M6 INTERSTATE ROAD - Armenia Complaint SG/E/2017/05 Complaints Mechanism - Complaints Mechanis m - Complaints Mechanism - Complaints Mechanism Complaints Mechanism - Complaints Mechanism - Complaints Mechanism - CONCLUSION REPORT 4 July 2017
EIB Complaints Mechanism Prepared by Alfredo Abad Deputy Head of Division Marta Juhasz Case Officer Felismino ALCARPE Head of EIB Complaints Mechanism External Distribution Complainant: Mr Hakob Hakobyan, owner of the Tufenkian Avan Dzoraget Hotel Promoter: Ministry of Transport and Communication of Armenia Internal Distribution Management Committee Secretary General Inspector General EIB services concerned 2.
M6 Interstate Road - Armenia The EIB Complaints Mechanism The EIB Complaints Mechanism provides the public with a tool enabling alternative and preemptive resolution of disputes in cases where the public feels that the EIB Group has done something wrong, i.e. if a member, or members, of the public considers that the EIB has committed an act of maladministration. When exercising the right to bring a complaint against the EIB, any member of the public has access to a two-tier procedure, one internal the Complaints Mechanism Division (EIB-CM) and one external the European Ombudsman (EO). If complainants are not satisfied with the outcome of the EIB-CM s procedure, a confirmatory complaint can be submitted by the complainant within 15 days of receipt of the EIB-CM s reply. Complainants who are not satisfied with the outcome of the EIB-CM s procedure and who do not wish to make a confirmatory complaint may also bring a complaint of maladministration against the EIB before the EO. The EO was created by the Maastricht Treaty of 1992 as an EU institution to which any EU citizen or entity may appeal with a request to investigate any EU institution or body on the grounds of maladministration. Maladministration means poor or failed administration. This occurs when the EIB Group fails to act in accordance with the applicable legislation and/or established policies, standards and procedures, fails to respect the principles of good administration or violates human rights. Some examples, as identified by the European Ombudsman, are: administrative irregularities, unfairness, discrimination, abuse of power, failure to reply, refusal of information, unnecessary delay. Maladministration may also relate to the environmental or social impacts of the EIB Group s activities and to project cycle related policies and other applicable policies of the EIB. The EIB Complaints Mechanism intends to not only address non-compliance by the EIB with its policies and procedures but to endeavour to solve the problem(s) raised by complainants such as those regarding the implementation of projects. For further and more detailed information regarding the EIB Complaints Mechanism, please visit our website: http://www.eib.org/about/cr/governance/complaints/index.htm 3
EIB Complaints Mechanism Table of contents EXECUTIVE SUMMARY 5 1. THE COMPLAINT 7 2. CLAIM 7 4. APPLICABLE REGULATORY FRAMEWORK 8 5. WORK PERFORMED BY THE EIB-CM 11 6. FINDINGS 11 7. CONCLUSIONS 15 LIST OF ACRONYMS 16 4.
M6 Interstate Road - Armenia CONCLUSIONS REPORT EXECUTIVE SUMMARY On 27 January 2017 Mr Hakob Hakobyan, owner of the Tufenkian Avan Dzoraget Hotel (hereinafter the Complainant), submitted a complaint to the Bank in relation to the M6 Interstate Road project in Armenia. The Complainant owns and manages the Tufenkian Avan Dzoraget Hotel, located at km 32+100 on the M6 road between Vanadzor and Alaverdi municipalities. The Complainant claims that he has suffered economic losses due to the road construction works. The Complainant explained that he had an agreement with the construction company to mitigate the negative impacts of the road rehabilitation on his hospitality business, and the agreement worked until October 2016. Since November 2016, however, the agreement has not sufficed to prevent a fourfold decline in revenues. The Complainant has contacted the Promoter to discuss possible mitigating actions, but they were unable to reach a solution. The Complainant requests the Bank to ensure that his losses are reimbursed. The project consists of the rehabilitation and upgrading of the M6 interstate road on a length of about 90 km between Vanadzor in central Armenia and Bagratashen on the north-eastern border between Armenia and Georgia. The Bank is financing the first 38 km section of the project