LAND ACQUISITION AND RESETTLEMENT COMPENSATION POLICY FRAMEWORK AND IMPLEMENTING GUIDELINES

LAND ACQUISITION AND RESETTLEMENT COMPENSATION POLICY FRAMEWORK AND IMPLEMENTING GUIDELINES Supplementary Appendix to the Report Recommendation of the President to the Board of Directors on the HEALTH SECTOR DEVELOPMENT PROGRAM in REPUBLIC OF THE PHILIPPINES Department of Health This report was prepared by the Borrower is not an ADB document. September 2004

TABLE OF CONTENTS I. Introduction Background 1 II. Definition Of Terms 2 III. Compensation Policy Framework 2 A. Principles And Objectives 2 B. Compensation Eligibility 2 C. Modes L Procurement: Compensation Donation 3 D. Compensation Entitlements For Other Losses Or Specific Affected Persons 4 IV. Implementation Procedures Organization 6 A. LAR Assessment, Preparation, Documentation 6 B. L Acquisition Compensation Report 7 C. LAR Conditions for Project Subproject Approval 7 D. Institutional Arrangements 7 E. Public Consultation Participation 7 F. Complaints Grievances 8 G. Internal External Monitoring 8 H. Implementation Schedule 9 Appendixes 1 Outline of Format for a Short LARP 10 2 Preliminary Screening of Project LGUs Provinces LAR Impact of Civil Works Proposed 12

ABBREVIATIONS ADB AP AI BHS CGC CPFPG DOH HSDP LAR LARP LGU MPDO RHU Asian Development Bank affected persons (households other juridical persons) affected individuals barangay health stations complaints grievances committee Compensation policy Framework procedural Guidelines Department of Health Health Sector Development Program l acquisition resettlement l acquisition resettlement plan local government unit Municipal Planning Development Office regional health units

I. INTRODUCTION AND BACKGROUND 1. These Compensation Policy Framework Procedural Guidelines (CPFPG) have been prepared by the Philippines Department of Health (DOH) to establish compensation provisions L Acquisition Resettlement (LAR) guidelines for the Health Sector Development Program (HSDP) fitting the requirements of the Involuntary Resettlement Policy of the Asian Development Bank (ADB). Approval of the CPFPG by each local government unit (LGU) targeted by the HSDP will be a condition for ADB approval of each subproject. 2. HSDP civil works consist in the following: (i) renovation expansion of hospitals to include three specialty services; (ii) renovation expansion of rural health units (RHUs) to have lying-in, birthing, laboratory facilities; (iii) upgrading expansion of barangay health stations (BHSs) to have birthing facilities; (iv) construction of new BHSs in areas more than 30 minutes away from the RHU. A preliminary listing of the cidate beneficiary provinces of the type of civil works LAR impacts relative to each of them is provided in Annex Table 1. 3. LAR for the HSDP is expected to be minimal, at times, unnecessary. To meet licensure accreditation stards DOH requirements, RHUs BHSs must have a floor area of 150 m 2 52 m 2, respectively, which with the addition of a small service yard, correspond to the maximum possible impact for each RHU BHS. The expansion of hospitals may require wider areas, but also in this case LAR is expected to be below the severe impacts threshold established by ADB policy. Where RHU, BHS, hospitals renovation expansion will take place in unoccupied areas within the limits of these facilities properties, LAR will not be required. However, it is virtually impossible to assume that it will not yield negative impacts on the stakeholders. 4. Based on ADB's Hbook on Resettlement: A Guide for Good Practice, projects or subprojects involving severe impacts are those involving (i) more than 200 affected individuals (AI) affected either by l losses exceeding more than 10% of their lholdings or by relocation; or (ii) more than 100 cultural minorities AIs affected by the same type of losses. Projects subprojects involving severe impacts require the preparation of a full l acquisition resettlement plan (LARP) while projects involving non-severe impacts (i.e. impacts below the indicated thresholds require a simplified short LARP). Given the LAR impacts expected for the HSDP, subprojects involving severe impacts the need to prepare full LARPs are extremely unlikely. 5. This CPFPG is based on the following issuances: EO 1035, Procedures Guidelines for the Expeditious Acquisition by the Government of Private Real Properties or Rights thereon for Infrastructure Other Development Projects using either Negotiated Sale or Expropriation; EO 132, Procedures to be followed in the Acquisition of Private Property for Public Use Creating Appraisal Committee; ADB's Policy on Involuntary Resettlement. 6. Differences between the above issuances have been reconciled to fit ADB policy.

