Document of
The World Bank
Report No: 44290-CN
PROJECT DOCUMENT
ON A
PROPOSED GLOBAL ENVIRONMENT FACILITY
TRUST FUND GRANT
IN THE AMOUNT OF US$ 1 MILLION
TO THE
PEOPLE’S REPUBLIC OF CHINA
FOR A
RAPID ASSESSMENT OF CHEMICAL CONTAMINATION OF THE
WENCHUAN EARTHQUAKE IN SICHUAN PROVINCE
July 3, 2008
Rural Development, Natural Resources and Environment Unit
Sustainable Development Department
East Asia and Pacific Region
ABBREVIATIONS AND ACRONYMS
CPS
DA
EPB
FECO
FM
FMS
GPS
IFR
M&E
MEP
MOF
NCB
ODS
POP
PPE
STRM
RMB
TOR
USD
Country Partnership Strategy
Designated Account
Environmental Protection Bureau
Foreign Economic Cooperation Office
Financial Management
Financial Management Specialist
Global Positioning System
Interim Financial Reports
Monitoring and Evaluation
Ministry of Environmental Protection
Ministry of Finance
National Competitive Bidding
Ozone Depleting Substances
Persistent Organic Pollutant
Personal Protection Equipment
Short Term Response Measure
Renminbi
Terms of Reference
US dollar
2
TABLE OF CONTENTS
A. STRATEGY CONTEXT AND RATIONALE ........................................................ 4
Background ..................................................................................................................................... 4
Rationale for Bank Involvement ..................................................................................................... 6
GEF Program Designation .............................................................................................................. 7
Country Drivenness ........................................................................................................................ 7
Sustainability .................................................................................................................................. 7
Replicability .................................................................................................................................... 8
B. PROJECT DESIGN .................................................................................................. 8
Project Development Objective ...................................................................................................... 8
Project Components ........................................................................................................................ 8
Risks ............................................................................................................................................. 11
C. IMPLEMENTATION ARRANGEMENTS .......................................................... 12
Roles and Responsibilities of Key Players ................................................................................... 12
Implementation Plan ..................................................................................................................... 15
D.
Fiduciary and Safeguards Review ......................................................................... 16
Fiduciary Assessments .................................................................................................................. 16
Safeguards..................................................................................................................................... 17
E. FINANCING ............................................................................................................ 18
Financing Plan .............................................................................................................................. 18
Cost Effectiveness......................................................................................................................... 19
Incremental Cost Analysis ............................................................................................................ 19
F.
MONITORING AND EVALUATION (M&E) ...................................................... 20
Annex 1: MEP Emergency Responses to the Earthquake .......................................... 21
MEP Emergency Response Policies, Plans and Guidelines (as of June 2, 2008) ......................... 21
MEP Program on Post Earthquake Environmental Safety Assessment and Countermeasures ..... 21
Annex 2: A Snapshot of The Five Project Counties ..................................................... 24
Pengzhou City in Chengdu Municipality ...................................................................................... 24
Shifang City in Deyang Municipality ........................................................................................... 25
Mianzhu City in Deyang Municipality ......................................................................................... 25
Anxian County in Mianyang Municipality ................................................................................... 26
Beichuan County in Mianyang Municipality ................................................................................ 27
Annex 3: Project Results Framework and Monitoring Arrangements ...................... 28
Annex 4: Equipment List ............................................................................................... 30
Annex 5: Financial Management and Disbursement Arrangements ......................... 32
Annex 6: Procurement Arrangements and Capacity Assessment .............................. 38
Annex 7: Proposed Actions to Mitigate Potential Environmental & Social Impacts 43
Annex 8: Map (IBRD 36244) ......................................................................................... 47
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A. STRATEGY CONTEXT AND RATIONALE
Background
1. A catastrophic earthquake measuring 8.0 on the Richter scale jolted Sichuan, Gansu
and Shaanxi Provinces of China at 14:28 on May 12, 2008. The earthquake was named
the Wenchuan Earthquake because its epicenter was in Wenchuan County in northwest
Sichuan Province. By May 27, more than 8,000 major aftershocks with a magnitude
above 4.0 on the Richter scale were recorded with some as high as 6.4. The National
Earthquake Bureau has predicted that aftershocks will continue for a long period of time
and some may reach a magnitude of 6.0 to 7.0. On May 16, 2008, Premier Wen Jiaobao
declared the earthquake, because of its intensity and the scope of its affected areas, to be
the most severe natural disaster that have occurred in the 60 years since the establishment
of the People’s Republic of China.1 As of June 18, 2008, the earthquake has affected a
population over 40 million with a death toll over 69,000. The hardest hit areas are in 40
counties in Sichuan Province which are close to the epicenter and with mountainous
topography.
2. The Chinese Government has responded quickly and effectively in its disaster relief
efforts. Resources from the national government, together with international and
domestic donors committed to disaster relief, reached over USD 11 billion as of June 18,
2008. The Government has listed the task of ensuring environmental safety as a high
priority during the current disaster relief period as well as for the recovery and
reconstruction period that is to follow. In the aftermath of the earthquake, the following
have been identified as potential sources of environmental risks: (a) nuclear and
radioactive sources; (b) hazardous chemicals from enterprises that produce, use,
distribute and store hazardous chemicals, including pesticide manufacturers, chemical
producers, natural gas purification plants, petrochemical depots (including docks), oil/gas
pipelines, oil tanks, gas stations, freezing houses, laboratories, and chemical distributors;
(c) pollution treatment facilities, including sewage treatment plants, mine tailing
reservoirs, and solid waste disposal facilities; and (d) wastes including human and animal
corpses, medical wastes, disinfectants, and domestic wastes.
3. In response, the Ministry of Environmental Protection (MEP) quickly established an
emergency environmental monitoring program (with a particular focus on drinking water
quality) and assisted the Sichuan Provincial Environmental Protection Bureau (EPB) in
emergency response actions to five accidents of chemical releases as of May 23, 2008. In
addition, MEP has issued a series of notices, decisions and technical guidelines to assist
the affected provinces in prevention and control of secondary environmental pollution
and accidents (see Annex 1 for MEP’s actions). Special attention has been given to
environmental impacts and risks associated with potential releases of hazardous
chemicals and wastes (including medical) from various industrial and commercial
sources, as well as domestic wastes. Initial screening by the Sichuan EPB has identified
that five out of the 40 hardest hit counties would need special attention on potential
1
http://news.xinhuanet.com/newscenter/2008-05/16/content_8186778.htm.
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chemical contamination due to concentration of chemical industries in these counties.2
The five counties are (See Annex 2 for a brief introduction of the five counties and their
damages in the earthquake):



Pengzhou City in Chengdu Municipality
Shifang and Mianzhu Cities in Deyang Municipality
Anxian and Beichuan Counties in Mianyang Municipality
4. Recognizing that local environmental infrastructure (including buildings, laboratories,
equipment and monitoring vehicles) has been seriously damaged by the earthquake,3
MEP has quickly provided environmental monitoring instruments and equipment and
four vehicles with a total value over 10 million RMB to the earthquake area. The Sichuan
EPB organized ten emergency monitoring teams with 22 emergency monitoring vehicles
and established 64 air and drinking water monitoring points in severely damaged counties.
Neighboring provinces also contributed vehicles equipped with monitoring devices. MEP
reported on May 23 that daily monitoring results reported from these points show that the
earthquake had not directly affected the drinking water quality or air quality of the
earthquake area. By May 30, MEP and the Sichuan EPB mobilized a total of more than
15,000 person days to visit 14,357 enterprises in Sichuan, including close to 3,000
chemical producers. Such visits included a rapid visual inspection of earthquake damage,
without any testing and analysis, and which was limited to those enterprises that were
accessible at that time. As of May 30, a total of 134 sites were found to pose potential
risks, and immediate corrective actions were carried out at the 28 sites.4 In addition,
some NGOs active in disaster relief responses have reported sites with potential
environmental risks.5
5. Although this initial screening and assessment has obtained some results, it does not
provide a full account of the potential impacts and risks posed by industrial sources.
Additional sites, particularly medium and small sized enterprises, are yet to be
investigated due to lack of information and accessibility. For those visually-inspected
sites, it is expected that sampling-and-test based rapid site assessment may still be needed
for some sites to ensure that no risks are overlooked.
6. A group of technical experts from Tsinghua University, commissioned by MEP,
visited the earthquake area from May 19 for a week to evaluate potential environmental
risks caused by the earthquake. Based on their findings and recommendations, MEP has
officially launched a Program on Post Earthquake Environmental Safety Assessment and
Countermeasures (the MEP program) on June 3, 2008.6 The MEP program includes ten
components and will provide support to Sichuan and local EPBs to evaluate a full range
of environmental impacts and risks caused by the earthquake. (See details in Annex 1).
The term “county” in this project document refers to counties and county-level cities.
Vice Minister Wu Xiaoqing of MEP reported on May 23, 2008 that the total loss of Sichuan
environmental protection agencies amounted to 590 million RMB.
4
http://www.sepa.gov.cn/xcjy/zwhb/200805/t20080530_123274.htm.
5
For example, Greenpeace reported potential risks of some chemical producers in the earthquake areas and
advocated accelerated identification of hazardous plants in the earthquake areas.
6
http://www.gov.cn/gzdt/2008-06/04/content_1005555.htm.
2
3
5
MEP will lead the implementation of the entire program with technical support from
national experts from key environmental research institutes. The total budget of the
program is about USD 5 million, including 20 million RMB (about USD 3 million) from
MEP, and USD 1 million each from the two proposed GEF medium sized projects. The
Ministry of Finance (MOF) and MEP are seeking support from the GEF to assess:
a. impacts of the earthquake on ecosystems and biodiversity conservation; and
b. potential chemical contamination in the five identified counties in Sichuan.
7. On May 20, 2008, MOF and MEP officially requested the Bank’s support to prepare
and implement the second proposed project listed above under the Persistent Organic
Pollutants (POPs) Focal Area of the GEF. In response, the Bank prepares this proposed
project to provide a comprehensive and systematic assessment of environmental risks
associated with hazardous chemicals and wastes from damaged facilities in five identified
counties in the earthquake area, as well as recommendations on mitigation actions to such
risks with a longer term perspective.
Rationale for Bank Involvement
8. This proposed project is an integral part of the Bank’s efforts in supporting the
Chinese Government in their emergency response to the Wenchuan Earthquake. As the
first phase of the Bank’s support, this project is coordinated with the overall Bank’s
support to China through a grant from the Global Facility for Disaster Recovery and
Reconstruction (GFDRR). The GFDRR grant will support the evaluation of earthquake
damages and assess needs for recovery and reconstruction. The outputs of these activities
will be fed, as appropriate, into later phases of the Bank’s support for recovery and
reconstruction in the earthquake area.
9. This proposed project is consistent with the China Country Partnership Strategy
2006-2010 (CPS), the Bank’s Environment Strategy (2001), and the EAP Environmental
Strategy (2005). Specifically, the project supports Pillar 3 of the CPS, Managing
Resource Scarcity and Environmental Challenges, as it help China mainstream
environmental concerns into the recovery and reconstruction process of the Wenchuan
Earthquake. Similarly, the project supports the EAP Environmental Strategy as it will
strengthen China’s institutional capacity to integrate environmental concerns into its
disaster recovery and reconstruction planning process. By minimizing environmental
risks, the project will also assist China in reinforcing the positive linkages between good
environmental management and quality of life advocated by the strategy.
10. The project contributes to all three strategies as it supports China in protecting the
regional and global commons by minimizing risks related to hazardous chemicals and
wastes, including persistent organic pollutants (POPs), by adopting sound chemical
management practices in its disaster recovery efforts. As an emergency response
operation, this proposed project will continue and expand the Bank’s assistance to
China’s POPs program.