between Vanadzor and Alaverdi municipalities. This section has been divided into three lots for the purposes of the public procurement of construction works. The Tufenkian Avan Dzoraget Hotel is located on the segment corresponding to Lot 2. The project is promoted and implemented by the Ministry of Transport and Communication of Armenia (hereinafter the Promoter), which has delegated implementation functions to the Transport Projects Implementation Unit (Transport PIU), a state institution. Construction works started in September 2016 and are expected to be concluded by 31 December 2020 at the latest according to the Finance Contract. The alleged negative impact of the project on the Tufenkian Avan Dzoraget Hotel concerns the implementation of the EIB Standard on involuntary resettlement, which falls within the remit of the Promoter. Pursuant to the aforementioned EIB Standard, temporary loss of income constitutes an eligible entitlement to measures counterbalancing the adverse economic and social impact of a project on affected persons (AP). The Bank s services have indicated to the EIB-CM that in practice project-induced income losses are first addressed through income restoration measures; if the aforesaid measures cannot be operationalized, compensation provides a fall-back option. The Promoter published a draft Land Acquisition and Resettlement Plan (LARP) in July 2016, while the final LARP is under preparation. The draft LARP established two relevant entitlement categories: 1. temporary interruption of business and 2. temporary loss of jobs of the employees of the affected businesses. The EIB-CM notes that the draft LARP envisions tackling project-induced income losses through compensation, while the document remains silent about possible income restoration measures. The EIB-CM notes that the draft LARP did not identify the Tufenkian Avan Dzoraget Hotel as a business actually operating in the project area, and the Complainant as an AP. Furthermore, the EIB-CM observed that the Bank s operational services are yet to formulate an opinion on whether the Complainant qualifies as an AP pursuant to the EIB Standards and the LARP. 5
EIB Complaints Mechanism The facts of the complaint indicate that the Complainant may fall into the category of APs, eligible for income restoration under the Bank s Standards. In this regard, the EIB-CM takes note that the EIB s operational services have not taken a view on the draft LARP, and the finalisation of the LARP is currently ongoing. Notwithstanding, the Bank will grant nonobjection to the final LARP pursuant to the Bank s Standard on involuntary resettlement. The EIB-CM recommends that the Bank assesses, when granting non-objection to the final LARP, whether the Complainant is listed among the APs and assigned to an appropriate mechanism. If the list of APs does not include the Complainant, the Bank should verify that the decision of the Promoter is supported by a reasoned opinion and is consistent with the Bank s Standards. The monitoring arrangements at project level enable the Bank to follow up the complaint during the implementation phase of the LARP. Based on the Bank s monitoring activity, the EIB-CM will submit a follow-up report to the Complainant 8 months after the submission of the present conclusions report. 6.
M6 Interstate Road - Armenia CONCLUSIONS REPORT Complainant: Mr. Hakob Hakobyan, on behalf of Tufenkian Avan Dzoraget Hotel Date received: 27 January 2017 Subject matter: economic losses due to road construction works Project status: Signed / partially disbursed / under monitoring Board Report: October 2015 Contract amount: EUR 51 m for a period of 20 years 1. THE COMPLAINT 1.1. On 27 January 2017 Mr. Hakob Hakobyan, owner of the Tufenkian Avan Dzoraget Hotel, lodged a complaint with the European Investment Bank. The complaint was forwarded to the EIB-CM the same day. The Complainant alleges that he has suffered economic losses since November 2016, due to the negative impact of road construction works on his hospitality business. 1.2. The Complainant understands that the road construction works will end sometime in 2018. He estimated that in the event that in 2017 and 2018 sales are 4 times less, this means losing USD 600 000 per year, thus in 2 years USD 1.2m. He further highlighted that the revenues from the hotel were supposed to cover his bank debts, so that he was not in a position to close the hotel for two years, i.e. until the M6 road becomes operational again. The Complainant requests the Bank to ensure that his losses incurred due to the rehabilitation of the M6 road are compensated. 