ETHIOPIAN ROADS AUTHORITY

Resettlement/Rehabilitation
Policy Framework

February 2002
Contents Page

List of Acronyms ________________________________________________________4

Preface ________________________________________________________________5
1. Background ______________________________________________________6
1.1 Objectives of the Framework _____________________________________________ 6
1.2 The RSDPSP and the RRP _______________________________________________ 6
1.3 Adverse Social Impacts __________________________________________________ 7
2. Operational Procedures _____________________________________________8
2.1 Institutional Framework_________________________________________________ 8
2.2 Planning Principles and Process __________________________________________ 8
2.2.1 Project Identification____________________________________________9
2.2.2 Project Preparation _____________________________________________9
2.2.3 Project Implementation_________________________________________12
3. Legal Framework for Expropriation and Compensation _________________13
3.1 Expropriation Law ____________________________________________________ 13
3.2 The ERA Strategy for Expropriation and Compensation_____________________ 13
3.3 World Bank Procedures for Resettlement/Rehabilitation (OD. 4.30) ___________ 14
4. Institutional Framework ___________________________________________15
4.1 The ERA Organizational Framework ___________________________________ 15
5. Socio-Economic Background of PAPs ________________________________17
5.1 Socio Cultural and Economic Landscape of PAPs _________________________ 17
5.2. Towns and Villages ____________________________________________________ 17
5.3 Cultural Affiliation of Project Affected People ( PAPs ) ______________________ 18
5.4 Land Use_____________________________________________________________ 18
5.5 Economic Activities ____________________________________________________ 19
5.6. Housing______________________________________________________________ 20
6. Social Impacts of the Road Rehabilitation Program _____________________21
6.1 Impacts on Land Use___________________________________________________ 21
6.2 Impacts on Economic Activities __________________________________________ 22
6.3 Impacts on Housing____________________________________________________ 22
6.4 HIV/AIDS____________________________________________________________ 23
7. Valuation Procedures _____________________________________________25
7.1 Organizational Procedures for Delivery of Entitlements _____________________ 25

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7.2 Method of Valuation ___________________________________________________ 25
7.3 Basis of Valuation _____________________________________________________ 26
7.4 Compensation Procedures and Civil Works Schedule _______________________ 27
8. Sources of Funding _______________________________________________29
9. Consultation and Participation Processes _____________________________30
9.1 Data Collection Phase __________________________________________________ 30
9.2 Planning Phase________________________________________________________ 31
9.3 Implementation Phase__________________________________________________ 31
9.4 Monitoring and Evaluation Phase ________________________________________ 32
10. Monitoring and Evaluation Arrangements_____________________________33
10.1 Monitoring Principles __________________________________________________ 33
A N N E X E S _________________________________________________________35
Annex 1: Screening Guidelines _________________________________________________ 36
Annex2: Outline of a Resettlement Action Plan (RAP) _____________________________ 38
Annex 3 : Methods of Valuation - World Bank Guidelines __________________________ 42
Annex 4: World Bank Operational Directive (OD) 4.30_____________________________ 47
Annex 5: Organizations/Persons Consulted_______________________________________ 56

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 List of Acronyms

ARCCH Authority for Research and Conservation of Cultural Heritage

Cr. Credit
DANNIDA Danish International Development Agency
EA Environmental Assessment
EEPA Ethiopian Environmental Protection Authority
EEPCo Ethiopian Electric and Power Corporation
EIA Environmental Impact Assessment
EMB Environmental Management Branch
EPS Executive Project Summary
ERA Ethiopian Roads Authority
EU European Union
GCRC Gross Current Replacement Cost
HIV / AIDS Human Immuno Deficiency Virus / Acquired Immuno Deficiency
Syndrome
IDA International Development Association
IEC Information, Education, Communication
IEE Initial Environmental Examination
JICA Japan International Cooperation Agency
MoFED Ministry of Finance and Economic Development
LEG Legal Department
NGOs Non- governmental Organizations
NORAD Norwegian Agency for Development Cooperation
OD Operational Directives
PAPs Project Affected Persons
Para(s). Paragraph(s)
PMO Prime Ministers Office
PPF Project Preparation Facility
RAP Resettlement Action Plan
QAG Quality Assurance Group
RED Regional Environmental Division
RoW(B) Right - of -Way (Branch)
RRAs Rural Roads Authority (ies)
RRP Road Rehabilitation Project
RSDP Road Sector Development Program
RSDPSP Road Sector Development Program Support Project
RVP Regional Vice President
SA Social Assessment
SIA Social Impact Assessment
SPR Sector Policy and Research
STDs Sexually Transmitted diseases
TM Task Manager
ToR Terms of Reference
WB World Bank

4
 Preface

A Resettlement Framework is a document that ought to be established prior to project

implementation. This has not been the case for the resettlement framework of the Road
Sector Development Program Support Project (RSDPSP). The rationale is simple.

The environmental assessment (EA, 1997) of the RSDPSP concluded that project
implementation would have limited impact on involuntary resettlement. The EA
suggested that the number of persons to be subject to involuntary resettlement would be
less than 200 persons, in fact not more than 20 households of the size of 5
persons/household. A detailed resettlement action plan was therefore never required.
Consequently, the project was cleared by World Banks environmental division in the
Africa Region.

However, at project launching, a subsequent review of the project by World Banks

Quality Assurance Group (QAG, 1999) suggested that the number of persons to be
affected by the project and subject to involuntary resettlement was probably higher and a
resettlement and rehabilitation policy framework was therefore required.

This document is the result of that process and was therefore not elaborated during
project preparation but under project implementation. The establishment of the document
has among others implied a process that has included: consultation with project affected
persons (PAPs); consultations with local governments; consultations with the Ethiopian
Environmental Protection Authority (EEPA); consultations with resident engineers and
the incorporation of road components from local master plans, into the subprojects design
processes.

Also, in conjunction with the World Bank concerns about project affected persons, the
Ethiopian Constitution has a provision stating that people affected by development
projects should be compensated and in the case of resettlement, their livelihoods should
be restored. This principle has been the guideline in mitigating adverse social impacts
induced by the operations of the Ethiopian Roads Authority (ERA). The two, World
Bank policy directives and the ERA practice in mitigating adverse social impacts,
constitute the basic framework of reference in establishing this document.

Tesfamichael Nahusenay

General Manager
Ethiopian Roads Authority

5
1. Background

1.1 Objectives of the Framework

The overall purpose of the policy framework is to clarify the principles of social impact
mitigation in the process of addressing social impacts induced by project operations. The
framework is valid for all road projects executed by the ERA, under the framework of
RSDPSP including bilateral as well as multilateral road projects.

The operational objective of the framework is to provide guidelines to stakeholders

participating in the rehabilitation/resettlement operations in order to ensure that project
affected persons (PAPs) will not be impoverished by the adverse social impacts of the
projects. The basic principles imply that PAPs should be: compensated for loss of assets
at replacement costs; given opportunities to share project benefits; and be assisted in case
of relocation or resettlement. Focus is on restoring the income earning capacity of the
project-affected persons. The aim should be to improve or at least sustain living
conditions prior to project operations or resettlement.

1.2 The RSDPSP and the RRP

In its Economic Recovery Program from the early 1990s, the Government of the Federal
Democratic Republic of Ethiopia identified the development of the road sector as one of
its prime priorities. In January 1995 a first draft strategy of the Road Sector Development
Program Support Project (RSDPSP) was elaborated realising that the investment required
for the program was beyond what the national budget could support. Therefore, the
government sought assistance from the international donor community and in August
1995 the final draft of the RSDPSP document was distributed to more than 30 potential
donors in the intention of getting their attention and invite them to a donors meeting held
in January 1996 in Addis Ababa. The consultation resulted in comments suggesting
further development of the proposal.

As result, the RSDPSP was formulated to provide a sectoral approach to improving the
efficiency and effectiveness of the road transport sector by co-ordinating capital
investment in the road network with institutional, policy and financial reforms. The
program was officially launched in September 1997. The implementation of the RSDPSP
commenced in July 1997 and is divided into two phases: Phase I July 1997 to June 2002
and Phase II July 2002 to June 2007. The first phase of the project focuses on the
rehabilitation of 10 roads along the trunk road system of Ethiopia. This constitutes the
Road Rehabilitation Project (RRP). The current framework covers both phase I and phase
II of the RSDPSP.

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1.3 Adverse Social Impacts

The long-term objective of the RSDPSP is to enhance the living conditions of Ethiopian
citizens. In the short term, however, project operations will have adverse social impacts.
Those impacts will be mitigated in the project implementation phase, and if
circumstances allow, prior to implementation. Project operations presumed to induce
adverse social impacts are: pavement widening; construction of diversion roads (detours);
creation of borrow pits, construction of access roads, establishment of quarry sites and
construction of culverts.

Their impacts will be monitored. The detail designs of the subprojects was and will be
carried out taking into account ways to reducing adverse social impacts. Each subproject
has and will provide a right of way report after mobilization. Those reports will identify:
houses to be relocated, land to be requested and the number of persons to be affected by
subproject operations.

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2. Operational Procedures

2.1 Institutional Framework

Stakeholders of the Ethiopian RSDPSP include a range of actors: government institutions

and organizations at federal, regional and local level; multilateral and bilateral
organizations, private enterprises (national and international); non-governmental
organizations (NGOs) and PAPs.

Experience from the Ethiopian road sector work suggests that, the Ministry of Finance
and Economic Development (MoFED), the ERA, local governments; the EPA and the
Authority for Research and Conservation of Cultural Heritage (ARCCH) are the key
stakeholders. These four actors will be consulted in the course of the project cycle in
order to assure that adverse social and cultural impacts of the subprojects are addressed
properly. Also, the four actors will be encouraged to participate in the identification and
the mitigation of the adverse social and cultural impacts that might be identified in the
implementation of the sub-projects.

The ERA is the implementing agency of the RSDPSP and the RRP, which implies, the
implementing agency of all subprojects. Likewise, the ERA is the implementing agency
of the resettlement & rehabilitation operations. The implementation of the subprojects
and the mitigation of adverse social impacts, will therefore be subject to the ERA
operational procedures in conjunction with: the requirements of the Ethiopian
Environmental Protection Authority (EEPA); the World Bank policy requirements (on
World Bank funded roads) and the potential requirements of other donors, multilateral as
well as bilateral.

The operational procedures cover three phases of the project cycle. These are: project
identification; project conception/preparation; and project launching/implementation.
Basic principles regarding resettlement/rehabilitation will be executed in the project
preparation phase as that is the phase that defines most actions to be undertaken during
project implementation.

2.2 Planning Principles and Process

The Right - of- Way Branch (RoWB) and the Environmental Monitoring Branch (EMB)
are the two ERA units in charge of the identification and the mitigation of adverse social
and environmental impacts. The EMB is accountable for planning and monitoring while
the RoWB is accountable for the implementation of the expropriation/compensation

8
operations. Also, the EMB addresses analytical issues such as ToRs, RAPs, EIA reviews,
and evaluations, while the RW is accountable for: registration of PAPs, establishment of
compensation committees, assessment and establishment of compensation rates and
payment of compensation.

The EMB and the RoWB will provide the general direction for the planning of the
expropriation/compensation tasks, ensure coordination in the mitigation of social impacts
among subprojects, monitor and document the implementation.

