INTEGRATED SAFEGUARDS DATASHEET

APPRAISAL STAGE

I. Basic Information

Date prepared/updated: 02/18/2011 / Report No.: AC5752
1. Basic Project Data
Country: Mekong / Project ID: P104806
Project Name: Mekong Integrated Water Resources Management
Task Team Leader: Toru Konishi
GEF Focal Area: I-International waters / Global Supplemental ID: P102141
Estimated Appraisal Date: November 1, 2010 / Estimated Board Date: May 3, 2011
Managing Unit: EASTS / Lending Instrument: Specific Investment Loan
Sector: General water, sanitation and flood protection sector (100%)
Theme: Water resource management (100%)
IBRD Amount (US$m.): 0.00
IDA Amount (US$m.): 32.50
GEF Amount (US$m.): 7.00
PCF Amount (US$m.): 0.00
Other financing amounts by source:
BORROWER/RECIPIENT 4.10
Financing Gap 14.40
18.50
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) / Yes [ ] / No [ ]

2. Project Objectives

The overall objective of the proposed APL is to establish key examples of integrated water resource management (IWRM) practices in the Lower Mekong Basin (LMB), at the regional, national and sub-national level.

3. Project Description

This is a regional project, aiming at providing support to Lao PDR, Cambodia, and the Mekong River Commission (MRC). The project would have the following three components:

# Component 1. Regional Water Resources Management (US$7.4 million). This component aims to increase dialogue, cooperation and understanding on IWRM principles among LMB countries. The activities will be implemented through the Mekong River Commission Secretariat (MRCS), through the following subcomponents:

(1-1) Regional Support for Trans-boundary IWRM Dialogue ($2.57 million): the project would support dialogue and pilot activities to address priority trans-boundary issues involving more than one country (such as wetland and flood management, fisheries management, and water resource management in Se San and Srepok and the Mekong delta). The activities would be implemented through a tailored grant mechanism;

(1-2) Support for Establishing an Approach for Environmental Impacts Risk and Disaster Risk Assessment in the LMB ($1.01 million). Key activities will include (i) assessment on exposures of environmental impact and risks to reach environmental baseline objectives in a selected Mekong river sub-area and (ii) initial support for the developing LMB risk model framework. The project will support dialog and provide technical assistance to MRCS and the countries to develop criteria for risk assessment and initiate activities to develop a risk model framework for LMB.

(1-3) Communication Outreach ($2.99 million): the project would support dialogue on and communication of IWRM principles to different stakeholders, including government, private sector, civil society and local communities, including indigenous groups, using a range of different and adapted communication strategies and languages; and

(1-4) Project Monitoring, Administrative Support, and Oversight ($0.81 million): The project will support technical assistance for the preparation and implementation of the national activities and overall project coordination and management, including preparation of a 6-monthly consolidated progress report, as well as direct oversight and reporting on Component 1.

# Component 2. National Water Resources Management (US$5.56 million). The key objective is to support legal, institutional and human resources strengthening to implement IWRM and better water resources planning in Lao PDR, which accounts for over 30 percent of the Basin#s flow. The activities will be implemented through the Water Resources and Environment Administration (WREA) of Lao PDR, through the following subcomponents:

(2-1) Support for Refining a Legal Framework Enabling Integrated Water Resources Management($0.6 million). This sub-component would support the Department of Water Resources within WREA in undertaking a legal review, stakeholder participation, preparation of a legal issue paper, review on the harmonization with the legal framework in the neighboring countries, and development of a #Roadmap# for revising the law; drafting of and consulting on a new Water Resources Law; and then, consideration by the National Assembly in 2013..

(2-2) Support for Water Quality and Aquatic Ecosystem Health ($1.3 million): A national water quality and aquatic ecosystem health policy and action plan has been developed. The project will support the Water Resources and Environment Research Institute (WERI) to implement the action plan, including carrying out water quality monitoring (building on equipment and training being provided by Finnish assistance);

(2-3) Support for Water Resources Modelling ($0.62 million): The project will support WERI, including review and selection of appropriate, adapted models, technical assistance and training;

(2-4) Support for Hydromet Network Upgrading ($1.8 million): through provision of equipment and training to the Department of Meteorology and Hydrology (DMH); and

(2-5) Component Management (US$1.23 million), supporting the administration and management costs associated with implementing Component 2, and would be responsible for facilitating the implementation and monitoring of Sub-components 3-1 and 3-2.