1.3. The allegation of the Complainant concerns the implementation of the EIB Standard on involuntary resettlement, which falls within the remit of the Promoter. The EIB-CM is enquiring whether the EIB has assessed and monitored the said social impacts in line with the Bank s environmental and social policy and guidelines. 2. CLAIM 2.1. The Complainant requests the Bank to ensure that his economic losses are reimbursed. 3. THE PROJECT AND THE BANK S FINANCING 3.1. The project consists of the rehabilitation and upgrading of the M6 interstate road on a length of about 90 km between Vanadzor and Bagratashen municipalities in Armenia, situated along the valley of the Debed river. The project contains several hairpin bends, steep inclines, narrow bridges and three tunnels (105m, 270m and 171m in length) which will need to be upgraded. 3.2. The project is part of the Armenian Transport Sector Development Strategy 2020. The M6 interstate road is a crucial transport corridor in Armenia representing the interconnection of the country with Georgia and thus the European Union and is therefore particularly significant for Armenia s exports and imports. The project is promoted by the Ministry of Transport and Communication of Armenia (hereinafter the Promoter), which has delegated implementation functions to the Transport Projects Implementation Unit (Transport PIU). 7
EIB Complaints Mechanism 3.3. The Bank signed with the Republic of Armenia a Finance Contract for an amount of up to EUR 51m to support the project in January 2016. The Bank disbursed the first tranche of the loan in September 2016. Table 1. Project timeline 2015 Apr EIB commences project appraisal 2015 May ESIA submitted by the Promoter 2015 Oct EIB Board report 2016 Jan Finance Contract signed 2016 Jul draft Land Acquisition and Resettlement Plan (LARP) submitted by the Promoter 2016 Sep First disbursement 2016 Sep Construction works start 2017 Jan Complaint submitted to the EIB 2017 Aug Scheduled Second Disbursement Date 2020 Dec Construction works are scheduled for completion 3.4. The project is co-financed by the EIB and the Asian Development Bank (ADB). The Government of Armenia has divided the project into two parts. The EIB is financing the first 38 km section between Vanadzor and Alaverdi municipalities, while the Asian Development Bank is supporting the second section of the project. The first section comprises the following three lots: Lot 1: Rehabilitation and Improvement of the M-6 Vanadzor-Alaverdi-Georgian Border Interstate Road from km 0+000 to km 17+625 Lot 2: Rehabilitation and Improvement of the M-6 Vanadzor-Alaverdi-Georgian Border Interstate Road from km 17+625 to km 30+125 Lot 3: Rehabilitation and Improvement of the M-6 Vanadzor-Alaverdi-Georgian Border Interstate Road from km 30+125 to km 38+450 4. APPLICABLE REGULATORY FRAMEWORK 4.1. Scope of the EIB Complaints Mechanism 4.1.1. When performing its activities, the EIB is bound by the EU Treaties and its Statute as well as by the relevant legislative and regulatory framework of the European Union. The EIB Complaints Mechanism Principles, Terms of Reference and Rules of Procedure (CMPTR) apply to complaints regarding maladministration by the EIB Group in relation to its activities, in support of and for the implementation of the aforementioned policies and regulatory framework. 4.1.2. Maladministration refers to instances where the Bank fails to act in accordance with the applicable legislation and/or established policies, standards and procedures, fails to respect the principles of good administration or violates human rights. 1 Against this background, it is pertinent to highlight that the EIB Complaints Mechanism Division is not competent to investigate complaints concerning international organisations, institutions and bodies of the European Union, national, regional or local authorities (e.g. government departments, state agencies and local councils). 2 1 EIB Complaints Mechanism Principles, Terms of Reference and Rules of Procedure (2012), part II, paragraph 1.2., available at: http://www.eib.org/infocentre/publications/all/complaints-mechanism-policy.htm 2 EIB Complaints Mechanism Principles, Terms of Reference and Rules of Procedure (2012), part IV, paragraph 2.3. 8.
