INTEGRATED SAFEGUARDS DATASHEET



INTEGRATED SAFEGUARDS DATASHEET

APPRAISAL STAGE

I. Basic Information

|Date prepared/updated: 02/28/2008 |Report No.: AC3233 |

| | |

|1. Basic Project Data | |

|Country: Costa Rica |Project ID: P085539 |

|Project Name: Port-City of Limon Integrated Infrastructure Project |

|Task Team Leader: Cecilia Claudia Corvalan |

|Estimated Appraisal Date: October 29, 2007 |Estimated Board Date: January 8, 2008 |

|Managing Unit: LCSTR |Lending Instrument: Specific Investment Loan |

|Sector: Ports, waterways and shipping (60%);General water, sanitation and flood protection sector (30%);Sub-national government |

|administration (10%) |

|Theme: Infrastructure services for private sector development (P);Regulation and competition policy (P);Other urban development |

|(P) |

|IBRD Amount (US$m.): 72.50 |

|IDA Amount (US$m.): 0.00 |

|GEF Amount (US$m.): 0.00 |

|PCF Amount (US$m.): 0.00 |

|Other financing amounts by source: |

|Borrower 7.20 |

|7.20 |

|Environmental Category: B - Partial Assessment |

|Simplified Processing |Simple [] |Repeater [] |

|Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to |Yes [ ] |No [X] |

|Crises and Emergencies) | | |

2. Project Objectives

The overarching purpose of the project is to revitalize the city of Limon in line with the Government Regional Development Strategy, and prepare the modernization of the port of Limon. More specifically, the project seeks to: (i) improve the protection and management of Limon?s cultural and natural heritage; (ii) increase access to the sewage system and reduce urban flooding in the area of Limoncito; (iii) create a more efficient, accountable and credible local government; (iv) create new employment opportunities through small and micro-enterprises; and (v) support the port modernization process and improve the railway access to the Moin port terminal.

3. Project Description

Component 1: Urban and Cultural Revitalization. Component 1 will invest in the urban upgrade, cultural heritage protection and revitalization and natural conservation of Limon, restoring its emblematic historical and cultural patrimony and providing basic services to one of its poorest neighborhoods. The aim is to rescue Limon?s unique cultural identity, while improving the city?s urban environment (livability) and attractiveness to visitors. This component comprises two sub-components: (i) Limon?s Cultural, Natural, and Architectonic Revitalization and (ii) Provision of Sewerage and Drainage Services. Component 1 will be implemented in close coordination with the activities foreseen in the other components particularly those related to the Strategic Plan of the City-Port of Limon and to Local Economic Development.

Component 2: Local Economic Development. Component 2 will support the generation of new sources of employment, particularly among the young, through the development of micro and small businesses, training and technical assistance, seizing the opportunities presented by growing cruise tourism and the historical/ cultural richness of Limon. Specific activities include: (i) the provision of seed capital, scholarships and access to non-financial support services (such as incubators and business support centers) for the promotion of new cultural businesses and small and micro enterprises run by youth and women through the establishment of a competitive fund and a development market-place type of activities to select the most promising business plans, as a means of triggering community driven economic development; (ii) capacity building to SME Unit of the Ministry of Economy to improve the coordination of training and technical assistance to Limon?s small and micro-businesses; and (iii) specific training activities to help existing cultural businesses improve the quality of their products. The project envisions to hire a technically sound firm or NGO specialized in the provision of non-financial services for the implementation of this component under the technical supervision of the Ministry of Economy. Within the framework of the recently approved Development Bank Law, state banks will expand SME financing opportunities through a new range of financial products, including individual and portfolio guaranty facilities.

Component 3: Local Governance and City-Port Strategic Planning. Component 3 will provide technical assistance for the Municipality of Limon to improve its capacity to deliver and manage quality services while empowering it to take an active role in the city?s development. Activities include: (i) formulation and implementation of pilot investments prioritized by the participatory strategic plan for the City-Port in coordination with other key government agencies, private sector actors, and citizens; (ii) strengthening of the municipality?s management capacity by administrative restructuring, supporting the creation of an office for urban planning and monitoring, and a tourism promotion center; (iii) strengthening of the municipality?s financial management capacity by integrating its information systems, and updating cadastre and revenue collection mechanisms; and (iv) physical improvements in its administrative building and provision of adequate equipments.

