federal republic of nigeria project (nuwsrp) environmental …

FEDERAL REPUBLIC OF NIGERIA ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK

NATIONAL URBAN WATER SECTOR REFORM PROJECT (NUWSRP)

E863

FEDERAL REPUBLIC OF NIGERIA

NATIONAL URBAN WATER SECTOR REFORMPROJECT

(NUWSRP)

ENVIRONMENTAL AND SOCIAL MANAGEMENTFRAMEWORK

(FINAL VERSION JANUARY 2004)

JAMES OREHMIE MONDAY

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TABLE OF CONTENTS

Page no.

Lists of Acronyms 3

1. Executive Summary. ... 4

2. Introduction. ..12

3. Description of Proposed Project. ..15

4. Baseline Data. ..20

5. Description of World Bank Environmental and Social Safeguards Policies ..33and Triggers.

6. Description of the Administrative, Policy, Legislative and Regulatory Framework. ..39

7. Determination of Potential Environmental and Social Impacts. ..49

8. Institutional Assessment and Framework for Environmental and Social Management. ..64

9. Environmental and Social Planning, Review and Clearing Process for ..71Participating State Water Agencies (SWA"s) Sub Project Activities to be Fundedunder the NUWSRP.

10. Monitoring Plan. ..76

11. Consultation Plan. ..81

12. Analysis of Alternatives. ..83

Annexes

Annex 1.0 List of Officials Consulted during the Preparation of the ESMF and RPF. ..85

Annex 2.0 Summary of World Bank Environmental and Social Safeguard Policies. ..88

Annex 3.0 Terms of Reference for ESIA's required of the SWA's ..91

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LIST OF ACRONYMS

ESIA - Environmental and Social Impact Assessment.ESMF - Environmental and Social Management Framework.FEPA - Federal Environment Protection Agency ( now defunct).FGN - Federal Government of Nigeria.FMEnv - Federal Ministry of Environment.FMWR - Federal Ministry of Water Resources.IDA - International Development Association (IDA)IMM - Impact Mitigation and Monitoring (branch under the EIA division of

FMEnv)LGA - Local Government AuthorityNUWSRP - National Urban Water Sector Reform ProjectNWRI - National Water Resources InstituteNWRP - National Water Rehabilitation ProjectNWSSP - National Water Supply and Sanitation PolicyPCU - Project Coordination UnitPIU - Project Implementation UnitPSP - Private Sector Partner or Private Sector Participation.RBDA - River Basin Development AuthorityRPF - Resettlement Policy FrameworkRWSS - Rural Water Supply StrategySEPAs - State Environment Protection AgenciesSMWR - State Ministry of Water ResourcesSRMC - Sector Reform Management CommitteeSWAs - State Water AgenciesUCC - Utilities Charges Commission.

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1.0. EXECUTIVE SUMMARY

1.1 General Country and Sector Status

The Federal Republic of Nigeria is a country well endowed with abundant mineralwealth, diverse people and a rich and enviable bio-diversity. Nigeria is situated in WestAfrica lying between latitudes 4000 N and 1400ON and longitudes 20500 W and 14045 E,bordered to its south by the Gulf of Guinea, by the Republic of Benin to the West,Republic of Niger to its North, Chad at its North Eastern Boundary ( water boundary) andCameroon to its East. Nigeria has a total area of 923,768 sq. km of which the total landarea is 913, 768 sq. km and 10,000 sq. km is water.

According to the latest estimates, the population of Nigeria is approximately, 130millionWorld Bank, Country at a Glance Report), with an average population density of 141persons per sq. km. This makes Nigeria the largest country in Africa by population. TheNorthern Region has a population of about 49.6 million, the middle belt to be about 26million and the Southern Region to be about 54.4 million. The annual average populationgrowth rate between 1995-2001 was projected at 2.6% and the urban populationrepresented 47% of the total population or 61.1 million people. The illiteracy rate, whichis an estimate of the percentage of the population over 15years old that have notcompleted a primary school education level is 35%.

One projection of Nigeria's population estimates that it will reach the level of 338 millionby the year 2050. If this estimate and other country estimates are correct, Nigeria wouldmove from 10th most populous country in the world to the 4th most populous country in ashort span of just under 50 years. The problems facing the water supply sector in Nigeriaare many, and characterized by acute shortage of supply, even though Nigeria isblessed with abundant water resources estimated at 226 billion m3 of surface water andabout 40 billion m3 of ground water.

For example, out of the 85 million people living in urban and peri-urban areas, less thanhalf have reasonable water supply. Many households, often the poorest, end uppurchasing water from private vendors at a much higher charge than from the publicsupply. Moreover, water supply services where they exist, are unreliable and of lowquality and are not sustainable because of difficulties in management, operation andpricing, and failure to recover costs. Also, many water supply systems show extensivedeterioration and poor utilization of existing capacities, due to under-maintenance andlack of funds for operations. Additionally, the high cost of imported equipment especiallyin terms of a depreciating currency, and inadequate cost recovery policies havecontributed to large financial deficits in many SWA's. This has left most SWA'sdependent upon state subventions to finance operations and maintenance of their watersystems, to service debt and to finance new investments.

The Federal Government of Nigeria and the states are totally committed to address thisproblem. Water has a top priority in the governments development agenda, mainly dueto the cross-cutting impact of safe water on health, productivity, and quality of life, withserious implications for poor and vulnerable communities.

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Therefore, the government of the Federal Republic of Nigeria is working to addressthese problems by recognizing the need to manage the water sector in an integrated andsustainable manner and has embarked on the preparation of a National WaterResources Management Strategy (WRMS) to ensure proper management anddevelopment of its water resources. Among the strategies being promoted in the WRMSare considerations for a participatory approach which seeks to give the private sector animportant role to play.

1.2 Project Objectives

In line with this strategy and following the successful implementation of the NationalWater Rehabilitation Project (NWRP) , the FGN requested the World Bank for support ofits National Urban Water Sector Reform Project (NUWSRP). The overarching objectiveof the proposed NUWSRP is to improve water supply in selected urban areas of Nigeriathrough optimal management of, and investment in, urban water utilities. The principaloperational objective of the proposed NUWSRP is to involve strategic private sectorparticipation (PSP) in managing and improving the quality and coverage of water supplyin these urban areas. In operational terms, the key development objective of theNUWSRP is to foster sustainable public-private partnerships in the water sector which:

* Improve service delivery capacity of participating water utilities throughorganizational restructuring, appropriate technical assistance, training, tariff andpolicy reform, transaction and investment design.

* Attract and retain long term finance to the sector from government and donorsthrough demonstrated improved service and efficiency of operation throughconducive investment climate and appropriate PSP transaction including: (i)regulatory, policy and legal frameworks at federal and state levels; and (ii) PSPtransactions with appropriate risk sharing, and optimal leveraging of grant, equityand debt financing.

* Improve access to water services by poor and vulnerable communities throughappropriate design and incentive structures of PSP contracts that are conduciveto targeting the poor for service improvements.

1.3 Project Description

The proposed NUWSRP is structured to achieve it objectives within four majorinvestment components of the project, which are;

Component 1: Policy and Institutional Development Component:

1A. Project Manaqement.

Project Management will be decentralized to the utility level, both in keeping with theCAS mandate, as well as with international best practice. Oversight and supervision willbe performed by the Federal Ministry of Water Resources (FMWR) in Abuja, with eachparticipating utility forming a Project Implementation Unit (PIU) for day to daymanagement and implementation of project activities. Each PIU will be led by a



Coordinator whose responsibilities will be defined in collaboration with IDA and FMWR.The PIU will be assisted by consultants financed under the project for specific areas ofexpertise, as needed. This component will finance necessary capacity building andequipment for the PIU.

1 B. Customer Outreach.

This sub component will partially finance establishment of an appropriate customeroutreach and communications mechanism within the participating utilities in all sixstates.

1 C. State Requlatorv Mechanism.

This sub component will finance the establishment of one or more state level regulatoryagencies and will support the establishment of the core regulatory entity, and capacitybuilding of independent regulators, and studies to draft regulatory gaps and providecoordination with federal regulation.

1 D. State Reform and Enablinq Leqislation

This sub component will finance drafting of and awareness raising regarding enablinglegislation at the state level in each participating state.

I E. State Government Communications Outreach

This sub component will finance the implementation of communications strategiesdeveloped during the preparation phase through surveys. At the state level, this subcomponent will finance media events, cross sectoral dialogue, and outreach events fordifferent groups of the general public, and be wider in scope and contents than theconsumer outreach component at the utility level.

1F. Federal Policy and Project Coordination

This sub component will finance the Project Coordinating Unit (PCU) at the FMWR tocarry-out the functions of coordination, quality control and standardization, oversight,and supervision; and will also provide support to the FMWR in its policy developmentwork, in monitoring and evaluation of project and sector activities and for regular projectand sector workshops to enhance capacity building.

1 G. Support to Non Participating States.

This sub component will support overall sector development through FMWR'sinstitutional reform efforts and capacity building for non participating states and will alsosupport the conduct of PSP option studies in up to six additional states, and small scaletechnical assistance and capacity building activities- based on what has and has notworked in the six project states - in the 30 non-project states.

1H. Federal Leqal and Regulatorv Reforms.

This sub component will finance activities at the federal level to establish a sustainablelegal and regulatory enabling environment.

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Component 2: Transactional Component

This component will support (a) all transaction advisory services, and (b) bidding, andcontract execution costs. This includes refinement of the work done under the PSPoptions studies, such as upgrading and digitizing of customer databases, assetinventories, and advisory tasks including negotiations with private investors, preparationof draft contracts, and finally, bidding and evaluation of technical bids.

Component 3: Environmental Component

To finance the environmental and social management process the NUWSRP will follow,as described in this ESMF.

Component 4: Investment Component

4A. Utilities with PSP Contracts Procured Pursuant to Bank Guidelines

Utilities which have successfully awarded PSP contracts under this project, and haveadhered to Bank standards of international competitive bidding, will be eligible to accessfinancing under this component for physical investments. Eligible investments includeany of the paraphernalia for improving performance, which could include: (i)rehabilitation of mechanical and electrical equipment, pipelines (including houseconnections) and structures, (ii) replacement of those that have passed their useful life,(iii) installation of customer or production meters or anything else that would help theutility operate in a more commercial manner ( including retrenchment costs), (iv)expansion or infill of distribution to enable the full production capacity to be utilized (based on consumption at expected tariff and on a reducing amount of unaccounted forwater), (v) standby generators ( or other equipment) to increase reliability, and (vi) smallinvestments in additional production capacity such as may be needed to matchproduction capacity to distribution capacity, or to serve new customers, e.g. newboreholes where appropriate or even an additional stream of treatment in an existingtreatment plant.

4B. Service Improvements in Poor and Vulnerable Communities

Based on the recommendations of the poverty maps and assessments, serviceimprovements in identified poor and vulnerable communities were designed. This sub-component will finance a range of delivery mechanisms, including but not limited topublic standpipes, in these targeted vulnerable communities. Delivery mechanisms andimprovement targets are to be included in the PSP contracts, and is so stipulated in thesub-loan agreements with each participating state.

1.4 Participating States

Thus far the states that have self selected , based on performance criteria and politicalcommitment to reform, are Kano, Kaduna, Gombe, Plateau, Enugu and Ogun. Whilethese six states are the current contenders, it is possible that all of these utilities will notcontinue to be able to participate in the project if their continued performance does notwarrant it. In these circumstances, other well-performing states may substitute for them.

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1.5 Environmental and Social Requirements

The FGN by its Federal and State Laws and Decrees and the World Banks Operationaland Procedural Policies, specifically OP 4.01 requires the government to prepare anEnvironment and Social Management Framework, ESMF, which establishes amechanism to determine and assess future potential environmental and social impactsof the participating State Water Agencies (SWA's) subproject investments under theproposed NUWSRP, and then to set out mitigation, monitoring and institutionalmeasures to be taken during design, implementation and operation of these subprojectsto eliminate adverse environmental and social impacts, offset them , or reduce them toacceptable levels. This is precisely what is required at this stage of project preparationsince the SWA's subprojects have not yet been identified. OP 4.01 further requires thatthe ESMF report must be disclosed as a separate and stand alone by the Government ofNigeria and the World Bank as a condition for Bank Appraisal of the NUWSRP. Thedisclosure should be both in Nigeria at the federal and state levels where it can beaccessed by the general public and local communities and at the Infoshop of the WorldBank and the date for disclosure must precede the date for appraisal of the project.

1.6 Key Highlights of the ESMF

The key highlights in this ESMF report are presented as follows:

* Detailed and comprehensive environmental and social baseline data which willprovide the environmental and social management process with key baselineinformation when identifying adverse impacts. The information contains data onNigeria's bio-physical environmental features such as its ecosystems, geology,hydrology in terms of ground and surface water resources, major and sensitivewetlands, flora and fauna. On social baselines the report discuss the mainfeatures of Nigeria's demographics, public health features, poverty and users ofwater resources.

* A through review of the World Banks Safeguards Policies is made. The triggeredpolicies are:

- OP 4.01 Environmental Assessment- OP 4.04 Natural Habitats- OP 4.12 Involuntary Resettlement- OP 4.37 Safety of Dams- OP 7.50 Projects on International Waterways.

Table 5.1 presents a summary of the requirements to comply with these polices. Thereport states that other Bank policies may apply and includes a summary in Annex 2.0 ofall the Bank Safeguards Policies.

* The administrative, policy, legislative and regulatory framework in Nigeria for theWater Sector in particular and for environmental management in general ispresented in chapter 6.0.

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* Generic potential adverse Environmental and Social Impacts from anticipatedproject activities are presented in detail in chapter 7.0, with causes and

corresponding mitigation measures.

* The activities of the SWA must include a Sanitation component that addressesmanagement of sewage and waste water at user end locations.

* The roles and responsibilities of key institutions for the purposes of this ESMFare discussed in Chapter 8.0 and summarized in Table 1.1 below;

Phase 1: Transaction stage Phase 2: Post PSPleading up to PSP Contract/implementation.award/investment planning.

Federal Ministry of Water Project Coordination and Project Coordination,Resources (FMWR) Oversight Oversight, reporting to IDA

Federal Ministry of Review and clearance of Monitoring SEPA's andEnvironment (FMEnv) ESIA's. reporting to FMWR

State Environment Review and clearance of Monitoring SWA's andProtection Agencies ESIA's reporting to FMEnv.(SEPAs)

State Water Agencies Prepare ESIA's Self Monitoring and reporting(SWAs) to SEPAs, FMEnv and FMWR.

Table 1.1: Summary Table of Institutional Framework for Environmental andSocial Manaqement.

Chapter 8 also proposes a training program at a Cost of US$105,000

* The Environmental and Social Management process is contained in Chapter 9.0with the following key features;

- Preparation of an Environmental and Social Impact Assessment (ESIA).Each and every participating SWA is required to prepare an ESIA for their subproject/activities to be funded under this project .

- Incorporate Mitigation Measures into the Design.The SWA's will re-introduce into/adjust/adapt/revise their sub project technicaland engineering designs (i.e. drawings , specifications for materials andworkmanship, Bills of Quantities, contract clauses, etc.) the required mitigation

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measures identified in the prepared sub project ESIA, before submission of theentire sub project proposal ( Technical Designs and ESIA) for review andsubsequent clearance.

Submit Proposals to respective State Environmental Protection Agency(SEPA) and to the FMEnv. The respective SEPA of the state in which theparticipating SWA is located and the FMEnv will review and clear the subprojects from an environmental and social standpoint only, by ensuring subproject designs have identified environmental and social impacts, mitigated theseimpacts and have monitoring plans and institutional measures to be taken duringimplementation and operation.

- Approval for Funding. Only when the SEPA's and the FMEnv have givenenvironmental and social clearance of the SWA sub projects , will they bereferred for approval for funding to the SRMC/FMWR.

Costs of Preparing the required ESIA's is estimated at US$45,000.

* Chapter 10 contains a detailed Monitoring plan, with verifiable indicators,monitoring roles and responsibilities and costs to implement this plan. Chapter 11presents the Consultation plan.

A summary of the cost plans are presented here below:

Cost in US $ For Implementing the Monitoring Plan

Service Providers Equipment Vehicles Total(for 3years)

SWA's (6no.) 15,000/year 250,000/state 35,000/state 1,980,000

SEPA's (6no.) 7,500/year 50,000/state 35,000/state 645,000

FMEnv. (lno.) 5,000/year 25,000 ----- 40,000

FMWR (1no.) 7,500/year 35,000 57,500

Total 442,500 1,825,000 455,000 US$2,722,500

Table 1.2

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Cost for Environmental and Social Management of theNUWSRP(in US$)

-Monitoring Plan 2, 722,500Training 105,000Cost of Preparing ESIA's 45,000Total Costs 2,872,500

Table 1.3



2.0. INTRODUCTION

The Government of the Federal Republic of Nigeria (FGN) has asked the World Bank forsupport of its National Water Urban Sector Reform Project (NUWSRP). The project isdesigned to be implemented in two phases, during the first phase, sector reforms wouldbe implemented as part of a strategy to seek Private Sector Participation (PSP) inpartnership with the State Water Agencies (SWA's) and in the second phase certainactivities that would improve the ability and performance for water service delivery wouldbe implemented. The activities that this project would be financing that would give risefor environmental and social concern were not identified during project preparation.

Therefore, in compliance with Federal and State laws of Nigeria and the World Bank'sSafeguards Policies, the Government of Nigeria, Represented by the Federal Ministry ofWater Resources has prepare this Environmental and Social Management Framework (ESMF) , to establish a mechanism to determine and assess future potentialenvironmental and social impacts of the NUWSRP, and then sets out mitigation,monitoring and institutional measures to be taken during implementation and operationsof the proposed investments , to eliminate their adverse environmental and socialimpacts, offset them, or reduce them to acceptable levels. The FGN is also furtherrequired to disclose this document in-country as a separate and stand alone documentso that it is accessible by the general public, local communities, present and futurecustomers of the water sector, potential project affected people, local NGO's and allother stakeholders and also at the Infoshop of the World Bank and the date fordisclosure must precede the date for appraisal of the project.

Since the project investments mentioned above have not yet been identified, each SWAthat participates in this project will be required to prepare a separate and stand aloneEnvironmental and Social Impact Assessment (ESIA), which would then subsequentlyhave to be cleared by their State Environmental Protection Agency (SEPA) and by theFMEnv and the World Bank, prior to approval of their planned/proposed plannedinvestments. These ESIA's would be the instruments through which the sub projectsenvironmental and social impacts are identified and assessed and would also evaluatealternatives and would design appropriate mitigation, management and monitoringmeasures.

2.1 Scope of Work

The scope of work is to:

(a) Prepare an Environmental and Social Management and Framework(ESMF)

(b) Resettlement Policy Framework (RPF)

The ESMF is to present a framework for screening, monitoring and mitigating potentialimpacts, with a process for triggering subsequent sub project environment and socialassessments, in all cases.

The RPF is required to be separate document, prepared following the appropriate lawsin Nigeria and the World Bank Operational Policy 4.12, and is also required to be

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disclosed before appraisal of this project. The RPF establishes the resettlement andcompensation principles, organizational arrangements and design criteria to be appliedto meet the needs of the people who may be affected by the project activities requiringland acquisition and /or denial, restriction or loss of access to economic resources.

2.2 Study Approach and Methodology

The study was conducted by the consultant using the following approach andmethodology;

* Review of the NUWSRP literature including the Project Concept Document(PCD), the evolving draft Project Appraisal Document (PAD), the approvedIntegrated Safeguards Data Sheet (ISDS), Mission Aide Memoir's, ProjectDocuments of NWRP, the Constitution of the Federal Republic of Nigeria,numerous relevant Federal, State, and local laws, regulations, decrees, acts,policies and guidelines, World Bank Safeguards Policies and other relevantdocuments.

* A 15 day study tour in Nigeria during which discussions were held withnumerous, relevant federal and state ministries and agencies ( See Annex 1.0 forcomplete list). The States visited were Kano, Kaduna, Plateau, Enugu and Ogun.Gombe State was not visited. These are the six states that have pre-selected/qualified for participation in this NUWSRP during project preparation.Using the specific circumstances of each state visited, the particular technicaloperations of each SWA was studied, their capacity to implement the proposedenvironmental and social management process and mitigation measures wasassessed, and discussions held to determine appropriate recommendations forimprovement in service delivery, mitigation, monitoring, institutional requirementsand their training and capacity building needs. This was also done for the eachSEPA visited and for the FMEnv. It was observed that the SWA's remainedextremely supportive of the planned NUWSRP and their level of support wasevident in their enthusiasm to participate and their lively contribution to thediscussions and field visits, and also in their verbal statements. In this spirit ofcommitment, support and ownership, the recommendations reached in this reportwere jointly agreed to as reflecting the needs of the SWA's and the SEPA's, andwere thus seen as sustainable.

* During the discussions with the SWA's and the SEPA's, the use, scope andefficacy of existing environmental requirements at the federal and state levelswas discussed and mutually agreed conclusions were drawn.