2.2.1 Project Identification

At project identification, social screening/social impact assessment (SIA) of the

subprojects will be conducted in the aim to determine whether or not a subproject (s)
would require detailed resettlement action plans as specified in World Bank policy. The
principles of compensation/rehabilitation will be triggered wherever there will be land
acquisition and adverse social impacts. Should, however, the SIA findings reveal that
more than 200 persons are affected by a subproject a resettlement action plan (RAP) will
have to be prepared. The World Bank OD 4.30 paragraph 4, states:

Where large-scale of population displacement is unavoidable, a detailed

resettlement plan, timetable, and budget are required. Resettlement plans should be
built around a development strategy and package aimed at improving or at least
restoring the economic base for those relocated. Experience indicates that cash
compensation alone is normally inadequate. Voluntary settlement may form part of
a resettlement plan, provided measures to address the special circumstances of
involuntary resettlers are included. Preference should be given to land-based
resettlement strategies for people dislocated from agricultural settings. If suitable
land is unavailable, nonland-based strategies built around opportunities for
employment or self-employment may be used.

And in note 8, the OD 4.30 specifies:

Where only a few people (e.g., less than 100-200 individuals) are to be relocated,
appropriate compensation for assets, logistical support for moving, and a relocation
grant may be the only requirements. However, the principles on which compensation
is to be based are the same as for larger groups.

2.2.2 Project Preparation

Upon the screening of a subproject at the identification phase, the project will be subject
to an SIA or SA, depending on its category. Terms of reference (ToR) for the
assessments will be drafted by the ERAs Environmental Monitoring Branch (EMB).
Issues to be addressed by the SIA or SA will include: demography; land tenure;
socioeconomic structure; consultations with local authorities and with the population;
environmental impact of the road and safety. At this stage, land tenure issues will be

9
given particular attention as they are linked to land acquisition. Closely linked to land
acquisition is involuntary resettlement.

The loss of land often implies that those who lived on the land lost need to be relocated or
resettled. The first objective of the EIA in regard to involuntary resettlement is to
estimate the capacity of the receiving area(s) to sustain additional population under the
conditions introduced by the resettlement operations.

Should the SIA findings reveal that more than 200 persons will be affected by the road
construction in one or more of the subprojects, a detailed resettlement action plan (RAP)
will be prepared after appraisal and after detailed design of the road. The number of PAPs
is a useful tool in the planning process. Experience from the ERAs other projects,
however, shows that the final number of PAPs is confirmed after the detailed design
work. The alignment of the centerline of the road will be the most critical work that will
affect the size of PAPs. Any estimation of the number of PAPs before the design of the
centerline must be considered as rough. Subprojects would therefore benefit from
establishing the central-lines as soon as possible. That would not only advance and
enhance the reliability of a RAP but it would also help the PAPs to better prepare their
relocation.

To reduce adverse social impacts on houses in towns and in villages, the right- of- way
requirements will be reduced when necessary. Furthermore, the centerlines will be
designed to follow the existing alignments when possible in order to reduce impacts on
houses. Also, the new road design will take into account, the physical development plans
established by the towns along the roads. Master plans of urban areas will be taken into
account in the design phase and incorporated into the road designs as integrated
components of the subprojects.

One of the key activities to be conducted at this stage is a socioeconomic survey that
serves as a background for the RAP. A household survey will be conducted, describing
the extent of the social impacts, thus identifying villages and households affected by the
project as well as preliminary identification of resettlement sites. The boundaries of land
owned by the various groups affected should also be described. The household based
social survey will contain general household data like:

Family size, gender and age information;

Education;
Occupation;
Land ownership, tenure arrangements, inheritance regulations;
All sources of income;
Inventory of wealth indicators, like building materials, house size, tools and utensils,
furniture, crops, livestock;
Means of transportation;
Distance to markets, work, schools, and health facilities;
Health implications;
Listing of affected households.

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The survey would estimate the extent to which the affected families will experience loss
of assets, including control over resources, as well as infrastructure and social services
available and disturbed. The survey should further describe local organizations and
institutions, traditional village councils, religious groups, etc., that could later participate
in planning and implementing the resettlement options. Expected changes in demography
and health impacts should also be addressed. At this stage, all PAPs will be listed in order
to avoid an influx of people trying to take advantage of the compensation and
rehabilitation. A cut off date will be proclaimed. That means, a date from which
eligibility for compensation will be terminated. New inhabitants coming to the project
affected areas will not be considered for compensation.

The ToR for the RAP will be drafted by the EMB and focus on the following:

Technical design alternatives to avoid resettlement;

Land tenure, household survey; socio-economic baseline study;
Selection of resettlement area and provision for alternative sites;
Organizational structures;
Community participation of both resettles and hosts, including also community
institutions or organizations of both groups and NGOs;
Legal framework;
Plan and design of development assistance to cover both project affected persons
(PAPs) and host community;
Valuation methodology, title registration, time frame in compensation procedures,
appeal mechanisms;
Impact on marginal groups, old people, women, ethnic minorities and pastoralists;
Cultural identity and preservation;
Access to training, employment and credit;
Housing, including criteria for house plot allocation, infrastructure and social
services;
State of natural resources, land suitability and carrying capacity at resettlement site
estimated at least two generations ahead taking into account population and livestock
growth, as well as water availability and water quality;
Immediate as well as foreseen health implications at resettlement site in relation to
water-borne diseases, nutrition, environmental hygiene, availability of clinics or other
health extension services, hazardous chemicals, toxic wastes, food contamination and
the work environment;
Possibilities and constraints regarding assimilation or integration of resettles into host
communities;
Staff requirements, staff training needs, necessary equipment,
Cost estimation, budget, synchronized resettlement implementation action plan with
the road implementation schedule; and
Monitoring and evaluation procedures.

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The final output of the ToR is a RAP. (Annex 2 shows the content of a RAP)

2.2.3 Project Implementation

At the launching of each subproject, stakeholders will be consulted to establish planning
principles and work arrangements aimed at identifying and mitigating adverse social
impacts induced by sub-project operations. Baseline surveys, valuation of properties and
payment of compensation will be effected ahead of the commencement of civil works.
Progressively, all PAPs will be consulted in the process, be it in the context of
resettlement/compensation, in the context of mitigating adverse impacts on cultural
heritage or in the context of mitigating other project related social impacts.

Likewise, prior to project launching, regional, zonal and local governments will be
consulted by the ERA, in line with established procedures. That is, the ERA will present
the project to the regional and the zonal administrations and they will present it to the
local governments. In addition, the ERAs right-of-way agent will consult with the
relevant local government officials to present the project prior to implementation.

Parallel with the road construction schedule, presumed implementation of

resettlement/rehabilitation action plans will be established. Compensation will be paid
prior to land acquisition. After mobilization phase, engineer representatives of each
subproject will be requested to elaborate right-of-way reports. Those reports should
present all obstacles identified in the right-of-way of the roads, after completion of the
final detailed designs.

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 3. Legal Framework for Expropriation and
Compensation

3.1 Expropriation Law

Resettlement and rehabilitation are recognized civic rights in the Ethiopian legislation.
Article 44 No.2 of the Constitution of the Federal Democratic Republic of Ethiopia has a
clause stating that:

All persons who have been displaced or whose livelihoods have been adversely
affected as a result of state programs have the right to commensurate monetary or
alternative means of compensation, including relocation with adequate state
assistance.

This is the basis for the compensation procedures established by the ERA has and
likewise, the legal framework for the present resettlement and rehabilitation policy
framework.

Furthermore, by signing the credit agreements for the RSDPSP (credit 3032) and the RRP
(credit 2438) with IDA, The Federal Democratic Republic of Ethiopia committed itself to
abide the involuntary resettlement policy of the World Bank and both parties do agree on
the fact that development projects should not be realized at the expense of the people
affected by the projects. Thus, the legal framework of the RSDPSP are the Ethiopian
constitution as transcended into the ERA procedures and the World Bank Operational
Directive (OD) 4.30 on involuntary resettlement and its operational policy as spelled out
in the resettlement and rehabilitation guidebook.

3.2 The ERA Strategy for Expropriation and Compensation

It is the objective of the ERA to avoid or reduce to a minimum, the detrimental effects of
road operations, on the livelihood of the people intended to be served by the roads.
However, if adverse social impacts induced by project operations are inevitable, the
ERAs strategy stresses that PAPs should be consulted and compensated for loss of their
properties.

To achieve the social mitigation goal, the ERA allocates and will allocate a yearly budget
for expropriations and compensations expected during project implementation. Ad hoc
expropriation/ compensation committees are and will be established by the right-of-way

13
agents in the jurisdiction of the local governments which population has been identified
to be negatively affected by road operations. Subprojects may therefore have more than
one compensation committee. The committees are composed of experts from the ERA,
civil servants from the local governments (Bureau or Department of Agriculture, Bureau
or Department of Works and Urban Development, Police, etc.) PAPs and other relevant
stakeholders.

The compensation rate and amount is and will be calculated by the ERAs Legal Division
(right-of-way agent) in concert with the compensation committee. The payment is and
will be effected by the Finance Division of ERA in concert with the Contract
Administration Division. These operations are and will execute relocation or demolishing
of any property.

3.3 World Bank Procedures for Resettlement/Rehabilitation (OD.

4.30)

The World Bank operational directives (OD) 4.30 (paragraph 26) states:... Where the
specific resettlement needs of each subproject are not known in advance, the borrower
would need to agree to resettlement policies, planning principles, institutional
arrangements and design criteria that meet Bank policy and requirements as a condition
of the loan. An estimate should be provided of total population to be displaced and
overall resettlement costs, as well as an evaluation of proposed resettlement sites.
Subprojects in sector investment loans should be screened by the implementing agency to
ensure consistency with this directive, and approved individually by the Bank. (For more
details, see annex 4)

The commitment of the Federal Government of Ethiopia to comply with the requirements
of World Banks operational directives (OD) 4.30 has been demonstrated, not only in the
ongoing implementation of the RSDPSP but also in the implementation of other projects,
such as the Gilgel Gibe Resettlement Project undertaken by the Ethiopian Electric and
Power Corporation (EEPCo).

14
4. Institutional Framework

4.1 The ERA Organizational Framework

The ERA is a federal Road Authority under the Ministry of Infrastructure. Development
and management of major highways and link roads is the responsibility of the ERA.
Regional or rural roads are developed and administered by the respective regional
government through the Rural Roads Authority (RRA). City councils and municipalities
manage the road network within their jurisdictions. The ERA provides technical
assistance to all of them, especially in the fields of contract administration and planning.
In the upcoming Phase II of the RSDP, the same assistance will continue to be provided.

The geographical organization of the ERA constitutes 10 districts. They are accountable
for the maintenance of the main road network. Regional roads management will be
implemented by the administrative leadership of the regional governments in concert
with their Rural Road Authorities (RRAs) as implementing bodies. As in the case of
federal road network development, actions will be taken to ensure conformity of design
standards with environmental and social protection requirements to reduce presumed
adverse environmental and social impacts. That work will be executed by the EMB. A
substantial component of the work will be capacity building in the aim to develop
regional and district capacity in road and environmental management, by ways of
strengthening social capital.

The capacity building operations will facilitate compliance with the decentralization
policy of the Federal Government, the ERA is being and will be decentralized on the
basis of commercialization principles to enhance effectiveness and efficiency in resource
utilization and decision making. As decentralization entails delegation of authority to
lower level management units, more decision making responsibilities have been accorded
to districts in regard to district road planning, administration of personnel, finance,
procurement and equipment management. This initiative will be strengthened by the
RSDPSP project operations.

