1 - World Bank



REPUBLIC OF MOLDOVA

Consolidated Agricultural Projects Management Unit (CAPMU)

RURAL INVESTMENT AND SERVICES PROJECT

(RISP-II, additional financing)

SECTORAL

ENVIRONMENTAL

REVIEW

March 31, 2008

Prepared by: Tatiana Belous

PhD, environmental consultant

TABLE OF CONTENT

|Acronyms | |

| |3 |

|Executive Summary |4 |

|1. Introduction and Country’s Background |6 |

|2. Rural Investment And Services Project Ii – Additional Financing |9 |

|3. National Environmental Assessment Policy, Legal and Administrative Frameworks |13 |

|4. World Bank Environmental and Social Safeguards |28 |

|5. Baseline data |31 |

|6. Potential Environmental Impacts |49 |

|7. Analysis of Alternatives |62 |

|8. Environmental Assessment and Management Guidelines |63 |

|9. Disclosure and Public Consultation |77 |

|Annex A. Impacts, Causes, Consequences and Mitigation |78 |

|for Agriculture | |

|Annex B. Impacts, Causes, Consequences and Mitigation |90 |

|Non-Agricultural Rural Activities | |

|Annex C Impacts, Causes, Consequences and Mitigation |100 |

|of Some Specific Rural Enterprises that Relate to Agriculture | |

ACRONYMS

ACSA National Agency for Rural Development

Acvaproject Design Institute

APCP Agriculture Pollution Control Project

BSECO Black Sea Economic Cooperation Organization

CAPMU Consolidated Agriculture Project Management Unit

CJD Creutzfeldt-Jakob disease

EA Environmental Assessment

SEE State Ecological Expertise

SEI State Ecological Inspectorate

EAMG Environmental Assessment and Management Guidelines

EIA Environmental Impact Assessment

EMP Environmental Management Plan

EU European Union

FI Financial Intermediary

GEF Global Environmental Facility

GDP Gross Domestic Product

GM Genetically Modified Organisms

GoM Government of Moldova

ICPDR International Commission for the Protection of the Danube River

IDA International Development Association

IEC Important Environmental Component

MAFI Ministry of Agriculture and Food Industry

MENR Ministry of Ecology and Natural Resources

MDL Moldovan lei

NGO’s Non-government Organizations

OP Operational Policy

PFI Participating Financial Institutions/ Intermediaries

RISP Rural Investment and Services Project

SER Sectoral Environmental Review

SEIA Statement on the Environmental Impact Assessment

SME Small and Medium Enterprise

TA Technical Assignment

US United States

USA United States of America

WUA Water Users Association

WB World Bank

Executive Summary

Project objective and description. The project is the Second Phase of a two-phase Rural Investment and Services Program. The Program objective, which remains unchanged, is to provide long-term support to accelerate agricultural recovery and growth so that Moldova’s agricultural and rural sectors can play their full role in providing the underpinnings for future income growth and poverty reduction. Within this program objective, the project’s second phase objective is to continue to foster post-privatization growth in the agricultural and rural sectors of Moldova by improving access of farmers and rural entrepreneurs to know-how, knowledge and financial services, while building the capacity of the private and public institutions to ensure the sustainability of these activities.

The additional financing project proposes the restructuring of RISP II by adding a Drought Adaptation Component with two Sub-Components: (i) Irrigation Finance Services; and (ii) Drought Adaptation Advisory Services.

The EA Process. The first environmental assessment for the RISP I project was prepared in 2002 as a Sectoral Environmental Review (SER). Due to further development of RISP and approval of RISP II project a new revision of the SER was conducted in 2005. As the proposed additional financing for the RISP-II project includes a new project’s component that would support on-farm irrigation, which may have potentially adverse environmental impacts it was necessary to revise the SER and conduct an environmental assessment recommending relevant mitigation and monitoring activities for newly proposed activities. The purpose of current revised SER is to analyze potential the effects of the RISP-II additional on-farm irrigation project’s sub-component may have on the environment and to provide solutions for the avoidance and/or mitigation of any adverse environmental impacts could occur as a result of the overall project.

Project Environmental Category. RISP-II is placed into the Bank’s FI Category which is applied to all proposed projects that involve investment of Bank funds through a participating financial intermediary (PFI) to be used for sub-projects of which the environmental impacts can not be determined during appraisal of the World Bank project.

National EA legal and institutional framework. Moldova has its own relatively well-developed legal and institutional framework for Environmental Assessments. This framework is in line with the existing WB EA rules and procedures as well as with the EU EIA Directives. The national EA legal basis is presented in two main laws: Law on Environmental Protection (1993) and Law on Ecological Expertise and Environment Impact Assessment (1996). These laws introduce the concept of state ecological review (literally, state ecological “expertise” – SEE) which seeks to examine the compliance of proposed activities and projects with the requirements of environmental legislation and standards. The SEE precedes decision-making about activities that may have an adverse impact on the environment. Financing of programs and projects is allowed only after a positive SEE conclusion has been issued. Procedures for conducting a SEE are contained in Guidelines on Performing SEE (2002). They define, in detail, the goal, objectives, and principles of the SEE, and stipulate the procedures for submitting project documentation, as well as reviewing procedures. The responsible SEE authority in Moldova is the Division on SEE within the State Ecological Inspectorate (SEI), a subdivision of the Ministry of Ecology and Natural Resources (MENR).

Institutional capacities to perform safeguards. The EA institutional capacity of the borrower was assessed during project preparation and concluded that MENR and SEE have relevant capabilities to perform their duties concerning reviewing of EA studies and enforcing EMP provisions. At the same time, within the CAPMU (the project implementing unit), there is no specially designated staff responsible for environmental issues in the agricultural sector, as well as any facilities that might assist in ensuring compliance with the existing legislation, regulations and ecological norms. In this regard it will be necessary to provide TA to the CAPMU to strengthen its capacity and ensure the environmental requirements will be fully integrated into design and implementation of the EIAs for subprojects.

Analysis of Environmental Impacts for the RISP II additional financing project. Overall, no significant or large-scale environmental impact is expected to occur under the project, given the relatively small size of most of the sub-projects to be supported. At the same time on farm irrigation activities can lead to environmental adverse impacts if they are not properly designed. The negative impacts may have various scale and evidence. Salinization and waterlogging (in case of poor water quality or high groundwater table in combination with extensive water application to the ground), may lead to the desertification phenomenon - if drainage is not managed effectively. Due to water withdrawing from the natural water streams impact to the fish resources may increase, particularly in the fish reproduction areas and seasons if pumping stations are not equipped by respective fish-protection installations. Improper pump and irrigation machines operations may provoke accidental water spills, both from the main and distribution pipelines, thus accelerating soil erosion, landslides and ravines formation. Poorly planned irrigation machines and tractors maneuvering on the fields may damage crops and also compact top soil. Lastly, irrigation may increase use of fertilizers and pesticides in order to protect highly-valued crops and increase yields. It may cause additional pollution to the environment and relevant advisory and mitigation measures would be required.

Environmental Assessment and Management Guidelines. The EAMG consists of the following: (a) procedures for environmental screening of subprojects and criteria for categorization; it also covers procedures for conducting an EIA and/or preparing an EMP for selected subprojects; (c) potential environmental and social impacts and suggested mitigation measures, based on the most advanced international practices; (d) recommended monitoring activities, including specifications for supervision as well as the basic environmental performance indicators, timeframe and responsibilities for proposed monitoring activities; and (e) implementing arrangements and capacity building along with a budget covering each step of the implementation of all proposed measures.

1. I NTRODUCTION AND COUNTRY’S BACKGROUND

1.1. Purpose of the revised Sector Environment Review

The Rural Investment and Services Projects (RISP-I, RISP-II) is a category FI project (Financial Intermediary) and in accordance with World Bank Operational Policy on Environmental Assessment (OP 4.01) requires an environmental assessment. Since project funds can be applied to a number of sub-projects to be specifically identified and designed at a later date during the course of the project lifespan, it will be necessary that the Government of Moldova (GoM) has the capacity to carry out a satisfactory environmental assessment of any sub-project for which either a partial or a full environmental impact assessment, as per World Bank requirements, may be required.

The main objective of the two-phase Rural Investment and Services Projects is to provide long-term support to accelerate agricultural recovery and growth so that Moldova’s agricultural and rural sectors can play their full role in providing the underpinnings for future income growth and poverty reduction.

The first environmental assessment for the RISP I project was prepared in 2002 as a Sectoral Environmental Review (SER). Due to further development of RISP and approval of RISP II project a new revision of the SER was conducted in 2005. The new report was named as the “Environmental Impact Assessment for the RISP-II project” (EIA) that includes revised environmental impacts and proposed mitigation and monitoring measures.

The proposed additional financing for the RISP-II project includes one new project’s Drought Adaptation Component, which may have potentially adverse environmental impacts and respectively requires an environmental assessment and relevant mitigation and monitoring activities. Taking this into consideration it was decided to conduct a revision of the environmental assessments done in the years 2002 and in 2005 for the RISP I and RISP II projects. The purpose of this revision is to analyze potential the effects of the RISP-II additional component may have on the environment and to provide solutions for the avoidance and/or mitigation of any adverse environmental impacts could occur as a result of the overall project.

The current revision of the SER consists of four main aspects: i) a review and summary of relevant to the EIA legislation, including newly developed legal acts, as well as assessment of recent environmental, agricultural and national development policies; ii) update of environmental, agricultural and social base-lines under new conditions and also in the respect of the irrigation project component; iii) analysis of potential impacts, mitigation and residual impacts of the on-farm irrigation activities; and, iv) revision of guidelines for environmental management of the overall project with a special focus on on-farm irrigation activities.

Within the revision of the environmental management guidelines, a special emphasis was given to description of the roles and responsibilities of the state agencies and lending institutions in identifying and addressing potential adverse environmental and social impacts of on-farm irrigation activities for which a loan may be requested, as well as scheduling, training, capacity buildings and other requirements.

Since the RISP-II with additional financing (similar to the RISP-I and original RISP-II) has no a specific location and project inputs will be countrywide, the review is treated as a strategic review for a group of agricultural inputs to be applied also countrywide.

2. Features of Moldova

The Republic of Moldova emerged as an independent State from the break-up of the former Soviet Union and officially gained its independence in August, 1991.

Moldova is situated in the southeast of Europe. It has a total area of 33,846 km2 and the country is 350 km long and from east to west it is 150 km wide. In 2007 population was 3,572,700 (without Transnistira and municipality Bender). It is one of the most densely populated countries in the region (118,3 inhabitants per 1 km2). Chisinau is the largest municipality with a population of 785,100 and other large municipalities are Balti (148,100), and Tiraspol (in Transnistria) and Bender. Twenty-one per cent of the population lives in the two major cities of Chisinau, and Balti; 61.3 per cent live in rural areas. A declining birth rate, increased death rate, and high rates of migration have resulted in a declining population over the past few years.

Administrative-territorial division of Moldova includes 32 regions (rayons) with 3 cities and 60 towns, 917 primarias with a total of 1575 villages. Moldova borders Ukraine on the north, east and south, and in the east it shares a border with Romania. Respectively Moldova forms part of the Black Sea watershed, including Danube and Dniester river basins.

It is a predominantly rural country with 74, 6% of the total land area under agriculture (2528, 3 thousand hectares). Major water courses include the Prut River which drains into the Danube River, and the Dniester River. Both rivers are transboundary watercourses whose uses are regulated by bilateral agreements.

Moldova’s topography is characterized by hilly plains with the highest altitudes occurring in the central part of the territory. Highest elevation is 429 m in central Moldova and the lowest levels are 1.75 m in the extreme southeast of the country.

1.3 Moldova Agriculture

Moldova is a country which heavily relies on agriculture. Presently, agriculture and agro processing account for nearly 30 per cent of GDP, 59 per cent of the value of exports and 43 per cent of employment.

The dominance of agriculture in Moldova’s economy derives from its moderate climate and productive soils. The black soils (chernozem) of Moldova are amongst the most fertile soils in the world and cover around 80% of total land area.

The percentage of land under cultivation in Moldova is the highest in Europe. Table below (Table 1.2) indicates agricultural areas under different destinations.

Table 1 Land Use in 2006

|Land use category |Area, thou. ha |Structure, % |

|Lands – total |3 384,6 |100,0 |

|of which: | | |

|Agricultural lands |2 518,2 |74,4 |

|of them: | | |

|arable land |1 833,2 |54,2 |

|  pastures |368,1 |10,9 |

|  hayfields |2,1 |0,1 |

|  fallow lands |15,8 |0,4 |

|perennial plantations |299,0 |8,8 |

|including: | | |

|orchards |131,1 |3,9 |

|vineyards |157,3 |4,6 |

The share of arable land, orchards and vineyards is high, a situation causing significant difficulties in maintaining a sustainable balance between natural and anthropogenic ecosystems, and leading to degradation of the soil cover, the biodiversity and the environment as a whole.

As a result of the land reform, the structure of agriculture land use has changed. After privatization in the 1990s, a large share of land remained as small individual plots. The privatization process resulted in an average landholding of 1.4 ha, often divided into few plots. In many cases it is not possible to use these small plots efficiently. Production of many traditional crops such as grain, sunflower or sugar beet is dependent on mechanization, and therefore can be performed only on bigger areas. In addition, the new farmers and owners lack experience, technical skills and finances to develop their production successfully. The investments in agriculture dropped.

The current status of agriculture land (fragmented in small plots) is limiting the implementation of sustainable and effective methods of agriculture and soil conservation. However, even larger farms/cooperatives are not organized in this sense, which results in soil erosion and landslides, and the general degradation of the soil cover.

At the beginning of 2005, approximately one third of the land was under small farms of maximum 2-3 ha. The rest of agriculture land was consolidated to various extents and in various forms (e.g. leasing, cooperatives, farmers associations, etc.). A land market is developing and agricultural land is being further consolidated. Since the consolidation of agriculture land is ongoing, now it is crucial to promote the approach of adapting agriculture activities to the concrete features of the landscape. This would allow better integration of agriculture technologies into natural material cycles and processes, and conservation of the soil quality and fertility.

The current domination of market mechanisms in agriculture leaded to the increase in cultivation of economically profitable crops (see figure below). This is not always the way to a sustainable agriculture production, in line with environmental and soil conservation requirements.

The figure 1 indicates dynamics of the main crops production in the Republic of Moldova in 1986-2005

Figure 1 Dynamics of Main Crops Production

1000 ha

[pic]

1986-1990 1991-1995 1996-2000 2001-2005

cereals; industrial crops; vegetables; forage crops

(Source: Republic of Moldova State of Environment Report 2006, Chisinau 2007.

Ministry of Ecology and Natural Resources/ Institute of Ecology and Geography)

The most important agricultural outputs are wine, horticultural, cereal, tobacco and livestock products.

2. Rural Investment and Services Project II – additional financing

2.1 Description of RISP II additional financing project

The Project Development Objective of the ongoing RISP II project is to continue to foster the post-privatization growth in the agricultural and rural sectors of Moldova by improving access of farmers and rural entrepreneurs to know-how, knowledge and financial services, while building the capacity of the private and public institutions to ensure the sustainability of these activities. The key measures of results for RISP II include the relative increase in productivity in project beneficiaries and growth in lending to agricultural and rural sectors in the portfolios of financial intermediaries.

RISP II has been a fully successful project. To date, about 48 percent of the IDA credit has been disbursed. Since its launch in 2006, RISP II has been at the forefront of the Government’s investment and technical support initiatives for rural areas in the country. The institutions and initiatives built under RISP II are recognized by the farmers, Government and donors alike, as some of the most important and relevant for a sound and long-lasting recovery of the agricultural and rural sectors in the country. RISP II comprehensively covers a wide range of themes such as: rural advisory services, rural business development, rural finance (including microfinance), and land re-parceling. The following are but a few highlights of activities successfully implemented under RISP II:

• Rural Advisory Services (RAS). Established during the first stage of the RISP APL, the National Agency for Rural Development ACSA has continued to provide extension and training services to farmers under RISP II. To date, ACSA constitutes a network of 35 regional extension offices with a staff of 423 regional and village based consultants, which have provided roughly 190,000 consultations to some 352,000 farmers. The type of advice provided to farmers covers a broad range of subjects, including agronomic know—how, market access information, and economic and legal issues. ACSA’s activities extend beyond generic consultations to farmers and include publication of specialized literature, organization of demonstration plots, and maintenance of a market information system.

• Rural Business Development. Under RISP II a number of so-called Development Agencies (DAs) operate in rural areas to support the development of small agricultural and non-agricultural businesses. Unlike ACSA, these DAs provide tailor-made advice (business plans, loan brokerage, and post-creation support) to proponents of commercially viable business ideas for setting up rural-based enterprises. To date, there are more than 300 Service Provision Contracts in the DA pipeline, for which 283 business plans were already developed and 257 loan applications were filed. The newly created and functional businesses had invested approximately $US 6.6 million dollars of borrowed and own funds in the development of DA supported ventures. Some 150 businesses created with the support of DAs have borrowed from the RISP II financed credit line.

• Rural Finance Component. Disbursements from the RISP II supported credit line have been moving at a brisk pace, with 58.5% either disbursed or approved for disbursement by RISP II Participating Financial Institutions (PFIs). The mix of enterprises benefiting from the credit line reflects evolving trends in rural areas, where investment are going not only to agricultural projects, but also more and more towards off-farm business projects, laying the foundation for a diversified rural economy. The rate of delinquency on RISP II supported loans is minimal, reflecting a rigorous selection of commercially viable projects by the PFIs, as well as the added-value of the services provided by DAs.

• Land Re-Parceling Pilots. RISP II is supporting the implementation of pilot land re-parceling projects in six Moldovan villages to showcase lessons and experience from concerted efforts to reduce land fragmentation. Official selection of participating villages has been successfully completed towards the end of 2007 and the implementation of pilots was formally launched in October. At this time it is premature to comment on the qualitative aspect of implementation of these pilots.

Proposed Changes. The Additional Financing proposes the restructuring of RISP II by adding a Drought Adaptation Component with two Sub-Components: (i) Irrigation Finance Services; and (ii) Drought Adaptation Advisory Services. No changes in the scope of the Project Development Objective are envisaged. Some changes are clearly expected at the outcome level.

• Sub-Component 1: Irrigation Finance Services. In respect to investments for small-scale on-farm irrigation, the proposed activities would rely on the experience and institutions of the original RISP II Rural Finance Component, using the same implementation set-up and eligible PFIs. PFIs will charge real interest rates and apply the same prudence standards towards potential borrowers as they do for other RISP II supported sub-loans. The only proposed change to the current credit line set-up is the availability of a small grant portion (20%) to match the loans, in order to alleviate borrowing costs for beneficiaries. The proposed approach is in compliance with the Bank’s Operational Procedure 8.30 (OP8.30).

• Sub-Component 2: Drought Adaptation Advisory Services. In respect to advisory services, the proposed activities would also rely on the experience and institutions of the original RISP II Rural Advisory Services Component, using the same implementation set-up and approaches. The National Rural Development Agency (ACSA) would engage in a series of activities aimed at raising awareness, knowledge and management capacity of small farmers to cope with the challenges posed by drought.

Implementation period. Implementation of the activities proposed under the Additional Financing is not expected to last beyond the original closing date of RISP II (June 30, 2010), therefore no extension of the closing date is being requested.

Implementation entity. All current institutional arrangements will remain in place. Project implementation will be the responsibility of the Ministry of Agriculture and Food Industry and the Ministry of Finance, which will be backstopped on management and fiduciary issues by the existing competent and effective Consolidated Agriculture Project Management Unit (CAPMU), in charge not only of RISP II, but also a number of other Bank financed projects. Coordination and oversight will be provided by the Project Steering Committee, which is already in place and operational. CAPMU will coordinate all project activities and will be responsible for all procurement, supervision, and financial control related matters. CAPMU will operate based on detailed annual work plans and associated budgets to be agreed with IDA at the onset of each project year.

The RISP II new component addresses the implementation mechanism geared towards making on-farm irrigation equipment available to farmers. The credit line will be opened to all types of farm sizes and all types of farm ownership. However, to avoid the entire financing being absorbed by a handful of very large farms, a cap will be put on the amount of financing available PER FARM. The final numbers approximate are the following: farms 60 ha - up to $100,000. Because of the nature of certain types of irrigation equipment (e.g., sprinklers) which are more appropriate for farms above 25 ha, the project will encourage and facilitate farmers to be organized in water users associations (WUAs) in order to jointly buy such equipment. In respect to advisory services, these activities will be implemented as part of the original RISP’s Rural Advisory Component, using the same implementation set-up and approaches.

2.2 Other implemented and planned projects and studies related to irrigation sector and lessons learnt

2.2.1 Moldova Irrigation Rehabilitation Project, FAO, 1997

In early 1996 the Government of Moldova requested the World Bank for assistance in the irrigation sector. FAO/World Bank Cooperative Program made efforts to prepare a Irrigation Sub-sector Review (phase I). The Irrigation Think Tank is developed Irrigation Strategy and respective implementation plan. The strategy and plan had not been implementing due to lack of external financing. According to the respective Memorandum the basic World Bank pre-financing requirements were not fully incorporated by the national Government, including:

• Stopping of energy subsidies by the state to the energy consumption by the irrigation schemes;

• Improvement of payment collection for the irrigated agriculture;

• Stopping of water pumping to the low efficient irrigation schemes (only about 80 000 ha of former centralized irrigation command areas were considered as economically viable out of total 190 000 ha in Moldova (out of Transnistria);

• Increase, support and promote Water Users Association (WUA) formation.

2.2.2 FAO project on testing of modern on-farm irrigation technologies

The FAO is supported Apele Moldovei, local AIPREs, Acvaproiect institute and farmers in testing of modern on-farm irrigation technologies within the three agro-climatic zones. Resulting from the clearly defined criteria - up to 9 pilot irrigation schemes were selected from about 50 farmers requests. For six pilot areas (20-30 ha) the sprinkler irrigation equipment were provided, including drag-horse machines, hand-move irrigation completes and central-pivot. Three pilot sites (up to 2 ha) were equipped by the different types of drip irrigation. All irrigation equipment provided were specified and tendered after preliminary feasibility study and designing in order to suit farmers needs and to be maximally adapted to the available and reliable water source, land configuration, slopes and crops patterns. Participating farmers groups is created WUA and ensure bank account for operational and maintenance expenses.

During 3 irrigation seasons the irrigation equipment (also includes tractor mounting pumps) were tested on the real farmer’s fields and were operated by the trained local operators, and under supervision of the Acvaproiect engineering and environmental staff. These provide several benefits for farmers regarding water and energy savings. The irrigation regimes, irrigation norms, application of fertilizers and pesticides were planed and implemented according to the weather conditions and on the base of assessment of soil humidity by the moisture registration devises (provided by the project). Farmers training program included theoretical, economic, savings/environmental, WUA performance and operation/maintenance items, important for sustainable irrigation.

2.2.3 World Bank study on National Drought Hazard Mitigation Policy Programs (2006)[1]

The study is mostly reviewed existing irrigation projects, plans and policies for Moldova. The assessment of the drought hazards mitigation in Moldova, conducted by the international experts indicates that a comprehensive irrigation sector development review carried out in 1996 and 1997 by the FAO culminated in the elaboration of a well-considered irrigation sector investments program. Also elaborated was a possible first-phase project, formulated by the FAO and suitable for support by the World Bank or other international development agencies. The presented irrigation sector investments program covers a 10-year period (without specified dates), subdivided into three development phases, and is valued at about 53.5 million US$, including both infrastructure and institutional improvement components. The program corresponds to the improvement of a total of 51 schemes to serve a total area of 82,700 ha. Included items (with cost shares) are (a) off-farm infrastructure investments, covering pumping station and conveyance systems rehabilitation (52%), (b) repairs to existing on-farm irrigation equipment (6%), (c) supply of new on-farm irrigation equipment (27%), (d) technical support for the investments program (9%), and (e) institutional program (6%). Some initial implementation progress occurred over the last year and is continuing in the present year. This work is being implemented with budget support funds provided as part of a European Union food security program, under a financing agreement with specially focused conditions.

There are two versions of a proposed first-phase project based on the overall irrigation sector investments program. One is a sub-program of the overall investments program itself. It covers a 3-year period and has an estimated value of 12 million US$. The project would comprise rehabilitation interventions in 15 schemes to serve an overall area of 17,600 ha. It appears that provision has not been made for corresponding institutional development activities under this project. The other first-phase project is the one formulated by the FAO. This one would have a 5-year implementation period and cost 35.5 million US$. Rehabilitation of an undetermined number of schemes to serve an area of 50,000 ha is envisaged. In addition to the various investment items identified above, some provisions were made for irrigation systems demonstration, drainage systems rehabilitation and agro-processing support.

The more recently drafted water sector program was discussed above in connection with flood and waterlogging hazard mitigation. The irrigation portion of this new 10-year (2006-2015) program has a significantly greater proposed scope than that of the previously prepared irrigation sector investments program. An expenditure over the 10 years of about 71.5 million US$ is envisaged, corresponding to an overall irrigation service area of 126,500 ha. This area is substantially greater than the area for which systems rehabilitation is deemed to be economically viable, according to the irrigation sector study. The program is presented on the basis of rayons, rather than discrete irrigation schemes, so that a comparison with the irrigation sector study is not readily achievable. No further details on intervention items or justifications were viewed.

2.2.4 Proposed irrigation component under the USA Millenium Challenge Corporation Moldova Compact Program

The Millenium Challenge Corporation is intended to facilitate developments in Moldova for: (i) road sector; (ii) increasing of energy efficient for heating in the town Balti; (iii) improvement of healthcare; and, (iv) irrigation. For the last component the Government of Moldova requested $48 million for this purpose. The irrigation project component would include:

Sub-component: 1. Rehabilitation of centralized irrigation schemes of Apele Moldovei. This sub-component is foreseen renovation/rehabilitation of 26 irrigation schemes, which are subordinated by the state Agency „Apele Moldovei” and related to the pumping stations which are located at the big rivers - Dniester and Prut, as well as at a few big accumulation reservoirs. Renovation of 26 irrigation schemes is expected to cover of about 36 000 hectares of former irrigable lands. For this purposes the project is proposed delivering of modern on-farm irrigation equipment (for 22 000 ha with short-term perspective to be increased up to 36 000 ha). The set of irrigation equipment is included sprinkler irrigation (about 32 000 ha) and drip one (about 4 000 ha).

Sub-component: 2. Increasing of the irrigation potential from the internal water sources (water reservoirs). This project sub-component is designed in order to increase access of private farmers to the irrigation and pumping equipment to be used for irrigation from a small internal rivers, reservoirs and ponds. The project is foreseen an extension of irrigation area up to 14 000 ha, by organization of new irrigation schemes (sprinkler and drip) at the currently non-irrigated lands

Sub-component: 3. Construction of Agriculture Processing Small Facilities. The sub-component is assumed construction of 16 “Caselor de Ambalare” (and up to 30 in short-term perspective). “Casele de Ambalare” is a small facility for primary processing of agricultural crops and includes units for crop cleaning, sorting, cooling and packing.

Sub-component: 4. Support for institutional capacity for small and medium farmers. This sub-component is considered as very important considering capacity of farmers to implement modern agriculture and irrigation technologies. As proposed by the initial environmental review the training of farmers should also include themes for reduction of energy consumption and water savings, for prevention operational failures, leakages and lost of water, as well as for measurement of soil moisture and application of fertilizers and pesticides under irrigation conditions.

The project is designed by the national experts and includes preliminary drafted environmental analysis. The project will be discussed by MCC team and Government in the April 2008.

3. NATIONAL Environmental Assessment POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORKS

3.1 Legal and Regulatory Framework

The legal framework for environmental protection, including for the assessment of potential environmental and social impacts, is encompassed in 41 laws, 20 decisions of the Parliament of Moldova that comprise ratification/joining acts with respect to international agreements, 43 governmental regulations and 16 instructive acts of the Ministry of Ecology and Natural Resources (MENR).

3.1.1. Legal framework

The legal framework related to RISP-II implementation, including its newly added project’s on-farm irrigation component is composed by following laws and regulations.

• The Law on Environment Protection (Nr. 1515-XII, 1993 with amendments)

This law is the legal basis for development of special normative acts and instructions on particular issues of environmental protection (art. 2) aiming at, among others:

i) the protection of the land, water and air from chemical, physical and biological pollution, and from other impacts disturbing ecological equilibrium;

ii) the conservation of biological diversity and the gene pool, the integrity of natural systems, and sites of national historical and cultural value.