* The discussions and field visits took the form of the consultant and a member ofthe FMWR arriving at a pre-arranged meeting at the offices the SWA, or SEPA,etc. where most if not all of the senior management of the agency visited waspresent. Following introductory remarks by the member of the FMWRaccompanying the consultant, the administrative head of the agency/office visitedwould make his remarks and then the consultant was invited to make hispresentation. The presentation of the Consultant can generally be characterized

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as stating the purpose of his mission, followed by explaining in some detail therequirements of the ESMF and RPF and the key features of the corresponding

World Bank Operational Policies , a call for the agency/office to share theirexperiences during NWRP or any other project regarding any environmental andsocial issues in light of the requirements of the ESMF/RPF, and then theconsultant would finalize his remarks by discussing potential plannedinvestments that SWA's may seek under this project . This was followed by anopen Q&A session often followed by a visit to operational facilities/sites, in thecase of the SWA's. On completion of the field visits, the group returned to theadministrative offices, where a summary meeting was held to discussenvironmental and social concerns based on observations of/ from the field/sitevisits, previous shared experiences and recommendations and requirements forcompliance with the ESMF/RPF during implementation of the NUWSRP.

. These discussions and consultations with the FMWR, FMEnv, SWA's andSEPA's proved invaluable in designing and coming up with appropriate solutionsand recommendations that the SWA's could claim ownership of and thus ensurethe sustainability of the project as a whole. The discussions and consultationswere the backbone of the work done by the consultant.

* Report writing.

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3.0 DESCRIPTION OF PROPOSED PROJECT

The Project Development Objective: The overarching objective of the proposed NationalUrban Water Sector Reform Project (NUWSRP) is to improve water supply in selectedurban areas of Nigeria through optimal management of, and investment in, urban waterutilities. The principal operational objective of the proposed NUWSRP is to involvestrategic private sector participation (PSP) in managing and improving the quality andcoverage of water supply in these urban areas.

In operational terms, the key development objective of the NUWSRP is to fostersustainable public-private partnerships in the water sector which;

i) improve service delivery capacity of participating water utilities throughorganizational restructuring, appropriate technical assistance, training, tariff and policyreform, transaction and investment design.

ii) attract and retain long term finance to the sector from government and donorsthrough demonstrated improved service and efficiency of operation through conduciveinvestment climate and appropriate PSP transaction including: (a) regulatory, policy andlegal frameworks at federal and state levels; and (b) PSP transactions with appropriaterisk sharing, and optimal leveraging of grant, equity and debt financing.

iii) improve access to water services by poor and vulnerable communities throughappropriate design and incentive structures of PSP contracts that are conducive totargeting the poor for service improvements.

The NUWSRP is designed into four components to achieve these objectives, which are;

Component 1: Policy and Institutional Development Component( US 41.OOmillion):

1A. Proiect Manaqement.

Project Management will be decentralized to the utility level, both in keeping with theCAS mandate, as well as with international best practice. Oversight and supervision willbe performed by the Federal Ministry of Water Resources (FMWR) in Abuja, with eachparticipating utility using the existing Project Implementation Unit (PIU) ( set up duringNWRP') for day to day management and implementation of project activities. Each PIUwill be led by a Coordinator whose accountabilities will be defined in collaboration with

IIt is worthy to note that preceding this project was the National Water Rehabilitation Project (NWRP)also funded by IDA, that has attempted to address many of the issues facing the urban water utilities. AboutUS$300m has been utilized under the NWRP to rehabilitate physical assets ( about a quarter of thatestimated in 1988 to be necessary), and in institutional development of the State Water Authorities (SWA's).The NWRP completed a manpower audit and established a national training program, developedstandardized edicts for the SWA's, developed manuals for many SWA functions, and provided technicalassistance to many SWA's to improve their commercial, financial and technical operations. The NWRP wasalso instrumental in establishing a network and dialog amongst the personnel of the SWA's, integrating thesupport given at the federal level, and promoting the ideas of reform needed in the sector. It has had a majorimpact in terms of capacity building, however many of the structural problems in the sector, remain, leadinginevitably to the clear conclusion that major structural reform is needed in the way of doing business in thesector.



IDA and FMWR. The PIU will be assisted by consultants financed under the project forspecific areas of expertise, as needed. Each PIU has undergone a fiduciary auditcomprising assessments of their capacity in procurement and financial management asper bank standards. PIU members have received training in procurement and financialmanagement as appropriate, and are expected to receive further training to reinforcetheir skills. This component will finance necessary capacity building and equipment forthe PIU.

I B. Customer Outreach (US$3 million).

This sub component will partially finance establishment of an appropriate customeroutreach and communications mechanism within the participating utilities in all sixstates. Most water boards currently have a basic outreach program, andcommunications strategy geared to building awareness regarding PSP in water serviceswas undertaken to a limited extent during project preparation. During implementation,the strategy will be operationalized with establishment of a core communications teamwithin the utility.

1C. State Requlatory Mechanism (US$9 million).

This sub component will finance the establishment of one or more state level regulatoryagencies (based on study recommendations) and will support the establishment of thecore regulatory entity, and capacity building of independent regulators, and studies todraft regulatory gaps and provide coordination with federal regulation. Principally, thiscomponent will operationalize the recommendations of regulatory analysis undertakenduring preparation.

1D. State Reform and Enabling Legislation (US$6 million).

This sub component will finance drafting of and awareness raising regarding enablinglegislation at the state level in each participating state. Again, this will primarilyoperationalize the recommendations of the analytical work and studies undertakenduring preparation, with added emphasis on public and stakeholder participation in thelegislative process.

1E. State Government Communications Outreach (US$6 million).

Given the importance of public communications regarding the PSP process in theprovision of public services, this sub component will finance the implementation ofcommunications strategies developed during the preparation phase through surveys. Atthe state level, this sub component will finance media events, cross sectoral dialogue,and outreach events for different groups of the general public, and be wider in scope andcontent than the consumer outreach component at the utility level. This sub- componentis designed to foster a greater and coherent understanding of the role of the privatesector in the provision of public services, water in particular. This will enhance overallsustainability by reducing resistance to PSP among the general public, and byimplication, generate greater continuity of support from the state government.

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IF. Federal PolicV and Project Coordination (US$5 million).

The federal ministry (FMWR) has an ongoing project coordination unit from the IDAfinanced NWRP which closed in 2001. This PCU has climbed the learning curve in terms

of procurement, financial management and disbursement pursuant to Bank guidelines,and can best guide the participating states in project management issues. Due to thedecentralized nature of this project, FMWR's role in NUWSRP is vastly different fromtheir role in NWRP. In this project, FMWR is responsible for coordination, quality controland standardization, oversight, and supervision. The state governments and the utilitiesthemselves are accountable for project management and day to day execution. FMWRwill also serve as a help desk on all queries operational questions and guidance fromparticipating utilities on matters of procurement, financial management anddisbursement, and if necessary, will liaise with IDA staff in Abuja on all matterspertaining to IDA guidelines and standards. This sub component will finance the ProjectCoordinating Unit (PCU) at the FMWR to carry-out the functions of coordination, qualitycontrol and standardization, oversight, and supervision; and will also provide support tothe FMWR in its policy development work, in monitoring and evaluation of project andsector activities and for regular project and sector workshops to enhance capacitybuilding.

1G. Support to Non Participating States (US$4 million).

This sub component will support overall sector development through FMWR'sinstitutional reform efforts and capacity building for non participating states. Due toresource, logistical and constraints arising out of a project involving more than six states,the vast majority of the states will not benefit from this project directly. However, it isexpected that due to the landmark nature of PSP in the water sector, the efforts of thesix participating states will impact the entire sector. To better link the outputs of thisproject, at least from a knowledge sharing and capacity building perspective, it isimportant to engage the non participating states in a reform process which benefits fromthe lessons learned from this project. This sub component will also support the conductof PSP option studies in up to six additional states, and small scale technical assistanceand capacity building activities- based on what has and has not worked in the six projectstates - in the 30 non-project states. This component will be executed and managed byFMWR.

1H. Federal Legal and Regulatory Reforms (US$2 million).

This sub component will finance activities at the federal level to establish a sustainablelegal and regulatory enabling environment. While most of the systematic reforms arelikely to be at the state level, several enabling legislative and regulatory reforms will beneeded at the federal level. The study during the preparation identified the areas ofreform, this component will operationalize those recommendations.

Component 2: Transactional Component (US$ 24.00 million)

This component will support (a) all transaction advisory services, and (b) bidding, andcontract execution costs. This includes refinement of the work done under the PSP

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options studies, such as upgrading and digitizing of customer databases, assetinventories, and advisory tasks including negotiations with private investors, preparationof draft contracts, and finally, bidding and evaluation of technical bids.

Component 3: Environmental Component (US$2.9 million)

To finance the environmental and social management process the NUWSRP will follow,as described in this ESMF.

Component 4: Investment Component (US$204.00)

4A. Utilities with PSP Contracts Procured Pursuant to Bank Guidelines (US$180 million)

Utilities which have successfully awarded PSP contracts under this project, and haveadhered to Bank standards of international competitive bidding, will be eligible to accessfinancing under this component for physical investments. Eligible investments includeany of the paraphernalia for improving performance, which could include: (i)rehabilitation of mechanical and electrical equipment, pipelines (including houseconnections) and structures, (ii) replacement of those that have passed their useful life,(iii) installation of customer or production meters or anything else that would help theutility operate in a more commercial manner ( including retrenchment costs), (iv)expansion or infill of distribution to enable the full production capacity to be utilizedbased on consumption at expected tariff and on a reducing amount of unaccounted forwater), (v) standby generators ( or other equipment) to increase reliability, and (vi) smallinvestments in additional production capacity such as may be needed to matchproduction capacity to distribution capacity, or to serve new customers, e.g. newboreholes where appropriate or even an additional stream of treatment in an existingtreatment plant.

Major "lumpy" investments in new dams, treatment plants, transmission mains, etc. withmajor engineering, financial and/or environmental implications would not be included inthe project; they would have to become separate projects subject to proper optimizationand safeguards in all respects. Funds available under this project based on currentevaluations are insufficient for these types of works.

4B. Service Improvements in Poor and Vulnerable Communities (US$24. million)

Based on the recommendations of the poverty maps and assessments, serviceimprovements in identified poor and vulnerable communities were designed. This sub-component will finance a range of delivery mechanisms, including but not limited topublic standpipes, in these targeted vulnerable communities. Delivery mechanisms andimprovement targets are to be included in the PSP contracts, and is so stipulated in thesub-loan agreements with each participating state.

In terms of implementation, the project has a tripartite structure involving activities at theutility level, at the state government level, an to a lesser extent, coordination and policyactivities at the federal level.

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The six participating utilities self selected to participate in the project through competitiveperformance criteria, particularly their apparent commitment at top political level toreform, and financial performance including cost recovery levels, as well as own-sourcedefforts to rehabilitate and expand coverage, are;

* Kaduna State Water Board, KdSWB (and Kaduna State Government KdSG)

* Kano State Water Board, KnSWB ( and Kano State Government (KnSG)

* Plateau State Water Board, PLSWB (and Plateau State Government PLSG)

. Ogun State Water Board, OGSWB ( and Ogun State Government OGSG)

* Gombe State Water Board, GOSWB ( and Gombe State Government GOSG)

* Enugu State Water Board, ENSWB ( and Enugu State Government ENSG)

While these states are the current contenders, it is possible that not all of them willcontinue to participate in the project if their continued performance does not warrant it. Inthese circumstances, other well-performing states may substitute for them. Utilitieswhich self select to continue participating in the project will undertake the followinginstitutional development (US$5.5 million per state - Phase 1) and investmentactivities ( up to US$34 million per state - Phase 2).

Phase 1:

* Studies to confirm and refine the appropriate PSP model* Willingness-to-pay and tariff studies* Investment planning and sanitation/environmental studies* Financial modeling, customer enumeration and preparation of asset registers* Public communication outreach and information dissemination; and* Transaction preparation, bidding and award.

Phase 2, after award of PSP contract

* Improved service delivery through contractual performance benchmarks* Increasing commercial utility performance under contract* System rehabilitation through PSP contract* Network expansion through PSP contract, and* Environmental management.

Phase 1 of the project, lasting typically for two years, will enable and facilitate award ofPSP contracts. Once a contract is in place in any state, with plausible and achievableoperational targets, financing will become available to the state through Phase 2 of theproject.

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4.0. BASELINE DATA

4.1 The Blo- Physical Environmental Features

Nigeria is situated in West Africa lying between latitudes 4°00 N and 1400ON andlongitudes 20500 W and 14°45 E, bordered to its south by the Gulf of Guinea for about850km, by the Republic of Benin to the West for 773km, Republic of Niger to its North for1497km, Chad at its North Eastern Boundary ( water boundary) for 87km and Cameroonto its East for 1,690km. Nigeria has a total area of 923,768 sq. km of which the total landarea is 913, 768 sq. km and 10,000 sq. km is water.

Nigeria is blessed with abundant water resources estimated at 226 billion m3 of surfacewater and about 40 billion m3 of ground water.

The main characteristics of Nigeria's geo-physical environment are southern lowlandsthat merge into central hills and plateaus; mountains in the southeast and plains in thenorth, with the lowest elevation point being at sea level (0 m) to 2,419m at ChappalWaddi.

The Northern Ecological Region is comprised of the Sokoto Plains on the western end,the High Plains of Hausa territory in the center and the Lake Chad basin in the extremenortheast. The southern part of the Northern belt covers Bauchi, Gombe, Kaduna andKebbi States .

Geographically, the Middle Belt Region (MBR) lies between the rainforest region to thesouth and the Guinea Savanna to the north. Administratively, it is the home to eightstates and the Federal Capital Territory (FCT) of the Federal Republic of Nigeria. Theregion is dominated by two main rivers of Nigeria, the Rivers Niger and Benue. The riverNiger flows from Jebba to Lokoja, a distance of about 300km, and the Benue runs fromMakurdi to Lokoja, a distance of 200km, forming extensive flood plains up to 10-15kmwide on both banks of the rivers. At Lokoja where the rivers Niger and Benue meet,River Niger flows southwards into the southeastern part of the country where it formsinto its delta (an area known as the Niger Delta comprising the States of Delta, Bayelsa,Imo, Rivers, and Akwa Ibom) consisting of many tributaries and estuaries as it emptiesinto the Atlantic Ocean at the Gulf of Guinea.

The landscape of southwestern Nigeria is basically divided into uplands and lowlands,with undulating topography covered by hills, while in the coastal part around Okitipupa, arolling topography is punctuated by deep gorges.

The climate varies from equatorial in the south, to tropical in the center and to arid in thenorth with rainfall patterns throughout Nigeria depending primarily on the interaction ofthe tropical maritime air mass and the tropical continental air mass which meet along theinter-tropical convergence zone (ITCZ). The annual average rainfall around the countryis between 2000mm and 3000mm, while the temperature is between 200 C and 320 C.

The amount of rainfall is usually highest near the coast and decreases inland. The meanrainfall in Port Harcourt in Rivers State (southern Nigeria) is over 4000mm, in Jos on thePlateau (State) (central Nigeria) it is between 1000-1250mm and in Maiduguri , Borno

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State ( extreme northeastern part of Nigeria) it is between 250-500mm. The relativehumidity near the coast at dawn is about 95-100%, and 70-80% in early afternoon, atmaximum temperature. Seasonal variation is slight, but periods of a few days of very lowhumidity occur January - February when the "harmattan" reaches coast. A meantemperature of 27° C is obtained in most areas. The minimum temperatures arerecorded around the coast around February, March and April. In the north, maximumobtainable temperature is 400 C, while the minimum could be as low. as 13° C, normaltemperatures range between 220C and 32°C.

4.1.1 Nigeria's Ecosystems

Nigeria's ecosystems can be classified into seven distinct ecological zones, namely, theSahel and Sudan Savanna in the Northern part; Guinea Savannah and DerivedSavannah in the Middle Belt and Lowland Rain Forest; Freshwater Swamp andCoastal/Mangrove in the South of Nigeria.

4.1.1.1 The Northern Zone

The northern part of Nigeria is situated in the Sudan Savannah belt where the naturalvegetation is largely scattered trees and short grasses between the Sahel Savannah andthe Guinea Savannah zones. The Sahel Savannah, which occupied only a small cornerof the northern fringes of Sokoto and Borno States, is now spreading at the expense ofthe Sudan Savannah, which in turn is expanding southward, at the expense of theGuinea Savannah.

The expanding desert in the north is considered to be one of the most severeenvironmental problems facing Nigeria. Desertification has been reported in Nigeria andother parts of West Africa since the 1920's. A combination of climatic ( climate change)factors and general increase in population and livestock pressure on the land andvegetation are accepted as the main causes of desertification.

4.1.1.2 The Middle Zone

The vegetation within the Middle Belt Region can best be described as typical GuineaSavannah, characterized by woodland vegetation with tall grasses lying between therainforest region to the south and the Sudan Savannah to the north. The GuineaSavannah is broadly divided into savannah woodland, park savannah and shrubsavannah.

The Jos Plateau, falling within the Middle Region, includes some inselberg landscapes,is generally undulating and marked by numerous domed or sugar-loaf hills andoccasional flat topped ridges. The elevation is approximately 300-600 meters above sealevel. It is made up of metamorphic rocks, with eroded volcanic intrusions covering about8000km2 . There are also ring dykes, the most prominent of which is seen on the KudarHills, 80km west of Jos. The vegetation in the Jos area is leguminous wooded savannaon rocky outcrops, with shrub land. Gullies are extensive throughout the plateau, but arenot as severe as those found in other states. The cause of gullies can often be attributedto Tin and other mining operations in the area.

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4.1.1.3 The Southern Zone

The southern ecological zone belongs to the high rainforest areas characterized by talltrees and various climbers and shrub undergrowth, with a relative replacement of timbertrees by tall grasses northwards in parts of Ondo State. The coastline of Nigeria isrelatively straight except for the broad indented delta region separating the eastern andwestern segments. From the coastline to about lOkms inland is a strip of sandydeposits, broken by a succession of east-west lagoons and swamps. The mean altitudeis 30 meters above sea level. Included in this southern region is the Niger Delta whichextends a distance of about 350kms east to west and approximately 150kms inland.Most of the 10,000 km2 is made up of swampland with a few islands. The two majorurban areas are Lagos and Port Harcourt and Oil is the major natural resource in thiszone. The soils are alluvial and are seasonally or permanently waterlogged. Forests andmangroves are found along the coastal creeks, estuaries and lagoons. The vegetation isdominated by varieties of the red mangrove trees. Many Nigerian mangroves lackadaptive features normally associated with plants in a brackish water environment; thisis because the saline water is continually diluted by the many stream which flow into thelagoons. In many areas, the coastal vegetation has been reduced to dense thicketsdominated by palm trees and lianas. This huge mangrove area has vast aquaculture andartisanal fishing potential which should be explored. In the Delta swamp, which has freshwater, the vegetation is quite different. Swamp forests occur extensively and containslender trees with stilt roots. Where the forest has been disturbed, the raffia palm hasspread very quickly to dominate the vegetation base.

In the northern areas of the southern zone, is a tropical lowland rainforest zone. Over theyears, human activity has removed most of the forest. Most of this area consists ofdeltaic alluvial sediments deposited by the Niger estuary which extend up to 280kminland. The soils in this area are highly weathered and infertile due to the humid tropicalenvironment.

In most areas, high population pressure no longer allow the traditional long fallows ofrapidly regenerating secondary forest necessary to maintain the fertility of the farm land.Indeed, in the states of Imo, Anambra and Akwa Ibom, with overall population densitiesexceeding 400 per kM2, much of the land is under continuous cultivation.

Although much of Nigeria's Southern Zone was at one time primary tropical rainforest,conversion to agricultural use, timber extraction and other land uses have converted allbut about 10% of this zone to secondary forest, plantation, or other non-forest land-uses.

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4.2 Hydrology

4.2.1 Surface Water Resources

Nigeria has a vast surface water system ( estimated at 226 billion m3) including the twomajor rivers, the Niger and the Benue, which traverse the northwest and northeastportion of the country The confluence of these two rivers is at Lokoja, after which they(river Niger) flow southwards into a Delta at the Gulf of Guinea where it empties into theAtlantic Ocean.

The River Niger is the most important river in Nigeria and it is the third longest in Africa.The Niger rises from the Futa Jallon High Lands in the Republic of Guinea, flowing fortwo thirds of its 4169km through Guinea, Mali, the Republic of Niger and enters Nigeriafrom the west and then runs south easterly to Lokoja, confluence with the River Benue.

The Benue River, which has its source in the Cameroon flows southwesterly to itsconfluence with the Niger. There are several other rivers and quite a number of minorstreams and rivulets that crisscross the entire Nigeria land mass. These include in thesouth, the Cross Rivers, the Osse, the Nun, the Anambra rivers, to the north, theKaduna, Kano, Challawa, the Gongola and the Hadeja, to the west the Ogun and Osunand to the east the Oji River.

As the Niger and its principal tributary the Benue, flow through the territory of nine othercountries, this has raised many sub-regional, regional and international issues fordevelopment and management.

These rivers in Nigeria can generally be classified as part of four principal river basins:the Niger River Basin, the Lake Chad Basin, the rivers of Cross and Imo and theWestern Littoral.