Component 4: Support for Improving Port Environment. This component will support: (i) improvement of the railway access to the Moin port terminal, which includes the repair of the bridge over the river Chirripo, the rehabilitation of a warehouse in Leesville, and the construction of a short section of track for direct access of rolling stock to the dock of Mo?n; and (ii) technical assistance to the Transport Ministry to support the concessions process of the terminals of Moin and Limon, including complementary analysis such conducting an environmental assessment of the proposed intervention, fine-tuning the Port Master Plan, developing a business plan for the port, and carrying out more detailed institutional analyses.

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

The project is located in Limon?s metropolitan area. There are the following salient physical characteristics relevant to the safeguard analysis:

? Cariar? Park: is located in the coastline of Limon, 5 kilometers from the City of Limon. Both have been declared Protected Areas. The park has an immense tourism potential but the lack of investments in maintenance, services, and infrastructure have resulted in an important deterioration of its recreational area.

? Uvita or Quiribr? Island: its geographical location 1100 meters northeast of the City of Lim?n turns this island into an important natural element for the urban area. The island was declared National Monument by Congress in 1985. It has two paths; one around the island?s perimeter and a central one, which reaches a light house that serves the port of Limon. The island is formed by coral reefs, which were partially destroyed during an earthquake in 1991.

? El Limoncito Wildlife Refugee: also know has ?El Humedal? it is located in between the outfalls of the Limoncito and Banano Rivers. The Limoncito river provides the main source of water and drainage for the Refugee, flooding the area for more than 6 months per year.

? Cultural and Arquitectonic Patrimony: the city of Limon has many buildings and sites that have been declared as Historic Patrimony by Costa Rica?s Ministry of Culture. The architectonic style shows distinctive Victorian-era accents mixed with a strong Caribbean influence.

5. Environmental and Social Safeguards Specialists

Ms Stefania Blotta Abakerli Baptista (LCSSO)

Mr Marco Antonio Zambrano Chavez (LCSAR)

|6. Safeguard Policies Triggered |Yes |No |

|Environmental Assessment (OP/BP 4.01) |X | |

|Natural Habitats (OP/BP 4.04) |X | |

|Forests (OP/BP 4.36) | |X |

|Pest Management (OP 4.09) | |X |

|Physical Cultural Resources (OP/BP 4.11) |X | |

|Indigenous Peoples (OP/BP 4.10) | |X |

|Involuntary Resettlement (OP/BP 4.12) |X | |

|Safety of Dams (OP/BP 4.37) | |X |

|Projects on International Waterways (OP/BP 7.50) | |X |

|Projects in Disputed Areas (OP/BP 7.60) | |X |

II. Key Safeguard Policy Issues and Their Management

A. Summary of Key Safeguard Issues

1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts:

In general, the nature of the works envisaged will not have significant direct or indirect socio-environmental impacts that could endanger the natural or social environment in the area of influence where works will be carried out. Moreover, the measures or actions to prevent, mitigate, and/ or compensate the potential socio-environmental impacts are easy to identify and, with proper management, the environmental and social sustainability of subprojects can be assured. In this regard, the project as a whole has been classified by the Bank as a ?Category B?, in accordance with the Environmental Assessment Policy [OP 4.01].

The project triggers the following Bank Safeguard Policies: Environmental Assessment (OP 4.01); Natural Habitats (OP 4.04); Involuntary Resettlement (OP 4.12); and Cultural and Physical Property (OPN 11.03).

The Environmental Assessment Policy (OP 4.01) is triggered because, with the execution of works, although no significant socio-environmental impacts are expected, these must be prevented, mitigated, and/or compensated by means of adequate management. To comply with this policy, agreement was reached on developing the present the Environmental and Social Management Framework (ESMF) of the project, and a Quick Urban Environmental Assessment (QUEA).

The Natural Habitats (OP 4.04), is triggered because the works proposed for the Cariari Recreational Park; Uvita Island and Limoncito Wetland, that potentially can affect these sensitive areas. In compliance with this policy, a Preliminary Environmental Assessment of the Cariari Park, Study of Capacity of Uvita Island and Update of the Environmental Management Plan for the El Limoncito Wildlife Refuge, was carried out during the preparation process.