# Component 3: Improved Floodplain and Aquatic Resources Management in Regionally Significant Areas (US$20.43 million). The component aims to demonstrate a successful implementation of IWRM practices regarding: (a) flood-plain management in selected river basins in Lao PDR; and (b) development of trans-boundary fisheries management in priority areas of the Lao PDR and Cambodia. The activities will be implemented through the following three subcomponents:

(3-1) Management of River Basins and Floodplains in the Xe Bang Fai (XBF) and Xe Bang Hiang (XBH)#Lao PDR (US$6.68 million), key activities would include:

(3-1-1) Strengthening management in priority river basins and floodplains: The Project will support the development of river basin organizations and a basin planning framework focusing on #hotspots,# development of a floodplain management plan for the lower XBF and XBH, focusing on the junction between the tributaries and the mainstream Mekong; the Project would support technical assistance, training, and minor goods and office renovation; and

(3-1-2) Upgrading of existing infrastructure for enhanced environmental benefits: The Project will support rehabilitating and modification of existing flood gates to restore flood-plain management and fish migration on 14,000 hectares and re-habilitation of irrigation infrastructure to support restoration of flood-plain rice cultivation and fish spawning on 8,500 hectares, together with providing support to improved, more water-efficient rice cultivation systems through civil works, equipment and extension support;

(3-2) Fisheries Management in Lao PDR (US$4.84 million) and (3-3) Fisheries Management in Cambodia (US$8.89 million), key activities would include:

(3-2-1) (Lao PDR) and (3-3-1) (Cambodia): Support for establishing community-managed fisheries management organizations in Champasak, Attapeu, Sekong Provinces in Lao PDR, as well as in Stung Treng and Kratie Provinces in Cambodia. The Project will support development of participatory management plans, training on fisheries management and conservation, development and implementation of alternative livelihood and commune development plans including support to priority rural infrastructure; the Project would provide training, establishment of the grievance mechanism, community outreach, operating costs, goods and minor civil works;

(3-2-2) (Lao PDR) and (3-3-2) (Cambodia): Support for Public Sector Fishery Management. These Sub-Components would strengthen the capacity of provincial and district fisheries authorities, to carry out the public functions (i.e. enforcement of the fishing regulations, monitoring and reporting on fish catch, extension services, research and development, and conservation of endangered species. Key activities include: (a) fish catch data collection, monitoring and regulation, together with the community fisheries organizations; (b) extension activities; and (c) support for indigenous species aquaculture and stocking through rehabilitation of hatcheries, water quality monitoring, technical assistance and study visits for fishermen and/or local authorities. The Project would finance goods, works, training and operational costs; and

(3-2-3) (Lao PDR) and (3-3-3) (Cambodia): Subcomponent Administration and Management. These Sub-Components would provide logistical support for component management to the fisheries departments in Pakse, Champasak province (Lao PDR) and in Phnom Penh (Cambodia), including operating costs and minor office renovation.

4. Project Location and salient physical characteristics relevant to the safeguard analysis

The activities of Components 1 and 2 fall under the categories of technical assistance, training, and capacity building; only activities under Component 3 might trigger Bank safeguard policies. The floodplain management activities (Subcomponent 3.1) will be carried out in the lower part of Xe Bang Fai (XBF) and Xe Bang Hiang (XBH) river basins, which are located in the central part of Lao PDR. The trans-boundary fisheries management activities (Subcomponents 3-2 and 3-3) will be carried out in two subareas: (a) along the Mekong mainstream between Champasak (Sipandon area) province in Lao PDR and Stung Treng-Kratie provinces in Cambodia; and (b) the Sekong River in Lao PDR, which is part of the #3S# river system (including the Sesan and Srepok rivers) spanning Vietnam, Lao PDR, and Cambodia before discharging into the Mekong.

Key physical and social characteristics of these areas are briefly summarized below.

# Xe Bang Fai River Basin (XBF, Lao PDR): Covers an area of 10,345 square kilometers (km²) and comprises two provinces: Khammouane and Savannakhet. Mean annual rainfall across the basin is estimated at 2,600 millimeter, resulting in a mean annual discharge of 494 cubic meters per second (m³/s) with mean maximum discharge being 3,422 m³/s, and peak floods of over 4,000 m³/s. During the dry season, the XBF carries little water, while most of the discharge occurs during the rainy season. The downstream part of the XBF river basin is annually flooded, nurturing an extensive floodplain that provides refuge and habitat to many of the migratory fish species of the Mekong River Basin. As the population gradually expanded into the floodplain of the XBF, these critically important habitats have increasingly been degraded. With the start of full operation of the Nam Theun 2 Hydropower Project (NT2) turbines, which started at the end of March 2010, this hydrological balance is being changed, as the downstream releases of water (on average 200 m³/s) have been diverted from the Nam Theun River into the XBF basin.

