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2. POLICY CONTEXT

2.1 General

The Project has not been finalized at the stage of environmental assessment although significant changes to the concept and the current description of components are not anticipated.

The challenge in conducting an EA for the Project is that there are no location specifics for the Project (the intent is that the Project and the grants and credits available through the Project will be available country wide). The other challenge is to attempt to determine as best as possible the various activities that individual farmers, agribusiness (including agro-processors) will wish to pursue in terms of loan proposals. As described in the following sections, a list of activities has been prepared based on previous similar studies and on discussions with stakeholders. It should be noted, however, that this list may not be comprehensive, and at the same time it may contain activities that will not be pursued by potential borrowers.

2.2 The WB safeguards policies that might be triggered

There are key 10 Environmental and Social World Bank Safeguard Policies which are intended to ensure that potentially adverse environmental and social consequences of projects financed by Bank are identified, minimized and mitigated. World Bank Safeguard Policies have a three-part format: Operational Policies (OP) - statement of policy objectives and operational principles including the roles and obligations of the Borrower and the Bank, Bank Procedures (BP) - mandatory procedures to be followed by the Borrower and the Bank, and Good Practice (GP) - non-mandatory advisory material. World Bank's Safeguard Policies and their relevance to sub-projects to be funded under the ADPC-3 Project Components (sub-projects) are indicated in the Table 2.1 below.

Table 2.1. World Bank’s Safeguard Policies and their relevance to the project

Safeguard Policies	Relevance
Environmental Assessment (OP/BP 4.01) This Policy aims to ensure that projects proposed for Bank financing are environmentally and socially sound and sustainable; to inform decision makers of the nature of environmental and social risks; To increase transparency and participation of stakeholders in the decision-making process	Certain activities under Component A (laboratory upgrade and TA), Component B (grant program and TA) and Component C (agricultural credits) can directly cause environmental impacts. The environmental issues to be dealt with, may include collection and disposal of animal waste and waste water, construction related issues (in case of small scale construction of rural facilities), impacts related to agro-processing, and impacts related to environmental management practices in laboratories to be upgraded under the project. These impacts are anticipated to be temporary, reversible and can be avoided, minimized or duly mitigated if managed appropriately. Component A will include support for upgrading of laboratories, including minor works and equipment among other aspects. Also, TA to be delivered under Components A and B may have environmental implications (for example, lead to increased use of pesticides).
Natural Habitats (OP/BP 4.04) This Policy aims to safeguard natural habitats and their biodiversity; avoid significant conversion or degradation of critical natural habitats, and t ensure sustainability of services and products which natural habitats provide to human society	Generally it is expected that there will be no important wildlife and wildlife habitats in the vicinity of the ADCP-3 sub-; if such cases occur, an EA will be required for specific sub-projects. If the sub-project-specific EA identifies risk of negative impacts on important wildlife and habitats, such sub-project will not be approved.
Pest Management (OP 4.09). This Policy is to ensure pest management activities follow an Integrated Pest Management (IPM) approach, to minimize environmental and health hazards due to pesticide use, and to contribute to developing national capacity to implement IPM, and to regulate and monitor the distribution and use of pesticides	This policy is triggered because, while not financing directly the purchase of pesticides, the project may lead to the increased use of pesticides. This will be mitigated through the capacity building (trainings), extension services, and specific measures provided in the framework document and specific EMPs. The Recommendations for the Development of the National Integrated Pest Management Program (IPM) and Pest Management Plan (PMP) has been prepared, with a dual purpose to (i) indicate how safe pesticide handling and integrated pest management practices will be promoted under the project, and (ii) suggest strategic approach for promoting integrated pest management in the country. The project related recommendations of the PMP have been duly incorporated into the project EMP.
Projects on International Waterways (OP 7.50). This Policy ensures that riparian States are duly notified of projects affecting common water bodies. It is applied for any investment involving water abstraction, release of water or materials into water, or hydrological impacts (regardless of scale) on water body shared by 2 or more countries (aquifers, open seas excluded; exception available for rehabilitation of existing schemes)	The project support for development of value chain would include inter alia investments for the improvement of on-farm infrastructure, such as small irrigation systems. Such activities, if any, are likely to be developed inter alia on the transboundary rivers Samur, Kura and Araz, flowing into the Caspian Sea and considered international waterways for the purposes for the Word Bank Operational Policy on Projects on International Waters (OP 7.50). The proposed project, however, is not expected to have any significant impacts on the quantity or quality of water flowing through these rivers or into the Caspian Sea. It is expected that sub-projects would not produce a noticeable change for the abstraction volumes of the systems and would not have an adverse change to the quality or quantity of river flows as the works would not change the nature of the original systems. The irrigation infrastructure improvements will not result in significant increases in either withdrawals from or discharges to the international waterways. Therefore, the project is not expected to have any adverse effects on the water flows or the rights of the other riparian states on the international waterways, so the Bank is seeking a waiver pursuant to paragraph 7(a) of OP 7.50 for this safeguard policy.
Disclosure Policy (BP 17.50) supports decision making by the borrower and Bank by allowing the public access to information on environmental and social aspects of projects and has specific requirements for disclosure	The EMP has been duly disclosed and consulted in the country before appraisal and in the WB Infoshop.