The Involuntary Resettlement Policy (OP 4.12) is triggered because, with the execution of the sanitary sewage works, it is expected that at least seven houses will be affected; these are located where the initial works are slated to take place. In this regard, it was agreed that a Involuntary Resettlement Policy Framework (IRPF) would be developed with the aim of having an instrument in place to properly deal with these cases, in accordance with Bank guidelines. An abbreviated Involuntary Resettlement Plan in accordance with Bank guidelines was done during the preparation process. The plan is based on the detailed identification of three viable resettlement alternatives and summarizes the resettlement priorities expressed by the affected families. The plan also details the socio-economic characteristics for affected families, specifies eligibility criteria and outlines institutional arrangements for implementation and grievances.

Finally, with regard to Cultural and Physical Property (OPN 11.03), this Safeguard Policy would be triggered by the possible discovery of archeological sites or random findings during the execution of works, which would require special treatment. It should be noted that in this regard Costa Rica has a good public policy; therefore it was not necessary to develop a Policy Framework for the Protection of Cultural and Physical Property. During project preparation, the cultural aspects of the project were extensively consulted with the authorities and experts of the Ministry of Culture, which commissioned a reconnaissance field visit of Limoncito in order to identify any potential archeological, paleontological or other remains that might be uncovered particularly during construction of the sewerage and drainage systems to be financed by the project. No significant impact is foreseen. Nevertheless, the bidding documents and contracts for all related civil works will specify chance finds procedures for all civil works financed by the project. Additionally, the Minister of Culture designated a focal person who will oversee all civil works activities to ensure compliance with national policies and avoid any potential adverse impact on Limon?s physical cultural resources. Finally, a well-respected organization with extensive experience in cultural patrimony (ICOMOS) has produced a cultural inventory for Limon, providing the government and the project preparation team with detailed information of the status of its cultural patrimony as well as recommendations for its conservation and promotion at policy and investment levels. The Director of the National Museum has also designated a person to supervise the restoration of the physical cultural assets and buildings of Limon.

Environmental Assessment of the subprojects. A preliminary environmental assessment (screening) was carried out for the subprojects identified in the project, applying the Environmental and Social Management Framework. The activities that may potentially have negative environmental and social impacts are mainly related to: the construction, expansion, and rehabilitation of drainage and sanitary sewer systems; the rehabilitation of railway sections, the construction of a railway bridge over the Chirrip? River, and the rehabilitation of warehouses on the route to Leesville; works to rehabilitate the historic center and work to improve the city?s urban environment; and rehabilitation of the Cariari Recreational Park and Isla Uvita.

? The drainage activities entail the rehabilitation and enlargement of an existing channel located in the area of direct influence of the wetland Limoncito, declared as a National Refuge of Wildlife. Since the works will be executed in an existing channel whose design will permit to evacuate the surplus water upstream of the wetland, it is expected that this work will not affect the current conditions of the ecosystem. Nevertheless the foreseen drainage activities were classified after the environmental screening as of MODERATE-HIGH environmental and social risk (Category B1), because it is located in a sensitive area as per the national environmental legislation and the Environmental and Social Management Framework (ESMF). This will require the preparation of an Environmental Impact Assessment (EIA) to assure the environmental sustainability of these activities.

? The sanitary sewage activities in Limoncito and Los Ba?os, consist of expansions of the existing network and the construction of wells to interconnect the system where the water served will be conducted to a Treatment Plant and subsequently evacuee through an emissary submarine that has the capacity to increase this new volume. In this sense, no significant environmental impacts are anticipated that could cause social and environmental negative impacts. Nevertheless, given the category of the activities as of MODERATE-LOW environmental and social risk (Category B2), an Environmental Management Plan (EMP) will be completed to assure an adequate environmental management of the direct and indirect negative impacts that be produced with the execution and operation of the works.

? No significant environmental impacts are expected from the rehabilitation of the railway line and the construction of the bridge over the Chirrip? river. Nevertheless, complementary works related to the road safety and impacts of noise should be included in the technical feasibility design, since the railroad crosses some towns along the train line which population may be affected especially during the construction. These activities were thus classified as of MODERATE-LOW environmental and social risk (Category B2), reason by which to comply with the national environmental legislation will require to develop the respective EMP for assure an adequate management of the potential social and environmental impacts that can be produced with the execution of the works and their subsequent operation.