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GEF Program Designation
11. This proposed project is a short-term response measure (STRM) under the POPs
Focal Area of the GEF. The project will help identify and prioritize any situation that may
pose immediate and long-term hazards to human health and to the environment due to the
release of hazardous chemicals and waste resulting from the earthquake, including POPs.
By providing recommendations that aim to manage hazardous chemicals and wastes in an
environmentally sound manner during the disaster recovery and reconstruction, this
project will help avoid or minimize any potential secondary pollution, including releases
of dioxins and furans, from the management and disposal of hazardous wastes.
12. This proposed project is positively linked with the Sound Chemicals Management
Focal Area under the GEF IV as it helps Sichuan recover and improve its capacity for
sound chemical management, in particular on impact and risks assessment related to
releases of hazardous chemicals and wastes, mitigation of such releases, and
environmentally sound disposal of wastes generated from such releases.
Country Drivenness
13. The proposed project is consistent with the top national priority for recovery and
reconstruction of the earthquake area. Article 21 of the Regulation on Recovery and
Reconstruction After the Wenchuan Earthquake (issued on June 8, 2008) has called for
full investigation and assessment of potential environmental pollution caused by the
earthquake to provide needed information for the development of reconstruction plans.
The proposed project is an integral component of MEP and Sichuan’s EPB’s efforts in
identifying potential environmental impacts and risks associated with releases of
hazardous chemicals and wastes from industrial facilities damaged by the earthquake.
Based on initial investigations, MEP and Sichuan propose that this project will evaluate
potential environmental impacts and risks associated with such releases. The results of
this project will help MEP and Sichuan better plan their efforts in mitigating
environmental impacts and risks from known releases, prevent further releases, and lead
to the proper disposal of wastes generated from such releases.
Sustainability
14. The sustainability of this project will be achieved through:
a. Recommendations on mitigation priorities that will be adopted and properly
implemented so that potential risks will be minimized;
b. Application of methodology developed and the equipment procured under the
project will initially be used for environmental monitoring in the five identified
counties, and will continue to be used to carry out site assessment associated with
actual and potential releases of hazardous chemicals and wastes in the remaining
35 counties that have been severely damaged by the earthquake; and
c. Institutional capacity developed under this project will be utilized in all
earthquake affected areas, as well as future chemical pollution emergencies and
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disaster response operations.
Replicability
15. The MEP’s emergency response actions and programs represent the first opportunity
for the Chinese government to integrate environmental issues systematically in its
disaster responses and recovery operations. Implementation of this proposed project will
help China gain experience on rapid assessment, mitigation of environmental impacts,
and risks associated with releases of hazardous chemicals and wastes in disaster
responses. It will allow China to apply valuable knowledge learned from this project to
the remaining 35 counties that have been severely damaged by the earthquake. It is also
expected that China will utilize the capacity built and experience gained in future disaster
responses and recovery operations. Lessons and experience learned from this project will
also benefit other developing countries in their disaster response and recovery operations.
B.
PROJECT DESIGN
Project Development Objective
16. This project’s development objective is to support the country’s emergency responses
to the Wenchuan Earthquake by identifying and assessing potential environmental
impacts and risks associated with the releases of hazardous chemicals and waste in five
out of a total of 40 hardest hit counties in Sichuan Province. Specifically, the project will
facilitate (a) identification of major sources of hazardous chemicals and wastes, including,
but not limited to, chemical plants, landfills, and hazardous chemicals/waste storage and
disposal sites that have been damaged by the earthquake; (b) preliminary site assessment
of the diffusion of toxic chemicals into the environment and their potential impacts and
risks to human health and the environment; (c) recommendations on mitigation priorities
to the assessed sites; and (d) timely dissemination of monitoring results to the general
public and training the general public on necessary safeguards measures.
Project Components
17. The proposed project includes the following five components:
18. Component 1: Source Identification (US$115,000 from GEF and US$85,000 from
Sichuan Environmental Protection Bureau (EPB)). This component will finance the
Sichuan EPB to recruit individual and firm consultants to identify potential sources of
significant contamination from hazardous chemicals and wastes by following national
and international best practices on rapid environmental assessment in disaster response
and recovery. Based on initial screening activities carried out by the Sichuan EPB, and
based on available methodologies and procedures for rapid assessment, technical
consultants will be recruited to rapidly assemble a field investigation form, investigation
procedures and a set of criteria to determine priorities for preliminary site assessment
activities to be supported by Component 2. The investigation procedures will include
proper use of personal protection equipment and necessary personal protection measures
for site inspection.
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19. After the procedures have been developed and the field investigators have been
trained, this component will support the field investigators to:
a. check the registration information of industrial facilities involved in production,
use, storage, distribution and disposal of hazardous chemicals and wastes;
b. establish an inventory of all identified facilities that are potential pollution sources.
Hazard maps will be prepared with the identified facilities clearly marked on the
map;
c. carry out on-site visual inspections to review the situations of sites that have not
been visited previously; and
d. update the inventory and the hazard map, and prepare a list of potential sites for
further testing and analysis.
20. This component is expected to be completed within two months.
21. Component 2: Preliminary Site Assessment (US$835,000 from GEF and
US$127,000 from the Sichuan EPB). This component will finance the Sichuan EPB to
recruit a consultant to carry out site assessment at the identified sites. Samples will be
taken, and analysis will be performed on site. The results of such analysis will be
recorded accordingly. This information will be analyzed later to assess potential impacts
and risks to the environment and human health by any releases of hazardous chemicals
and wastes from the sites. Preliminary site assessment reports will be prepared as soon as
possible after each site visit.
22. As the environmental monitoring infrastructure in the project area has been seriously
damaged by the earthquake, this component will support the procurement of portable
monitoring and analytical equipment, and necessary off-road vehicles that can reach
badly damaged areas. A detailed equipment list is provided in Annex 4.
23. Results of this component will be examined against ambient environment quality data
obtained from Components 1 (water environment assessment), 2 (solid waste pollution
assessment) and 4 (soil pollution assessment) of the MEP Program. This comparison will
be used to evaluate possible linkage between likely sources of chemical releases and the
ambient environmental data.
24. This component is expected to be completed within two months.
25. Component 3: Recommendations on Mitigation Priorities. (US$150,000 from the
Sichuan EPB). Based on monitoring results and preliminary site assessment reports, the
consultant will carry out a priority setting exercise to focus on immediate needs in the
project areas. Outputs of this exercise will enable the Sichuan EPB to further identify its
emergency response needs and start looking into its medium- and long-term
environmental management tasks during the recovery and reconstruction of the
earthquake area.
a. High priority emergency responses. It is expected that the consultant will
recommend emergency response to those sites that are considered high risks.
Those recommendations will be followed up with full site assessments to be
9
carried out by the Sichuan EPB in future. Such emergency responses may include,
but not be limited to, seal production facilities that are leaking, stop operations of
waste disposal facilities that have been damaged, collect leachate from dumpsites
if leaches are found, fence off these facilities to prevent public access to these
sites, and put up warning signs. Suggestions will also be made to ensure that any
emergency response actions will be properly implemented to avoid or minimize
secondary environmental impacts. These actions are expected to be on-site
interventions only and do not involve transportation of any hazardous substances
from sites, nor any site cleanup activities. As the impact of the earthquake on
those hazardous waste treatment facilities in the affected areas are yet to be fully
evaluated, it is not recommended that any stored hazardous waste be sent to any
facilities for final disposal. All production activities in these sites will be banned
until the sites are fully remediated.
b. Low priority medium- and long-term action. This recommendation will be
proposed for sites with medium to low risks. Given the limited site information
obtained from the rapid and preliminary site assessment, it is not expected that the
consultant can propose any concrete mitigation measures to such sites. However
they can recommend that the Sichuan EPB carry out full site assessments to
clearly understand the extent of damages and contamination of these sites. As the
project counties have been severely damaged by the earthquake and the secondary
disasters such as landslide, flooding and are still facing continuous aftershocks,
such in-depth site investigations are not foreseeable in the near future. This
category of sites will be required to install fences with warning signs to prevent
public access. Identified hazardous wastes shall be properly stored on sites,
labeled and recorded. All production activities, if any, will be banned. On-site
waste disposal will also be banned. For the same reason mentioned above,
disposal of any stored hazardous wastes off-sites will not be recommended at this
stage.
c. No action. For sites with minimal earthquake impact, no further action will be
recommended, and the site is to be marked as no risk in the inventory.
26. These recommendations will be provided to MEP for incorporation into the MEP
integrated assessment (see Annex 1) for the Sichuan EPB. The MEP integrated
assessment will provide a basis for the Sichuan EPB to plan its emergency response
actions with sound environmental information on a priority-based time-scale in the
earthquake area. It is expected that MEP/Sichuan EPB will evaluate the consultant’s
findings and recommendations on a rolling basis.
27. This component is expected to be completed within one month.
28. Component 4: Information Disclosure (US$50,000 from GEF and US$38,000 from
the Sichuan EPB). This component will finance the Sichuan EPB in developing a
program to disclose information generated from this project. Monitoring results,
preliminary risk assessment reports, and recommendations on mitigation actions will be
publicized through leaflets, websites, TV and radio programs etc. In addition, this
component will support the preparation and distribution of information to the public on
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necessary safeguards measures for avoiding or minimizing potential exposures to releases
of hazardous chemicals and wastes. Caution will be exercised in information disclosure
to ensure that any disclosed information will not be misinterpreted and cause widespread
panic to the public, currently a very vulnerable population.
29. This component will commence after the immediate rescue effort has been completed,
and the public is more at ease. Public disclosure activities will continue throughout the
project life.
30. Component 5: Project Management (US$50,000 from MEP and US$50,000 from
the Sichuan EPB). This component will support the management of the project including,
among other things, equipment procurement, consultant recruitment, financial
management and monitoring and evaluation. As the national implementing agency, MEP
will procure the needed equipment based on an equipment list provided by the Sichuan
EPB, facilitate consultant contract signing with consultants selected by the Sichuan EPB,
prepare withdrawal requests to MOF, and provide general oversight. In the meantime, the
Sichuan EPB will concentrate on all ground activities, and ensure all activities are carried
out as scheduled. Management oversight from MEP and supervision of project activities
by the Sichuan EPB will be ongoing throughout the project life.
Risks
31. External Risks. The success of this project will be heavily affected by external risks
associated with the overall disaster relief and recovery operations. Potential flooding
from reservoirs and quake lakes represents the highest risk to the project. Such inundation
might destroy the to-be-investigated industrial sites and wash away hazardous chemicals
and wastes from the site. This risk is of serious environmental and safety concern.
32. The second external risk for this project is accessibility to identified sites. There are
still frequent aftershocks in the earthquake area, causing massive landslides and damage
to the roads and communication systems in the mountainous areas. It has been reported
that this risk has significantly increased the time needed for travel, and has also damaged
vehicles carrying environmental monitoring equipment. The approaching rainy season in
Sichuan will exacerbate further the difficulties of accessibility in the project area. This
risk may also prevent the monitoring equipment/vehicles procured under this project
from being delivered to the project area.
33. The third external risk is epidemic outbreaks. The occurrence of such events would
seriously delay the implementation of this project.
34. Project Risks. The first risk is related to the capacity of the Sichuan EPB and local
EPBs in the three municipalities. High demand on local EPB staff for emergency
environmental monitoring will exceed available manpower of these agencies and prevent
them from carrying out project activities as planned. To mitigate this risk, it is envisaged
that if needed environmental monitoring staff from neighboring provinces will be
sub-contracted to ensure sufficient manpower for project activities.