In the Lake Chad basin located in the North - East region of Nigeria occupies 20% of thenations land, the rivers of Hadejia and Jamaare originate from its west highlands, passthrough a vast wetland in the middle course, and are discharged into Lake Chad as theKomadugu-Yobe river along the international border with Niger where the river dischargeis reduced to a minimum extent.

The Cross and Imo rivers systems rises in the Cameroon highlands where the annualrainfall exceeds 4000mm and the catchment is covered by dense rainforest.

The Western littoral consists of a number of small basins such as the Ogun, the Oshun,the Owena and the Osse, in the south west of the country.

The rivers of Nigeria and their tributaries serve as the source of raw water for most of theState Water Companies in Nigeria which is treated and channeled as potable water forthe urban and peri-urban centers, which are the focus of the NUWSRP. For the sixstates who have self selected and qualified to participate in the NUWSRP, the main riversystems used as the main source of water by their utility boards in those states are asfollows.

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* The main river systems in Enugu state are tributaries of the Anambra river basinand the Cross River Basin. The major tributaries being the Nyaba and Atavurivers from the Udi escarpment flowing eastward into the Aboine; the Aboine riverwhich is fed by numerous springs and seasonal streams at the scarp of theNsukka plateau; the Oji river and the Adada river which rise from the Nsukkaplateau and enters the Anambra river systems.

* In Kano State, the main rivers are the rivers Challawa and river Kano.

* In Kaduna State it is river Kaduna.

* In Ogun State they are the rivers Ogun and Osun.

Various stakeholders in the past have had plans to dredge major rivers be it to improvelong-neglected river public river transport ( tourism) and for transporting of heavymachinery by the petro-chemical and other large industries. SWA's also dredge riverbeds in an attempt to increase water head.. Critics of these activities are fearful of theeffects dredging the rivers could have on communities ( on livelihoods and flooding ofsettlements) and the environment in downstream areas. Gradual siltation along thebeds of some of the rivers has worked against the requirements of some state waterutilities.

4.2.2 Ground Water Resources

Generally, geology in Nigeria may be divided into roughly two equal major unitary areas;

(i) the Crystalline Rock area referred to as the Basement Complex whichextends mainly in the north-central, south central and eastern parts ofNigeria, representing a total area of 442.9 x 10 3 km2.

(ii) the Sedimentary Deposit is to the north-western, north-eastern and central-southern parts of Nigeria representing a total area of 480.9 x 103 km2 .

A typical transverse profile of the ground consists of a dry clay top layer 4m thick, amoist sandy clay layer between 4-9m depth, and underneath a saturated sandy clay.Normally, in most areas ground water is available within 5m of the surface. Availabledata also indicate that the quality of ground water is also high. Ground water sources(accessed by boreholes) are used by state water companies generally as a secondarysource to surface water, to add additional capacity and to meet new demand inrelatively smaller urban areas. In most cases the quality of the ground water is of highquality and little treatment is required as natural filtration and sedimentation haveoccurred through seepage and percolation through sandy soils to the natural underlyingaquifers. As stated in earlier parts of this section, the relatively high rainfall charges thewater table adequately.

Electrical conductivity of water is low, suggesting very low risk of salinity. The pH valuesare 6.2-6.4 and the total dissolved solids are low. Generally, the contents of Zn, Mn, Fe,Ni and B are also low and may not pose any problem to human consumption.

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For example, Enugu state lies in the sedimentary materials zone of Nigeria. The soilsand rocks vary from coal measures and shale in Enugu town, to the Ajalli sandstones inUdi, Ezeagu and parts of Oji River. Towards Nsukka, the Ajalli sandstones are overlainby the Nsukka formation. The Ajalli sandstones yield prolific aquifers, from about100m3/hr to 300m3/hour from boreholes drilled in Udi, Ezeagu and Nsukka areas. Thedepth of the water table varies throughout Enugu state from about 100m in Udi to 150min Ezeagu and Nsukka areas.

4.3 Nigeria's Water Ecosystems

The state water companies reliance on raw surface water (rivers) as their main sourcefor the provision of potable water to urban areas and the NUWSRP focus on enhancingtheir performance and capacity , inter alia, makes the critical understanding of theecosystems around the river flood plains a pre-requisite for sustainable use of the riversnatural and economic resources. The activities of the participating state water utilities willdirectly impact on the critical ecosystems of the rivers that they extract raw water from.The activities of industry, local communities and the state water utilities and therequirements of the natural ecosystems necessary for perpetuity need to be balanced.

Generally, the flood plains of the rivers are subjected to seasonal flooding and arenaturally rich in nutrients deposited in the plains as the flood waters recede. Largevolumes of sediment are seasonally discharged into the floodplains and help to renewthe fertility of the soils. The abundance of water and the seasonal supply of renewedalluvium make these soils fertile and suitable for rice and other crops, such as maize andsugarcane. The continuous cultivation of these soils, rainfall and unregulated applicationof irrigation water may have depleted or leached out basic cations, resulting in severesoil acidity. Most of these soils are therefore poor in organic matter, cation exchangecapabilities and essential macronutrients such as nitrogen, phosphates and potassium,despite the fact that these flood plains receive annual silt deposits from flood waters.However, the soils of these flood plain areas are generally more fertile when comparedto the sandy upland soils being used by farmers in those areas.

Also of critical importance is the amount of industrial activity that depend on the rivers,upstream and downstream of the state water utilities treatment plants. Industrialactivities include extracting raw water and deposit of contaminated waste ( some treated,others only partially treated and in some cases they are not treated at all).

The undisturbed natural ecosystems of the rivers and their flood plains are known tosupport varying degrees of natural vegetation complexities ranging from the treelessgrassland/shrub thicket of thorny Acacia to the mixed tree/shrub/grass communitiescomprising browse (woody) plants and forage grasses. These river flood plains alsocarry vegetation complexes of varied floristic associations, such as Daniella oliveri anddominant tree savannahs with one or more other emergent/co-ordinant tree speciessuch as Terminalia macroptera, Burkea Africana, Butyrospermum paradoxium, Parinaricuratellifolia, among others. The rich vegetation of these areas provides natural refugeand nesting materials for waterfowl, other birds and animals and are a host to hundredsof species. About 20 species are palearctic migrants, of which four species breed inNigeria.

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Wetlands are typical of much of Nigeria, with a mainly agricultural base, including theagro-pastoral communities of the north. The environment and its natural resourcesmaintains Nigerian rural life and the local economy through the protection andmaintenance of soil productivity, the recycling of nutrients, the cleansing of air and water,and the maintenance of climatic cycles. Also, the wetlands are a source of medicine, aswell as other non-timber forest products (NTFP) critical to local communities. Among theecological benefits, the wetlands play an important role by maintaining groundwaterrecharge in the floodplain.

The dominant economic activities include fishing, extraction of forest products andsubsistence agriculture. Main contributions include: collection of medicinal plants,block/brick making, potash, sand, pottery, grazing, gavel and irrigation. The localpopulation also supplements its nutritional diet and income with a wide variety of forestproducts.

The wetlands represent fragile ecosystems that are globally and locally important. Theseecosystems support a significant rural population, providing production and consumptionactivities that are dependent on the healthy functioning of the ecosystems. Thewetlands are, however under threat as a large portion of wetlands has already been lostto drought and upstream dams. To assure continued traditional use, maintaining watersupply to the wetlands would be preferable to indiscriminate diversion of river water inupstream areas.

4.3.1 Major Wetlands

4.3.1.1 The Hadejia-Jamaare Floodplain

The Hadejia-Jama'are wetlands span the ecological zones of Guinea Savannah, SudanSavanna and the Sahel. They were formed by the waters of the Hadejia and Jama'arerivers which converge to form the Komadugu Yobe river, flowing northeast into LakeChad. This area receives about 600-700mm of rainfall per year, lasting from June toSeptember. The wetlands are formed by the regular flooding of rivers during the rainyseason. Due to droughts and construction of dams upstream, the inundated area hasbeen reduced from 3200km2 in 1950 to an area of about 1200km2 today. The Hadejia-Nguru Wetlands are an important site for wildlife conservation and waterfowl inparticular, and are deemed of international importance as breeding grounds formigratory birds contributing to global diversity. As such, they are the focus of HadejiaNguru Wetlands Conservation Project, and under taken by the Nigerian ConservationFoundation and International Agencies to conserve migratory birds and natural habitatfor the benefit of local communities and waterfowl population.

The wetlands provide a range of natural resources and economic activities supportingthe various livelihoods of the local communities. These include wet and dry seasonfarming, fishing, fuel wood collection, livestock rearing, gathering of wild food resourcesand forestry. The Hadejia-Nguru Wetlands have long been recognized as an importantcenter for fish production in the region, with an estimated market value of N489 million,for an estimated annual catch of 6000 metric tones of fish. The productive and consumeractivities associated with the wetlands are believed to support a population of over 1.5million people. Quite apart from their role in supporting fishing, agriculture and forestry,

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the Hadejia-Nguru wetlands in Northern Nigeria play a major role in recharging aquifersthat are used by local communities for domestic water supplies.

4.3.1.2 The Niger and Benue Rivers Floodplains

From Jebba to Lokoja, a distance of about 300km, the Niger frequently overflowsforming extensive floodplains on either side extending in width to about 15km upstreamand 10km along the lower 80km. Also, along the 200km from Makurdi to the Lokojaconfluence are extensive floodplains about 10km wide, mostly along the south bank.About 50,000 ha (15%) of the lowland floodplains are located in the western part of theregion ( Kwara and Niger states, 30% in the central part (Kogi, FCT, Nassarawa andBenue states) and about 55% in the eastern area (Plateau, Taraba and Adamawastates)

4.3.1.3 The Niger Delta

The Niger Delta cuts across several ecosystems, namely; coastal/mangrove, freshwaterswamp forests, lowland rainforests and derived savanna with small areas of intactnatural forest. It is a vast flood plain formed by the accumulation of sedimentary depositswashed down the Niger and Benue rivers. The high rainfall and river discharge duringthe rainy season, combined with the low, flat terrain and poorly drained soils, causewidespread flooding and erosion. A dynamic equilibrium between flooding, erosion andsediment deposition is the characteristic of the Niger Delta. The Delta has a highpopulation density, with a current population estimated at about 27 million (NationalPopulation Commission, 2002), of which about 70% is rural. The Delta is an important oilproducing region of Nigeria, yet the Niger Delta region remains poor, lacking in basicinfrastructure and services with household energy still dependent on other (nonpetroleum) natural sources. Furthermore, pollution from oil drilling and leakage frompipelines has adversely affected the ecosystems and livelihoods of local communities ofparts of the Delta.

4.4 Geology

Geologically, Nigeria lies on the Southeast portion of the West Africa Craton. Thegeological setting comprises broadly sedimentary formations and the crystalline rocks ofthe basement complex. They occur more or less in equal proportions around thecountry. The soils of Nigeria vary in color, texture, structure and physical and chemicalproperties. The soils have low pH values (2.7-6), low organic matter, low potassiumlevels and variable phosphorus levels. They can be broadly grouped into maincategories based on their parent materials, including Basement Complex Soils, AcidSand Soils, Juvenile Soils on recent deposits and ferralitic Soils.

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4.5 The Social Environmental Features

4.5.1 The Demographics

According to the latest estimates, the population of Nigeria is approximately, 130millionWorld Bank, Country at a Glance Report), which makes Nigeria the largest country bypopulation, in Africa. The average population density of 141 persons per sq. km. TheNorthern Region has a population of about 49.6 million, the middle belt about 26 millionand the Southern Region about 54.4 million. The annual average growth rate between1995-2001 was projected at 2.6% and the urban population represented 47% of the totalpopulation or 61.1 million people. The illiteracy rate, which is an estimate of thepercentage the population over 15years old that have not completed a primary schooleducation level is 35%.

One projection of Nigeria's population estimates that it will reach the level of 338 millionby the year 2050. If this estimate and other country estimates are correct, Nigeria wouldmove from 10 th most populous country in the world to the 4 th most populous country in ashort span of just under 50 years. The tables below place Nigeria's rapid forecastedgrowth in global perspective.

Countries Ranked by Population 2000 (in millions)

1 China 1,2562 India 1,0173 United States 2754 Indonesia 2195 Brazil 1746 Russia 1467 Pakistan 1418 Bangladesh 1299 Japan 12610 Nigeria 123

Countries Ranked bv Population 2050 (in millions)

1 India 1,7072 China 1,3223 United States 3944 Nigeria 3385 Indonesia 3316 Pakistan 2607 Brazil 2288 Bangladesh 2119 Congo (Kinshasa) 1841 OMexico 167

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1998 2010

Births per 1,000 population ............................................. 42 37Deaths per 1,000 population ........................................ .... 13 16Rate of natural increase ................................................ 2.9% 2.1%Annual rate of growth ................................................ 3.0% 2.1%Life expectancy at birth (years) .......................................... 53.6% 46.3%Infant deaths per 1,000 live births ....................................... 71 57Total fertility rate (per woman) .......................................... 6.1 5.1

The real significance of Nigeria's demographic situation is that it simultaneously has alarge population and one of the highest rates of growth in the world, causing itsprojection to move up so rapidly in total population. Many unknown factors could alterthe above estimate. AIDS is one factor that could have a dramatic impact on Nigeria'sfuture demographics. While AIDS is not the critical national health concern that it is inother sub-Saharan countries, it may grow to become a problem of great concern.

Rural - Urban migration in Nigeria, like in most other countries is fueled by the pursuitfor increased economic/ livelihood opportunities. Today, it is estimated that 45% or 58.5million people form the urban population of Nigeria. 68.8% or 40.3million of this urbanpopulation are considered to be low income earners. This pressure has forced changesin urbanization patterns, for instance, giving rise to a significant increase in peri-urbangrowth centers, as migrants pour daily into the cities to work but can only afford to live innew sprawling growth centers outside these cities, often where basic infrastructure andsocial services are very poor.

Mid year Population Estimates and Averaqe Annual Period Growth Rates: 1950 to2050 (Population in thousands, rate in percent).

Year Population Period Growth Rate

1950 31,797 1959-1960 2.11960 39,230 1960-1970 2.31970 49,309 1970-1980 2.91980 65,699 1980-1990 2.81990 86,530 1990-2000 3.02000 117, 171 2000-2010 2.52010 150,274 2010-2020 2.02020 183, 962 2020-2030 2.12030 225,866 2030-2040 2.12040 279,405 2040-2050 1.92050 337, 591

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Midvear Population, by Aqe and Sex: 1998 and 2010 (population in thousands)

1998 2010

Age Total Male Female Total Male Female

Total 110,532 55,920 54,613 150,274 75,657 74,617(50.59%) (49.41% ) (50.35%) (49.65%)

0-4 19,737 9,942 9,795 24,706 12,447 12,258(1 7.86%)2 (16.44%°)

5-9 16,286 8,162 8,124 22,070 11,073 10,997(14.73%) (14.69%)

10-14 13,510 6,768 6,742 19,682 9,865 9,817(12.22%.) (13.10%)

15-19 11,271 5,881 5,840 16,988 8,510 8,478(10.20%) (11.30%)

20-24 9,516 4,788 4,728 13,928 7,014 6,914(8.61%) (9.27%)

25-29 7,857 3,982 3,876 11,435 5,817 5,617(7.11%) (7.61%)

30-34 6,600 3,355 3,245 9,005 4,612 4,392(5.97%) (5.99%)

35-39 5,426 2,798 2,627 7,012 3,591 3,421(4.91%) (4.67%)

40-44 4,456 2,339 2,117 5,718 2,900 2,818

(4.03%) (3.81%)45-49 4,041 2,085 1,956 4,718 2,392 2,326

(3.66%) (3.14%)50-54 3,460 1,787 1,673 3,877 1,989 1,888

(3.13%) (2.58%)55-59 2,677 1,381 1,296 3,366 1,692 1,674

(2.42%) (2.24%)60-64 2,010 1,024 986 2,870 1,409 1,461

(1.81%) (1.91%)65-69 1,469 742 727 2,112 1,022 1,091

(1.33%) (1.41%)70-74 973 486 487 1,438 685 753

(0.88%) (0.96%)75-79 531 263 268 852 400 452

(0.48%) (0.57%)80+ 262 136 126 499 240 259

(0.24%) (0.33%)

2 Figures in bold italics are a percentage of the total

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4.5.2 Ethnic Groups and Religion

Nigeria, which is Africa's most populous country, is composed of more than 250 ethnicgroups, the larger of which are the Hausa and Fulani, who are predominantly from theNorth represent approximately 29% of the population or 37.7 million people, the Yoruba,predominantly from the South ( South West) and represent approximately 21% of thepopulation or 27.3 million people and the ibo, predominantly from the East representabout 18% of the population or 23.4 million people. The other large groups are the Ijawwith about 10% or 13million, the Kanuri with about 4% or 5.3million, the lbibio with about3.5% or 4.6million and the TIV with about 2.5% or 3.3 million people. The Middle Beltregion of Nigeria shows the greatest degree of ethnic diversity, particularly in Adamawa,Taraba and Plateau States. The religious groups include Muslims which make up abouthalf of the population at approximately 65 million people, Christians at about 40% orabout 52million people and the rest are of indigenous beliefs (10%) or about 13 millionpeople.

4.5.3 Status of Urban Water Supply

Rapid population growth has not been accompanied by an increase in the delivery ofessential urban services such as water supply, sewerage and sanitation, and collectionand disposal of solid wastes. It is estimated that currently only about 50% of the urbanand 20% of the semi-urban population have access to reliable water supply ofacceptable quality (i.e. something better than a traditional source). Overall effectiveurban water supply coverage may be as low as 30% of the total population due to poormaintenance and unreliability of supplies. Rural coverage is estimated at 35%.

Except for Abuja and limited areas of Lagos, no urban community has a seweragesystem, with the result that sewage and sullage either lie stagnant or are disposedthrough the storm water drainage system. The proportion of the population with accessto safe facilities for disposal of excreta and waste water is lower than for water supply.

The operational efficiency of the SWAs is unacceptably low as indicated by themonitoring indicators compiled under the National Water Rehabilitation Project (NWRP).Many of the states have been unable to provide statistics because of lack of reliablemanagement information systems, and for those responding, non-revenue orunaccounted for water (UfW) is very high, up to 63% reported for 1998. It is conceivablethat UfW could be higher given the absence of metering of production and distribution.

Additionally, the data reveals that insufficient financial resources, unmotivated staff, anda highly politicized tariff setting regime exist on the institutional side while, on thephysical side, aging pipes, frequent breaks, unreliable and unstable supply of electricalenergy or fuel, and treatment chemicals, and treatment works in poor condition, arecommon to most systems. Preventive maintenance is not a common practice andlimited funds have led to under-investment in new and expanded capacity whilepreventing the periodic replacement of the aging components of existing facilities. ThusSWAs are currently unable to meet the existing demand for safe water within theirrespective cities and states. This puts increasing pressure on women's work, health andwell being and children's education, given that the principal burden of fetching watercontinues to be borne by women and girls.

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The problems of large utilities are compounded by the inclusion of peri-urban areassurrounding the cities which come under the jurisdiction of the main utility. The menu ofservice choices available to residents of such peri-urban areas is drastically reducedeven compared to the sporadic services offered to main city residents. Often such peri-urban areas remain a low priority in terms of investments due to a relatively highernumber of illegal and/or squatter settlements on public land. Most are served by publicstandpipes on the system of the main utility, or by wells or boreholes. Some utilitieshave established kiosks for sale of water to consumers or water carriers in these peri-urban areas. In many cases, water carriers deliver water to the consumers who paymuch more than the utility charges for their water, since they must pay both the utilitycharge for the water and the cost of labor of the carrier.

4.5.4 Public Health Features

The increase in urban and peri-urban population over the years, coupled with thesignificant decline in the performance of the SWA's to provide potable water ( it isestimated that only 50% of the urban and 20% of the peri-urban have access to reliablewater supply), and with poor or no acceptable sanitation or drainage infrastructure inmany of these areas, the prevalence rate for diseases such as diarrhea, malaria,dysentery and other serious health conditions are high.

4.5.5 Poverty

According to the World Bank , Country at a Glance report, 2001, the gross nationalincome (GNI) per capita of Nigeria is US$290, which is significantly lower than theaverage of US$470 for sub Saharan Africa (SSA).

It is estimated that 60% of the total population of Nigeria live below the poverty line. Theaverage percentage of the urban poor ( i.e. % of population below national poverty line)is a staggering 45% compared with the SSA average of 32%.

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5.0 DESCRIPTION OF THE WORLD BANK ENVIRONMENTAL ANDSOCIAL SAFEGUARD POLICIES AND TRIGGERS.

This ESMF has been designed so that all investments under the NUWSRP will complywith all Federal, State and local laws of Nigeria and the Environmental and SocialSafeguard Policies of the World Bank . In this chapter, the Bank's safeguards policiesand their applicability are discussed and in the subsequent chapter those of Nigeria arepresented.