? On the improvement of the Recreational Cariari Park, most of the infrastructure required already exist, but in abandonment. Investments in the construction of physical infrastructure will not affect the most sensitive areas of the Park. This activity has benefited from INBIO advice, institution of recognized prestige at national and international level regarding the sustainable management of biodiversity. Additionally, this activity will include as part of its attractions, the marine corridor between the Cariari Park and the Uvita Island, another marine ecosystem. Overall, this activity has been categorized as of MODERATE environmental and social risk (Category B1), which will require the preparation of the a EMP. During project preparation, a Preliminary Environmental Assessment of the Cariari Park was carried out and included a sampling of the fauna and flora of the zone, its respective ecological zoning and the pre-design of the intervention to show the social, environmental, technical, and economic viability of the subproject.

? Regarding the rehabilitation of the historic buildings and investments in urban recreational areas, given the characteristics of the foreseen works, no significant environmental impacts that could put in risk the natural and social environment are expected. On the contrary, the foreseen activities represent a HIGH POSITIVE impact for the population of Lim?n who will benefit directly from these new spaces and urban cultural renew, and for visitors from the cruisers and elsewhere. These activities have been classified as of LOW environmental and social risk (Category C), and will be require a ?Declaraci?n Jurada of Environmental Impact? in accordance with the national environmental legislation and the ESMF.

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area:

N/A

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts.

N/A

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described.

During the process of preparing and evaluating the project, a series of activities, studies, and instruments were developed for the purpose of ensuring the environmental and social sustainability of the project and of complying with national environmental legislation and the Bank?s Safeguard Policies. In addition, these studies are intended to be used as guidelines and management tools during project implementation by all the agencies concerned. These studies are: Conceptual Framework for the Environmental and Social Management (MCMAS) of the Project; Quick Urban Environmental Assessment (EAUR); study of tourism load capacity and identification of potential conservation and/or sustainable use activities in Quiribr? Park (Uvita Island); and updating of the Environmental Management Plan for the El Limoncito Wildlife Refuge. The GoCR has also prepared an Abbreviated Resettlement Plan for Limoncito and a Resettlement Policy Framework for the project.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people.

As a basis for project preparation, a socio-economic diagnostic of project?s sphere of influence was carried out in order to define a poverty profile and broadly identify populations groups in particularly disadvantaged positions. This study indicated a direct relationship between poverty levels and the following variables: (i) gender of head of household (51 percent of female head of households fall below the poverty line); (ii) unemployment (89 percent of the unemployed live in poverty; 33 percent in extreme poverty); (iii) type of employment (private sector employees and temporal employees face higher levels of poverty than public employees); (iv) type of insurance (60 percent of pensioners are poor). Surprisingly, variables such as ethnicity and level of education, in isolation, proved to be non significant in terms of determining levels of poverty.

The result of this study lead to the conclusion that the most effective way of combating poverty in the cit of Limon is through the generation of new sources of income and employment, particularly among the most vulnerable groups - Including women (20 percent of the female EAP is unemployed) and the young (35 percent of the EAP between 12-25 is unemployed), particularly young males (51 percent of the male EAP between 12-25 is unemployed). The Local Governance component will also support the empowerment of the poor and vulnerable groups leaving in Limon, through the promotion of participatory process aiming at giving voice to citizens, and particularly to these groups, in local planning and monitoring access and quality to municipal services.

The socio economic study does not sustain the generalized perception that Afro-descendants face particular disadvantages in terms of socio economic opportunities within the city of Limon. Composing 46 percent of the total population, they present higher levels of education than other ethnic groups (except for Chinese); and, in general terms, lower levels of poverty (except for Afro-descendant female headed households, which tend to present higher levels of extreme poverty than female-headed households pertaining to other ethnic groups). However, the design of promotion mechanisms to foster cultural micro enterprises, drawing on the cultural and historic identity of the city will be particularly beneficial for Afro-descendants.

