Livelihood Restoration in Practice: Key Challenges and Opportunities

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1 Livelihood Restoration in Practice: Key Challenges and Opportunities BRITISH MUSEUM, LONDON, NOVEMBER 9, 2016 Shaza Zeinelabdin, Senior Social Dev t Specialist Larissa Luy, Principal E&S Specialist

2 IFC RESETTLEMENT HANDBOOK Update the existing IFC Resettlement Handbook (2002) Provide practical guidance on implementation of PS 5 Expand scope to include emerging issues e.g. fragile and post conflict situations, large scale urban displacement Provide practical tools, approaches, examples and case studies

3 DILEMMAS What constitutes success: How do we assure ourselves that the livelihood Program has met its objectives? Government is handling resettlement & compensation and our client has no leverage: what do we expect them to do? How do we close the gap between national regulations and where there are material gaps regarding the IFC PS 5? What should you do in case the government is or has already completed the resettlement If resettlement happened a few years before our client was provided the land, do they need to do anything?

4 LIVELIHOOD RESTORATION: DEFINING SUCCESS Improvement or restoration of livelihoods is the objective of most international resettlement standards, but - No established paradigm for how we measure progress with restoring livelihoods - Clarity on how livelihoods should be defined Newmont Ahafo mine, Ghana RAP Completion Audit - 6 years after physical relocation: Living standards significantly improved 75% of households had access to land/ well developed crops livelihoods restored or close to being restored 25% had not reached point of secure livelihood illness, drug dependency, bad luck with land, fire, drought, lack of finance, etc.

5 WORKING WITH GOVERNMENT MANAGED RESETTLEMENT PROGRAMS How do we achieve objectives of our standards? The business case for client: why it pays off to get involved? The business case for the Government: why it pays off to work with the private sector Partnering with government and strengthening capacity

6 PARTNERING WITH GOVERNMENT Private sector sponsors usually cannot sustain livelihood programs indefinitely Government capacity needs to be developed for longer term sustainability (e.g. vulnerable peoples support; agricultural extension, SME support etc.) CNOOC Shell Petrochemical Project, Daya Bay, PR China - Jointly led, government executed resettlement - Project Sponsor provided: - Construction and operations employment - Skills training and paid work experience - Mentored formation of village construction companies - Government provided: - Provided transitional support, industrial land - Registered those needing employment - Provided bidding opportunities for village companies

7 USE LIVELIHOOD RESTORATION PROGRAM DELIVERY PARTNERS Most Private Sector sponsors have no expertise in livelihood restoration Emerging model is to partner with development NGOs, Consultants, Buyers to design/implement multi-faceted programs BTC pipeline - Sponsor was oil and gas operator, not a livelihood specialist - Used umbrella NGOs as Project Managers, - Local NGO, Institutions and Consultant partners to deliver programs - All programs/sub-programs based on logical frameworks - Performance based evaluation

8 CUT-OFF DATES Validity of census and asset surveys ~ 2 years how do you manage a cut-off when the use-by date of census/asset surveys has expired? Problems where project is delayed and moratorium restricts affected peoples rights to develop for a protracted period compensable? Managing customary/ancestral claims over land - the claimants live elsewhere (e.g. PNG post clan/tribal conflict) not present at the cut-off? Examples LNG Project, West Africa - cut-off date and restriction on new development announced project never proceeded Petrochemical project, China affected villagers subjected to a cut-off and restriction on new development for 12 years, before the Project finally proceeded

9 COMPREHENSIVE LIVELIHOOD BASELINE STUDIES Often insufficient data is collected to fully understand or describe pre-resettlement livelihoods Failure to account for full suite of livelihood resources that communities or households utilize (esp. in subsistence settings) losses are significantly undervalued Linear project in Sub-Saharan Africa - poor data, difficult to reconstruct livelihoods retrospectively (e.g. women s coastal gathering overlooked by baseline) Mozambique Gas Development Project comprehensive agriculture, foraging, fisheries, coastal gathering, small trading studies including value chain analysis and gender disaggregation

10 DESIGN MULTIPLE PROGRAMS - NOT ALL WILL SUCCEED Livelihood restoration is an imprecise art Good practice requires multiple programs don t put all your eggs in one basket Sufficient dialogue upfront with sponsors to help them understand livelihood implications Livelihood support durations years

11 DURATION OF LIVELIHOOD PROGRAMS How long do livelihood programs need to be maintained? Sponsor perception is often that livelihood support need only be short duration/ is easy to execute To effect changes in traditional agricultural practices/adopt new methods takes time (trials, demonstration, adoption, assistance in overcoming problems) Tenke Fungurume Mining, DRC - Agricultural intensification with introduction of irrigation, fertilizers: 7-8 yrs. BTC Pipeline: 3 yrs. to restore production levels on good soils; >10 yrs. on alpine grazing land CNOOC-Shell Petrochemical Project - Rural to urban resettlement: 6-8 yrs.

