LAND ACQUISITION POLICY FRAMEWORK

FOR THE BULGARIA: MUNICIPAL INFRASTRUCTURE DEVELOPMENT - P099895

1.The purpose of the Land Acquisition Policy Framework (PF) is to clarify land acquisition principles, together with organizational arrangements under the Bulgaria Municipal Infrastructure Development Project (MIDP). The proposed project objective is to improve the provision of water and wastewater supply.

2.This objective will be met through the following components:

Component 1: Project Implementation Support

Component 2: Technical Services to prepare Master Plans in [48] water and wastewater utilities

Component 3: Completion of three water supply dams – Luda Yana, Neikovtsi, and Plovdivtsi – and rehabilitation of the Studena dam that is currently operational which supplies water to the town of Pernik

3. Component 1will provide support to project implementation and management. Component 3 will support investment, which may require acquisition of land for the dam construction, reservoir and/or sanitary belts surrounding the reservoir. Because the nature and design of the rehabilitation works of Component 3 are not known before appraisal, the zone of impact of the constructions or the precise sitting alignments and areas to be included within the reservoirs and sanitary belts cannot be determined either. Therefore, the Government of Bulgaria hereby submits a Land Acquisition Policy Framework [LAPF] consistent with the World Bank O.P 4.12 on Involuntary Resettlement, as a condition of appraisal. For the successive investments to be carried out and financed by the Bank, specific land acquisition plans consistent with the principles included in this LAPF will be submitted to the Bank for approval when detailed investment planning information and the scope of the civil works becomes available.

4. Component 2 will support Technical Services to help identify investment priorities for water supply and waste water management for Municipal Water Companies. The outputs of TA under Component 2 are expected to be only at a pre-feasibility level of detail, with feasibility studies, detailed designs and investment to follow later and be financed separately, possibly with assistance from EU. However, the TA provided under Component 2 involves preparation of site assessments including specific recommendations for siting of facilities which if implemented could involve expropriation of land. The TA will therefore provide all information needed to apply the processes outlined in this Policy Framework to the acquisition of any such land. The World Bank has reviewed the Terms of Reference for TA under Component 2 to ensure that this aspect is appropriately addressed. Based on this understanding, the LAPF applies to Component 2.

5.The Policy Framework covers the following elements, consistent with the provisions described in the World Bank Policy, OP 4.12 on Involuntary Resettlement:

(i) Activities for which land acquisition is required

(a) Expropriation of land

6.As indicated before, the design, siting, scope of the works and other details for the investments are not known in advance. The design for the specific investment will be determined during implementation.Land that has been or may in future need to be expropriated includes the site of the dams, their respective reservoir areas, and the area of the sanitary zones of Belt 1 (see below) where land use restrictions are sufficiently stringent that it has been determined these areas should become state property. The bulk of the land required for the main dam wall, dam lakes and corresponding submerged area, ancillary structures and adjacent infrastructure has previously been acquired by the Government of Bulgaria in the years 1978-1982, 1986, and 1998-2000.

At the previous stage of construction designs for sanitary zones were prepared for Neikovtzi and Plovdivtzi dams and the lands within Belt I have also been expropriated. As the design for the sanitary zones at Luda Yana dam is yet to be prepared, at this stage it is not clear if additional lands should be expropriated. Considering, however, that the land expropriated for Luda Yana currently exceeds the projected size of the dam cup, and the fact that the reservoir is likely to be smaller than originally planned as the new design will no longer include provision for irrigation of 6,300 hectares, it is unlikely that additional expropriation will be needed. However, in the unlikely event that additional land is needed, expropriation will be done in accordance with the LAPF. The additional land acquisition supported under the Project is expected to be relatively minor, such as construction of ancillary structures including a water purification plant at Luda Yana dam,.Based on the available data it is not expected that any additional expropriation of land for will be required for Neikovtzi dam.

7. Any expropriation of land required for or directly linked to the dams will be carried out following well-established procedures specified in Bulgarian laws and procedures relating to land purchase and expropriation and World Bank Operational Policy (OP) 4.12 and Bank Procedures (BP) 4.12 on Involuntary Resettlement. Wherever Bulgarian Laws and World Bank policies are not in agreement, the principles agreed upon in the LAPF will be followed (as further specified in the following sections). However, the total value of compensation provided for any expropriation in any case should not be less than the amount which the individual or household would receive under the Government’s legal framework for land restitution and expropriation. It should be noted that no displacement of population is expected at any of the three sites.