35. The extent of cooperation of industrial owners of the priority sites poses another risk
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to the successful implementation of this project. To mitigate this risk, MEP and the
Sichuan EPB have planned to engage environmental enforcement teams if necessary to
obtain access to the sites and ensure full cooperation.
36. Health and safety risks to field investigators and analysts from monitoring stations
due to their exposure to hazardous substances also need to be considered. To mitigate this
risk, training on personal safety procedures and provision of personal protection
equipment will be provided to all field investigators.
C. IMPLEMENTATION ARRANGEMENTS
Roles and Responsibilities of Key Players
37. MOF, representing the Government, will sign the Grant Agreement with the Bank.
It will open and manage the designated account. It will sign an implementation agreement
with MEP, designating MEP as the national implementing agency. MEP, in turn will sign
an implementation arrangement with the Sichuan EPB, designating Sichuan as the local
implementing agency. MEP will assign its Foreign Economic Cooperation Office (FECO)
to provide free assistance to the Sichuan EPB in project implementation.
38. The Steering Committee of the MEP Program will oversee the implementation of this
proposed project. It will review progress and impact of the project, and ensure effective
linkage with other components in the MEP program.
39. FECO, on behalf of MEP, will assist the Sichuan EPB to implement the project. It
will have a two person team, plus procurement and financial management staff, to help
manage the project. Its role will include: (a) provide overall guidance to the Sichuan EPB,
(b) procure and sign procurement contracts based on the equipment list provided by the
Sichuan EPB, (c) sign consultant contracts with contract providers based on selection by
the Sichuan EPB, (d) pay equipment suppliers and service providers based on contracts,
and request reimbursement from the designated account in MOF, and (e) finalize progress
reports received from the Sichuan EPB and submit them to the Bank. MEP and the
Sichuan EPB have confirmed that they will not require a project management fee and the
full amount of the grant will be used for project activities in Sichuan.
40. FECO is an office of MEP that handles all bilateral and multilateral assistance for the
ministry. In the past twenty years, it has managed many international assistance projects
in the billions of dollars. Among other, FECO has managed many Bank projects
including: (a) a highly successful completed environment TA project, (b) two completed
and two ongoing ODS projects amounting to USD 500 million and its successful ODS
phase-out has helped the country meets all its Montreal Protocol commitments, (c) two
ongoing POPs projects, (d) one ongoing HFC-23 project, and (e) some completed and
ongoing GEF biodiversity projects. It has over 80 staff, most of which have advanced
college degrees and project management experience. It has a number of very strong
project management teams in different focal areas, and a management system with clear
roles and responsibilities. Since 2005, it has instituted a contract review committee which
meets once a month and reviews all contracts, regardless of size, before any contract
12
awards. Such tight internal control mechanisms have helped FECO manage Bank projects
with a satisfactory record. Therefore, it has the ability to manage this project and assist
the Sichuan EPB to implement the project. Within FECO, the director of the POPs Unit
will have direct oversight of this project as she understands chemical and hazardous
waste management issues, and is in charge of all POPs activities of China. Working
together, the FECO’s POPs, Procurement, and Financial Units have provided strong
support to the Sichuan EPB on all project management issues.
41. Sichuan EPB will be the local implementing agency responsible for all project
activities, and is the sole beneficiary of the Grant. It will appoint a senior staff member as
project manager who will be responsible for day-to-day operations, coordination of
planning and monitoring of progress and impacts. The project manager will be assisted
by a three-person project team.7 The project team will ensure that all components are
implemented in a timely, coordinated and coherent manner to meet the project stated
objectives efficiently and effectively. Accordingly, the Sichuan EPB will: (a) initiate
project activities; (b) oversee the planning and implementation of project activities,
including checking the results of the surveys and chemical analysis for consistency and
accuracy; (c) prepare quarterly reports; (d) review on a regular basis the status of
implementation of the project, with a view to adopting corrective measures when
necessary; (e) coordinate and consolidate periodical reports from participating entities
and consultants; (f) provide technical backstopping; (g) monitor and evaluate project
progress and problems; (h) keep MEP/FECO and the World Bank informed on project
implementation; (i) liaise with relevant provincial bureaus and departments in Sichuan
and the Central Government, NGOs, and private sector organizations, donors and other
stakeholders in project implementation; and (j) organize MEP and Bank mission
activities.
42. The following diagram explains how the GEF grant will be channeled from the GEF
to China and to Sichuan for project activities.
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Roles and responsibilities of the project team will be refined during project implementation. Currently, it
is expected that one member will be working with MEP/FECO on procurement issues, another working on
supervising site investigation and assessment activities of the consultant, and the third on public
information disclosure activities.
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GEF
Grant
Agreement
World Bank
Ministry of Finance
Designated Account
at MOF
Implementation Agreement – MOF
designating MEP as the national
implementation agency of the project
MEP
Implementation Agreement between
MEP and Sichuan EPB, with Sichuan
EPB as the beneficiary and local
implementing agency; FECO assists
Sichuan EPB in project implementation
Sichuan EPB
Figure 1: Project Implementation Arrangements
43. Equipment Procurement. Sichuan has provided MEP with the list of needed
equipment (including two vehicles to transport equipment and field teams to the project
sites). This was based on a quick needs assessment that reviewed earthquake damage to
monitoring stations and their monitoring devices, assistance received from other
provinces and donor organizations, and expected monitoring tasks to be carried out in the
earthquake area (see Annex 4 for details). MEP/FECO has agreed to procure the
equipment as requested by the Sichuan EPB, and sign equipment contracts on behalf of
the Sichuan EPB. Equipment will be delivered directly from suppliers to designated
locations as required by the Sichuan EPB.
44. Based on a meeting held on June 9, 2008 with potential equipment suppliers in
Beijing, MEP/FECO packaged technical equipment for monitoring into five procurement
packages and received suppliers’ price quotations on June 16, 2008. For standard
equipment, such as portable computers, vehicles, walkie talkie, GPS, projectors etc,
MEP/FECO will prepare some simple specifications, obtain a price quote either by
telephone or by fax, and then select suppliers. The most important criteria regarding a
contract award is the delivery time as it is urgent to have the equipment in Sichuan as
soon as possible. No prior review is required for procurement of goods, but all contracts
are subject to post review.
45. Consultant Recruitment. The Sichuan EPB has identified the Sichuan Academy of
Environmental Sciences to carry out Components 1 and 4, and the site assessment
activity under Component 2 (estimated to be around $220,000) and the Sichuan
14
Environmental Monitoring Station to carry out the monitoring activity under Component
2 (budget estimated to be around $150,000). It is agreed that these two consultants will be
sole sourced because they have proven technical capacity, understanding of local
conditions, knowledge of local dialects, and ability to getting local cooperation. Prior
review of the two contracts by the Bank is required. Working with MEP/FECO, the
Sichuan EPB will also identify two technical experts to provide needed technical support
to this project. The total estimated budget for technical experts is about US$30,000 and
recruitment will be based on consultant qualifications. The Bank team will clear all terms
of references (TOR) before contract signing. No prior review will be required for the
individual consultants, but their contracts are subject to post review. Annex 6 provides
details of the procurement arrangements.
46. Coordination and Consultation. As a component of the MEP Program, the
coordination and consultation of this project at the national level will be carried out by
MEP/FECO to ensure complementarities between this proposed project and other
components of the MEP Program. In addition, MEP will coordinate activities of this and
other ongoing environmental related disaster responses and recovery activities, and
promote information exchange with other disaster responses activities.
Implementation Plan
47. It is expected that all major activities will be concluded by the end of September 2008
except for information disclosure activities which will continue until the conclusion of
the MEP Program, which is scheduled to be completed by June 2009. As MEP/Sichuan
EPB has requested to start the project implementation as soon as possible, the Bank has
agreed to provide retroactive financing up to 40% of the GEF grant for eligible expenses
incurred between June 10, 2008 and the date of Grant Agreement signing.
15
2008
Aug.
2009
Sep. Oct.- Jan.- Apr.W3- W1- W3- W1- W3- Dec. Mar. June
Component and Activities
June
W3W4
W1W2
W4
W2
Component 1: Source Identification
Development of investigation data
form, investigation procedures and
priority setting criteria
Training of field monitoring staffs
on data collection and recording,
and use of personal protection
equipment
Development of an inventory of
potential sites and hazard maps
On site inspection, preparation of a
updated inventory, and selection of
priority sites
Component 2: Preliminary Site
Assessment
Equipment procurement
Site assessment and draft site
assessment reports
Site assessment reports (final draft)
Component 3: Recommandations
on Mitigation Priorities
Recommendations on mitigation
priorities
Mitigation recommendations and
other technical reports
Component 4: Information
Disclosure
Component 5: Project management
X
X
X
X
x
x
x
x
x
X
X
X
x
x
D.
July
W4
W2 W4
x
x
x
X
x
x
X X
x
x
x
x
x
x
X
X
X
X
X
X X
X
X
X
X
X
X
X
X
X X
X
X
X
Fiduciary and Safeguards Review
Fiduciary Assessments
48. The Bank financial management specialist has assessed the adequacy of the project
financial management system and found that the project meets the minimum Bank
financial management requirements. Taking into account the risk mitigation measures
proposed under the project, the financial management risk rating of this project is
expected to be low. Annex 4 provides details of the assessment.
49. The Bank procurement specialist has assessed the capacity of MEP/FECO in
procurement process and management, and found that MEP/FECO has adequate
experience in carrying out such tasks under Bank financed projects. The procurement risk
rating of this project is average. Annex 6 provides details of the assessment.
16
Safeguards
50. The proposed project is a technical assistance project that aims to help Sichuan
identify potential environmental risk associated with hazardous materials in the
earthquake area. As an integral part of the MEP Program, the project itself is an
environmental safeguarding activity that will have significant positive environmental and
social contributions to the recovery and reconstruction of the project area.
51. Two levels of safeguards concerns are identified. At the project level, the major
environmental concerns are related to personal health and safety of site investigators and
analysts, and proper management of the very limited amount of wastes generated under
this project. Concerns on health and safety issues will be adequately addressed through
provision of necessary personal protection equipment (PPE) and prior safety training to
all involved staff. In particular, the training will emphasize the importance of how to
carry out inspection and sampling in the damaged areas without provoking any risks from
physical stability of the structures as well as from hazardous substances.
52. Implementation of this project will generate laboratory wastes, including those
unused samples and all hazardous wastes generated from sampling and analysis processes.
In addition, personal protection clothes and equipment will also become wastes if they
are no longer usable. All these wastes will be collected, properly packaged, and disposed
according to hazardous waste management procedures defined by the national
environmental regulations. By doing so, environmental and health risks caused by
improperly stored or disposed wastes can be minimized.
53. A secondary level of environmental concerns is related to emergency response actions
to be carried out by MEP/Sichuan EPB at the identified high-priority sites. It is noted that
although this project will not finance any of such activities, MEP/Sichuan EPB will use
recommendations proposed by the consultant financed by this project to develop its
emergency response actions at the high priority sites. As such recommendations may
involve the handling of hazardous wastes, improper use of such recommendations in
actual emergency response actions may lead to secondary environmental contamination.
Given this practical concern, the project will require the technical consultants to
particularly highlight how the emergency response measures should be implemented to
avoid or minimize possible secondary environmental risks associated with such
mitigation actions. In addition, all emergency response actions should be carried out with
the greatest care and follow all national environmental requirements, including those
policies and technical guidelines issued for the recovery and reconstruction (details in
Annex 1). For medium- and long-term actions, MEP/Sichuan EPB will be reminded that
the results of this project are based on preliminary assessment activities. In-depth site
assessment will have to be carried out to help MEP/Sichuan EPB further understand site
situations before they can plan any site mitigation.
