on environment protection.
Sub-project owners borrowing from the RFP II Funds are required to carry out necessary measures to protect the environment, minimize environmental pollution or degradation that may result from implementation of the sub-projects in accordance with Vietnamese laws, provisions of Development Credit Agreements and Policy Manuals of RFP II, and regulations of this Guidance.
Procedures of screening, evaluation and supervision of environmental impacts of sub-projects must comply with regulations for each group of sub-pfojects set forth in Annex I to this Guidance.
- Sub-project classification
In this Guidance, the sub-projects are classified based on type, location, environmental sensitivity and scale of sub-projects, and magnitude of potential environmental impacts, specifically:
2.1.Sub-projects that are required to form EIA report: including sub-projects listed in AnnexIII of this Guidance)
For sub-projects of this group, the sub-project owners are required to submit a full EIA report prepared in accordance with the Bank’s safeguard policies and Vietnamese laws on EIA set forth in the Law on enviroment protection in 2005, Decree No.80/2006/ND-CP dated August 9, 2006 of the Government specifically stipulating and guiding the implementing of the Law on Environmental Protection; Pursuant to Circular No.08/2006/TT-BTNMT dated September 08, 2007 issued by Ministry of Resouce and Environment guiding Strategy Environment assessment, Environment Impact Assessment and Environment Protection Commitment;
2.2.Sub-projects that are required to form commitment to environment protection:including sub-projects mentioned in Annex IV of this Guidance.
Sub-projects falling in this group, the sub-project owner have to form commitment to environment protection and comply with regulations on environment protection specificed in the Law on environment protection in 2005, Decree No.80/2006/ND-CP dated August 9, 2006 of the Government specifically stipulating and guiding the implementing of the Law on Environmental Protection; Pursuant to Circular No.08/2006/TT-BTNMT dated September 08, 2007 issued by Ministry of Resouce and Environment guiding Strategy Environment assessment, Environment Impact Assessment and Environment Protection Commitment;
2.3.Sub-projects that are temporarily exempted from environment impact assessment:including sub-projects mentioned in Annex V of this Guidance.
2.4.Ineligible sub-projects in term of environment protection:
Apart from ineligible sub-projects as regulated in the Policy Manuals (such as real estate trading, purchasing land....), sub-projects listed in Annex VI attached to this Guidance are ineligible in term of environment protection. Those are sub-projects prohibited by Vietnamese laws, the Bank’s policies, or causing adverse environment impacts and will be ineligible for financing.
2.5.Sub-projects that are required to form Agreement on environment protection:
Sub-projects that PFIs disbursed to sub-project owner before being reimbursed from RDF II based on SOE (mentioned in Section 4, Article 4.2 of this Guidance), lack environment procedures as stipulated. When applying for documents to reimburse from RDFII, PFI and the sub-borrower need to supplement loan document a standard form of environmental protection agreement signed between PFIs and sub-borrowers. Methods fill in environmental protection agreement form based on sub-project quality, specified in AnnexVII of this Guidance.
- The document on environment protection
3.1. For sub-projects that are required to form EIA report: (including sub-projects listed in Annex II attached to this Guidance) have to form and submit report on environment impact assessment according to the WB’s safeguard policy and regulation on environment impact assessment of Vietnam. Sub-project owner shall have to submit to PFI:
a)The copy of EIA report formed sub-project owner and the copy of approved document on EIA granted by state agecies on environmental management.
b)Report on “Completing contents of EIA report and requirements of approved document on EIA report” and Supevision minutes on “Implementing contents of EIA report and requirement of the Decision”.
3.2. For sub-projects that are required to form Environmental Protection commitment: (mentioned in Annex IV of this Guidance), sub-project owner shall have to provide PFI with the copy of environmental protection commitment formed sub-projects and the copy of Certification of environment protection commitment granted by District-level People's Committees or Commune-level People's Committees.
3.3. For sub-projects that are required to form environmental protection agreement:
Sub-projects falling into this group, sub-project owner shall have to make and submit to PFI an environmental protection agreement according to the form in AnnexVII of this Guidance.
Based on the Agreement on environmental protection provided by sub-project owner (according to the guidance in AnnexVII), the PFI shall review, evalute and visit to the site where sub-project shall be implemented, offer to petitions on environmental protection. After approving the agreement on environment protection, PFI and sub-project owner shall sign this agreement. The agreement shall be made into 2 copies, one for PFI and one for sub-project.
- Disbursement
- Under the method where disbursement is made prior tosubmission of statement of expenditures (SOEs), PFIs shallrequest the sub-project owner to complete procedure and documents on environment impact assessment when he/she submits the loan application to PFI for its review.
- Under the method where disbursement is made on SOEs basis, PFIs shall have to verify documents and pay a site visit to ensure that:
a)No being reimbursed from RFPII resources to sub-projects specified in Section 2.4 of Part II of this Guidance.
b)Being conditionally reimbursed: sub-project specified in Section 2.1, 2.2 or 2.5 of Part II of this Guidance, when reimbursing sub-project, PFI shall request sub-project owner to undertake additional measures to protect the environment according to one of the regulations set forth in Section 3 of Part II of this Guidance.
- Filling documents
PFIs shall retain documents related to sub-project environment impact assessment together with loan application in accordance with the prevailing regulations for WB and BIDV monitoring and supervision.
- Sub-project whose loans exceed free limit of PFI.
For sub-projects whose loans exceed free limit of PFI, PFI must enclose documents on sub-project’s environment impact assessment according to regulation in this Guidance with sub-project documentation and submit them to BIDV (Transaction Center III) and WB for re-appraisal.