The World Bank Safeguard Policies are;

1. Environmental Assessment (OP4.01, BP 4.01, GP 4.01)2. Natural Habitats (OP 4.04, BP 4.04, GP 4.04)3. Forestry (OP 4.36, GP 4.36)4. Pest Management (OP 4.09)5. Cultural Property (OPN 11.03)6. Indigenous Peoples (OD 4.20)7. Involuntary Resettlement (OP/BP 4.12)8. Safety of Dams (OP 4.37, BP 4.37)9. Projects on International Waters (OP 7.50, BP 7.50, GP 7.50)10. Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)

In preparing this ESMF, a consideration of the type of future investments planned vis-a-vis the baseline data presented in Chapter 4 against the requirements of the BankSafeguard policies ,has led to the determination that only the following Bank policiesapply.

1. Environmental Assessment (OP4.01, BP 4.01, GP 4.01)2. Natural Habitats (OP 4.04, BP 4.04, GP 4.04)3. Involuntary Resettlement (OP/BP 4.12)4. Safety of Dams (OP 4.37, BP 4.37)5. Projects on International Waters (OP 7.50, BP 7.50, GP 7.50)

Notwithstanding, since the exact location of the investments was not known at the timeof preparation of the NUWSRP, and the possibility for present states that have qualifiedto be deselected during project implementation in favor of other states, other bankpolicies may apply and not all policies selected above may apply simultaneously.

Therefore, a complete description of the bank safeguards and their triggers forapplicability can be found on the World Bank's official web site www.worldbank.orq andsummarized in Annex 2.0.

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* 5.1 Environmental Assessment (OP4.01, BP 4.01, GP 4.01)

This policy requires environmental assessment (EA) of projects/investments proposedfor Bank financing to help ensure that they are environmentally sound and sustainable,and thus improve decision making . The EA is a process whose depth, and type ofanalysis depend on the nature, scale, and potential environmental impact of the activitiesproposed for funding under the NUWSRP. The EA process takes into account thenatural environment (air, water, and land): human health and safety; social aspects (involuntary resettlement, indigenous peoples, and cultural property) and transboundaryand global environmental aspects.

The environmental and social impacts of the NUWSRP will come from the activities andinvestments to be made under Component 4 of the project. However, since the exacttechnical details and location of the investments will not be identified before appraisal ofthis project, the EA process calls for the FGN, represented by the FMWR, to prepare aEnvironmental and Social Management Framework (ESMF) report which will establish amechanism to determine and assess future potential environmental and social impactsof the selected SWA's project investments under the proposed NUWSRP, and then toset out mitigation, monitoring and institutional measures to be taken duringimplementation and operation of the project investments to eliminate adverseenvironmental and social impacts, offset them, or reduce them to acceptable levels.

OP 4.01 further requires that the ESMF report must be disclosed as a separate andstand alone document by the FGN and the World Bank as a condition for Bank appraisalof the NUWSRP. The disclosure should be both in Nigeria where it can be accessed bythe general public and at the Infoshop of the World Bank and that the date for disclosuremust precede the date for appraisal of the project.

This ESMF stipulates that each SWA will have to prepare an Environmental and SocialImpact Assessment (ESIA), during the transaction stage, for their planned activities.Section 9.0 and Annex 3.0 sets the relevant process and requirements of the ESIA's.

* 5.2 Natural Habitats (OP 4.04, BP 4.04, GP 4.04)

The conservation of natural habitats, like other measures that protect and enhance theenvironment, is essential for long term sustainable development. The Bank thereforesupports the protection, maintenance, and rehabilitation of natural habitats.

Natural Habitats are land and water areas where (i) the ecosystems biologicalcommunities are formed largely by native plant and animal species, and (ii) humanactivity has not essentially modified the areas primary ecological functions. All naturalhabitats have important biological, social, economic, and existence value. Importanthabitats may occur in tropical humid, dry, and cloud forest; temperate and boreal forest;Mediterranean-type shrub lands; natural arid and semi-arid lands, mangrove swamps,coastal marshes, and other wetlands; estuaries, sea grass beds, coral reefs, freshwaterlakes and rivers; alpine and sub alpine environments, including herb fields, grasslands,and paramos; and tropical and temperate grasslands.

Therefore, the Natural Habitats policy may be triggered in certain cases because theinvestments proposed under this project would involve the extraction of raw water from

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Nigeria's rivers which contribute to the sustainability of critical ecosystems such aswetlands and flood plains. The natural ecosystems of the rivers and their flood plains areknown to support varying degrees of natural complexities of flora and fauna. Therefore,this OP requires that any activities funded under the NUWSRP that adversely impactthese ecosystems are successfully mitigated so that the balance of the ecosystems areenhanced or maintained. This would require the SWA's to design appropriateconservation and mitigation measures to remove or reduce adverse impacts on thewetlands or their functions, keeping such impacts within socially defined limits ofacceptable change. Specific measures may depend on the ecological characteristics ofthe affected wetland. Such measures must include provision for monitoring andevaluation to provide feedback on conservation outcomes and to provide guidance fordeveloping or refining appropriate corrective actions.

No project activity that results in the significant reduction in the mean water levelor completely drains a wetland area or floodplain due to extraction of raw waterfrom a surface water source by the SWA's will be permitted.

0 5.3 Involuntary Resettlement (OP/BP 4.12)

Significant efforts are to be made in the design and screening stages of proposed SWA'sproject investments, to avoid impacts on people, land, property, including peoplesaccess to natural and other economic resources, as far as possible. Notwithstanding,land acquisition, compensation and resettlement of people seem inevitable for certaintypes of investments on certain occasions. These social issues are of crucial concern tothe FGN and the Bank as its impact on poverty, if left unmitigated, is negative,immediate and widespread. Thus, OP 4.12 will be triggered in those cases. Therefore, aResettlement Policy Framework (RPF) has been prepared by the government andapproved by the Bank in compliance with OP 4.12. The RPF sets the guidelines for theResettlement and Compensation Plans (RAPs) that would have to be prepared whenany project investment triggers this policy. The RAPs would have to be submitted to therespective SEPA's and to the FMEnv for approval but would also have to be approvedby the Bank as a condition for that particular investment.

This policy would be triggered when the planned activities of the SWA's causeinvoluntary taking of land and other assets resulting in: (a) relocation or loss of shelter,(b) loss of assets or access to assets (c) loss of income sources or means of livelihood,whether or not the affected persons must physically move to another location.

The World Bank Safeguard policy OP 4.12, in most cases, is not triggered becausepeople are being affected by physical displacement. It is triggered because the projectactivity causes land acquisition, whereby a physical piece of land is needed and peoplemay be affected because they are cultivating on that land, they may have buildings onthe land, they maybe using the land for water and grazing of animals or they mayotherwise access the land economically, spiritually or any other way which may not bepossible during and after the project is implemented. Therefore, people are in mostcases compensated for their loss (of land, property or access) either in kind or in cash ofwhich the former is preferred.

The resettlement policy applies to all affected and displaced persons regardless of thetotal number affected, severity of impact and whether or not they have legal title to land.

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Particular attention should be paid to the needs of vulnerable groups among thoseaffected and displaced. The policy also requires that the implementation of the RAPs area pre-requisite for the implementation of the project activities to ensure that (economic orphysical) displacement or restriction of access does not occur before necessarymeasures for resettlement and compensation are in place. For project activities involvingland acquisition, it is further required that these measures include provision ofcompensation and of other assistance required for relocation, prior to (economic orphysical) displacement, and preparation and provision of resettlement sites withadequate facilities, where required. In particular, the taking of land and related assetsmay take place only after compensation has been paid, and, where applicable,resettlement sites, new homes, related infrastructure and moving allowances have beenprovided to affected and displaced persons. For project activities requiring relocation orloss of shelter, the policy further requires that measures to assist the affected anddisplaced persons are implemented in accordance with the RAP. The policy aims tohave the affected and (economically or physically )displaced persons perceive theprocess to be fair and transparent.

OP 4.12 requires the RPF to be disclosed both in Nigeria and at the Bank Infoshopbefore appraisal of this project can occur.

e 5.4 Safety of Dams (OP 4.37, BP 4.37)

The Bank may finance types of projects that do no include a new dam but will rely on theperformance of an existing dam such as water supply systems that draw directly from areservoir controlled by an existing dam, diversion dams or hydraulic structuresdownstream from an existing dam, where failure of the upstream dam could causeextensive damage to or failure of a new Bank-funded structure; and or irrigation or watersupply projects that will depend on the storage and operation of an existing dam.Projects in this category also include operations that require increases in the capacity ofan existing dam, or changes in the characteristics of the impounded materials, wherefailure of the existing dam could cause extensive damage to or failure of the Bank-funded facilities.

The NUWSRP will under no circumstances fund the construction of new dams,large or small. However, the operations of SWA's depend either on the use of existingdams run, operated and owned by themselves in some states or in other states by theRiver Basin Development Authority (RBDA) of that state, for one or a combination of thefollowing:

i) as a reservoirii) to manage water flow and levels in riversiii) provision of raw water.

Therefore, for participating SWA's that involve the use of existing dams as describedabove, the Bank requires that the FMWR arrange for one or more independent damspecialists to:

(a) inspect and evaluate the safety status of the existing dams or theirappurtenances, and its performance history;

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(b) review and evaluate the owner's operation and maintenanceprocedures; and

(c) provide a written report of findings and recommendations for anyremedial work or safety-related measures necessary to upgrade theexisting dams to an acceptable standard of safety.

The Bank may accept previous assessments of dam safety or recommendations orimprovements needed in the existing dam if the FMWR provides evidence that;

(a) an effective dam safety program is already in operation, and(b) full-level inspections and dam safety assessments of the existing

dam, which are satisfactory to the Bank, have already beenconducted and documented.

5.5 Projects on International Waters (OP 7.50, BP 7.50, GP 7.50)

This policy applies to the following type of international waterways:

(a) any river, canal, lake, or similar body of water that forms a boundarybetween, or any river or body of surface water that flows through, two or morestates3

The rivers Niger and Benue , each flow through at least one otherneighboring country, and through Nigeria.

(b) Any tributary or other body of surface water that is a component of anywaterway described in (a) above.

Many other rivers in Nigeria are tributaries of the Niger or Benue rivers.

(c) Any bay, gulf, strait, or channel bounded by two or more states or, if withinone state, recognized as a necessary channel of communication between theopen sea and other states, and any river flowing into such waters.

This policy applies to water and sewerage type projects funded by the Bank.

Projects on international waterways may affect relations between the Bank and itsborrowers and between states ( whether members of the Bank or not). The Bankrecognizes that the cooperation and goodwill of riparians is essential for the efficient useand protection of the waterway. Therefore, it attaches great importance to riparians'making appropriate agreements or arrangements for these purposes for the entirewaterway or any part thereof. The Bank stands ready to assist riparians in achieving thisend.

This policy requires the FMWR, if it has not already done so, formally to notify ripariansof the proposed NUWSRP and its details for the activities of SWA's that are oninternational waterways as defined in 5.5 (a), (b) and (c) above .

3The word "states" in OP 7.50 is referring to countries and not states within federated countries likeNigeria.

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Summary of Requirements of Bank Safeguards Policies Triggered by the activitiesin the NUWSRP.

Bank Safeguards Action Required by By Whom Date action requiredPolicy Triggered. Triggered Policy by.OP 4.01 1 )Preparation of ESMF 1) ESMF by FMWR 1) ESMF to be approvedEnvironmental (this document) by Bank and disclosed inAssessment Nigeria and Bank

2) Preparation of sub Infoshop before projectproject ESIA's ( see 2) Sub project appraisal date.section 9.0 of this ESIA's by SWA'sreport) 2) Sub project ESIA's to

be approved byrespective StateEnvironmentalProtection Agency andthe FMEnv anddisclosed in respectivestate beforeTransaction/PSPcontracts are signed.

OP 4.04 Screening of SWA's SWA's, State Before approval of subNatural Habitats activities to identify Environmental project ESIA's and

adverse impacts on Protection before transaction/PSPNatural Habitats and Agencies and the contracts are signed.effective mitigation FMEnv.measures in sub projectESIA's.

OP 4.12 1) Preparation of RPF. 1) RPF by FMWR 1) RPF to be approvedInvoluntary by Bank and disclosed inResettlement 2) Preparation of Sub Nigeria and Bank

project RAPs. 2) RAPS by SWA's Infoshop before projectappraisal date.

2) Sub project RAPs tobe approved byrespective StateEnvironmentalProtection Agency andthe FMEnv anddisclosed in respectivestate beforeTransaction/PSPcontracts are signed.

OP 4.37 Preparation of Dam FMWR To be approved by BankSafety of Dams Safety Measures and disclosed in Nigeria

Report and Bank Infoshopbefore project appraisaldate.

OP 7.50 Notification of Riparian FMWR Before Project Appraisal.Projects on CountriesInternational Waters

Table 5.1

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6.0 DESCRIPTION OF THE ADMINISTRATIVE, POLICY , LEGISLATIVEAND REGULATORY FRAMEWORK

6.1 Administrative Structure for the Water Sector at the Federal Level

The Federal Republic of Nigeria (FGN), is a federation of 36 states4 and the FederalCapital Territory (FCT) in which the federal capital, Abuja is located.

The Federal Ministry of Water Resources (FMWR), initially created in 1976, isresponsible for formulating and coordinating national water policies, management ofwater resources including allocation between states, and approving developmentprojects. Specifically the functions of the FMWR include:

* Establishment and operation of the National Water Quality Laboratories andMonitoring Network and water quality standards.

. Maintenance of database on water supply and sanitation facilities andperformance.

* Mobilization of national and international funding and technical support. Promoteand coordinate other collaborative activities by other government and Non-governmental agencies in the sector.

* Provide technical support and assistance to the state and Local GovernmentWater Supply and Sanitation Agencies and the community water supply andsanitation committees.

* Creation of an enabling environment for meaningful private sector participationin the sector.

* Provision of a framework for regulation of private sector participation in watersupply and sanitation. Under Decree 101, formulate laws for private initiatives inthe water supply industry.

* Assist individual agencies, and be responsible for the maintenance of thehydrological primary network.

The River Basin Development Authorities (RBDA's) , now 12 in total, were alsocreated in 1976 for planning and developing water resources, irrigation work and thecollection of hydrological, hydro-geological and meteorological data. Their maininvolvement in potable water supply has been the provision of multi-purpose dams andthe supply of water in bulk, some to urban water systems.

The National Water Resources Institute (NWRI) was legally established in 1985 and isresponsible to the FMWR for engineering research functions related to major waterresources projects and training sector professionals and technicians.

4 The 36 states are: I)Abia, 2)Adamawa, 3)Akwa Ibom, 4)Anambra, 5)Bauchi, 6)Bayelsa. 7)Benue,8)Borno, 9)Cross Rivers, lO)Delta, I I)Ebonyi, 12)Edo, 13)Ekiti, 14)Enugu, 15)Gombe, 16)lmo.17)Jigawa, 18)Kaduna, 19)Kano, 20)Kastina. 21)Kebbi, 22)Kogi. 23)Kwara, 24)Lagos, 25)Nassarawa.26)Niger,27)Ogun, 28)Ondo. 29)Osun, 30)Oyo. 31 )Plateau. 32)Rivers, 33)Sokoto, 34)Taraba, 35)Yobe and36)Zamfara.

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The Utilities Charges Commission (UCC) was established in 1992 to monitor andregulate utility tariffs, including those of State Water Agencies (SWA's).

6.1.1 Administrative Structure for the Water Sector at the State Level

At the State Level, responsibility for potable water supply was traditionally entrusted todepartments of the state governments, all 36 of them. In the 1970's, as the demand forpotable water supply grew, most water departments of state governments weregradually transformed into State Water Agencies (SWA's), to provide urban, semi-urban and, in some cases, rural water supply. Each SWA has, in general, beenestablished under an edict to develop and manage water supply facilities within itsrespective state and to meet sound financial objectives. The SWA's are responsible totheir state governments, generally through a State Ministry of Water Resources (SMWR)though in some cases under alternative arrangements. In some states, responsibilitiesfor rural water supply remain with or have been transferred back to a state governmentdepartment; additionally, in several states ( 22 currently), state rural water and sanitationagencies have been set up largely to implement some government/donor funded RuralWater Supply Strategy (RWSS) programs.

6.1.2 Administrative Structure for the Water Sector at the local Level

At the Local Government Level, the Local Government Authorities (LGA's), of whichthere are 774 nationally, are responsible for the provision of rural water supplies andsanitation facilities in their areas although only a few have the resources and skills toaddress the problem. Only few LGA's have rural water supply divisions that are able toconstruct small water systems such as open wells and small impoundments of surfacewater.

6.2 Administrative Structure for Environmental Management

With regards to management of the bio-physical environment throughout Nigeria, theoverall responsibility was held by the now defunct Federal Environmental ProtectionAgency (FEPA) 5, which was absorbed into the Federal Ministry of Environment(FMEnv) in 1999.

FEPA developed the National Policy on the Environment 1989, revised in 1995, withsustainable development as its goal.

6.2.1 The Federal Ministry of Environment (FMEnv)

FMEnv's mandate includes the establishment of federal water quality standards andeffluent limitations, protection of air and atmospheric quality, protection of the ozonelayer, control and discharge of hazardous substances, inter alia and ensures that all

5FEPA - all references to FEPA made in this document is in total realization that FEPA was absorbed intothe Federal Ministry of Environment (FMEnv) in 1999 and therefore FEPA since then does not exist as anInstitution.

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major development projects in Nigeria are subject to mandatory Environmental ImpactAssessment (EIA) pursuant to EIA Act. No. 86 (Decree No. 86) of 1992.

Within FMEnv, there is an Environmental Impact Assessment Division, headed by aDirector, to take all responsibility for EIA related issues and within the EIA division inFMEnv is the Impact Mitigation Monitoring (IMM) branch, with special responsibility formonitoring the implementation of Environmental Management Plans (EMP) contained inapproved EIA's.

6.2.2 Federal Requirements for Environmental Impact Assessment (EIA)

In addition to the guidelines for EIA , Decree No. 86 contains provisions for thescreening of projects according to impact potential, including listed activities6 for whichmandatory EIA preparation is required.

* Category I projects will require a full Environmental Impact Assessment (EIA).. Category II projects may require only a partial EIA, which will focus on

mitigation and environmental planning measures, unless the project is locatednear an "Environmentally Sensitive Area" (ESA in which case a full EIA isrequired.

* Category IlIl projects are considered to have "essentially beneficial impacts" onthe environment, for which an Environmental Impact Statement (EIS) will beprepared by the FMEnv.

EIA's are then submitted to the EIA Division of the FMEnv for approval and monitoring ofthe project during implementation and operation based on an environmentalmanagement plan (EMP) in the EIA.

6.2.3 State Environmental Protection Agencies

Decree No. 58 of 1958, as amended by Decree No. 59 of 1992, which establishedFEPA, also issued a federal directive to the states to establish state EnvironmentalProtection Authorities7. The six states which have self selected each have a functioning (to varying degrees) Environmental Protection Agency or Authority established understate edicts. The functions of these agencies/authorities is to exercise generalresponsibility for the protection and development of the environment in their State and inconsultation with the Federal Ministry of Environment (FMEnv), ensure implementationand enforcement of FMEnv's regulations in the State and in particular shall;

* Ensure the carrying out of annual State of the Environment Report.

6 Listed are activities that impact coral reefs, mangrove forests, small islands, tropical forcsts. areas witherosion-prone soils, areas prone to desertification, natural conservation areas, wetlands of national orintemational importance, areas which harbor threatened or endangered species, areas of particular scientificinterest, areas of historic or archeological interest and areas of importance to threatened ethnic groups.

7 Examples are Kaduna State Environmental Protection Authority (KEPA), Enugu State EnvironmentalProtection Authority (EnSEPA), Ogun State Environmental Protection Agency (OGEPA) etc.

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* Enforce State regulations control criteria, procedures, guideline andenvironmental standards for effective prevention, remediation, control andprevention of point and non-point sources of pollution and degradation.

* Formulate, implement, and review environmental policy in the State and inparticular to demand and review EIA and EIS for new development projectsand also to demand and review environmental audit reports for existingdevelopments and such other operations which are deemed to havesignificant impact on the environment.

* Prepare in accordance with state policy and Edict on the environment periodicmaster plans for the development and the financial requirements forimplementation of such plans.

* Prevent, stop any act of omission or commission which consequences are likelyto adversely affect the environment and to generally deal with any dischargesolid, liquid or gaseous, deposited willfully or otherwise in the environment and todeal generally with any violation which the authority may deem hazardous to theenvironment and the ecosystem.

* Monitor the entire state of parts of the state for any such discharge.* Cause the responsible parties to stop or remove such discharge.. Monitor environmental quality, conduct programmes of continuing,

surveillance and of regular periodic inspection of actual or potentialcontaminants of point and non-point of sources of the environment inaccordance with the laid down regulations as the authority may deem fit.

* To liaise with federal, state, local governments and other public and privateauthorities, agencies, and institutions engaged in environmental planning andfunctions.

Therefore, all State Environmental Protection Agencies/Authorities require by theirrespective state laws (edicts)8 that their SWA's prepare an Environmental ImpactAssessment Report9 for activities planned under this NUWSRP.

The State Ministry of Environment in the states, set policy guidelines for the StateEnvironment Protection Agencies to implement. The state ministries do not implement,enforce or monitor implementation of state environmental policies. That responsibilitylies with the state environmental protection agencies.