A stakeholder analysis conducted as part of the preparation of the project yielded important guidance for designing and implementing a consultation and communication strategy through out the different stages of project preparation. Extensive consultations were held involving local elected authorities (including the major and municipal council), and civil society organizations, including trade unions, business chambers, community and cultural organizations, religious leaders and universities. At the national level, the national and Bank teams engaged in broad consultations and dialogues with the heads of key governmental agencies involved in project preparation and leaders of political parties represented in the National Congress.

Extensive government-led and Bank consultations in San Jose and in Limon with local government, council members, community organizations, and regional and central representatives from key government agencies took place during the project preparation phase. More specifically, on July 23, 2007, a public consultation session organized by the Project Coordination Unit took place in Limon. The objective was to present the project, the Environmental Assessment, and the Resettlement Plan related to the sanitation works in the area of Limoncito. Multiple local stakeholders as well as Bank staff and local consultants attended the session.

|B. Disclosure Requirements Date | | |

|Environmental Assessment/Audit/Management Plan/Other: |

|Was the document disclosed prior to appraisal? |Yes | |

|Date of receipt by the Bank |07/19/2007 | |

|Date of "in-country" disclosure |07/24/2007 | |

|Date of submission to InfoShop |10/25/2007 | |

|For category A projects, date of distributing the Executive Summary of the EA to the | | |

|Executive Directors | | |

|Resettlement Action Plan/Framework/Policy Process: |

|Was the document disclosed prior to appraisal? |Yes | |

|Date of receipt by the Bank |08/15/2007 | |

|Date of "in-country" disclosure |07/24/2007 | |

|Date of submission to InfoShop |10/25/2007 | |

|Indigenous Peoples Plan/Planning Framework: |

|Was the document disclosed prior to appraisal? | | |

|Date of receipt by the Bank | | |

|Date of "in-country" disclosure | | |

|Date of submission to InfoShop | | |

|Pest Management Plan: |

|Was the document disclosed prior to appraisal? | | |

|Date of receipt by the Bank | | |

|Date of "in-country" disclosure | | |

|Date of submission to InfoShop | | |

|* If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and |

|disclosed as part of the Environmental Assessment/Audit/or EMP. |

|If in-country disclosure of any of the above documents is not expected, please explain why: |

| |

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting)

| | |

|OP/BP/GP 4.01 - Environment Assessment | |

|Does the project require a stand-alone EA (including EMP) report? |Yes |

|If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? |Yes |

|Are the cost and the accountabilities for the EMP incorporated in the credit/loan? |Yes |

|OP/BP 4.04 - Natural Habitats | |

|Would the project result in any significant conversion or degradation of critical natural habitats? |N/A |

|If the project would result in significant conversion or degradation of other (non-critical) natural habitats, |N/A |

|does the project include mitigation measures acceptable to the Bank? | |

|OP/BP 4.11 - Physical Cultural Resources | |

|Does the EA include adequate measures related to cultural property? |Yes |

|Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? |Yes |

|OP/BP 4.12 - Involuntary Resettlement | |

|Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? |Yes |

|If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? |Yes |

|The World Bank Policy on Disclosure of Information | |

|Have relevant safeguard policies documents been sent to the World Bank's Infoshop? |No |

|Have relevant documents been disclosed in-country in a public place in a form and language that are |Yes |

|understandable and accessible to project-affected groups and local NGOs? | |

|All Safeguard Policies | |

|Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation |Yes |

|of measures related to safeguard policies? | |

|Have costs related to safeguard policy measures been included in the project cost? |Yes |

|Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures|N/A |

|related to safeguard policies? | |

|Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately |Yes |

|reflected in the project legal documents? | |

D. Approvals

|Signed and submitted by: |Name |Date |

|Task Team Leader: |Ms Cecilia Claudia Corvalan |10/24/2007 |

|Environmental Specialist: |Mr Marco Antonio Zambrano Chavez |10/24/2007 |

|Social Development Specialist |Ms Stefania Blotta Abakerli Baptista |10/24/2007 |

|Additional Environmental and/or Social Development|Mr William Reuben |10/24/2007 |

|Specialist(s): | | |

| | | |

|Approved by: | | |

|Regional Safeguards Coordinator: |Mr Reidar Kvam |10/24/2007 |

|Comments: |

|Sector Manager: |Mr Jose Luis Irigoyen |10/24/2007 |

|Comments: |

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