Azerbaijan republik

5. ENVIRONMENTAL REVIEW PROCEDURE GUIDELINES

5.1 Overview

Each sub-loan/ grant proposal will undergo an environmental review procedure, as follows:

- Credit/grant applicants: identify possible environmental impacts of proposed activities, identify and undertake mitigation measures if appropriate. The credit/grant application form will include a checklist to identify environmental risks. The credit/grant applicants are also responsible for obtaining appropriate permits and approvals that may be required for the particular type of activity to be financed, and are issued by the local authorities responsible for environmental issues. In all cases where an environmental assessment report or environmental monitoring plan are required, these are to be prepared by the credit/grant applicants and, where relevant, submitted to the Ministry of Ecology and Natural Resources (or its Agents), and the EIA report and monitoring plans are to be provided with the credit/grant application. The PMU Environmental Specialist will provide assistance and guidance as necessary.
- VCDS and PFIs: screening of applications including for environmental impacts, ensuring required permits have been obtained. Carry out field site visits for secondary environmental screening at site (specifically, for sub-projects classified as category B) to physically establish the veracity of the environmental data provided by applicants, and to confirm that the environmental category is appropriate and EMP is adequate;
- PMU: monitor compliance with EMP, provide advice on specific issues that may arise; monitor for cumulative impacts; provide training on environmental due diligence to PFIs; through the IAC and RACs, provide training and information on IPM and sustainable agricultural practices via advisory services component

5.2. Environmental screening for credit applications

The potential sub-borrower shall complete Environmental Screening Checklist (Form 1, Annex 2). It is expected that the majority of mid-size credit sub-projects will fall into category B and therefore the proponent may need permits from the DoSEE and these are to be obtained by the borrower and submitted to the PFI with the sub-project proposal. Credit application package must include guidelines and instructions to the borrower with information to be provided. The Ministry of Environment of Azerbaijan shall issue environmental permits, if required. The procedure for issuing permits includes: (i) state ecological expertise, and (ii) public participation in the decision-making process.

The PFI will screen each sub-project against the environmental checklist (Form 2, Annex 2) to define the environmental category of the sub-project, review the proposed mitigation measures, and ascertain that all required permits have been obtained and are valid. In addition, for sub-projects classified as Environmental Category B or when the initial screening reveals high or significant risks, a secondary screening is made through a visit to proposed site to physically ascertain the veracity of the data. The PFI shall complete Field Site Visit Checklist (Form 3, Annex 2).
In cases when possible adverse impacts are discovered during the Field Site Visit, the Environmental Screening and Field Site Visit Checklists are submitted to the Ministry of Environment, which issues a preliminary environmental statement listing potential environmental concerns and mitigation measures and whether an environmental assessment (EA) is required.
During the project implementation, the PFI should ensure that the environmental mitigation measures are implemented. In the case of non-compliance, the PFI (with assistance of PMU Environmental Specialist as needed) will investigate the nature and reason(s) for noncompliance, and a decision is taken about what is needed to bring a sub-project into compliance or whether financing should be suspended.

5.3 Environmental screening for grant proposals

The grant proposal process is managed by the VCDS. The selection process will include environmental screening by the Secretariat to ensure compliance with the criteria, followed by a technical review by independent contracted specialists based on specified scoring procedures. The PMU Environmental Specialist will assist the Secretariat to conduct the environmental screening of proposals to determine the environmental category and evaluate the proposed mitigation measures. Environmental Screening Checklist to be completed by the Secretariat is given in Annex 2 (Form 2). Specialist consultants will be contracted as needed to assess environmental impacts that may be high risk, or involve a subject outside the expertise of the PMU Environmental Specialist. The same environmental screening and categories are used as for the credit components. Secondary screening to the proposed sub-project may be conducted for potentially high risk projects, and on a random basis to cover 10% of the proposals per year.

5.4 Sub-project Categories

Sub-projects assessed as Category A, (high environmental risks). No Category-A sub-projects will be financed by the project.
Sub-projects assessed as Category B, (moderate environmental risks) may require Secondary Screening during appraisal. An EIA may be required for some Category B sub-projects. For expansion of existing facilities or where change of technology is proposed, an environmental audit may be required, depending on the nature of the sub-project.
Sub-projects assessed as Category C, (sub-projects having no significant environmental issues) require no Secondary Screening.

5.5 Secondary Screening

Secondary Screening may be conducted to establish the veracity of the environmental data provided by the sub-project proponent. This is a physical check executed by the PFI loan officer and VCDS as part of sub-project appraisal. The completed Secondary Screening form (Form 3, Annex 2 – Field Site Visit Checklist) will be entered in the project files.

Secondary Screening during site inspection includes updating and physical verification of all data provided in the credit/grant application:

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  Confirm actions taken since submittal of the credit/grant application
  
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  Environmental data provided by the applicant is correct
  
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  No potential environmental issues have been ignored
  
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  The environmental category classification is appropriate
  
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  Environmental management and monitoring plan is adequate
  
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  EIA report has been completed (where required)
  
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  Statutory environmental permits have been received and are adequate
  
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  Public Participation/Information consultations are complete (Annex 6)
  
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  Land and resettlement (where relevant) has been identified and compensation arrangements agreed.
  

In cases where Secondary Screening substantially modifies any of the above, the Environmental Screening Category and the Environmental Management Plan may need to be revised. The sub-project must not be financed by the PFI until the revisions have been accepted and checked by the PFI.