2 II. DEFINITION OF TERMS Affected Person - (household) affected by project-related changes in use of l, water, or natural resources. Compensation - money or payment in kind to which the people affected are entitled in order to replace the lost asset, resource, or income. Replacement Cost Rate - value determined to be fair compensation for real property based on a statistical analysis of l sales (when active l markets exist) or through an analysis of the cost to substitute a plot with another of equal dimension location productive potential (when active l markets do not exist); in the case of houses structures the replacement cost is the cost at current market rates of building materials plus labor, without depreciation or deductions for salvaged materials. Resettlement Effect - loss of physical non-physical assets, including homes, communities, productive l, income-earning assets sources, subsistence, resources, cultural sites, social structures, networks ties, cultural identity, mutual help mechanisms. LARP - a time-bound action plan with budget setting out resettlement strategy, objectives, entitlements, actions, responsibilities, monitoring, evaluation. III. THE HSDP COMPENSATION POLICY FRAMEWORK A. Principles Objectives 8. The implementation of these CPFPG will be guided by the following principles: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Negative impacts will be minimized as much as possible, unless absolutely necessary. Impacts affecting informal settlers will be avoided. When impacts will be unavoidable, compensation will be sufficient to improve or at least restore the pre-project income living stards of affected persons; Lack of formal title to l should not be a bar to compensation or rehabilitation; Compensation activities will be carried out with equal consideration of women men. The compensation beneficiaries will be the documented owners independently from their gender; The affected persons will be fully informed consulted on compensation options resettlement planning; Asset compensation will be provided at market rates (for l crops) at replacement rates (for houses other assets); Lost assets compensation, replacement l rehabilitation provisions allowances will be provided in full prior to ground leveling demolition; Resettlement compensation costs will be included in subproject budgets. B. Compensation Eligibility 9. affected persons accounted in the impacts assessment are entitled to be fully compensated or rehabilitated for their losses independently from the l tenure status of their plots. Affected persons include any person, household, firm, or a private/public institution, which on account of LAR, would have their right, title or interest on l, house/structures, crops or income affected in whole or in part by the project.

3 10. Affected persons who occupy the affected areas after the cut-off dare, or buildings constructed after the cut-off date will not be compensated. The cut-off date will coincide with the date in which the date of commencement of the impacts census will be clearly specified in the LARP for each subproject. C. Modes L Procurement: Compensation And Donation 1. Compensation 11. L procurement will be carried out in principle through compensation at replacement cost without detractions for transition costs either: (i) in cash at market rates 1 (when in the project area there is an active l market); (ii) in cash based on the affected plot s productivity (when in the project area there is no active l market); or (iii) through the provision of a replacement plot equal in value productivity to the plot lost. replacement l will be provided with secured tenure status. Eventual taxes fees will be paid or waived by the LGUs. 12. Compensation for partial l impacts will be carried as follows: (i) (ii) Partial agricultural l losses. When these represent 10% or less of the total l property of an affected person the remaining l is still economically viable only actual impacts will be compensated in cash at market rates. If more than 20% of a villager's agricultural l is affected the rest of the affected person's lholding is not economically viable, then the LGU, may if the affected person (AP) so wishes, acquire the entire lholding, preferably through l for l arrangements but, if this is not possible, in cash. Partial residential l losses. If the affected l represents 10% or less of the whole property the remaining l are still viable residential lot cash compensation at full replacement cost (market value) will cover actual impacts. However, if the impact is more than 20% of a lot or if the remaining l is insufficient to rebuild the residential structure lost, the affected person will have the option to receive compensation at replacement cost for the whole lot. 13. In case replacement l schemes are used, the viability of replacement plots their equivalence with the plots lost will be assessed by the LGUs agricultural offices. 2. Donation 14. The LGUs, may also seek to procure l through voluntary donations as long as the conditions laid below are followed: (i) (ii) The affected persons have decided to donate their l based on an informed consent that is prior to this decision they have been (a) informed of their compensation entitlement at market rates; (b) actually offered the relative compensation amounts; The donation does not affect the donor s livelihood; 1 L market rates will be calculated by a government financial institution (i.e. L Bank) on the basis of a statistical analysis of actual l transactions carried out in project areas in the six months period preceding the impacts assessment.