12 LEGACIES Bottom line Did past displacement result in unmitigated adverse impacts, diminished wellbeing, and/or grievances which may place the client social license to operate at risk? Key questions When did it occur, why, by whom, what process was followed, residual impacts/ grievances? Risk Analysis No significant residual impacts / displacement was minor: no further action required. Document the historic process Residual impacts identified: gap analysis + supplemental actions required, esp. if recent (3-5 yrs.) or with ongoing mitigation

13 MONITORING & ADAPTIVE MANAGEMENT Monitoring is often an afterthought not integral part of program design Designing/ implementing livelihood restoration programs is an imprecise science programs often need mid-term adjustment to improve effectiveness External factors (political, economic, natural disasters) can change the project context, necessitating mid-program adjustments Major Private Sector Projects (BTC Pipeline, Newmont Ahafo Gold, Chad Cameroon, Tangguh LNG, PNG LNG) - Internal Monitoring by Sponsor s resettlement team - External Monitoring by Independent Environmental and Social Consultant - Completion Audit by independent third party unremoved from the Project (livelihood/resettlement completion) - (Others: Government EIA monitoring, NGO Monitoring, High Level IAP)

14 Strictly Confidential Mizuho s Experience with implementing Livelihood Restoration Plans Sustainable Development Office Global Project Finance Department

15 CASE 1 Project located in Asia Involving large scale land acquisition and loss of income of affected communities Project affected communities include mainly farmers. Land owners given cash compensation as there was no land available in the areas close by Livelihood Restoration Plan (LRP) was prepared for affected communities, however it had some fundamental issues: The project company did not identify a cut off date, the census was done much later and was based on village records and not undertaken specifically by the project company As a result, the number of people to benefit from the project kept increasing through out the due diligence process, no identification of number of women, aged or vulnerable households The project company submitted a LRP which was just an extension of their CSR activities, in which all the project villagers could participate and it did not prioritize project affected farmers who lost their source livelihood due to land acquisition. These CSR activities were working well but the activities were mainly attended by women and were only sufficient to supplement income and not replace income from farming that had been lost The LRP mentioned that project company will focus on providing alternative livelihood and jobs creation, but little information was provided on what type of jobs will be identified Monitoring and reporting process was not identified to measure the success/failure.

16 CASE 2 Project located in Asia Involving land acquisition and loss of income of affected communities Project affected communities include - land owners, tenant farmers and daily farmers (who rent the land from the land owners for farming and harvesting) Initially, project company was to only provide compensation to the land owners and ask land owners to compensate the tenant farmers and daily farmers accordingly. In order to be in line with the requirements of IFC PS5 they agreed to consider tenant farmers and daily farmers as project affected communities. The tenant farmers and daily farmers were compensated with livelihood allowance each month (the allowance was determined based on consultation and agreed by all the affected parties). This monetary compensation was provided to the farmers until the tenant farmers could harvest the replacement land and daily farmer find another job. Project company found a replacement land for the tenant farmers, which the project company is going to lease from an agricultural company and provide it to the tenant farmers to cultivate. Eventually, the plan was to hand it over to a local NGO to manage the land. However, as a result of perceptions of inequality within the communities, the village head started collecting a certain percentage of the compensation to distribute to the rest of the village. The affected farmers were disappointed that they did not receive the amount which was agreed upon but there was little client could do to change this situation!

17 OTHER EMERGING ISSUES Legacy resettlement (usually government managed) Forced eviction vs legal eviction Buffers should have been resettled, but weren t Land donation acceptable in private sector resettlement? Staged resettlement (e.g. for large mines) where there is incremental loss of productive land with each expansion Civil society (Oxfam, Human Rights Watch): -Addressing cost of access to services post resettlement -Raised challenges of engagement/consultation in repressive countries -Incidence of reprisals against people making complaints -Challenges of customary law vs national/ statutory law -Predatory loan schemes targeting resettlement beneficiaries Clearer guidance on gender considerations in resettlement projects Expanding concept of marginalized groups LGTBs Refugees/ IDPs Climate change induced resettlement Fragile States special considerations Indigenous People & how IFC PS 5 is applied

18 THANK YOU!

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