The main principles of protection of the environment (art. 3) include:

i) priority setting of goals and activities for protection of the environment;

ii) an obligation of implementation of legislation on the protection of the environment, observation of standards, norms and admissible limits of use of natural resources and energy, influence of chemical, physical and biological factors upon environmental components, etc.;

iii) the responsibility of all persons, including the judiciary, for damage of the environment, the prevention, limitation and fight against pollution, as well as reparation of damages to the environment and its components at the expense of those guilty of the damage;

iv) the planning and placing into operation activities of socioeconomic dimensions; implementation of programs and works that result in changes to the environment and its components may be permitted only in case of activities where sanitary zones may be required, populations within any such proposed zone must be informed of these planned activities not later than 30 day prior to development, and they should be in agreement with the proposed development.

The law stipulates that local public administrative body (art. 9) and the central environmental body (art.15) limit (control) the use of natural resources, the control and prevention of pollution, erosion, soil compaction, salinization and contamination by chemical fertilizers and pesticides, and the rational use of pastures.

Among other duties, the central environmental body should (art. 15):

i) execute state control over the condition of the environment and its components, observe relevant legislation including signed and ratified international agreements, develop and implement measures to decrease the man-made impacts upon ecosystems, biodiversity and human health, and provide prognosis of possible ecological crises, accidents and disasters;

ii) organize and provide integrated ecological monitoring, environmental impact assessment and ecological auditing;

iii) together with Government, conduct the censuses of natural resources and regulate their use, limit the accumulation of harmful industrial and domestic waste.

The central environmental body (art. 16) will:

i) conduct state environmental expertise which is its exclusive area of responsibility and competence;

ii) prohibit / or suspend the construction and reconstruction of industrial, agricultural and other activities which exploit natural resources; and likewise to other activities that are in defiance of environmental legislation.

State Ecological Expertise should be conducted (art. 21) for:

i) construction, extension, reconstruction and modernization of any economic and social activity (administrative and military activities are exempt) that may cause an impact to the environment. This will be independent of location, source and extent of financing, type of investor, and mode of construction and equipment utilized.

According to art. 21 (1) expertise should be conducted within 45-90 days from the time of receiving the project documentation, however, for domestic housing and other social activities, within 15 days.

Expertise must be conducted (art. 22) for, among other activities:

i) hydro technical installations, dykes, irrigation and drainage systems;

ii) establishment of vineyards and orchards in zones with water protection schemes;

iii) production, sale and use of pesticides and other toxic substances;

iv) any other activity that may have a negative effect on environmental quality. Thus, considering any human activity that may be recognized as potentially dangerous art. 22 may be used for a wide range of construction activities.

Art. 26 (1) gives the State Ecological Inspectorate the right to control observance of laws and normative acts.

Art. 32 provides requirements regarding economic activities regardless of who the proponent may be:

i) … to take measures preventing … soil erosion, salinization, waterlogging, compaction, contamination by chemical fertilizers and pesticides, and requirements for observing the norms for the application of chemicals in agriculture;

ii) to ensure that developments that are sources of harmful impacts to the environment have equipment and cleaning units to reduce these impacts below the maximum permissible limits determined by the environmental bodies;

ii) to create and maintain protective forest belts and green zones around industrial enterprises and livestock farms, to ensure that the environment at these locations is managed effectively, and to ensure that effective protective measures are in place;

iii) … to mitigate any environmental impact … at the owner’s expense.

Art. 33. declares principles of environmental protection in the sphere of agriculture while art. 35 introduce environmental requirements of economic activities on agricultural lands. This includes recommendations of the state agricultural bodies with respect to crop rotations, structure of agricultural lands, scientifically based amelioration, protection of effective organic levels in soils, etc.

Art. 45) prohibits the discharge of untreated waste waters containing pollutants and / or harmful pathogens into surface waters and groundwater.

• The Land Code (Nr. 828-XII, 1991 with amendments)

The Land Code establishes relations and rights of land ownership and the basic framework of land use; it prescribes to owners ways of supporting land and resource protective measures; it determines responsibility of owners concerning the support of the landscape. Art. 5 states land protection as a priority over other types of activities.

Art. 23 is particularly important because it stipulates cases of termination of land rights including: (point 11) use of the land in ways that result in soil degradation, chemical and other pollution, deterioration and destruction of ecosystems or their components; (12) management of irrigated lands that results in waterlogging, secondary salinization and soil erosion.

Within the obligations of the land owners (art. 29) are: use of land to conform to its intended and planned use, observe conditions of land exploitation, to ensure structure of crop rotation to conform to good agricultural practices, to apply chemical inputs only to recommended levels and to provide protection and improvement of soil fertility.

Currently, the draft on new Land Law is under Parliament revision. The new law is expected to establish an improved legal framework for protection and improvement of the soil reserves, and would promote sustainable using of soils.

• The Law on Ecological Expertise and Environment Impact Assessment (Nr. 851-XIII, 1996)

This law introduces the legal procedure (art. 2). Ecological Expertise (section 1 of the article) is executed by i) the central environmental body, ii) administrative branches of other central bodies, or iii) public associations conforming to the rules determined by the law and other related standard acts of law. Territorial environmental agencies have the same authority as the central body in the case of Ecological Expertise and their ability to conduct such Expertise (art.7). The Department of Ecological Expertise can conduct its functions with the support of specialists from other ministries and departments.

Art. 6 (2) of the law states that any activity is subject to ecological expertise if it is related to:

i) construction, additions to existing structures, reconstruction, technical equipment, modernization, re- profiling, conservation, demolition or liquidation of economic and social activities that could have an impact on the environment;

ii) construction of hydro technical installations, systems of irrigation and drainage, systems used for the prevention of soil erosion and soil salinization;

iii) locating and development of industrial, domestic and agricultural waste sites.

Art. 16 refers to the list and type of activities which are required to be subject to an environmental impact assessment prior to engineering designing. The list is part of the Regulations on Environmental Impact Assessment (EIA) recognized by art. 16 of the law.

Those activities in the list relevant to the RISP-II include:

i) Cement-slate production including those that use asbestos in technological processes;

ii) Cannery plants with minimum capacity of 100 million units produced;

iii) Agro-industrial livestock farms for the raising of cattle, pigs, sheep and poultry;

iv) Industrial and other waste disposal sites and processes in which a minimum of 10,000 cubic meters of waste per 24 hour period is handled;

v) Orchards and vineyards of 500 ha and more;

vi) Irrigation and drainage systems of 1000 and 100 ha minimum respectively;

vii) Greenhouses enclosing a minimum area of 24 ha.

Art. 18 is in respect to the submission of documentation for the State Ecological Expertise (SEE). Among others, preliminary engineering and siting documentation is submitted to the local public administration and co-interested institutions. As well, documentation is submitted to the relevant state agencies for approval (e.g. health, fire). Documentation initially submitted for SEE is to be accompanied by bank documentation, where relevant, showing financial viability (section 7).

The EIA and SEE documents must include information describing and assessing the expected direct/indirect impacts of planned activities. This is particularly important for activities that may impact on air quality, surface water and soils as well as impacts on the functions and stability of ecosystems, people and settlements. The EIA/SEE documents will also include, i) a comparison of alternatives and justification for the selected alternative, ii) mitigation measures and conditions to avoid or minimize impacts. These impacts have to be considered during all stages of the project including construction, operation and decommissioning.

There are several laws that establish spatial and environmental limitations for the locating of many rural developments / activities.

• The Law on Water Protection Strips and Banks along Rivers and Water Bodies (Nr. 440-XIII, 1995)

This law introduces the regime of Protected Areas for riverside protective bands along small rivers and lakes, and large rivers of 20 and 100 meters and wider, respectively. Where economic activities are limited the bands can be wider. Also within this zone:

i) use of pesticides are limited to areas 300 m back from the river bank edge;

ii) siting of livestock farms is controlled;

iii) storage of waste waters and sludge from livestock farms, location of technical services and washing of machinery and transport, location of waste deposits and industrial waste, and irrigation by sewage is all controlled with respect to distance from river bank edge.

• The Law On Fund of Natural Areas Protected by State (Nr. 1538-XIII, 1998) amended by the Law on Adoption of Changes and Amendments to the Law On the Fund of Natural Areas Protected by State (Nr 354, 2006)

This law stipulates the types of protected areas which are the following: Scientific Reserves (having the most strict protection regime); Nature monuments; Nature reserves; Landscape reserves; Resource reserves; Multi-functional management areas, Botanical, Dendrological and Zoological Gardens, Garden architecture monuments and the Wetlands of International Importance (Ramsar Sites)

The number and surface areas of current protected areas are presented in Chapter 5.12

The law also establishes protective zones around natural areas of 500 – 1500 m, wetlands of international importance 1000 - 1500 м and 100-150 m for botanical and zoological gardens. Secular trees and rare plants are protected by 30 – 50 m wide buffers, etc..

• The Water Code (Nr. 1532-XII, 1993 with amendments)

This law establishes the right of the state to determine water use (art. 1). It provides the general legal framework for water use, control and protection. Protective measures must be provided for the location, construction and operation of any developments or activities regarding water bodies. For natural and juridical persons it is prohibited to construct and put into operation objects that did not pass ecological expertise, or that are not equipped with water-protective facilities. Construction and operation of developments without water protective measures and procedures and without approval through ecological expertise is prohibited. The law subdivides water consumption into general and special uses.

The Code contains a general chapter on the agricultural use of water. Amongst other stipulations, the law stipulates that irrigating lands (art. 55) with sewage water (without specification to kind) as well as other discharges (art. 72) is permitted by environmental authorities providing approval has been granted by those bodies responsible for sanitation and animal health control.

Currently the Water Code is under substantial revision by the water management authority –State Water Agency “Apele Moldovei”. The draft of new Water Law, which should replace existing Water Code, is under final consultations with ministries and should be presented for Government approval and Parliament discussions during this year. The draft Law is focused on the water resources management aspects under EU Water Framework Directive (2000/60/ЕС) policy, introducing new environmental safety requirements for any physical intervention into the water bodies, incorporates requirements for Water Certificate (new construction) and Water Permits for all water users, stipulates the needs for better management of water protection zones, introduce limitations for risk zones (floods, erosion, landslides, etc.), etc. “Apele Moldovei” is also planning (for the year 2008) to develop a new law which would be specifically in focus on irrigation, drainage and land improvements.

• Law on Natural Resources (Nr. 1102-XIII, 1997)

This law is stipulating the basic principals of natural resource management and use. The legal act includes among others (i) provisions for “natural resource use pay” and “pollution pay” principles, (ii) taxation levies and stimulus for economic entities who would improve production technology in order to minimize utilization of natural resources and increase their protection, (iii) other economic instruments and tools for stimulation of environmentally friendly economic activities.

• Law on fish reserve, fishing and fish-farming (Nr. 149-XVI, 2006)

Most of national natural water streams, lakes and reservoirs are classified as fish-water. It is prohibited by the law: (i) discharge to the fish water of un-treated waste water, (ii) use of fertilizers, pesticides and other chemicals on the water bodies and at the banks (300 m), (iii) lowering of water level or use water for agricultural purposes without permission from Fish Protection Agency, (iv) pump water without fish protection installations, etc.

• The Law on Taxes for Pollution of the Environment (Nr. 1540-XIII, 1998)

This law (art. 2 [2]) refers to the penalties for the discharge of pollutants into the environment.

Art. 9 (1) describes the penalty charges for pollutants released from sewage discharges both into water bodies and sewerage systems where such discharges are in excess of the limits prescribed. Part 2 of this article indicates that penalty charges for pollutants released into storage facilities and filtration fields are collected based on the total volume of water allocation. Part 3 describes the penalty charges for water diversion from fishery ponds in the case of excessive volume of pollutants. Annex 6 of the law indicates charging norms for pollutants released from cattle, pig and poultry farms into catch pits, but annex 7 - for collection and storage of other solid wastes, including toxic. Essentially the law condones the action of the polluter providing that he pays the penalty, and that mitigation is not required.

• The Law on Plant Protection (Nr. 612-XIV, 1999)

This law, among others, establishes (art. 14) the requirement of those responsible for the storage, transportation, selling and use of pesticides used for plant protection to observe the stated rules and norms for such. As well, the law bars environmental pollution and other negative impacts that such may have on man and animals.

• The Law on Local Public Administration (Nr. 186-XIV, 2002)

The Law determines the areas of activity of local public authorities which administer and control within their territorial units land use and the use of natural resources. Local public authorities are responsible for observing national legislation within their area of domain.

The responsibilities of administrative-territorial units of the first (lowest) level (art. 10) include:

i) social-economic development, territorial development and town-planning;

ii) construction, facilities and operation of systems of water supply, sewerage, water treatment, sanitary maintenance of settlements, management of domestic wastes;

iii) protection of soils, plants, animals, and other measures for protection of the environment;

iv) land relations, allotment of land lots for house construction, and for other purposes.

The responsibility of administrative-territorial units of the second (district) level (art. 11) among others includes the management of sanitary-protective zones. Namely the mayors (art. 34) should introduce measures to provide environmental protection to conform to the law.

• The Law on Basics of Town-planning and Territorial Development (Nr. 835-XIII, 1996)

This law relates to planning, location and construction of buildings, including any modifications to buildings. For construction purposes based on approved documentation (art. 52) the local public administration will provide permission for operation and permission for any location changes needed.

Procedure for providing permission for location, construction and operation is provided through the Government adopted (art. 55) regulations of the central body responsible for town planning and territorial development.

Assessment of the probable environmental impacts of the above activities and developments, and the provision of ecological expertise is conducted in accordance with the Law on Ecological Expertise and Environmental Impact Assessment.

3.1.2. Regulatory framework

• Instruction on Order of Organization and Conduction of the State Ecological Expertise, (MENR, 2003)

State Ecological Expertise (SEE) is applied for any new construction, its modernization and up-grading at the stage then designing documentation are prepared, including relevant studies.

Among general provisions of the instruction should be mentioned next: state ecological expertise is based upon laws, norms and ecological standards and fully determines ecological, economic, and social factors which affect environment before taking decision on economic and other activities. Basic principles of ecological expertise are: comprehensive examination of technical, ecological, social and economic parameters presented in documentation on planned economic activity with considering of regional characteristics, ecosystem conditions and their sustainability to planned impact, perspective of socio-economic development of the region; Priority goals of ecological expertise are maintenance of ecological balance, conservation of genetic fund and biological diversity, creation of favorable conditions for living, etc.

All design documentations should be presented to the State Ecological Expertise units (MENR for important projects, headquarters of the State Ecological Inspection and rayonal Ecological Inspectorates). Technical solutions, reflected in the submitted for SEE technical documentation have to be sufficiently substantiated in relation to reduction/mitigation of impact on environment.

The instruction is accompanied by a series of annexes, which (i) describe in details requirements for project documentation submitted to SEE; (ii) nominate subdivisions of MENR responsible for SEE in relation to the various types and scales of projects; (iii) establish requirements for every chapter or volume of project documentation, etc.

3.1.3. Other relevant national concepts, policies, strategies

• The Concept of National Water Policy (Decision of the Parliament, Nr. 325-XV, 2003)

Regarding RISP-II irrigation sub-component this concept declare that state supporting stimulus can be applied for energy/water efficient irrigation schemes; small-scale on-farm irrigation can be developed only under technical, operational and staff qualification control; water sources for irrigation should correspond water quality standards. Document is assumed certification for irrigation schemes. Water Users Associations are considered as an important institutional element for consolidation of irrigation efforts of farmers. Nevertheless, most of these provisions are not completely or efficiently realized.

• National Program on Securing of Ecological Safety for 2007-2015 (Governmental Decision, Nr. 304, 2007)

Ecological safety is a basic component for sustainable development. The Ecological safety is such a state of environment when majority of natural and anthropogenic impacts do not cause changes which immediately or afterwards may result in degradation of environmental ecosystems and affect adversely on human health. As compounds of ecological safety are considered sectoral impacts (industry, agriculture, power engineering, transport etc.), general types of activity (transboundary contamination, wastes generation), extraordinary situations (floods, landslides) and organizational activities (monitoring, risk assessment, ecological insurance, prevention and warning system, international and regional cooperation) and described actions to be taken to secure ecological safety.

The respective Action Plan includes following provisions related to the RISP-II activities as:

• Modernization of soil treatment (plugging, agro-chemistry) technologies and safety increasing of soil fertility, as well as improving of soil use methods

• Research and application of environmentally friendly agriculture

• Step by step introduction of sustainable agriculture by environmentally friendly crop rotation, conservative soil treatment, organic fertilization and reduction of chemical agents in agriculture

• National Program “MOLDOVAN VILLAGE” (2005-2015)

Its objective is to intensify public investments in rural areas, and create conditions for regional development and environmental protection. The major targets are:

• Sustainable economic grown in agricultural and non-agricultural spheres

• Poverty reduction in rural areas

• Rural infrastructure reconstruction and development

• Reforming of agricultural sector (optimization of agricultural entities, new technology, etc.)

• International standards and agro-production variables

• Environmentally friendly agriculture

Among other the program emphasizes protection against natural hazards, including droughts, stating that Moldova is frequently exposed to such hazards. Vulnerability to natural hazards is analyzed in descriptive terms. The program aims to reduce these vulnerabilities. The irrigation technologies applied to mitigate drought hazards should be economically viable and energy safety, thus preventing soil salinization and water logging.

• National Development Strategy for the years 2008-2011 (Law Nr. 295-XVI, 2007)

The Government’s current strategy for poverty reduction for the period to 2011 is set out in the newly developed National Development Strategy, which is replacing Economic Growth and Poverty Reduction Strategy Paper (EGPRSP). The Strategy’s development derives from the need to further pursue the reforms initiated in two important strategic planning documents – the Economic Growth and Poverty Reduction Strategy Paper (EGPRSP) and the Moldova-European Union Action Plan (MEUAP). The National Development Strategy starts from the basic objective derived from the Constitution of the Republic of Moldova and namely, establishment of adequate conditions for improving the quality of life. At country level, this implies a deep transformation and modernization of the country and an effective qualification for accession to the EU. The Millennium Development Goals (MDGs) established by year 2015 is linked with National Development Strategy.

The essential prerequisite to sustainable and balanced economic growth are (i) assurance of a macroeconomic stability by means of steady and foreseeable monetary and fiscal policy, and (ii) improvement of central and local governments’ performance;

The medium-term priorities are:

• Strengthening Democracy Based on the Rule of Law and Respect for Human Rights Principles;

• Settlement of the Transnistrian Conflict and Reintegration of the Country

• Enhancing the Competitiveness of the National Economy

• Developing Human Resources, Providing for Employment Opportunities and Promoting Social Inclusion

• Regional Development

The Action Plan is accompanying the Strategy and represents the technical tool for implementing the priorities and objectives of the Strategy. The Plan is composed of actions that represent major initiatives aimed at contributing to the accomplishment of one or a number of programs and measures included in the Strategy.

• Strategy for Development of Agricultural Sector in 2006 - 2015 (Governmental Decision, Nr. 1199, 2006)

Its objectives are to: (i) increase value-added production; (ii) increase processed agricultural products; (iii) increase the quality and competitiveness of agricultural products; (iv) enable Moldovan agricultural products to reach international markets; and (v) endeavor to maintain agricultural incomes at or above 85 per cent of average national income, (vi) minimization of the negative impacts from agriculture towards environment.

Tasks identified to attain these objectives include: annual increases of five to seven per cent in agricultural production; a focus on value-added commodities; an overall increase of 20 per cent in processed agricultural products; and an annual increase of 10 per cent in organic agricultural produce.

The strategy specifies eight mechanisms for addressing objective-related tasks: harmonization with the relevant EU legal framework; agricultural modernization through research and development; use of private-sector initiative and competitiveness; cooperation and integration of production, processing and marketing; land consolidation; improved standards and certification; development of production-related infrastructure; and ecological agricultural development.

In relation to the irrigation sector the Strategy foreseen recovering of 126,5 thousands hectares by new irrigation equipment.

• Water Resources and Irrigation Master Plan (under development)

The Agency Apele Moldovei is currently developing new national water strategy based on river basin management, EU and international water management approaches. The country-wide irrigation Master Plan is also under finalization and will be presented to the GoM by the end of 2008. Both documents are developed by the Acvaproiect Institute. The irrigation master plan would stipulate policy, management and technical options for further development of the irrigation sector in Moldova, providing the arguments and recommendations to the Government how to deal with modern and sustainable irrigation in the mid and long-term perspectives.

3.2 Environmental International Cooperation and Treaties

3.2.1 International Cooperation

The Republic of Moldova is party to many international agreements with regard to environmental protection. These are listed in Table 2.1.

Table 2 Conventions and Agreements to which Moldova is part

|Convention/Agreement |Status |

|Resolution of the 37th Session of the United Nations General Assembly, with The |Joined 23 June 1993 |

|World Charter for Nature | |

|Rio de Janeiro Declaration on Environment and Development, with approval of Agenda |Signed June 1992 |

|for XXI Century | |

|Convention on the Conservation of European Wildlife and Natural Habitats (Bern, |Ratified in 1993 (Parliamentary Decision N 1546-XII as|

|1979) |of 23.06.93) |

|Convention on Transboundary Effects of Industrial Accidents (Helsinki, 1992) |Ratified in 1993 (Parliamentary Decision N 1546-XII as|

| |of 23.06.93) |

|Convention on Environmental Impact Assessment in Transboundary Context (Espoo, |Ratified in 1993 (Parliamentary Decision N 1546-XII as|

|1991) |of 23.06.93) |

|Convention on the Protection of Transboundary Watercourses and International Lakes |Ratified in 1993 (Parliamentary Decision N 1546-XII as|

|(Helsinki, 1992) |of 23.06.93) |

|Convention on Long-Range Transboundary Air Pollution (Geneva, 1979) |Ratified in 1995 (Parliamentary Decision N 399-XIII as|

| |of 09.07.96) |

|United Nations Framework Convention on Climate Change (Rio de Janeiro, 1992) |Ratified in 1995 (Parliamentary Decision N 404-XII as |

| |of 12.06.95) |

|Kyoto Protocol to the United Nations Framework Convention on Climate Change |Law on joining the Kyoto Protocol |

| |N 29-XV as of 13.02.03 |

|Convention on Biological Diversity ( Rio de Janeiro, 1992) |Ratified in 1995 (Parliamentary Decision N 457-XIII as|

| |of 16.03.95) |

|Convention for the Protection of the Ozone Layer (Vienna, 1995) |Ratified in 1996 (Parliamentary Decision N 966-XII as |

| |of 27.07.96) |

|Cartagena Protocol on the Biosafety to the Convention on Biological Diversity |Ratified 11 September 2003 |

|Convention on the Control of Transboundary Movement of Hazardous Wastes and their |Ratified in 1998 (Parliamentary Decision N 1599-XIII |

|Disposal (Basel, 1989) |as of 10.03.98) |

|Convention on Wetlands of International Importance Especially Waterfowl Habitat |Ratified in 1999 (Parliamentary Decision N 504-XIV as |

|(Ramsar, 1971) |of 14.07.99) |

|Convention on Cooperation for the Protection and Sustainable Development of the |Ratified in 1999 (Parliamentary Decision 323-XIV as of|

|Danube River (Sofia, 1994) |17.03.99) |

|The United Nations Convention to Combat Desertification in those Countries |Ratified in 1999 (Parliamentary Decision N 257-XIV as |

|Experiencing Serious Droughts and/ or Desertification, particularly in Africa |of 24.12.98) |

|(Paris, 1994) | |

|Convention on Access to Information, Public Participation in the Decision-Making |Ratified in 1999 (Parliamentary Decision N 346-XIV as |

|Process and Access to Justice in Environment (Aarhus, 1998) |of 07.04.99) |

|Convention on Migratory Species of Wild Animals (Bonn,1979) |Ratified in 2000 (Parliamentary Decision N 1244 -XIV |

| |as of 28.09.00) |

|Agreement on the Conservation of African-Eurasian Migratory Species |Hague, 1995 (Decision N 1244-XIV as of 28.09.00) |

|The Agreement on the Conservation of Bats in Europe |London, 1991 (Decision N 1244-XIV as of 28.09.00) |

|Convention on International Trade in Endangered Species of Wild Fauna and Flora |Ratified in 2000 (Parliamentary Decision N 1246-XIV as|

|(Washington, 1973) |of 28.09.00) |

|European Landscape Convention (Florenсе, 2000) |Ratified in 2001 (Parliamentary Decision N 321-III as |

| |of 12.11.01) |

|Convention Concerning the Protection of the World Cultural and Natural Heritage |Party from 23 December 2002, with exception on art. 18|

|Convention on Plant Protection Service (Rotterdam, 1998) |Ratified in 2004 Parliamentary Decision N 389-ХV as of|

| |25.11.2004) |

|Convention on Persistent Organic Pollutants (Stockholm, 2001) |Ratified in 2004 Parliamentary Decision N 40-ХV as of |

| |19.02.2004) |

The above conventions and agreements, except for the Cartagena Protocol and the Convention on Biodiversity mainly relate to the rural business sector of RISP-II. Regarding the Cartagena Protocol, Moldova’s Law on Biosafety (Nr. 755-XV of 21.12.01, version of 03.05.02) limits the use of GMOs through labeling and to state permission to import GMO seed material and products.

Moldova has three internationally accepted sites which fall within the Ramsar Convention; the Lower Prut River (approximately 16,900 ha), site “Unguri-Holosnita” at the middle Dniester (approximately 15,500 ha) and the Lower Dniester River (approximately 60,000 ha). The location of these sites is in proximity to large areas of agricultural land situated in the lowlands and adjacent terraces of the two rivers. These areas are important with respect to the Bonn Convention. As such these agricultural areas should be respectful of wise resource use principles and sustainable environmental friendly agricultural practices. Moldova is a participant of the Pan-European Biological and Landscape Diversity Strategy that is recognized as the CBD tool in Pan-Europe. The program document of the Strategy was adopted by the Ministerial Conference, Kiev 2003. The Kiev Resolution on Biodiversity includes:

i) The identification of all significant natural areas existing within agricultural ecosystems in the pan-European region will be complete by 2006. A substantial proportion of these areas will be placed under biodiversity management using mechanisms including rural development instruments, agro-environmental programs and the practice of organic agriculture, to inter alia support their economic and ecological viability, by 2008.

ii) The Pan-European Ecological Network (core areas, restoration areas, corridors and buffer zones) in all States of the pan-European region will be identified and mapped as a European contribution towards a global ecological network, by 2006.

3.2.2 Regional Cooperation

The Basic Treaty between Romania and Ukraine (June 2, 1997) and with the cooperation of Moldova includes creation of “Upper Prut” and “Lower Danube” Euro regions. This cooperative agreement was strengthened at the Ismail Summit of July 1997, whereby the Presidents of three countries signed the Declaration on Cross-border Cooperation.

The Agreement on the creation of the Euroregion "Upper Prut" was signed in Sept. 2000 and it covers the predominantly agricultural Balti and Edineti districts in Moldova. A commission for environmental protection and sustainable development for the Euro region has been established although currently budgets are insufficient to pursue the agreed upon activities. In Moldova the “Lower Danube” Euro region includes the Cahul district with the Lower Prut Ramsar Site containing a small scientific reserve – Beleu Lake.

There are also two relevant Moldova-Ukrainian cooperative acts described as follows:

There exists an agreement between the Government of the Republic of Moldova and the Government of Ukraine on the joint use and protection of boundary waters (1997). The agreement embraces sectors of rivers and other surface water courses which are shared by both countries. Major international activities under existing water management agreement were in focus of flood prevention, water quality and quantity monitoring, accidental risk prevention and early warning, maintaining of ecological water level regime and water resources allocation between two countries. Shares of available water resources between countries are also agreed. Currently, this document is revised and a new Moldova-Ukraine Agreement on Dniester River Basin Sustainable Management (draft is under national consultations) would supplement existing water resources transboundary protocol. The development of new inter-state Dniester water resource agreement is supported by the UNECE and OSCE.

There is also a protocol on cooperation in the field of environmental protection between the Ministry of Environmental Protection of Ukraine and Ministry of Ecology and Natural Resources of the Republic of Moldova. This is broad agreement focusing on the ecological state of the Dniester River Basin. This arrangement between the two countries is widely recognized as being only intentions and little action to date has been taken.

3.3 National Procedures for Environmental Approval

According to the national environmental approval practices, all projects fall under three main categories:

• First category – projects which can have significantly impact environment, thus require full EIA before designing and can be further developed (detailed engineering design) with only positive approval of EIA findings by the SEE;

• Second category – projects require ecological substantiation of project activities and a special environmental chapter to be included in the project design documents and respectively positive approval from SEE before construction, and

• Third category - the rest projects do not need to be passed through formal procedures of EIA and SEE.