4 (iii) (iv) The plots to be donated are titled, are not rented to tenants, occupied by squatters, or have encumbrances; The voluntary aspect of the donation is documented by (i) a signed Deed of Donation; (ii) by a signed statement that they are aware of the above condition. The inclusion of both documents in the LARP will be based on ADB approval for the implementation of a subproject. D. Compensation Entitlements for Other Losses or Specific Affected Persons 15. The compensation of other losses beside l will be based on the following entitlements (an entitlements matrix is included in Appendix 1): (i) (ii) (iii) (iv) (v) (vi) Crops. Cash compensation at market rates to be paid to lowners tenants based on their specific sharecropping agreements; Trees. Cash compensation based on type, age productive value; Houses, structures other improvements. Cash compensation at replacement cost free of detractions for depreciation transaction costs. When project impacts affect more than 20% of a house or when after the impact a house becomes unusable, the affected persons will be entitled to the compensation of the entire asset. When 20% or less of a house is affected the rest remains viable for continued use, only actual impacts will be compensated in cash; resettlers will receive a resettlement allowance to pay for relocation expenses. Businesses. When the business is lost permanently, cash compensation equivalent to 1 year income based on tax declaration or, if this is unavailable, 1 year income based on local minimum salary; when the loss is temporary cash compensation for the business interruption period based on tax declaration or, when this is not available, local minimum salary; Agricultural l tenants, sharecroppers workers. When tenants will permanently lose a part or the entirety of their rented plots they will receive a subsidy corresponding to 1 full year of income from the lost l. The same applies to sharecroppers. Agricultural workers whose contract will be interrupted will receive an indemnity corresponding to 3 months of income. House renters. House renters who have leased a house for residential purposes will be provided with a cash grant of three months rental fee at the prevailing market rate in the area, will be assisted in identifying alternative accommodation.

5 Table 1: Compensation Matrix Asset Residential/ commercial l Impact Category Affected Persons Compensation Entitlements Less than 20% of l loss with Titleholder Cash compensation for affected l at full replacement cost free of taxes, registration, transfer costs remaining l still Rental/Leaseholder Minimum cash compensation equivalent to 10% of viable for present use lease/rental fee for the remaining period of rental/lease agreement More than 20% of laffected OR less than 20% of l affected but with remaining l unfit to continued use Titleholder L for l replacement or compensation in cash free of taxes, registration, transfer costs according to AP s choice. If so wishes, the AP has the option of request compensation also for the unaffected portion of the plot. Rental/Leaseholder Three months rental allowance. Structure partially Owner Cash compensation for affected structure other affected but remaining fixed assets structure remains viable Full (cash) assistance to restore the remaining structure for continued use Rental/Leaseholder Cash compensation for affected assets. Structures Entire structure affected OR structure more than 20% affected but remaining structure is not viable for continued use Owner Rental/Leaseholder Cash compensation for entire structure other fixed assets Transfer/resettlement assistance Disturbance compensation equivalent to 3 months of rental Assistance in finding alternative rental arrangements Crops Crops affected by LAR Affected Person Cash compensation at full market value. Trees Trees affected by LAR Titleholder Cash compensation based on type, age, productive value of affected trees. Business/ employment Arable L Temporary/permanent loss of business, or employment Less than 10% of l loss with remaining l Affected Person Farmer/Titleholder Cash compensation equal to 1 year income, if the loss is permanent Cash compensation for the period of business interruption, if the loss is temporary Cash compensation for affected l at full replacement cost free of taxes, registration, transfer costs still economically viable Tenant/Leaseholder Cash compensation equivalent to market value of gross harvest of the affected l for one year or for the remaining period of tenancy/lease agreement, whichever is greater More than 10% of l lost Farmer/Titleholder Tenant/Leaseholder Agricultural Worker L replacement plots of equal value or cash compensation free of taxes, registration, transfer costs according to AP s choice. When l loss is more than 10% or less than that but the remaining l is economically unviable the AP may ask compensation also for the unaffected portion of the plot. Rehabilitation assistance. Cash compensation equivalent to 1-year market value of gross harvest. Cash indemnity for 3 months of income. Assistance in getting alternative employment IV. IMPLEMENTATION PROCEDURES AND ORGANIZATION A. LAR Assessment, Preparation, Documentation 16. LAR preparation for each LGU will entail the following activities: (i) identification of the plots needed for project implementation; (ii) preparation of an impact assessment/ap inventory,