M6 Interstate Road - Armenia 4.2. EIB Statement on Environmental and Social Principles and Standards (2009) 4.2.1. The present complaint relates to the EIB Standard on involuntary resettlement. 3 According to this Standard, people whose livelihoods are negatively affected by a project should have their livelihoods improved or at minimum restored and/or adequately compensated for any losses incurred. 4.3. EIB Environmental and Social Handbook (2013) 4.3.1. 4.3.2. 4.3.3. 4.3.4. 4.3.5. The Environmental and Social Handbook states that the environmental and social impact assessment will take into account all relevant stages of the project cycle, including: preconstruction, construction and operations, decommissioning and reinstatement, ensuring that mitigation measures and actions are identified so that all relevant stages of the project operate in compliance with applicable laws and regulations and EIB Standards. 4 The Handbook also sets out the substantive and procedural requirements that the Promoter has to follow during the implementation of the EIB Standard on involuntary resettlement. 5 One of the objectives pursued by the EIB Standard on involuntary resettlement is to respect the right to property of all affected people and communities and mitigate any adverse impacts arising from their loss of assets, or access to assets and/or restrictions of land use, whether temporary or permanent, direct or indirect, partial or in their totality. The Handbook defines entitlement for the purposes of the EIB Standards. In this context, entitlement refers to a range of measures comprising compensation, income restoration, transfer assistance, income substitution, and relocation which are due to Affected Persons (APs), depending on the nature of their losses, to restore their economic and social base. The Bank s service have informed the EIB_CM that in practice project-induced income losses are first addressed through income restoration measures, which aim to restore the incomeearning capacity of APs. If such measures cannot be deployed, compensation provides a fallback option. APs are identified based on, inter alia, the area of influence of the project. By definition the area of influence comprises areas, individuals and communities impacted beyond the footprint of the project or activity by cumulative impacts from further planned development of the project or other sources of similar impacts in the geographical area, any existing project or condition, and other project-related developments that can realistically be expected at the time due diligence is undertaken. In addition to the area of geographical or spatial influence, temporal influence should also be determined. 6 The Promoter is required to put in place a Resettlement Action Plan (RAP) for all operations that entail involuntary resettlement. It must develop a RAP in line with the EIB s requirements and has to receive the EIB s non-objection before implementation. Arrangements for the implementation of the plan(s) will be agreed with the EIB and incorporated into the RAP and the Finance Contract. 7 3 EIB Statement on Environmental and Social Principles and Standards (2009), paragraph 51. 4 EIB Environmental and Social Handbook (2013), page 19, paragraph 34 5 EIB Environmental and Social Handbook (2013), page 52 et seq. 6 EIB Environmental and Social Handbook (2013), page 5. 7 EIB Environmental and Social Handbook (2013), page 60-61, paragraphs 64, 66. 9
EIB Complaints Mechanism 4.3.6. 4.3.7. 4.3.8. The Promoter prepares the RAP based on a census and a socio-economic baseline survey to establish the number of people to be displaced, livelihoods affected, and property to be compensated. 8 The census should include an inventory of losses (assets, access to resources or services, etc.), a detailed measurement survey and valuation of lost assets, and it covers the total affected population. The Bank s minimum requirements for the RAP include, inter alia: 9 describe the nature and magnitude of project impacts and identify all people to be displaced, paying special attention to vulnerable groups; carry out a census to establish the number of people to be displaced, livelihoods affected, property to be compensated and the cut-off date for eligibility claims; establish the eligibility criteria and describe the entitlements for all categories of displaced people and types of impact suffered; include valuation of and compensation for lost assets and loss of income and demonstrate that these rates are adequate, i.e. at least equal to the replacement cost of lost assets/income or meeting minimum average wage thresholds; prepare a grievance mechanism for the settlement of disputes arising from resettlement-related issues, ensuring access to grievance and recourse for all affected persons; and, include the implementation schedule, budgets, and arrangements for monitoring and evaluation. According to the Handbook, the project s legal agreements will provide for the Promoter s obligations to implement a RAP and to report to the EIB on implementation progress. The promoter must set up necessary systems (i.e. resources, staff, and procedures) to monitor the implementation of a RAP on a regular basis and take corrective action as necessary. Affected persons will be consulted as part of the monitoring activities. The implementation and effectiveness of the resettlement action plan will be subject to independent monitoring and review. 10 4.4. Finance Contract 4.4.1. 4.4.2. 4.4.3. Article 1.04B of the Finance Contract provides that the disbursement of the second Tranche is conditional upon receipt by the Bank, in form and substance satisfactory to it, on or before the date falling 7 (seven) Business Days before the Scheduled Disbursement Date, of the following documents or evidence: (a) from the Promoter and if deemed necessary by the Bank: (i) a copy of the approved LARP; (ii) a copy of the independent review confirming implementation of the LARP evidencing that 100% of the acquired land is made available to the Promoter Pursuant to Article 6.05 paragraph (e) subparagraph (i) of the Finance Contract, the Borrower must ensure that it implements and operates the Project in compliance with and in due consideration of the requirements of Environmental and Social Standards. Pursuant to Article 8.01 and Schedule A.2 of the Finance Contract, the Promoter must deliver to the Bank semi-annual project progress reports that include a report on environmental and 8 EIB Environmental and Social Handbook (2013), page 56, paragraph 30. 9 EIB Environmental and Social Handbook (2013), page 61, paragraph 68. 10 EIB Environmental and Social Handbook (2013), page 62, paragraph 70. 10.