For example. in Kaduna State, KEPA is set up under Edict No. I of 1998.

The TOR's for the preparation of these ElA's is contained in Annex 3.0 of this ESMF.

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6.3 Relevant Federal Policies

6.3.1 National Water Policy

A National Water Supply and Sanitation Policy (NWSSP) was adopted in January 2000.The center-piece of this policy is the provision of sufficient potable water and adequatesanitation to all Nigerians in an affordable and sustainable way through participatoryinvestment by the three tiers of government, the private sector and the beneficiary.

The targets in the policy are;

(i) to meet the national economic target of improving service coveragefrom 40% to 60% by the year 2003.

(ii) extension of service coverage to 80% of the population by the year2007.

(iii) extension of service coverage to 100% of the population in the year2011.

(iv) sustain 100% full coverage of water supply and wastewater servicesfor the growing population beyond the year 2011.

The Policy sets consumption standards for;

(i) Semi - urban (small towns) which represent settlements withpopulations between 5,000 - 20,000 with a fair measure of socialinfrastructure and some level of economic activity with minimumsupply standard of 90 liters per capita per day with reticulation andlimited or full house connections.

(ii) Urban Water supply at 120 litres per capita per day for urban areaswith population greater than 20,000 inhabitants to be served by fullreticulation and consumer premises connection.

Among the policy objectives is the requirement to guarantee free access for the poor tobasic human needs level of water supply and sanitation services.

The Policy Strategies are:

(i) Increase service coverage for water supply and sanitation nationwideto meet the level of the socio-economic demand of the nation on thesector.

(ii) Ensure good water quality standards are maintained by water supplyundertakings. The WHO drinking water quality standards shall be thebaseline for the national drinking water quality standard.

(iii) Ensure affordability of water supply and sanitation services for thecitizens.

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(iv) Guarantee free access for the poor to basic human need level ofwater supply and sanitation services.

(v) Enhance national capacity in the operation and management of watersupply and sanitation undertaking.

(vi) Privatize water supply and wastewater services ( where feasible) withadequate protection for the poor.

(vii) Monitor the performance of the sector for sound policy adjustmentand development for water supply and sanitation.

(viii) Through Legislation, Regulations, Standards and laws for watersupply and sanitation.

(ix) Reform of the water supply and sanitation sector to attain andmaintain internationally acceptable standards

6.3.2 The National Policy on the Environment 1989

The National Policy on the Environment , 1989 outlines strategies for water resourcesmanagement, along with the Water Resources Decree No. 101 of the FMWR, andtogether they are concerned with:

* Environmental Impact of Water Resources development at the planning stages.* Specification of water quality criteria for different users.* Establishment of adequate control and enforcement procedures.• Public health implications or water resources development projects.

6.4 Existing Legal Provisions for Water and Sanitation Supply.

At the Federal Level, there is a Decree for Water Resources, the Decree No. 101 thatvets rights and control of water in the Federal Government which took effect from 23rdAugust 1993. There are also decrees establishing the River Basin DevelopmentAuthorities and the National Water Resources Institute.

At the State Level, the various State Water Authorities/ Boards and the State RuralWater Supply and Sanitation Agencies have enabling Acts setting them up to supplypotable water to inhabitants of their respective states.

At the Local Government Level, the various laws setting them up define rural watersupply as one of their primary functions.

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6.4.1 State Edicts

6.4.1.1 Edicts Setting Up the State Water Authorities/Boards (SWA's)

Each SWA is set up through the provisions of state edicts which generally provide for thefollowing;

* Establishment, Constitution and Functions of the Board.* Financial Provisions, Assets and liabilities of the Board.* Administrative Organization of the Board.* Powers and Procedure in Respect of Water Supply and Water Rates.* Accounts and Reports of the Board.. Offences.* Miscellaneous and General Provisions.

The respective state Edicts generally give the following functions to the SWA's;

* To control and manage all waterworks vested, or to be vested, in the Boardunder the provisions of the respective edict.

* To establish, control, manage, extend and develop such new waterworks and toextend and develop existing ones as the Board may consider necessary for thepurpose of providing water in order to meet the requirements of the generalpublic, agriculture, trade and industry in the State.

* To ensure that water is supplied to the customers thereof at reasonable chargesand in potable quality and adequate quantity.

. To organize the conduct of comprehensive research for the purposes of theBoard from time to time on matters relating to its function under this Edict and tosubmit the result of such research to the Commissioner for the utilization of thesame by him in the formulation of policy relating to the supply and usage of waterin the State; and

* With the right approval, to make arrangements and enter into agreements withany person, department, or office of the Government or any other body orinstitution, or to delegate authority to any of its members, officers, employees,servants or agents, for the exercise, performance, or provision by that person,department, office, body, institution, member, officer, employee, servant or agentas agent of the Board, or any of the functions, services or facilities which may beexercised, performed or provided by the Board under the respective state edict.

The respective state edicts empowers the Boards (SWA's);

* To adopt with or without amendments such master plans for the maintenanceand development of its undertakings as its officers may prepare and submit fromtime to time.

* To construct, reconstruct, maintain and operate waterworks and all otherstations, buildings and works, necessary for the discharge of its functions.

• To carry any water pipe through, across or under any street or any place laid outor intended as a street, and after giving reasonable notice in writing to the owner

45



or occupier thereof, into, through or under any lands whatsoever without payingcompensation, but making good any damage done.

This power is in direct contradiction to the provisions of the World BanksOP 4.12 InvoluntarY Resettlement and the provisions of OP4.12 must becomplied with if the World Bank is to fund part or whole of this NUWSRP.

* To abstract water from any lake, river stream, or other natural source.

This ESMF sets out the conditions under Nigerian Law and the Bank'sSafeguards Policies, for which this can be done in the project Notably,abstraction of water from any lake, river stream, or other source under thisproiect must be done consistent to the provisions of Bank SafeguardsPolicies OP 4.01 on Environmental Assessment, OP4.04 Natural Habitats,OP4.37 Safety of Dams and OP 7.50 Projects on International Waters andthis ESMF.

* From time to time, to examine any surface or under-ground waters for thepurpose of determining what, if any, pollution exists and the causes thereof.

. To enter upon any land at anytime for the purpose of laying, examining,repairing or removing any water-pipe .

This power must also be exercised consistent with the provisions of OP4.12 Involuntary Resettlement.

* To construct public fountains in any street or other public place in the state.

* To acquire, purchase, lease, mortgage, hold, construct, manufacture or maintainany property whatsoever whether movable or immovable, required for or inconnection with the performance of its functions and to sell, dispose of, orotherwise deal with such property or any part thereof.

This power must also be exercised consistent with the provisions of OP4.12 Involuntary Resettlement.

The details of the powers of each SWA varies from state to state and can be found in therespective edict of each state establishing the SWA.

6.4.2 Land Use Act 1978

The Legal basis for land acquisition and resettlement in Nigeria is the Land Use Act1978 and modified in 1990. The following are selected relevant sections;

Section 1. Subject to the provisions of this Act, all land comprised in the territory of eachState in the Federation are hereby vested in the Governor of each state and such land

46



shall be held in trust and administered for the use and common benefit of all Nigerians inaccordance with the provisions of this Act.

Section 2. (a) all land in urban areas shall be under the control and management of theGovernor of each State; and (d) all other land shall be under the control andmanagement of local government within the area of jurisdiction in which the land issituated.

Therefore, according to the Land Use Act, all land in Nigeria is vested in the Governor ofeach State, and shall be held in trust for the use and common benefit of all people. Theadministration of land area is divided into urban land which will be directly under thecontrol and management of the Governor of each State; and non-urban land, which willbe under the control and management of the Local Government. The Governor of eachState will have the right to grant statutory rights of occupancy to any person for anypurpose; and the Local Government will have the right to grant customary rights ofoccupancy to any person or organization for agricultural, residential and other purposes.

The Act gives the government the right to acquire land by revoking both statutory andcustomary rights of occupancy for the overriding public interest. In doing so, the Actspecifies that the State or Local Government should pay compensation to the currentholder or occupier with equal value.

6.4.3 Other Relevant Federal and State Laws

* FEPA Guidelines and Standards for Environmental Pollution Control in Nigeria,1991.

* The FEPA Harmful Wastes (Criminal Provisions) Decree No. 42,1998.* The FEPA National Policy on the Environment, 1989.* FEPA National Effluent Limitation Regulations, section 18, 1991.* FEPA Pollution Abatement in Industries and Facilities Generating Waste

Regulations, section 19, 1991.* Solid and Hazardous Waste Management Regulations of 1991.* Environmental Impact Assessment (EIA) Decree No. 86, 1992.* National Guidelines and Standards of Waste Management in the Oil Industry.* Effluent Limitation and Management, Regulation No. 3 of 1998, Kaduna State

Government.* Control of Water Pollution Sources, Regulation No.. 4 of 1998, Kaduna State

Government.

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6.4.4 International Conventions

Nigeria is also a party to other international agreements on Biodiversity, ClimateChange, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea,Marine Dumping, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protectionand Wetlands. Examples are;

* The African Convention on the Conservation of Nature and Natural Resources,1968

• The Convention Concerning the Protection of the World Cultural and NaturalHeritage, The World Heritage Convention, 1972.

* The Convention on International Trade in Endangered Species of Wild Faunaand Flora, CITES, 1973.

* Convention on Conservation of Migratory Species of Wild Animals, 1979.* The Basel Convention on the Control of Transboundary Movement of Hazardous

Waste and Disposal, 1989.* The Framework Convention on Climate Change, Kyoto Protocol* The Convention on Biological Diversity, 1992* The Convention on the Prevention of Marine Pollution by Dumping of Waste,

MARPOL, 1972

6.5 Membership of International River Basin Commissions.

Nigeria is a member of the following international River Basin Commissions:

* Lake Chad Basin Commission (LCBC, headquartered in N'djamena, Chad)* Niger Basin Authority (NBA, headquartered in Niamey, Republic of Niger)

48



7.0 DETERMINATION OF POTENTIAL ENVIRONMENTAL AND SOCIALIMPACTS

7.1 General Background Information

7.1.1 Environmental

There are three key national environmental problems facing Nigeria today, and they are;

* Soil Degradation.

* Water Contamination.

. Deforestation.

Other environmental problems that also give rise for concern are gully erosion, fisheriesloss, coastal erosion, wildlife and biodiversity loss, water hyacinth, air pollution, oilpollution.

Severity of Impact of Problem on:Problem Economic Growth Distributional Resource Integrity

EquitySoil Degradation High High HighWater High High HighContaminationDeforestation High High HighGully Erosion Moderate Moderate HighFisheries Loss Moderate Moderate HighCoastal Erosion Moderate Moderate ModerateWildlife and Low Low HighBiodiversity LossAir Pollution Low High ModerateWater Hyacinth Moderate Low Low

Table 7.1

Application of this same criteria at the regional, state and local levels in Nigeria couldsubstantially alter the severity of impact for each environmental problem.

This discussion will now focus on the problems impacting the water sector in generaland on the NUWSRP in particular.

49



7.1.2 Causes of Water Contamination

Poor sanitation and waste water treatment, inadequate solid waste disposal and stormdrainage, weak institutions and poorly located water supply intakes have beenidentified'° as the key problems affecting water quality, and presenting significant waterpollution problems and potential health threats.

The contamination of water resources in Nigeria is caused by the discharge of untreateddomestic, agricultural and industrial waste into water bodies, affecting downstream watersupply in urban and rural communities. Pollution has also affected riverine and marineeco-systems in two important ecological zones; (i) in the Lagos Lagoon ( throughindustrial and domestic pollution) and (ii) in the Niger Delta area ( primarily because ofoil spillages).

In many of the urban areas, risk of contamination extend not only to surface water, butalso to ground water because of relatively high water tables. In such situations wherewater tables are relatively high ( say, between 1m-1Om below the land surface), leachingof solid wastes and seepage is a public health risk for the large urban populationdepending on ground water supplies.

With regards water pollution through industrial effluents, as the proliferation of industrialactivity grows rapidly, in-situ industrial waste treatment systems and plants ( wherepresent) seem incapable of satisfactorily addressing this issue.

Textile plants, breweries, slaughtering factories, sugar refineries, pulp and paper plants,petroleum industry , SWA's, to varying degrees, all discharge raw, untreated and liquideffluents into open gutters, drains, streams, channels and lagoons. The effect of this sortof pollution renders surface waters and the underground water systems unsafe forhuman, agricultural and recreational use, destroys biotic life, poisons the naturalecosystems, and causes severe threats to human life.

Water pollution, if uncontrolled, could represent a significant technical problem for thefuture management of the public water supply system. Not only is the treatment of suchwater costly, but in addition, the quality of this water, even after treatment, can beunsatisfactory from the point of view of health, odor, and taste. Secondary and oftendangerous pollutants are also formed during treatment of low quality intake water, sincein many cases, chlorine which is used for disinfection, results in the formation of organo-chlorine and other suspected carcinogens.

The nature of the toxic waste from industry depends on the type of material the industryproduces. For example, the textile industry produce waste water which has a high Phand bears intense, toxic organic chemical and heavy metals from the processing offibrous materials. The petro-chemical industry, on the other hand, emits oil, grease, andheavy metals from spillages, the deballasting process, and from accident. From theauto- industry, there are high levels of lead from the paints and scrap metals used andthe pulp ,paper and plastic industries produce effluents which have high ratings ofmercury and Lead ( Pb) content.

'" See Towards the Development of an Environmental Action Plan for Nigeria, 1990. World Bank ReportNo. 9002-UNI

50



7.1.3 Problems associated with Water Hyacinths

Water hyacinths are pervasive in many of Nigeria's waterways and have receivedconsiderable attention within the country as an environmental menace. Theirproliferation can in some instances be exacerbated by water contamination, although theprimary impact of water hyacinth is to disrupt the viability of waterways and theoperations of traditional fishermen. Its potentially more serious impacts include chokingof irrigation channels, infestation of irrigated fields and providing a breeding habitat formosquitoes.

7.2 Positive Environmental and Social Impacts.

The overall environmental and social impacts from planned activities of this project arelively to be positive as the NUWSRP offers the unique opportunity to address some ofthe key structural issues affecting the water sector in Nigeria and through theimplementation of activities in six self selecting/participating states. The holisticapproach of this project offers the opportunity to (i)implement fundamental structuralreforms in this sector, (ii) institutional and legislative reforms to address many concernsin the sector including environmental and social issues, (iii) to provide capacity buildingmeasures to implement these reforms and (iv) to monitor the performance of the sectorpost project.

7.3 Activities of all Stakeholders on the Water Resources of Nigeria.

Activities of the various users of water resources are interrelated and co-dependent tovarying degrees on the activities of each user. One cannot separate the activities of onegroup of stakeholders from another in terms of addressing impacts their activities onwater resources has on the environment and on communities who depend on theseresources to sustain their livelihoods.

Therefore, while the main stakeholders of this project are the SWA's, activities of otherstakeholders in the water sector will have impacts on the water resources used by theSWA's and ultimately on the urban communities who are the consumers and ultimatebeneficiaries of this project. Additionally, as the NUWSRP is designed from a sectorwide and holistic perspective, the activities of other stakeholders in the water sector canbe addressed by this project in general, but more particularly addressed in this ESMF, interms of their adverse environmental and social impact on the water resources used bythe SWA's.

The key stakeholders with significant impacts on water resources in Nigeria are:

* The State Water Authorities/Agencies/Boards (SWA's).* Large, medium and small industries ( manufacturing, petroleum, agro-producing,

etc.)* Agriculture ( farming, irrigation)* River Basin Development Authorities (RBDA's)

51



First, the anticipated activities of the SWA's in this project are broken down intophases and stages" as shown on page 53.

The Phases shown on page 53 are coincidental with the stages of planning in the overall NUWSRP.

Many other activities would be going on during implementation of the project but those highlighted above

are related specifically to the issues covered in this ESMF.

52



In Phase 2: Construction fIn Phase 1: Planning Stage a) Rehabilitation of water

treatment plants.a) Tariff Studies: to determine a tiersystem that is economically and b) Expansion of capacity of watercommercially viable but also designed to treatment plants.target and include the urban poor andvulnerable for provision of services, based c) Rehabilitation of Existingon affordable rates following sensitization Network.of these groups and consultation todetermine willingness and ability to pay. d) Expansion of reticulation

network to new areas.b) Technical Surveys and Designs toprovide engineering details for planned e) Provision in network/or standinvestment ( rehab. and expansion). alone Sanitation services ( details

i ~~~~~~to be worked out at planningc) Conduct of ESIA, to identify and stage).mitigate impacts due to b) above and to f) sinking nee ).renoic sidentify urban poor and vulnerable groups Itargeted for provision of services and todetermine their income (individual andhousehold).

d) SWA's to commit themselves to include fsanitation aspects in their design andservices realizing that at least 70% of thepotable water they provide to customerswill inevitably end up as waste water whichmust be safely and suitably disposed of. Operations Stage

Key /Typical Activities in theWater Treatment Plants

1 sl Step: Provision of Raw Water

2nd Step: Raw Water Extraction.

3rd Step: Sedimentation.

Post- Generation /Distribution 4th Step: Filtration.

a) Network Expansion

b) New Connections to network.5th Step: Chemical Treatment:

c) Sanitation Services.

d) Maintenance of network.6th S:eP bul Storage ,.i le-.nWater

7th Steo Disirbt,ulgon io Ner-cnrt.

Fiq 7.1 Flow Chart of Planned Proiect Activities of SWA's.

53



Intake of raw water fromriver sources by suction(electric) pumps.

j/ t7 /t7> Raw water subfected throughProvision of Raw Water from Stee 2 sedime'ntatIon process by gravitynatural sources such as rainfall means aided by addibon of Alomand from Dams/ Reservoirs and pretreated with chemicals toowned and operated by RBDA's balance Ph.or SWA's (Differs from stale to _ Sludge separated from water atstate). this stage.

Step 1 SterI3

,E -

Potable/drinkable-water is now The next stage is the Filtrationpumped lo Bulk/Balancing The clear (filtered) water is passed process where the partially clearStorage Tanks . through a quality control process, water is passed through sand

Step 6 where it is tested and treated for the filters resulting in clear water atpresence of micro-biological the end ot this.substances using chlorine and the Phbalanced using lime. Stear 4

Step, 5

Pumped to Distrlbltion/StorageOverhead Tanks in sirategic areas inIhe city for distribution into network. Fiq 7.2 A Closer Look at Key Operational Stages of Water Treatment Plants

Step 754



Phase/Stage Planned Activities Positive Impacts Adverse Mitigation Measures

In Phase 1: Planning Stage a) Tariff Studies: (i) to Will ensure pro-poor demanddetermine a tier system that is driven, efficiency oriented None N/Aeconomically and PSP transaction.commercially viable (ii)designed to target and include Will improve access to waterthe urban poor and vulnerable services by poor andfor access to services, based vulnerable communitieson affordable rates,(iii)sensitization andconsultation of these groupsto determine willingness andability to pay.

Specific measures to beb) Technical Surveys and N/A Will allow ESIA to identify addressed in ESIA consistentDesign to provide engineering adverse impacts of planned with triggered Bankdetails for planned investment investments on water Safeguards and Nigerian

rehab. and expansion). resources, natural habitats, federal, state and local laws.dam safety and others.

Specific measures to bec) Conduct of ESIA and ESIA and RAP's will identify ESIA will identify adverse identified in ESIA. Identifiedprepare RAP's where urban poor and vulnerable impacts. poor and vulnerable in ESIArequired groups targeted for provision will be made available for

of services and to determine employment by civil workstheir income (individual and contractors and forhousehold). participation in other project

activities.

d) SWA's to commit Increased public and 70% of the potable water Sanitation component mustthemselves to include environmental health from SWA provides customers will be included to safely disposesanitation aspects in their suitable sanitation inevitably end up as waste of waste water.design and services. component. water. Considerable

contamination of watersources if no sanitation isprovided, with impacts onpublic health.

Table 7.1: Impacts from Planninq Activities durinq Phase 1.

55



Phase/Stage Planned Activities Positive Adverse Mitigation Measures

Contractors to clean sites/areas contaminated

In Phase 2: a) Rehabilitation of water from spillages and leakages and to source backfilltra)tRehabilantiosf. ae N/A From negligent and bad material and sand from approved locations only

Construction treatment plants. practices of potential and not from random mining local/close areas forcontractors, excavation of this material.

b) Expansion of capacity of borrow pits for fill materialwater treatment plants. and sand, inappropriate Suitable Storage and transportation of building

c) Rehabilitation of Existing transporting, storage and materials.Network. use of items such as

cement, petroleum products, No use of banned, harmful and hazardous

d) Expansion of reticulation heavy equipment and substances according to Nigerian and/ornetwork to new areas. machinery, contaminated or international standards. ( e.g. Asbestos)

construction sites.Provision in network/or Provision of suitable and safety clothing, shoes

e)and alone Sanitation Impacts from water and head protection for site staff.stand alone Sanitation cotmnain ai. oltoservices ( details to be contamination, air pollution,servies ou detpails ionb disturbance of natural Adoption of best Health and Safety workingworked out at planning habitats and delicate eco- practices/conditions.stage). systems.