6 (iii) a valuation of the market value of affected assets; (iv) the conduction of AP consultation/information activities to inform them of their entitlements of the value of their assets; (v) when voluntary donation is the mode of l procurement considered, the implementation of the donation procedures described in section 3.3.2. These activities will be carried out by the Municipal Planning Development Office (MPDO) of each concerned LGU with the assistance of the relevant barangay captains. The implementation of the above activities is detailed below: (i) Impact Assessment Affected Persons Inventory. Following the identification of the needed plots its validation by the interlocal health zone project manager, the MPDO will prepare the impacts assessment affected persons inventory. The information to be gathered for this task include: Number of affected persons, affected individuals, household heads names; Amount area of all affected residential plots; Amount, category/type, area of all affected agricultural plots; Quantity quality of affected crops trees; Quantity/category of all other affected fixed assets improvements; Temporary l impacts; Permanent temporary business impacts; For each affected person, impacts severity relative impacts to l houses. (ii) (iii) (iv) Valuation of Affected Assets. This task will be carried out by local L Bank offices based on a statistical analysis of l transactions in the 6 months preceding the impacts assessment. House replacement costs will be estimated by the LGUs based on cost of new materials labor. Affected Persons Consultation Participation Activities. This task will involve meetings informing the beneficiary communities of the project of the provisions of this CPFPG. In addition, each affected person will be personally informed of its entitlements under this CPFPG will receive a copy of this text. affected persons will also be personally consulted to carry out a final negotiation of compensation rates indicate their choices regarding alternative compensation items. Requirements for Voluntary L Donation. When voluntary donations are considered as a mode of l procurement, project authorities will prepare the following documents for each donor: a. A Deed of Donation signed by donor, relevant authorities an independent witness; b. An assurance signed by donor, relevant authorities an independent witness, indicating in detail the donated assets that the donation (i) is voluntary; (iii) is based on the donor s full knowledge of his/her compensation entitlements of the donated assets replacement value; (iii) does not affect the donor s livelihood; (iii) involves only an unencumbered titled plot which is not occupied by tenants or squatters.

7 B. L Acquisition Resettlement Plan 17. The LAR preparation activities above detailed will be documented for each subproject in a LARP fitting the requirements of the ADB resettlement policy. Since it is expected that less than 200 individuals will be affected by each subproject, the LARP will in general follow the requirements for short LARAPs. Where a subproject will affect more than 200 individuals the LARP will follow the requirements for a full LARP. The outline for a LARP fitting a short LARP format is presented as Appendix 1. 18. The LARP shall be prepared by the MPDO implemented by the concerned LGU. L acquisition release of compensation to the APs will commence when the HSDP unified PMO, through its project manager assigned in the province, finds the LARP acceptable. The implementation will be completed at least one month prior to the commencement of any construction work. C. LAR Conditions for Project Subproject Approval 19. HSDP subproject approval will include conditions tied to LAR preparation issues as follows: (i) (ii) (iii) (iv) DOH ADB approval of this CPFPG is a condition for HSDP appraisal; LGU approval of this CFPG is a condition for final inclusion in HSDP programs; Approval of the LARPs by the MPDO ADB will be a condition for contract awards; LARP implementation full compensation of the APs will be a condition for the initiation of civil works. D. Institutional Arrangements 20. The overall responsibility for implementing the guidelines set forth in this document rests on the LGUs. The municipal planning development officer, in coordination with barangay leaders, is responsible for preparing the inventories lists of affected persons. The barangay leaders barangay committees will ensure the active effective consultation with the affected persons under their jurisdiction. 21. Funds for implementing the inventories will be provided by the LGU based on the budgetary requirements established by the municipal barangay committees in consultation with the affected persons. E. Public Consultation Participation 22. The community will be fully informed about the construction of the health facility. Specifically for affected persons, they will be fully consulted about acceptable alternatives options that are satisfactory to them. F. Complaints Grievances 23. Complaints grievances relating to any aspect of the compensation program detailed in this CPFPG will be hled as follows: Level 1 Complaints grievances will be first lodged to a complaints grievance