The current Organizational Structure of the ERA is as shown on the next page.

15
 ETHIOPIAN ROADS AUTHORITY
ORGANIZATIONAL CHART

ERA BOARD

GENERAL MANAGER

Legal & Protection Internal Audit

of Right-of-Roads Service
Division

Information & Public

Relations
Services

Operations Department Engineering & Regulatory Human Resource &

Deputy Department Financial Department
General Manager Deputy General Manager Deputy General manager

Procurement Own Force Own Force Equipment & Civil Contract Design, Research Planning & Finance Human Resource Personnel
Services Construction Maintenance Supplies Administration & Network Programming Division Development Administration
Division District (10) Division Division Management Division Division Division
Division

Operational (Commercial) Units Regulatory Units Support (managerial) Units

5. Socio-Economic Background of PAPs

5.1 Socio Cultural and Economic Landscape of PAPs

The RSDPSP will cover all regions of Ethiopia. Consequently, it will affect the various
social and cultural landscapes of the country. Social assessments will be conducted in
subprojects that have been screened to have major social impacts in terms of
compensation and relocation of people.

The people living, for example, in the IDA financed project areas are mainly engaged
principally in agricultural activities especially in the northern and north western parts of
the country. The people in the eastern part of the country are either farmers or
businessmen engaged in the trading of chat and other inter-border trades. On the other
hand, people in the Northeastern part lead a nomadic life. In all cases there are people
whose livelihood is based on activities such as trade (small shops) and selling local
drinks.

Based on the above situation, the major right-of-way issues may include farmland
acquisition and demolishing of few houses in towns along the project roads.

Despite the occurrence of minor detrimental social effects on people, the rehabilitation
and /or upgrading of the road projects might influence more creativeness and productivity
of the local people and improve the living standard of the community in both road project
influencing societies.

Socioeconomic surveys will be conducted in order to establish: detailed information

about categories of PAPs; the extent of impacts; provide the basis for determining
eligibility and for estimating resettlement costs; and establishing baseline information for
monitoring and evaluation.

5.2. Towns and Villages

Most of the towns and villages in Ethiopia are found along roads manifesting that roads
greatly contribute to urbanization and overall development. Such villages and towns in
most of the cases are known to be unplanned. Although the establishment of towns and
villages are not planned, they have benefited much from their proximity to transport
access.
There are many towns and villages situated by IDA-financed roads in Ethiopia.
Especially, in the eastern parts of the country, there are many towns and villages located
within the right-of-way of roads due to the peculiar socio-economic condition of the
areas. In the northern parts of the country, the encroachment into the right-of-way is very
much less than the eastern part.

Villages and towns, in general, are focal points of business and residential areas of the
local people. They are the center of administration, economic, and cultural values serving
the rural population particularly the road influencing communities and project affected
people.

5.3 Cultural Affiliation of Project Affected People ( PAPs )

Culture of a society is usually based on the socio-economic situation of a particular

community within a given environment. Directly or indirectly, cultural forms of a
community may have positive and/or negative impacts on the socio-economic
development of the people under consideration.

Considering the road project influencing communities and project affected people (PAP)
for example, the particular norm or culture they have may facilitate or adversely affect
the implementation of the road development. In general, there are slight variations in the
cultural values of people along the subprojects.

Regarding religion, different types of religion are found in different parts of the country;
Christianity and Islam being the major ones.

Early marriage system is exercised in the northwestern part as a result of which exist
many divorces.

The dominant languages in the north are Amharic and Tigrigna while Oromiffa
dominates in the east (where the subproject Awash-Harar is found). The Afars (north-
eastern part) speak their own language, Afarigna and there are different languages spoken
in the southern region. In addition, there are nationalities with different languages in the
Gambela and Benishangul-Gumuz regions and the Somalis in the eastern region speak
Somaligna. There are other minorities in the country who are not mentioned here.

5.4 Land Use

Ethiopia is a country where several agro-ecological zones and various types of

topography exist. Landforms range from lowland plains to mountain peaks. These are the
result of geological and geomorphological processes taking place in and on the surface of
the earth since time immemorial.

18
Once geological processes had operated in the interior of the earth and resulted in
forming various land forms, geomorphological processes took place and started to
sculpture the surface of the earth.

Because of the nature of land transport, roads traverse various landforms to connect two
places of interest and hence, one can observe different land use practices along them.

It is evident that about 85% of the population of Ethiopia lives in rural areas and engaged
in Agricultural activities as their mainstay. Due to this fact, except in lowland areas
where the weather is difficult and the land is unsuitable for agriculture, farming remains
the dominant land use along almost all subprojects. The other land use patterns include:
pastureland, settlement and wasteland.

In lowland areas however, land is kept for grazing since the inhabitants are nomads
whose life is based on cattle rearing. There are areas like National Parks, Game Reserves,
Control Hunting Areas, Protected Forests, Archaeological Sites, Religious Sites, etc in
different parts of the country.

In urban areas, land is mainly used for the construction of different types of buildings.

5.5 Economic Activities

Economic activity involves the production of goods and / or services for sale or exchange
and production of certain products for own consumption and people in the project areas
are involved in economic activities that are suitable to the respective areas.

Economic activities undertaken in rural areas and urban centers are different. As
agriculture is the main stay of the majority of the Ethiopian population and people in the
rural areas are involved in this sector. Their activities mainly include farming and cattle
rearing which is termed as mixed farming. This activity is widely practiced on the middle
and highland areas. In the lowland areas, on the other hand, a cattle rearing by nomadic
tribes is the common occupation.

On the contrary, urban inhabitants are mainly engaged in the trade of various natures
while others are employed in private, governmental and non -governmental institutions.
In some cases, some urban dwellers also base their life on farming especially those who
live in small towns and at the outskirts of big towns.

In general, economic undertakings in the rural areas is mainly mixed farming including
growing of cereals, legumes, vegetables, etc, including other cash crops like coffee. In
urban areas, trade and employment are the dominant means of subsistence.

19
5.6. Housing

Housing is one of the basic needs of human being. Housing condition is the direct
manifestation of the economic growth of the country since it is directly related to the
wealth of individuals. This difference is quite common even within an area, which
signifies the economic unbalance among the inhabitants.

Housing condition in Ethiopia is generally of low standard especially in the rural areas.
The construction materials they are made of vary from area to area depending on the
availability of materials, the climatic condition of the areas, etc.

There are significant differences between houses in rural and urban areas.

In rural areas where most of the people live without facilities such as water supply,
electric light, telephone, toilet and the like. Even the settlement pattern in rural areas does
not encourage the implementation of these facilities; i.e., houses are highly scattered and
constructed in a very traditional way.

The availability of construction materials, weather condition and the economic growth of
the area are among the factors that determine the housing condition of a given area. Thus,
houses are mostly made of wood & mud and grass is used as roof cover in most parts of
the country and in some places, corrugated metal sheet replace grass as roofing based on
the owners economic capability.

In the lowland areas where the major inhabitants are nomads, they construct tukuls from
locally available materials, which they can take with them whenever they change places
in search of water and fodder for their cattle.

In towns and small villages, however houses are made of wood and mud, bricks, blocks,
stone and covered with corrugated metal sheet. In small settlements and at the outskirts of
towns, houses with grass cover are also seen.

Regarding water supply, in rural areas, people normally get water from the nearby rivers,
springs, ponds and in some cases from wells. In urban areas, however, pipe water and
well (ground) water are the major water sources.

Although electric light is available in many towns, still much has to be done to electrify
the rural areas of the country. Toilet facility is also relatively better in towns than in rural
areas. Other amenities are also available in towns though differences among the
inhabitants within a town are wide.

In general, housing condition between the urban and rural areas is significantly different.

20
6. Social Impacts of the Road Rehabilitation Program

6.1 Impacts on Land Use

Roads are constructed with the aim of connecting two places of interest traversing
various land forms. Along the project roads, depending on the economic level of the area
in particular and the country in general, various land use systems are encountered.

The dominant land use pattern along the roads are agriculture, industrial and residential
areas (urban and sub urban areas) , pasture / grazing , national parks, bare lands and
occasionally forest lands. Agriculture takes the largest share and this is the manifestation
of the fact that the sector is dominant in the countrys economic sphere.

Roads create or enhance accessibility and make virgin lands suitable for various land use
practices. In this case, many of the potential remote areas, where due to lack of roads are
not accessible and not developed, are opened up and developed for agriculture and other
activities that enhance the livelihood of the local inhabitants. Furthermore, roads also
enhance the performance of the existing land use pattern; because due to roads new and
improved technologies can be introduced and other agricultural inputs such as fertilizer,
select or improved seed, pesticides, herbicides and the like which improve or promote the
productivity can be supplied (It is at this stage understood that herbicides and pesticides
have their own detrimental effects on the environment).

Although roads have enormous advantages for the development of a given area, they
sometimes pave the way for erosion that makes the farmland unsuitable for agriculture.
This may result eventually in complete loss of fertility of the land or minimize its
productivity and eventually results in changes in the land use pattern.

Roads constructed across national parks may disturb the ecosystem to the extent that
some of the species in the area may become extinct. In general, roads, in both
construction as well as operation phases affect the system of the park by making the
wildlife migrate to other suitable areas for their life. In such cases, therefore, the land use
pattern will be changed from national park to, say, a pasture land.

In general, roads have both negative and positive impacts on the land use pattern.

21
6.2 Impacts on Economic Activities

Roads have impacts on the economic activities undertaken by the local people residing
within the corridor. One of the principal objectives of road construction in a given area is
to promote the socio-economic development in the area. Roads also create new economic
sphere by inviting other activities, which were not in the area through attracting other
entrepreneurs because of the developed road in the area.

The major economic activity along is agriculture; that is, both crop production and animal
husbandry are existent in most of the areas. On the other hand, trade business is also
exercised substantially.

The advantage of having a road in an area helps the quick transportation of agricultural
sector inputs that improve yields such as fertilizer; pesticides, herbicides and improved
(select) seed easily find their way to the remote areas. Moreover, veterinary medicines
are easily supplied if the area is accessible. Farmers can also easily have access to
markets for their produces.

Roads can also create good opportunities for the traders to find new market areas where
they can buy and / or sell their goods. They can supply consumers with what they need on
time. People can easily reach health and education services, which have impact on the
economic activities of an area.

Roads sometimes alter the economic engagement of a community. That is, settlement by
the new road will develop changing farmers to, for example, merchants and thus the
agricultural activity may decrease to some extent.

6.3 Impacts on Housing

As stated earlier, most of the houses in rural Ethiopia are made of wood and mud with
mostly thatched roofs. In the urban centers, most of the houses are made of wood and
mud but covered with corrugated iron sheets.

It is obvious that due to the upgrading of roads, the accessibility as well as the mobility of
the people in the area will increase and as a result the movement of industrial goods to
the rural areas will be enhanced. Therefore, rural dwellers that can afford will have access
to purchase building materials like corrugated iron sheets and blocks to construct their
houses in a better way.

On the other hand, if the road to be constructed will create resettlement of people within
the right-of-way, the people will benefit from the construction of the road in such a way
that their new houses will be of a better standard.