3.3.1. Projects that required full EIA before engineering designing

An annex to the Law on Environmental Expertise and Environment Impact Assessment, 1996 contains regulations for conducting full EIA studies. The EIA procedures are only applicable to complex and potentially dangerous (to the environment) projects which could lead to significant impacts. There are thirty-two types of projects requiring an EIA. Among others, these include activities relevant to the RISP-II and agricultural processing in general:

i) Sugar and fat production factories, meat and milk processing factories;

ii) Cannery plants with minimum capacity of 100 million units produced as well as big storage facilities and huge agro-processing facilities;

iii) Agro-industrial livestock farms for the raising of cattle, pigs, sheep and poultry;

iv) Orchards and vineyards of 500 ha and more;

v) Irrigation and drainage systems of 1000 and 100 ha minimum respectively;

vi) Greenhouses enclosing a minimum area of 24 ha;

vii) Vine, distilled alcohol and brewery factories with capacity more than 100 000 deka- litters per year.

The MENR may require EIA for other types and scales of projects on the case-by-case screening, but criteria and procedures for this decision are not specifically stipulated in the Law.

The EIA should be conducted at an early stage of the project, before designing stage. The EIA should be conducted by national certified experts (design institutes) following the defined methodology, report structure and documentation requirements.

The Statement on the Environmental Impact Assessment (SEIA) should be a subject of public and ministerial revisions. Corrected SEIA and other EIA documentations (additional reports, results of specific investigations, tables, maps, models, etc.) should be presented to MENR for revision as a part of SEE process (conducted by the Division of Environmental Pollution Prevention). The principal objective of the SEE is to check if all environmental standards/ principles are adhered, and environmental protection measures are addressed. A positive decision of SEE on the SEIA provides the official basis to initiate detail design of the project.

Once the technical and economic evaluation (feasibility study) and detailed design are prepared, it is again a subject of reviewing by SEE. The EIA findings including listing of mitigation measures and environmental management plan should be incorporated in the chapter “Protection of Environment” of the Design Report. At this stage SEE can be conducted either by the central office of the MENR (Division of Environmental Pollution Prevention), or by the central headquarter of the State Ecological Inspectorate (both are located in Chisinau) or by the Rayonal Ecological Inspections in dependence on the scale of the project and its economic significance. In addition to compulsory SEE, so called “ministerial” and/ or “public” expertise can be voluntarily applied.

The EIA procedure (fig.2) is generally a complex one. The steps to be followed for submission and approval of EIA are illustrated in figure below. The developer (initiator of the planned activity) is responsible for organization of EIA study, conducting of consultations and public hearings, presentation of EIA documentation and SEIA to the SEE, including financing.

Figure 2 Environmental Impact Assessment Procedure

[pic]

To conclude, it is not expected that any sub-projects under RISP-II, shall be a subject of full EIA study.

3.3.2. Projects that require SEE of design documentation

All other projects, which may have negative impact to environment, but not classified as “EIA required projects” will require applying of SEE procedures before construction. SEE procedures are usually applied after feasibility and engineering design stages. Procedures for conducting SEE are stipulated in upgraded Instruction on Order of Organization and Conduction of the State Ecological Expertise, 2003.

Basic principles of ecological expertise are: comprehensive examination of technical, ecological, social and economic parameters presented in documentation on planned economic activity with considering of regional characteristics, ecosystem conditions and their sustainability to planned impact, perspective of socio-economic development of the region; Priority goals of ecological expertise are maintenance of ecological balance, conservation of genetic fund and biological diversity, creation of favorable conditions for living, etc. Sections “Environment Protection” and “Environment Protection during Construction” in the project documentation should be developed only by specialists in these fields. Technical solutions, reflected in the submitted for SEE technical documentation have to be sufficiently substantiated in relation to reduction/mitigation of impact on environment.

The planned and design documentation relevant to the RISP-II projects should be presented for SEE approval either to the Division for Environmental Pollution Prevention of the MENR or Department of Ecological Expertise and Environmental Authorizations of the State Ecological Inspectorate (headquarter), either Rayonal Ecological Inspectorate, depending on the scale and types of the projects. In case if SEE is required the Annexes to the Instruction on Order of Organization and Conduction of the State Ecological Expertise, 2003 should be consulted in details.

It should be concluded that any RISP-II project which intended for new construction, substantial modernization of the technological profile, application of new technologies, changing of land use pattern, including supporting on-farm irrigation is a subject of SEE.

Regarding the development of on-farm irrigation activities it is necessary to take into account all new or substantially repaired former irrigation facilities should be accompanied by the appropriated designing documentation. It is important to consider also several other factors as: soil properties (water porosity, water accumulation potential, soil profiles), planned crop pattern (water demand for plants), viability of the water source (water quality and quantity), placing, size and capacities for the distribution network and location of hydrants for the new irrigation techniques (drip irrigation, sprinkler drag moves machines, hand-move irrigation complexes, central pivots, open channel, etc.), as well as farm land-plot configuration. Consideration of these aspects would require specific engineering and environmental feasibilities and designing for all newly rehabilitated irrigation schemes.

It is important to note that construction permits, coordinated with all requested authorities, would be required in case of new construction or substantial reconstruction (or re-laying) of existing distribution networks.

Water use permits should be obtained by on-farm irrigation beneficiaries before operation of the irrigation scheme. They are issued by the Environmental Inspectorate after obtaining of full set of approvals, including from Sanitary-Epidemiological Services, Ageom and Apele Moldovei.

3.3.3. Projects that not require EIA and SEE of the design documentation

Projects that do not meet criteria for full EIA study and/or SEE of design documentation fall under this category. Usually under such category fall: purchasing of agricultural machinery, tractors operation, light reconstruction, infrastructure maintenance projects, - they do not require SEE.

3.4 Institutional Capacity for Environmental Management

The assessment of the institutional capacity for Environmental Management for RISP-II was conducted in 2005. The major findings that were included in the EIA Report for the RISP-II, as well as additional ones that specifically relate to the on-farm irrigation, are presented below.

3.4.1 Ministry of the Ecology and Natural Resources

The MENR has a central unit and a network of regional agencies under immediate supervision of the State Environmental Inspectorate (SEI). The SEI has a special division in charge for performing of the state ecological expertise. In spite of some difficulties due to staff shortage and sometimes, insufficient skill in comprehensive environmental assessment, both central and local SEI staff has capabilities to perform environmental assessment of planned activities to be funded through international, national and private funds.

3.4.2. The Ministry of Agriculture and Food Industry

The Ministry of Agriculture and Food Industry is the Government's agency for agricultural policy and promotion of sustainable agricultural, agro-processing and agro-business developments. The Ministry has departments relating to regulatory functions, administration, technical support and oversight of agriculture production and processing throughout the country. There is also a ministerial division dealing with usage of plant protection chemicals and its compliance with environmental protection requirements. The Ministry focuses on policy-making and on the planning and design of development programs. However, due to budget constraints, it has limited capacity to implement, oversee or coordinate development programs and to assess their individual and aggregate impact. The Ministry have also very little capacity in the comprehensive project’s environmental screening and management.

3.4.3. The Agency “Apele Moldovei”

The Agency “Apele Moldove” has been created in August 2007 as the governmentally affiliated structure on the base of former Republican Water Management Concern “Apele Moldovei” previously subordinated to the Ministry of Agriculture and Food Industry. The Agency, among others, has duties to develop irrigation policy and maintain the major irrigation and drainage pumping facilities as well as the main pipelines and reservoirs up to the on-farm distribution networks.

The Agency has a separate department for irrigation and general water resources management (including two river basin administrative structures – for the Dniester and for the Danube catchments areas). The Agency has under its subordination several inter-rayonal Irrigation Districts (AIPRE) and a Training Center. The AIPREs mostly deal with various water infrastructure construction, operation and maintenance (water reservoirs, dams, dukes, flood protection facilities, irrigation/drainage schemes), and considered as the operational sub-divisions of Apele Moldovei. Currently, the territorial responsibilities of existing AIPREs is under discussion, mostly considering river basin management approach to be fully incorporated in the schedule of Agency regarding new Water Law draft. The major responsibility of AIPREs for irrigation sector – is to ensure water delivery to the farm lands (situated under existing centralized irrigation schemes) on the base of farmer’s water demands and provide technical and consultation support to the new small-scale on-farm irrigation schemes.

However, due to budget constraints, the Agency and AIPREs has limited capacity to implement, oversee or coordinate development programs and to assess their individual and aggregate environmental impact. The Agency and AIPREs have also very low capacity to assess any environmental issues and no responsible staff for environmental consideration.

T0 the Agency is also sub-ordinated the specialized water-infrastructure designing institute “Acvaproiect”, which is well staffed by the professional engineers and environmental specialists for conduction of feasibility studies, engineering designing, and supervision of irrigation schemes construction, conducting of respective farmer’s training and advising on the irrigation season planning and operation. The institute is the main national body dealing with country water resources and water policy options formulation, drafting of water related legislation and strategies, and,– can provide reliable irrigation consultancy services to the farmers. The institute has also experience in working within several international projects, including testing of modern on-farm irrigation technologies (FAO project on testing modern on-farm irrigation technologies).

3.4.4 Commercial Banks

The commercial banks and the one corporation that have been selected as PFIs in RISP-I and II have no specially assigned people with regard to projects environmental assessment and management. All of the PFIs mainly rely on the issuance of certificates from the Environmental Inspectorate as the approval that the proposed project for lending purposes is environmentally sound. However, considering the above statement on capacity and effectiveness within the MENR, some PFIs may be approving some loans for projects where an environmental impact could be significant (this was a conclusion of the assessment done for the RISP I implementation phase). During the conducted assessment several PFIs indicated that some basic training (e.g. environmental awareness) may be useful for their loan officers in order to prevent potential problems under the second phase of the Project.

3.4.5 CAPMU and Supporting Field Network

CAPMU’s and its associated GEF Agriculture Pollution Control Project (APCP) is staffed with trained environmental specialists. Development officers who are responsible for identifying and processing projects for funding have to some expend environmental training and as such are not well prepared to immediately identify whether or not the proposed project may result in adverse environmental impacts. ACSA extension workers are well aware of sustainable agricultural methods and promote such wherever possible. This is a positive step towards environmental protection but it does not provide them with the relevant knowledge that would assist them in providing advice to farmers that will ensure that all aspects of the environment are considered. The main conclusion of the conducted capacity assessment was RISP-I implementing staff is not sufficiently equipped with the knowledge required to identify whether or not an activity will have potential adverse environmental and social.

3.4.6. RISP-II Environmental Impact Assessment (2005) recommendations

The RISP-II EIA Report (2005) identified a number of potential issues mostly with regard to institutional capacities and provided recommendations for addressing them and in particular: (a) CAPMU should hire an environmental consultant to examine compliance on the Category A and Category B projects and to review the quality of EIAs and EMPs for these sub-projects as well as to assist in their environmental management and monitoring; (b) additional training on environmental awareness, environmental management and monitoring should be provided to PFIs, staff of the Implementing Agency, and development officers; (c) the World Bank supervisory mission for the Project should include an environmental specialist on its missions at least once a year to monitor EMPs of a sampling of the Category A and B sub-projects..

Within the initial stage of the RISP II implementation an important role in reviewing the quality of EIAs and EMPs for proposed sub-projects was given to the GEF-funded Agricultural Pollution Control Project (APCP), which is currently under implementation and aims to reduce potential nutrient pollution of investment financed under it for expert advice and assistance on retainer basis. RISP I and RISP II have already built important synergies with the APCP and have already carried out training on environmentally friendly agriculture practices for ACSA and SPs. APCP has taken the leadership with the provision of TA to the RISP I and II borrowers for the design of the environmental mitigation investments and APCP also provides assistance to the RISP clients with the supervision of the more complex mitigation investments. Furthermore, in 2007 APCP has assisted MOAFI and Ministry of Ecology and Natural Resources to draft a Moldovan Code of Good Agriculture Practices that was approved, published and largely distributed amount broad public and interested parties.

With regard to hiring a new Environmental Specialist on a permanent basis in the CAPMU especially for examining compliance on the Category A and Category B projects and for reviewing the quality of EIAs and EMPs for these sub-projects, and especially for on-farm irrigation subprojects, it was decided that will be done by the end of FY 08.

Based on the recommendations mentioned above, in 2006 CAPMU has organized several trainings for various stakeholders involved in the project implementation: staff of the Participating Financial Institutions, staff of CAPMU and its four subordinated agencies, seven involved PFIs, Technical Unit representatives, responsible for the Credit Line implementation. Altogether there were organized 10 training seminars implemented by Environmental NGO “Biotica. At these workshops there were delivered and discussed the following issues:

• Main impacts and pollution of soil and water

• Use of grazing and haying lands, its degradation

• Specific physical, chemical and linked contamination and impacts

• Specific risks

• Agruculture, environment and economics

• National ecological legislation, agriculture and rural businesses

• World Bank Safeguard Policy; rules and principles regarding the environment

• Getting environmental permissions for businesses

• Description in business-plan and assessment of probable impacts

Lastly, as the approved subprojects under the RISP II were mostly category C projects, until now WB supervision missions didn’t include environmental specialist that should supervise implementation of Category A and B subprojects. At the same time, the WB team will include such specialist in the supervision mission that will be organized in the fall of 2008.

4. World Bank Environmental and Social safeguards

4.1 The WB safeguards policies that might be triggered

According to the Bank’s OP 4.01, it undertakes environmental screening of each proposed project for which it will provide funding in order to determine the appropriate extent and type of environmental assessments (EA). The Bank classifies a proposed project into one of four categories, depending on the type, location, sensitivity and scale of the project and the nature and magnitude of its potential environmental impacts. The four Categories are: A, B, C, and FI. The Category FI is applied to all proposed projects that involve investment of Bank funds through a participating financial intermediary (PFI) to be used for sub-projects of which the environmental impacts can not be determined during appraisal of the World Bank project. Thus the RISP II additional financing project is considered as FI project. The financial intermediary is required to screen proposed sub-projects and must ensure that sub-borrowers conduct an appropriate EA for each sub-project, where warranted. Before approving a sub-project, the PFI verifies that the sub-project meets the environmental requirements of appropriate national and local authorities and is consistent with the Operational Policies (OP) and other applicable environmental policies of the Bank.

As an FI category project, World Bank funding for the RISP II project will be used to support a variety of agricultural and non-agricultural rural activities, including development of the irrigation facilities. A number of these activities could have an effect on those areas of concern that are addressed in the Bank’s safeguard policies. Table 6.1 provides a brief description of the essence of each of the relevant policies (5 more relevant selected from the 10 policies) and the risk of application on each of these policies as a result of RISP-II.

Table 4.1 Relevant World Bank Safeguard Policies and Likelihood of Application

|Safeguard Policy |Description |Likelihood of Application |

|Environmental |EA to be conducted for all projects that fall into |High: On-lending could support various activities (e.g. |

|Assessment |either Category A or Category B |irrigation, agro-processing) that would require Bank |

| | |quality EAs. |

|Forestry |The Bank’s lending operations in the forest sector are|Low: On-lending applications could apply to forestry |

| |conditional on government commitment to undertake |operations or processing operations. The likelihood of this|

| |sustainable management and conservation-oriented |occurring is low. It is possible that large farms may |

| |forestry. In forest areas of high ecological value, |establish windbreaks and afforestation projects to prevent |

| |the Bank finances only preservation and light, non |desertification. This would be a positive benefit. |

| |extractive use of forest areas. | |

|Natural Habitats |The conservation of natural habitats is essential for |Low to Moderate: Loan applications for expanded |

| |long-term sustainable development. The Bank supports, |agricultural activities including irrigation could lead to |

| |and expects borrowers to apply, a precautionary |direct habitat conversion or loss, or indirect habitat |

| |approach to natural resource management to ensure |impact. These could include land drainage, irrigation and |

| |opportunities for environmentally sustainable |agricultural expansion into wetlands. It could also include|

| |development. The Bank does not support projects that |fisheries activities including aquaculture that could |

| |involve the significant conversion or degradation of |result in aquatic ecosystem impacts. |

| |critical natural habitats. | |

|Pest Management |In Bank-financed agricultural operations, pest |Low: Only 25% of any loan can be used for operating costs |

| |populations are normally controlled through IPM |and the Project does not support the purchase or the |

| |approaches, such as biological control, cultural |manufacture, sale or storage of pesticides. |

| |practices, and the development and use of crop | |

| |varieties resistant or tolerant to the pest. The Bank | |

| |may finance the purchase of pesticides when their use | |

| |is justified under an IPM approach. | |

|International |Irrigation, drainage, water and sewage, industrial and|Moderate: Moldova shares the Dniester and Prut rivers with |

|Waterways |similar projects that involve the use or potential |Ukraine and Romania, respectively. Activities including |

| |pollution of international waterways (rivers, canals, |processing, irrigation and drainage could all be candidate |

| |lakes or similar bodies of water). |activities for on-lending. The project is not expected to |

| | |significantly alter the quantity or quality of water of |

| | |these rivers, but may be more significant to the internal |

| | |rivers which contribute to the water status of the |

| | |transboundary rivers. |

One of important raised environmental concerns for the RISP-II with additional financing project is related to the potential impacts on the international water courses. Although the project area covers two international waterways, the Dniester and Prut Rivers, the proposed investments under the project are only for rehabilitation and improvement of existing on-farm irrigation schemes, which are not expected to change the volume of extraction/discharge water or quality of water of these rivers. It is evidently that water abstraction, in order to suit demand for new small-scale on-farm irrigation schemes, would not exceed established in the past limits and permissions for the respective pumping stations. Due to application of modern irrigation technologies (like drip or movable sprinklers) the water consumption would be less in comparison of former big-scale irrigation machines. Water losses would be also reduced and mitigated. The project is proposed advisory service to the implicated farmers, thus provide better local knowledge on efficient use of irrigation machinery, better planning of irrigation schedule, application of optimized irrigation norms and water/energy savings. Overall, there will be no additional use of water under the proposed Project. Accordingly, the equipment funded under this Project is targeting the rehabilitation of existing schemes which will not (i) adversely change the quality or quantity of water flows to the other riparians; and (ii) be adversely affected by the other riparians' possible water use. Furthermore, all investments to be financed by this Project will apply Moldovan environmental laws and regulations as well as the applicable World Bank safeguard policies (e.g., the OP 4.01 on Environmental Assessment).

Moldova is a party to the Convention for the Protection and Sustainable Use of the River Danube, 1994, and as such is a member of the International Commission for the Protection of the Danube River (ICPDR). Moldova is also a member of the Danube-Black Sea Task Force which provides a platform for cooperation between IFIs, donors and beneficiaries on water protection and water–related issues concerning the Danube and the Black Sea. While Moldova is not yet a member of the Black Sea Convention, the country participates actively at actions of related institutions such as the Black Sea Economic Cooperation Organization (BSECO). Also, the Government of Moldova signed an Agreement, dated November 1994, with Ukraine on joint use and protection of boundary waters. As indicated above, the AF Project is not expected to have any adverse effects on the Black Sea, into which all rivers from Moldova flow.

Therefore, given the rehabilitation nature of the activities under the project, the team considers that no notification to other riparian states is required under the Bank policy. However, the OP/BP 7.50 policy applies to this project and falls within the exemption to the notification requirement under paragraph 7 (a) of the Policy. The team has prepared and requested such exemption in a memo addressed to the ECA VP.

Project interventions will be exclusively within existing irrigated areas, with rehabilitation only of on farm irrigation infrastructure. Since no new irrigation land development is expected, and also the project activities are not expected to impact the seepage of water into the wetlands, the project would not have any adverse or beneficial impact on wildlife and natural habitats. Thus OP 4.04 “Natural habitats” is not triggered.

No impacts on physical cultural resources which are not placed in the vicinity of the existing irrigation schemes. In this case, respectively OP 4.11 “Physical/Cultural Resources” is not triggered. The “Involuntary Resettlement” safeguard OP 4.12 also is not triggered: all subprojects will be conducted on the existing irrigated lands, - there will be no temporary or permanent loss of agricultural lands and/or involuntary resettlement. Therefore, there will be no compulsory land acquisition under the project.

4.2. Potential Category A and Category B sub-projects

The World Bank requires environmental impact assessments to be conducted for any sub-projects that fall into either Category A or Category B. Table 4.2 lists the types of projects that fall within these two categories.

Table 4.2 World Bank Categories for Environmental Assessment Purposes

|Category A Projects (projects/components which may have diverse and |Category B Projects (projects/components which may have diverse and |

|significant impacts – normally require EA) |significant impacts – more limited environmental analysis |

| |appropriate) |

|dams and reservoirs |agro industries (small scale) |

|forestry production projects |electrical transmission |

|industrial plants (large scale) and industrial estates, including |irrigation and drainage (small scale) |

|major expansion, rehabilitation, or modification |renewable energy |

|irrigation, drainage and flood control (large scale) |rural electrification |

|aquaculture |tourism |

|land clearance and leveling |rural water supply and sanitation |

|reclamation and new land development |watershed projects (management or rehabilitation) |

|resettlement |protected areas and biodiversity conservation |

|river basin development |rehabilitation of highways or rural roads |

|manufacture, transportation and use of pesticides or other hazardous|rehabilitation or modification of existing industrial facilities |

|and/or toxic materials |(small scale) |

| |energy efficiency and energy conservation |

There are a number of potential activities (irrigation, agro-processing, drainage, and rural non-agricultural enterprises) in RISP-II that fall within the two categories (mostly for category B) listed above. If a loan application from an existing or newly planned activity falls into one of these categories, it will be incumbent upon the proponent to conduct an EA in order to meet Bank requirements. It is most likely that the proponent will need to fulfill this requirement as a result of Moldova environmental regulations. It will be the responsibility of the proponent to ensure that the EA required under national law also meets the requirements (in vigor and content) of the Bank.

New on-farm irrigation activities, to be supported by the project, would mostly falls to the Category B, due to their small-scale and due to the fact they will be implemented only on the existing irrigable lands. Respectively an environmental impact assessment and a special environmental management plan would be required.

5. Baseline Data

As the review is sectoral in nature the data that has been collected and described in Section 5 includes only descriptive broad country-wide information and does not reflect any one particular site where a sub-project may occur. Available, from the previous environmental RISPs reports, the baseline information were refreshed and additional details were added on water resources due to the new component.

RISP-II additional financing is and will provide loan money to farmers and rural entrepreneurs throughout Moldova. As well it will provide a number of other services including the training of officers of financial institutions and support to an agricultural extension service. Since the RISP-II project is to be applied country-wide, for bounding purposes the entire country has been selected. Regarding water abstraction for irrigation, agriculture related sedimentation and water pollution, the Dniester River and the Prut River are international waters shared between Moldova, and Ukraine and Romania respectively. These are included due to potential pollution to these countries resulting from RISP-II project activities in Moldova, as well as due to the additional withdrawal of irrigation water foreseen. As well, the Ialpug River and a number of small tributaries flow into Ialpug and other Danubian/Black Sea lakes in Ukraine were considered regarding possible changes of water quantity and quality.

5.1 Location and Topography

The Republic of Moldova is situated in southeastern Europe. Moldova has direct access to the lower Danube and is bordered by Romania on the west and by Ukraine on the north, east and south. Moldova is a small country with a total area 33,846 km2 and is 350 km north to south and 150 km west to east. The country lies on the Russian plain and is bordered on the east and west by the Dniester and Prut rivers, respectively. The landscape is dominated by rolling hills, and void of mountains and plateaus. The mean altitude of the country is 147 m above sea level and the highest elevation is 429 m in central Moldova. Topographic relief has an important influence on the microclimate and determines, to a significant degree, agricultural specialization. The country forms a varied mosaic of undulating open and wooded steppe alternating with plains.

Natural conditions in Moldova are typified by a substantial variation in topography, soils, climate, flora, and water resources. The country encompasses 12 geomorphologic regions.

5.2 Climate

5.2.1 General

Moldova has a moderate continental climate formed by the air mass from the Atlantic region. It is characterized by short mild winters and long hot summers. Solar radiation amounts to 45-55 kcal/cm2 per year and determines soil heating, evaporation, and average air temperature. The annual length of solar radiation is 2060 hours in the north and 2330 hours in the south, 60-80% of which occurs during the hot season. Average air temperature is 7.5-10.0 °C and soil surface temperatures range from 10-12 °C on average. The warm period lasts 146 to 180 days per year. Annual precipitation varies from 550 mm in the north of the country to 350 mm in the south and falls mainly in the summer months as torrents. About 18% of total precipitation falls as a mixture of rain and snow during the winter months. Winds are low with high winds being very rare.

5.2.2 Agricultural climate

The winter atmospheric condition is unstable and is influenced by different air masses (continental, arctic, and tropical) and as a result the air temperature is quite changeable. Above freezing temperatures during the winter have a negative impact on the wintering of agricultural crops, triggering rooting and/or stimulating vegetative growth. The coldest month is January with the average temperature ranging from minus 3 °C to minus 5 °C. Following arctic air masses the temperature can fall to minus 28-35 °C but winter stable temperatures are rare.

Average winter monthly temperature of soils is above or equal to zero. Where there is no snow cover, or during a long winter, frost can penetrate to a depth of one meter. 18% of annual precipitation occurs during the winter in the form of rain and snow.

Spring weather is unstable and can be characterized by rapid temperature rises and drying soils. Late spring frosts may present a high risk to agriculture. Rapid increase of solar radiation in combination with strong winds provokes low air humidity and hot dry winds. Summer is long, normally hot and dry but air temperatures are stable. The warmest month is July, with the average temperature ranging from 19°C to 22°C and the maximum daily temperature frequently exceeding 30°C.

Summer precipitation is quite variable, ranging from monthly averages of 55-85 mm to 200-300 mm. Normally, the dry period begins in July and lasts for two to three months. However, during several last years the dry period starts earlier than before.

5.2.3 Weather related hazards to agriculture

The extrapolation of the present trends in natural risk factors frequency speaks for the risks of hydrologic and meteorological hazards increasing in the future. Since the 1950s, the number of weather calamities in the world increased 5.5 times, while natural disasters caused by other than climate factors grew only 2.4-fold. According to the Centre for Epidemiologic Studies of Natural Hazards (Belgium), the most frequent natural hazards of hydrometeorologic origin occurring on the territory of the Republic of Moldova are floods, droughts, and strong winds. Heavy rains are fairly frequent in Moldova. They are often accompanied by squalls and hail, the latter which can seriously damage crops. Between 1992 and 2003, 90% of all the natural hazards in Moldova were weather disasters, mostly inundations (50%), followed by strong winds (25.5%) and droughts (12.5%). According to an assessment by the UN Development Program, on average, a catastrophic drought in Moldova is likely to directly affect 280,000 people.

It should be emphasized that Moldova is already increasingly suffering from conditions brought about by climate change, which is expected to result in “… elevated aridity of Moldova’s territory, especially during periods of crop growth. There were noted the trend towards higher temperatures and lower humidity (as illustrated by the serious drought that occurred in the summer of this year), and the potential for climate change to influence the frequency and severity of several key threats, including droughts, erosion, and flooding According to estimate droughts bring the major damage to agriculture (average annual 21.12 million US$ in comparison to hail and heavy rains accompanied by strong winds (average annuals 5,9 million US$) and frost (average annual 2,9 million US$)[2].

In the last two decades droughts have been registered more frequent and they become more severe. During 1990 - 2007 period on the territory of the Republic of Moldova have been registered 9 years with droughts (1990, 1992, 1994, 1996, 1999, 2000, 2001, 2003, 2007) that caused crop decrease. Droughts, which previously occurred once in ten years in the north and four times in ten years in the south, and which have severe impact on agriculture occur more often now. In the table below (Table 5.1) is shown severity of draughts occurred in Moldova in 1946 and from 1990 to 2007.

Table 5. 1. Drought assessment by the affected areas[3]

|Years |Spring |Summer |Fall |

| |Affected |Type of Drought[4] |Affected |Type of Drought |Affected surface|Type of Drought |

| |surface (%) | |surface (%) | |(%) | |

|1990 |7 |local |67 |catastrophic |60 |catastrophic |

|1992 |27 |extensive |60 |catastrophic |40 |severe |

|1994 |87 |catastrophic |40 |severe |100 |catastrophic |

|1996 |13 |extensive |40 |severe | | |

|2000 |81 |catastrophic |19 |extensive |25 |very extensive |

|2003 |94 |catastrophic |12 |extensive |12 |extensive |

|2007 |75 |catastrophic |88 |catastrophic | | |

State Hydrometeorological Service reports that in 1990, 1992 and 2003, the droughts last for the whole vegetation period (IV - IX months), in the rest years the drought has been registered in summer.

In 2007, the dramatic drought was registered in Moldova. In fact, in spring 2007, the average temperature was 11-13°C, what was 2-3°C as higher as climatic norm; In May-July 2007 the number of days with high temperatures was as follows:

>30°C - 36-45 days (i.e. 3 times as much as normal duration)

>35°C - 10-12 days (usually 35°C is the norm for one day per month in summer, i.e. 10-12 times as much as higher as normal duration)

In the period from September 2006 to July 2007 the amount of precipitation on average made 50 -75 % of climatic norm; in May-June 2007 the amount of precipitation was 30% from climatic norm. The continuous period without precipitation, as per parts of the country, was as follows: 28-33 days in the central part; 33-38 days in the southern part and 53-73 days for some locations (Vulcaneşti, Basarabeasca).