M6 Interstate Road - Armenia social monitoring, including adequate reference to labour standards, occupational health and safety as well as evidence of the progress in implementing the LARPs. 5. WORK PERFORMED BY THE EIB-CM 5.1.1. 5.1.2. In light of the concerns of the Complainant, the EIB-CM liaised with the EIB s operational services. This served to clarify the background of the project, the status of implementation and the Bank s involvement, and enabled an exchange of views on the issues raised by the Complainant. The EIB-CM reviewed the relevant documents of the project, including the appraisal fact sheet, the Environmental and Social Impact Assessment (hereinafter the ESIA), the contractual arrangements and the exchange of communication between the operational services of the Bank, the Promoter and the Complainant. 6. FINDINGS 6.1.1. 6.1.2. 6.1.3. 6.1.4. In July 2016 the Promoter submitted a draft LARP to the EIB. The final LARP is under preparation at the time of writing of the present report. The draft LARP concerns exclusively the section financed by the EIB (km 0+000 km 38+450). The project s alleged negative impact on the Tufenkian Avan Dzoraget Hotel may relate to two entitlement categories listed in the LARP: 1. temporary interruption of business (entrepreneurship) and 2. temporary job loss. While the Complainant s claim centres on the loss of revenue, the EIB-CM considers it appropriate to mention the provisions of the LARP that may apply to the employees of the Hotel. The EIB-CM notes that the draft LARP envisions tackling project-induced income losses through compensation, while the document does not mention other possible income restoration measures. The draft LARP provides the following definition of the first entitlement category: 11 Interruption of Business (entrepreneurship) a) Compensation for loss of business with tax declaration will be provided in case permanent and temporary stoppage of business (entrepreneurship), as follows: Permanent loss of business (entrepreneurship) will be compensated in cash equal to a 1-year net income based on tax declaration; Temporary impact i.e. stoppage of business (entrepreneurship) will be compensated in cash equal to the monthly income based on tax declaration for the months of stoppage. State registration and license fees will also be compensated, if any. b) In absence of tax declaration permanent and temporary losses business (entrepreneurship) the compensation will be made in the above mentioned way based on the minimum monthly salary. State registration and license fees will also be compensated, if any. 6.1.5. Regarding the calculation methodology, the draft LARP makes the following statement: 11 Draft LARP (2016), paragraph 106. 11
EIB Complaints Mechanism In case of impacts on businesses and/or employment losses identified during the LARP finalization the relevant compensation will be calculated based on requirements of Entitlement matrix of this LARP. The compensation for affected businesses will be calculated based on the tax information from government bodies provided during the finalization of LARP. The compensation for affected employees will be calculated during the finalization of LARP based on the list of affected employees and their average salaries received from the respective government body. However, for the affected businesses (affected commercial and industrial buildings) the average estimation was made based on the similar projects data. The estimated compensation for businesses is 11,455,000AMD. The calculation mechanism applied for estimation is presented in Table J7. Table J7: Estimated compensation for affected businesses 12 6.1.6. 6.1.7. 6.1.8. Regarding the entitlement category of temporary job loss, the LARP provides that employees who have worked for an affected business (company or individual entrepreneurship) by employment contract and suffered forced downtime not through the employee's fault can apply for cash compensation. 13 The employee will receive a cash indemnity for all months of business stoppage based on the average salary up to 6 months. 14 The draft LARP is based on a preliminary social impact assessment. As regards businesses affected by the project, the draft LARP states that it was not possible to identify type of businesses actually operating in the Project affected areas at this stage, in this draft LARP the number of affected businesses is based on the number of affected non-residential (commercial and industrial) buildings. The final actually affected number and type of businesses will be done during the final LARP preparation stage via DMS (Detailed Measurement Survey) and inventory of assets. 15 The draft LARP has identified five businesses permanently affected by the project, in other words, subjected to relocation. The draft LARP notes that the preliminary social impact assessment could not encompass the extent of temporary impact on businesses due to construction works. The actual number of affected businesses, as well as the type of impact 12 Draft LARP (2016), paragraph 160-161. (http://mtcit.am/edfiles/files/tsig/m6-3.pdf) 13 Draft LARP (2016), page 11, 49. 14 Ibid. 15 Draft LARP (2016), paragraph 160. 12.