8 committee (CGC) to be established at barangay level composed by the barangay Captain, the barangay Secretary, one member of the barangay justice (lupong tagapamayapa) informal community representatives. The CGC will have to provide written response to the AP within 15 calendar days of receiving the complaint. Level 2 Level 3 Level 4 If the AP is not satisfied with the decision of the CGC, he/she may appeal to the MPDO within 15 calendar days of receiving the written decision from the CGC. The decision of the MPDO will be rendered within 30 calendar days upon receipt of the AP's appeal. If AP is not satisfied with the MPDO decision he/she may appeal to the Provincial Health Officer (PHO) within 15 calendar days of receiving the MPDO written decision. The decision of the PHO will be rendered within 30 calendar days upon receipt of the AP's appeal. If AP is not satisfied with the decision of the PHO, the case may be submitted to the HSDP Unified PMO for consideration. The decision of the HSDP Unified PMO will be rendered within 30 calendar days upon receipt of the AP's appeal. 24. If the affected person remains unsatisfied after all appeals within the HSDP administration his/her grievances can be lodged to the appropriate court of law. However, resort to courts prior to availing in its entirety of the above detailed process would make the appellant's action dismissible on the ground of non-exhaustion of administrative remedies. 25. Affected persons lodging complaints grievances at any of the above levels will be exempted from all administrative legal fees. G. Internal External Monitoring 26. LAR preparation implementation will be supervised monitored by the respective project manager in coordination with the MPDO the barangay committee. The findings will be recorded will form part of the quarterly reports to be submitted to the HSDP Unified PMO by them to ADB. 27. Internal monitoring activities will include the following: Verification that the impacts assessments the AP baseline information has been effectively prepared that the valuation of assets lost or damaged, the provision of compensation, other entitlements have been carried out as prescribed by this CPFG; Verification that the necessary insurances for voluntary donation are valid cover all points prescribed by this CPFPG; Oversee that the inventory compensation plan is implemented as designed approved; Verify that funds for implementing the inventory compensation plan are provided by the municipality /or province to the barangay committee in accordance with the approved provisions; Record all grievances resolution mechanisms ensure that complaints

9 are dealt with in a timely manner. 28. LAR preparation will also be monitored evaluated by an external monitoring agency (EMA) be as it may a nongovernment organization, an academic institution or an independent consultant. A detailed external monitoring plan terms of reference for the EMA will be prepared as a condition for project effectiveness by the HSDP unified PMO which will finance External monitoring activities. The EMA will be hired within the first year of project implementation will report semi-annually to the unified PMO at the end of HSDP implementation will prepare a final LAR evaluation report. H. Implementation Schedule 29. The LARC will be prepared within the first year following subproject identification. Payment of compensation provision of other entitlements (in cash or in kind) will be satisfactorily completed prior to the ADB giving "no objection" for award of contract of civil works. The requirement shall also apply if APs voluntarily contribute any part of their l /or assets for the construction of health facilities. Deeds of Donations, donations assurances other relevant legal documents shall be satisfactorily completed submitted to the ADB before it gives a "no objection" for award of contract for civil works to the LGUs.

10 Appendix 1 OUTLINE OF FORMAT FOR A SHORT LARP 1. Introduction This chapter will provide (i) a brief description of the Project (include maps); (ii) description of impacts; (iii) a summary assessment of impacts/affected person (AP) number total l acquisition resettlement (LAR) costs. 2. Impacts Assessment Affected Persons Inventory This chapter will indicate when the impacts assessment was carried out by whom. Include the definition of the assessment beginning to be used as entitlement cut-off date. This chapter will also provide the impacts assessment base line information as follows: Total number of families affected by the subproject Total number of persons affected by the subproject L Impacts assessment (for each AP indicate, area, category, tenure status of affected l; provide general totals) House/structures Impacts assessment (for each AP indicate area type of affected house structure; provide general totals) Crops trees losses assessment [(i) for each AP indicate crops relative area affected; (ii) for each AP indicate type number of trees affected]. Impacts on tenants, lless laborers, informal settlers Impacts on businesses 4. Socio-Economic Information This chapter will include a short socio-economic census with the following information: Description of APs including their ethnic group spatial distribution Socioeconomic characteristics of project affected families Employment types major sources of income; Average income agricultural l area in project areas 5. Compensation Policy, Eligibility, Entitlement Criteria This chapter will summarize the project compensation policy for the subproject based on the provisions of the CPFPG. Issues to be discussed in the text include: Compensation principles, Eligibility/entitlements, including conditions for donations. Compensation entitlements for each category of AP Other assistance (transport allowance, rehabilitation assistance, etc.) Entitlements matrix.