However, draughts in 2007 resulted in abnormally low soil moisturize what lead to huge damage to agriculture. The data on productive moisturize reserve in soil is presented in the table 5.2.

Table 5.2 Productive Moisturize Reserve in Soil (end of July 2007)

|Meteorological |Depth of soil layer, cm |Multi-annual |

|posts | |average |

| |0-10 |0-20 |0-50 |0-100 | |

|Glodeni |2 |2 |4 |6 |96 |

|Soldanesti |0 |0 |6 |43 |108 |

|Rezina |2 |7 |24 |48 |108 |

|Falest |0 |0 |0 |0 |96 |

|Cornesti |0 |0 |0 |5 |96 |

|Anenii-Noi |1 |2 |7 |21 |115 |

|Stefan-Voda |0 |0 |0 |16 |97 |

|Ciadir-Lunga |0 |0 |13 |35 |112 |

|Cahul |1 |3 |10 |34 |112 |

Actions towards mitigation of droughts may include inter alia rehabilitation of irrigation system. Lack of irrigation systems reduces the seed production up to a reproduction ratio of 1:10. In case of irrigation the reproduction ratio could be doubled, and the expected yields of seed would be about 4.5 t/ha which is about 2 t/ha more then current average yield and will ensure an additional income of 1000 US$ per hectare to seed producers.

In conformity with some climate change projections, temperatures will continue to climb, while precipitation drops by 20-60 mm per year in various areas. Evapo-transpiration will rise, increasing crop water requirements. Meteorological drought will become more common and intense. According to all models available, the flow of the Dniester River is expected to decline by 5-10% during 2010-2039, by 11-18% during 2040-2069, and by 10-28% during 2070-2099. The respective figures for the Prut River are 8-15%, 16-25%, and 12-41%. The flow of small internal rivers is expected to diminish even more: by 19-36% during 2010-39, by 12-49% during 2040-69, and by 17-66% by 2070-99[5].

5.3 Geology

Moldova is a zone of articulation of tectonic platforms. Most of the country is on the southwestern margin of the East-European Pre-Cambrian platform with the remainder on the Scythian palaeozoic-secondary platform and Fore-Dobrujian Mountain Deflection.

Archaean and Proterozoic formations are overlapped by Palaeozoic (uncovered thickness about 700 м), Secondary (1250 m) and Neozoic deposits (750 м) uncovered by boreholes. Cretaceous strata are mainly limestones that outcropped at the bottom of the Dniester and Prut valleys in the north of Moldova. In general, the territory is composed of limestones and sandy-loam Pliocene and Miocene deposits of marine and coastal origin, the latest of these being of the Pontic Sea. Upper Pliocene deposits represent high alluvial terraces of the two main rivers. Quaternary deposits (pebbles, gravel, sands and loams) of alluvium and diluvium are spread universally on uneven surfaces of old formations. The majority of watershed areas are covered by loess (wind deposited) of sandy loams and clay sands up to a depth of 50 m. A special feature of Moldova is landslip accumulations of depths to 30 m that are formed as the result of shifts and mixing of all above listed layers.

Seismic activity in Moldova is as a result of recent movements in the earth's crust of the Carpathian Mountains. The southern part of the country is in the zone of probable earthquakes up to a level 8 on the Richter scale. The northern areas of the country and the Dniester left-bank are in the 6 point zone, and the rest of the country in the 7 point zone.

4. Soils

Moldova probably has the best in Europe soils for agricultural production and the most productive of these soils, the chernozems, are found in the northern and central areas of the country, and comprise 75% of all agricultural land. Soils of the southeast region of the country are generally decertified and have a low level of biological production.

The chernozems include 10 subtypes of black soils, three subtypes of grey wood soils and two subtypes of brown wood soils. The soils are mainly of heavy texture with 63 % of the territory covered by heavy loam soils and 17% by loam soils. The presence of heavy loams in the subsoil has had a limiting effect on the distribution of indigenous forests in the forest-steppe zone. Carbonate, ordinary, leached (favorable for many agricultural plants) and typical (most favorable for arable agriculture) black soils dominate, covering 21.1, 20.7, 13.0 and 9.4% of the territory respectively. Alluvial soils are distributed in the valleys and cover 10.2% of the territory. However, more than 55% of these are saline. Grey wood soils are found at elevations above 250-270 m and occupy 9.5% of the country.

During the past 100 years the average humus content of the country’s soils has decreased from 6% to 3.2% due to man’s activities and during the last decade soil losses have accelerated as a result of poor agricultural practices. About 2 million hectares of land are affected by erosion, near 43% of the agricultural land of Moldova is eroded to some degree, and over 17% of the agricultural lands are heavily eroded.

The nature of the country’s topography and climate also promote soil erosion, and anticipated climate changes will only exacerbate this situation and promote desertification.

Erosion in Moldova is mostly driven by water and by wind. The rate of erosion depends on four factors: (i) erosivity of rainfall; (ii) topsoil properties; (iii) slope gradient and length; and (iv)land use, cover, and management[6]. Erosion materializes by an annual loss of soils which ranges from 5 to 10 tons per hectare for slightly eroded land to over 30 tons per hectare for highly eroded soils. The average annual increase of eroded land is about 7,700 ha. Annually, Moldova loses about 26 million tons of soil and this loss includes 700,000 tons of humus, 50,000 tons of nitrogen, 34,000 tons of phosphorous and 579,000 tons of potassium. These losses translate into annual agricultural losses of 525,000 tons of food crops and 57,000 tons of fruit and grapes.

Soil erosion also leads to the silting of rivers, streams and reservoirs, chemical water pollution, and other losses in terms of services to the population.

Soil compaction is also a serious problem and this is caused by the use of heavy machinery during cultivation and harvesting. As many as ten passes by heavy machinery, in a single growing season, can occur. This was a more important problem in the past when heavy machinery was in wide use on the large state farms. Today, due to the lack of equipment and resources, farmers carry out much of their cultivation with simple implements.

Geological structure (alternation of permeable and impermeable layers) along with a specific hydrologic regime is contributing to increased activity of landslides. The total area affected by the landslides is 55 500 ha. The most affected is the central part of the country. During the last years, the area of landslides enlarged annually by 1000 ha.

Chernozem soils are highly vulnerable to irrigation as a result of their underlying parent materials. Irrigation has long been used for ensuring a stable agriculture output. In Soviet times irrigation systems have been created on 230 000 ha, including Transnistria region (presently only a minor part of these are being irrigated). Large-scale irrigation resulted in soil destructing, compaction, salinization and alcalinization on big areas. The productivity of such lands is on average, 30% lower.

The total area (not only due to the irrigation) of alkalinized soils is 107 500 ha, of which about 35% are used as arable lands and 65% are pastures. The total area of salinized soils approaches 112 200 ha, of which 30% are arable lands and 70% are pastures[7].

5.5 Water Resources

5.5.1 Surface water

Surface waters of Moldova occupy about one percent of the country’s total area. Density of the river network varies from 0.84 km2 in the north to 0.2 km2 on the left-bank of the Dniester and in the southern part of the country. The main rivers of Moldova are the Dniester and Prut which originate in the Carpathian Mountains in Romania. The Dniester catchment, which is the largest basin in the country, rises in the Carpathian Mountains in Western Ukraine, and flows into the Black Sea. It is a major Moldovan international river, with an average annual discharge ranging from 224 m3/sec at the entry to Moldova to 245 m3/sec at its exit. River flow is regulated through the barrages Dniestrovsk in southwestern Ukraine, and Dubasari in Moldova.

The river Prut drains approximately 24% of the country and forms Moldova's western border with Romania, until its confluence with the Danube. Prut is the last big tributary of the Danube River which also enters the Black Sea in Ukraine/Romania. Average annual flow varies from 85 m/sec in the north to 110 m/sec at the confluence with the Danube. Prut River is regulated by the Costesti-Stanca reservoir (jointly operated by Moldova and Romania) in northwestern Moldova.

Maximum rivers’ flows normally occur in springtime as a result of snowmelt in the Carpathian Mountains. Both rivers flow through the country from the north to the south parallel each other

In addition to these two major rivers, there are numerous smaller rivers from which only nine have a length exceeding 100 km. Internal surface water resources account for 1, 32 billion m3 per year. The whole river network consists of about 3600 water courses totaling about 16 000 km. The average river density is 0, 48 km/km2. Characteristics of the major Moldova’s rivers are shown in the table 5.3.

Table 5.3 The main characteristics of the major rivers

|River |Length, km |Surface of hydrographic basin, km2|Medium annual flow, |Medium Debit, |

| | | |mln. m3/sec |m3/sec |

|Dniester * |1 352 (657) ** |72 100 (19 070)** |10 700 |330 |

|Prut * |976 (695) ** |27500 (7 990) ** |2 906 |92 |

|Danube * |2 857 ( < 1) ** |81 7000 (8 350)** |203 000 |6 500 |

|Raut |286 |7 760 |313 |9,9 |

|Bic |155 |2 150 |91,3 |2,9 |

|Botna |152 |1 540 |33,6 |1,1 |

|Ichel |101 |814 |20,5 |0,7 |

|Cubolta |100 |947 |61 |1,6 |

|Ialpug * |142 (135) ** |3 180 (3 165)** |91,2 |2,9 |

|Cogilnic * |243 (125) ** |3 910 (1 030)** |59,1 |1,9 |

|Cainari |113 |835 |46,8 |1,4 |

|Ciuhur |97 |724 |21,8 |0,7 |

|Cahul * |39 |605 |9,2 |0,3 |

* - transboundary river.

** - into parentheses it is presented the surface of hydrographic basin on the Republic of Moldova territory.

The water regimes of both large and small rivers have been altered through damming, particularly two power dams on the Dniester River and one on the Prut River (Costesti-Stinca) designated to prevent floods, trap sediment, provide irrigation, provide domestic/industrial water and support fisheries.

There are 57 natural lakes with a total surface of 62 km2, some 3500 water reservoirs with total surface 333 km2; the estimate total storage capacity of the small reservoirs is about 1,5 billion m3.

Natural wetland ecosystems in floodplains have been significantly transformed through drainage and the construction of embankments.

Water quality in the Dniester and Prut rivers is mainly second class ("moderately polluted"). However, in some sectors of these rivers the quality is as low as 3rd class ("polluted") and 4th class ("very polluted"). Fourth class quality is particular to the lower Prut River. The water quality of lesser rivers in the country is generally 3rd and 4th class. Table 5.4 indicates water quality of the Dniester and Prut rivers for selected parameters.

Table 5.4 Water quality (media annual) of the main rivers in Moldova

|Parameters |Dniester River, gauge stations |Prut River, gauge stations |

| |Otaci |

| |2001 |2004 |2006 |

|Agriculture use |1 946 700 |1 952 600 |1 974 100 |

|Residential areas |309 900 |309 100 |319 600 |

|Industry, transport and other special uses |38 600 |58 500 |58 400 |

|Nature protection, health protection, recreation |2 000 |3 000 |3 700 |

|Forest fund |354 300 |429 300 |435 400 |

|Surface waters |57 100 |83 700 |84 400 |

|Reserve fund |655 900 |548 400 |508 600 |

|Total land |3 384 300 |3 384 600 |3 384 600 |

Currently, 1 874 700 ha (55, 4%) of the land is held by private owners. The rest of the land is under public property and is shared between the central government (781 300 ha or 23, 1%) and the local authorities (728 700 ha or 21,5%).

5.7 Air Quality

In 2006 the annual volume of collective emissions from various sources in Moldova was round 211, 9 kt from, primarily, motor transport and power plants and industrial activity. About 90% of total emissions are attributable through road transport. 10, 3 kt of emissions are annually attributable to energy and heat production industry. The main pollutants include CO, SO2, NO2, cement, iron and wood dusts, lead, soot, formaldehyde, and benzpyrene. The most polluted areas are municipals Chiisinau, Rezina, Balti, Cahul, Soroca, Edinet, Tiraspol Bender and Ribnita (three latest are under Transnistria).

5.8 Biodiversity

Geographical location of Moldova (near the Carpathian Mountains, Black Sea and East-European Plain), provide conditions for high-level biodiversity. However, land use and environmental pollution adversely affect the country’s biodiversity.

Natural landscapes and biodiversity in Moldova are limited and due to severe human impact (primarily cultivation) they have been rigorously affected. Natural ecosystems cover not more than 20% of the country, are very fragmented and are mostly degraded The biodiversity of the steppe zone in the southern part of the republic has been more affected by human impacts than the biodiversity in the forest zone in the central and northern parts, leading to a non-uniform distribution of biodiversity. Moldova consists of five landscape zones: i) the forest-steppe plateau and higher elevations located in the northern portions of the country; ii) the Beltsi region of meadow-steppe elevations and plains; iii) the forest region of Codry and elevations of Central Moldova; iv) the steppe-plain region of the lower section of Dniester terraces occupying the southeastern protuberance of the country and, v) the region of fragmentary plains of the Southern Budjac steppe.

Four biogeographical regions are included in Moldova’s small land area. These are the European Deciduous Forest Region, the Danube Wooded-Steppe, the Podillya-Moldova Wooded Steppe and the Azov-Black Sea Steppe. The wooded steppe in Moldova includes components of the Mediterranean and calcareous Podillyan ecosystems. There are small areas of meadows (in the river valleys), halophites (on the salinized lands), hydrophytes (in the wetland areas) and xerophites (on the rocks and dry clay slopes) which comprise the rest of the country's ecosystem variability.

5.9 Vegetation

5.9.1 General

The vegetal resources of the Republic of Moldova can be categorized as: forest, steppe, and meadow, aquatic and paludal resources.

The flora of the Republic of Moldova comprises 5513 indigenous species, including 1832 vascular plants species. The highest specific richness is associated with forest communities (over 850 species), followed by meadow (about 650 species), steppe (over 600 species), and aquatic and palustrine ecosystems (about 160 species). There are found 160 species of mosses, 130 species of lichens and 300 species of capped mushrooms.

Official statistics show that forests cover 9.6% of the country although in reality the total coverage is smaller. The most significant forested area is Codru in the centre of the country. Oak forests (consisting of Durmast, English and Pubescent oaks) make up 53% of all forests. Forests formed by other species (ash, hornbeam and to some degree beech, and poplar in the floodplains, and willow on drifts and silts) make up to 12% of the country’s forest cover. Plantations of locust and other exotic species occupy 38.7% of total forest cover.

Within the European steppe and forest biome, the Moldova landscape displays small areas of steppe and forest biomes with forest-steppe dominating. Little remains of the forest-steppe forest cover. Mesophilic feather-grasses and Fescue are the dominate herbs in the forest-steppe cover type. The pubescent oak forest of the Danube forest-steppe has a distinctive character and comprises numerous small glades.

The Balti meadow steppe in the north has all but disappeared in the last 100 years and the Budjac steppe in the south currently preserved only as separate fragments of steppe associations. These two steppes were divided by a zone of forests and forest-steppe, covering the centre of Moldova. The flora of the Budjac Steppe was very diverse with the northern portion displaying mesophilic species of Feather grass, Fescue and other species whilst the southern portion is characteristic of more drought-resistant species of Feather grass.

5.9.2 Forest vegetation

Around two hundred year ago, the territory between the Dniester and the Prut rivers had 30% forest coverage. In nineteen century, big areas became use foragriculture, largely at the expense forests clearance. The forests were continuously shrinking until the post-II World War period when big areas of degraded lands unsuitable for agriculture were allocated for re-forestation (see table 5.6 below).

Table 5.6 Forested areas in Moldova

|Year |1848 |1918 |

|Scientific reserves |5 |19,378 |

|Nature monuments, including: |130 |2,907 |

|Geological and paleontological |86 |2,682 |

|Hydrological |31 |100 |

|Botanical |13 |125 |

|Natural reserves, including: |63 |8,009 |

|Forests |51 |5,001 |

|Medicinal herbs |9 |2,796 |

|Complexes |3 |212 |

|Landscape reserves |41 |34,200 |

|Resource reserves |13 |523 |

|Multi-purpose management areas, including: |34 |1,030 |

|Typical areas of steppe vegetation |5 |148 |

|Typical areas of meadow vegetation |25 |675 |

|Forest Protection Strips |2 |208 |

|Botanical gardens |1 |105 |

|Dendrological gardens |2 |104 |

|Garden architecture monuments |20 |191 |

|Zoological gardens |1 |20 |

|Ramsar Sites |3 |94705,5 |

|TOTAL |313 |161 192,5, |

Action is being taken to conserve and extend the natural protected areas. The first National Report „Millennium Development Objectives in the Republic of Moldova”, approved by Government decision, foreseen increasing the protected areas from 1,96% until 2,2% in 2010 and 2,4% in 2015, which is still too small as compared with the Central and Eastern Europe average (9%).

13. Environment and Agriculture

“The irrational use of natural resources over the decades, first of all, the intensive exploitation of agricultural lands, the use of ecologically harmful technologies in agriculture and industry, an air and water pollution, have led to significant reduction in productivity of natural potential and a destructive impact on the environment, especially on water resources, air, soils and biodiversity[13]”.

The major environmental problem is the condition of the country’s agricultural soils. Agricultural yields are currently declining and yet the country’s rich Chernozem soils are capable of supporting a highly productive, export-oriented agriculture and food processing industry if they are managed effectively in a sustainable manner. Soil erosion is also a serious concern. The area of eroded land increases annually by 0, 9% and 26 million tons of soil are lost to erosion each year. In economic terms erosion costs the country approximately lei 3, 1 billion annually as a result of lost agricultural productivity. Soil degradation is caused by i) poor cultivation technologies; ii) land allocation taking insufficient account of the need for soil erosion; iii) inadequate cropping rotations; iv) limited access by farmers to information on good land use practices; v) lack of finance to address the issues, and, vi) poor forestry practices.

Water pollution in Moldova is a serious environmental issue and agricultural practices contribute significantly to this issue. The application of chemical fertilizers, herbicides and pesticides, soil erosion, and the uncontrolled disposal of farm animal wastes are the major sources of water pollution from agriculture. Agricultural chemical inputs may also be contributing to groundwater pollution.

In 2007 average application of mineral fertilizers (in re-counting on active substance) was 21 kg/ha of sown area; in all, there was applies 16, 1 tons of mineral fertilizers (active substance). The total application of organic fertilizers amounted 38, 7 thousand tons, or on average 0, 04 tons per ha.

A number of activities related to environmental protection (including biodiversity conservation) will be required through the Ministry of Agriculture’s program for Sustainable Growth Through Competitiveness are described in Moldova’s Biological Diversity Conservation National Strategy and Action Plan (2002). These activities include several specific measures to ensure biodiversity stability as it relates to agriculture and agricultural practices.

5.14 Socio-Economic Framework

5.14.1 General

“After the collapse of the Soviet Union, Moldova faced the deepest and most prolonged recession among transition countries, and the resulting increase in poverty has made it the poorest country in Europe today[14]”. The economic collapse that accompanied independence led to the “ruralization” of Moldova. The rural population as a proportion of the national population increased from 56, 4% in 1993 to 61, 4% in 2005, reflecting the loss of urban jobs.

Nevertheless, Moldova has made significant steps away from the former centralized planned economy. These steps have included the finalizing of most privatization, the development of relevant legal frameworks, as well as development of relevant strategies and programs.

2. The main socio-economic indicators

Gross domestic product in 2007 amounted 53 354 million MDL (current market prices). In comparable terms GDP was 3, 0% higher than in 2006. Industrial enterprises have produced goods to the amount of 26 187 million MDL (in current prices). The situation in the industrial sector was determined mainly by the enterprise activities from manufacturing industry, the share of which in 2007 summed 89, 1% from the total volume of production obtained at the enterprises with main industrial activity. The volume of production obtained by these enterprises decreased by 3, 3% in comparison to 2006. This decrease was caused by the recession of the production of enterprises with main activities of: manufacture of sugar; wine; tobacco products; wood products, etc. At the same time there was noted the growth of volume of industrial production in mining and quarrying; manufacture of footwear, paper and paperboard; medicaments, cement, lime, optical instruments; furniture; production and distribution of electricity etc.

Agricultural production summed up 12 550 million MDL, being 76, 9% (in comparable prices) compared to the previous year. The decline of agricultural production was determined by the reduction of vegetal production with 33, 4% and animal production with 1, 8%.

Investments in fixed capital at the expense of all financing sources conducted in the national economy in 2007 totaled 14 936 million MDL, out of which 8484 million MDL constituted construction-assembly works; retail sales of goods in 2007 totaled 28304 million MDL, export and import of goods in 2007 amounted 1341,8 and 3689,9 million US dollars, respectively.

The average monthly salary of an employee in the national economy in 2007 amounted 2 063 MDL. In the budgetary sphere the average salary constituted 1 625 MDL, while in the real sphere of economy – 2 292 MDL (in processing industry – 2 264 MDL; in quarrying and mining industry – 3 042 MDL; in the energy sector – 3 485 MDL). The highest average salary was paid in the financial-banking sector – 4 367 MDL. In comparison, in education, the average salary was 1 314 MDL, while in the healthcare and social assistance sector – 1 634 MDL. The number of the officially registered unemployed, according to the data of the National Agency for Labor Force Employment, on the 1st of January 2008 recorded 18, 9 thousand persons. The rate of inflation was about 14%[15].

Since 2000 the GDP has averaged over 5% per year and the improved growth performance has been attributable to an increase in consumer demand as a result of marked increases in inflows of worker remittances and real wages. As well, there has been a recovery of demand from Moldova’s main trading partners (Russia and Ukraine), the legacy of the positive structural developments during the 1998-2001 period, and the sustained pace of fiscal consolidation. However, these growth achievements are still fragile and medium and long term prospects are uncertain.

Currently Moldova ranks 88 in the overall list of 141 states, included in a top of failed states. «Annual index of weak, developing states» has been recently made public by American Foundation «Centre for Global Development» and Washington-based Brookings Institution in the USA.

5.14.3 Socio-economic features

Moldova remains to have the lowest per capita income in Europe and it has the lowest level of living standards amongst the transition countries. Poverty began to be reduced in 2000 as the economy began to turn around. Maintaining growth is essential for ensuring continuing fall of poverty levels. A substantial segment of the population is still vulnerable and likely to fall into poverty in the event of a crisis. The catastrophic economic decline of the 1990s gave a powerful impetus to emigration, making Moldova one of the most migrant- and remittance-dependent countries in the world. At least 27 per cent of Moldova’s working-age population is currently employed abroad17.

The key characteristic of the current Moldovan economy is its great vulnerability to external shocks, arising from its dependence upon limited and unstable export markets, dependence on remittances17. The European Commission reported that amount of money transmitted via formal channels by Moldovan migrant workers surged from US$ 84 million in 1996 to US$ 317 million in 2003. However, in conformity with unofficial data, in 2007 Moldovan citizens working abroad transferred through US$1, 8 billion. The remittance volume exceeds by almost 15% the figure registered in 2006. There is an obvious fact that expenditure on consumption of often imported goods is rather than investment in local production. In this last regard, the quality and sustainability of the growth achieved since 2000 raises concerns[16].

Approximately one third of Moldova’s population has migrated abroad in search of employment. “Remittances have increased steadily since 1993 and are now estimated to contribute 25 to 30 per cent of GDP. These massive financial inflows are used mainly for consumption, and have fueled the country’s strong macroeconomic growth over the past six to seven years. However, remittances have also become one of the main drivers of inflation and have caused the local currency to appreciate, making Moldovan products less competitive internationally. The dependence on remittances exposes the country to the risk that, should remittance levels fall, declining incomes could lead to a sharp increase in poverty rates nationwide”17.

4. Rural Poverty

Moldova has attained a significant reduction in poverty from 1999 to 2005. In 2005 about 35% of Moldova’s people were living in absolute poverty compared to 72% in 1999, and 16% in extreme poverty in 2005 to 60 % in 199917. “Poverty is primarily a rural phenomenon: in 2005, the incidence of absolute and extreme poverty in rural areas was 36% and 21% compared to 34% and 18% in small towns, and 6% and 2% in larger cities. More recently, however, and despite real GDP growth of 7,1% in 2004-2005, absolute poverty rose by 3% in the same period, reversing for the first time the downward trend in poverty that had accompanied economic recovery since 1999. The increase of poverty is more evident in rural areas. The trend in rural poverty in Moldova is shaped by: continuing migration by young people out of rural areas; the consequent reduction in the proportion of an economically active population; the lack of investment in rural areas, with the exception of larger-scale farming activities and the rising cost of living. Households headed by persons engaged in agriculture are particularly vulnerable. In 2005, 46% of households headed by farmers were poor. Agricultural incomes have historically trailed the estimated minimum monthly subsistence requirement. Increasingly, the trend in rural poverty in Moldova is shaped by: (i) continuing migration by young people out of rural areas; (ii) the consequent reduction in the proportion of an economically active population; (iii) the lack of investment in rural areas, with the exception of larger-scale farming activities, which tend to be capital-intensive and generate few employment opportunities; and (iv) the rising cost of living. This situation is further exacerbated by the fact that social assistance and pensions are poorly targeted and have not kept pace with the rising needs of the rural poor. Poverty in Moldova affects not only traditionally vulnerable categories, such as the less educated, unskilled and long-term unemployed, but also many who despite being able to work, qualified and in good health, are either underemployed or poorly paid.”[17].

5.14.5 Rural Income Improvements

Investments will have to be made in rural infrastructure and rural institutions with a particular focus on marketing if rural incomes are to be improved. Considering the limited commercial orientation of household farms, interventions focused on production incentives will need to be targeted. As well, a focus should be placed on the creation of productive non-farm employment in the private sector. “Small and medium sized enterprises (SMEs) are vital for attracting the population into economic activity, creating new jobs, supplying the market with goods and services, and encouraging entrepreneurship, regional development and the reduction of poverty”. SMEs employ 29% of the overall number of employees and account for around 30% of national sales. Small and micro-enterprises are characterized by relatively high levels of economic efficiency. Small enterprises employ 21% of salaried staff[18].

5.15 Agriculture

5.15.1 General

“Moldova is a country heavily relies on agriculture. Presently, agriculture and agro-processing account for nearly 30 per cent of GDP, 59% of the value of exports and 43% of employment. However, growth since 2000 has averaged just two to three per cent per annum, and the sector’s relative contribution to the economy continues to decrease although, as noted above, 61.3% of the population still lives in rural areas.

A number of constraints are hindering overall agricultural growth. Larger-scale farms tend to produce low-value staples although their mechanization and relatively secure markets may bring attractive returns to a small number of investors. Smaller-scale farms could produce higher-value crops such as fruit and vegetables but are limited by inadequate knowledge and technology, low prices for produce, high input prices, and lack of access to markets. Factors contributing to the latter include poor quality and safety standards of produce; inefficient commodity supply chains, including a lack of producer organizations; and poor physical infrastructure. In financial terms, government support for agriculture is low at two to four per cent of GDP. The agricultural subsidies have been directed more towards providing short-term income relief than stimulating long-term investment”17.

Out of the total of 1974 thousand hectares of agricultural land, 86, 5% is in private ownership. 40, 7% of the private land is owned by 390 380 individual farmers. Average plot size is about 1, 65 hectare, including: - 1, 42 ha under annual crops (86%) - 0, 22 ha under perennial crops (14%). An area of 879, 2 thousand hectares or approximately 52, 3% of the total agricultural land is used by 1883 agricultural corporative units, agricultural cooperatives and peasant farms (that have over 100 ha).

5.15.2 Crop Sector

In 2005 crop sector made 69% of the gross value of the Moldovan agricultural output. The main crops are cereals (32%), grapes (8%), potatoes (8%), sunflower (5%), vegetables (5%) and fruits (4%). Other crops are sugar beet (2%), tobacco (1%), forage crops and others (4%).

Total agricultural production of crop sector amounted 62%, or 7321 million MDL. Cereals were produced for 2, 8 million MDL; sugar beet – 0, 9 million MDL, sunflower - 0, 3 million MDL; vegetables – 0, 3 million MDL; potatoes – 0, 3 million MDL. Sown areas under main crops in 1998-2005 are presented in the table 5.8.

Table 5.8 Surface areas of main crops (by all categories of producers)

|Item |1998 |1999 |2000 |2001 |2002 |

|Actually Irrigated % |67 |49 |30 |5 |16 |

The drainage of upland areas has been limited to a number of small areas totaling 10,000 ha.

5.17 Human Environment

5.17.1 Population and Ethnicity

In 2007 the number of stable population in Moldova was 3 581 thousand from which 1 478 thousand (or 41, 3%) was urban population and 2 103 thousand (or 58,7%) was rural population. For reference, in 1996 the share of urban and rural population was 465 and 54%, respectively. The trend of a growing urban population now obviously seems to be reversing as a result of diminishing employment opportunities in the municipalities.