22
6.4 HIV/AIDS

The problem of infectious diseases in Ethiopia is becoming critical due to the steady
emergence of the HIV/AIDS that has been spreading fast during the last two decades
(Health Policy, 1998). It is estimated that 9.3% of the Ethiopian population is infected
with HIV/AIDS and 250,000 have died of the disease in 1997 alone (UNAIDS, 1998). A
substantial health crisis may emerge in the country, unless an integrated effort to stop the
spread of the epidemic is enforced. Therefore, in the country of the cradle of humankind,
there is an imminent risk that life itself might be imperiled for present and future
generations.

Having understood the magnitude of the problem as well as the huge resource needed to
combat HIV/AIDS, the Ethiopian Government issued a policy, which calls for an
integrated effort of multi-sectoral response to control the epidemic. The Ethiopian
Governments HIV/AIDS policy urges communities at large, including government
ministries, local governments and the civil society to assume responsibility for carrying
out HIV/AIDS awareness and prevention campaigns. In line with this policy, the ERA
has taken the initiative to develop and implement an HIV/AIDS awareness and
prevention strategy for the road sector. The strategy will comprise three phases:

(a). An awareness and prevention campaign for the ERA headquarters staff (966 persons
732 males and 234 females) in Addis Ababa;
(b). An awareness and prevention campaign for the ERA districts staff and projects
(15,000 persons);
(c). The continuation and consolidation of awareness and prevention campaign for
domestic and international contractors.

The overall objective of the ERAs HIV/AIDS awareness and prevention strategy is to
contribute to reducing HIV/AIDS incidents in the transport sector. This will not only
contribute to strengthening national efforts to halt the epidemic but also support
international initiatives to stop the spread of the disease.

Operational Objectives
The operational objectives are:
To promote continuous sectoral, gender related information, education and
communication (IEC) messages about HIV/AIDS infections, protection, counseling
and care;
To support capacity building needs of the ERAs medical branch in addressing
HIV/AIDS;
To increase availability and accessibility of condoms;
To establish a sectoral policy that will safeguard human and civic rights and avoid
discrimination of the ERA staff who are infected by HIV/AIDS;
To contribute to the national efforts in establishing indicators that will ensure
effective monitoring and evaluation.

23
In January 2001, the strategy was submitted to the national HIV/AIDS secretariat for
funding. Each subproject of the RSDPSP will be included as a subject of the HIV/AIDS
strategy.

24
7. Valuation Procedures

7.1 Organizational Procedures for Delivery of Entitlements

With regard to land and structures, "replacement cost" is defined as follows: For
agricultural land, it is the pre-project or pre-displacement, whichever is higher, market
value of land of equal productive potential or use located in the vicinity of the affected
land, plus the cost of land preparation to levels similar to those of the affected land, plus
the cost of any registration and transfer taxes; for land in urban areas, it is the pre
displacement market value of land of equal size and use, with similar or improved public
infrastructure facilities and services and located in the vicinity of the affected land, plus
the cost of any registration and transfer taxes; for houses and other structures, it is the
market cost of the materials to build a replacement structure with an area and quality
similar to or better than those of the affected structure, or to repair a partially affected
structure, plus the cost of transporting building materials to the construction site, plus the
cost of any labor and contractors' fees, plus the cost of any registration and transfer taxes.

In determining the replacement cost, depreciation of the asset and the value of salvage
materials are not taken into account, nor is the value of benefits to be derived from the
project deducted from the valuation of an affected asset. Where domestic law does not
meet the standard of compensation at full replacement cost, compensation under domestic
law is supplemented by additional measures so as to meet the replacement cost standard.

7.2 Method of Valuation

The ERA will employ two methods, which can be used to conduct valuation of properties
of resettlers. These are replacement cost and compensation. (see Annex 3)

Replacement cost
The replacement-cost approach is based on the premise that the costs of replacing
productive assets that have been damaged because of project activities or improper on-
site management can be measured. These costs are taken as a minimum estimate of the
value of measures that will reduce the damage or improve on-site management practices
and thereby prevent damage. The approach involves direct replacement of expropriated
assets and covers an amount that is sufficient for asset replacement, net depreciation,
moving expenses and other transaction costs. This minimum value is then compared to
the cost of the new measures. Within the road sector, this is arrived at by analyzing

25
current construction costs relative to design, materials employed, workmanship and final
finish of the subject properties.

In line with the principles of equivalent reinstatement if the premises to be reinstated

require repair, a deduction to reflect this should be made. The deduction for repairs is
made in accordance with the principle that the reinstated property should as far as
possible be equal to the property being reinstated.

7.3 Basis of Valuation

The basis of valuation is Gross Current Replacement Cost (GCRC). Gross Current
Replacement Cost is defined as the estimated cost of erecting a building as new having
the same gross external area as that existing with the site works and services on a similar
piece of land. The valuation process will also consider the use of compensation value
for affected properties.

Compensation value is defined as the amount to be paid to the leaseholder which is

calculated as an amount which is above the gross current replacement cost, including the
costs for the inconvenience caused to the leaseholders by relocation, and to enable the
same leaseholders to build slightly better houses than what they currently occupy.

Compensation Approach
The compensation approach is based on the willingness of owners of a resource to give
up their rights to that resource. In general, the issue of compensation will address four
questions: what to compensate for (e.g. land, structures, business, fixed improvements or
temporary impacts); how to compensate; when to compensate; and how much to
compensate.

Compensation for land structures, business, fixed improvements and other temporary
impacts are based on among other things market valuation, productivity valuation,
negotiated settlements, material and labor valuation, disposition of salvage materials and
other fees paid. It should be noted that lack of license or permit will not be a bar to
compensation. Because, even squatters have construction costs relative to design,
materials employed, workmanship and final finish.

If relocation of business becomes necessary, access to customers and suppliers should be

assured. In addition, workers losing employment in the process of relocating should be
entitled to transitional income support.

Compensation for temporary impacts should include but not limited to the following:
Compensation equivalent to lost income required for the duration of impact
Compensation equivalent to lost income required for loss of access
Physical restoration of assets (or access) required prior to return

26
In addition, PAPs will be entitled to transitional assistance which include moving
expenses, temporary residence (if necessary), employment training and income support
while awaiting employment and should have an option for full compensation if duration
of impact is to exceed two years. In preparing the valuation average costs will have to be
assumed. It should be noted that costs of construction vary from one locality to the other.

7.4 Compensation Procedures and Civil Works Schedule

Compensation will be paid by the ERAs right of way branch (RoWB) at replacement
cost. The ERAs practice is to establish expropriation and compensation committees for
each local government (Woreda) affected. The committees are constituted of
representatives of local governments, representatives of PAPs and the ERAs right of
way agent. Together they will conduct the registration of affected properties and the
number of PAPs per households. Likewise, they will establish the compensation rates,
taking into account, World Bank requirements. All compensations will be effected ahead
of the civil works.

Compensation procedures will include three steps: (a) Establishment of compensation

committees, (b) Assessment of replacement values of identified assets; (c) Establishment
of compensation rates for all assets to be expropriated. For instance, compensation for
trees will take into account the distinction between various type of trees and their
economic values; fruit trees versus non -fruit trees etc. Fruit trees will be compensated for
the value of lost production until another tree comes to the same stage of productivity.

Compensation Rates for Loss of Crops and Trees

Cash compensation is paid for loss of crops and trees that are found on the land that has
been acquired. The compensation rates are established by the relevant agricultural office
of the locality considered. In accordance with the ERA procedures and in consultations
with local governments, the ERAs right of way agents have executed the expropriation
and the compensation for the loss of crops and trees. The decisions taken will as is the
practice, be documented with meeting protocols and receipts upon payment. The
documents will as usual, be available at local government offices and at the ERA
headquarters. Compensation rates for loss of crops and trees will be based on market
values and cover a cash value of the loss estimated until the new crop or tree comes to
maturity. The process and the necessary actions to be taken will be concluded after
consultations with local governments and the ERA.

Compensation Rates for Loss of Houses

Likewise, compensation procedures for loss of houses are established in consultations
between the ERA and local governments. The right of way agent executes the
expropriation/compensation procedures in concert with: the ERAs Legal and Right-of
Roads Division, the Contract Administration Division, the Resident Engineer, the entitled
Project Affected Persons (PAPs) and the local government. A local government
committee establishes the compensation rates in concerts with concerned PAPs. The rates
are established at market value. As in the case of expropriation/compensation for loss of

27
crops and trees, the decisions taken are documented. Also, each individual PAP has the
right to refuse the rate proposed and take his case to the court if he finds the
compensation to be under market value.

Grievance Redress
Following the ERAs practice, compensation is only paid to the PAP after a written
consent of the PAP. Should a PAP refuse the compensation suggested by the ERA right-
of- way agent, litigation is settled by the local governments courts. Each individual PAP
has the right to refuse the compensation rate proposed and take his case to the court if he
finds the compensation to be under market value. This system has worked for the last two
decades and the ERA has experienced such an issue.

However, grievances are first preferred to be settled amicably whenever possible. That is,
positive discussions are made to convince the affected PAP in the presence of elders,
local administration representative or any influential person in the locality. If the PAP is
not convinced with what has been proposed, as stated above, he can take the case to the
court.

28
8. Sources of Funding

As stated in the Constitution of Ethiopia, people affected by development projects have

the rights to be compensated and resettled wherever the situation compels. This forms the
bottom line for the commitment of the Government towards compensation and
resettlement/rehabilitation.

The budget required is approved by the Parliament and the disbursement is monitored by
the Ministry of Finance and Economic Development (MoFED).

Based on the above favorable situation, therefore, like any other interventions expected to
be undertaken within a fiscal year, the ERA has a yearly budget for resettlement/
rehabilitation. The cost is calculated on the basis of the estimates made in the SIA about
the number of PAPs presumed to be affected by the projects in the pipeline including the
quantity and types of properties of the PAPs. Upon establishing the cost estimates of the
roads operations, the budget including resettlement/rehabilitation is submitted to the
ERAs board for review.

Once the budget is approved and transferred to the ERA account, the implementation is
undertaken through a coordinated effort and involvement of the Finance, Contract
Administration, Legal and Right-of-Way and Planning & Programming Divisions of the
ERA. That is, the Legal and Right-of-Way Division usually do the estimation of
properties with the assistance of the Planning Division in the social aspects. The Finance
Division processes the estimated fund and finally the compensation is effected through
the Contract Administration Division.

29
9. Consultation and Participation Processes

Relocating or compensating people implies communication or dialogue with the

stakeholders. After completion of the design or the design review, PAPs will be consulted
individually and in groups, depending on the context. The consultation and participation
process will include four phases: i) data collection; ii) preparation and planning of
operations; iii) implementation of operations; and iv) Monitoring and evaluation.
The Environmental Management Branch of the ERA will coordinate all the four
operations.

9.1 Data Collection Phase

Actors: The ERA Environmental Management Branch (planning, coordination and

Monitoring), the ERA Right-of-Way Branch (compensation/rehabilitation)
Ministry, Bureau or Department of Agriculture (agriculture data)
Ministry, Bureau or Department of Urban Development (housing data)
PAPs (provision of other relevant data)
Municipality and local administration (household data)

The above actors will constitute the main task force in the data-collection phase. This
process will include consultations with PAPs, and other relevant stakeholders. The data
collected will serve as an instrument for the monitoring of the social mitigation measures
to be implemented.