Work during approved and acceptable hours toand Sinking new boreholesminimize noise and effects of air pollution from

their equipment.

Effective and close supervision of constructionactivities.

Legal Instruments to hold Contractors financiallyand in some cases criminally liable for adverseimpacts that result from failure to implementcontracted required mitigated measures.

Employment of local, poor and vulnerablemembers of communities by civil workscontractors and to use their services as much asfeasible.

Specific measures to be addressed in ESIA

Table 7.2 Impacts from Construction Activities durinq Phase 2.

56



I I I reports.Phase/Stage ImpactsOPerationseStage Planned Activities Positive Adverse Mitigation Measures

Operations Stage|1 st Step: Provision of Raw Implementation of measures in Dam

Kev ITypical Activities Water into Rivers. Flooding of river banks. Safety report, especially ensuring that

in the Water Treatment maintenance budget available to

Plants From Dams and Reservoirs Large quantities of owners/operators to undertakeowned and operated by SWA's water stored for Dam Failure preventive and corrective maintenanceor RBDA's, depending on what controlled use in and early warning/response forprevails in each state. SWA's and emergency situations.

irrigation during dryWeirs constructed across river spells.channels downstream of raw Monitor water levels downstream of weirs

water intake point to ensure Weirs across rivers affects water to ensure downstream users can sustain

sufficient water head upstream levels and flows for down stream livelihoods.of intake. users, especially during dry

season.

Table 7.3: Impacts from Operation Activities

57



2 d Step: Raw Water i) Pollution of water, air and i)Carefully designed regimes for safe

Extraction. natural habitats from lubricant operation and maintenance of theseand fuel leaks from operation of heavy equipments, and safe

From river sources using large large suction pumps and large transportation and storage of lubricants

electric and powerful suction stand-by power generators (e.g. and fuel for same. Safe and suitable

pumps. 0.5mega watt). housing of pumps and generators.

ii)effects of reduction of water ii) Maintenance of minimum water levels

levels due to excessive in rivers, downstream of intake. Maintainextraction of raw water from good and reliable records of quantities ofrivers on downstream users e.g. raw water extracted. Sensitization ofirrigated farms, fishermen, other downstream users.industries). Monitoring of water levels downstream of

intake.

iii) Also, excessive raw water (iii) Draining of wetlands not allowed.extraction may lead to possible Regular monitoring of effects ondraining of wetlands over time critical nearby wetlands required.and disturbance of naturalecosystems.

iv) controlled dredging and suitableiv) Siltation on river bed to disposal of material.upstream soil erosionexacerbated by water extraction.

Table 7.3 cont'd: Impacts from Operation Activities

58



3'd Step: Sedimentation.

Standard method is by gravity i) Contamination of rivers when i) treatment of sludge to rid off pollutant

flow after intake to reduce sludge is return untreated chemicals in it either by in-situ treatment

turbulence. Raw water is then downstream of intake, adding plant and then return to river or

mixed with Alom ( segregator) to pollution levels in water for continuous re-cycling in water treatment

and pre-lime before water downstream users. plant.

enters clarifiers where thesedimentation process occurs, Contamination of land when Do not just dump untreated sludge on

producing sludge which is then sludge is dumped untreated on nearby land.

extracted from the system. The site.

clearer water moves on bygravity to the next step. ii) Contamination of surrounding ii) Suitable storage of chemicals in

land and nearby water sources secure bags and off the floor in well

from inappropriate transport, ventilated and secure stores. Safe

storage, handling, mixing of transportation of chemicals to mixing

chemicals and leaks of pipes areas and for introduction into supply

supply chemicals into system piping systems, and appropriate and safedisposal of wasted and left overchemicals. Regular inspection andrepairs of piping systems.

4 th Step: Filtration.

Water now enters the filtration i) contamination from Suitable disposal of filtered waste

process which is through inappropriate disposal of filtered through sludge treatment plant or -re-

compacted sand filters waste material. cycling method. No dumping on site

(progressive compaction allowed.

paftem of different sizes of ii) and waste material from sand

sand grain particles). filters cleaned by back-wash.


59



5 th Step: Clear Water QualityControl/ Chemical i) Contamination of surrounding i) Suitable storage of chemicals in

Treatment: land and nearby water sources secure bags and off the floor in wellfrom inappropriate transport, ventilated and secure stores. Safe

Immediately after the filtration Safe and potable storage, handling, mixing of transportation of chemicals to mixing

process, the clear water is water produced has chemicals and leaks of pipes areas and for introduction into supply

tested to determine quantities good positive supply chemicals into system. piping systems, and appropriate and safe

of Lime (to balance Ph) and impacts on the disposal of wasted and left overchlorine ( to kill harmful micro- environment and chemicals. Regular inspection andbiological organisms.) to be public health of the repairs of piping systems.

added. citizenry.

Each SWA has a Water ii) Quality and reliability of lab ii) Lab services need to be drastically

Quality Control Lab in the services in terms of adequate improved.

water treatment plant. lab technicians, frequency oftesting regime, compliance with Better and modern equipment neededtesting regime, reliability and and guarantee of supplies required.suitability of equipment, close Some labs often run out of testingsupervision of staff and other due material.diligence practices, isquestionable. Better trained water chemist, biologist

and other water scientists in labs.There is insufficient frequency of required.testing at various stages.

Better testing regime and improvedThere is no testing for the frequency of testing required.presence of harmful chemicalsubstances. Generally the Testing must include the determination ofpresence of harmful chemical harmful chemical substances too andsubstances such as mercury, effective treatment or emergency planslead, arsenic and cyanide is not where the presence of dangerous levelsconclusively determined. detected in water leaving the filtrationChlorine works against stage required.microbiological substances only.Apparently, chemical tests Closer supervision of lab. staff required.responsibility of Stateenvironment agencies only. Introduction of a Watch Dog body

required ( see later sections) to monitorthese measures.


60



h Step: Bulk Storage ofClean Water.

i)Poor security around Bulk i) Need to completely fence off perimeter

Potable treated water is now storage tanks, presenting around water treatment plants, better and

pumped to bulk opportunities for sabotage, more secure manhole covers on tanks,

storage/balancing tanks. terrorism etc. more frequent testing of water in bulkstorage before it is pumped out for

In some cases the water in distribution.these tanks is tested again to ii) poor recording keeping.check that the Ph level is Unable to independently ii) Introduce a records Database/MIS

balanced, absence of micro- determine efficiency of plant inbiological substances, turbidity terms of losses from calculationand other tests. of intake and output quantities.

7th Step: Distribution toNetwork.

i)Gravity feed from overhead i)More pollution from significantly NUWSRP must have a sanitation

tanks into reticulation network. greater waste water component to address disposal ofinappropriately disposed off. significant waste water.

ii) Distribution /connection toconsumers, customers. ii) contamination due to illegal

connections, leaks from burstiii) network expansion. pipes, and sanitation

infrastructure in a state ofdisrepair can adversely impactenvironmental public health.

General Comments The SWA's would have to introduce a maintenance and monitoring program that covers all stages of their operations. This program

would have to be fully funded, with key institutional support, defined responsibilities and accountable to the top leadership, if adverse

impacts are to be sustainably mitigated. This may require new legislation at both the federal and states level to enforce this

requirement . Above all, a fundamental shift in attitudes of the employees of the SWA and their customers towards due diligence

work, willingness to maintain standards and care for the environment is required.

Table 7.4: Impacts on Water Resources from other Stakeholders

61


Table 7.4 cont'd NATIONAL URBAN WATER SECTOR REFORM PROJECT (NUWSRP)

Institutions/Sector Activities P NaImpacts Mitigation Measures12Positive Negative

Industry(Manufacturing, Discharging untreated waste None Harms or destroys, Require the treatment of

Petrochemical, mining) with unacceptable and illegal ecosystems, renders surface waste before discharge into

quantities/concentrations of and ground water sources rivers, lakes, ocean, delta etc.harmful substances such as unsafe for humantoxic organic chemicals, consumption, agricultural and Enforce existing laws.heavy metals and oils/grease. recreational use

Continuous monitoring ofindustrial activity forcompliance with licensingconditions and EMPprovisions with severepenalties for violators.

The Laws and requirementsmust also be applied toGovernment and State (i.e.public) owned industries. Forinstance, Public ownedindustries must also berequired to carryout ElA'sbefore approval to operate.

River Basin Development Provisions of Raw Water for Provide water during dry Flooding and endangering Implement measures in Dam

Authorities (RBDA's) SWA's and Irrigation. spells and/or drought. communities during a Dam Safety report.failure.

Agriculture Irrigation and Pesticide Use Increased agricultural output, Uncontrolled/excessive Monitor water levels.enhance food security and irrigation due to extraction ofraise livelihoods. excessive water from river

sources can lead to siltationon river bed, erosion and

12 Some of these mitigation measures cannot be implemented in this project. However, sector wide approaches should be attempted to address the impacts from

other users on water resources. The cumulative impact of these other users ( identified in this table) are greater than the impacts on water resources from the

SWA's alone, and directly affect the activities of the SWA's.

62



affect activities of downstreamusers such as fishermen.

Pesticide can lead to the Controlled use under an IPMcontamination of water regime and enforcesources by harmful chemical prohibition laws onsubstances. importation, marketing and

use of banned toxicpesticides.

Sand and other artisanal Low technology and Provides livelihood Severe land degradation and Adopt modern andmining activities along river knowledge based methods to opportunities. contamination of land , water sustainable practices throughbanks. extract, purify, wash etc. and other resources. provision of training, market

development, financing, etc.

Table 7.4 ended: Impacts on Water Resources by other ( not SWA's) Stakeholders

63



8.0. INSTITUTIONAL ASSESSMENT AND FRAMEWORK FORENVIRONMENTAL AND SOCIAL MANAGEMENT

8.1 Institutional Roles and Responsibilities

The main institutions with key responsibilities in this ESMF are:

* 8.1.1 The Federal Ministry of Water Resources (FMWR)

The role of the Federal Ministry of Water Resources (FMWR) in this project is one ofcoordination, promotion and policy development. FMWR's principal function is to ensurethan an enabling legal, regulatory and policy environment at the federal level is in placeto promote private sector participation (PSP) and involvement in water utilitymanagement. The FMWR is accountable for the overall coordination of the projectamong various participating states. The responsibilities of the FMWR fall in three maincategories; (i) monitoring and evaluation, troubleshooting, quality assessment andcontrol, and coordination, (ii) implementation of the federal component of the project,which includes support to non participating states, and (iii) information help desk on arange of procedural and project management issues including procurement, financialmanagement, disbursement, performance benchmarking for water utilities, and otherinformation which SWA PlU's are likely to seek.

Specifically with regards this ESMF, the FWMR will play an oversight role by monitoringthe SWA's to ensure that they are performing and carrying out their responsibilities asdetailed in the approved ESIA. The FMWR will play this role by relying on the analysis ofperiodic reports of the respective SEPA. The FMWR will forward these reports to theFMEnv for analysis of cumulative impacts and efficacy of corresponding state mitigationmeasures.

Thus the FMWR will perform a central processing and coordination role between theSEPA's and FMEnv on the activities of the SWA's by being a channel for receiving,compiling and processing periodic monitoring reports and for issuing necessarycorrective guidelines and to report to IDA.

In addition, the FMWR will monitor the social aspects of the ESIA's to ensure povertytargets are being met.

The FMWR will report to the World Bank.

* 8.1.2 Sector Reform Management Committee SRMC

The Sector Reform Management Committee (SRMC) will be an ad hoc technicalcommittee of experts, set up during Phase 1 of project implementation to inter alia,primarily assist and work with the FMWR to supervise the work of the TransactionAdvisers (TA's), to launch bids for PSP and to make recommendation for award of PSPcontracts.

64



* 8.1.3 The Federal Ministry of Environment (FMEnv)

One of the primary responsibilities of the Federal Ministry of Environment (FMEnv) is toensure that all major development projects in Nigeria are subject to mandatoryEnvironmental Impact Assessment (ESIA) pursuant to EIA Act. No. 86 ( Decree No. 86)of 1992.

Therefore, together with the SEPA's, the FMEnv will review and clear the SWA's ESIA's.Then, the role the FMEnv will play in this project is one of monitoring, to ensure; (i) thatthe SWA's are preparing ESIA's and submitting them to their respective SEPA's andtheir office , (ii) that the SEPA's are also reviewing the ESIA's and clearing themaccording to Federal Guidelines, State Laws and World Bank Safeguards policies, (iii)that the SEPA's are monitoring the activities of the SWA's during construction and post-construction ( i.e. operations stage) at all locations in the state on which the SWA's havefacilities and installations, (iv) cumulative impacts at the federal level from any collectiveimpacts of the SWA's activities are adequately mitigated and monitored at the statelevel.

The FMEnv will report to the FMWR and will receive the periodic monitoring reports ofthe SEPA's through and from the FMWR. The activities of the FMEnv will be coordinatedby the FMWR.

* 8.1.4 The State Water Agencies/Authorities/Boards (SWA's)

The State Water Agencies (SWA's) will be responsible; (i) for complying with allFederal, State and Local Laws regarding the environment and with all social/povertyguidelines, parameters and targets set by the project, and of all triggered World BankSafeguards policies, (ii) to conduct and prepare an ESIA report for their plannedinvestments under this project and to submit the ESIA to its SEPA and to the FMEnv forclearance, (iii) to implement all appropriate mitigation measures identified in the ESIAinto the project planning cycle, technical and engineering designs and drawings, andPSP contracts, (iv) to ensure that these mitigation measures are complied with duringconstruction and post construction (i.e. operations ) stages of their activities, by selfmonitoring of their activities and by periodically reporting to its SEPA and the FMEnv, (v)to maintain an adequate budget to implement the appropriate maintenance proceduresand practices of their operations required to ensure mitigation measures identified intheir ESIA's are implemented and sustain and (vi) to comply with any directives that maybe issued from time to time from the SEPA's and FMEnv.

a 8.1.5 The State Environment Protection Agencies (SEPA's)

The State Environmental Protection Agencies (SEPA's) are responsible; (i) to ensure theactivities planned under this project by the SWA's comply with their states environmentallaws and requirements, and that of the Federal Government and the World Bank'striggered Safeguards Policies, (ii) for receiving, review, commenting, requiring revisionswhere necessary and clearing and approving the Technical and Engineering Designdetails of the SWA's and the mandatory and corresponding ESIA, (iii) to perform regularand intrusive monitoring regime of the construction, operations and maintenance stages

65



of the activities of the SWA's, (iv) for preparing periodic monitoring reports on theactivities of the SWA's at all stages of operations and to send these reports on a regularbasis to the FMWR who will then process them and send them to the FMEnv and WorldBank, (v) to comply with ( consistent with state laws) the directives of the FMEnv andFMWR, (vi) to issue directives to the SWA's consistent with state laws on environmentalrequirements.

* 8.1.6 The World Bank

The World Bank has overall responsibility to ensure that its Safeguards Polices arecomplied with, and will perform this role by reviewing all periodic technical, financial andmonitoring reports of the FMWR, FMEnv, SWA's and SEPA's and will issue all itsrequirements through the FMWR.

The roles of these institutions for environmental and social management of this projectare summarized in Table 8.1 below.

Phase 1: Transaction stage Phase 2: Post PSPleading up to PSP Contract/implementation.award/investment planning

Federal Ministry of Water Project Coordination and Project Coordination,Resources (FMWR) Oversight Oversight, reporting to IDA

Federal Ministry of Review and clearance of Monitoring SEPA's andEnvironment (FMEnv) ESIA's. reporting to FMWR

State Environment Review and clearance of Monitoring SWA's andProtection Agencies ESIA's reporting to FMEnv.(SEPAs)

State Water Agencies Prepare ESIA's Self Monitoring and reporting(SWAs) to SEPAs, FMEnv and FMWR.

Table 8.1: Summary Table of Institutional Framework for Environmental andSocial Manaqement.

66



8.2 Capacity Assessment to Perform these Roles.

8.2.1 The Federal Ministry of Water Resources (FMWR)

The FMWR through the office of the Director of Water Supply will provide overall qualitycontrol and coordination oversight. The professional staff at the FMWR are experiencedand suitably qualified to carry out this role as the FMWR has recently completedsatisfactory management of IDA funded National Water Rehabilitation Project whichinvolved all 36 states, and was centrally managed by the FMWR.

The ESMF is recommending that one Engineer in the office of the Director of WaterSupply, be specifically assigned the responsibility for the Environmental requirements inthis ESMF and another professional be assigned the responsibility for Social/Povertyrequirements .

That is:

1 no. Engineer -for Environmental Responsibilities

Key responsibilities would be:

* Coordinate, liaise with and monitor the SEPA's and FMEnv• Review periodic Environmental Audit reports from SWA's , SEPA's and FMEnv.* Advice FMWR on Environmental issues* Compile and prepare periodic Environmental reports for submission to World

Bank* Review ESIA reports from SWA's.

1 no. Social Scientist - for Social/Poverty Responsibilities

Key Responsibilities would be:

* Prepare TOR's for Poverty Studies such as, social/poverty assessment.* Review and comment of Poverty Studies.

. Monitor the performance of SWA'/PSP performance in meeting povertytargets/goals.

* Review and compile periodic poverty performance reports from SWA's/PSP'sand prepare periodic consolidated reports for FMWR and World Bank.

8.2.2 Federal Ministry of Environment (FMEnv)

The roles of the FMEnv are (i) to review and clear in conjunction with the SEPA's, theESIA's ( which will be six in total) prepared by the SWA's and (ii) monitoring.

The staffing levels at the EIA division of the FMEnv and the Impact Mitigation andMonitoring (IMM) Branch of the EIA division are sufficient with adequate experience to

67



carry out these roles. For monitoring, this project would provide logistical and technicalsupport to them to assist their work as per table 10.1.

8.2.3 State Water Agencies (SWA's)

There will be a separate Project Implementation Unit (PIU) for each participating SWA.During the transaction phase and run-up to transaction, the PIU will be the executingagency. After a successful PSP transaction and award of contract, depending on thenature of the contract, the composition of the PIU may or may not change.

The present composition of PIU ( remaining from the closed NWRP) with ProjectManager, Procurement Officer, Project Account will be strengthened for environmentaland social management by a new position.

The PlU's in all participating SWA's will create and fill the position of Environmental andSocial Specialists. This position will be maintained during Phase 2, that is after PSPtransaction award.

1no. new Environmental and Social Specialist in the PIU with the following keyresponsibilities:

* The custodian of all environmental and social issues required of the SWA's.* Responsible for preparing the required ESIA for their state.* Ensure SWA's comply with all environmental guidelines of Federal, State and

Local Authorities, and Bank Safeguards policies during investment planning,construction and operations.

* Perform self monitoring of SWA's activities at all stages of operations.* Liaise with their SEPA and the FMEnv.* Prepare periodic environmental reports for submission to SEPA and FMWR.

8.2.4 State Environment Protection Agencies (SEPA's).

The SEPA's will perform four key roles in their state in this project:

* Review, comment and clear SWA's ESIA.. Monitor activities/operations of the SWA during all stages ( i.e. investment

planning, construction and operations/maintenance.* Enforce state laws.* Report to FMEnv and FMWR on a periodic/regular basis.

The SEPA's generally have separate departments:

* One for requesting, review clearing of ESIA's.* One for Monitoring and Compliance.

The staffing levels are sufficient to carry out these roles.

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Key staff in these departments will be provided with training as per training program herebelow. The SEPA's will also be provided with limited financial support to procurenecessary equipment as per table 10.1

8.3 Training Needs

8.3.1 Proposed Training Program

Proposed Training Program Duration

Environmental and Social assessment process 1Odays.Review of Environmental and Social Management Process.* Screening processes to determine adverse impacts from SWA's activities.. How to measure cumulative adverse impacts* Preparation of terms of reference for carrying out ESIA. How to review and approve the ESIA's. The importance of public consultations in the ESIA process* How to monitor SWA's performance viz-a-viz poverty targets/requirements. Management of Water Quality Laboratories* Case studies

Environmental and Social policies, procedures and guidelines 5 days

. Review and discussion of Nigeria's federal and state environmental policies,procedures, and legislation.* Review and discussion of the Bank's safeguards policies.* Review of ESIA and Resettlement /Compensation Plans.

* Collaboration with institutions at the Federal, State and Local levels.

Selected topics on environmental protection 2 days

. Sustainable use of Water Resources and prevention of contamination* Soil Erosion* Sanitation Management* Ground and Surface Water management

8.4 Cost estimates

The costs estimates are based on the assumption that the training program will be heldat the state level; resource persons are likely to come from other parts of the country andtherefore require travel allowances; participants will come from the FMWR's, SWA's,SEPA's and FMEnv and attend during the day only but will receive a per diem. Theseestimates include an allowance for travel expenses. It is proposed that the trainingprogram will be implemented in each participating state and once in Abuja over the firsttwo years of the project cycle, i.e. during Phase 1. It is estimated that one completetraining module of 17days will cost in total about US$15,000. There will be 7 modulesoffered separately. The total costs is estimated at US$105,000

69



World BanK

FMEnv ) A

A S. AL

FMWR

w~~~~~~~~

SEPA X

-. * w

SWAIPSP

Fiq 8.1: Flow Chart of Monitoring Roles and Responsibilities.