Moldovans constitute a majority in the country, representing 76% of the population. Ukrainians and Russians make up 8% and 60%, respectively. Gagauzians makes up 4%, Romanians – 2% Bulgarians –2%, and other nationalities make up near 1% of total population The Gagauzian ethnic group lives in the south of the country and are administratively autonomous. Also in the south an administrative region has been established for a resident Bulgarian minority. The Russian and Ukrainian groups are mainly concentrated in the major cities and the Transnistria region. The population of a few villages in the northern part of the country is dominated by Ukrainians.

5.17.2 Culture

The Republic of Moldova has a long history of cultural traditions in the areas of cultural infrastructure, education, art, music and folklore. The cultural fabric of the country has been developed over a long period as a result of a number of factors including ethnic heterogeneity, impact of foreign influence (Turkish, Greek, and Slavic), western media, a high degree of ideological inculcation, and a high percentage of rural people. Changes that took place during the transition period have brought about modifications in the structure of society.

Traditionally, the cultural centers in villages were attractive institutions; they included libraries, theatre and concert centers, amateur artistic groups, extracurricular creative development circles, and associations for makers of folk crafts. However, many of cultural facilities are still deteriorated and do not used because of insufficient funding and low wages of rural people in charge for development of local cultural activities.

The rural traditions in folk arts and crafts represent a cultural expression of the fundamental ethnic values of the Moldovan nation and contribute to the maintenance of its national identity. The revitalization and development of these spheres is fundamentally important. Although valued, products made by local craftsmen such as knitwear, embroidery, carpeting, artistic weaving and ceramics have no market in the country because of the low purchasing power of the population.

5.18 Relationship with Natural Resource Base

A poverty stricken rural population has to rely on the land resource base to survive. The land provides the family with the base upon which to grow its own food and surplus food for cash. The groundwater resources provide domestic water and for irrigation, and in many villages deep boreholes tap artesian water.

Local surface water resources (ponds, reservoirs, small rivers) are generally considered to be highly affected by soil erosion, pollution from the land surface, waste water discharges and unauthorized dumping of wastes. Nevertheless they are an important local resource for livestock watering, fishing, commercial fish farming, maintaining domestic waterfowl, and recreation for children.

Pasture grassland is limited for most villages and local authorities usually designate the less productive lands for community pasture purposes. Due to the lack of pasture land other areas such as forests, wetlands and roadside plantings will often come under grazing pressure.

6. Potential Environmental Impacts

6.1 General

The RISP-II (with additional financing) project has no significant changes from the design of RISP-I. The only additional project sub-component is related to the Drought Adaptation which was extensively considered during current revision of the SER. The challenge in conducting an SER type assessment for the RISP-II (with additional financing) is that, like for RISP-I and RISP-II (previous stage) there are no location specifics for the Project (the intent is that the credit proceeds would be available country-wide on first come – first serviced). Another challenge is to attempt to determine as best as possible the various activities that individual farmers, farmers’ groups, and rural entrepreneurs will wish to pursue in terms of loan proposals. However, in all likelihood project activities will not differ from those supported in RISP-I and RISP-II (first stage), except that development of more extended irrigation facilities will be eligible for the RISP-II (with additional financing).

6.2 Determination of Potential Impacts

World Bank experience with this type of projects has been used as a basis for identifying the potential impacts for a wide range of rural activities that have been financed through RISP-I and RISP-II. The special attention during actual environmental review for the RISP II with additional financing was given to on farm irrigation activities.

Table 6.1.below shows the ten groups representing all of the sub-projects (approximately 1000 in total) for which loans have been granted during RISP-I. Approximately 400 agricultural loans have been provided and the other 600 loans have been for non-agricultural rural enterprises. These groups have been re-ordered to include other activities which would be possible candidates for loans through RISP-II (also for the second stage) and which are likely activities and enterprises to occur in rural Moldova.

Table 6.1 Agricultural and Non-Agricultural Activities Supported in RISP-I

|Animal husbandry |

|Poultry |

|Egg production |

|Chick incubation |

|Chick production |

|Cattle |

|Cattle breeding and grazing |

|Cattle breeding without grazing |

|Swine |

|Breeding |

|Vegetable production |

|Irrigation |

|Greenhouses |

|Other technology |

|Horticulture and viticulture |

|Aquaculture |

|Beekeeping |

|Agro- processing |

|Flour milling |

|Bakeries |

|Oil processing |

|Canning |

|Transportation and Mechanization |

|Microbuses |

|Large transports |

|Agro-mechanization services |

|Motor transport services |

|Services |

|Information services |

|Small retail shops |

|Hotels |

|Other production enterprises |

|Woodworking |

|Ceramics |

|Cement |

6.3 Criteria for Impact Assessment

Criteria used for determining the significance of an impact includes severity, extent, duration, frequency, possibility of occurrence, and possibility of reversibility of the impact. The extent of each of the criteria was based on professional judgment.

Of the 18 farm inputs listed in Annex A for the year 2005 and based on the RISP I experience, six of these will have very insignificant impact. The remaining 12 inputs will have varying levels of potential impact and for each of these a matrix has been established (Annex A) that describes the potential direct and indirect impacts that can be expected, and the consequences of these impacts. The mitigative solutions to these impacts are also provided. Assessment of potential environmental impacts related to the on-farm irrigation is also added. The new assessment was done on the base of the similar methodology as for the RISP-I and RISP-II (first stage).

Each input is given a level of impact significance prior to mitigation and a level of significance (for the residual impact) assuming that mitigation is carried out. All ‘levels of significance’ ratings and other ratings are relative and subjective. Similarly, Annexes B and C address the non-agricultural rural enterprises. A guide to levels of significance is provided in Table 6.2.

Table 6.2 Level of Significance of Potential Impact

|Level of Significance |Description |

|Very High Significance |Potential impact of the enterprise could cause damage to an IEC over a large area affected (e.g. loss |

| |of important habitat, loss of biodiversity, loss of large areas of productive land). Mitigation is not|

| |possible and the impact is irreversible. |

|High Significance |Potential impact of the enterprise could cause irreparable damage to a small area (e.g. on site) of an |

| |IEC; or, potential impact could cause damage to an IEC over a large area, but the ecosystem can still |

| |function (e.g. surface water contamination causing limited aquatic ecosystem damage). The impact is |

| |reversible over a long period of time. |

|Moderate Significance |Potential impact damages an ecosystem over a small area but it is still functional and the damage is |

| |reversible over a long period of time. Damage to an ecosystem over a large area, still functional, and |

| |the damage is reversible over a relatively short period of time. |

|Low Significance |Potential impact of the enterprise could cause damage to an IEC over a small area but system still very|

| |functional and damage is reversible over a short period. |

|No Impact |Non measurable impact. |

The RISPs’ projects are environmentally benign. The overall development effect of the sub-projects will be positive. The loans will result in improved agricultural production, and improved socioeconomic conditions of the rural population. The projects will further contribute to the country’s food security, hopefully contribute to the generation of foreign exchange through increased agricultural and agriculture related exports, and most of all sub-projects, will significantly contribute to the alleviation of rural poverty. All this factors may be considered as the mechanisms for long-term improving of the natural environment.

The RISPs’ projects also contribute to environmental enhancement through the work of the extension officers who promote various sustainable agricultural practices including animal waste management, soil erosion prevention, intercropping and effective and sustainable crop rotations. There is a sense that the extension service will contribute to the sustaining of what is now a relatively clean environment.

But, which is very important, it will be the responsibility of the extension service to demonstrate more environmentally friendly ways of increasing production and incomes. To some extent, it is presumed that some of the agricultural and non-agricultural rural enterprise activities under the former socialist regime which created significant environmental problems and which have since ceased operating, may be refurbished, or new replacement activities introduced that are expected to operate more efficiently and without the major environmental impacts of the past may result. Current environmental regulations and management should prevent a return to serious environmental issues but this will be highly dependent upon effective application of these regulations.

Due to incorporation of new project component, regarding on-farm irrigation, the environmental safety should be considered as an integral financing schedule. It is because the development of irrigation in Moldova should consider as much as possible the fertile chernozem’s soils protection against rainfall compacting, salinization and top soil erosion. Water sources should be protected as well assuming fish and other aquatic biodiversity, water deficit and impacts to the downstream water users. It is also important to consider, that, in the past, the big-scale irrigation caused a number sever impacts to the sensitive environment.

6.4. Important Environmental Components

A number of broad agricultural community issues as well as their cause and effect have been identified through the environmental assessments done for the RISP-I and RISP-II projects, including NGO roundtable discussion, consultations with borrowers, ministerial staff and national experts, as well as under findings of the current SER.

These have been used to compile a set of important environmental components (IECs)[19]. Table 6.3 lists the IECs identified.

Table 6.3 Important Environmental Components

|Physical Components |Biological Components |Socioeconomic Components |

|Soil quality |Forests |Culture |

|Soil fertility |Flora |Employment |

|Soil erodibility |Fauna |Income |

|Soil organic content |Forest habitat |Poverty |

|Hydrological regime |Aquatic ecosystems |Gender |

|Groundwater quality |Germplasm |Education |

|Surface water quality | |Health |

|Topography | |Migration |

|Land | |Waste disposal |

|Air quality | |Domestic water |

| | |Markets and marketing |

With regards to the planned on – farm irrigation activities the IECs include: soil physical and chemical characteristics, erosion, groundwater table, surface water quantity, aquatic biodiversity, as well as number of socioeconomic components (employment, poverty and income, markets, etc.)

6.5. Project Positive Impacts

The RISP II project provides several benefits. Overall, the project will contribute to increased agricultural production, improvement of rural socioeconomic conditions and the alleviation of rural poverty. Specifically, each of the broad categories for the non-agricultural rural enterprises, and each of the input groups for the farms will provide a number of benefits as indicated in Table 6.4 and Table 6.5.

Table 6.4: Benefits – Non-Agricultural Rural Enterprises

|Broad Category |Benefits |

|Non-renewable resource |Sand and aggregate materials made available for new and improved access roads which will allow better |

|extraction industry |market access. This in turn results in improved farm incomes, more jobs and general improvement of rural|

| |socioeconomic conditions. Materials are also used for construction of farm and other structures. |

|Renewable resource extraction |Development of fishery resources provides alternative protein sources for the population, improved rural|

|industry |incomes and potential exports that will result in improved balance of payments and increased foreign |

| |exchange reserves. Forestry related (e.g. harvesting, sawmilling) activities can provide building |

| |materials for farm and rural enterprises. |

|Agro-processing |Provides value added to agricultural produce. Provides jobs and improved socioeconomic conditions. |

| |Creates potential export products resulting in improved balance of payments and increased foreign |

| |exchange reserves. |

|Other Manufacturing |Provision of jobs, incomes, and meeting demand for agricultural related products (e.g. farm machinery, |

| |fertilizer) and other products which may reduce imports and loss of foreign exchange reserves. May |

| |result in an export market. Creates jobs and potentially improved incomes. |

|Agribusiness and other Services |Provision of jobs; provision of essential services to improve agricultural supply chain and services |

| |that generally will contribute to rural development. |

|Construction |Provision of jobs; provision of needed structures to contribute to rural economic development. |

|Trade (wholesale and retail) |Provision of jobs; provision of arrangements for large and small farmers to market goods as well as the |

| |marketing of manufacturing goods; improved rural economy. |

|Hotels and restaurants |Provision of jobs and infrastructure and services for travelers who will contribute to rural economies. |

|Transport |Provision of improved access to markets and services; lower cost goods and services; improved rural |

| |economic and social conditions with easy access to other centers. |

Table 6.5 Benefits – Farm Inputs

|Input |Benefits |

|Seed * |Production; increased farm income; improvement of rural economy; contribution towards national security |

|Fertilizer * |Increased production; increased farm income; rural economy improved; contribution towards national food |

| |security |

|Pesticides * |Increased production; increased farm income; rural economy improved; contribution towards national food |

| |security |

|Pedigree animals |Fewer animals required for same production; or, improved production and higher quality product for |

| |marketplace; improved farm income; rural economy improved; stock available for export and increasing |

| |foreign exchange. |

|Animals for finishing and for |Improved farm income; rural economy improved; contribution towards national food. |

|dairy | |

|Tractors |Reduces labor burden on farm family; improves farm efficiency; improves production, profits and rural |

| |economy. |

|Other farm implements |Reduces labor burden on farm family; improves farm efficiency; improves production, profits and rural |

| |economy. |

|Small equipment |Reduces labor burden on farm family. |

|Grain drying equipment |Reduce grain spoilage and improves farm profits. |

|Irrigation equipment and |Improved farm production leading to improved profits and general improvement in rural economy; |

|irrigation maintenance |contribution towards national food security. |

|Vehicles |Improved farm efficiency leading to improved farm profits; reduces the labor load on the farm family; |

| |could reduce burden of women. |

|Farm buildings for stock, |Improved management of livestock; protection of machinery, thus improving farm net profits; prevention of|

|machinery and chemicals |chemical spills and loss of agricultural chemicals. |

|Storage facilities (fuel, grain|Ease handling of fuels and petrochemicals, avoidance of fuel spills and reduce wastage; reduce spoilage |

|and other produce) |of crops and grains leading to improved economic efficiency and higher farm incomes. |

|Fencing materials |Reduce boundary disputes; containment of livestock; improved management of livestock. |

|Primary processing equipment |Value added stays in rural areas leading to improved local economy through provision of jobs; improved |

| |farm income; reduction in transportation costs and fossil fuel consumption. |

|Fuel, lubricants * |Ability to run machinery for improved crop production and farm incomes |

|Veterinary services * |Healthy livestock, improved production and farm incomes |

* denotes operational inputs and would not exceed 25% of the total value of any loan to a farmer and must be directly related in nature to the investment part of the loan (e.g. fuel for the tractor that is purchased through the loan)

All but one of the benefits presented in the above two tables are socioeconomic. Generally, as economies improve through expansion and growth in all economic sectors, the biophysical environment suffers. The only biophysical benefits (or environmental enhancement) are gained by the storage of agricultural chemicals (including fuel) and yet it is the biophysical resource base that supports much of the rural economic activity (soil, water, forests, and mineral resources). As irrigated areas increase and as more agro-processing plants are developed/or expanded, impacts on the biophysical resource base increase. As farmers become wealthier through effective marketing and various farm improvements, an increase in the application of agro-chemicals leading to soil and water contamination could be expected. This ultimately can result in human health problems as well as impacts on aquatic ecosystems and soils. As local socioeconomic conditions improve, including an improved education of the public, it is hoped that the biophysical environment will benefit. The agricultural extension component of the Project will promote sustainable agriculture which will contribute significantly to environmental protection.

As the rural economy grows the onus will be on the Government of Moldova to ensure that relevant environmental regulations are in place, maintained and enforced. The economic development of the rural areas must be sustainable, and the very resources that provide the basis for this development must be protected and managed.

6.6. Potential Adverse Impacts of Agricultural Activities

Impacts for each of the 18 potential inputs (12 capital investment inputs and 6 operational inputs) to farms are presented in Tables A-1 to A-20 in Annex A. As well, the tables describe the consequences of the impacts and mitigation measures required. A rating for the potential impact, the residual impact and the risk is also provided. A summary of the potential impacts and their level of significance is given in Table 6.6.

Table 6.6 Summary of Potential Negative Environmental Impacts - Farm Inputs

|Farm Input |Potential Negative Impacts |Level of Significance |

|Seed * |Water and soil contamination through chemical inputs |Low-moderate |

|Fertilizer * |Water pollution |Moderate-high |

|Pesticides * |Ill health; water pollution |High |

|Pedigree animals |None |None |

|Animals for finishing and dairy |Overgrazing; forest degradation |High |

|Tractors |Soil compaction and erosion |Moderate-high |

|Other farm implements |None |None |

|Small equipment |None |None |

|Grain drying equipment |High energy use |Low |

|Vehicles |CO2 and other emissions |Low-moderate |

|Farm buildings for stock, machinery and |Reduction in productive land |Low |

|chemicals | | |

|Storage facilities (fuel, grain and other |Reduction in productive land |Low |

|produce) | | |

|Fencing materials |Social barriers |Low |

|Primary processing equipment |Water pollution |Moderate |

|Fuel, lubricants, etc. * |Water and soil pollution |Low-moderate |

|Veterinary services * |Hormones and chemicals in meat and animal products |Moderate |

* denotes operational activities for which a maximum of 25% of the loan can be used.

The major potential impacts associated with the 18 potential agricultural inputs relate to water and soil quality, soil erosion, salinization and resource loss.

One of the most significant impacts will come from livestock rearing in closed conditions, both on the small farm holding and the large commercial farm. This results in a concentration of animal waste that can contaminate both groundwater and surface waters. In the case of the former, public health is at risk, in the case of the latter, aquatic ecosystems and, possibly public health, are both at risk. Livestock expansion, particular for farms in the hills and near the mountains, can lead to pressure on common public lands including forests. Loss of biodiversity and soil erosion can occur if livestock and pastureland are not managed effectively and if livestock numbers are not controlled.

6.7 Potential impacts of on-farm irrigation activities

6.7.1 General

This project component aims to increase irrigation access of private and groups of farmers to the existing irrigable lands, existing irrigation infrastructures, including existing pumping equipment, and no significant or large-scale environmental impact is expected to be occurred under the project considering relatively small size of most of the sub-projects to be supported.

The proceeds of the project will be used to finance both on-farm irrigation Technical Assistance and investment activities. TA would include information dissemination and training on several topics related to combating droughts; drought resistant cropping patterns and crop mix; introduction and adoption of drought crop resistant varieties; extension of knowledge on irrigation; information dissemination on water conservation; and community involvement in drought mitigation, including establishment of Water Users Associations. The investment activities through credit lines will be channeled through selected commercial banks and would support mostly purchasing on-farm irrigation equipment and rehabilitation on on-farm irrigation infrastructure. Due to the demand driven nature of the investment activities, it is not possible to state a priori the exact types of investments.

There is not envisaged the extension of irrigation area out of available irrigable lands, as it will be mostly relay on the farmers irrigation equipment demand in the nearest years are not expected to change the volume of extraction/discharge water or quality of water of these rivers. It is evidently that water abstraction, in order to suit demand for new small-scale on-farm irrigation schemes, would not exceed established in the past limits and permits for water abstraction the respective pumping stations. Due to application of modern irrigation technologies (like drip or movable sprinklers) the water consumption would be less in comparison of former big-scale irrigation machines. Water losses would be also reduced and mitigated. The project is proposed advisory service to the implicated farmers, thus provide better local knowledge on efficient use of irrigation machinery, better planning of irrigation schedule, application of optimized irrigation norms and water/energy saving.

6.7.2 Potential negative impacts of on-farm irrigation

On farm irrigation activities can lead to environmental adverse impacts if they are not properly designed. The negative impacts may have various scale and evidence. Salinization and waterlogging (in case of poor water quality or high groundwater table in combination with extensive water application to the ground), may lead to the desertification phenomenon - if drainage is not managed effectively. In turn, irrigation by contaminated water or by water with increased salt content (what is typical Moldovan small internal water courses) may provoke degradation of fertile soil, salinization of productive lands and consequently (in long-term perspective) damage to agriculture: crop lost, lower agricultural incomes and lower value of agricultural lands.

Due to water withdrawing from the natural water streams impact on the fish resources may increase, particularly in the fish reproduction areas and seasons if pumping stations are not equipped by respective fish-protection installations. Improper pump and irrigation machines operations may provoke accidental water spills, both from the main and distribution pipelines, thus accelerating soil erosion, landslides and ravines formation. Poorly planned irrigation machines and tractors maneuvering on the fields may damage crops and also compact top soil. Also as the pumping equipment and motors/tractors normally are being placed just at the water bodies’ banks and even insignificant leakages of lubricants, oils or diesel from poor maintained tractors or engines may pollute surface water and floodplains. Besides, to protect highly-valued crops and increase yields, the farmers which will apply irrigation may increase use of fertilizers and pesticides in order to. It may cause additional pollution to the environment and relevant advisory and mitigation measures would be required.

Additionally on-farm irrigation activities may also require the increase of fertilizers and pesticides usage in order to protect highly-valued crops and increase yields. This ultimately may cause additional pollution to the environment and can result in human health problems as well as impacts on aquatic ecosystems and soils.

To summarize, the most common environmental impacts of on-farm irrigation are:

• soil salinization due to use of saline water or to the rise of saline water table;

• waterlogging due to excess water application;

• nitrate and pesticide contamination of the groundwater (and surface waters) due to excessive use of chemicals in intensive agricultural production and/or to over irrigation;

• soil erosion due to surface runoff from surface and sprinkler irrigation systems;

• soil degradation due to modifications of the soil profile from inappropriate land grading;

• deterioration of the soil structure from both surface flow and sprinkler raindrops;

• degradation of water bodies receiving saline irrigation return flows.

These impacts can be reduced when appropriate water application techniques coupled with irrigation scheduling are applied. In this regard, it is, however, necessary to stress the following aspects[20]:

1. Irrigation scheduling techniques cannot be properly implemented nor produce the desirable consequences unless proper water application practices are implemented. This may be one reason why innovations in irrigation scheduling techniques are not widely adopted in practice;

2. Application efficiency depends not only on system design criteria but also on the volume and timeliness of water applications, e.g., scheduling decisions. Thus, the adoption of improved hardware is not by itself enough to attain high levels of performance.

3. High application uniformity minimizes the differences in water application over a field, e.g., areas receiving too much or too little water. Application uniformity affects both yields and the extent of environmental impact from irrigation.

4. Application efficiency, ea, has a lesser effect on crop yield but low ea due to excessive water application has the potential to create waterlogging and various environmental impacts listed above.

However, majority of above negative environmental effects may be predicted, avoided and mitigated prior to approval for funding irrigation schemes to be used, however, it might require more complex of site-specific environmental assessments and consideration of on-site specific mitigation requirements.

6.7.3 Potential positive impacts of on-farm irrigation

As was mentioned significant negative impacts to environment are not expected, as most of the works are to be carried out on the existing irrigated lands and will be small-scale, temporary and reversible to nature, and can be mitigated by adopting by adequate management measures. Furthermore, the RISP II additional financing project would contribute to environmental enhancement through the work of the extension officers who promote various sustainable on-farm irrigation practices as well as extension of knowledge on irrigation, conservation of water, and drought mitigation.

Project interventions will be within existing irrigated areas, with rehabilitation of on farm irrigation infrastructure works limited to land that has already been under cultivation. Since no new land development is expected, no project activities are expected to affect the extent of water seepage of water into the wetlands, the project is not expected to have any adverse or beneficial impact on wildlife and natural habitats.

No impacts on cultural heritage are expected since all the activities will be carried out on existing irrigation schemes/ irrigated lands. There will be no also temporary or permanent loss of agricultural lands and/or involuntary resettlement, and hence, there will be no compulsory land acquisition under the project.

A summary of the main potential positive impacts of on-farm irrigation activities and level of their significance are presented in Table 6.7.

Table 6.7 Positive impacts of On-Farm Irrigation

|Environmental and |Impact |Significance |

|Socio-Economic attributes | | |

| |Environmental |

|Water resources |Reduced irrigation water demand/ water saving|High |

|Soil quality |-Less soil is to be a subject of |High |

| |salinization/ compaction | |

| |-Less soil to be a subject of pesticide and |High |

| |fertilizers contamination/ reduced losses of | |

| |fertilizers resulting from a decrease in | |

| |seepage, which is particularly relevant for | |

| |nitrates | |

| |-increase in the soil redox potential of the | |

| |soil and in oxygen in the soil atmosphere |High |

|Biodiversity |-improvement of the soil fauna and flora |Medium |

| |resulting in more favorable conditions for | |

| |the crop to assimilate the nutrients, | |

| |particularly organic fertilizers | |

|Pest management |-relative humidity tends to decrease and air |Medium |

| |temperature to increase: these changes in | |

| |microclimate are to be favorable for the | |

| |reduction of diseases and insect pests | |

| |Socio-Economic |

|Better agricultural management |better control over irrigation discharge |High |

| |rates, duration and frequency | |

|Expenses |less cost of maintenance of small-scale |High |

| |irrigation system | |

|Income |-increased income due to sustainable yield |High |

| |-improved market concurrent capability due | |

| |to lower yield prices | |

|Poverty |-reduced poverty due to stable income |High |

| |- reduced better development of rural | |

| |ago-processing and agro-business |High |

6.8 Potential adverse Impacts of Non-Agriculture Rural Enterprises

Potential impacts for each of the nine non-agriculture rural enterprise categories (extractive industry is divided into renewable and non-renewable resources) are presented in Tables B-1 to B-7 in Annex B. As well, the tables describe the consequences of the impacts and mitigation measures required. A rating for the potential impact, the residual impact and the risk is also provided. A summary of the potential impacts and their level of significance is given in Table 6.7.

The major potential impacts associated with the nine non-agricultural rural enterprise categories include water and air quality deterioration, loss of biodiversity and impacts on biophysical resources, including forest cover losses and soil erosion. Of the nine categories, agro-processing and other manufacturing will contribute to the most significant impacts. The trade enterprise group will comprise of many individual businesses but generally, the impact of this group is negligible. Even a cumulative impact within the entire trade category is likely not to have a negative impact as significant as the potential impact that one poorly designed and managed agro-processing enterprise could create.

The agro-processing and manufacturing sectors generally produce a wide range of wastes that are disposed of in the form of effluents that flow into surface watercourses, seepage into groundwater, emission gases that are released into the atmosphere and solid wastes that are disposed of in municipal and unorganized dumps. Such wastes can pose a threat to groundwater supplies, air quality, aquatic ecosystems, and ultimately to human health.

Activities that relate to the forest industry (e.g. sawmilling, timber harvesting) within the renewable resource extraction sector, if not regulated, have the potential for indirectly resulting in an overall reduction in forest cover, loss of habitat, loss of biodiversity, and soil erosion. Aquaculture development and commercial fishing can lead to the loss of species and the modification of aquatic ecosystems.

Table 6.8 Summary of Potential Environmental Impacts – Non-Agricultural Rural Enterprises

|Enterprise Category |Potential Impacts |Level of Significance |

|Extraction industry: |biophysical and archaeological losses |High |

|Non-renewable resources |noise, |High |

| |dust and vibrations |Moderate |

| |aesthetics |High |

|Extraction industry: |Forestry: | |

|Renewable resources |biodiversity loss |High |

| |loss of forest cover |High |

| |loss of habitat | |

| |soil erosion |High |

| |(these are indirect impacts that could result in support to |High |

| |sawmilling and forest harvesting operations) | |

| |Fishery: | |

| |biodiversity loss | |

| |population dynamics | |

| |aquatic ecology altered |High |

| |loss of species |Low-mod. |

| | |High |

| | |Moderate |

|Agro-processing |water pollution |High |

| |noise and odors |Low-Moderate |

| |loss of biodiversity |Low |

|Services (agriculture and other rural) |noise |Low |

| |soil and water pollution |Moderate |

|Manufacturing |water pollution |Very high |

| |air pollution |Very high |

| |biodiversity loss |High |

|Construction |soil erosion |Low |

| |noise |Low |

| |safety |Moderate |

| |water pollution |Moderate |

|Trade (wholesale and retail) |water pollution |Low |

| |soil erosion |Low |

|Hotels and restaurants |water pollution |Low |

|Transport |water pollution |Low |

| |air pollution |Moderate |

Although Table 6.7 indicates a large number of HIGH potential impacts, through mitigation and common sense practices most of these can be reduced to low or moderate residual impacts, as indicated in the tables in Annexes B and C.

6.9 Potential Cumulative Impacts

Assuming that all mitigation is carried out on all projects for which loans are provided, there will still be residual effects, but when considered in total, they probably will not have an overall significant effect on the environment. The major environmental concerns, as described in Section 6.6 and 6.7 are water pollution and soil erosion, and the consequences and secondary effects that erosion will cause. The described below modalities for assessment of cumulative impacts and its mitigation and monitoring approach is also applicable to the irrigation projects.

Considering the small size of most projects, it would be easy to dismiss the negative effects that each project might have on the environment. For instance, it is anticipated that small farmers will request modest loans for the purchase of livestock. Such a loan to a single farmer would present little environmental concern and a large number of such small loans spread throughout the country would have a relatively negligible effect. However, if by chance a large number of requests for loans originated from the same area, and more importantly from the same watershed, the cumulative effect of all of the small (negligible) effects could be significant.

Cumulative effect is important in spatial terms, as indicated above, and also over time. For instance, a loan for seed purchase (albeit this loan would be small since it is operational in nature) in itself has no negative impact, and in fact, has much the opposite with an increased production and return to the farmer. However, the same loan provided for more than two years in a row could promote poor crop and land management and disrupt a relatively current good agricultural management system characterized by sound crop rotations which include nitrogen fixing crops and green manure crops. By avoiding an appropriate crop rotation program the farmer can deplete the fertility of his soil and further promote soil erosion. Over time there would be a cumulative effect.