8.According to the Agricultural land Ownership and Use Act 1991, and the Act Restoring Ownership on Forests and Forest Stock Land Tracts form the Forestry Fund, 1997, the last date for people to initiate claims for restitution of agricultural or forest land was May 14, 2007. Therefore, this LAPF does not include provisions for addressing new claims of ownership of land required for construction or operation of the three dams or is otherwise linked with the project. However, the LAPF does cover any cases in which the initial claim was made prior to this deadline and in accordance with the law, but which have not yet been resolved. This may include one known case in the vicinity of Plovdivtzidam, concerning land which was claimed by the heirs of a Mr. Sinapov. There is one known case in which some land parcels were restituted to claimants under a court judgment and an expropriation process was initiated in 1998, but because the State failed to provide the details of the dam project to be added to the map of restored properties, it was not possible to determine whether the land fell within the area required for the dam. If the detailed design indicates that any of this land falls within the reservoir or within SSA belts any expropriation that is required will be carried out in accordance with this LAPF. (see next section),

(b)Restriction of land use or access

9.Under OP 4.12, restrictions on access to land or on use of land are regarded as a form of land acquisition. Bulgarian law provides for some restrictions of the activities within the sanitary zones, depending on their proximity to the dam site. The design and setting up of the sanitary zones shall be performed in accordance with the relevant Bulgarian law (Water Act, Public Health Act and Ordinance N 3 of 16.10.2000 on the Conditions and Procedures for studying, planning, approving and exploiting Sanitary and Protection Zones neighbouring water sources and drinking and household water supply facilities and mineral water sources used for treatment, prevention, drinking and hygiene purposes). As noted above, the strongest restrictions are imposed on the activities in the sanitary zones of belt I which should become public state property (expropriation). Land use and access restrictions in Belts II and III are more limited and are not considered equivalent to expropriation. Under this LAPF, such restrictions will be treated as loss of assets and income in the context of OP 4.12: i.e., the corresponding compensation amount at replacement cost will be determined based on a process of negotiation with the affected people and will be of a size sufficient to restore their livelihoods that are adversely affected.

(ii) Principles and objectives governing land acquisition

10.For civil works associated with MIDP, it is likely that there is need for limited acquisition and this may result in the loss of landand perhaps the loss of sources of income. Loss of shelter is highly unlikely as people are not expected to lose their residences or other structures.

11.The premise governing the LAPF is that land acquisition may cause hardship and impoverishment, and therefore where it is not feasible to avoid land acquisition, project affected persons (PAPs) will consulted and compensated and assisted in their efforts to improve or restore their livelihoods and standards of living to levels prevailing prior to the beginning of project implementation. To support this objective, the following principles will apply:

  • During the sub-project preparation process, consideration of technical options shall involve a concurrent assessment of potential associated land acquisition impacts, so that, where feasible, design alternatives to minimize such impacts can be identified as early as possible.
  • Consultation arrangements during the project sub-component preparation process shall be transparent and inclusive to ensure that all persons affected by involuntary land acquisition are consulted on the mitigation measures.
  • Compensation for lost assets shall be provided before land and other assets are taken into possession.

(iii)Legal framework reviewing the fit between Bulgarian laws and regulations and World Bank OP 4.12 requirements, and measures proposed to bridge any gaps between them, and description of entitlements

12.Bulgaria does not have a single expropriation law. Rather there are several legislative acts governing the expropriation process. These laws and ordinances include the Law on Ownership, State Property Act, Municipal Property Act, Spatial Development Act, Code of Civil Procedure and Ordinance for the order of establishing prices of agricultural lands. These together define the procedures for expropriation of immovable property in Bulgaria. The expropriation of private properties is done only for a public interest and with fair compensation.

13.Prior to land acquisition, the investor submits proposals to the Committee on Agricultural Lands at the Ministry of Agriculture and Forests for approval of the design and likely change in land use. Simultaneously, licensed assessors begin the process of property evaluation to assess compensation amounts. The expropriation proposal is then submitted to the Minister of Finance and the Minister of Regional Development and Public Works, who jointly submit the proposal to the Council of Ministers (CoM). Simultaneously with the submission of the proposal for expropriation to the Council of Ministers, the copies of the expropriation proposal are mailed to the concerned Municipalities who announce it immediately. The Mayor of the respective Municipality also informs the potentially affected persons the proposal for expropriation. After the Council of Ministers decrees a decision on the proposal, appeals by interested owners are allowed to be submitted at the Supreme Administrative Court within 14 days after the publication of the information in the State Gazette. The investor of the project makes the payment of the compensation amounts into accounts of affected individuals at a commercial bank. The investor also announces the action in two national and one local newspaper. The Bulgarian procedures provide for information to the local governments and the people likely to be affected by a particular project.