54. Given that the secondary level of environmental concerns might involve potential
adverse impacts/risks if the recommended emergency response measures are not properly
designed and implemented, this proposed operation is classified as category B. More
detailed discussion on proposed actions to mitigate potential environmental and social
17
impacts are listed in Annex 6.
E.
FINANCING
Financing Plan
55. Out of the USD 1.5 million project cost, USD 1 million will be financed by a GEF
grant and USD 500,000 will be in-kind contribution from MEP and the Sichuan EPB.
Under this project, the GEF grant will be used to recruit technical consultants as well as
to procure urgently needed monitoring equipment. In-kind contribution includes staff cost,
office facilities, transportation, communications and other costs incurred during project
preparation and implementation. MEP/FECO and the Sichuan EPB will absorb all costs
related to project management.
Project Cost and Financing
Project cost
Component
1. Source Identification
2. Preliminary Site
Assessment
3. Recommendations on
Mitigation Priorities
4. Information Disclosure
5. Project management
Total
Project financing
Counterpart
Cost
GEF
% of Total
% of A contribution % of B
(USD)
Grant (A)
(B)
200,000
13%
115,000
11%
85,000
17%
962,000
64%
835,000
84%
127,000
25%
150,000
10%
0
0%
150,000
30%
88,000
100,000
1,500,000
6%
7%
100%
50,000
5%
1,000,000
100%
38,000
100,000
500,000
8%
20%
100%
56. Direct co-financing for this proposed project from MEP/FECO and Sichuan EPB is
USD 0.5 million. Actual co-financing for this project is actually much higher as this
amount does not include any resources allocated to any activities in the MEP Program
that have direct linkages to this project. As an integral part of the MEP Program, this
proposed project is directly linked to the following components of the Program (a)
Component 1 (about US$400,000) for the assessment of drinking water and water
pollution, (b) Component 2 (about US$400,000) for the assessment of solid waste
pollution, (c) Component 4 (about US$400,000) on soil pollution, and (d) Component 7
(about US$200,000) for the assessment of industrial recovery and development strategy.
Components 1, 2 and 4 will assess whether the water, solid wastes and soil are above
nationally acceptable levels, and this proposed project (as Component 8 of the MEP
program) will try to fingerprint sources of identified pollution, as well as provide input to
the development of industrial development strategy (Component 7).
57. The co-financing amount is even higher when emergency environmental monitoring
activities carried out since May 13, 2008 are counted. As noted early in the description of
Component 2 of this project, monitoring results of ambient environmental quality from
the emergency environmental monitoring activities will be used together with monitoring
18
results from Component 2 to fingerprint potential sources of chemical contamination. No
exact cost figure has been accounted for such activities, but MEP reported as of May 23,
2008 that MEP and other provinces of China mobilized monitoring equipment and
vehicles with a total value over a total of 110 million RMB to support Sichuan’s
emergency environmental monitoring activities.8
Cost Effectiveness
58. This project aims to identify, assess and mitigate potential negative impacts/risks
associated with releases of hazardous chemicals and wastes (including POPs) and further
deterioration of these contaminated sites. It is expected that early identification and
interventions will minimize negative environmental and health impacts of such releases
and thus avoid high costs later for management, remediation, and disposal of wastes
generated from such releases. Therefore, the cost effectiveness of this project is expected
to be high.
Incremental Cost Analysis
59. Baseline Scenario. Without this project, the MEP Program would not be able to carry
out a preliminary assessment of impacts and risks associated with the releases of
hazardous chemicals and waste in the five most affected counties/districts. This means
that Sichuan may have significant delay before it can carry out in-depth investigations of
those large-scale facilities that have been visually examined and also visit and assess
those facilities that have not been previously evaluated. Consequently, negative impacts
on the environment and public health resulting from un-managed releases of hazardous
chemicals and wastes might not be identified and mitigated in a timely manner. With a
drawn-out timeline hazardous conditions can deteriorate even further.
60. GEF Alternative. With this GEF project, the project will systematically identify and
assess in the five project counties sources of hazardous chemicals and wastes (including
POPs) that are of high risk to the environment and public health. The results of this
project will contribute to the identification of water, solid waste and soil pollution sources
and be integrated into the larger MEP Program. Many chemical plants, waste incinerators,
sewage treatment plants and dumpsites in the five counties are potential sources of
dioxins and furans releases. In addition, there are POP pesticides in agricultural lands and
an unknown number of PCB sites yet to be confirmed. Proper assessment of the risks and
recommendations on mitigation priorities will help Sichuan avoid or minimize
environmental risks from chemical and POP contamination and prevent the public from
being exposed to such hazards. This will support Sichuan in its recovery and
reconstruction efforts and will contribute greatly to the global effort to eliminate releases
of POPs.
61. Incremental Costs. As an integral part of the MEP Program as well as the overall
environmental emergency response actions of MEP and the Sichuan EPB, this project
provides incremental financing to Sichuan’s emergency response operations. It will
8
http://gb.cri.cn/china/newslive/080523b.htm (Press conference on Environment Emergency Responses
with Vice Minister Mr. Wu Xiaoqing of MEP).
19
ensure that environmental issues related to the releases, management and disposal of
hazardous chemicals and waste will be fully incorporated into the country’s overall
disaster recovery and reconstruction actions in the entire earthquake area. The results of
this project will assist the province to fingerprint chemical contamination and advise the
province on how to take immediate, short-term and long-term actions to address
identified environmental and health risks associated with chemical contamination. Such
recommendations will provide valuable input to the province’s efforts to clean-up and
dispose of hazardous waste in its recovery and reconstruction efforts over the next three
to eight years. Compared to the scale of the country’s disaster relief, recovery and
reconstruction efforts, the incremental cost of USD 1 million from the GEF are expected
to be far smaller than the potential incremental benefits obtained through accelerated
source identification, site assessment and mitigation recommendation supported by this
proposed project.
F.
MONITORING AND EVALUATION (M&E)
62. M&E activities will be carried out during project implementation to ensure all
proposed project activities will be properly and timely carried out according to the project
implementation plan agreed by all stakeholders. Details of a results framework, including
monitoring indicators for project outcomes and results, data collection methodology, data
collection and reporting responsibilities, and frequency of M&E activities are listed in
Annex 3.
63. Sichuan EPB will be the key agency to collect and report project progress on a
regular basis. It will submit quarterly progress reports based on agreed reporting
formats to MEP/FECO project team who will finalize them and send them to the Bank
for review. Sichuan EPB will visit project sites from time to time to verify whether the
field investigators are following appropriate sampling and analysis procedures, using
personal protection equipment properly, and reporting site situations faithfully. It is also
required to report findings and results of all project activities to stakeholders so that all
stakeholders will have full participation in project implementation and can provide timely
guidance on implementation of project activities.
64. In terms of financial management of this project, a qualified financial auditor will
carry out a financial audit of the designated account to be set up in MOF. In addition, the
Sichuan EPB and MEP will prepare a draft Implementation Completion Report (ICR)
three months after project completion to summarize key achievements, as well as lessons
and experience learned in this project. The ICR will be sent to the Bank for review and
finalization.
65. MEP and the Bank will conduct supervision missions on a regular basis to monitor
project progress.
20
Annex 1: MEP Emergency Responses to the Earthquake
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
MEP Emergency Response Policies, Plans and Guidelines (as of June 2, 2008)
1. Notice on Prevention and Control of Secondary Environmental Pollution Incidents
After the Sichuan Earthquake (2008-05-13);
2. Decision about Starting of the National Emergency Plan for Response to Emergent
Environmental Incidents (2008-05-13);
3. Emergency Notice on Emergency Environmental Monitoring Plan During the
Earthquake Disaster Relief Period (2008-05-13);
4. Guidelines for Protection of Central Drinking Water Sources in the Earthquake
Region (2008 -05-20);
5. Technical Plan for Assurance of Drinking Waster Safety in the Earthquake Region
(2008-05-20);
6. Guidelines for Monitoring of Surface Water Quality and Central Drinking Waster
Quality in the Earthquake Region (2008-05-20);
7. Guidelines for Debris Removal and Waste Management after the Earthquake
(2008-05-24);
8. Emergency Notice on Assurance of Drinking Water Safety in the Earthquake Region
(2008-05-26);
9. Guidelines for Safe Use and Control of Hygienic Disinfectant Chemicals in the
Earthquake Region (2008-05-29);
10. Guidelines for Safe Disposal of Medical Wastes in the Earthquake Region
(2008-06-02); and
11. Guidelines of Environmental Protection During Construction of Temporary
Settlement Areas (2008-06-02)
MEP Program on Post Earthquake Environmental Safety Assessment and
Countermeasures
Objectives
The main objective is to evaluate the post-earthquake environment and recommend
counter measures on key issues, such as drinking water safety, nuclear and radioactive
safety, soil and ecology, environmental protection in reconstruction and resettlement, and
recovery and strengthening of environmental protection capacity. Processes and trends of
ecological environment change will be identified, earthquake loss estimated, and impacts
to the ecological environment analyzed and assessed to eliminate risks to environmental
safety, restore damaged environmental facilities, remedy the ecological environment, and
avoid secondary environmental hazards. The study results will provide specifications and
technical support for the reconstruction of the earthquake region, and can also assist to
prevent and mitigate environmental impacts caused by similar disasters in the future.
21
Components
1. Assessment of drinking water and water environment pollution (led by Tsinghua
University);
2. Assessment of solid waste pollution (led by Tsinghua University);
3. Assessment of nuclear and radioactive safety (MEP);
4. Assessment of soil pollution (led by Beijing Normal University);
5. Assessment of ecological environment and biodiversity (led by the Department of
Ecology, MEP; GEF grant of USD 1 million, with UNDP as the international
implementing agency);
6. Environmental protection during the temporary settlement of rural and urban
residents (led by Chinese Academy of Environmental Sciences);
7. Assessment of industrial development strategy and environmental protection during
the reconstruction of industrial enterprises (led by Chinese Academy of
Environmental Sciences);
8. Rapid Assessment of potential chemical contamination due to the Wenchuan
Earthquake in Sichuan Province (Led by Foreign Economic Cooperation Office,
MEP. GEF grant of USD 1 million, World Bank as the international implementing
agency);
9. Assessment of environmental protection infrastructure and environmental regulatory
enforcement capacity (led by Chinese Academy of Environmental Planning); and
10. Integrated assessment of and countermeasures for the post-earthquake environment
(led by Tsinghua University).
Budget
Total budget is about USD 5 million, of which 20 million RMB (USD 3 million
equivalent) is from MEP and USD 2 million from GEF for components 5 and 8. The
entire funding will be used for Sichuan activities.
Scope
The Sichuan Earthquake affected areas cover 100,000km2, mainly in Chengdu, Deyang,
Mianyang, Guangyuan, Aba, and Ya’an municipalities in Sichuan Province, Hanzhong
and Ankang in Shanxi Province, Pangnan, Gannan, Tianshui, Pingliang, Qingyang and
Dingxi Municipalities in Gansu Province. The project area will cover all directly affected
areas, with a focus on 6 of the most severely damaged municipalities: Chengdu, Deyang,
Mianyang, Guangyuan, Aba, and Ya’an.
Timeframe: June 3, 2008 – June 1, 2009
The program was officially launched on June 3, 2008. MEP has requested that the first
progress report be submitted by June 15, 2008, the second by July 15, 2008, and the third
by August 15, 2008. MEP expects major activities to be completed by August 15, 2008.
Methodology
The ten components are grouped into 4 stages:
22
1. Survey the direct impact to the environment and ecology of the earthquake affected
areas to understand the changes in water, solid wastes, nuclear and radioactivity, soil,
and ecology that have occurred after the earthquake. Measures will be proposed to
deal with these changes during the emergency response and temporary settlement
stages;
2. Identify the secondary and potential environmental issues and risks arising from
human activities during the emergency relief in the aftermath of the earthquake.