Farmers should not be denied loans on the basis of their location, but if patterns appear to show concentrations of loans in one watershed and where there is a risk of a significant cumulative effect, the responsible loan officers should alert the local environmental inspectorate office for special monitoring of the situation. Likewise, if a group of large commercial farms in one particular watershed takes advantage of the loan program, the environmental inspectorate should focus on monitoring the cumulative effects on water quality and soil erosion.

With other rural enterprises the environmental concerns usually focus on air emissions and effluent discharge. Although each industrial activity may have emission controls that keep stack emissions well within national standards, cumulatively, all of the industries in one region (e.g. in a small closed valley with poor air circulation) could significantly contribute to the deterioration of overall air quality, resulting in an impact on human health.

The other aspect of cumulative effects of the overall project is the accumulation of a large number of very small impacts over the full range of sub-projects. That is, the cumulative impact of all of the small impacts as a result of a number of loans for fertilizer purchase, added to the cumulative impact of all of the small impacts from the livestock purchase sub-project, added to the cumulative impact of all of the small impacts from the non-farm enterprises. The overall cumulative impact could be significant. Since many of these activities can have an effect on water quality, the overall effect on water quality could be significant.

In a comprehensive examination of cumulative effects, analysis would be made of all of the other various activities taking place that have impacts. For instance, other programs that could be provide agricultural lines of credit, forestry programs that could be contributing to soil erosion, and in the same vein, road construction activities and other general construction that could add to the soil erosion problem. Although this Project can not be concerned about the effects of other projects, it is important to place the Project and the effects that it does have on the environment within the context of the overall development picture.

In order to prevent the risk of adverse cumulative environmental effects, a brief analysis of the portfolio relative to cumulative effects should be conducted annually and reported to the environmental inspectorate.

6.10 Potential Residual Impacts

Residual impacts are those impacts that remain once all mitigation has taken place. These are the trade-offs for the benefits to be gained through the Project. Assuming that full mitigation is carried out, residual effects could still be significant, particularly when considering the cumulative effect. A summary of residual effects is provided in Tables 6.9 and 6.10

Table 6.9 Summary of Probable Residual Effects – Non-Agricultural Rural Enterprises

|Enterprise Group |Probable Residual Effects |Significance |

|Non-renewable resource extraction industry |Aesthetics |Moderate |

|Renewable resource extraction industry |None |None |

|Agro-processing |Water pollution |Low |

|Services (agriculture and other rural) |Water pollution |Low |

|Manufacturing |Air pollution; water pollution |Low-moderate |

|Construction |Water pollution; soil erosion |Low-moderate |

|Trade |None |None |

|Hotels and restaurants |Water pollution |Low - None |

|Transport |Water pollution; air pollution |Low |

Table 6.10 Summary of Probable Residual Effects – Agriculture

|Sub-project Group |Probable Residual Effects |Significance |

|Seed * |Water pollution from chemical inputs |Low |

|Fertilizer * |Water pollution |Low |

|Pesticides * |Water and soil pollution |Moderate |

|Pedigree animals |None |None |

|Animals for finishing and dairy |None |None |

|Tractors |Soil compaction and erosion; water and soil |Low |

| |pollution | |

|Other farm implements |Soil erosion |Low |

|Small equipment |None |None |

|Grain drying equipment |High energy consumption via fossil fuels - |Low |

| |contribution to greenhouse gases | |

|Irrigation equipment and irrigation maintenance |Groundwater losses; surface water |Low-moderate |

| |extraction; salinization and waterlogging | |

|Vehicles |Fossil fuel consumption – contribution to |Low |

| |greenhouse gases | |

|Farm buildings for stock, machinery and chemicals |Loss of productive land |Low |

|Storage facilities (fuel, grain and other produce) |Loss of productive land |Low |

|Fencing materials |Cultural and social systems |Low |

|Primary processing equipment |Water pollution; occupational hazards |None |

|Fuel, lubricants, etc. |None |None |

|Veterinary services |Some chemical residuals in meat and animal |Low |

| |products | |

Assuming that all mitigation is carried out, the residual effects will be minimal. Although ratings are subjective, and only relative to one another, this analysis indicates that only two activities, manufacturing and construction, receive residual effects ratings above LOW-MOD. The non-renewable resource extraction industry will have a MODERATE level of significance. Residual effects of agricultural activities are minimal.

6.11 Environmental Risks

Overall, the risk of any of the identified potential impacts is moderate because effective environmental management (including support of sound and comprehensive EAs where these are required, monitoring, and enforcement of the regulations) is questionable. If enforcement is carried out in an effective and efficient manner, the environmental risks associated with the various activities to be supported through the Project will vary. Risks for those activities that would lead to impacts which can be governed by specific legal instrumentation would be low, given that enforcement is implemented. Risks for which there is no effective legal instrument would vary, depending upon the nature and level of impact, and the cost of mitigation. Of particular concern would be for those activities resulting in water and air pollution, and soil erosion.

7. Analysis of Alternatives

7.1 “No project” alternative

The radical alternative to the project is the 'no project' alternative. This alternative would have a number of environmental and socio-economic impacts and benefits. “No project” would result in fewer chemicals finding their way into the soil and water systems, and soil compaction frequency and intensity would decrease as well as the incidence of soil erosion. Without programs for food processing and irrigation, effluents and emissions would not be of a concern and additional desertification through waterlogging and salinization would not occur. However, no revitalization of the agricultural sector which the various components in the designed project would provide, agricultural inputs would continue to increasingly decrease or become permanently unsustainable due to drought which is becoming endemic in large parts of the country what may lead to increased poverty, especially in rural areas, land would be cultivated manually.

7.2 “With Project” Alternative

This alternative would have a number of socio-economic impacts. The most important impact would be to the social environment where opportunities for significant socioeconomic improvement in the rural areas from a rehabilitated agricultural economy would not be lost. Without these improvements there would be no chance that local populations would ever focus on environmental issues in the future when their main concern would only be one of basic survival.

With the current project design there is the aim of relieving rural poverty, providing essential infrastructure and generally improving rural socioeconomic conditions. If mitigation of potential impacts is addressed seriously, these socioeconomic gains can be acquired with very little residual environmental impact, and the project will provide an overall net benefit.

7.3 Other alternatives related to “With Project” Alternative

Other alternatives addressed in the project preparation document refer to various methods of design and implementation of the various project components, as well as their scale and these alternatives relate solely to the need of ensuring a successful project.

These other alternatives would have little bearing on the environmental impacts as they have been identified for the current designed project. If any effect, these alternative managerial and operational designs may reduce environmental impact simply because the proponents of the current design suggest that these alternatives would contribute to a less effective project. If little is accomplished, therefore, the impacts will be reduced.

8. Environmental Assessment and Management Guidelines

8.1 General

The Environmental Assessment and Management Guidelines (EAMG) will be the guiding document to ensure that impacts likely to be encountered by any of the activities that are supported by the lending program will be avoided, mitigated or minimized to an acceptable level. The guidelines describe the mitigative procedures to be considered and provide best practice guidelines to avoid impacts in the first place. They provide also monitoring schedule and a process to follow for monitoring the effectiveness of environmental management. As well, the guidelines indicate responsibilities, scheduling and indicative costs for its implementation. However, detailed costs are not possible to provide in this plan since the sub-projects and their extent are unknown at this stage. Table 7.1 provides only monitoring responsibilities.

Finally, the guideline outlines an environmental capacity building program that will contribute to a better understanding of environmental issues amongst the various stakeholders in the Project. Such capacity building will contribute to an overall program with minimal environmental impact.

The World Bank requires that any sub-project that would normally fall within Category B be subject to an EIA. The onus of recognizing loan applications for sub-projects that may fall into one of these categories rests with the PFI loan officers, the field development officers under the service provider and the RISP staff of CAPMU.

8.2 Screening and identifying sub projects Category

The majority of sub-projects anticipated will be similar to those that have been financed through RISP-I and II. Those which could fall within the category B would include livestock and on-farm on irrigation in the agriculture sector and agro-processing and other rural industrial activities in the non-agricultural rural enterprise sector.

Adequate and appropriate environmental review is the responsibility of the MENR. However, it is not certain that the environmental assessment for sub projects that would require an EIA would have the vigorous analysis required by the Bank. In such cases, to ensure that the World Bank’s environmental requirements are met it will be necessary for CAPMU to establish an adequate and appropriate environmental review and monitoring procedure. CAPMU should establish procedures for screening and scoping of sub-project proposals including, as appropriate, consultation with the local state environmental inspectorate and the public. Based on preliminary review of the potential impacts and the scale of sub-projects (screening and scoping) and in consultation with the local state ecological inspectors CAPMU would provide advice to sub-project proponents (beneficiaries) in determining the level of environmental analysis required. CAPMU must ensure that where assessments are conducted by licensed bodies and individuals to meet national requirements that such assessments, where the sub-project is a Bank Category B, also meet World Bank standards.

It must be remembered that ‘‘....it is the extent of the impacts, not the sector, that determines the extent of the environmental assessment and, hence, the category.[21]’ and as such it will be important that the CAPMU and PFI loan officers have sufficient knowledge to recognize the significance of any impacts that may occur for any particular sub-project being assessed for a loan.

In accordance with the World Bank’s OP/BP 4.01 Environmental Assessment, the project has been classified as a Category FI for environmental assessment purposes. The project will finance through commercial banks small scale on-farm irrigation activities that are not expected to have significant environmental and social impacts. In order to ensure the sustainability of the proposed subprojects, CAPMU has prepared the revised Sectoral Environmental Review and Environmental Guidelines as guiding documents to analyze the potential adverse environmental and social impacts of the proposed activities as well as to recommend relevant mitigation and monitoring measures.

8.3 Mitigation measures

8.3.1 General Remarks

Mitigation of any environmental effects will be the responsibility of the sub-project proponent (beneficiary). However, it will also be the responsibility of the lending agency, the MENR, concerned public and CAPMU to ensure that mitigation is carried out successfully.

8.3.2 Mitigation of on farm irrigation activities environmental impacts

For agricultural activities mitigation should not necessarily entail expensive inputs and much can be achieved towards the minimizing of residual impacts through applying appropriate, efficient and safe farming techniques. ACSA is in a position to advise farmers on the proper handling and application of pesticides and fertilizers, including application rates and timely application. As well, they can advise on effective cultivation techniques (including the size of tractors and the type of equipment to be engaged) that will reduce the threat of soil erosion.

Irrigation schemes can be well planned and implemented in order to avoid the loss of productive land through salinization and waterlogging. That is why a special attention should be given on selection of agricultural plots to be under irrigation. The number of environmental pre-selection criteria should be preliminary set-up and beneficiaries’ proposals should be evaluated after the in-site assessment of both water source and land-plots. Investment planning should consider characteristics of local environmental conditions, results of feasibility study, and provisions of design documentation and, application of mitigation measures.

A number of factors should be evaluated in details, e.g.: whether land plots are situated downhill or on the slope with high gradient; are they situated in the area with high groundwater table or in vicinity of ravines, landslides or slopes of high gradient. In case of over-irrigation, above mentioned unfavorable conditions, as well as water leakages, spills, pipe fracture and other associated accidents may trigger significant negative impacts and provoke hard or irreversible pressures on the soils, groundwater and local landscapes.

The irrigation techniques to be eligible for purchasing should also have pre-defined environmentally friendly specifications (e.g. – rain intensively, wheel pressure to the ground (if applicable), leakage control devises and accidental valves, etc.). Over-irrigation can be easily mitigated by using of soil moisture devises, showing to the farmers “when” to start irrigation. As an important mitigation measure a farmers training and advisory service should be applied to the irrigation project component.

Adherence to national water and air quality standards will be monitored by local environmental inspectors to ensure that these environmental components are protected. Techniques to be used in extraction and manufacturing sectors are often a matter of choice, albeit mostly economic. The environmental requirement will have to be considered when such choices are made. Such consideration will be the responsibility of the proponent and he/she will be required to absorb the economic cost of the consideration. The proponent may have no choice if the laws governing environmental protection are to be respected. Suggested mitigation measures for the various potential impacts are provided in Annexes A, B and C.

8.3 Mitigation through Application of Good Available Practices

The most appropriate good practices for non-agricultural rural enterprises relate to safety and health, as well as water, and air quality. Agro-processing activities must maintain high hygiene standards and all businesses must ensure safety instruction to their employees as well as the provision of protective clothing and equipment where appropriate.

Table 8.1 provides some suggested good practices related to agricultural production. This list of inputs includes the operational inputs which by Project policy can not exceed 25% of the total loan (indicated by *). Suggested mitigation for various sub-project activities is provided in the Annex tables (Annexes A, B and C).

Table 8.1 Some Good Agricultural Practices – Towards a Protected Environment and Sustainable Agriculture

| |Good Practices |

|Activity | |

|Seed * | . selection of seed with lowest agro-chemical input requirements to achieve high|

| |yields (however, avoiding GM seed since GMOs are officially not accepted in |

| |Moldova) |

| |. selection of seed with minimal level of pest and disease vulnerability |

| |. rigorous sanitation facilities and procedures for imported seed |

| |. rigorous sanitation facilities and procedures for exported seed |

| |. extension services provide advice on appropriate fertilizer and pesticide |

| |applications |

| |. where possible, extension service to promote sustainable agricultural practices|

| |including IPM, minimum tillage, contour ploughing, crop rotations, and green |

| |manuring |

|Fertilizers * |. selection of best fertilizers for crop and prevailing soil conditions |

| |. application levels as per recommended by manufacturer and extension service |

|Pesticides * |. integration of crop and pest management strategies (IPM) |

| |- product selection |

| |- application rates, timing, |

| |- placement in relation to the root system, weed cover and soil properties |

| |- to consider best management irrigation practices which minimize water movement |

| |below the root zone |

| |- IPM is a priority and pesticides to be applied sparingly and only where |

| |absolutely necessary |

| |. careful handling of pesticides; protective clothing and equipment to be used |

|Pedigree livestock |N/A |

|Livestock for finishing |. manure handling facilities designed to ensure zero runoff |

|Tractors |. purchase of engine efficient tractors that provide highest ratio of power and |

| |work to fuel input |

| |. tractors with high efficiency emissions control |

| |. tractors no larger than necessary for the most extensive work anticipated |

|Farm implements |. implements suitable for minimal tillage and others which are applicable to |

| |organic farming methods |

|Small equipment |. energy efficient equipment |

|Grain drying equipment |. energy efficiency to be a prime concern |

|Irrigation equipment |. highest efficiency equipment |

| |. equipment that assists in the use of irrigation water in an efficient manner |

|Vehicles |. low emission vehicles/vehicles with high efficiency engines |

|Farm buildings for stock, machinery, and |. location of buildings where least disturbance of resources required |

|chemicals |. energy efficient building design including heating, ventilation |

| |. building design to minimize materials and use of environmentally friendly |

| |materials |

|Storage facilities |Same as above |

|Fencing materials |N/A |

|Primary processing equipment |. high efficiency equipment including low emission fuels (e.g. gas, solar) |

|Fuel, lubricants * |. safe storage of fuels, lubricants and chemicals |

|Spare parts * |. safe disposal of used parts (e.g. batteries, fluids, etc.) |

|Veterinary supplies and services * |. ensure medicines and inoculations are within the guidelines for safe animal |

| |care and that such inputs are not harmful to humans; avoid use of hormones (e.g. |

| |to increase dairy production) |

|Feed and concentrates * |. where imported, ensure source of raw materials (e.g. GMO or otherwise) |

To ensure timely and effective mitigation, an effective monitoring system will be implemented and guidelines for developing a monitoring system are discussed in Section 7.4.

With regard to good practices as these relate to non-agricultural rural enterprises, a number of general guidelines are provided in Table 8.2.

Table 8.2 Some Good Non-Agricultural Rural Enterprise Practices – Towards a Protected Environment

|Enterprise Group (with some examples) |Good Practices |

|Non-renewable resource extraction industry (e.g. sand and |.operating hours set to meet local needs to minimize disturbance |

|aggregate quarrying) |.erosion and runoff controls set in place |

| |.dust control with spraying |

| |.location at non-sensitive biophysical sites |

|Renewable resource extraction industry (e.g. forestry) |.sustainable yield management practices to be followed |

| |.erosion and runoff controls set in place and avoidance of steep |

| |slopes (forestry) |

|Agro-processing |.site location to minimize disturbance to local communities |

| |.safety standards upheld and safety equipment and training |

| |provided |

| |.effective equipment installed to manage effluent and emission |

| |discharges |

|Services (agriculture and other rural) |.proper disposal facilities for all wastes |

|Manufacturing |.effective equipment installed to manage effluent and emission |

| |discharges |

|Construction |.safety standards upheld and safety equipment and training |

| |provided |

|Trade |.site location to minimize disturbance to local communities |

| |.proper disposal facilities for all wastes |

|Hotels and restaurants |.proper disposal facilities for all wastes |

|Transport |.maintenance of engine efficiency |

A significant component of the Project is the provision of extension services. This component can have a very significant positive impact on the environment. Through the promotion of sustainable agricultural methods the extension service will ensure that many aspects of the environment (soil quality, soil quantity, water quality, health, farmer and rural incomes).

8.4 Monitoring requirements

The project’s PFI loan officers will be responsible for ensuring that sub-projects comply with Bank environmental requirements and Moldova environmental legislation. However, loan officers are not environmental specialists and for the most part they are only interested in making the loan and monitoring the financial and economic aspects of the sub-project. With some basic training (see Section 7.5 and Table 7.4) they will be able to monitor the sub-projects but often they will have to rely on consultations with the CAPMU environmental specialist (assuming that one of the Unit’s officers will receive appropriate training) and/or MENR staff for guidance and advice. If there are to be a large number of sub-projects that require such monitoring (sub-projects that fall within the Bank’s categories A and B) monitoring will likely be conducted on a sample basis. From an environmental viewpoint, those group of sub-projects which have the potential for creating the most serious environmental problems should be given highest priority for sampling. For monitoring to be effective, results must be acted upon, and as such, monitoring results will be considered when loan applications are reviewed and conditions are placed on subsequent loans.

Although the legal authority and responsibility of monitoring rests with the MENR the capacity for monitoring and enforcement is limited and its effectiveness is questionable. CAPMU will need to ensure that an effective monitoring program is built into the sub-projects. For sub-projects with potential for significant impacts, a monitoring plan would be required as part of the documentation for sub-project approval. The results of monitoring would be taken into account in consideration of subsequent requests for financing.

Loan officers of PFIs should be responsible for:

• monitoring all sub-projects that have required an EA by the Bank, to ensure that mitigation is conducted as planned and to ensure that no unanticipated effects have occurred;

• randomly reviewing, with field visits, projects that have not required EAs, to ensure that they are environmentally acceptable (he/she will use a checklist to determine whether or not the borrower is complying with the environmental requirements and guidelines);

• inform CAPMU of any irregularities regarding the sub-project and aspects of the environment

• where necessary, prescribing corrective actions to be taken, without which the loan will be cancelled/not renewed;

• taking into account the cumulative effect of a number of projects in a small area, particularly within a critical watershed.

Bank supervision missions should include an environmental specialist once a year to audit monitoring procedures and results.

Table 8.3 provides a summary of monitoring and reporting responsibilities for CAPMU.

Table 8.3 Summary of Monitoring Responsibilities

|Monitoring Requirements |Responsibility |Frequency |

|Ensure borrowing enterprises are in |CAPMU through Environment Specialist; |Monthly – unannounced visits. Scientific |

|compliance with standards set for with |Environmental Inspectorate |measurements required. |

|discharges, emissions and solid wastes). | | |

|Make recommendations where appropriate. | | |

|Review of monitoring results. Ensure follow|CAPMU |Bi-annually, to ensure that monitoring is |

|up on recommendations. | |regular and that borrower is meeting |

| | |environmental requirements |

|Examine environmental aspects (other than |PFIs with CAPMU |Bi-annually – unannounced visits (no |

|discharges, emissions and solid wastes) as | |measurements required) |

|indicated in enterprise’s environmental | | |

|management plan, for compliance. Make | | |

|appropriate recommendations. | | |

|Examine environmental effects of |PFIs and / or CAPMU |Bi-annually |

|enterprises that did not require EIAs and | | |

|make recommendations. | | |

|Review of PFI monitoring reports (see |CAPMU |Bi-annually |

|above) and ensure follow up of | | |

|recommendations. | | |

|Review efficiency and effectiveness of |World Bank |Annually |

|overall monitoring – process and results. | | |

|Review selected EIAs of borrowing |World Bank |Annually |

|enterprises for completeness re: WB | | |

|requirements. Visit selection of | | |

|enterprises to test accuracy of EIA. | | |

|Examine the cumulative effect of selected |World Bank |Mid-term review |

|enterprises. | | |

8.5 Environmental Management Capacity Development

8.5.1 General

The economic and business activities in rural areas created and financed through the Project’s Rural Business Development, Rural Finance and On-Farm irrigation Components may have direct or indirect impact on the environment. Therefore, environmental issues command increased attention, and raising environmental awareness among the staff of the business development agencies, participating financial institutions, and the implementing agencies is a key aspect of the capacity building activities designed under the Project. While many of the activities are a continuation from Phase I, Phase II will also gradually transfer responsibilities to the appropriate government agencies, and build capacity of these agencies to ensure long-term institutional development and sustainability.

Therefore, along with implementation of policy, legal and regulatory reforms, technical assistance and investment support, RISP II additional financing project will also continue the institutional capacity-building.

8.5.2 CAPMU

CAPMU staff needs to be generally aware of the procedures established for environmental screening, scoping, assessment, review, management, mitigation and monitoring. They also need to be aware of types of sub-projects that are ineligible for financing under World Bank guidelines and the general procedures and costs that may be associated with carrying out environmental assessment of potential Category A or B sub-projects. To ensure that all elements of the CAPMU management structure are fully aware of the environmental screening, assessment, management and monitoring activities that are incorporated in RISP - II implementation, the Project should invest in appropriate training for each of the links in the management chain. To ensure compliance of RISP - II financed sub-projects with existing environmental regulations and those that may be introduced and promulgated in the future CAPMU has to ensure a closer relationship with the APCP staff in terms of environmental review and input to sub-projects. This staff could provide guidance on initial project screening and review; develop terms of reference for sub-project review or assessment; review environmental management and monitoring plans submitted as part of the sub-project appraisal process, and, periodically determine that monitoring is being carried out to appropriate standards.

Activities to be carried out by the CAPMU in cooperation with the APCP staff would include:

• review applications for sub-project financing to determine if the proposed sub-project falls within the Bank categories full EIA and partial EIA (Category B);

• if the sub-project falls within one of these categories it is certain that national requirements will be for an EA; the consultant must ensure that the EA is conducted in such a manner as to meet the standards of the Bank;

• on other sub-projects, a sampling of same would be selected for field inspections to ensure that good practices are being conducted and that there are no unexpected and unacceptable impacts from such sub-projects;

• review environmental assessments, environmental management plans and monitoring plans for sub-projects requiring them;

• provide guidance to sub-project proponents (beneficiaries) on environmental mitigation that can be incorporated into project implementation;

• monitor all sub-projects requiring an environmental assessment to ensure that mitigation is being carried out as planned and that no unidentified negative effects have occurred;

• selectively undertake field visits to sub-projects for which environmental clearance permits were required, to monitor compliance.

Besides, a training program to develop and improve professional skills and capacity in environmental management issues for the staff involved in project implementation will be organized under the project. The development of training program is to be under overall responsibility of CAPMU. For this purpose the environmental specialist is to be appointed to develop curricula and organize the training.

8.5.3 PFI Loan Officers

PFIs are not in the environment business. Their main function is to approve and administer loans. These organizations do not have the knowledge, or the official responsibility for environmental protection. PFI loan officers place most of their faith in the project proponent for acquiring the relevant approval documents including the environmental clearance document. However, the accuracy and effectiveness of EIAs conducted on sub-projects and the ecological expertise examinations are questionable. Thus, it is recommended that PFI loan officers have the ability to screen sub-projects and to judge whether or not an EIA is required.

They should also have an understanding of the content of environmental management and monitoring plans in particular for on farm irrigation activities and the general nature of mitigation requirements for "typical" sub-project investments. They need to be generally aware of MENR requirements for ecological expertise and the permitting process.

A user friendly environmental review manual would be helpful in providing loan officers (as well as CAPMU staff) in determining the World Bank category of on farm irrigation projects and the impacts that can be expected for various their types.

8.5.4 Environmental Specialist under CAPMU

During the RISP II preparation, an environmental review was undertaken, which both (i) reviewed the environmental aspects of RISP I implementation and (ii) provided guidance on a range of measures to raise environmental awareness in the project institutions during the RISP II implementation. One of the recommendations stated in the report was that Environmental training ranging from raising awareness to more detailed environmental management should be provided to the project participating agencies.

Environmental Specialist to be appointed by CAPMU would work under the supervision of Project Manager/CAPMU Director, as well as in close collaboration with relevant MENR staff and other stakeholders including concerned NGOs, and will be responsible for screening the proposed sub-projects (although the PFI would also provide screening recommendations) that would result in designating the sub-project a World Bank category (B or C). The objective of the Environmental Specialist’s assignment is to be increase the awareness of environmental issues and strengthen the capacity of project stakeholders, to ensure that potential environmental impacts could be recognized, avoided or at least minimized through mitigation.

Environmental Specialist has to meet the following qualification criteria: appropriate education in environmental sciences and engineering (preferably, irrigation); relevant knowledge of the current environmental situation in Moldova; high familiarity with politics and policies regarding environmental issues; at least 5 years experience in the area of environmental management; knowledge of World Bank Safeguard policies and EA requirements; experience with similar assignment would be an advantage; outstanding communicational, presentational and organizational abilities

The tasks to be performed by Environmental Specialist should include:

• design the appropriate environmental training program, based on the environmental legislation of the Republic of Moldova, Environmental Safeguards of the World Bank, Environmental Impact Assessment carried out during the preparation of the RISP II and the Environmental Standards Section of the Rural Investment Guidelines (RIG);

• design and agree with CAPMU the training agenda and plan for delivery of the training;

• prepare a reference manual for the lending staff of the PFI, based on the environmental legislation of the Republic of Moldova, identifying which economic activities require what permissions, compliance procedures and/or compliance inspections;

• deliver the training through a series of seminars to the target audience;

• based on the feedback from participants and implementing agencies, if necessary, make amendments to the training material and adjustments to the training methodology during the training implementation period;

• ensure the organization and logistics of the training seminars (including, but not limited to equipment for presentations, documentation, handouts, training room);

• provide recommendations for further implementation of environmental monitoring and assessment.

Besides, appointed Environmental Specialist would ensure that applicable national standards and guidelines are being followed and achieved. Where multiple sub-projects are being carried out in geographical proximity, the specialist will assess the possible cumulative effects on the environment (in particular natural habitats, forests, soil, and air and water quality). He/ she would also provide guidance and backstopping to PFI loan officers on the application of project environmental screening procedures to sub-project proposals.

8.5.4.1 Development of Training Program

The target audience for the training program will include staff of the Development Agencies, staff of the Participating Financial Institutions, and staff of the Consolidated Agricultural Project Management Unit and Credit Line Directorate. In the design of the training program, the Environmental Specialist has to take into account the following: (i) the training program should be practical and include work with realistic case studies, based on actual loan proposals and types of business activities supported by the Project; (ii) the training program should cover an explanation and practical application of the environmental standards and forms designed for use by the participating financial institutions and included in the Rural Investment Guidelines (Section VIII and Annex 5).

While developing a training program to be implemented a special attention has to be paid inter-relations of irrigation and pest management. To prevent or reduce the movement of chemicals to groundwater, users must consider many different site-specific best management practices, including: integration of crop and pest management strategies (IPM), product selection, application rates, timing, placement in relation to the root system, weed cover, soil properties, and be aware on irrigation management strategies. Pesticide selection should not be based only on cost effectiveness, but also on toxicity to non-target species, product solubility, persistence, and leaching potential, irrigation schedule, and soil type, and other site characteristics. Agricultural chemicals should be applied only at the labeled or recommended rates. Lower rates applied more frequently combined with sound irrigation management practices can significantly reduce chemical movement.

In relation to on-farm irrigation component, the users are to be aware that agricultural chemicals are moved through the soil by both rain and irrigation. Hence, it is important to consider best management irrigation practices which minimize water movement below the root zone. Failure to irrigate properly may well jeopardize the future use of some important soil applied chemicals. Irrigation schedules based on soil moisture deficits are likely to improve pest control and grove response to treatment by maximizing retention of toxic concentrations in the root zone and prevent problems of environmental contamination.

8.5.4.2 Implementation of Training Program

To better achieve project’s objective through implementation of training program by the environmental specialist it has to be envisaged the training for himself to improve his knowledge in the issues listed below.