Monitoring Reporting

I w *-- -

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9.0 ENVIRONMENTAL AND SOCIAL PLANNING, REVIEW ANDCLEARING PROCESS FOR PARTICIPATING STATE WATERAGENCIES (SWA'S) ACTIVITIES/SUB PROJECTS TO BE FUNDEDUNDER THE NUWSRP.

At the time the NUWSRP was being prepared, the activities (sub projects) of theparticipating six SWA's were not identified. Consequently, specific information on landrequirements and other detailed engineering and technical details were not available.Therefore, exact details and intensity of social and environmental impacts and theireffective mitigation could not be determined during project preparation. This documentreferred to as the Environmental and Social Management Framework (ESMF) is thusprepared to establish the mechanism to determine and assess future potential adverseenvironmental and social impacts from sub project activities of the SWA's that are to beidentified and cleared based on the process identified in flow chart fig. 9.1 and then toset out mitigation, monitoring and institutional measures to be taken duringimplementation and operation of the sub projects to eliminate adverse environmentaland social impacts, offset them, or reduce them to acceptable levels.

This section therefore, identifies and illustrates the steps involved in the environmentaland social assessment process leading towards the clearance and approval of SWA subprojects from an environmental and social management standpoint. This process isembedded into the overall timeline, phasing and project implementation process for theentire NUWSRP. The steps in the flow chart incorporate the requirements of both,relevant Federal/ State laws and the Bank's triggered safeguards policies.

9.1 The Environmental and Social Management Process

The key steps in the environmental and social planning process are:

1). Preparation of an Environmental and Social Impact Assessment (ESIA).

Each participating SWA is required to prepare an ESIA for their sub project/activities tobe funded under this project .

Because of the anticipated size and scale of each participating SWA's sub project interms of; (i) their funding envelope ( est. US$34 million per SWA), (ii) the extent of civilworks required to rehabilitate and expand their existing network and coverage, (iii) thehigh technical standards required of their operations in a reformed sector, (iv) the needfor extensive monitoring of their operations, and (v) the need for the activities of theSWA's to be economically and financially viable while requiring them to extend coverageto the urban poor as well, Nigerian laws and World Bank policies require that eachparticipating state prepares a separate Environmental and Social Impact Assessment(ESIA)13 for their sub project/activities to be funded under this project. These ESIA's arerequired to identify adverse environmental and social impacts from their planned subproject investments, then to set out mitigation, monitoring and institutional measures tobe taken during implementation and operation of the sub projects to eliminate adverseenvironmental and social impacts, offset them, or reduce them to acceptable levels.

13 FOR's for the preparation of these ESIA's can be found in Annex of this ESMF.

71



This broadly covers Steps 1 to 5 in flow chart fig. 9.1

2). Incorporate Mitigation Measures into the Design.

The SWA's will re-introduce into/adjust/adapt/revise their sub project technical andengineering designs (i.e. drawings , specifications for materials and workmanship, Billsof Quantities, contract clauses, etc.) the required mitigation measures identified in theprepared sub project ESIA, before submission of the entire sub project proposa'14

(Technical Designs and ESIA) for review and subsequent clearance.

This covers Step 5 in flow chart fiq. 9.1

3). Submit Proposals to respective State Environmental Protection Agency (SEPA)and to the Federal Ministry of Environment (FMEnv).

The FMEnv and the respective SEPA of the state in which the participating SWA islocated will review and clear the sub projects from an environmental and socialstandpoint only, by ensuring sub project designs have identified environmental andsocial impacts, mitigated these impacts and have monitoring plans and institutionalmeasures to be taken during implementation and operation.

The FMEnv and the SEPA's would verify that the sub project designs for the SWAactivities in their state, meet environmental and social requirements of their state andnational and federal requirements and that they are consistent with the Bank's OP 4.01,the overall NUWSRP ESMF ( i.e. this report) and other applicable and social policiesand safeguards of the World Bank.

The FMEnv and the SEPA's would also review and check for compliance with this EAprocess.

If, however the sub project proposal unsatisfactorily addresses these issues it will besent back to the SWA for re-design and re-screening and then it must be re-submitted tothe FMEnv and the SEPA for re-review. The revised design and ESIA will be reviewedagain by the FMEnv and the respective SEPA, and if now acceptable, it will be cleared.

Any proposed sub projects that do not comply with the Federal, State and Localrequirements of the Environmental Laws of Nigeria and Social requirement guidelines ofthis project, and the requirements of the World Bank Safeguards policies will not becleared.

This process is designed to ensure that the environmental and social assessmentprocess is part of and conducted during the sub project design process thereby ensuringthat sub project activities are environmentally and socially acceptable and sustainable.

'4 Sub project proposal is the complete set of dossier including the engineering and technical designs and

the ESIA report.

72



That is to say that when SWA's prepare their sub project designs and proposals forfunding, the sub project ESIA would simultaneously screen these designs to identifyadverse environmental and social impacts of their planned investments, and thenprepare as part of their proposal an environmental and social impact assessment, thatpresents the appropriate mitigation measures, and the institutional framework requiredfor implementation, monitoring of mitigation measures and cost associated with thesemeasures.

Therefore, the SWA's submitted sub project proposal will contain planned investmentsand designs that have already been screened through the sub project ESIA and containappropriate mitigation measures.

The sub project ESIA screening process will be guided by the generic potential adverseand social impacts often associated with urban water service projects, outlined inSection 7 of this ESMF.

This broadly covers Step 6 in Flow Chart Fig 9.1.

4). Approval for Funding.

Only when the FMEnv and the SEPA's have given environmental and social clearanceof the SWA sub projects , will they be referred for approval for funding to theSRMC/FMWR.

This broadly covers Step 7 to 8 in flow chart fiq. 9.1

9.2 Costs of Preparing ESIA's

There will be at least six ESIA's prepared, one for each state. The cost of preparinggood quality ESIA is estimated at about US$7,500/per ESIA which gives a total ofUS$45,000.

73



Project ImplementationStart of Phase I

Step 2Conduct PSP Option Study in each

. waF Participating State to recomrmend , Steo3c=Zi~> appropriate PSP option: Lease. rEt= Convene workshop in each parlicipaling

Service Contract. Management stale of all slakeholders lI approve PSPStep A Contracl, Concession, etc. Option based on study report

Transaction Adviser (TA)Cotct onesn.t.

Step4Step 5 i) Conduct Willingness-to-pay and tariff studies.

Conducl ESIA to identify adverse impacts of ii)a in step 4 anddesign of mitigation measures to be incorporated in i ii) Detailed Investment Planning begins; producing amongengineering and iechnical designs other requirements:

a) Engineering and Technical Designs for systemPrepare RAP's based on disclosed RPF if necessary based Rehabilitation and Nerwort. Expansion.on ilb in step 4. bI Land Assessment Needs.

At tne er,a of Step 6. EngineeringStep 6 and Technical Designs for the

ESIA's engineering and technical designs Dianne invesiments Would havesubmilted to Ihe FMEnv and Ihe respeclise =: jr.dergone the enmironmentaiSEPA's for review and approval. pianning process ard impacts ilIRAPS' also to be submitled to the FMEnv mitigaled ,r ine desinsand to the respective SEPA for approval.

Ste8 TA to launch nidding process on behalf ofSRMC to seek PSP partner TA will evaluatetechnical bids and make a recommendation to < Step 7the SRMC for PSP award. Transaction Adviser (TA) will prepare draft bidding and contract

documents for award of PSP contract based on chosen PSP

N.B. SRMC is the Sector Reform Management option from Step 3 above. These documents will incorporateCommittee. engineering and technical designs from Step 6, which would form

part of the activities/investment planning SWA and PSP to jointlycarry out after award of PSP contract.

SteP 9Award of PSP Contract Step 10

a)System Rehabilitation and Network Expansion through execution ofPSP contract.

b)Operations Phase: i.e at Treatment Plants, Connection to NewI L Customers etc.

c)Continued Environmental and Social Management during a) b) andmaintenance stage.

End of Phase I

Start of Phase 2

| Fia. 9.1: KeV Staqes in Prolect Cycle



9.3 Environmental and Social Management Plan (ESMP) for State WaterAuthority investment plans/activities/sub- projects

The Environmental and Social Impact Assessments (ESIA's) that the SWA's arerequired by this ESMF to prepare must contain an Environmental and SocialManagement Plan (ESMP) that will consist of a set of mitigation, monitoring andinstitutional measures to be taken during implementation and operations to eliminateadverse environmental and social impacts, offset them, or reduce them to acceptablelevels. The ESMP ( which will be part of the ESIA's) should also include the actionsneeded to implement these measures, including the following features:

Mitigation: Based on the environmental and social impacts identified in theprepared ESIA's, the ESMP should describe with technical details of eachmitigation measure, together with designs, equipment descriptions and operatingprocedures as appropriate.

Monitoring: Environmental and social monitoring during the implementation ofthe SWA's sub projects, in order to measure the success of the mitigationmeasures. The ESMP should include monitoring objectives that specify the typeof monitoring activities that will be linked to the mitigation measures. Specifically,the monitoring section of the ESMP provides:

* A specific description and technical details of monitoring measures thatinclude the parameters to be measured, the methods to be used,sampling locations, frequency of measurements, detection limits ( whereappropriate), and definition of thresholds that will signal the need forcorrective actions, e.g. the need for on-site construction supervision, orthe need to test and treat for presence of harmful/poisonous metals suchas Pb, Hg, etc.

. Monitoring and reporting procedures to ensure early detection ofconditions that necessitate particular mitigation measures and to furnishinformation on the progress and results of mitigation.

The ESMP should also provide a specific description of institutional arrangements, (i.e.who is responsible for implementing the mitigation measures and carrying out themonitoring regime ( for operations, supervision, enforcement, monitoring ofimplementation, remedial action, financing, reporting and staff training.)

Additionally, the ESMP should include an estimate of the costs of the measures andactivities recommended so that the SWA's can budget the necessary funds. Similar tothe process for carrying out the ESIA, the mitigation and monitoring measuresrecommended in the ESMP should be developed in consultation with all the affectedgroups to include their concerns and views in the design of the ESMP.

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10.0 MONITORING PLAN

The objective for monitoring is two fold.

1) to alert project authorities and to provide timely information about the success orotherwise of the Environmental and Social Management process outlined in this ESMFin such a manner that changes can be made as required to ensure continuousimprovement to the process.

2) to make a final evaluation in order to determine whether the mitigation measuresdesigned into the SWA's project activities ( sub projects) have been successful in sucha way that the pre- project environmental and social condition has been restored,improved upon or worst than before and to determine what further mitigation measuresmay be required.

A number of indicators would be used in order to determine the status of affected peopleand their environment (land being used compared to before, number of customerscompared to before, level of new investment in sanitation compared to before, howmany poor customers connected to /served by SWA's compared to before, healthstandards, how many clean water sources than before, how many people employed thanbefore etc). Therefore, the projects EA process will set two major socio-economic goalsby which to evaluate its success:

* Has the pre-project environmental state of natural resources, bio-diversity andflora and fauna, been maintained or improved upon, and

* The extent to which access to water services by the urban poor and vulnerablecommunities has been improved upon.

In order to assess whether these goals are met, the SWA's sub-projects will indicateparameters to be monitored, institute monitoring milestones and provide resourcesnecessary to carry out the monitoring activities.

The following are some pertinent parameters and verifiable indicators to be used tomeasure the ESMF process, mitigation plans and performance;

For the ESIA process the following indicators may be consideredlused;

* Number of people in the FMWR, FMEnv, SEPA's and SWA's who havesuccessfully received ESIA training in screening methods etc., evaluate thetraining content, methodology and trainee response to training through feedback.

* Number of SWA's who have adopted the ESMF process as required for all theirsub project activities; evaluate the rate of adoption.

* Number of SWA sub projects preparing the required ESIA.* In how many SWA's sub projects is there a sanitation sub -component/aspect.• How has the adoption of the ESMF requirements improved the environmental

health and bio-physical state of the customers of the SWA's.• Has the adoption of the ESMF processes by the SWA's resulted in improvements

in the sustainable use of the states water resources.

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* Efficiency of SWA's maintenance and operating performance .* How many completed rehabilitated water treatment plants are in good working

condition one year after completion.* How many SWA's have implemented an effective and working facilities

maintenance program.* Out of the number of urban poor and vulnerable people/groups identified in each

participating state in the Social Assessment Studies, how many of them are;(i)targeted for provision of access to urban water services, ii) at what rate are theybeing provided with access and (iii) how many have access to water services atthe end of Year 1, Year 2, Year 3, Year 4 etc. in the project cycle.

* How many SEPA's have adopted the ESMF processes.* At what frequency and rate are the SEPA's monitoring the activities of the SWA's

at all stages.* How many SEPA's are up to date with their periodic monitoring reports.* Is the FMEnv receiving the periodic monitoring reports of the SEPA's and what

are the main concerns of the FMEnv at this stage.* Is the FMWR receiving and compiling the periodic reports of the SEPA's and is it

forwarding it to the FMEnv?. Overall assessment of (i) activities that are going well (ii) activities that need

improvements and (iii) remedial actions required.* Are the processes identified in this ESMF working well.. Final Question: Based on the performance of the SWA's/PSP, what, if any

changes to the ESMF or RPF is needed. Should there be additional training/capacity building measures to increase the performance of the SWA's andSEPA's.

10.1 Monitoring Roles and Responsibilities

10.1.1 State Water Agencies/Authorities/ Boards : It is planned that theenvironmental and social impacts and their designed mitigation measures are to bemonitored during implementation (construction/rehabilitation works) and operationincluding maintenance) stages of the SWA's sub projects. The roles and responsibilitiesfor monitoring impacts and mitigation measures will be as follows ( capacity buildingneeds to achieve and sustain this have been addressed in Section 8;

The SWA's will be assisted by service providers to monitor the environmental and socialimpacts and mitigation measures of their own sub project activities as contained in theirsub project ESIA's. These activities will include acquiring land to lay infrastructureconnections and to operate water treatment plants, sub stations, sanitationinfrastructure, etc. The SWA's will monitor and evaluate the environmental and socialimpacts of these activities and the mitigation measures designed, regularly and asfrequently as specified in the sub project ESIA's and will maintain suitable records to bemade available to their respective SEPA. The SWA's will monitor the impacts andmitigation measures during all phases of their sub project execution cycle, fromtransaction stage in Phase 1 to construction, operations and maintenance executingstages in Phase 2. The SWA's will also be responsible for monitoring the environmentaland social impacts and mitigation measures resulting from the action of their contractors,sub contractors, transporters, suppliers and all other third parties in the course of their

77



duties under the sub project. Further, the SWA's would also be responsible for

monitoring the environmental and social impacts and mitigation measures of their

subproject activities at other locations beyond their project sites, at end user locationssuch as at the RBDA's ( monitor Dam sites), sanitation infrastructure sites, downstreamof water treatment plants to monitor river water quality, etc.

Therefore, wherever environmental and social impacts are attributable to their sub

project activities the appropriate mitigation measures will apply consistent with the subproject ESIA, and they would be responsible for monitoring and evaluating the same.The SWA's will report to their SEPA and to the FMWR.

10.1.2 State Environmental Protection Agencies (SEPA's): The SEPA's will play theleading role of monitoring the activities of the SWA in their state. The SEPA's will carryout this role by ensuring that the sub project environmental and social management plan(ESMP) contained in the cleared sub project ESIA reports is being implemented asspecified therein. That is to say that the SEPA's will monitor the SWA's monitoringprocedures and reports on a regular basis, perhaps quarterly. They will rely on a bottom

up feed back system to them from the SWA's by going through their monitoring reportsand making regular site visits to inspect and verify for themselves the nature and extentof the impacts and the success or lack off, of the mitigation measures.

The SEPA's will need equipment and transport to carryout their task effectively and thiswill be provided by the NUWSRP and is budgeted for later in this section.

10.1.3 The Federal Ministry of Environment (FMEnv): In addition to reviewing andclearing the subproject ESIA's, the role of the FMEnv will be monitoring as detailed in

Section 8.1.3. They will perform this role by reviewing periodic reports from the SEPA's,prepare consolidated periodic monitoring reports and make spot/unannounced siteinspections at the state level. The FMEnv will report to the FMWR.

The FMEnv will need equipment and transport to carryout their task effectively and thiswill be provided by the NUWSRP project and is also budgeted for later in this section.

10.1.4 The Federal Ministry of Water Resources (FMWR): The FMWR will beresponsible for ensuring project compliance of the SWA's with the environmental laws ofNigeria and social requirements set by the NUWSRP, but will be assisted as definedabove by the SEPA's and the FMEnv. The FMWR will monitor their activities byreviewing the consolidated periodic monitoring reports of the FMEnv and by conductingperiodic technical audits of the SWA's.

In conclusion therefore, the system for monitoring functions on a bottom up approach onthe one hand in terms of placing monitoring responsibilities on the SWA's who are thensupervised and monitored by the SEPA's who in turn are accountable to the FMEnv andthe FMWR. On the other hand, this system is made functional by the transfer oftechnology, capacity building through training and technical assistance and, budgetsupport in the top down direction. This system for monitoring is thus strengthened andsustainable and should yield successful results overall.

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This monitoring plan consists of a set of mitigation, monitoring and institutional measuresto be taken during implementation/construction and operations of the participatingSWA's sub project activities, to eliminate adverse environmental and social impacts,offset them, or reduce them to acceptable levels. The plan also includes actions neededto implement these measures.

The monitoring plan specifies the monitoring measures to be carried out with linkages tothe potential adverse impacts that would have been identified through a processcontained in Section 9 , by:

1. Scheduling and coordinating monitoring tasks.2. Evaluating mitigation effectiveness3. Identifying where applicable, corrective management practices4. Ensuring that monitoring findings are suitably evaluated and incorporated into

future management decisions.

10.2 Costs for Implementing the Monitoring Plan

The FMWR will be responsible for implementing the monitoring plan. The SWA's will beresponsible for recruiting their own service providers that would work with them. Thecost of transportation and equipment for the SWA's, SEPA's, FMEnv and FMWR inexecution of their monitoring roles and responsibilities is included. As described in earliersections of this report, US$34 million is targeted to fund the sub project activities of eachparticipating state.

Cost in US $

Service Providers Equipment Vehicles Total(for 3years)

SWA's ( 6no.) 15,000/year 250,000/state 35,000/state 1,980,000

SEPA's (6no.) 7,500/year 50,000/state 35,000/state 645,000

FMEnv (1no.) 5,000/year 25,000 ----- 40,000

FMWR (1no.) 7,500/year --- 35,000 57,500

Total 442,500 1,825,000 455,000 US$2,722,500

Table 10.1

Monitoring cost per state is equivalent to US$453,750 over three years. Or about 1.33%of total targeted investment per state.

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Monitorinq Plan

Potential Social and Mitigation Measures Monitoring Phase/Stage Responsibility CostsEnvironmental Measures

Negative ImpactsPermanent loss of 1 .Identify land for locating To determine if affected On-going and whenever 1 .Participating SWA US$442,500 for serviceLand, of reticulation and pipe people have restored land is used/acquired by providers, $455,000Denial, Restrictive or networks, grids, their pre-project a participating SWA. 2. SEPA transportation costs andloss of access to other expansion of treatment incomes / economic $1,825,000 foreconomic resources plants, sub-stations and conditions, or not, 3. FMEnv equipment.

new installations or over increased them or not,head tanks that does not by checking and 4. FMWRimpact people and their evaluating on a periodiceconomic resources. basis, using verifiable 5. The SWA's and Training budget is

indicators set out in SEPA's will be assisted US$105,000or Section M. of RPF. by service providers and

will receive training.2. Prepare resettlementand compensation plansconsistent with theprepared RPF.

1. Increased Raw Water Prepare and use cleared Periodic monitoring and On going throughout the 1. Participating SWAContamination. subproject ESIA report evaluation of verifiable life of the project and The sum of US$7,5002. Increased pollution (and implement safety indicators for all impacts beyond thereby 2. SEPA has been budgeted perof land(soil), river and measures in Dam Safety identified in the sub ensuring the institutional state for ESIA, making aother natural water report), addressing project ESMP and arrangements are 3. FMEnv total of US$45,000.sources. specific mitigation examples of which are sustainable beyond the3. Drying of Wetlands. measures such as contained in Section 10 life of the project. 4. FMWR4.Disturbance of Natural training and capacity of this report.Habitats and Wildlife. building to use modern 5. The SWA's and5.Flooding. and appropriate SEPA's will be assisted6.Dam Failure. technologies for design by service providers and7.1ncreased disturbance and implementation, will receive training.of ecosystems. sanitation, efficiency use, The Grand total Cost

emergency preparedness for Environmental(see Section G. for and response, and Socialcomplete lists) environmental restoration, Management is:

regular and suitablemaintenance ofequipmentplant, etc. US$2,872,500

Table 10.2

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11.0 CONSULTATION PLAN

The purpose of consultation is to seek the participation of all the stakeholders in thewater sector in Nigeria, not least off all the urban and peri-urban communities who willbe served by the SWA's, NGO's, potential PSP's and all other stakeholders, therebyintroducing transparency and accountability in the project.