Measures will be proposed to mitigate these impacts or risks;
3. Analyze and propose standards and requirements, including needed environmental
infrastructure for environmental protection during the reconstruction, resettlement,
and production recovery, and continue to make further study on the typical secondary
pollution risks in key areas; and
4. Prepare a comprehensive assessment of the environmental safety based on the
outputs from above, and formulate a series of standards and norms that can be used
in future environmental safety assessments.
Consultants
Leading consultants: Tsinghua University, Chinese Academy of Environmental
Sciences, and Beijing Normal University.
23
Annex 2: A Snapshot of The Five Project Counties
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
1.
This annex summarizes basic information of the five project counties. Unless
otherwise noted, the information included in this Annex is provided by the Sichuan EPB
on June 5, 2008. Annex 8 shows their geographic locations.
Pengzhou City in Chengdu Municipality
2.
The City. Pengzhou City is located 25 km northwest of Chengdu with an area of
1,420 km2 and a population of 783,700 in 2006. Its topography is characterized by 50%
mountainous regions, 11% smaller hills, while the remaining 39% is a plateau. In 2006,
Pengzhou’s total economic output reached 8.9 billion RMB with an industrial output of
3.9 billion RMB (about 44% of the total output). Its major industries include
pharmaceutical products, construction material, food, and chemical industries. Two
industrial parks are immediately adjacent to the urban area of the city.
3.
Damages. As it is only 30km from the epicenter, Pengzhou was seriously affected
by the earthquake. Its direct economic loss is estimated to be around 23 billion RMB. The
Pengzhou City EPB and Environmental Monitoring Station, had over 200 of their
environmental monitoring devices and a monitoring vehicle damaged. The total loss
amounted to 800,000 RMB.
4.
The city’s wastewater treatment plant, built in 2005 with a daily treatment
capacity of 30,000 cubic meters, was not in operation after the earthquake due to power
shortage. The city’s municipal waste incinerator, built several years ago with a daily
capacity of 120 metric tons, has never achieved normal operation. In addition, some gas
stations were damaged but no leakages were observed. Most of them have resumed
operation.
5.
Risks. Initial investigation by the Sichuan EPB identified six enterprises which
have high risks of potential releases of their feedstock chemicals and/or final chemical
products. These are: one pharmaceutical producer, four chemical producers, and one
leather processor. Their production includes medical products, formaldehyde, potash,
PVC, caustic soda, methanol, penicillin intermediate, and leather. Further investigation
of Pengzhou’s industrial sector and potential users and generators of hazardous chemicals
and wastes will be needed.
6.
Six quake lakes were formed after the earthquake. It is reported that two
constitute low risks as mitigation measures have already been implemented, two are of
high risks as actions have yet to be adopted, and the remaining two are yet to be
evaluated because there is no accessibility. The potential impact of these lakes on the
facilities to be investigated by the project is yet to be evaluated.
24
Shifang City in Deyang Municipality
7.
The City. Shifang City is located 20km southwest to Deyang Municipality and
60km northwest of Chengdu Municipality with an area of 864 km2 and a population of
430,000. Of the 864 km2, 60% is mountainous area, 30% is arable land areas, and 10% is
surface water.
8.
Shifang’s economy has been ranked No. 2 among all the counties of Sichuan in
the past 13 years. In 2006, its total economic output amounted to 10.7 billion RMB, of
which over 60% is from its industrial sectors. Among all of the industrial sectors, the
chemical industry contributed over one third of the total industrial output and is listed as
one key pillar industry of the city. Other key industries include food processing and
pharmaceuticals.
9.
Damages. Shifang was severely damaged by the earthquake because it lies on the
fault line of the Longmen Mountains and was only about 40 km from the earthquake’s
epicenter. Its transportation, power, water supply, and communication infrastructure were
seriously damaged. Its direct and indirect economic losses are estimated at over 90 billion
and 250 billion RMB, respectively. Serious secondary geological disasters such as
landslides, depression, and mud-and-stone flows triggered by the earthquake have caused
significant added difficulty for emergency relief efforts.
10.
The sewage treatment system of Shifang is in good condition after the earthquake
but its operation stopped because of power failure. The municipal solid waste incineration
facility has been damaged and is undergoing repair. Some gas stations were damaged, but
no oil leakage were observed. All gas stations have resumed their operations.
11.
Environmental agencies in Shifang were also seriously affected by the earthquake.
The total area of damaged office buildings of Deyang Environmental Monitoring Station
is over 2500 m2. In addition, fifty monitoring devices of the Station were damaged. Total
loss amounted to over 11 million RMB.
12.
Risks. Initial investigations by the Sichuan EPB have identified 20 high-risk sites,
including 19 chemical producers and one pharmaceutical manufacturer. Their main
production includes phosphate, sulfuric acid, ammonia phosphate, cowhide and sulfur
based fertilizers. Further investigation of its industrial sector and potential users,
generators of hazardous chemicals and wastes has yet to be carried out.
13.
Six quake lakes were formed after the earthquake. Significant risks exist, but are
yet to be mitigated. The potential impact of these lakes on the facilities to be investigated
by the project is yet to be evaluated.
Mianzhu City in Deyang Municipality
14.
The City. Mianzhu is located in the northwest of Sichuan Basin with a total area
of 1,245.3 km2, of which 60% is mountainous, 30% is arable land, and 10% is surface
water. In 2006, Mianzhu had a population over 513,000. Its economic output amounted to
over 11.7 billion RMB, of which about 65% was industrial output. Among others, the key
25
industries of the city are food processing and chemical production.
15.
Damages. As the city is only 60 km from the epicenter, it was also severely
damaged by the earthquake. It is reported that all of its enterprises were affected, with
55,000 factories collapsing and more than 60,000 production facilities suffering damage.
The estimated direct economic loss is over 136 billion RMB.
16.
Mianzhu has yet to complete the construction of its sewage treatment plant. Its
recently completed municipal waste incineration facility is in good condition after the
earthquake, and has resumed operation since May 21, 2008. Some gas stations reported
damages, but no oil leakage. Most of the gas stations have resumed their operations
already.
17.
The loss of environmental agencies in Mianzhu amounts to 8.6 million RMB. It
includes damage to over 2500 m2 of buildings and 50 monitoring devices of Mianzhu
Environmental Monitoring Station as well as two vehicles of the Mianzhu EPB.
18.
Risks. Initial investigation of the Sichuan EPB in Mianzhu identified 17 high-risk
sites, including two leather processors and 15 chemical producers. Major production
includes phosphoric acids, ammonia phosphates, sulphuric acid, cowhide, and caustic
soda. Further investigation of its industrial sector and potential users, generators of
hazardous chemicals and wastes are needed.
19.
Four quake lakes were formed after the earthquake. Significant risks exist, but are
yet to be mitigated. The potential impact of these lakes on the facilities to be investigated
by the project is yet to be evaluated.
Anxian County in Mianyang Municipality
20.
The County. Anxian County is located in the northwest of Sichuan Basin with a
total area of 1,404 km2 and a population of 540,000. It is 110km from Chengdu and 10km
from Mianyang.
21.
Damages. It is estimated that the direct economic loss of Anxian is over 30 billion
RMB. 500,000 people are in need of basic living supplies. The county has yet to establish
its wastewater treatment plant and the municipal waste treatment facility. Some of its gas
stations were affected, but no leakage was reported. Most the gas stations have resumed
their operations.
22.
The loss of Anxian Environmental Monitoring Station includes building damages
of 700 m2 and 53 damaged monitoring devices, with an estimated economic value of
about 21 million RMB.
23.
Risks. Initial investigations of the Sichuan EPB have identified six problematic
chemical producers. The major productions are barium carbonate, yellow phosphoric acid
and sulfuric acid. Further assessment of its industrial sector and potential users, and
generators of hazardous chemicals and wastes, is needed.
26
24.
Two quake lakes were formed after the earthquake. Significant risks exist but are
yet to be mitigated. Potential impacts of these lakes on the facilities to be investigated by
the project are yet to be evaluated.
Beichuan County in Mianyang Municipality
25.
The County. Located 72 km from Mianyang and 186 km from Chengdu in the
northwest of Sichuan Basin, Beichuan has a population over 161,000 and a total area of
2,867.83 km2, of which 98.8% is mountainous. In 2006, its economic output was over
one billion RMB with over 85% of this coming from its industrial sectors. Key sectors
include hydropower and mining, wood processing, food processing, pharmaceutical and
chemical industries.
26.
Damages. Due to its closeness to the epicenter and mountainous landscape,
Beichuan was totally destroyed by the earthquake. It was flooded on June 10 by the
Tangjiashan quake lake. The Government has decided that the entire county will be
relocated. The estimated loss of Beichuan is over 65 billion RMB.
27.
The county’s sewage treatment plant was under construction. Its newly built
municipal waste landfill was destroyed by the earthquake. Most of its gas stations have
been damaged, although it is unknown whether there are any leakages.
28.
The loss of Beichuan EPB and Environmental Monitoring Station is over one
million RMB. It includes damage to over 300 m2 of building and to 20 monitoring
devices.
29.
Risks. Initial investigation of the Sichuan EPB identified three risky enterprises,
two chemical producers and one pesticide producers. Major production includes
phosphoric acid, ammonia, caustic soda and raw pesticide. Further assessment of its
industrial sector and potential users and generators of hazardous chemicals and waste will
be needed.
27
Annex 3: Project Results Framework and Monitoring Arrangements
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
PDO
To support emergency responses
to the Wenchuan Earthquake by
identifying and assessing
potential environmental impacts
and risks associated with the
releases of hazardous chemicals
and wastes in the five of the 40
most hardest hit counties.
Intermediate Results
One per Component
Component One:
Risks screened for identified sites
Component Two:
Risks assessed preliminarily for
potential sources of chemical
contamination
Component Three:
Risk mitigation prioritized
Component Four:
Risk information communicated
to the public
Outcome Indicators
1. Prioritized and informed risks
incorporated into the MEP
Program
Use of Outcome
Information
1. Mitigation actions for high
risk sites
2. Recovery and
reconstruction actions
3. Public information
disclosure
Results Indicators
Use of Results Monitoring
for Each Component
Component One:
Component One:
1. An inventory of potential sites 1. Future environmental
and hazard maps prepared and
monitoring during and after
updated
disaster recovery and
2. A list of potential sites
reconstruction period
identified
2. Preliminary site assessment
Component Two:
Component Two:
1. Procured monitoring
1. Recommendation on
equipment used in
mitigation priorities.
preliminary site assessment
2. Public information
2. Sampling and testing results
disclosure
obtained
3. Information integrated into
3. Data analyzed and
the MEP Program
assessment reports submitted
to MEP/Sichuan EPB
Component Three:
Component Three:
1. Prioritized mitigation
1. Emergency responses and
recommendations proposed
long-term mitigation
to MEP/Sichuan EPB
planning
2. Public information
disclosure
3. Information integrated into
the MEP Program
Component Four:
Component Four:
1. Public education materials
1. Public support for the MEP
prepared and disseminated
Program
2. Public awareness on
avoidance of chemical
exposure
28
Outcome Indicators
Prioritized and informed risk
mitigation to be planned by
MEP/Sichuan EPB
Baseline
(%)
Target Value (%)
Q1
Q2
Q3
Data Collection and Reporting
Q4
Frequency
and
Reports
Data Collection Instruments
Data Collection
Responsibility
1. Quarterly progress reports
TBD*
TBD
TBD
TBD
100
Component One:
An inventory of potential sites and
hazard maps prepared and updated
Health and safety training completed
TBD
TBD
TBD
TBD
100
Priority sites identified
TBD
TBD
TBD
TBD
100
0
100
0
20
80
100
0
20
80
100
0
20
80
100
Quarterly
1. Sichuan EPB and
FECO
2. Site visits by Sichuan EPB & 2. FECO and Sichuan
MEP
MEP
3. Bank supervision mission
3. Bank mission
Results indicators for Each Component
100
1. Quarterly progress reports
2. Consultant reports
Quarterly 3. Site visits by Sichuan EPB&
MEP
4. Bank supervision mission
1. FECO/Sichuan EPB
2. Sichuan EPB
3. Sichuan EPB &
MEP
4. Bank mission
Component Two:
Monitoring equipment procured
Sampling and testing results obtained
and wastes properly disposed of
Data analyzed and assessment reports
prepared
Component Three:
Recommendations on mitigation
priorities and related measures
proposed
Quarterly
Quarterly
1. Quarterly progress reports
2. Consultant reports
3. Site visits by Sichuan EPB
4. Hazardous wastes transfer
manifests
5. Bank supervision mission
1. FECO/Sichuan EPB
2. Sichuan EPB
3. Sichuan EPB
4. Sichuan EPB
1. Quarterly progress reports
2. Consultant reports
3. Bank supervision mission
1. FECO/Sichuan EPB
2. Sichuan EPB
3. Bank mission
5.Bank mission
Component Four:
Public education materials prepared and
1. Quarterly progress reports
1. FECO/Sichuan EPB
0
50
75
100
Quarterly
disseminated
2. Bank supervision mission
2. Bank mission
* The values of cells marked with “TBD” will be confirmed during project implementation after the number of priority sites to be assessed under this project is
determined. It is estimated that the number of sites will be around 100 to 200.