In relation to training delivery to target groups, it is expected that the environmental specialist will train at least 3 groups of target audience. Each training group will consist of 15 -16 participants in order to ensure maximum learning opportunities. All training will be continuously evaluated and the evaluation results shall be used to modify the training program in order to suit perfectly the participants’ needs.

Each training seminar will be 1 day long and will be hold in Chisinau.

A. Training for CAPMU Environmental Specialist

Tree-day training aims to increase capacity of hired environmental specialist in such fields as impact identification and elaboration of mitigation measures inter alia in relation on-farm irrigation and pest management, preparation of environmental clauses for contractors, monitoring and reporting.

B. Seminar for CAPMU director, RISP manager and staff of RISP

One-day seminar on Environmental Awareness is intended to deliver and discuss the importance of the environmental concerns and the consequences for non-addressing issues in relation to Project implementation. The awareness of this target group is to be increased in environmental impact assessment procedures including: (i) national and World Bank requirements for environmental assessment, mitigation, monitoring and reporting; (ii) screening and scoping procedures including checklists (iii) the generic procedures for environmental assessment required by the World Bank and national authorities; (iv) management plan content; (v) monitoring and reporting requirements of the World Bank

The seminar to be organized by Environmental specialist may require involvement of resource experts or skilled NGO. As a background paper for the seminar the current Sectoral Environmental Assessment can be used as it contains all necessary information to be presented for the seminar’s participants.

C. Workshop for Rural development officers.

One-day workshop on basics of Environmental Analysis aims to raise awareness of rural development officers through deliverables related to their specific operations, likely impacts and their consequences of operations on the environment, options for impacts mitigation, as well as legal provisions. The workshop can be organized by the CAPMU environmental specialist with involvement of recourse expert or skilled NGO.

The major findings of the current Sectoral Environmental Assessment can be used as a background paper showing procedures for screening and scoping phase, identification of significant impacts, development of mitigation and monitoring requirements.

D. Workshop for the PFI staff (branch officers and loan officers)

One-day workshop on Environmental analysis which would include elements of environmental impact assessment procedures is to be focused (i) on national and World Bank requirements for environmental assessment, mitigation, monitoring and reporting; (ii) screening and scoping procedures including checklists (iii) the generic procedures for environmental assessment required by the World Bank and national authorities; (iv) management plan content; (v) monitoring and reporting requirements of the World Bank for sub-project supervision. Field studies will be included.

E. Preparation of Manual for PFI loan officers and other target groups

There should be prepared a user friendly Manual describing screening (categorizing) of projects and providing description of likely impacts on environment, as well as optional measures to reduce and/ or mitigate these impacts to ensure not deteriorating of the environment due to Project implementation

Table 8 summarizes the environmental capacity building requirements for the RISP-II additional financing project.

Table 8. Summary of Environmental Capacity Building Requirements

| Target Audience |Type of Capacity Building |Description |Inputs Required |Training cost estimate |

|1.CAPMU Environmental Specialist |Environmental Training |Three-day training to increase |2 days of national consultant time |1) Food: 3 pers x 3 days x 12 US$ |

| | |specialist’s capacity in such | |= 216 US$ |

| | |issues as impact identification, | |2) Transportation expenses (during |

| | |inter-relation of irrigation | |the training preparation) = 14 US$ |

| | |techniques and pest management, | |3) Kit for participant 1 |

| | |preparing of mitigation measures, | |participant x 5 US$ = 5 US$ |

| | |and of environmental clauses for | |4) Stationary: 23 US$ |

| | |contractors, monitoring and | |5) Room rate: 50 US$ |

| | |reporting | |6) Printing of seminar materials: 8|

| | | | |US$ |

| | | | | |

| | | | |Total estimate cost 316 US$ |

|2. CAPMU director, RISP manager and|Environmental awareness workshop (a|One day seminar discussing the |2 days of national consultant time.|1) Food: 144 US$ |

|staff of RISP |refresher seminar) |importance of the environment and | |2) Transportation expenses (during |

| | |the consequences for not addressing| |the training preparation): 17 US$ |

| | |issues. | |3) Kit for participant 9 |

| | | | |participant z 5 US$ = 45 US$ |

| | | | |4) Stationary: 35 US$ |

| | | | |5) Room rate: 100 US$ |

| | | | |6) Printing of seminar materials 9 |

| | | | |pers x 8 US$ |

| | | | |= 72 US$ |

| | | | | |

| | | | |Total estimate cost 413 US$ |

|3. Rural development officers |Environmental analysis workshop |One-day workshop on environmental |5 days of national consultant time |1) Food: 16 pers x 1 days x 12 US$ |

| | |awareness but with additional depth|for first workshop of 16 officers, |= 192 US$ |

| | |related to their specific |and 2 days of time for second group|2) Transportation expenses (during |

| | |operations. Beyond environmental |of 16. Total time: 7 days. |the training preparation) = 35 US$ |

| | |awareness with emphasis on impacts | |3) Kit for participant 16 |

| | |and their consequences, and | |participant X 5 US$ = 80 US$ |

| | |mitigation; outline of relevant | |4) Stationary = 77 US$ |

| | |legal requirements. | |5) Room rate = 100 US$ |

| | | | |6) Printing of seminar materials 9 |

| | | | |pers x 8 US$ |

| | | | |= 72 US$ |

| | | | | |

| | | | |Total estimate cost 556 US$ |

|4. PFI staff (branch officers and |Environmental analysis including |One day workshop on environmental |Six days of national consultant |1) Food: 16 pers x 1 days x 12 US$ |

|loan officers) |environmental impact assessment |analysis and impact assessment with|time for first group of 16 |= 192 US$ |

| |procedures |emphasis (i) on national and World |officers; three days of consultant |2) Transportation expenses (during |

| | |Bank requirements for environmental|time for each additional group of |the training preparation) = 35 US$ |

| | |assessment, mitigation, monitoring |16. 220 branch and loan officers |3) Kit for participant 16 |

| | |and reporting; (ii) screening and |equates to approximately 14 |participant X 5 US$ = 80 US$ |

| | |scoping procedures including |workshops. Total consulting days: 6|4) Stationary = 77 US$ |

| | |checklists (iii) the generic |+ (14 x3) = 48 person days |5) Room rate = 100 US$ |

| | |procedures for environmental | |6) Printing of seminar materials 9 |

| | |assessment required by the World | |pers x 8 US$ |

| | |Bank and national authorities; (iv)| |= 72 US$ |

| | |management plan content; (v) | | |

| | |monitoring and reporting | |Total estimate cost 556 US$ |

| | |requirements of the World Bank for | | |

| | |sub-project supervision. Field | | |

| | |studies will be included. | | |

|5. PFI loan officers and others |User friendly manual |A manual describing, step by step, |Six days of manual preparation plus| |

| | |how to screen (categorize) projects|cost of manual production. | |

| | |and to provide impacts to be | | |

| | |expected and how to mitigate such | | |

| | |impacts | | |

9. Disclosure and Public consultation

Disclosure and public consultations to the environmental assessments done for RISP-I (in the year 2001) and for RISP-II (in the year 2005) was solicited and includes:

• discussions with farmers, service providers (agricultural extension workers) and entrepreneurs, and with commercial banks to inform them of the environmental assessments of the RISP projects, and - more importantly, to identify likely activities for which loans through the RISP project would be requested;

• a half day NGO forums was held to solicit ideas on likely farm and non-farm rural activities to be funded and the probable environmental impacts that could be expected from these activities;

• the draft final environmental assessments was forwarded electronically to the NGOs that attended the NGO roundtable;

• newspaper advertisements in the year 2005 were placed in nine regional newspapers which provided full national coverage, to invite the general public to examine the environmental assessments draft document and to make further input to the review (the draft RISP-II environmental assessment was made available in the 35 centres of ACSA, as well as at ACSA and CAPMU offices in Chisanau);

• the RISP-II environmental assessment draft document was also posted on CAPMU and ACSA’s web sites and the report was also submitted to the Ministries of Agriculture, Ecology and to the Agricultural University. Open houses for purposes of discussion of the report were organized at CAPMU, ACSA and NGO “Biotica”;

• the final version of the RISP environmental assessments conducted in 2002 and 2005 years were placed in the World Bank InfoShop in Washington DC.

• the revised version of the SER was placed at the local web-sites in Moldova, - REC Moldova and CAPMU on March 27, 2008 for disclosure and public consultation.

ANNEXES

Annex A

Impacts, Causes, Consequences and Mitigation

For

Agriculture

* Denotes inputs allowed but can not exceed 25% of the loan and must be directly related to the main loan (e.g. spare parts and fuel to 25% of the total value of the loan can be purchased for use in the tractor purchased through the other 75% of the loan.

A1: Pedgree Seed

A2: Fertilizers

A3: Pesticides

A4: Pedigree Livestock

A5: Livestock for Finishing or Dairy

A6: Tractors

A7: Other Farm Implements

A8: Small Equipment

A9: Irrigation Equipment

A10: Vehicles

A11: Farm Buildings for Stock and Machinery

A12: Storage Facilities

A13: Primary Processing

A14: Fencing Materials

A15: Fuel, Lubricants, etc.

A16: Veterinary Services

A17: Feeds and Concentrates

Table A1 *

|Pedigree Seed |

|Overall Potential Impact: LOW – MODERATE |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Positive impact through increased | | | | |

|yields and improved farm economy. | | | | |

|Risk of introduction of genetically | |Genetic drift into other areas where |Policies and legislation to prevent |GoM has a policy of banning GMOs |

|modified organisms which may be | |GMOs are not wanted; |importation of GMO plant seeds |however there is little control on |

|socially unacceptable | |Development of pesticide resistant | |their entry into the country. |

| | |weeds | | |

|Water and soil pollution |Increased use of high levels of |Soil and water contamination leading to|. determination and application of |In general terms, high yielding |

| |chemical fertilizers and pesticides in |modified aquatic ecosystems. |optimum quantities and scheduling for |varieties (HYV) require large inputs |

| |order to attain expected high yields. | |fertilizers and other inputs; |to achieve expected results – plant |

| | | |introduction of an integrated pest |species and varieties would have to |

| | | |management program (IPM); |be examined on a case by case basis; |

| | | |Adoption of more least cost farming |close liaison with MoA required. |

| | | |techniques (organic farming). |However, some varieties introduced |

| | | | |through Project assistance may show |

| | | | |improved response to fertilizers and |

| | | | |resistance to disease and pests which|

| | | | |would result in fewer chemical inputs|

| | | | |required. |

| | | | |Organic farming techniques are |

| | | | |currently practiced in other areas of|

| | | | |the FSU. |

Probable Residual Impact Assuming Full Mitigation: LOW

Table A2 *

|Fertilizer |

|Overall Potential Impact: MODERATE TO HIGH (cumulative impact) |

|Direct Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Reduction in soil organic content |Reliance on chemical fertilizers which |Modified soil structure and reduction |Fertilizer application in conjunction |Extension workers should work closely|

| |do not have an organic component – less|in soil moisture holding capacity; |with crop rotation practices. |with farmers to develop application |

| |reliance on compost material and manure|increase in soil acidity. In the long |Further reduce chemical fertilizer use |rates and best land husbandry and |

| |for meeting soil fertility |run, possible loss of productivity as a|through incorporation of various least |crop rotation plans. |

| |requirements. |result of insufficient soil moisture; |cost farming practices (organic |‘Nature’ [22] stated a study that |

| | |loss of soil’s natural fertility. |farming). |found that 17% of world farmland has |

| | | | |been degraded since 1945 due to Green|

| | | | |Revolution farming. |

|Air pollution |Emission of greenhouse gases from |Contribution to global warming |Optimum fertilizer quantities and | |

| |chemical fertilizers. |resulting in climate change. |application schedules should be planned| |

| | | |and implemented. | |

|Water pollution |Nutrient enrichment of water bodies |Eutrophication of water bodies; |Optimum fertilizer quantities and |Work closely with extension workers |

| |from fertilizer runoff. |modified aquatic ecosystems. |application schedules should be planned|to develop best land and crop |

| | |Contaminated potable water sources. |and implemented. |management plans. |

| | | |Least cost farming (organic farming) |Impact as a result of use on a single|

| | | |techniques should be introduced. |farm will not be significant but |

| | | | |cumulatively |

| | | | |over many farms within the same |

| | | | |watershed the impact could be very |

| | | | |significant. |

Probable Residual Impact Assuming Full Mitigation: LOW - MODERATE

Table A3 *

|Pesticides |

|Significance of Overall Potential Impact: HIGH (cumulative impact) |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Illness |Improper handling, application and |Increased health costs; lost work |Training in the proper handling and |MoA should develop application |

| |storage of pesticides. |time; lost family income. |use of pesticides; proper storage of |certification programs. |

| |Consumption of crops with high levels | |pesticides. |Public education is required and this |

| |of pesticide residues. | |. introduce an IPM (integrated pest |could be done through ACSA extension |

| | | |management program) |services and the NGO community. |

| | | |Use only UN approved pesticides. |It is unknown of the GoM currently |

| | | |Health warnings to wash foods. |has an IPM policy. |

|Soil contamination |Residual pesticides in soil. |Loss of soil productivity; long term |Use of appropriate pesticides that do |ACSA extension officers should promote|

| | |loss / altered soil micro-fauna |not have residuals or in which |IPM. |

| | |important to soil / plant |residuals do no harm to soil. | |

| | |relationships. |Adopt an IPM program. | |

|Loss of biodiversity |Pesticide ingestion by fauna. |Loss of fauna |Use UN approved pesticides and |Read / remember ‘Silent Spring’ by |

| | | |recommended application levels and |Rachel Carson. Between 1982 and 2000 |

| | | |timing. |PEI province of Canada experienced |

| | | |Adopt an IPM program. |632% increase in pesticide use for |

| | | | |potato production, resulting in 26 |

| | | | |separate fish kills since 1994. In |

| | | | |2002 in a two week period 12,000 dead |

| | | | |fish (from pesticide kill) washed up |

| | | | |on shorelines.[23] |

|Water pollution |Ground and surface water |Impaired health of local and |Use of least harmful pesticides as |International waters could be |

| |contamination. |downstream water consumers; increased |approved by UN agencies. |affected. |

| | |health costs; lost work time; lost |Apply IPM techniques. |Pesticide use not likely significant |

| | |family income. | |on a single farm but cumulatively on |

| | |Aquatic ecosystems damaged; | |many farms within the same watershed, |

| | |biodiversity losses. | |impact could be very significant. |

Probable Residual Impact Assuming Full Mitigation: MODERATE

Table A4

|Pedigree livestock |

|Significance of Overall Potential Impact: NONE |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Positive input | |Leading to better quality and | | |

| | |increased production of meat, and wool| | |

| | |and dairy products; increased farm | | |

| | |incomes. | | |

|None |None |None |None | |

Probable Residual Impact Assuming Full Mitigation: N/A

Table A5

|Livestock for finishing or dairy |

|Significance of Overall Potential Impacts: MODERATE TO HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Loss of ground cover and soil erosion.|Carrying capacity of pasture is |Reduced productivity; loss of soil; |Develop pasture carrying capacities and|Work closely with agricultural |

| |exceeded. |sedimentation: hydrological regime |pasture management program; ensure that|extension services to determine and |

| | |modified resulting in flooding and |these are not exceeded. |maintain pasture carrying capacities. |

| | |drought conditions; desertification | | |

|Loss of biodiversity |In high altitude areas stock may |Possible loss of species endemic to |Ensure that grazing does not occur in |Work closely with agricultural |

| |threaten forested or other protected |Armenia. |protected or other areas of important |extension services. |

| |areas; reduced vegetation cover |Sedimentation; hydrological regime |biodiversity. |Livestock should be reintroduced to |

| |leading to soil erosion and loss of |modified resulting in flooding and | |remote mountain areas where grazing |

| |water holding capacity. |drought conditions. | |formerly occured (but under strict |

| | | | |control) in order to eliminate weed |

| | | | |population and as a way of |

| | | | |rehabilitating original plant |

| | | | |communities and ultimately of |

| | | | |protecting biodiversity. |

|Water pollution |Livestock in a confined area produce |High nutrient loading in runoff waters|Introduce effective waste management; |Cases of manure leading into |

| |high concentration of manure. |leading to poor water quality and |design and implement alternative to |groundwater with virulent strains of |

| | |threat to human health (E. coli). |confined quarters. |E.coli have lead to human deaths (e.g.|

| | | | |Walkerton, Canada, 2000) |

Probable Residual Impact Assuming Full Mitigation: NONE

Table A6

|Tractors |

|Significance of Overall Potential Impact: MODERATE TO HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Soil and water pollution |Contamination from machine fuels and |Loss of soil productivity; loss of |Good practices to be carried out by |This is a minor impact and awareness |

| |lubricants. |crop production. |equipment operators. |to operators to refuel under safe |

| | |Loss of potable water. |Agricultural machinery should be kept |conditions is all that would be |

| | | |in good repair and fuels and lubricants|required. Agriculture extension |

| | | |stored and handled in appropriately |service can educate farmers, as well |

| | | |designed areas. |as loan officers. |

|Air pollution |CO2 releases from machinery. |Contribution to greenhouse gasses and |Ensure all fossil fuel engines are | |

| | |global warming. |efficient and well maintained. | |

|Soil erosion |Tilling land against the contour |Rapid runoff of water; no percolation;|Till on the contour. |Extension service to advise farmers of|

| |because easier on steep slopes. |soil carried with runoff into water | |proper tilling techniques with |

| | |bodies. | |tractors. |

|Soil compaction |Heavy machinery. |Erosion and sedimentation; loss of |Ensure equipment of a size that |Large farms require large machinery |

| | |water. |suitable for soil conditions. |appropriate for the magnitude of the |

| | | | |job. |

Probable Residual Impact Assuming Full Mitigation: LOW

TableA7

|Other farm implements |

|Potential Overall Impact: LOW – MODERATE |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Same as in Table C9 |

Probable Residual Impact Assuming Full Mitigation: LOW – MODERATE

Table A8

|Small equipment |

|Potential Overall Impact: NONE |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

| |

|NOT APPLICABLE |

Residual Impact Assuming Full Mitigation: NONE

Risk: NONE

Table A9

|Irrigation equipment and On-farm-irrigation |

|Potential Overall Impact: HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Water losses |Extraction of groundwater; extraction |Loss of water to other current and |Water sharing plan to ensure equitable |Water sharing plan will be challenging|

| |of surface water |potential users; modification of |distribution; No extraction from |to prepare and implement. Most of |

| | |aquatic habitat. |important aquatic habitats; Prevent use|mitigation requiring collective |

| | | |of groundwater sources (prohibited by |decision of farmers on the same |

| | | |law); Application of water saving |irrigation scheme. That is why WUA may|

| | | |irrigation techniques; Use of soil |be important to simplify efforts of |

| | | |moisture measurement devises; Careful |individual farmers. |

| | | |planning of irrigation season and water| |

| | | |application norms; Avoid over-pumping | |

| | | |from the head pumping stations, etc. | |

| | | |Careful . design of on-farm | |

| | | |irrigation systems; implementation of | |

| | | |irrigation scheduling; | |

|Loss of soil productivity |Salinization and waterlogging. |Desertification, loss of productive |Appropriate drainage system installed |Again it is related to the selection |

| | |land. |and operational activities designed to |of modern and efficient irrigation |

| | | |eliminate causes of impacts. |machinery and devises, monitoring of |

| | | |Design of appropriate on-farm |weather and soil characteristics, |

| | | |irrigation systems; implementation of |planning of irrigation demand |

| | | |irrigation scheduling | |

|Accidental (un-productive) water |Improper operation of the whole |Land degradation (triggering of |Establish water losses control plan; |WUA is advantage to commonly mitigate |

|losses |irrigation scheme (from head pumping |landscapes, ravines and top-soil |Negotiation with pumps operators and |impacts |

| |station to the end-use irrigation |erosion), water and energy loss |establishing of adequate communications| |

| |technique) | |in case of emergency; Routine | |

| | | |inspection of network, hydrants and | |

| | | |irrigation equipment; Permanent control| |

| | | |of water meters | |

|Soil compaction |Big irrigation drops, moving of |Loss of soil productivity, accelerated|Only environmentally friendly | |

| |heavily machines and irrigation |run-off, poor water permeability of |irrigation equipment should be | |

| |equipment |the soil profile |eligible. Implementation of irrigation | |

| | | |schedule | |

|Soil and water pollution |Use of increase amount of fertilizers |See table A3 |Training and advisory | |

| |and pesticides | | | |

| | | | | |

Probable Residual Impact Assuming Full Mitigation: LOW - MODERATE

Table A10

|Vehicles |

|Potential Overall Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Air pollution |CO2 emissions |Contribution to global warming. |Efficient engines and conservation of |Not likely that efficient engines will|

| | | |use. |be used and conservation will not be a|

| | | | |priority. |

Probable Residual Impact Assuming Full Mitigation: LOW

Table A11

|Farm buildings for stock and machinery |

|Potential Overall Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

| Loss of productive land. |Improper location of buildings. |Reduced income from lower crop |Location of buildings on sites with low|This is not likely to be a major |

| | |production. |productivity; efficient design to |consideration. |

| | | |minimize space required. | |

Residual Impact Assuming Full Mitigation: LOW

Risk: LOW

Table A12

|Storage facilities (fuel, chemicals, grain and other produce) |

|Potential Overall Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Loss of productive land. |Improper location of buildings. |Reduced income from lower crop |Location of buildings on sites with low|This is not likely to be a major |

| | |production. |productivity; efficient design to |consideration. |

| | | |minimize space required. | |

|Water pollution. |Leakage of fuel and chemicals into |Pollution of ground and surface water |Construction to include impermeable | |

| |surface and groundwater. |leading to contaminated drinking water|flooring and bunds to prevent runoff. | |

| | |and irrigation water as well as | | |

| | |affecting aquatic ecosystems. | | |

Probable Residual Impact Assuming Full Mitigation: LOW

Table A13

|Primary processing |

|Significance of Overall Potential Impacts: MODERATE – HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

| |

|See Tables for agro-processing, particularly abattoir and dairy processing (Annex B) |

Probable Residual Impact Assuming Full Mitigation: NONE

Table A14

|Fencing materials |

|Significance of Overall Potential Impacts: MODERATE TO HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Social disruption |Exclusion of certain people or groups |Prolonged legal procedures and ill |Consultation with affected groups or |This is not likely to be a problem. |

| |from land to which they have had |feelings within community. |people; |Public participation exercise should |

| |traditional access either for use or | |Where required, establishment of easement|identify any potential problems. |

| |for passage. | |conditions. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table A15 *

|Fuel, lubricants, etc. |

|Significance of Overall Potential Impacts: HIGH |

|Potential Impacts |Causes | Consequences |Mitigation Required |Remarks |

|Soil contamination |Improper storage and handling of fuels|Loss of soil productivity. Lost |Proper storage and handling of fuel; | |

| |and lubricants; improper disposal of |revenue. |containment of fuel containers within | |

| |waste lubricants. | |concrete bonded area; proper disposal of | |

| | | |waste lubricants. | |

|Water pollution |Improper disposal of used lubricants |Loss of domestic and irrigation water|Proper storage and handling of fuel; | |

| |and improper handling of fuels and |supplies; illness to humans and |containment of fuel containers within | |

| |lubricants find their way into surface|livestock; lost revenue; altered and |concrete bonded area; proper disposal of | |

| |and ground water sources. |damaged aquatic ecosystems. |wastes lubricants. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table A16 *

|Veterinary services |

|Significance of Overall Potential Impacts: MODERATE |

|Potential Impacts |Causes |Potential Consequences |Mitigation Required |Remarks |

|Possible human illness |Ingestion of meat products containing |Lost work and income. |Organic methods of livestock husbandry |Only approved drugs and hormones |

| |hormones and other chemicals. | |could be used; minimal application of |should be used but even these could |

| | | |only necessary drugs. |have some long term, and yet unknown, |

| | | | |effects on humans. |

| | | | |EU has a ban on Canadian beef due to |

| | | | |the use of growth hormones but no |

| | | | |evidence of adverse effects on humans.|

|Soil and water contamination. |Insecticides used in dip tanks. |Contaminated soil and water not |Proper containment and disposal of dip | |

| | |useable for cultivation Potable water|tank liquids to avoid soil and water | |

| | |or water for irrigation is |contamination. | |

| | |contaminated; | | |

| | |Downstream aquatic ecosystems | | |

| | |affected. | | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table A17 *

|Feed and Concentrates |

|Significance of Overall Potential Impacts: LOW |

|Potential Impacts |Causes |Potential Consequences |Mitigation Required |Remarks |

|Animal health |Contaminated feed |Human illness |Ensure that ingredients of all feeds and |Feeds with animal remains have led to |

| | | |concentrates are known and that they do |or Spongiform encephalopathy (BSE) or |

| | | |not contain animal spinal cord wastes or |mad cow disease which has been |

| | | |related wastes. |connected to the fatal |

| | | | |Creutzfeldt-Jakob disease (CJD) in |

| | | | |humans. |

Probable Residual Impact Assuming Full Mitigation: None

Annex B

Impacts, Causes, Consequences and Mitigation

Non-Agricultural Rural Activities

B1: Planning and Construction of All New Enterprises etc.

B2: Agroprocessing

B3: Services and Other Agribusiness

B4: Extraction Industry – Non-renewable

B5: Extraction Industry - Renewable

B6: Manufacturing

B7: Construction

B8: Trade

B9: Hotels and Restaurants

B10: Transport

Table B1

|For Planning and Construction of all New Enterprises, Rehabilitation of Existing Enterprises and De-commissioning of all Enterprises |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Planning Phase: |

|Loss of biodiversity |Poor location analysis not taking into |Loss of flora and fauna. |Location in areas that are not high | |

| |account important biophysical values. | |priority for biodiversity protection. | |

|Loss of cultural features |Poor location analysis not providing |Loss of important cultural sites and |Location in areas of little or no |Public participation is a requirement|

| |consideration to cultural values. |structures. |cultural significance. |for all EIAs and if properly |

| | | | |conducted during EIA will ensure |

| | | | |input required to select appropriate |

| | | | |alternative sites. |

|Socially unacceptable |Poor location analysis not taking into |Nuisance factor to local communities; |Location in areas where noise, odor or |Public participation is a requirement|

| |consideration local communities’ |loss of peace and quiet; loss of access|aesthetics will not be a problem; |for all EIAs and if properly |

| |lifestyle, movement patterns and |to other areas or sites (e.g. school |location to be selected which doesn’t |conducted during EIA will ensure |

| |values. |children may have to walk greater |interfere with important access (e.g. |input required to select appropriate |

| | |distances due to loss of direct route |to schools). |alternative sites (and modus |

| | |to school. | |operandi) for enterprise. |

|Construction Phase : |

|Soil erosion |Vegetation and topsoil is removed for |Further soil erosion off-site and |Ensure awareness by workers; adopt |If possible construction should occur|

| |initial construction and access, |downstream; increased sediment loads in|appropriate soil protection techniques;|in dry periods or seasons, |

| |exposing bare soil that is vulnerable |receiving streams resulting in aquatic |ensure exposed soil surfaces are kept |particularly in situations where soil|

| |to erosion, particularly in rainy |habitat changes. |to a minimum and for short periods of |erosion could be a problem. |

| |periods. | |time; conserve topsoil, recover and | |

| | | |replant when construction is completed.| |

|Soil contamination |Spilled and dumped fuels, and other |Loss of soil productivity. Contaminated|Environmental awareness; training in | |

| |chemicals. |groundwater. |handling and storage of fuels, | |

| |Ineffective on-site sewage treatment | |lubricants and chemicals; provision of | |

| |during construction phase. | |proper on-site storage facilities. | |

|Water pollution |Spilled and dumped fuels and other |Contaminated groundwater and surface |Same as above. | |

| |chemicals. |water resulting in contaminated |Provision of waste containing toilets | |

| | |drinking water and in the case of |which waste can be transferred to a | |

| | |surface water, damaged aquatic |municipal treatment facility. | |

| | |ecosystem. | | |

|Noise and dust |Vehicles and construction machinery; |Nuisance factor to neighboring |Operations during normal working hours | |

| |dirt access roads. |communities. |only; access roads to be watered during| |

| | | |dry periods. | |

|Solid waste |Littering of unused construction |Unsightly and remnant construction |Effective disposal of materials and | |

| |materials and workers personal garbage.|materials could pose a safety hazard. |garbage in designated waste disposal | |

| | | |sites. | |

|Loss of access |Construction site may have formerly |Nuisance and possibly economic |During planning phase ensure that local|Public participation during planning |

| |been used as an access for local |hardship. |people are aware of restrictions during|phase should identify this and |

| |population (and vehicles) for various | |construction and alternative |similar conflicts. |

| |sections of the community. | |arrangements for access are provided. | |

|Injuries |Inadequate safety procedures for |Injury / death resulting in lost work |Ensure construction workers are given | |

| |workers; inadequate signage and |days (for construction workers and |safety instruction; ensure safety | |

| |construction activities exposed where |general public; lost income. |officers on site; ensure effective | |

| |public can interface with such. | |signage for the public and ensure that | |

| | | |all exposed construction areas are | |

| | | |barricaded from public access. | |

|Decommissioning Phase: (it is unlikely that any of the enterprises will undergo decommissioning in a 25-50 period from initial start up or refurbishment but if such should occur then the listed |

|impacts should be considered). |

|Same as above for construction plus: |See above |See above |See above | |

|Waste |Concrete, blocks, steel, glass will |Public safety hazard. |Removal and recycling or effective | |

| |result from demolition; old equipment |Waste of resources. |disposal of all toxic materials; | |

| |will be dismantled. | |complete demolition after recycling | |

| | | |useful materials; removal to a | |

| | | |designated and environmentally safe | |

| | | |disposal site and burial of clean and | |

| | | |inert materials. | |

|Aesthetics | |Unsightly site (as are many industrial |Following removal of all materials (see| |

| | |sites from former Soviet times). |above), site to be formed (topsoiled | |

| | | |where relevant and feasible) and | |

| | | |landscaped, where appropriate, to suit | |

| | | |surrounding areas. | |

|Soil erosion |As for construction phase above. | | | |

|Safety |As for construction phase above. | | | |

Table B2

|Agro-processing: This sector will include processing of foodstuffs and could include canning, meat processing including abattoirs, oil seed processing, milling, bakeries and other processes. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Contaminated surface and ground water |Aquatic ecosystem losses; biodiversity|Ill health leading to societal costs; |Appropriate waste water treatment to |Some water contamination, for |

|from effluents |losses; economic losses to fisher |lost work days |meet national standards; adoption of |manufactures with effluents, will occur |

| |folk; contaminated domestic water | |holding facilities and recycling; | |

| |supplies | |alternative processes. | |

|. injury and illness as a result of | |. injuries and illness; lost work |. provision of appropriate safety |This may come under any regulations |

|poor working conditions | |time; lost family incomes |features and protective clothing; |relating to occupational safety. |

| | | |training on the use of equipment; | |

| | | |awareness of dangers. | |

See specific agro processing activities in Annex D.