11 Appendix 1 6. Implementation Issues This chapter will provide information on the actual compensation options chosen by the APs. In particular the chapter will detail: Number of AP who chose replacement l, location/dimension of replacement plots assurances of that they are equal in value productivity to the plots lost; Number of APs suffering partial l or house losses but entitled to compensation for their entire properties Number of AP who chose to donate their lot value of donated plots (Deeds of Donation Donation Assurances for each AP will be included in appendix 1) 7. Cost Estimates Budget This chapter will (i) indicate the unit compensation cost at replacement rates for each affected item; (ii) detail the methodology followed in asset valuation, when asset valuation was carried out by whom; (iii) provide a detailed costing of the LAR program. 8. LAR Implementation Issues This section will detail various implementation issues including: a. Public Participation. Consultation Grievance Resolution Consultation with stakeholders at the different stages of the Project. The minutes of the consultation/information meeting inclusive of eventual requests of the APs will be included in Appendix 2. Existing project specific mechanisms for grievance resolution procedures. b. Organizational Set-up Organizational structure of the unit/division within the LGU responsible for management, supervision, implementation of l acquisition resettlement compensation report. c. Implementation Schedule Implementation schedule for l acquisition compensation for each component of the project, including description of different activities their sequence. The schedule will be detailed in a chart clearly indicating the connection between LAR activities civil works activities.

12 Appendix 2 PRELIMINARY SCREENING OF PROJECT LGUs AND PROVINCES AND LAR IMPACT OF CIVIL WORKS PROPOSED The information in this table is provided to give an indication of the type of impacts caused by the project. The provinces municipalities listed are based on a screening exercise but have not yet been selected for project participation. The impacts described may be proven different after the sites have been surveyed. Province/ LGU IFUGAO Lagawe Mayoyao Health Facility Hospitals Type of Civil Works Is L Acquisition Necessary? Are settlers Present in Project Locations? Use of l by settlers Proposed Resettlement Program. Civil works will take place in existing location municipalities RHU BHS New construction Yes known known. Civil works will take place in existing location If l is occupied short LARPs are needed; fair compensation for l owners settlers NUEVA VIZCAYA Bambang Hospital. Civil works will take place in existing location Dupax rte Hospital - Civil works will take place in existing location RHU BHS new construction Yes known known - Civil works will take place in existing location If l is occupied short LARPs needed; fair compensation for l owners settlers ILOCOS NORTE Dingras Hospital. Civil works will take place in existing location Bangui Hospital RHU BHS Yes known known. Civil works will take place in existing location. Civil works

13 Appendix 2 Province/ LGU Health Facility ORIENTAL MINDORO Calapan Hospital Pinamalayan Hospital Type of Civil Works new construction, New construction Is L Acquisition Necessary? Yes Yes Are settlers Present in Project Locations? known known Use of l by settlers known known Proposed Resettlement Program will take place in existing location If l is occupied short LARP needed; fair compensation for l owners settlers Short LARP needed; fair compensation for l owners settlers Short LARP needed; fair compensation for l owners settlers RHU - Civil works will take place in existing location BHS new construction Yes known known If l is occupied short LARPs are needed; fair compensation for l owners settlers ROMBLON Looc Hospital - Civil works will take place in existing location Odiongan Sibuyan Hospital Hospital RHU BHS new construction Yes Yes known known known known - Civil works will take place in existing location - Civil works will take place in existing location If l is occupied short LARP needed; fair compensation for l owners settlers If l is occupied, short LARPs are needed; fair compensation for l owners settlers BHS = barangay health station, LARP = l acquisition resettlement plan, RHU = rural health unit.