Annex 4: Equipment List
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
No.
Equipment
Estimated unit
costs (RMB)
Number
Needed
Estimated total
costs (RMB)
1
Portable COD Analyzer
29,800
5
149,000
2
BOD Autoanalyzer
32,000
5
160,000
3
Conductivity Meter
3,755
5
18,775
4
Portable Ion Concentration Meter
5,100
5
25,500
5
Desktop pH/mv Meter
1,400
5
7,000
6
Fluorine Ion Selective Electrode
5,000
5
25,000
7
Saturated Calomel Reference Electrode
50
5
250
8
Portable TOC Analyzer
80,000
2
160,000
9
Portable Dissolved Oxygen Meter
5,165
5
25,825
10
Portable Gas Chromatograph
500,000
2
1,000,000
11
Portable Spectrophotometer
40,100
5
200,500
12
Portable Chromium(VI) Analyzer
3,800
5
19,000
13
Portable Ammonia Nitrogen Monitor
1,215
5
6,075
14
Portable Phosphate/total Phosphor Analyzer
6,000
5
30,000
15
Portable Heavy Metal Analyzer
196,000
2
392,000
16
Portable Residual Chlorine Analyzer
5,000
5
25,000
17
VOC Analyzer
45,000
5
225,000
18
Flue Gas Analyzer
42,000
2
84,000
19
Portable Multi-Gas Detector
10,000
5
50,000
20
Portable Ammonia Monitor
5,000
5
25,000
21
Chlorine Monitor (air)
4,500
2
9,000
22
Portable Single Gas Monitor
108,000
2
216,000
23
Single Gas Analyzer
14,500
2
29,000
24
Portable Oil Content Analyzer
62,000
2
124,000
25
Handheld Radiation Meter
10,000
2
20,000
26
Digital SLR Camera
28,500
2
57,000
27
Laser Distance Measurer
4,200
2
8,400
28
Interphone
2,750
8
22,000
29
Computer (Laptop)
16,000
2
32,000
30
Gasoline Power Generator
31
4WD SUV
32
10,000
2
20,000
349,000
2
69,8000
GPS
3,980
5
19,900
33
Vehicle Station
8,000
2
16,000
34
Wide Format Color Inkjet Printer
9,000
1
9,000
35
Projector
18,666
1
36
Chemical-resistant Goggle
100
20
18,666
2,000
37
PVC Gloves with Attached Sleeves
180
24
4,320
No.
Estimated unit
costs (RMB)
Equipment
Number
Needed
Estimated total
costs (RMB)
38
Neoprene Chemical-resistant Long Gloves
50
20
1,000
39
Chemical Safety Suit
1,900
10
19,000
40
Respirator
1,300
10
13,000
41
Safety helmet
50
10
500
42
Boots
400
10
4,000
229
3,970,711
Total
31
Annex 5: Financial Management and Disbursement Arrangements
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
1.
The Financial Management Specialist (FMS) has conducted an assessment of the
adequacy of the project financial management system of the GEF - Rapid Assessment of
Chemical Contamination of the Wenchuan Earthquake in Sichuan Province Project (the
project). The assessment, based on guidelines issued by the Financial Management Sector
Board on November 3, 2005, has concluded that the project meets the minimum Bank
financial management requirements, as stipulated in OP/BP 10.02. In the FMS’ opinion,
the project will maintain adequate financial management arrangement acceptable to the
Bank and, as part of the overall arrangements that the borrower has in place for
implementing the operation, provide reasonable assurance that the GEF grant will be
used for the purposes for which the grant is provided. Financial management risk is
defined as the risk that the GEF grant will not be used for the purposes intended and is a
combination of country, sector and project specific risk factors. Taking into account the
risk mitigation measures proposed under the project, a “low” financial management (FM)
risk rate was assigned to the project at the appraisal stage.
2.
Funding sources for the project include a GEF grant and counterpart funds. The
GEF grant will flow from the Bank into a project designated account (DA) to be set up at
and managed by the Ministry of Finance (MOF,) to Foreign Economic Cooperation
Office (FECO) of Ministry of Environment Protection (MEP), and finally to contractors
or suppliers. The GEF grant agreement will be signed between the Bank and the People’s
Republic of China through MOF. MOF will then sign an implementation agreement with
MEP, designating MEP/FECO as the national implementing agency. MEP, in turn will
sign an implementation arrangement with the Sichuan EPB, designating Sichuan as the
local implementing agency. Counterpart funds will be in-kind (i.e., staff cost, office
facilities, transportation, communications, etc.) incurred during project preparation and
implementation.
Country Issues
3.
To date, no CFAA has been carried out by the Bank for China, though dialogue
with the Government of China in respect of the CFAA exercise has been initiated.
However, based on studies and material produced by others, our observations of
developments in the areas of public expenditures, accounting and auditing, and Bank
experience with China projects for the past several years, we note that substantial
achievement in the aforementioned areas has been made and further improvement is
expected in the next few years. This is a work in progress and as the economic reform
program further unfolds, the Government of China has come to realize the importance of
establishing and maintaining an efficient and effective market mechanism to ensure
transparency and accountability, and minimize potential for fraud or corruption.
32
4.
Due to a unique arrangement by the Government of China, funding (particularly
Bank loan/grants) of Bank projects is controlled and monitored by MOF and its extension
at sub-national level, (i.e. finance bureaus at provincial, municipal/prefecture and county
level). However, project activities are usually carried out by implementing entities of a
specific industry or sector due to the level and complexity of expertise involved. While
this segregation of duties provides added fiduciary assurance, the above arrangement
usually requires more coordination on the project, as the multi-level management of the
funding and implementation mechanism sometimes works to the detriment of smooth
project implementation.
Audit Arrangements
5.
The Bank requires that project financial statements be audited in accordance with
standards acceptable to the Bank. In line with other Bank financed projects in China, the
project will be audited in accordance with International Auditing Standards and the
Government Auditing Standards of the People's Republic of China. The Foreign Funds
Application Audit Department of the China National Audit Office has been identified as
auditors for the grant. The implementing period is scheduled to be one year. Pursuant to
the Bank’s audit policy, only one audit report will be required. Audit of the financial
statements covering the entire period during which withdrawals from the grant are made
will be furnished to the Bank not later than six months after the end of such period.
Disbursement Arrangements
6.
One segregated DA denominated in US dollars will be established at a
commercial bank acceptable to the Bank and managed by MOF. The proposed grant will
flow from the World Bank to the DA managed by MOF, who will then distribute the
funds either directly to consultants or suppliers based on withdrawal applications
submitted by FECO, or reimburse FECO for expenditures paid in advance by FECO.
7.
To ensure the grant could be timely disbursed under this emergency circumstance,
the advance to the DA will be made in two payments. The first 50% will be disbursed
upon effectiveness of the Grant Agreement and the second 50% will be disbursed upon
the signing of all procurement contracts. To document the use of the advance and report
eligible expenditures paid from the DA, FECO needs to cooperate with MOF to submit
unaudited interim financial reports (IFR) to the Bank on quarterly basis. The IFR
template is the same format as annual reporting and has been agreed between the Bank
and MOF. By the closing date of the grant, any undocumented advances to the DA must
be refunded to the Bank.
8.
Counterpart funds will be in-kind contributions (i.e., staff cost, office facilities,
transportation, communications, etc.) incurred during project preparation and
implementation. Sichuan EPB, Sichuan and other participating monitoring stations will
be contributing manpower and related costs to conduct preliminary site assessment and
the GEF grant will cover equipment and consulting service costs. MEP and the Sichuan
EPB will absorb all costs related to project management.
33
9.
The GEF grant would be disbursed against eligible expenditures as in the
following table.
Category
Amount of the Grant Allocated
(in USD million)
(Taxes Inclusive)
(1) Goods
(2) Consulting Services
Total
Percentage of
Expenditures
to be financed
600,000
100%
400,000
100%
1,000,000
10.
Retroactive financing of up to 40% of the GEF grant will be applied for eligible
expenses incurred between June 10, 2008 and the date of Grant Agreement signing.
Financial Management and Reporting Arrangements
11.
Implementing Agencies. The proposed project will be under the oversight of the
Steering Committee set up under MEP. It will review progress and impact of the project,
and ensure effective linkages with other components.
12.
FECO will assist the Sichuan EPB to implement the project. It will have a two
person team plus procurement and financial management staff, to help manage the project.
Its role will include: (a) provide overall guidance to the Sichuan EPB, (b) procure and
sign procurement contracts, (c) sign consultant contracts with contract providers based on
selection by the Sichuan EPB, (d) pay equipment suppliers and service providers based
on contracts and request reimbursement from the designated account in MOF, and (e)
finalize progress reports received from the Sichuan EPB and submit them to the Bank.
MEP and the Sichuan EPB have confirmed that they will not require a project
management fee and the full amount of the grant will be used for project activities in
Sichuan.
13.
Sichuan EPB will be the local implementing agency responsible for all project
activities and is the sole beneficiary of the grant. It will appoint a senior staff as project
manager who will be responsible for day-to-day operations, coordination of planning and
monitoring of progress and impacts.
14.
Project activities will be recorded and original supporting documents maintained
by FECO. FECO has been managing a couple of capacity strengthening trust funds and
several large size grants, such as ODSIII, ODSIV and two POPs projects. It has
cumulated extensive experience in managing financial management and disbursement,
and is deemed capable of conducting project accounting and preparing the relevant
project financial statements.
15.
Risk Assessment and Mitigation. The following risks with corresponding
mitigating measures have been identified during the assessment:
34
Risk
Risk
Rating
Before
Mitigating
Measures
Inherent Risk
 Country
level
Modest

Entity Level
Low

Project
Level
Modest
Control Risk
 Budgeting
Modest

Accounting
Low

Internal
Control
Funds Flow
Modest

Financial
Reporting
Low

Auditing
Low

Overall
Modest
Incorporated Risk
Mitigating Measures
Risk
Rating
After
Mitigating
Measures
Legal and institutional framework is acceptable and
current Public Financial Management systems are
functioning reasonably well. Continuous dialogue with
related government entities and technical assistance from
the Bank will help the government to improve its public
sector financial management. In short-term, annual audit
requirements will reduce the risk of project funds not
being used for its intended purposes. For those areas
where government system can not be used, the Bank's
specific requirements will be embedded into project
financial management system. Project supervision
mission, using a risk-based approach, will review the
implementation with regards to all aspects of project
financial management to minimize project FM risk.