Table B3

|Agribusiness and other Services: This would include banking, machinery repair and sales, seed, feed and chemical sales, leasing of farm machinery, purchasing agents for produce, etc. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Water pollution |Modified aquatic habitats and loss of |Costly cleanup; ill health |Ensure that repair services have |None |

| |downstream water resources to other | |proper methods of oil, fuel oil and | |

| |users. | |other vehicle fluids, disposal. | |

Table B4

|Non-Renewable Resource Extraction Industry: Sand and aggregate quarrying for road building that will directly benefit agriculture and agriculture related industries. Materials also to be used for|

|construction as it relates to agriculture and agriculture related activities. All stages are considered including planning, site, operation and decommissioning. The major concerns with the |

|extraction industry include: i) loss of biophysical and cultural features; ii) water quality losses; iii) water extraction; iv) noise, dust and vibration from operations; and, v) aesthetics. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected|

|Loss of important biophysical features or |Loss of educational and scientific |Loss of natural heritage, biodiversity and |Careful siting of quarry; no |No impacts if quarry not |

|archaeological sites |values |cultural heritage |quarry allowed. Mitigation will|allowed; where quarry materials|

| | | |be difficult since quarries |are scarce and no alternative |

| | | |must be sited where suitable |available, residual impacts |

| | | |materials are found. |could be high |

|Loss of agricultural land | |Food production losses; |Ensure that important |Profitable quarrying |

| | |Loss of jobs and income |agricultural lands are |opportunities will not likely |

| | | |protected from quarry siting; |be halted by agricultural |

| | | |Ensure comprehensive |activities. Food production |

| | | |compensation for farmers. |losses will likely occur but |

| | | | |they will be relatively minor. |

| | | | |Full compensation probably |

| | | | |would not be achieved. |

|Water quality |During quarrying fine material runoff |Modification / loss of aquatic habitat with |Containment of quarry materials|Some containment may be |

| |into surface water |negative effect fish populations and species |and waste and effective |possible but there will remain |

| | |mix; loss of potable water to downstream |disposal of same. |some fine material gravitating |

| | |users. | |into surface waters. |

|Water quantity |Depending upon quarry material and |Water losses could be detrimental to source |Incorporation of a closed |With a proper system, water |

| |purpose of materials but large |water body ecosystem; returned water results |system to ensure water is |losses could be minimal (after |

| |quantities of water may be required for|in poor water quality (see above) |re-used. Sediment loads |extracting initial amount of |

| |washing material (e.g. for producing | |disposed of effectively (e.g. |water to be used in closed |

| |washed stone) | |land fill) |system). |

|Safety threat | |Injury or death |Quarries must be fenced and |Without full mitigation, site |

| | | |warnings to the public posted; |after decommissioning could |

| | | |decommissioning when abandoned |pose a threat to the safety of |

| | | |quarries present a hazard as a |people and livestock. |

| | | |result of steep quarry wall | |

| | | |cuts and unstable materials. | |

| | | |Full mitigation likely to be | |

| | | |difficult to achieve. | |

|Noise, dust and vibrations threatens public |Lost work days |Lost income |Timing of operations, dust |Can not eliminate essential |

|health | | |control. |components of the operation. |

| | | | |Some residual impact but |

| | | | |hopefully only to the nuisance |

| | | | |level and not threatening to |

| | | | |public health. |

|Aesthetics |Loss of visitors to area, particularly |Loss of local employment, reduction in |Screening during operations and|There will always be evidence |

| |if area is one with tourist |socioeconomic conditions. |landscaping site upon |of a former quarrying |

| |attractions. | |decommissioning. Mitigation |operation. |

| | | |will not be easy to achieve due| |

| | | |to high costs of landscaping. | |

Table B5

|Renewable Resource Extraction Industry: World Bank will not support renewable resource extraction activities that are not managed on a sustainable basis. Major environmental concerns, in the case|

|of forestry not managed on a sustainable basis, would include loss of biodiversity, erosion, loss of forest cover and habitat, and loss of jobs. In cases of large tracts of forest, climate |

|modification could be of concern. Major concerns for fishery activities include biodiversity loss, alteration of population dynamics, and alteration of aquatic ecology. Only in a very special |

|circumstance should support be given to the extraction of forest resources. The project should actively support the establishment of tree cover for agricultural purposes such as wind breaks, soil|

|and water protection and as a source of future construction materials. (This analysis is included in the EIA in the event that loan applications for forest harvesting equipment or sawmilling |

|equipment are requested. The only reason for such equipment would be for the extraction and milling of primary forest products. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected|

|Forestry: | |Loss of species and their habitats; reduced|Protection of important |Under effective management that|

|Biodiversity loss | |tourism |habitats; sustainable |considers value of all forest |

| | | |management; selection of areas |resources, commercial and |

| | | |and sites with little or no |otherwise, residual impact will|

| | | |tourism or tourism potential; |be minimal or none. |

| | | |Establishment of new forest | |

| | | |areas. | |

|Increased erosion during construction of |Construction of forest roads generally |Erosion, deforestation |Effective planning and control |None |

|forest roads |leads to greater risk of illegal | |of resource extraction. | |

| |logging | | | |

|Loss of forest cover |Loss of industry jobs; | Loss of productive land; |Sustainable management; |Sustainable forest management |

| |Soil erosion; increased threat of |Water course sedimentation; |Selective harvesting, |would result in no residual |

| |mudflows and landslides in mountain |Flooding; |particularly on steep slopes; |impact. |

| |areas. |Property damage and threat to life |establishment of new forest | |

| | | |areas. Mitigation is moderately| |

| | | |easy with committed management.| |

|Loss of wildlife habitat | |Reduced tourism |Sustainable management |Minor temporary losses only. |

| | | |including wildlife management. | |

|Fishery: | |Loss of species and their habitats |Sustainable management. |None |

|Biodiversity loss | | | | |

|Population dynamics altered |Size limits through net mesh size |Possible loss of production; |Sustainable management. |Small residual impact |

| |restrictions will lead to an imbalance |Altering of aquatic ecosystem | | |

| |in overall population structure, the | | | |

| |full consequences of which are unknown.| | | |

|Aquatic ecology altered | |Undesirable species may dominate; |Sustainable management. |None. |

| | |Loss of desired production in terms of | | |

| | |quantity and quality | | |

|Loss of species |Job losses; reduction in rural economy |Biodiversity loss; more unfavourable species |Sustainable management. |No residual impact |

| | |may fill available niche | | |

Table B6

|Manufacturing: The major environmental effects of the manufacturing sector will be related to effluents and emissions. As well, location of manufacturing activities, and indirectly the pressure |

|that they may place on natural resources will also be of concern. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Contaminated surface and ground water |Aquatic ecosystem losses; biodiversity|Ill health leading to societal costs; |Appropriate waste water treatment to |Some water contamination for |

|from effluents |losses; economic losses to fisherfolk;|lost work days |meet national standards; adoption of |manufactures with effluents, will |

| |contaminated domestic water supplies | |holding facilities and recycling; |occur |

| | | |alternative processes. Mitigation easy| |

| | | |if regulations enforced. | |

|Air pollution through air emissions |Vegetation damage |Ill health leading to societal costs; |Appropriate technology to meet stack |Ambient air quality deteriorates |

| | |lost work days. |emission standards. |(cumulative effect) |

|Loss of productive land and land for |Vegetation damage; |Food production losses; |Ensure that waste disposal occurs in |None |

|other uses through solid waste |Biodiversity losses; |Health costs and loss of potable water|environmentally safe and designated | |

|disposal |Water contamination (ground and |supply |areas; | |

| |surface) | |Recycling. | |

|Biodiversity and other biophysical | | |Siting of plant on environmental |None |

|losses as a result of location | | |grounds. | |

Table B7

|Construction: This section would include any construction activity in the rural areas. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Refer to Table B1. | | | | |

Table B8

|Trade. There are basically no impacts after eliminating areas of trade such as those that deal with tobacco, alcohol, and firearms, from loan eligibility. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

| |

|N/A |

Table B9

|Hotels and Restaurants: |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Water pollution from wastes |Modified aquatic ecosystems and loss |Illness and loss of biodiversity |Ensure effective waste management and |None |

| |of water quality to downstream users. | |disposal | |

Table B10

|Transport: This sector includes road, air, water transport and pipeline transfer (railways are excluded). Major impacts to be considered relate to, maintenance of vehicles, air, water and soil |

|pollution. |

|Potential Direct Impacts |Potential Indirect Impacts |Consequences |Mitigation Required |Residual Impacts to be Expected |

|Improper disposal of used |Polluted water (ground and |Increased costs for domestic and |Appropriate handling and storage of |None |

|lubricants, and the improper |surface) not available for |agricultural waters |used oils and lubricants – recycling | |

|handling of fuels, as well as |domestic or agricultural use; | |where possible; | |

|traffic accidents, can result in |Damaged aquatic ecosystems | | | |

|water and soil contamination | | | | |

|Increased consumption of fossil | |Contribution to greenhouse gases;|Fuel efficient engines |Economics dictates the type of vehicle and fuel used;|

|fuels increase air pollution | |global warming contribution | |residual impact will be the same |

Annex C

Impacts, Causes, Consequences and Mitigation

of Some Specific Rural Enterprises

that Relate to Agriculture

C1: Abattoir

C2: Meat Packing

C3: Vegetable Processing and Canning

C4: Tanning (Leather Production)

C5: Aquaculture

C6: Dairy Processing

C7: Oil Processing

C7: Flour Milling

C8: Storage (warehousing)

C9: Markets

Table C1

|Abattoir (Meat processing) |

|Overall Potential Impact: HIGH (due to human health threat) |

|Potential Impacts |Cause |Consequences |Mitigation Required |Remarks |

|Contaminated meat |Poor sanitary conditions including lack|Consumers become ill; lost work days; |Provision of protective clothing; |Government inspections can be erratic|

| |of protective clothing and ineffective |lost productivity and income; |effective use of disinfectants; |and perhaps not always effectively |

| |maintenance; processing of sick and |abattoir’s reputation leads to lost |effective sanitary inspections leading |conducted. There are cases of people |

| |diseased animals. |business. |to required standards being met; |becoming ill. This is mainly related |

| | | |effective regulatory animal and meat |to small farm slaughter. |

| | | |inspection. | |

|Contaminated groundwater and surface |Improper disposal of animal manure and |Contaminated drinking (E. coli) water |Ground waste bone, meat and offal into |Current ban on using such flour as |

|water |offal as well as bones and other |resulting in illness (possibly death), |flour for animal feed (see remarks); |animal feed in other countries due to|

| |non-useable animal parts including |lost productivity and income. |blood can be used for blood sausage; |threat of bovine spongiform |

| |blood. | |other water and blood waste must be |encephalopathy (BSE-mad cow disease) |

| | | |collected and treated before proper |which can result in deadly |

| | | |disposal into municipal waste treatment|Creuztfeldt-Jakob (CJD) disease in |

| | | |systems; manure should be recycled or |humans for those consuming meat of |

| | | |allowed to mature in an impervious |infected animals. |

| | | |containment – mature manure can be | |

| | | |applied as fertilizer for crop | |

| | | |production or on pastures. | |

|Odour |Manure; refrigerants (NH3); animals and|Nuisance to nearby residents. |Avoid escaping NH3; maintain good | |

| |carcasses. | |sanitary conditions; dispose of manure | |

| | | |in a timely fashion. | |

|Ozone depletion |Refrigeration and freezing units |Increase in UV rays resulting in skin |Convert refrigerants from ozone |GoM is signatory to the Vienna |

| |utilizing Freon or ammonia. |cancer if proper protection is not |depleting substances (NH3 and |Convention and the Montreal Protocol |

| | |taken; can also affect plant health. |chlorofluorocarbons) to a |re: ozone-depleting substances. |

| | | |hydrofluorocarbon. | |

|Groundwater depletion |Large volumes of water used in washing.|Lowering of water table and depletion |Water apportioning; efficient use of |Of particular concern when planning a|

| | |of water resources required by others. |water including recycling. |new abattoir that water resources are|

| | | | |sufficient to meet needs of present |

| | | | |and future users. |

|Injuries |Knives and saws used in the processing;|Lost productivity, work days and |Safety instructions; safety clothing | |

| |large and heavy animal carcasses can |income. |where appropriate (e.g. hard hats). | |

| |fall and cause injury. | | | |

Probable Residual Impact Assuming Full Mitigation: LOW

Table C2

|Meat Packing (This activity is often combined with the abattoir) |

|Overall Potential Impact: HIGH (due to threat to human health threat) |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Contaminated meat |Poor sanitary conditions including lack|Consumers become ill; lost work days; |Provision of protective clothing; |Government inspections can be erratic|

| |of protective clothing and ineffective |lost productivity and income; |effective use of disinfectants; |and perhaps not always effectively |

| |maintenance; processing of contaminated|Meat packing enterprise loses |effective sanitary inspections leading |conducted. |

| |meat from abattoir. |reputation resulting in lost sales, |to required standards being met; | |

| | |lost revenue and loss of job. |effective regulatory animal and meat | |

| | | |inspection; assurance that carcasses | |

| | | |and meat joints delivered are free of | |

| | | |contamination and have been | |

| | | |refrigerated adequately. | |

|Contaminated groundwater and surface |Improper disposal of bones and fat. |Illness |Ground waste bone and fat into flour |Current ban on using such flour as |

|water | | |for animal feed (see remarks). |animal feed in other countries and |

| | | | |other places due to threat of |

| | | | |spongiform encephalopathy (BSE-mad |

| | | | |cow disease) which can result in |

| | | | |deadly Creutzfeldt-Jakob (CJD) |

| | | | |disease in humans for those consuming|

| | | | |meat of infected animals. |

|Disease |Improper disposal of wastes into |Lost workdays and income. |Appropriate disposal of waste. | |

| |municipal disposal sites providing | | | |

| |ideal habitat for vermin. | | | |

|Illness |Canning uses lead solder for can seams.|Lead (Pb), a carcinogen, is cumulative |Use tin (Sn) for soldering or adopt | |

| | |in humans. |other appropriate sealing methods. | |

|Solid waste |Canning material scrap. |Wasted resource. |Recycle back to processor. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table C3

|Vegetable Processing and Canning |

|Overall Potential Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Damage to aquatic ecosystems. |Residue from vegetable and fruits |High organic content leading to oxygen |Compost vegetative waste. | |

| |allowed to be dumped into surface |depletion and habitat destruction. | | |

| |waters. | | | |

|Illness |Canning uses lead solder for can seams.|Lead (Pb), a carcinogen, is cumulative |Use tin (Sn) for soldering or adopt | |

| | |in humans. |other appropriate sealing methods. | |

|Solid waste |Canning material scrap. |Wasted resource. |Recycle metal back to metal processor. | |

|Injuries |Open machinery. |Lost productivity, work days and |Safety instructions; safety clothing | |

| | |income. |where appropriate (e.g. hard hats); | |

| | | |protective guards on all machinery. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table C4

|Tanning |

|Overall Potential Impact: HIGH (primarily due to toxic chemicals in effluent discharge) |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Modification of aquatic habitats |A variety of chemicals is used in the |Receiving water bodies become highly |Containment and treatment facilities to|Christian[24] suggests separating |

| |tanning industry including Cr, NH4, Ti,|polluted and toxic, rendering them |ensure that effluent discharges are |effluents into four wastewater |

| |Na2SiF6, Na2S, CaO, Na3OH4, Na2SO4, |unfit for other uses and destroying |within the regulated limits. |streams: low polluted, high polluted,|

| |(CH2)6N4, AlNH4(SO)2. These chemicals |existing fauna and flora; loss of |Chemicals should be stored and handled |chromium bearing and sulphide bearing|

| |can be found in waste effluent or they |biodiversity. |in such a manner as to prevent |wastewaters. Solid wastes[25]might be|

| |can reach the effluent discharge as a |Organic wastes can deplete oxygen |spillage. |separated into three fractions: spent|

| |result of spillage. As well there is |levels surface waters, resulting in | |salt, non-chromium containing solids,|

| |waste including leather and hair from |damaged habitat and aquatic | |and chromium solid wastes. Aerobic |

| |the hides that can find its way into |communities. | |biological treatment (composting) is |

| |the aquatic habitat. | | |suggested as proper technology for |

| | | | |the non-chromium containing solid |

| | | | |waste since this can represent up to |

| | | | |80% of all of the solid waste |

| | | | |generated at a tannery[26]. |

|High energy consumption |Aging high production tanneries use |Depending on source of energy, could |For new tanneries building design and | |

| |large amount of energy, particularly in|contribute to greenhouse effect (if |construction should be compact and | |

| |winter. |fossil fuel derived) or if hydro |energy efficient. | |

| | |derived, could result in pushing high | | |

| | |demand on limited supply that would | | |

| | |result in additional energy sources to | | |

| | |be found. | | |

|Injuries |Tanneries use heavy machinery, which, |Lost productivity, work days and |Safety instructions; safety clothing | |

| |if not fitted with protective shields, |income. |where appropriate (e.g. hard hats); | |

| |can cause injury. | |protective guards on all machinery. | |

|Illness |A number of chemicals have to be |Lost productivity, work days and |Effective training in the handling of | |

| |handled in the tanning process. Some of|income. Long term illness. |chemicals; protective clothing (e.g. | |

| |these can be dangerous to the health of| |respirators, gloves of inert material);| |

| |workers if not properly stored and | |proper storage for highly volatile | |

| |handled. | |compounds. | |

|Solid waste and contamination of |Hair and small quantities of skin and |Small quantities of leather do not |Minimize amount of waste; treat hides |See remarks for modification of |

|groundwater and surface water. |leather waste during the tanning |present a problem. Hair of hides often |before removal of hair (or treat hair |aquatic habitats, above. |

| |process. |contains parasites and disease. Unknown|after removal). | |

| | |as to whether or not these could find | | |

| | |their way into groundwater and surface | | |

| | |water and pose a threat to health. | | |

|High water consumption |Large tannery uses large amounts of |Drawdown of water table which could |Ensure proper water apportionment with | |

| |water. |affect other users. |other competing users; efficient water | |

| | | |use and recycling. | |

Probable Residual Impact Assuming Full Mitigation: LOW - MODERATE

Table C5

|Aquaculture |

|Overall Potential Impact: HIGH |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Water contamination |Concentration of fish excrement |Eutrophication; modification of aquatic|Remove wastes and dispose of | |

| |released into water ways. |ecosystem and species mix modified. |effectively, most likely on | |

| | | |agricultural land. | |

|Biodiversity loss |If exotic species (e.g. O. mykiss) are |Loss of economically valuable species |Take measures to ensure containment of |O. mykiss can be a highly predatory |

| |used, breeding pairs could escape and |or loss of important food sources for |exotic species. Not likely that this |fish in the absence of its natural |

| |place pressure on indigenous fish |these species. Biodiversity losses as a|will be 100% effective and O. mykiss is|and preferred food source of insects.|

| |populations. |result of loss of indigenous species |most likely to already be present in | |

| | |and perhaps endemic species. |natural waterways. | |

|Loss of important ocean biodiversity |Feed stocks are often developed from |Ocean by-catch is significant. These |Have knowledge of the source and | |

| |ocean by-catch. |are unwanted species in terms of the |composition of feed and do not the | |

| | |human consumption market and are caught|importation of feed with fish meal | |

| | |by accident during commercial trawling |unless certified that it does not | |

| | |operations. By-catch species have a |contain ocean by-catch or species of | |

| | |significant role to perform in marine |significance. | |

| | |ecosystem dynamics but they are viewed | | |

| | |as nuisance and garbage fish by the | | |

| | |commercial fishery. | | |

|Human health |Contaminated feed. |Illness |Ensure that feed stocks come from known|In Canada feed for farmed Atlantic |

| | | |sources and that their composition |salmon (Salmo salar) has been known |

| | | |meets all human health standards. |to contain farm livestock wastes |

| | | | |which are now banned from use as a |

| | | | |base for livestock and aquaculture |

| | | | |feed. This is due to the linkage of |

| | | | |these wastes with bovine spongiform |

| | | | |encephalopathy (BSE or mad cow |

| | | | |disease) and its possible connection |

| | | | |with Creuzfeldt-Jakob (CJD) disease |

| | | | |that leads to death in humans. |

|Aquatic ecosystem modification |Lake and river systems become dominated|Indigenous aquatic ecosystems are |Ensure that farmed fish do not escape. |Farmed fish have probably already |

| |by exotic species. |modified. |Use only sterile fish stock. |escaped into the natural system. |

Probable Residual Impact Assuming Full Mitigation: LOW

Note: This is one activity where the bounds of the EIA can be expanded world-wide as a result of the use of feed stocks based on by-catch and the effect that this can have on world-wide marine ecosystems.

Table C6

|Dairy Processing |

|Overall Potential Impact: HIGH (primarily due to human health threat) |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Surface water contamination |Effluent discharge containing whey |Waterways become opaque and display |Effective collection and treatment of | |

| |(waste from cheese making); discharge |high protein levels resulting in |whey before discharge; make available | |

| |of acid from milk processing as a |damaged or destroyed aquatic ecosystem.|all whey to farmers for feedstock. | |

| |result of cleaning of equipment. | | | |

|Ozone depletion |Refrigeration and freezing units |Increase in UV rays resulting in skin |Convert refrigerants from ozone | |

| |utilizing Freon or ammonia. |cancer if proper protection is not |depleting substances (NH3 and | |

| | |taken; can also affect plant health. |chlorofluorocarbons) to a | |

| | | |hydrofluorocarbon. | |

|Food contamination |Pasteurization process not effective; |Consumers become ill (could be very |Origin of milk should be known; | |

| |workers in contact with milk and milk |serious as milk could come from cows |pasteurization process must be | |

| |products. |with brucellosis or tuberculosis); |effective; workers must be protected | |

| | |workers could infect milk products |with effective clothing and workers | |

| | |during handling. |should not come in direct contact with | |

| | | |milk products; veterinary diligence to | |

| | | |ensure healthy animals. | |

|Injuries |Open machinery. |Lost productivity, work days and |Safety instructions; safety clothing | |

| | |income. |where appropriate (e.g. hard hats); | |

| | | |protective guards on all machinery. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table C7

|Oil Processing |

|Overall Potential Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Polluted surface water |Biomass waste allowed migrating to |Degraded aquatic ecosystem. |Effective disposal of biomass waste | |

| |surface waters. | |(composting or use as animal feed). | |

|Solid waste |Biomass waste. | |Compost or use as animal feed. | |

|Illness |Cold pressed oil contains high amounts |Serious illness resulting in lost |Use alternative pressing process. | |

| |of fatty acids and pesticide residues. |productivity, work days and income. | | |

|Injuries |Open machinery. |Lost productivity, work days and |Safety instructions; safety clothing | |

| | |income. |where appropriate (e.g. hard hats); | |

| | | |protective guards on all machinery. | |

Probable Residual Impact Assuming Full Mitigation: NONE

NOTE: Moldova is not a large producer of oil seed and it is unlikely that commercial processing of oil seed will be viable.

Table C8

|Flour Milling |

|Overall Potential Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Solid waste |Wheat husks left from milling dumped at|Wasted resources. |Recover bran; use for animal feed. | |

| |municipal disposal site. | | | |

|Injuries |Open machinery. |Lost productivity, work days and |Safety instructions; safety clothing | |

| | |income. |where appropriate (e.g. hard hats); | |

| | | |protective guards on all machinery. | |

|Illness |Flour dust. |Respiratory irritation. |Provide masks to workers. | |

Probable Residual Impact Assuming Full Mitigation: NONE

Table C9

|Storage (warehousing) |

|Overall Potential Impact: LOW |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Only potential impacts during siting, construction and decommissioning phases. (see Table B:1) |

Probable Residual Impact Assuming Full Mitigation: NONE

Table C10

|Markets |

|Overall Potential Impact: MODERATE |

|Potential Impacts |Causes |Consequences |Mitigation Required |Remarks |

|Illness |Vermin (rats). |Spreading of disease resulting in lost |Regular inspection of markets and | |

| | |workdays, sales and income. |extermination of vermin; maintenance of| |

| | | |high sanitary standards. | |

| | |Lost workdays and income. |Refrigeration of meat and dairy | |

| |Unrefrigerated meat and dairy products.| |products. | |

|Ozone depletion |Refrigeration and freezing units |Increase in UV rays resulting in skin |Convert refrigerants from ozone | |

| |utilizing Freon / or ammonia. |cancer if proper protection is not |depleting substances (NH3 and | |

| | |taken; can also affect plant health. |chlorofluorocarbons) to a | |

| | | |hydrofluorocarbon. | |

Probable Residual Impact Assuming Full Mitigation: NONE

-----------------------

[1] Managing Natural Livelihood Threats in Rural Moldova. World Bank, 2007

[2] A Hazardous Existence: Managing Natural Livelihood Threats in Rural Moldova. Draft Report. World Bank, 2007

[3] Source: years: 1946- Mediul Ambiant, October 2005; 2000-2007 – State Hydrometreological Service

[4] local - less and equal to 10%; extensive - 11 to 20%; very extensive - 21-30%; severe - 31% to 50%; catastrophic - more than 50%

[5] Source: N. Lalykin, G. Syrodoev, ”Some approaches to estimation of climate change impact on water resources. In: Climate of Moldova in XXI century. ed..R. Korobov, 2004, pp. 194-205

[6] Managing Natural Livelihood Threats in Rural Moldova. World Bank, 2007

[7] Republic of Moldova State of Environment Report. 2006

[8] Source: The Land Cadastre of the Republic of Moldova, 2007

[9] Republic of Moldova State of Environment Report 2006, Chisinau 2007. Ministry of Ecology and Natural Resources/ Institute of Ecology and Geography

[10] Republic of Moldova State of Environment Report 2006, Chisinau 2007. Ministry of Ecology and Natural Resources/ Institute of Ecology and Geography

[11] Republic of Moldova State of Environment Report 2006, Chisinau 2007. Ministry of Ecology and Natural Resources/ Institute of Ecology and Geography

[12] Republic of Moldova State of Environment Report 2006, Chisinau 2007. Ministry of Ecology and Natural Resources/ Institute of Ecology and Geography

[13] Recession, Recovery and Poverty in Moldova. Poverty Assessment. A World Bank Country Study. 2004

[14] Recession, Recovery and Poverty in Moldova. Poverty Assessment. A World Bank Country Study. 2004

[15] Source: National Bureau of Statistics, 2007

[16] The Republic of Moldova. Country Strategic Opportunities Program. IFAD, Roma, 2007

[17] [pic] ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download