14.Under the Project, in addition to the mailing of the expropriation proposal to the Mayor by the investor, the PIU will take supplemental measures to ensure that all affected people are notified in a timely way regarding their lands that are expected to be expropriated. In addition, under the Project, the Government of Bulgaria will allow appeals by interested owners to be submitted to the Supreme Administrative Court within 30 days after the Council of Ministers decrees a decision on the proposal.

15.The amount of compensation is determined with the help of qualified property assessment experts for urban and rural lands. For rural areas, where there is no active land market, the offer price for land is calculated based on a situation-specific formula that takes into account the market value of the affected property (as published by the MoA), and includes coefficients to improve the market price depending on the size and quality of the estate; existence of irrigation systems; distance from basic markets; distance from the coastal line of the Black sea or from the end of the beach strip; and the distance urban zones and bordering roads with permanent cover. The market value of the asset determined in conjunction with the State Property Act (STA) and paid as compensation to affected persons. The World Bank policy requires compensation for land to be at “replacement value,” enabling the affected person to purchase land of equivalent area and quality in the vicinity. Under the project, the Government of Bulgaria will appoint an independent valuator to review the Government’s valuation method and the resulting proposed offer prices for the first 15 expropriation cases to determine whether they correspond to this principle of “replacement value.” If this review indicates they do not, the valuation methodology applied to expropriation associated with the project will be revised to correct the discrepancy.

16.Loss of Income: It should also be noted that less than 10-20% of an individual’s land holding is expected to be adversely affected by the land acquisition process for the project – therefore, no significant loss of income is expected and impacts can be generally considered to be minor.However, if PAPs suffer loss of income through loss of more than 20% of their land holding, income restoration assistance will be provided if required, despite the fact that Bulgarian law does not call for this. This will take the form of “Rehabilitation Assistance” meaning assistance comprising job placement, job training, cash compensation, transition support or other forms of support to enable displaced persons, who have lost their source of livelihood as a result of the displacement, to improve or at least restore their income levels and standard of living to pre-project levels.

17.Loss of Structures: It is not expected that there will be any residential or other structures that will need to be acquired in the project site. However, in the event that there are structures (barns, kiosks, small commercial buildings etc.,) that will need to be demolished, “depreciation” will not be considered in calculating the compensation payable for affected structures. Although this differs from the provisions of Bulgarian law, the affected people will be compensated at a level enabling them to replace their structures."

18.Bans and Restrictions on Sanitary Zones: Under the legislation currently in force, belt І of Sanitary and Security Area around the dams comprises “the aquatic area from the dam wall up to a distance of 1000 m. from the water collecting facility against the stream, as well as a 50 m large strip from the boundary of the water site”. As mentioned elsewhere, these lands for belt I may need to be expropriated for the Luda Yana though it is not very likely, but not for Plovdivtzi or Neykovtzi sites as they have already been expropriated. The lands falling under belt ІІ and belt ІІІ are not subject to expropriation; however, some bans and restrictions on carrying out certain activities that are likely to have negative impacts on the water source, have been established. These include in the case of Neykovtzi, the managing of private animal farm, falling within the SSA belt ІІ; the managing of three chalets, falling within SSA belt ІІІ, creating new cemeteries etc,. According to data provided by the Municipality of Rudozem and Plovdivtzi county, the establishment of belt ІІ and belt ІІІ of Plovdivtzi Dam SSA will not result in bans or restrictions on activities.The restrictions in Luda Yana belts II and III are not yet known. The compensation for the expropriation of the lands in the innermost belt, Belt I, will be carried out as per the details set out in the Policy Framework .In Bulgaria, people adversely affected by land use restrictions in Belts II and IIIshall be compensated for loss of profits according to the procedures laid down by the Minister of the Regional Development and Public Works and the Minister of Environment and Waters; people who have restrictions imposed on farming and related activities shall be compensated according to a methodology for the evaluation of the compensation for lost profits deriving from restricted application of agrochemicals in the SSA, which shall be established by the Minister of Agriculture and Food Supply. Under this project, these restrictions on land use on Belts II and III on all dam sites will be treated as loss of assets and income triggering the Bank’s Policy on Involuntary Resettlement and the corresponding compensation amount at replacement cost will be determined based on a process of negotiation with the affected people and will be of a size sufficient to restore their livelihoods that are adversely affected.