FECO has experience in managing the ongoing ODS and
POPs projects financed by the World Bank. It has
accumulated extensive knowledge on Bank’s
requirement and procedures.
FECO and Sichuan EPB will conduct the detailed project
implementation while MOF will manage the Designated
Account and oversee the use of grant proceeds. The
working arrangement between the concerned parties
needs to be agreed in advance and the Bank will closely
supervise its actual implementation progress to avoid any
bottlenecks.
Modest
The FMS will work with the project team to improve the
budget to actual variation monitoring and evaluation.
Accounting policies and procedures for the Bank
financed projects are already in place.
Internal control procedures and policies are already in
place and functioning well in MOF and FECO.
Funds flow arrangement is straight forward. MOF has
been managing designated accounts for various Bank
projects. Additionally, the two tranche advance and
periodical reporting will benefit smooth project
implementation.
The financial reporting responsibilities are established.
The form, content and periodicity of financial reports are
well defined by MOF and understood by FECO.
The external auditor, Foreign Funds Application Audit
Department of the China National Audit Office, has
extensive experience with Bank project audits. The audit
will be conducted in accordance with acceptable auditing
standards.
Low
Modest
Low
Low
Low
Modest
Low
Low
Low
Low
35
16.
Therefore, the overall FM risk-rating assigned to this project at the appraisal stage
is low, provided the proposed mitigating measures are carried out. The FMS will monitor
the effectiveness of the measures and project FM risk during project implementation.
17.
Strengths. Both MOF and FECO have been managing disbursement and financial
management for various Bank projects and they have extensive experience in processing
withdrawal applications and maintaining project financial accounting records. Their
experience and knowledge will help to ensure the grant is properly used as intended.
Additionally, advancing funds to DA will increase disbursement efficiency and to ensure
the grant could be timely disbursed under such an emergency situation.
18.
Weaknesses and Action Plan. Besides the FM risks identified in paragraph 15
above, no other significant weakness is identified.
19.
Budgeting. Although the cost table has been prepared for the project and the
project will prepare its implementing plan, the budgeting system within the project is
usually not well maintained or monitored. The FMS will work with the related entities to
improve their budgeting system during project implemenation.
20.
Accounting. The accounting regulation currently used by all the Trust Fund
recipients in China was drafted by the Finance Division and issued by the International
Department of MOF. It will also be used for the implementation of this grant. The
regulation provides in-depth instructions of accounting treatment of project activities and
covers the following:




Chart of account
Detailed accounting instructions for each project account
Standard set of project financial statements
Instructions on the preparation of project financial statements
21.
The standard set of project financial statements mentioned above has been agreed
between the Bank and MOF and applies to all Bank financed grant and includes the
following:




Balance sheet of the project
Statement of implementation of grant agreement
Statement of designated account
Notes to the financial statements
22.
FECO will be managing, monitoring and maintaining project accounting records
and will retain original supporting documents for project activities. In addition, FECO
will coordinate with MOF to prepare the project financial statements, which will then be
submitted to the Bank for review and comment on a regular basis.
23.
The computerized financial management system “User Friend (Yong You)”, a
well established accounting software package approved by MOF will be utilized by
36
FECO for this project. The task team will monitor the accounting process to ensure that
complete and accurate financial information will be provided in a timely manner.
24.
Internal Control and Internal Auditing. The related project accounting policy,
procedures and regulations were issued by MOF and a series of control procedures are
functioning well in FECO to standardize its financial management and disbursement
work.
25.
There is no independent Internal Audit department for the project. However, this
will not have an impact on the project’s financial management as MOF’s monitoring and
annual external audits will serve as the mechanism to ensure that financial management
controls are functioning appropriately.
26.
Financial Reporting. The format and content of the project financial statements
represents the standard project financial reporting package agreed to between the Bank
and MOF, and have been discussed and agreed to by all parties concerned.
27.
Financial Covenants. No specific financial covenants are applicable to the project
except for those standard financial covenants such as project audit and interim financial
reports.
28.
Supervision Plan. The supervision strategy for this project is based on its FM risk
rating, which will be evaluated on regular basis by the FMS and in consultation with
relevant task team leader.
37
Annex 6: Procurement Arrangements and Capacity Assessment
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
General
1.
Procurement for the proposed Project would be carried out in accordance with the
World Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits dated May
2004,; and Guidelines: Selection and Employment of Consultants By World Bank
Borrowers dated May 2004, , and the provisions stipulated in the Legal Agreement which
takes into consideration the provisions stipulated in the Grant Agreement. The various
items under different expenditure categories are described in general below. For each
contract to be financed under the Project, the different procurement methods or consultant
selection methods, the need for estimated costs, prior review requirements, and time
frame are agreed between the Recipient and the World Bank in the Procurement Plan.
The Procurement Plan will be updated as required to reflect the actual project
implementation needs and improvements in institutional capacity. Since the Project is in
response to an emergency situation, OP/BP8.00 shall apply, which allows for flexible and
simplified procurement approaches.
2.
Procurement of Goods: Approximately US$600,000 will be made available for
goods procurement. This will include but may not be limited to: (a) testing and analysis
equipment for rapid assessment, such as air, soil and water analyzers, gas detectors, gas
chromatograph, gas monitors and personal safety equipment, etc.; (b) standard equipment,
such as interphone, power generator, GPS, projectors, cameras, and computers; and (c)
two off-road rugged vehicles. It is expected that:
a. Shopping will be the procurement method for four procurement packages ranging
from US$66,000 to US$82,000, and two contracts in the range of US$100,000 to
US$140,000 for gas chromatograph and off-road vehicles.
b. Direct contracting will be the procurement method for some small standard
equipment, such as interphones, digital cameras, portable computers, GPS,
protector, which will cost less than US$2,700 each, some of which are about
US$100 each. This standard equipment will be bought directly from stores after
telephone enquires and comparison of prices and specifications. There will be a
few small contracts, each less than $10,000. The total amount allocated for direct
contracting will not be more than US$35,000.
3.
Selection of Consultants: There will be four consultancy contracts estimated to
cost US$400,000, divided into the following:
a. There will be two firm contracts for which it is proposed to use single source
selection method. Prior review of the contracts is required.
i. One contract will be signed between MEP/FECO and the Sichuan
Environmental Monitoring Station for US$150,000. The Sichuan
38
Environmental Monitoring Station is a non-profit legal entity, administratively
under the guidance of the Sichuan EPB. Its business operation is under the
guidance of the National Environmental Monitoring Station of China. It is
responsible for all environmental monitoring in Sichuan. To ensure sufficient
manpower for the project activities, the Sichuan Environmental Monitoring
Station will subcontract work to environmental monitoring stations in
neighboring provinces. In addition to being fully involved in rapid
assessments in some sites, it will also play a coordinating role among all
subcontractors in this assignment. It has no direct relationship with FECO.
ii. One contract will be signed between MEP/FECO and the Sichuan Academy of
Environmental Sciences for US$220,000. It is also a non-profit legal entity
and is administratively under the guidance of the Sichuan EPB and its
business is under the guidance of the Chinese Academy of Environmental
Sciences in Beijing. It develops overall environmental strategy, engages in
important environmental endeavors in the province, and provides technical
assistance to the Sichuan EPB. It does not have any direct relationship with
FECO.
b. There will be two individual contracts for a total of about US$30,000 for two
technical experts to be identified by Sichuan EPB. These two consultants will be
selected with Individual Consultant selection method. There will be no prior
review of these two contracts, but post review will be required.
Justification for Single Source Selection for the Sichuan Environmental Monitoring
Station and for the Sichuan Academy of Environmental Sciences.
4.
It is important that consultants are familiar with local areas, local industrial
situation, have knowledge of local dialect for effective communication, and are accepted
by local industrial sectors and residents. If consultants are from outside the province, they
may not be accepted by local residents and may not gain access to the affected areas,
particularly in the current vulnerable situation.
Assessment of the Agency’s Capacity to Implement Procurement
5.
Appointed by MOF, FECO of MEP will be the national implementing agency for
the project. FECO and Sichuan will sign an implementation arrangement designating
Sichuan as the local implementing agency and sole grant beneficiary. In this context, all
procurement in the project will be handed by FECO in MEP. Based on an initial needs
assessment, Sichuan has provided FECO with a list of necessary equipment for rapid
assessment, and the consultant work that will be required. FECO, on behalf of the
Sichuan EPB and at its request, will sign all procurement and consultant contracts with
suppliers and service providers. All goods will be delivered to Sichuan and all services
will be performed in Sichuan as well.
6.
FECO is an office of MEP that handles all bilateral and international assistance
for the ministry. In the past twenty years, it has managed many international assistance
projects in the billions of dollars. Among others, FECO has managed many Bank projects
39
including: (a) a highly successful completed environment TA project, (b) two completed
and two ongoing ODS projects amounting to USD 500 million and its successful ODS
phase-out has helped the country meets all its Montreal Protocol commitments, (c) two
ongoing POPs projects, (d) one ongoing HCFC-23 project, (e) some completed and
ongoing GEF biodiversity projects. It has over 80 staff, most of which have advanced
college degrees and project management experience. It has strong project management
teams in different focal areas, such as ODS, POPs, biodiversity, and carbon finance; and a
management system with clear roles and responsibilities. Since 2005, FECO has
instituted a contract review committee which meets once a month and reviews all
contracts, regardless of size, before any contract awards. Such tight internal control
mechanisms have helped FECO manage a number of Bank projects with a satisfactory
record. Therefore, it has the ability to manage this project and assist the Sichuan EPB to
implement the project.
7.
FECO has a procurement unit of six persons and has capably managed many large
contracts, including civil works, ICB, NCB, and shopping. There will be one staff from
the procurement unit assigned to this project to ensure procurement is carried out in
accordance with the agreed procedures in the project. Within FECO, the director of the
POPs Unit will have direct oversight of this project as she understands chemical and
hazardous waste management issues and is in charge of all POPs activities of China.
Together with the POPs Unit, the FECO Procurement and Financial Units will provide
support to the Sichuan EPB on all project management issues. FECO is responsible for
maintaining all procurement records and files for this project for post review and audit.
8.
During project implementation, FECO will provide overall guidance to the
Sichuan EPB and oversight of all project activities. Sichuan EPB will have a team of four
staff, one of which will deal with the contract implementation such as delivery of
equipment, and distribution of equipment to different investigation teams.
Frequency of Procurement Supervision
9. Procurement supervision will be part of the overall supervision efforts for this Project.
In addition to the prior review supervision for most of the activities to be carried out from
World Bank offices, the capacity assessment has recommended one procurement
supervision mission each year to carry out post review of procurement actions.
Procurement Plan
10.
Thresholds of Procurement Methods and Prior Review:
Shopping
Direct
contracting
SSS
IC
Abbreviations
Procurement method as specified in article 3.5 of the Bank’s Procurement
Guidelines
Procurement method as specified in article 3.6 of the Bank’s Procurement
Guidelines
Single-Source Selection
Selection of Individual Consultants
40
Procurement Methods
Goods
Shopping
Direct contracting
Consultants
Single Source Selection
Individuals – Competitive
based on IC
11.