PAPs, including local administration (the Bureau or Department of Agriculture, the

Bureau or Department of Works and Urban Development, the Local Police) will be
consulted through individual and group meetings to share information about the project.
For example, owners of properties in the right-of-way, will be informed about actions to
be taken and the rehabilitation or the resettlement measures anticipated in order to
prepare them for the changes. At those meetings, PAPs will be invited to participate in
the data-collection phase by providing socio-economic information about their
livelihoods. Their contributions will be integrated into the subproject implementation
process, from planning to evaluation.

The data-collection phase will include three major processes:

i) Preparation of the resettlement/rehabilitation policy framework (completed at project
preparation);
ii) Execution of the social impact assessment (to be initiated/completed at project
launching) and
iii) Establishment of the presumed RAP for projects that would require it.
(to be initiated/completed before civil works).

30
9.2 Planning Phase

Actors: The ERAs Environmental Management Branch (planning, coordination and

Monitoring), the ERA Right of Way Branch (compensation/rehabilitation)
Municipality and local administration (planning)
PAPs (planning inputs, sounding board and advice-giving)

Planning and coordination of the tasks of the various actors is the key to a successful
implementation of the expropriation/compensation arrangements. To achieve that goal,
workshops will be organized with the above-mentioned stakeholders and other relevant
government agencies, at project launching and at the commencement of every subproject
identified to have adverse social impacts.

The above three stakeholders will be requested to participate in the decision making
process and provide inputs in the area of their expertise in order to establish a coherent
work plan. Also, PAPs will be consulted in the aim to obtain their positions on issues at
stake. The requirements of their work programs/businesses activities will be incorporated
into the expropriation/compensation plans.

The workshops will focus on: a) taking stock of the legal framework for compensation;
b) settle institutional arrangements and mechanisms for payment of compensation;
c) define tasks and responsibilities of each stakeholder and d) establish a work plan.

9.3 Implementation Phase

Actors: The ERA Environmental Management Branch (planning, coordination and

monitoring), the ERA Right-of-Way Branch (compensation/rehabilitation)
The Ministry of Finance and Economic Development (procurement of funds)
The ERA and local administration (payment of compensation)
PAPs (endorsement of arrangements)

The execution of the expropriation/compensation operations will be conducted by the

ERA together with the Ministry of Finance and Economic Development, and local
government agencies. PAPs will be consulted about the compensation arrangements
prepared. Cash compensation amount and size of land offered for compensation will be
presented to each eligible PAP (husband and wife) for consideration and endorsement
before cash payment or land for land compensation can be effected.

31
9.4 Monitoring and Evaluation Phase

Actors: The Environmental Management Branch of ERA (planning, coordination and

monitoring)
Municipality and local administration (monitoring and evaluation)
PAPs and NGOs or private consultants wherever required (evaluation)

The ERA will organize project completion workshops with government agencies, NGOs
and representatives of PAPs after completion of the expropriation/compensation
operations but prior to the closure of the mitigation measures. The aim of that exercise is
to assess progress in the operations executed, suggest corrective measures where needed
and solve pending issues.

After completion of all expropriation/compensation operations, PAPs will be consulted in

a household survey. The aim of that survey is to assess the impacts of the social
mitigation measures implemented. Likewise, the municipality and other local
administration with PAPs will be consulted to provide their assessments of the impacts of
the social mitigation measures applied.

The findings of the survey and the workshops will be presented in the Project Completion
Report, which will be established by the ERA.

32
10. Monitoring and Evaluation Arrangements

Actors: The Environmental Management Branch of the ERA (planning, coordination and
Monitoring)
Municipality and local administration (monitoring and evaluation)
PAPs and NGOs or private consultants as required (evaluation)

Monitoring and evaluation will be a continuous process. The ERA will continuously take
stock of all expropriation compensation reports and discuss it on regular basis.

After completion of the resettlement /rehabilitation operations, it is expected that PAPs

should be better of than prior to resettlement. Therefore, resettlement /rehabilitation
operations need to be monitored as regard performance and compliance with the above
goal.

Since resettlements are the by-products of road construction, the principal of the
resettlement/rehabilitation operations will be the ERA, in close co-ordination and co-
operation with local authorities. However, in the case of large-scale resettlement projects,
the ERA may conduct the monitoring through an NGO or the consultant who might have
established the Resettlement Action Plan (RAP).

The frequency of monitoring may vary, depending on the magnitude and complexity of
the operations. Field visits by the ERA will be effected at least once a month. The local
administration will conduct its own monitoring, but when possible, this will be done
together with the ERA.

10.1 Monitoring Principles

For each subproject with adverse social impacts, a monitoring and an evaluation plan of
the mitigation measures will be established. The scope of the plan will, however, take
into account the size of the social impacts to be mitigated while respecting the basic
monitoring principles. The plans will describe:

The internal monitoring process;

Key monitoring indicators (provide a list of monitoring indicators, which would be
used for internal monitoring);
Institutional (including financial) arrangements;
Frequency of reporting and content for internal monitoring, process for integrating
feedback from internal monitoring into implementation;
Financial arrangements for external monitoring and evaluation, including process for
awarding and maintenance of contracts for the duration of resettlement;
Methodology for external monitoring;

33
 Key indicators for external monitoring, focusing on outputs and impacts;
Frequency of reporting and content for external monitoring and process for
integrating feedback from external monitoring into implementation.
Analysis of the environmental and social performance or record of each sub-project

Internal Monitoring will be conducted by the EMB of the ERA, following the plan
described and the ERA Board should make the necessary follow-up to ensure that proper
monitoring is being undertaken. Likewise, the concerned local administration will also
conduct their own monitoring or in collaboration with the ERA.

External Monitoring will be conducted through WB supervision missions. Classic WB

supervision mission (twice a year) will, however, not be sufficient to monitor progress in
the mitigation of adverse social impacts. Given the limited social scientific capacity of
the ERA, the World Bank supervision missions should be coupled with capacity building
inputs from an international resettlement expert. This would ensure: progress on the
ground; strengthen analytical capacity and safeguard proper documentation of operations
executed and the progress made.

Before closure of the mitigation of adverse social impacts, the ERA will consult a local
NGO to conduct an evaluation of the mitigation measures executed. The evaluation
report will be used as a planning instrument to correct pending issues and suggest a post-
project monitoring period in the aim to ensure that PAPs have not been subject to
impoverishment induced by the ERAs RSDP operations.

34
ANNEXES

35
Annex 1: Screening Guidelines

The Environmental Impact Assessment (including social) are processes embodying various
stages. Given that environmental studies require both time and financial resources as inputs
and that some projects may generate impacts that are of little consequence, it has become an
established practice to determine in advance whether or not, a particular project will generate
major environmental and social impacts and be subjected to an environmental and social
assessment study. The process of determining whether or not a project requires some
environmental analysis to be conducted before implementation is called screening.

Within the roads sector, some of the projects generate impacts of consequence as experience
elsewhere indicate. A series of studies (1995-1996) initiated by the Zambia National Roads
Board through the Road Maintenance Initiative, supported by the World Bank, have shown
that road rehabilitation and maintenance can generate environmental and social impacts such
as:

i) Destruction of wildlife habitats and loss of bio-diversity along road environments;

ii) Increased soil erosion during road works leading to siltation of rivers and streams
along roads;
iii) Contamination of soils and water resources by chemical, oil and fuel spillage both
during road works and road use;
iv) Disruption of traditional lifestyles;
v) Dislocation of social values, increased sexually transmitted diseases STDs and
increased infections of HIV/AIDS among both local communities and project
workers.

Screening
Screening determines whether or not a project proposal requires detailed environmental and
social impact assessment and, if so, at what level. Screening involves judging whether or not
the expected impacts of a proposal on the social environment are likely to be of significant.
While it is true that there are different approaches to screening, which could be categorized
into, judgmental and predetermined, the approach suggested here is a sequential one
involving several levels of consideration in determining the potential significance of impacts
from a proposed road rehabilitation/construction project.

Suggested screening tools

1. Provisions made under national policies and legislation.
2. Use of a matrix checklist to identify impacts.
3. Use of a questionnaire checklist to determine significance of impacts.
4. Use of transects along and across the road.

Provisions made under national policies and legislation

Provisions made under the Ethiopian national policies and legislation could be used to
address specific environmental concerns that may be affected by the construction and
rehabilitation of roads as provided for under relevant policies and pieces of legislation.
Notable policies and pieces of legislation with specific provisions on environmental and
social impacts include: The National Environmental Action Plan (NEAP), National
Environmental Procedure Manual, of the ERAs, Environmental Procedure Manual and
Ethiopian labor laws.

Use of a matrix checklist to identify potential relationships and influences

In order to understand the anticipated relationship between road construction/ rehabilitation
activities and potential social impacts, matrix checklists will be used as illustrated in the
example below.

Project Operations, Presumed Social Impacts and Mitigation Measures

Project Adverse Mitigation Major Social

Operations Soc. Impacts Measures Benefits Next Steps
Loss of land Compensation for Enhanced
Borrow Pits Loss of houses land through communication
Loss of revenue traditional tenure among villages
from trees system Strengthened
Compensation in purchasing
cash for trees, capacity
(for example, 3 Enhanced access
years production to markets for
value). host population.
Quarry
Diversions /
Bridges
Right of Way
Accumulated Influx of migrant Building of a Enhanced quality Document
Impact of workers workers camp of life for workers. capacity
Project Influx of ad hoc Creation of a Prevention of building gains
Operations dealers. settlement area unplanned made in the
Conflicts of for newcomers settlements. process of
interest with Enhanced access implementing
host population. . to social services the mitigation
and to better measures.
quality of life for
host population.

37
Annex 2: Outline of a Resettlement Action Plan (RAP)

Introduction Project Background

Brief introduction about the project

List of project components
Description of project components causing land acquisition and resettlement.
Overall estimates of land acquisition and resettlement.

Minimizing resettlement
Describe efforts made for minimizing resettlement
Describe the result of these efforts

Census and Socio-economic Surveys

Identify all categories of impacts (loss of property and assets; loss of livelihood;
impacts on groups and communities)
Give formats and tables for census surveys
Provide outlines for socio-economic survey
Summarize process for consultations on the results of the census surveys
Describe need and mechanism to conduct updates, if necessary

Resettlement Policy and Legal Framework

Identify areas of conflict between local laws and World Bank policies, and
project-specific mechanisms to address conflicts
Provide a definition of project affected persons
Describe entitlement categories for each category of impact
Describe method of evaluation used for affected structures, land, trees and other
assets
Provide entitlement matrix

Resettlement Sites

Does the project need community relocation? Have these been approved by the
PAPs?
Give layouts and designs of residential sites
Have the PAPs agreed to the strategy for housing replacement? Have the selected
sites been explicitly approved by the PAPs describe the specific process of
showing the sites to the PAPs and obtaining their opinion on them.
Describe the technical and feasibility studies conducted to determine the
suitability of the proposed sites.

38
 Is the land quality/area adequate for allocation to all of the PAPs eligible for
allocation of agricultural land ?
Give calculations relating to site requirements and availability.
Describe mechanisms for (i) procuring, (ii) developing and (iii) allotting
resettlement sites
Provide detailed description of the arrangements for site development for
agriculture, including funding of development costs.