The NUWSRP which is to be implemented in two phases depends on the meaningfulparticipation of all stakeholders for success. During the project preparation andimplementation stages, the opportunities for effective consultation and participationwere/are:

. During the preparation of the Environmental and Social ManagementFramework (ESMF) that is this report and the approved ResettlementPolicy Framework (RPF), the consultant who prepared these documentsvisited Nigeria and met project officials at the Federal and State levels. Infive of the six self selected participating SWA's , the FMEnv, the fiveSEPA's, and various other state and federal ministries, agencies. Thecomplete list of those consulted can be found in Annex 1.0 of this report.

• The ESMF and RPF will be disclosed in Nigeria and at the World Bank'sinfoshop.

Consultations will continue:

* During the preparation of the ESIA's for each participating SWA. Theapproved and cleared ESIA's will be disclosed publicly in each State.

* During the preparation of Resettlement and Compensation Plansextensive consultations will take place when the Socio-economic studyand census exercise is being conducted.

* During the preparation of the Tariff Studies to determine a tier system thatis economically viable but also designed to target and include the urbanand vulnerable poor for provision of services, based on affordable ratesfollowing sensitization of these groups and others and consultation todetermine willingness to pay.

* During the conduct of the poverty assessment.

* During the preparation of the PSP option study.

* Their will be national and state workshops held to discuss the PSP studyrecommendations with all stakeholders and to seek consensus of the wayforward and on the recommendations of the study for the preferred PSPtransaction type( e.g. lease, management contract, concession, etc.)

Public participation and consultations would take place through workshops, seminars,symposia, meetings, radio programs, request for written proposals/comments, filling in ofquestionnaires/forms, public readings and explanations of project ideas and

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Requirements. Public documents would be made available at the, federal, state andlocal levels at suitable locations like the offices of the FMEnv, the FMWR, the SEPA'sand the SWA's, and at state/public libraries, complying with federal and state lawsregarding disclosure of public documents. These measures would take into account thelow literacy levels prevalent in these communities by allowing enough time for responsesand feedback.

The consultation plan will be monitored by FMEnv and SEPA who will set their ownverifiable indicators to assess the degree of participation of the key stakeholders duringall phases of project implementation.

The SEPA's will make recommendations when they clear/review SWA's sub projectESIA's , consistent with this plan.

Consultation Plan

Project Stage Activities InstitutionalResponsibilities

During Project Preparation Preparation of ESMF and FMWRRPF

Transaction Stage, Phase Preparation of Tariff FMWR, SRMC, SWA's,1. studies, PSP Option study, SEPA's and FMEnv.

Poverty Assessment,SWA's sub project ESIA's,etc.

Implementation SWA's and PSP perform SWA's, PSP partners,according to transaction SEPA's and FMWRcontract.

Monitoring Review of verifiable FMEnv,FMWR, SWA"s andindicators SEPA's.

Table 1 1.1

The costs to implement the consultation plan are included in the costs of the monitoringplan.

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12.0. ANALYSIS OF ALTERNATIVES

The Federal Government of Nigeria and the states are totally committed to achieving theobjectives of this project, which is to improve water supply in urban areas of Nigeria.Water has a top priority in the governments development agenda, mainly due to thecross-cutting impact of safe water on health, productivity, and quality of life, with seriousimplications for poor and vulnerable communities.

The federal government also realizes the acute and severe problems facing the watersector in Nigeria today. Services are in critically short supply. For, example, out of the 85million people living in urban and peri-urban areas, less than half have reasonable watersupply. Many households, often the poorest, end up purchasing water from privatevendors at a much higher charge than from the public supply. Moreover, water supplyservices where they exist, are unreliable and of low quality and are not sustainablebecause of difficulties in management, operation and pricing, and failure to recovercosts. Also, many water supply systems show extensive deterioration and poorutilization of existing capacities, due to under-maintenance and lack of funds foroperations. Additionally, the high cost of imported equipment especially in terms of adepreciating currency, and inadequate cost recovery policies have contributed to largefinancial deficits in many SWA's. This has left most SWA's dependent upon statesubventions to finance operations and maintenance of their water systems, to servicedebt and to finance new investments.

Therefore, the "do nothing" scenario will worsen the present situation and worsenpoverty at the same. This is not an option.

The level of financial investments necessary to achieve these goals is very high. Totalinvestments depend on coverage and level of service that is sought. The World Bankestimates that for 80% coverage within 20 years, with about 50% of those served inurban areas having water connections, about US$ 10 billion each are needed forinvestment in water and sanitation. This represents $1 billion per year or 3% to 4% ofNigeria's current GDP. Regardless of the coverage and service level sought, clearlyhuge resources from many sources are required to have a significant impact.

The option the Government has adopted is the internationally accepted method ofintroducing reforms into the management for delivery of public services which isadopting a strategy that includes, inter alia, reforms in the water sector requiring aprofound change in the institutional and regulatory framework based on the concept ofwater supply as a service industry while at the same time ensuring that poor andvulnerable groups are included and indeed targeted for access to water services.

The NUWSRP is part of this strategy to address the critical problems in the water sectortoday. The question now becomes what is the best strategy to adopt that achieves theobjectives of this project, that is sustainable beyond the project life, economically viable,will involve the meaningful participation of the private sector, include the provision ofaccess to the poor and vulnerable groups as well, while not placing irreversible adverseimpacts on the bio-physical and social environment.

Any chosen option must address these issues. The NUWSRP does.

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Within the NUWSRP, the PSP options study will consider alternatives and makerecommendations on the best methodology for PSP in collaboration with the SWA's.Some of the options for PSP would be management contracts, leasing arrangements,granting concession rights etc.

Also, the design, clearance, implementation and monitoring of sub projects will addressthe adoption of different options, sites, routes, methods, techniques and ideas.

The environmental and social management processes that are outlined in this reportsupports this goal.

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ANNEX 1.0

LIST OF OFFICIALS CONSULTED DURING THE PREPARATION OF THE ESMFAND RPF.

Dr. L.C. The - Permanent Secretary , Federal Ministry of Water Resources

Eng. M.A.K. Abubakar - Director, Department of Water Supply and Quality ControlFederal Ministry of Water Resources

Eng. B.M. Tahir - Deputy Director (Urban Water Supply)Federal Ministry of Water Resources

Eng. Benson Ajisegiri - Project Coordinator - NUWSRP

Eng. Gerald Osuagwu - Project Coordinator - Small towns water project ????

Eng. Patrick Ikediashi - Federal Ministry of Water Resources

Eng. Bayo Oguntonade - Federal Ministry of Water Resources

Mr. Chuks Mbaike - Federal Ministry of Water Resources

Mr. M.O Arowollo - Assistant Director of Surveys, Federal Ministry of Works,

Lands and Surveys.Ms. Anne Akpoyowarre- Senior Surveyor, Federal Ministry of Works, Lands and

Surveys.Dr. B.A. Ajakaiye - Director, Department of Environmental Assessment, Federal

Ministry of Environment.Ms. Philo 0. Adinye - Assistant Director , Department of Environmental

Assessment , Federal Ministry of Environment

Mr. Odusanya Kehinde - Head of Impact Mitigation Monitoring (IMM) Branch,Department of Environmental Assessment, Federal Ministryof Environment.

Eng. Suleiman Sani - Managing Director, Kano State Water Board

Eng. Sulayman Salisu - General Manager Engineering, Kano State Water Board

Eng. Ibrahim Yau - Assistant General Manager, Projects, Kana State Water

Board.Mr. Auwalu Wada - Water Chemist, 2nd Challawa Water Treatment Plant , Kano

Kano State Water Board, KanoEng. Hassan Mohammed - Assistant General Manager Projects, Kaduna State Water

BoardEng. Kabiru Ahmed Rufai - Assistant Chief Engineer, Projects , Kaduna State Water

Board

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Eng Ibrahim Balarabe - Plant Manager, Maloli Water Treatment Plant, Kaduna StateWater Board.

Eng. Ahmed Ibrahim - DBeputy Plant Manager, Malali Water Treatment Plant, KadunaState Water Board.

Michael J. Mbaka - Water Chemist, Malali Water Treatment Plant, KadunaState Water Board.

Alhogi Tanimu Gibril Jamaa - Permanent Secretary, Kaduna State Ministry of Environment

Alhogi Mahmoud Shuaibu - Assistant Director of Environment, Kaduna State Ministryof Environment.

Mr. Paymond N. Angani - General Manager, Kaduna State Environmental ProtectionAgency.

Mr. Aminu Shahu Sani - Director, Monitoring and Compliance, Kaduna StateEnvironmental Protection Agency.

Eng. B.N. Ede - Managing Director, Enugu State Water Board.

Eng. U.T. Onodugo - Director of Engineering, Enugu State Water Board.

C.C. Okegbe - Ag. El) (F& 5), Enugu State Water Board.

B.A. Chukwu - Deputy Director (C) , Enugu State Water Board.

Eng. 5.0. Ugw ...... - Assistant Chief EE/SPLO , Enugu State Water Board.

P.C. Ojeh - Head of Department, Admin, Enugu State Water Board.

Eng. H.C. Agueze - Project Facilitator, Enugu State Water Board.

Afam Nnaji - Commissioner, Enugu State Ministry of Lands.

Barrister Ms. B. E. Onwude - Permanent Secretary, Enugu State Ministry of Lands

Barrister V. C. Chukwuani - Senior Counsel, Enugu State Ministry of Lands

Eng. Myke E. Onyia - General Manager, Enugu State Environment ProtectionAgency.

Eng. A.A. Jolaoso - General Manager, Ogun State Water Corporation

Eng. Dimeji Akinhonmi - Assistant General Manager (Planning and Development)Ogun State Water Corporation.

Eng. Michael Kehinde - Principal Engineer, Ogun State Water Corporation.

Mr. Olatunji Mafolasire - Acting Executive Director (Operations)Ogun Oshun River Basin Development Authority

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Eng. Jimi Omoliki - Assistant Director, Ogun Oshun River Basin DevelopmentAuthority

Eng. Bayo Alayande - Chief Engineer, Ogun Oshun River Basin DevelopmentAuthority

Eng. 5.0. Oyekunle - Chief Engineer, Ogun Oshun River Basin DevelopmentAuthority

Eng. Tony Ojesina - Commissioner, Ogun State Ministry of Environment

Eng. Olaniyi Abiola - Permanent Secretary, Ogun State Ministry of Environment

Dr. Adeleke Adedoyin - General Manager, Ogun State Environment Protection Agency

Mr. Adetimi Lehiu - Director, Ogun State Environment Protection Agency

Eng. Tony Ojeshire - S.C.E., Ogun State Environment Protection Agency

Arc. Kayode Anibaba - Consultant, Ogun State Ministry of Environment.

Samuel N. Maaen - Plateau State Water Board

Clement Suttinshak - Plateau State Water Board

Lambert Gonzuk - Plateau State Water Board

Eng. Nantip Y. Wuyep - Plateau State Water Board

Mrs. Julcit Dangyang - Plateau State Water Board

Godsave A. Lohor - Plateau State Water Board

Ishaq Umaru - Plateau State Water Board

Daniel W. Gowal - Plateau State Water Board

Haruna D. Tohomdet - Plateau State Water Board

Eng. Z. Fom - Plateau State Water Board

Dr. Emmanuel D. Yarusan - Plateau State Water Board

Salome B. Masiyer - Plateau State Water BoardMrs. Helen Shaldas - Acting Permanent Secretary, Plateau State Ministry of

Environment.Eng. Emmanuel Dasat - Director of Environment, Plateau State Ministry of

Environment.

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ANNEX 2.0

World Bank Environmental and Social Safeguard PoliciesSummary

* Environmental Assessment (OP 4.01). Outlines Bank policy and procedure for theenvironmental assessment of Bank lending operations. The Bank undertakesenvironmental screening of each proposed project to determine the appropriateextent and type of EA process. This environmental process will apply to all sub-projects to be funded by NUWSRP.

. Natural Habitats (OP 4.04). The conservation of natural habitats, like othermeasures that protect and enhance the environment, is essential for long-termsustainable development. The Bank does not support projects involving thesignificant conversion of natural habitats unless there are no feasible alternatives forthe project and its siting, and comprehensive analysis demonstrates that overallbenefits from the project substantially outweigh the environmental costs. If theenvironmental assessment indicates that a project would significantly convert ordegrade natural habitats, the project includes mitigation measures acceptable to theBank. Such mitigation measures include, as appropriate, minimizing habitat loss (e.g.strategic habitat retention and post-development restoration) and establishing andmaintaining an ecologically similar protected area. The Bank accepts other forms ofmitigation measures only when they are technically justified. Should the sub-project-specific ESIA's indicate that natural habitats might be affected negatively by theproposed sub-project activities with suitable mitigation measures, such sub-projectswill not be funded under the NUWSRP.

* Pest Management (OP 4.09). The policy supports safe, affective, andenvironmentally sound pest management. It promotes the use of biological andenvironmental control methods. An assessment is made of the capacity of thecountry's regulatory framework and institutions to promote and support safe,effective, and environmentally sound pest management. This policy will most likelynot apply to NUWSRP.

* Involuntary Resettlement (OP 4.12). This policy covers direct economic and socialimpacts that both result from Bank-assisted investment projects, and are caused by(a) the involuntary taking of land resulting in (i) relocation or loss of shelter; (ii) loss ofassets or access to assets, or (iii) loss of income sources or means of livelihood,whether or not the affected persons must move to another location; or (b) theinvoluntary restriction of access to legally designated parks and protected areasresulting in adverse impacts on the livelihoods of the displaced persons. TheESMFand RPF reports discusses the applicability of this policy in detail.

* Indigenous Peoples (OD 4.20). This directive provides guidance to ensure thatindigenous peoples benefit from development projects, and to avoid or mitigateadverse effects of Bank-financed development projects on indigenous peoples.Measures to address issues pertaining to indigenous peoples must be based on theinformed participation of the indigenous people themselves. Sub-projects that wouldhave negative impacts on indigenous people will not be funded under NUWSRP.

* Forests (OP 4.36). This policy applies to the following types of Bank-financedinvestment projects: (a) projects that have or may have impacts on the health andquality of forests; (b) projects that affect the rights and welfare of people and theirlevel of dependence upon or interaction with forests; and (c) projects that aim to

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bring about changes in the management, protection, or utilization of natural forests orplantations, whether they are publicly, privately, or communally owned. The Bankdoes not finance projects that, in its opinion, would involve significant conversion ordegradation of critical forest areas or related critical habitats. If a project involves thesignificant conversion or degradation of natural forests or related natural habitats thatthe Bank determines are not critical, and the Bank determines that there are nofeasible alternatives to the project and its siting, and comprehensive analysisdemonstrates that overall benefits from the project substantially outweigh theenvironmental costs, the Bank may finance the project provided that it incorporatesappropriate mitigation measures. Sub-projects that are likely to have negativeimpacts on forests will not be funded under NUWSRP.

* Cultural Property (OPN 11.03). The term "cultural property" includes sites havingarcheological (prehistoric), paleontological, historical, religious, and unique naturalvalues. The Bank's general policy regarding cultural property is to assist in theirpreservation, and to seek to avoid their elimination. Specifically, the Bank (i) normallydeclines to finance projects that will significantly damage non-replicable culturalproperty, and will assist only those projects that are sited or designed so as toprevent such damage; and (ii) will assist in the protection and enhancement ofcultural properties encountered in Bank-financed projects, rather than leaving thatprotection to chance. The management of cultural property of a country is theresponsibility of the government. The government's attention should be drawnspecifically to what is known about the cultural property aspects of the proposedproject site and appropriate agencies, NGOs, or university departments should beconsulted; if there are any questions concerning cultural property in the area, a briefreconnaissance survey should be undertaken in the field by a specialist. NUWSRPwill not fund sub-projects that will have negative impacts on cultural property.

* Safety of Dams (OP 4.37). For the life of any dam, the owner is responsible forensuring that appropriate measures are taken and sufficient resources provided forthe safety to the dam, irrespective of its funding sources or construction status. TheBank distinguishes between small and large dams. Small dams are normally lessthan 15 m in height; this category includes, for example, farm ponds, local siltretention dams, and low embankment tanks. For small dams, generic dam safetymeasures designed by qualified engineers are usually adequate. This policy doesapply to NUWSRP since existing dams owned by RBDA's or SWA's will supply rawwater to SWA's.

* Projects on International Waterways (O 7.50). The Bank recognizes that thecooperation and good will of riparians is essential for the efficient utilization andprotection of international waterways and attaches great importance to ripariansmaking appropriate agreements or arrangement for the entire waterway or any partthereof. Projects that trigger this policy include hydroelectric, irrigation, flood control,navigation, drainage, water and sewerage, industrial, and similar projects that involvethe use or potential pollution of international waterways. This policy most likely willapply to NUWSRP as the rivers Niger and Benue and their tributaries are potentialsources of supply of raw water.

* Disputed Areas (OP/BP/GP 7.60). Project in disputed areas may occur the Bankand its member countries as well as between the borrower and one or moreneighbouring countries. Any dispute over an area in which a proposed project islocated requires formal procedures at the earliest possible stage. The Bank attemptsto acquire assurance that it may proceed with a project in a disputed area if the

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governments concerned agree that, pending the settlement of the dispute, the projectproposed can go forward without prejudice to the claims of the country having a dispute.This policy is not expected to be triggered by sub-projects. This policy is unlikely to betriggered by sub-projects to be funded by NUWSRP.

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ANNEX 3.0

Generic Terms of Reference for the Preparation of the mandatory ESIA for SWA'ssub project activities. (To be revised at appropriate time by the SWA assisted bythe FMWR)

Tasks

1. The following specific tasks, among others, will be required:

* Review of Engineering and Technical Designs for planned investments to identify,assess, and quantify to the extent possible, all environmental and social impactsand risks in the state.

. Provide detailed and tangible mitigation measures to reverse these adverseimpacts or manage them within acceptable limits according to law in Nigeria andWorld Banks Safeguards polices.

* Develop an environmental and social management process to ensure successfulmitigation of all adverse impacts, a tangible monitoring plan and institutionalarrangements to execute this plan.

* Assess further the SWA's and PSP partners capacity to manage the sub project'senvironmental and social issues and propose measures in how to reinforce theircapacity, for example, by establishing an environmental unit/working group, andproviding technical training. Suggest capacity building and technical assistancerequirements in relation to safeguard and awareness needs in the public andprivate sectors to be implemented under the proposed sub project.

* Develop a suitable maintenance plan with estimates of cost to ensuresustainability of mitigation measures.

Outline of the ESIA Report

The ESIA report must be concise but detailed and thorough to include all significantenvironmental and social impacts. The report should focus on identifying impacts,mitigating them in the technical designs, during construction, operation and sustainablethrough an effective maintenance plan.

The FMEnv, the SEPA's and the World Bank ASPEN environmental and socialreviewers will need to approve the ESIA. The ESIA 's will be disclosed in the respectivestate of the SWA and also in Abuja.

* List of Acronyms

* Table of Contents

* Executive Summary

* Description of Proposed Sub Project

* Baseline Data

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Present State ( where necessary trans state/border) baseline data pertaining to (i) thephysical environment (i.e., topography, geology climate and meteorology, surface waterhydrology); (ii) biological environment (i.e., flora types and diversity, rare andendangered species within or adjacent to project intervention sites, including wetlands,sensitive habitats); and (iii) Socioeconomic and cultural environment, including presentand projected, where appropriate.

* Environmental and Social Safeguard Issues and Triggers

Discuss the applicability of any of the World Bank's Operational Policies and conduct therequired analyses as described above.

* Legislative and Regulatory Framework

Discuss Nigeria's and the State's environmental and social national policies, laws,regulatory and administrative frameworks.

* Identification of Potential Environmental and Social Impacts

Identify and assess the changes brought about by the sub project in relation to thebaseline data; differentiate between short, medium and long-term impacts; and describethe extent and quality of available data and any pertinent information deficiencies, whichmight preclude the projection of impacts.

* Identify Tangible Mitigation Measures

Develop and describe feasible and cost-effective mitigation measures to prevent orreduce negative impacts. Provide cost outlays for the proposed measures, as well astheir institutional and capacity building requirements to implement them.

a Institutional Assessment

The ESIA will establish appropriate institutional arrangements in the SWA's/PSPrelationship, between its SEPA and FMEnv consistent with this ESMF and recommendand develop training modules and prepare associated costs.

* Monitoring Plan

Design a monitoring plan for the implementation of measures requiring mitigation, aswell as for the impacts of sub project activities. The monitoring plan should clearlyindicate the linkages between impacts identified in the ESIA report, indicators to bemeasured, methods to be used, sampling locations, frequency of measurements anddefinition of thresholds indicating the need for corrective actions. The monitoring planmust identify parameters to be monitored, direct and indirect impact; conflicts arisingfrom competition for water and/or land resources and clear responsibilities forsupervision, frequency of inspections, and a budget for the recommended activities. It isimportant that all aspects of the monitoring arrangements be appropriately costed andthe responsibilities clearly defined.

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