Package Description
G1
Technical Equipment Package 1
Portable COD Analyzer
Portable Dissolved Oxygen
Meter
Portable Spectrophotometer
G3
Portable Chromium(VI)
Analyzer
Portable Ammonia Nitrogen
Monitor
Portable Phosphate/total
Phosphor Analyzer
Portable Residual Chlorine
Analyzer
Technical Equipment Package 2
BOD Autoanalyzer
All
Not applicable, TOR cleared with the Bank prior to
contracting
Unit price
(USD)
# of
units
4,319
749
5
5
Estimated
value in
USD
66,000
21,594
3,743
5,812
5
29,058
551
5
2,754
176
5
880
870
5
4,348
725
5
3,623
4,638
5
75,438
23,188
Conductivity Meter
544
5
2,721
Portable Ion Concentration
Meter
Desktop pH/mv Meter
739
5
3,696
203
5
1,014
Florine Ion Selective Electrode
725
5
3,623
Saturated Calomel Reference
Electrode
Portable TOC Analyzer
7
5
36
11,594
2
23,188
Portable Oil Content Analyzer
8,986
2
17,971
Technical Equipment Package 3
80,290
VOC Analyzer
6,522
5
32,609
Portable Multi-Gas Detector
1,449
5
7,246
725
652
5
2
3,623
1,304
15,652
2
31,304
2,101
2
4,203
Portable Ammonia Monitor
Chlorine Monitor
Portable Single Gas Monitor
Single Gas Analyzer
G4
Not applicable, but equipment list agreed with the Bank
before signing of any contract
Not applicable, ditto
Goods:
Ref.
No.
G2
Prior Review
Technical Equipment Package 4
Flue Gas Analyzer
6,087
2
82,351
12,174
Handheld Radiation Meter
1,449
2
2,899
609
2
1,217
1,449
2
2,899
Laser Distance Measurer
Gasoline Power Generator
41
Procure.
Method
Review
by Bank
Shopping
Expected
contract
date
June 20
Shopping
June 20
Post
Shopping
June 20
Post
Shopping
June 20
Post
Post
Ref.
No.
Package Description
Portable Heavy Metal Analyzer
G5
Chemical-resistant Goggle
PVC Gloves with Attached
Sleeves
Neoprene Chemical-resistant
Long Gloves
Chemical Safety Suit
Respirator
Safety helmet
Boots
Portable Gas Chromatograph
G6
Off-road vehicles
G7
Digital SLR Camera
G8
Interphone
G9
Computer (Laptop)
G1
0
G11
GPS
G1
2
G1
3
Unit price
(USD)
# of
units
Procure.
Method
Expected
contract
date
Review
by Bank
28,406
2
14
26
20
24
290
626
7
20
145
275
188
7
58
72,464
10
10
10
10
2
2,754
1,884
72
580
144,928
Shopping
June 20
Post
50,580
2
101,159
Shopping
June 25
Post
4,130
2
8,261
Direct
Contracting
June 25
Post
399
8
3,188
June 25
Post
2,319
2
4,638
June 25
Post
577
5
2,884
June 25
Post
Vehicle Station
1,159
2
2,319
June 25
Post
Wide Format Color Inkjet
Printer
Projector
1,304
1
1,304
June 25
Post
2,705
1
2,705
June 25
Post
TBD
Post
Unallocated amount
24,535
Total
12.
Estimated
value in
USD
56,812
TBD
600,000
Consulting Services
Ref.
No.
Description of Assignment
C1
Site Monitoring
C2
Source identification, site
assessment, and
information disclosure
C3
C4
Monitoring expert
Site assessment expert
Estimated
Costs
Selection
Methods
Review
by Bank
Expected
contract
date
Contract
duration
Comments
150,000
SSS
Prior
June 27
1 yr
220,000
SSS
Prior
June 27
1 yr
Sichuan
Environmental
Monitoring
Station
Sichuan
Academy of
Environmental
Science
IC
IC
Post
Post
June 27
June 27
1 yr
1 yr
20,000
10,000
42
To be selected
To be selected
Annex 7: Proposed Actions to Mitigate Potential Environmental & Social Impacts
China: Rapid Assessment of Chemical Contamination
of the Wenchuan Earthquake in Sichuan Province
Overall Positive Impacts
1.
The proposed project is a technical assistance project that aims to help Sichuan
identify potential environmental risk associated with hazardous materials in the
earthquake area. As an integral part of the MEP Program, the project itself is an
environmental safeguarding activity that will have significant positive environmental and
social contributions to the recovery and reconstruction of the project area.
Project Level Negative Impacts and Mitigation Measures
2.
At the project level, the major environmental concerns are related to personal
health and safety of site investigators and laboratory technicians and proper management
of a very limited amount of wastes generated under this project.
3.
Health and safety. Concerns on health and safety issues will be adequately
addressed through provision of necessary personal protection equipment (PPE) and prior
safety training to all involved staff. In particular, the training will emphasize the
importance of how to carry out inspection and sampling in the damaged area without
provoking any risks from physical stability of the structures as well as from hazardous
substances.
4.
Limited amount of hazardous wastes generated under the project. Implementation
of this project will generate laboratory waste, including those unused samples and all
hazardous wastes generated from sampling and analysis processes. In addition, personal
protection clothes and equipment will also become waste if they are no longer usable. All
these wastes will be collected, properly packaged, and disposed of according to
hazardous waste management procedures defined by the national environmental
regulations. By doing so, environmental and health risks caused by improperly stored or
disposed wastes can be minimized.
Potential Negative Impacts Associated with Future Actions and Mitigation Measures
5.
Although this project will not finance any investment activities, the project will
finance consulting services that will deliver recommendations that assist MEP/Sichuan
EPB prioritize their mitigation actions. Therefore, the project is expected to have indirect
impacts in the project area when MEP/Sichuan EPB adopt the project’s recommendations
to plan its emergency response and future mitigation actions at the high priority sites.
Properly planned and implemented emergency response and future mitigation actions are
expected to generate positive social and environmental impacts for the project counties.
However, it is also recognized that improper use of such recommendations in emergency
43
response and future mitigation actions may lead to secondary environmental
contamination if identified hazardous substances are mishandled.
6.
Given this practical concern, the project will require the technical consultant to
particularly highlight how the emergency response measures should be implemented to
avoid or minimize possible secondary environmental risks associated with such
mitigation actions. In addition, all emergency responses actions should be carried out
with the greatest care and follow all national environmental requirements, including those
policies, technical guidelines issued specifically for the recovery and reconstruction of
the earthquake area.
7.
For medium- and long-term actions, MEP/Sichuan EPB will be reminded that
results of this project are based on preliminary assessment activities. In-depth site
assessment will have to be carried out to help MEP/Sichuan EPB further understand site
situations before they can develop any site mitigation plans.
Sequencing of Mitigation Activities to Avoid and Minimize Risks
8.
MEP emergency policies, plans and guidelines issued prior to June 2, 2008.
MEP and the Sichuan EPB have already taken a series of actions in their efforts to
minimize such risks. To minimize potential secondary environmental risks associated
with activities to be carried out during the recovery and reconstruction process, MEP
issued eleven emergency notices, policies, and technical guidelines (see Annex 1 for
details). In addition, MEP commissioned technical experts to review environmental
impact of the earthquake immediately after the earthquake. Based on the findings and
recommendations of technical experts, MEP initiated its MEP Program to systematically
assess environmental impacts and risks in the post-earthquake environment and
recommend counter measures on key issues, such as drinking water safety, nuclear and
radioactive safety, soil and ecology, environmental protection in reconstruction and
resettlement, chemical contamination, and recovery and strengthening of environmental
protection capacity (see Annex 1 for details). This proposed project has been included in
the program as one of its ten components.
9.
The MEP Program on integrated assessments on environment (launched on
June 3, 2008 and expected to be completed by June 3, 2009). Component 10 will reach
conclusions from different assessments on soil, drinking water, solid waste, nuclear and
radioactive substances, ecology and biodiversity, temporary resettlement, potential
chemical contamination (from this proposed project), industrial development strategy and
environment protection during reconstruction, environmental protection infrastructure
and enforcement capacity. This will allow Component 10 of the MEP Program to develop
an integrated assessment which will provide a comprehensive understanding of the
earthquake damages to the environment and propose measures to ensure that mitigation
actions and future remediation and reconstruction programs will be consistent with
applicable national policies and standards. Information collected from the MEP’s ongoing
environmental monitoring program will also be reviewed and analyzed so that priorities
for environmental safety of the earthquake area can be identified. Based on the integrated
assessment, new policies, guidelines and action plans will be developed and enforced to
44
better regulate environmental emergency responses as well as long-term mitigation
actions to be carried out in the earthquake area.
10.
Sichuan’s integrated re-construction program (expected to start after
situations in the earthquake area are stabilized). To support the future reconstruction,
MEP will present the integrated assessment to the Sichuan EPB and Sichuan Government.
This assessment, together with other sectors’ assessments (such as assessment on effects
on agriculture and livestock, construction, health, education, infrastructure, utilities, etc.)
will help Sichuan to prioritize its reconstruction and recovery program, which is expected
to be presented to the State Council. Initial estimate is that the reconstruction period will
last three to eight years.
11.
Government’s requirements in construction (including upgrading and
expansion) of any facility. The reconstruction of the earthquake area will be carried out
by following strictly all existing national regulations and technical standards and
guidelines, including those for environmental protection. All large construction (any
construction of building, facilities, schools, hospitals, road, sewerage plants, chemical
plants, etc) will have to be reviewed and cleared by the National Development and
Research Committee (NDRC) or by the Sichuan DRC, and other relevant authorities,
including the Sichuan EPB. Any proposed planning and construction activities (including
reconstruction of damaged facilities) will have to follow national environmental
regulations to carry out either planning environmental assessment or environmental
impact assessment to identify and mitigate potential environmental impacts of such
proposed actions. Conclusion of any construction activities (such as schools, landfills,
industrial plants, waste management facility) will also be reviewed and commissioned by
relevant government authorities (either provincial or local) to ensure the facility has met
all safety, health, fire fighting and other construction codes. Only when this permit is
obtained, can the facility be used.
Public Disclosure
12.
Another measure to ensure proper implementation of emergency response and
future actions is public disclosure of project information. Due to the fact that the projects
counties have been severely damaged by the earthquake and have suffered secondary
disasters such as landslides, flooding and continuous aftershocks, the preparation of this
project has been carried out mainly with MEP through direct phone and email
communications with the Sichuan EPB. It is also not expected that disclosure of project
documents at the project counties can be done at this stage. One project county, Beichuan,
has been partially flooded, and the entire population has been re-settled throughout the
Sichuan province. The other four project counties have also been seriously damaged –
roads are almost impassible, most schools, libraries, hospitals have collapsed, and local
authorities and population are currently mainly concerned with safety, sanitary, and
survival issues.
13.
In view of this, MEP has agreed to disclose the project document in English on
the MEP POPs website within a month and disclose the project document in Chinese
within two months after the signing of the Grant Agreement between the Bank and the
45
Ministry of Finance of China. Following the MEP practice, the Sichuan Academy of
Environmental Sciences will disclosure the project document on its own website.
The project has included one project component – Component 4 on Information
Disclosure – to effectively carry out public disclosure to ensure the public are aware and
fully informed. Monitoring results, preliminary risk assessment reports, and
recommendations on mitigation measures will be publicized through leaflets, websites,
TV and radio programs. In addition, this component will support preparation and
distribution of information to the public on necessary safeguards measures for avoiding
or minimizing potential exposure to releases of hazardous chemicals and wastes.
However, caution will be exercised in information disclosure to ensure that any disclosed
information will not be misinterpreted and cause widespread panic to the currently very
vulnerable population.
14.
46
Annex 8: Map (IBRD 36244)
47