Institutional Arrangements

Identify and discuss the institutions responsible for delivery of each item/activity
in the entitlement policy
Describe the project resettlement unit functions and organizational structure of
the unit and coordination relationship
State how coordination issues will be addressed in cases where resettlement is
spread over a number of jurisdictions.
Identify who will coordinate all agencies-with the necessary mandate
State when the project resettlement unit will be staffed.
Describe plans for training and development of staff in the resettlement t
unit/local agencies.
Discuss initiatives taken to improve the long term capacity or resettlement
institutions

Income Restoration

Briefly spell out the main restoration strategies for each category of impacts, and
describe the institutional, financial and technical aspects.
Describe the process of consultation with project affected persons (PAPs) to
finalize strategies for income restoration
How do these strategies vary with the area/locality of impact?
Are the compensation entitlements sufficient to restore income streams for each
category of impact? What additional economic rehabilitation measures are
necessary?
Does income restoration require change in livelihoods, development of alternative
farmlands, etc., or involve some other activities, which require a substantial
amount of time for preparation and implementation?
How does the action plan propose to address impoverishment risks?
Are choices and options built into the entitlements? If so, what is the mechanism
for risk and benefit analysis of each option? What is the process of ensuring that
PAPs have knowledge about alternatives and can make informed decisions? Is
there a mechanism to encourage vulnerable groups among PAPs to choose lower
risk options such as support in kind rather than cash?
What are the main institutional and other risks for the smooth implementation of
the resettlement programs?

39

Implementation Schedule

List and briefly describe the chronological steps in implementation of the

resettlement, including identification of agencies responsible for each step of the
program.
Prepare a month-wise implementation schedule of activities to be undertaken as
part of the resettlement implementation (Gantt chart)
Describe the linkages between resettlement implementation and initiation of civil
works for each of the project components.

Costs and Budget

Clear statement of financial responsibility and authority.

Ensure that the cost of resettlement is included in the overall project costs.
Identify components, if any, to be funded by donors such as the World Bank,
JICA, NORAD, DANNIDA, etc.
Resettlement costs should be a part of annual involvement plans.
Prepare a cost-wise, item-wise budget estimate for the entire direction of
resettlement implementation, including administrative expense, monitoring and
evaluation and contingencies.
List the sources of funds and describe the flow of funds.
Describe the specific mechanisms to adjust cost estimates by the inflation factor.
Describe provisions to account for physical and price contingencies.

Participation and Consultation

Describe the process of consultation/participation in resettlement preparation and

planning.
Describe the various stakeholders.
Describe the plan for disseminating information to project affected persons
(PAPs), such as provisions for a booklet to inform PAPs and other stakeholders.
Describe examples of outcomes of participation and consultation, such as how
local beneficiaries views have influenced the design process, entitlements and
support mechanisms, or other issues.
Have workshops been conducted, or are they planned? Who are the participants,
and what are the expected outcomes?

Grievance Redress

Describe the step-by-step process for registering and addressing grievances

Provide specific details regarding registering complaints, response time,
communication modes, etc.
Describe the mechanism for appeal
Describe the provisions to approach civil courts in case other provisions fail.

40

Monitoring and evaluation

Describe the internal monitoring process

Define key monitoring indicators. Provide a list of monitoring indicators, which
would be used for internal monitoring.
Describe institutional (including financial) arrangements.
Describe frequency of reporting and content for internal monitoring.
Describe process for integrating feedback from internal monitoring into
implementation.
Describe financial arrangements for external monitoring and evaluation, including
process for awarding and maintenance of contracts for the duration of
resettlement.
Describe methodology for external monitoring.
Define key indicators for external monitoring, focusing on outputs and impacts.
Describe frequency of reporting and content for external monitoring.
Describe process for integrating feedback from external monitoring into
implementation.

41
Annex 3: Methods of Valuation - World Bank Guidelines

The text bellow is from the World Bank Resettlement & Rehabilitation Guidebook, found on
the web at: http://essd.worldbank.org/sdv/guidebook/generic/gindex.htm

Method of Valuation for structures, land, trees and other assets

at Replacement cost.

Replacement costs is the method of valuation of assets which helps determine the amount
sufficient to replace lost assets and cover transaction costs. In applying this method of
valuation, depreciation of structures and assets should not be taken into account. For losses
that cannot easily be valued or compensated for in monetary terms (e.g. access to public
services, customers and suppliers; or to fishing, grazing or forest areas), attempts are made to
establish access to equivalent and culturally acceptable resources and earning opportunities.

Replacement cost for houses and structures

Replacement cost for land
Replacement costs for other assets

Method of Valuation for structures, land, trees and other assets

Replacement cost for houses and structures

Replacement cost is the market cost of the materials to build a replacement structure, plus the
cost of transporting building materials to the construction site, plus the cost of any labor and
contractors' fees, plus the cost of any registration and transfer taxes. ( the cost of the land
upon which the house or structure sits is considered in Replacement cost for land).

Method of Valuation for structures, land, trees and other assets

Replacement cost for land

For agriculture land, replacement cost is the pre-project or pre-displacement, whichever

is higher, market value of land or equal potential or use located in the vicinity of the
affected land, plus the cost of land preparation to levels similar to those of the affected
land, plus the cost of any registration and transfer taxes.
For land in urban areas, replacement cost is the pre-displacement market value of land
equal size and use, with similar or improved public infrastructure facilities and services
and located in the vicinity of the affected land, plus the cost of any registration and
transfer taxes.
Determining replacement cost in countries with active land markets
Determining replacement cost in countries with "mixed" land markets and property
systems

42
 Determining replacement cost in countries lacking land markets

Method of Valuation for structures, land, trees and other assets

Replacement cost for land

Determining replacement cost in countries with active land markets: Determining

replacement cost of affected land can be relatively easy where active land markets exist
(for example, in most regions of India, Pakistan, Bangladesh, and Thailand). In projects
located in these areas, RAPs should include land market surveys. Private and independent
real estate agencies, banks, or mortgage firms could be engaged to determine market
prices for land, or to evaluate the adequacy of administratively set compensation. If
Borrowers refuse to engage private professional agencies, or if legal restrictions preclude
payment of fair market prices, solatiums, relocation or subsistence allowances, or other
forms of cash assistance can be used to "top up" compensation to replacement cost levels.
Alternatively, committees including PAPs or NGO representatives can be formed to
participate in establishing land valuation, and helping PAPs to identify and purchase
replacement land.

Precedents in Practice
In India, land committees have been established for several projects to identify or purchase
replacement land from willing sellers. In the Orissa Water Resources Consolidation Project
(Cr.2801) legal compensation was to be supplemented by "rehabilitation assistance grants"
sufficient to purchase replacement land or other productive assets. The projects also
promised reimbursement for, or exemption from, all transfer fees or taxes.
In Bangladesh, the Jamuna Bridge Multipurpose Project (Cr.2569) replaced provision of
administratively set compensation and an automatic 50% solatium with land purchase
committees guaranteeing supplemental compensation sufficient to purchase replacement
lands from a willing seller identified by the PAP. As long as the replacement land was within
maximum allowable cost ceilings, the PAP could choose between more land of lesser quality,
or less land of higher quality.

Method of Valuation for structures, land, trees and other assets

Replacement cost for land

Determining replacement cost in countries with "mixed" land markets and property
systems: In some Borrower Countries (notably Indonesia and the Philippines), or in
particular regions within Borrower Countries, formal property titling remains incomplete,
leaving a complex melange of competing legal and customary claims upon land (see also
Customary Claims and Common Property). In Indonesia, for example, untitled land
continues to exist even in downtown Jakarta, with titled land valued 10-60% higher. In
areas lacking coherent and integrated property systems, resource valuations may differ
substantially and some property claims are likely to go unrecognized. Hence, establishing
replacement cost requires much greater attention to the type of title and usage rights held
by affected persons. And projects acquiring land in such areas should encourage vigorous
information disclosure, negotiation or arbitration procedures, and independent grievance
mechanisms.

43
 Precedents in Practice
In the Philippines, resettlement plans for the Leyte-Luzon Geothermal Project
(Ln.3746) called for negotiated settlements on land acquisition between PAPs and
the National Power Corporation. In the event agreement could not be reached,
compensation disputes would be addressed by an Independent Appraisal
Committee, consisting of a real estate expert and representatives from the local
land bank and the Philippines National Bank.
Also in the Philippines, PAPs in the Transmission Grid Reinforcement Project
(Ln.3996) could choose between compensation as evaluated by an independent
appraiser or replacement land provided by the project.
In Indonesia, resettlement plans for the pending Second Sulawesi Urban
Development Project would give PAPs with insecure tenure (and those now in
rental housing) tenurial rights in developed houseplots that cannot be sold for at
least 10 years.

Method of Valuation for structures, land, trees and other assets

Replacement cost for land

Determining replacement cost in countries lacking land markets: Though both

Vietnam and China are experimenting with mechanisms to increase individual or
household tenure, land remains collectively or publicly owned and cannot be alienated. In
China, the Bank accepts country practice of compensating the collectivities rather than
affected households for expropriated land. (Affected households, in turn, receive
replacement land or other forms of rehabilitation assistance from collectives or local
authorities.) In Vietnam, by contrast, affected households often are directly compensated
for loss of use of land. In the absence of land markets, replacement cost in these countries
needs to be linked to the productive value of the affected land.

Precedents in Practice
In China, compensation for expropriated rural land is calculated as a multiplier
(usually 3-6) of the average annual value of agricultural production over the
preceding three years. Some project plans, gradually increase the multiplier to
favor smaller average landholdings in affected villages. An additional
resettlement "subsidy" (allowance) for the people who need to be economically
rehabilitated is also paid (and also is calculated as a multiplier). Where PAPs are
relocated from one local jurisdictional unit to another, compensation and
rehabilitation packages can be split among both. In some projects, the original
unit of residence is compensated for loss of land while the unit of relocation
receives rehabilitation assistance for providing alternative lands, jobs, or
commercial opportunities. In the Xiaolangdi Resettlement Project (Cr.2605),
however, all compensation and rehabilitation assistance goes to the local unit in
the area of relocation; if collectives lose both land and PAPs they receive no
compensation. National law limits combined compensation for land and economic
rehabilitation to no more than 20 times the average annual productive value of the
acquired land.

44
 In Vietnam, an emerging market permits land use rights to be bought and sold at
highly fluctuating prices. Compensation rates payable in cash to project affected
households were introduced by national decree (87-CP) in 1994, which sets
minimum and maximum prices for various categories of land. The prices
established in this decree are set administratively and may not represent
replacement cost. Bank experience in Vietnam so far has mainly focused on the
land-for-land option for people losing more than 20% of their total holding, and
cash compensation for people losing less than 20%. New laws also allow for
outright ownership (and alienation) of houseplots up to 200 square meters in size.
The Irrigation Rehabilitation Project (Cr.2711) provides 60% of replacement cost
for non-owned homesteads (plus full compensation for the house or other
structures) to be used for purchase of privately owned homesteads. In all
instances, compensation is to be sufficient to purchase a 200-square-meter parcel.
The conversion from use rights to outright, alienable ownership is considered as
contributing to replacement cost.

Method of Valuation for structures, land, trees and other assets

Replacement cost for structures Calculating replacement costs

Schedule of rates obtained from the infrastructure department: The infrastructure

construction departments in all countries have a schedule of rates for preparing estimates
for construction projects, which Borrower agencies themselves use to assess costs for
construction materials and labor. When applied to calculation of replacement cost, rates
current for the period of actual replacement must be used.