III. MONITORING, SUPERVISION AND REPORTING INFORMATION
1. Throughout the sub-loan’s duration, the sub-project owner shall be subject to BIDV (Transaction Center III) and PFI’s monitoring and supervision with respect to the implementation of regulations that have been approved by the environmental management agencies, or commitments in the environment protection agreement that have been agreed by PFI.
2. PFIs shall be responsible for monitoring and supervision, or co-monitoring and supervision of sub-project owners with respect to the implementation of environment protection commitments and regulations, specifically:
2.1For sub-projects that are form EIA report and register Environmental Protection Commitment: the PFIs shall co-operate with local environmental management agencies (DONREs) to monitor and supervise the sub-project owners with respect to the compliance and implementation of environment protection commitments and regulations set out in the EIA report or the registration paper for meeting environmental standards. The contents, timing and methods of monitoring and supervision shall be decided by the environmental management agencies, at least 2 times/year.
2.2For sub-projects that are required to form environmental protection agreement : the PFIs shall be responsible for monitoring and supervision of the sub-project owners with respect to the implementation of environment protection measures as indicated in the environment protection agreement between PFIs and sub-borrowers. The findings shall be recorded and filed as an attachment to loan application.
3. During the project implementation, PFIs shall be subject to regular/irregular monitoring and supervision of BIDV and the WB’s environmental specialist with respect to the implementation of regulations of this guidance.
4. PFIs shall quarterly report to BIDV (accompanied with quarterly progress reports) the following contents:
4.1. Classification of EIA of sub-projects (Annex VIII).
4.2.The implementation of environment protection measures that the sub-project owner committed when he/she applied for borrowing the project funds (Annex X).
4.3. The copies of (i) classification of sub-project in term of environmental aspects (Annex II), (ii) Approval of EIA report, (iii) Certificate of registering Environmental Protection Commitment (If any) and (iv) Agreement of environemtal protection.
4.4. For sub-projects that are required form EIA report, after sub-project fulfilled and entered into operating, PFIs need to request sub-project owner to sent the copies the minutes of implementing contents of EIA report, Certificate of implementing contents of environmental protection commitment.
IV. TREATMENT
In the process of monitoring, supervising, If PFIs find out any sub-projects that have adverse impacts on the environment since sub-project owners do not strictly comply with regulations and measures of environment protection as committed, the PFIs shall request sub-project owners to take remedial actions immediately. In case the sub-project owners do not implement the remedial actions as requested, the PFIs shall have appropriate measures of treatment depending on the nature and level of violation.
V. IMPLEMENTATION PROVISIONS
- This Guidance shall take effect 15 days after the date of signature and replace the Guidance No.2749/HD-SGD3 dated May 25, 2006 issued by General Director of BDIV on assessment and supervision of environmental impacts of sub-projects borrowing from the Rural Finance Project I&II financed by the WB.
2. BIDV Transaction Center III shall be responsible for disseminating and guiding PFIs in order for PFIs to instruct sub-project owners to strictly implement this guidance.
3.If there is any difficulty during execution of this guidance, the financial institutions shall inform BIDV (Transaction Center III) for joint resolution.
Recipients:PFIs/MFIs
SBV (for reporting)
BIDV, Deputy General Directors;
Filed at: Legal Dept., Office, TC3. / General Director
Tran Bac Ha
ANNEX I
Procedures of reviewing and supervision of
environmental aspects of sub-projects borrowing from the
Rural Finance Project II financed by the World Bank
Step 1: Financial institutions shall classify sub-projects by groups
a)In case PFI obtains RFP II funds prior to submission of SOE: PFI’s credit officer shall classify sub-projects by groups (according to Annex II) when he/she reviews the loan applications to make sure that the accepted sub-projects are eligible, and then move to Step 2.
b)In case disbursement from BIDV to PFIs is made on SOE basis: when applying for reimbursement from the RFP II, PFIs' credit officers shall verify the loan application of each sub-project, classify sub-projects by respective groups (Annex II), and request sub-project owners to summit environmental protection documents as instructed in Step 2.
Step 2:
a) For sub-projects that require a full EIA report or Environmental Protection Commitment, PFI’s credit officers shall be responsible for assisting sub-project owners to contact local environmental management agencies as District-level People's Committees or Commune-level People's Committees (in case authorized by District-level People's Committees) for instruction of procedures of obtaining approval of the EIA report, certificate of implementing content of report and requirement of approval of the EIA report, or certificate of Environmental Protection Commitment.
b) For sub-projects that require an environment protection agreement, PFIs’ credit officers shall be responsible for guiding sub-project owners to fulfill the agreement in accordance with the form provided (Annex VII).
Step 3: After obtaining necessary environmental certificates or fulfilling and signing the environment protection agreement, the sub-project owner shall submit this certificate/agreement to PFI for completion of loan application.
Step 4: The sub-project owner shall consolidate recommendations, requirements concerning measures of environment protection (if any) and complete the plan for implementation of sub-project.
Step 5: Sub-projects that are eligible in term of environment protection may borrow or be reimbursed from the RFP II Funds. The RFPII shall not finance sub-projects that are ineligible in term of environment protection.
Step 6: During the implementation of sub-projects, PFIs shall be responsible for monitoring and supervising, or co-operating with local state agency in charge of environmental management to monitor and supervise the compliance with regulations, measures, and commitments on environment protection undertaken by sub-project owners.