The basin#s population in 2005 was estimated at 231,000, most of which engaged in agricultural production, fisheries and related livelihoods. Some people dwelling along the upper part of XBF (Mahaxay district) are of the Makong ethnic minority, belonging to the Mon-Khmer group, and Makong is considered to be one of the vulnerable groups. People in the lower part of the river are of Phouthay ethnic minority, one of the mainstream Lao-Tai groups. Over the last decade, the area has been increasingly linked to regional markets and trade-routes, with a Mekong Mainstream Bridge currently under construction, connecting the basin to both Thailand and to Vietnam.

# Xe Bang Hiang River Basin (XBH, Lao PDR): The XBH is located next to the XBF basin and covers most of Savannakhet province, with an estimated basin population of 817,000 people. The river stretches over a length of 370 kilometers (km), flowing from the Lao-Vietnam border to the Mekong, and draining an area of 19,223 km². Its main tributaries are the Sepone, Sethamouk and Sechamphone. Mean annual precipitation is 1,600 millimeters, contributing to a mean annual discharge of 538 m³/s, a mean maximum discharge of 4,097 m³/s and a peak flood of 8,500 m³/s. Like the XBF, the XBH provides one of Lao PDR#s most important wetland areas, which provides a critically important habitat to the country#s wildlife, including migratory fish. One of the first two Ramsar sites (Xe Champhone Wetland) is located in this river basin. Similar to other basins in central Lao PDR, the area has been subjected to increased regional integration and economic development during the last decade; the towns of Mukdahan (Thailand) and Savannakhet (Lao PDR) are now connected through the East-West Economic Corridor, with a bridge over the Mekong, and a road network from Thailand into Vietnam.

# The Champasak (Lao PDR) to Stung Treng / Kratie (Cambodia) Transboundary Area: The area plays a major role in the maintenance of biodiversity in the whole LMB. There are numerous spawning grounds, dry season refuges and migration routes for a significant collection of Mekong fish species. The total area stretches for about 338 kilometers (km), including some 161 km in the Lao PDR and 177 km in Cambodia. Part of the Cambodian area is a registered Ramsar site, while discussions are ongoing regarding designating the Siphandon Area (the Lao PDR part) as a Ramsar site. One of the first two Ramsar sites (Boueng Kiate Ngong) is located in this area.

Fishing in the area is mostly small-scale, conducted by rural households, and often considered a secondary livelihood activity. Unsustainable fishing practices are common in the project area. These include: (a) the use of destructive methods and gears; (b) the exploitation of fish in sensitive areas (deep pool refugees, spawning grounds and migratory routes) and at sensitive times (spawning and migration periods); Also, local environmental disturbances (e.g., alterations of critical habitats, such as wetlands, inundated forests, rapids) may be impacting on fisheries. Fish resources are also coming under pressure from transboundary environmental impacts mainly due to infrastructure developments, chemical runoff from farming, hydropower generation and flood-control, including loss of genetic diversity and the depletion of indigenous stocks. Expansion of commercial fish species and wider economic developments in the area (including better access to markets and growth in tourism) also provide opportunities for the people to improve their living standards.

Champasak is the third largest province of Lao PDR (15,415 km2) and has a total population of about 575,600 (37 persons/km2), of which 36 percent lives below the poverty line. The majority of fishing villages in Champasak are of the predominant Lao Tai group.

Stung Treng and Kratie provinces are located in the northeast of Cambodia and are connected to the Mekong border with Lao PDR. Stung Treng is classified as a rural province (11,092 km2) comprising 5 districts, 34 communes, and 128 villages. Stung Treng population is about 111,734 persons (50 percent female) or about 20,000 households, resulting in a low population density (about 10 persons/km2 compared to 75 persons/km2 for Cambodia). The inhabitants of the province are self- denominated Nek Srok Lue (habitants from the high land) and there are 14 different ethnic groups: Khmer, Lao, Kavet, Kuoy, Vietnamese, Chinese, Phnong, Lun, Brao, Kreung, Chams, Tum Puon, Kachock, and Jarai. Forest covers a large portion of the land; there are many rivers and tributaries crossing the area; and access to roads and infrastructure is limited.

Kratie (11,094 km2) is also classified as a rural province, comprising 5 districts, 46 communes, and 250 villages. It has a large area of forest cover, but mostly with poor soil. The Kratie population is relatively large (about 318,523 persons, or 65,000 households), yielding a density of 29 persons/km2. About 8 percent of its population is considered indigenous, comprising a number of Chinese and/or Vietnamese minorities and other 7 indigenous groups: Phnorng, Kouy, Mil, Khonh, Kraol, Steang, and Thanmoun. Agricultural land possession is small (0.48 ha per household). About 70 percent of the total population of Stung Treng and Kratie lives along the Mekong River and about 70 percent of these people are rural and most of them are subsistence farmers/fishers. The area is considered critical for conservation and biodiversity and fisheries is critical for people#s diet.