Method of Valuation for structures, land, trees and other assets

Replacement cost for structures Calculating replacement costs

Rates quoted by contractors for similar structures in other construction projects /

programs: Where rate schedules do not exist or are out of date, recent quotations by
contractors for similar types of construction in the vicinity of the project can be used for
calculating replacement cost. In projects offering the options of cash compensation or
alternative accommodation, the construction cost estimates for alternative
accommodation could be used for calculating cash compensation payable.

Method of Valuation for structures, land, trees and other assets

Replacement cost for other assets

For public infrastructure: in-kind replacement under force account within an agreed time
schedule, or full compensation to the agency replacing the service is required.

For cultural property and community-owned facilities: in-kind replacement or

compensation at replacement cost for land and structures (e.g., religious churches,
mosques, temples, or shrines; private or community-operated schools; village meeting
houses; local libraries).

45
 For cash crops: Arrangements should be made to allow for harvest or market value
should be paid for lost cash crops. In some countries average annual market value of
crops for the previous 3 years is deemed appropriate as crop compensation.
Compensation for subsistence crops can be in-kind, or can be an amount of cash
sufficient to purchase equivalent supplies.

For trees: Where markets do not provide sufficient information about the value of fruit or
timber, compensation for fruit-bearing and non-fruit-bearing trees should be at net
present value calculated for the productive life. In the case of immature trees, a less
costly alternative may be to directly replace seedlings.
Other assets: Tubewells, graves, fishponds, poultry houses, fences, and other tangible assets
should be replaced in kind (or with functional equivalents), relocated, or be compensated at
replacement cost.

46
Annex 4: World Bank Operational Directive (OD) 4.30

This directive was prepared for the guidance of staff of the World Bank and is not
necessarily a complete treatment of the subjects covered.

OD 4.30-----June 1990
Involuntary Resettlement
Introduction
1. This directive describes Bank1 policy and procedures on involuntary resettlement, as well
as the conditions that borrowers are expected to meet in operations involving involuntary
resettlement.2 Planning and financing resettlement components or free-standing projects are
an integral part of preparation for projects that cause involuntary displacement. Any
operation that involves land acquisition or is screened as a Category A or B project for
environmental assessment purposes3 should be reviewed for potential resettlement
requirements early in the project cycle (para. 20).

2. Development projects that displace people involuntarily4 generally give rise to severe
economic, social, and environmental problems: production systems are dismantled;
productive assets and income sources are lost; people are relocated to environments where
their productive skills may be less applicable and the competition for resources greater;
community structures and social networks are weakened; kin groups are dispersed; and
cultural identity, traditional authority, and the potential for mutual help are diminished.
Involuntary resettlement may cause severe long-term hardship, impoverishment, and
environmental damage unless appropriate measures are carefully planned and carried out.5

Policy Objectives
3. The objective of the Bank's resettlement policy is to ensure that the population displaced
by a project receives benefits from it. Involuntary resettlement is an integral part of project
design and should be dealt with from the earliest stages of project preparation (para. 28),
taking into account the following policy considerations:
(a) Involuntary resettlement should be avoided or minimized where feasible,
exploring all viable alternative project designs. For example, realignment of roads or
reductions in dam height may significantly reduce resettlement needs.
(b) Where displacement is unavoidable, resettlement plans should be developed. All
involuntary resettlement should be conceived and executed as development programs,
with resettlers provided sufficient investment resources and opportunities to share in
project benefits. Displaced persons should be (i) compensated for their losses at full
replacement cost prior to the actual move; (ii) assisted with the move and supported
during the transition period in the resettlement site; and (iii) assisted in their efforts to
improve their former living standards, income earning capacity, and production
levels, or at least to restore them. Particular attention should be paid to the needs of

47
 the poorest groups to be resettled.
(c) Community participation in planning and implementing resettlement should be
encouraged. Appropriate patterns of social organization should be established, and
existing social and cultural institutions of resettlers and their hosts6 should be
supported and used to the greatest extent possible.
(d) Resettlers should be integrated socially and economically into host communities
so that adverse impacts on host communities are minimized. The best way of
achieving this integration is for resettlement to be planned in areas benefiting from
the project and through consultation with the future hosts.
(e) Land, housing, infrastructure, and other compensation should be provided to the
adversely affected population, indigenous groups,7 ethnic minorities, and pastoralists
who may have usufruct or customary rights to the land or other resources taken for
the project. The absence of legal title to land by such groups should not be a bar to
compensation.

Resettlement Planning
4. Where large-scale8 population displacement is unavoidable, a detailed resettlement
plan, timetable, and budget are required. Resettlement plans should be built around a
development strategy and package aimed at improving or at least restoring the economic
base for those relocated. Experience indicates that cash compensation alone is normally
inadequate. Voluntary settlement may form part of a resettlement plan, provided
measures to address the special circumstances of involuntary resettlers are included.
Preference should be given to land-based resettlement strategies for people dislocated
from agricultural settings. If suitable land is unavailable, nonland-based strategies built
around opportunities for employment or self-employment may be used.

Plan Content
5. The content and level of detail of resettlement plans, which will vary with
circumstances, especially the magnitude of resettlement, should normally include a
statement of objectives and policies, an executive summary, and provision for the
following:
(a) organizational responsibilities (para. 6);
(b) community participation and integration with host populations (paras. 7-10);
(c) socioeconomic survey (para. 11);
(d) legal framework (para. 12);
(e) alternative sites and selection (para. 13);
(f) valuation of and compensation for lost assets (paras. 14-16);
(g) land tenure, acquisition, and transfer (para. 17);
(h) access to training, employment, and credit (para. 18);
(i) shelter, infrastructure, and social services (para. 19);
(j) environmental protection and management (para. 20); and
(k) implementation schedule, monitoring, and evaluation (paras. 21-22).

Cost estimates should be prepared for these activities, and they should be budgeted and
scheduled in coordination with the physical works of the main investment project.

48
Organizational Responsibilities
6. The responsibility for resettlement rests with the borrower. The organizational
framework for managing resettlement must be developed during preparation and
adequate resources provided to the responsible institutions. The organization responsible
for resettlement should be strengthened when entities executing infrastructure or other
sector- specific projects lack the experience and outlook needed to design and implement
resettlement. One alternative is to create a special resettlement unit within the project
entity: this can facilitate the involvement of other line agencies. Another alternative is to
entrust resettlement to the regional or town administration that knows the population and
area, can mobilize local expertise, speaks the resettlers' language, and will ultimately be
responsible for the integration of resettlers into the host population and area. There also
may be considerable scope for involving nongovernmental organizations (NGOs) in
planning, implementing, and monitoring resettlement.9

Community Participation and Integration with Host Population

7. Most displaced people prefer to move as part of a preexisting community,
neighborhood, or kinship group. The acceptability of a resettlement plan can be increased
and the disruption caused by resettlement can be cushioned by moving people in groups,
reducing dispersion, sustaining existing patterns of group organization, and retaining
access to cultural property10 (temples, pilgrimage centers, etc.), if necessary, through the
relocation of the property.

8. The involvement of involuntary resettlers and hosts in planning prior to the move is
critical. Initial resistance to the idea of involuntary resettlement is to be expected. To
obtain cooperation, participation, and feedback, the affected hosts and resettlers need to
be systematically informed and consulted during preparation of the resettlement plan
about their options and rights. They should also be able to choose from a number of
acceptable resettlement alternatives. These steps can be taken directly or through formal
and informal leaders and representatives. Experience has shown that local NGOs can
often provide valuable assistance and ensure viable community participation. Moreover,
institutionalized arrangements, such as regular meetings between project officials and
communities, should be provided for resettlers and hosts to communicate their concerns
about the resettlement program to project staff throughout planning and
implementation.11 Particular attention must be given to ensure that vulnerable groups
such as indigenous people, ethnic minorities, the landless, and women are represented
adequately in such arrangements.

9. The plan should address and mitigate resettlement's impact on host populations. Host
communities and local governments should be informed and consulted. Any payment due
the hosts for land or other assets provided to resettlers should be promptly rendered.
Conflicts between hosts and resettlers may develop as increased demands are placed on
land, water, forests, services, etc., or if the resettlers are provided services and housing
superior to that of the hosts. Conditions and services in host communities should
improve, or at least not deteriorate. Providing improved education, water, health, and
production services to both groups fosters a better social climate for their integration. In
the long run, the extra investment will help prevent conflicts and secure the project's

49
aims.
10. Successful resettlement requires a timely transfer of responsibility from settlement
agencies to the settlers themselves. Otherwise, a dependency relationship may arise, and
agency resources may become tied up in a limited number of continually supervised
schemes. Local leadership must be encouraged to assume responsibility for
environmental management and infrastructure maintenance.

Socioeconomic Survey
11. Resettlement plans should be based on recent information about the scale and impact
of resettlement on the displaced population. In addition to describing standard household
characteristics, socioeconomic surveys should describe (a) the magnitude of
displacement; (b) information on the full resource base of the affected population,
including income derived from informal sector and nonfarm activities, and from common
property; (c) the extent to which groups will experience total or partial loss of assets; (d)
public infrastructure and social services that will be affected; (e) formal and informal
institutions (such as community organizations, ritual groups, etc.) that can assist with
designing and implementing the resettlement programs; and (f) attitudes on resettlement
options. Socioeconomic surveys, recording the names of affected families, should be
conducted as early as possible to prevent inflows of population ineligible for
compensation.

Legal Framework
12. A clear understanding of the legal issues involved in resettlement is needed to design
a feasible resettlement plan. An analysis should be made to determine the nature of the
legal framework for the resettlement envisaged, including (a) the scope of the power of
eminent domain, the nature of compensation associated with it, both in terms of the
valuation methodology and the timing of payment; (b) the legal and administrative
procedures applicable, including the appeals process and the normal time-frame for such
procedures; (c) land titling and registration procedures; and (d) laws and regulations
relating to the agencies responsible for implementing resettlement and those related to
land compensation, consolidation, land use, environment, water use, and social welfare.

Alternative Sites and Selection

13. The identification of several possible relocation sites and the demarcation of selected
sites is a critical step for both rural and urban resettlement. For land-based resettlement,
the new site's productive potential and locational advantages should be at least equivalent
to those of the old site. The Bank encourages "land for land" approaches, providing
replacement land at least equivalent to the lost land. For rural settlers, irrigation, land
reclamation, tree crop development, intensification of production, and other innovations
often can provide adequate production potential on limited amounts of land to resettle
agriculturalists, even in countries with high population densities. In selecting sites,
attention must be paid to the availability of sources of off-farm income (fishing, gathering
forest products, seasonal wage employment) to complement farm income. For urban
resettlers, the new site should ensure comparable access to employment, infrastructure,
services, and production opportunities. For both rural and urban resettlement, the
borrower needs to (a) develop institutional and technical arrangements for identifying and
preparing relocation sites, e.g., pooling together small plots, wasteland reclamation, land

50
leveling, and terracing; (b) draw up timetables and budgets for site preparation and
transfer; (c) make legal arrangements for transferring titles to resettlers; and (d) consider,
when necessary, a temporary freeze on land transactions within the relocation area to
prevent land speculation. Though the Bank does not normally disburse against land
acquisition, it can finance land improvement to accommodate resettlers.

