ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy. The financing will be co-financed with the International Finance Corporation of World Bank Group (IFC), and the project’s environmental and social (E&S) risks and impacts have been assessed in accordance with IFC’s Environmental and Social Sustainability Policy (ESSP) and related Environmental and Social Performance Standards (PSs). To ensure a harmonized approach to addressing the E&S risks and impacts of the project, and as permitted under AIIB’s Environmental and Social Framework (ESF), IFC’s ESSP and relevant PSs will apply to the project in lieu of AIIB’s ESF. The Project has been assigned as Category A because the environmental and social risks and impacts are long term, irreversible in nature and cover large area beyond the project footprint.
Environmental Aspects. Xekaman 3 is a rock filled dam and surrounded by highly modified habitat. There are no reported significant biodiversity resources within the project influence area. A 700-meter section downstream of the dam has no flow during the dry season. Provision for environmental flow will be designed and reflected in the operation of the dam. Xekaman 1 and Xanxay are adjacent to the Dong Amphan which is the key biodiversity area (KBA). The forest cover is relatively thick and diverse. A critical habitat study will confirm any significant biodiversity resources in the area. In addition, a Biodiversity Action Plan (BAP) Strategy will be prepared to detail actions needed to achieve the objectives of the BAP including achieving net gains for critical habitat values, scoping of conservation actions for the Dong Amphan KBA, requirements for environmental flows, monitoring, evaluation, potential partnership models and estimated costs. A forest offset program was agreed with the Laos government and will be fully implemented. There is minimal use of the downstream river resources by the community for all three dams.
A Cumulative Impact Assessment (CIA) was undertaken for the Sekong Basin in 2021 by the IFC. The CIA identified a number of valued environmental components (VECs) including aquatic and terrestrial biodiversity and natural resources livelihood dependence. Recommendations for future management of the Sekong watershed promote an integrated approach to development focusing on improving environmental flows, dam safety and sediment management.
An Environmental and Social Corrective Action Plan (ESCAP) will be developed and agreed with the company in accordance with IFC’s ESSP and relevant PSs. This consolidates all corrective actions based on the findings of the ESDD. Additional studies on Critical Habitat Assessment and Environmental Flow assessment will be done and provide input to the ESDD. Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards. The institutional capacity to implement E&S actions will be enhanced to adequately implement, supervise and monitor required actions.
Dam Safety. Visual inspection of the dams and related structures (penstock, turbine, tailrace) have indicated no obvious flaws or structural defects. Leaks through the dams are within normal thresholds. Some instrumentation to monitor dam safety will need to be replaced or repaired. An updated dam safety plan has been included in the ESCAP which includes annual review by a dam safety panel, comprehensive inspection every five years and an updated Emergency Response Preparedness Plan considering flooding due to catastrophic failure of the weir. Members of the dam safety panel will be vetted by the Lenders.
Social Aspects. The Project at the time of development involved loss of residential and production land and resettlement of households. Other impacts included loss of production land only due to submergence, indirect impacts on the fishery and domestic water supply, host community impacts, where resettlement sites are established. By June 2020, Project Affected Households (PAPs) were resettled in in Souksavang Dakbou and Houy whereas Tangkeu villagers still live in the old village, as it is closer to the farmland. Several public consultation meetings were held with PAPs including ethnic groups (EPs). The consultations indicated that in-kind support measures, livelihood and income restoration measures need to be strengthened. The details and activities, mitigation plans and institutional arrangements will be further required according to ESCAP. In addition, the Projects will develop and implement Supplemental Livelihood Restoration Plans (SLRPs) for the Projects to mitigate the impacts on PAPs. The SLRPs will include impact and identification of tailored livelihood restoration measures corresponding with findings of the ongoing socioeconomic survey, including measures to support to access alternative lands, water supply, among others, detailed time-bound actions, grievance mechanism, implementation and monitoring arrangements, schedule and budget, as well as procedure to conduct a livelihood restoration completion audit.
Indigenous People. For all Projects, the affected communities consist of several ethnic minority groups, including Talieng, Harak, Brao, Yae, Cheng and Brou. It was determined that these ethnic minority groups have ancestral presence in the project’s area and meet the definition of indigenous people as per PS7. To minimize the project’s impacts on these communities, the Xekaman 1/Xanxay Project developed and implemented an Ethnic Minority Development Plan (EMDP) as part of its social obligations in the Concessional Agreement with the Government of Lao PDR. The plan includes supports for traditional customs and culture, ceremonial assistances, in-kind support for vulnerable people in the resettlement site, and funding for gender development programs in Sanxay and Xaysetha districts. The remaining EMDP activities will be continued during the operation phase as part of the ESMP.
E&S Information Disclosure. The E&S documentation in English and summary in local language[s], as appropriate, will be disclosed by the Viet Lao on its website and in hard copies in the Project areas. A summary of this documentation will also be disclosed on IFC’s website, and AIIB’s website will include links to the documentation on the Client’s website and IFC’s website.
Grievance Redress Mechanism (GRM). The Projects do not have in place a formal grievance process that enables PAPs and workers to bring and escalate grievances as needed. Therefore, the scope and structure of a formal GRM process in line with ESP at the project level will be developed as part of due diligence, and the information of developed GRM at the project-level together with AIIB’s Project-affected Peoples Mechanism (PPM) in language(s) understandable to the PAPs and the project contracted workers will be disseminated to local communities and the people concerned timely in an appropriate manner.
IFC Environmental and Social Review Summary (ESRS)
IFC Summary of Investment Information (SII)