Valuation of and Compensation for Lost Assets

14. Valuation of lost assets should be made at their replacement cost. Compensation is
facilitated by (a) paying special attention to the adequacy of the legal arrangements
concerning land title, registration, and site occupation; (b) publicizing among people to
be displaced the laws and regulations on valuation and compensation; (c) establishing
criteria for determining the resettlement eligibility of affected households, e.g.,
households that have only partially lost their assets but are no longer economically viable
should be entitled to full resettlement; and (d) developing mechanisms to prevent illegal
encroachers and squatters, including an influx of nonresidents entering to take advantage
of such benefits, from participating in the compensation arrangements, by an early
recording of the numbers and names of affected populations entitled to
compensation/rehabilitation.

15. Some types of loss, such as access to (a) public services; (b) customers and suppliers;
and (c) fishing, grazing, or forest areas, cannot easily be evaluated or compensated for in
monetary terms. Attempts must therefore be made to establish access to equivalent and
culturally acceptable resources and earning opportunities.

16. Vulnerable groups at particular risk are indigenous people, the landless and
semilandless, and households headed by females who, though displaced, may not be
protected through national land compensation legislation. The resettlement plan must
include land allocation or culturally acceptable alternative income-earning strategies to
protect the livelihood of these people.

Land Tenure, Acquisition, and Transfer

17. Resettlement plans should review the main land tenure and transfer systems,
including common property and nontitle-based usufruct systems governed by locally
recognized land allocation mechanisms. The objective is to treat customary and formal
rights as equally as possible in devising compensation rules and procedures. The plan
should address the issues raised by the different tenure systems found in a project area,
including (a) the compensation eligibility of land-dependent populations; (b) the
valuation procedures applicable to different tenure types; and (c) the grievance
procedures available for disputes over land acquisition. Plans should contain provisions
for conducting land surveys and regularizing land tenure in the earliest stages of project
development. Planning should also anticipate the approximate time needed to acquire and
transfer land.

Access to Training, Employment, and Credit

18. Normally, general economic growth cannot be relied upon to protect the welfare of
the project-affected population. Thus, alternative employment strategies are needed for
nonagricultural displaced people, or where the land that can be made available is not

51
sufficient to accommodate all the displaced farmers. The resettlement plan should, where
feasible, exploit new economic activities made possible by the main investment requiring
the displacement. Vocational training, employment counseling, transportation to jobs,
employment in the main investment project or in resettlement activities, establishment of
industries, incentives for firms to locate in the area, credit and extension for small
businesses or reservoir aquaculture, and preference in public sector employment should
all be considered where appropriate.

Shelter, Infrastructure, and Social Services

19. To ensure the economic and social viability of the relocated communities, adequate
resources should be allocated to provide shelter, infrastructure (e.g., water supply, feeder
roads), and social services (e.g., schools, health care centers).12 Site development,
engineering, and architectural designs should be prepared for shelter, infrastructure, and
social services. Since community or self-built houses are often better accepted and more
tailored to the resettlers' needs than contractor-built housing, provision of a building site
with suitable infrastructure, model plans, building materials, technical assistance, and
"construction allowances" (for income foregone while resettlers build their houses) is an
option communities should be offered. Planning for shelter, infrastructure, and services
should take into account population growth.

Environmental Protection and Management

20. The screening process for an environmental assessment (EA) normally classifies
projects involving involuntary resettlement as Category A.13 The EA of the main
investment requiring the resettlement should thus cover the potential environmental
impacts of the resettlement. The resettlement plan must be developed in coordination
with the EA and define the boundaries of the relocation area, and calculate incremental
population density per land unit. In agricultural projects (involving, for example,
relocation to the catchment surrounding a reservoir, or to a downstream command area),
if the incoming resettled population is large in relation to the host population, such
environmental issues as deforestation, overgrazing, soil erosion, sanitation, and pollution
are likely to become serious and plans should either include appropriate mitigating
measures, including training of oustees, or else should allow for alternative sites to be
selected. Urban resettlement raises other density-related issues (e.g., transportation
capacity, access to potable water, sanitation systems, health facilities, etc.). Constructive
environmental management, provided through the EA's mitigation plan,14 may provide
good opportunities and benefits to resettlers and host populations alike (e.g., project-
financed compensatory afforestation not only replaces the forests submerged by
reservoirs but also offers gainful employment). If the likely consequences on the
environment are unacceptable, alternative and/or additional relocation sites must be
found.

Implementation Schedule, Monitoring, and Evaluation

21. The timing of resettlement should be coordinated with the implementation of the
main investment component of the project requiring the resettlement. All resettlement
plans should include an implementation schedule for each activity covering initial
baseline and preparation, actual relocation, and post-relocation economic and social
activities. The plan should include a target date when the expected benefits to resettlers

52
and hosts would be achieved.

22. Arrangements for monitoring implementation of resettlement and evaluating its

impact should be developed by the borrower during project preparation and used during
supervision.15 Monitoring provides both a warning system for project managers and a
channel for the resettlers to make known their needs and their reactions to resettlement
execution. Monitoring and evaluation units should be adequately funded and staffed by
specialists in resettlement. In-house monitoring by the implementing agency may need to
be supplemented by independent monitors to ensure complete and objective information.
Annual and midterm reviews are desirable for large-scale resettlement. The borrower
should be required to continue impact evaluation for a reasonable period after all
resettlement and related development activities have been completed. The borrower
should also be required to inform the Bank about the findings.

Bank Role and Project Options

23. The Bank supports borrowers' efforts through (a) assistance in designing and
assessing resettlement policy, strategies, laws, regulations, and specific plans; (b)
financing technical assistance to strengthen the capacity of agencies responsible for
resettlement; and (c) direct financing of the investment costs of resettlement. The Bank
may sometimes finance resettlement even though it has not financed the main investment
that made displacement and resettlement necessary (para. 26).

24. The task manager (TM) should inform the borrower of the Bank's resettlement policy.
Starting early in the project cycle, the TM with the support of Bank operational, research,
and legal staff should assess government policies, experiences, institutions, and the legal
framework covering resettlement. In particular, the TM needs to ensure that involuntary
resettlement is avoided or minimized, that laws and regulations concerning displaced
people provide compensation sufficient to replace all lost assets, and that displaced
persons are assisted to improve, or at least restore, their former living standards, income
earning capacity, and production levels.

25. The adequacy of the resettlement plan should be reviewed by appropriate social,
technical, and legal experts. Resettlement specialists should visit the possible resettlement
sites and review their suitability. In the case of large-scale relocation, such experts should
be included in independent technical or environmental review boards.16

26. Bank financing of resettlement can be provided as follows: (a) As a component of the
main investment project causing displacement and requiring resettlement. (b) If large
enough, as a free-standing resettlement project with appropriate cross-conditionalities,
processed and implemented in parallel with the investment project that causes the
displacement. The latter approach may better focus country and Bank attention on the
effective resolution of resettlement issues. (c) As a sector investment loan.17 Where the
specific resettlement needs of each subproject are not known in advance, the borrower
would need to agree to resettlement policies, planning principles, institutional
arrangements, and design criteria that meet Bank policy and requirements as a condition
of the loan. An estimate should be provided of total population to be displaced and
overall resettlement costs, as well as an evaluation of proposed resettlement sites.

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Subprojects in sector investment loans should be screened by the implementing agency to
ensure consistency with this directive, and approved individually by the Bank. For
countries with a series of operations requiring resettlement, efforts to improve the policy,
institutional, and legal framework for resettlement should form part of the Bank's
ongoing country and sector dialogue with the government. These efforts should be
appropriately reflected in economic and sector work and in country strategy papers and
briefs.

Processing and Documentation

27. The Regional Vice President (RVP) should be kept informed of major resettlement
issues, and his guidance sought where necessary. The Regional Environment Division
(RED), the Legal Department (LEG), and settlement specialists in Sector Policy and
Research (SPR) should be consulted or included as necessary in peer reviews on
involuntary resettlement issues throughout the project cycle.

Identification
28. The possibility of involuntary resettlement should be determined as early as possible
and described in all project documents. The TM should (a) briefly summarize in the
Initial Executive Project Summary (Initial EPS)18 the magnitude, strategy, and timing of
the resettlement; (b) inform borrowers of the Bank's resettlement policy; (c) review past
borrower experience with similar operations; (d) invite agencies responsible for
resettlement to discuss their policies, plans, and institutional, consultative, and legal
arrangements for resettlement; and (e) where appropriate, ensure that technical assistance
is provided early to borrowers. Such assistance should include the use of Project
Preparation Facility (PPF) resources19 for planning resettlement and building
institutional capacity.

Preparation
29. During project preparation, the feasibility of resettlement must be established, a
strategy agreed upon, the resettlement plan drafted, and budget estimates prepared.20 The
full costs of resettlement should be identified and included in the total cost of the main
investment project, regardless of financing source. The costs of resettlement should also
be treated as a charge against the economic benefits of the investment project that causes
the relocation. Any net benefits to resettlers (as compared to the "without project"
circumstances) should be added to the benefit stream of the main investment. While the
resettlement component or free-standing project need not be economically viable on its
own, it should be the least- cost approach consistent with the policies laid out above.

Appraisal and Negotiation

30. Submission to the Bank of a time-bound resettlement plan and budget that conforms
to Bank policy is a condition of appraisal for projects involving resettlement, except for
sector investment loans as discussed in para. 26. All final EPSs should confirm that this
requirement has been met. The appraisal mission should ascertain (a) the extent that
involuntary resettlement and human hardship will be minimized and whether borrowers
can manage the process; (b) the adequacy of the plan, including the timetable and budget
for resettlement and compensation; (c) the soundness of the economic and financial
analysis; (d) the availability and adequacy of sites and funding for all resettlement

54
activities; (e) the feasibility of the implementation arrangements; and (f) the extent of
involvement of beneficiaries. At negotiations, the borrower and the Bank should agree on
the resettlement plan. The resettlement plan and the borrower's obligation to carry it out
should be reflected in the legal documents. Other necessary resettlement-related actions
must be covenanted. The Staff Appraisal Report and the Memorandum and
Recommendation of the President should summarize the plan and state that it meets Bank
policy requirements.

Implementation and Supervision

31. Resettlement components should be supervised throughout implementation.21
Supervision that is sporadic or left until late in implementation invariably jeopardizes the
success of resettlement. Bank supervision missions should be staffed with the requisite
social, economic, and technical expertise. Annual reviews of large-scale resettlement and
in-depth Bank reviews of midterm progress are highly desirable. These reviews should be
planned from the outset to allow the Bank and the borrower to make necessary
adjustments in project implementation. Complete recovery from resettlement can be
protracted and can often make it necessary to continue Bank supervision until well after
populations have been relocated, sometimes even after a project has been closed.

Ex- Post Evaluation

32. The project completion report22 submitted to the Operations Evaluation Department
should evaluate resettlement and its impact on the standards of living of the resettlers and
the host population.

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Annex 5: Organizations/Persons Consulted

1. Ethiopian Roads Authority (Planning and Programming, Contract Administration and

Legal & Right-of-Way Divisions)
P.O.Box 1770
Tel. 251 1 517170
Fax: 251 1 514866
email: [email protected], [email protected]
Addis Ababa

2. Environmental Protection Authority

Tel. 615196
Addis Ababa

3. Eastern Hararghe Zonal Administration

Harar

4. Western Hararghe Zonal Administration

Tel. 42
P.O.Box 15
Asebe Teferi

5. Ethiopian Electric Light & Power Corporation

(Gilgel Gibe Resettlement Project)
Tel. 159031
Addis Ababa

6. Authority for Research and Conservation of Cultural Heritage

Tel. 510705, 159113
P.O.Box 13247
Addis Ababa

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