M6 Interstate Road - Armenia on businesses (temporary or permanent) will be verified at the LARP finalization stage through a detailed measurement survey (DMS) and census. 16 6.1.9. Based on the aforesaid, the EIB-CM finds that the draft LARP did not identify the Tufenkian Avan Dzoraget Hotel as a business affected by the project, and the Complainant as an AP. 6.1.10. The Tufenkian Avan Dzoraget Hotel is located on the segment corresponding to Lot 2, at km 32+100, close to the second tunnel of the M6 Road. The Complainant explained that tour operators and guests have perceived passing through the construction area as perilous and are therefore avoiding this section of the M6 road. 6.1.11. At its outset, the Debed River Valley constitutes a narrow strait, frequently affected by rockfalls and landslides. 17 Accordingly, the procurement notice for construction works approved by the EIB stipulated specific provisions on traffic management during construction works. Due to the characteristic of the existing road, is no possible to make a temporary widening during construction, such as to allow the upgrading works simultaneously across the full carriageway. It is therefore necessary to provide the construction of a half-carriageway at a time, forcing traffic to take place on a single lane with the system of the alternate one-way. To minimize the negative impact on the traffic, it will need to contain the length of the sections under construction to no more than 500 m. In case of multiple interventions on the same lot, they should be spaced at least 2 km. To ensure a sufficient level of security both to vehicles in transit and to the men at work, appropriate signage will be installed, located at a distance sufficient to allow the stop of passing vehicles - about 200 m - and managing the alternate traffic with traffic lights, which will operate even in the periods of suspension of work, for example during the night. All these measures have to be taken and managed by the Contractor, after the approval of the relevant proposal by the competent local Authorities and Police. 18 6.1.12. During the course of the complaint s handling, the EIB s operational services informed the EIB-CM that due to the construction works, the road section from km 28+140 to km 35+650 is operating with restricted availability, i.e. it is only available to local traffic and should not be considered to be available to national traffic. This is due to the fact that it is impossible to carry out the widening of the existing tunnel (from km 30+579 to km 30+800) while the road is fully open to traffic. The construction works at the tunnel are scheduled for completion in August 2017. Because of this circumstance, travellers from Vanadzor to the hotel are advised to use an alternative route (H22) that is longer and costs additional time. The EIB s operational services further explained that travellers from Alaverdi to the hotel must consult the Traffic Police Department in order to know the time and location of blasting operations on the road. The schedule of blasting operations is always communicated on time by the construction company to the Traffic Police Department. The Technical Specifications in force allow for onelane closure over a limited length of road (1 km) and require a minimum distance of 2 km between the closed lanes. Figure 1: location of the hotel and the alternative route H22 16 Draft LARP (2016), paragraph 58-59. 17 The procurement notice described the location of the M6 road in the following way: the road has many difficulties due to the morphology the land crossed - a narrow valley of the Pambak and Debed Rivers where is located also the railway to Georgia - and the geological ground conditions, mostly subject to landslides and rockfalls. The road has a narrow cross-section, in some sections of 5 6 m. Sub-vertical slopes generally flank it. In addition, the horizontal alignment is very tortuous, with many curves of radius below the minimum required by the minimum design standard for an Interstate Highway (Class III.b). Source: Invitation for Bids - Armenia-Yerevan: EIB - Road rehabilitation 2016/S 066-114047 (OJ/S S66 05/04/2016) 18 Invitation for Bids - Armenia-Yerevan: EIB - Road rehabilitation 2016/S 066-114047 (OJ/S S66 05/04/2016) 13
EIB Complaints Mechanism 6.1.13. As the project documents and the draft LARP attest, it was foreseen that despite the best preventive efforts, the construction works of the project would cause temporary interruption to business activities along the M6 road. 6.1.14. Pursuant to the EIB Standard on involuntary resettlement, temporary loss of income constitutes an eligible entitlement category. The draft LARP transposes this entitlement into the legal framework of the project and establishes a calculation mechanism. The EIB-CM observes that the LARP is under preparation and that the Bank has not taken a view on the document. The final LARP is subject to the non-objection of the Bank. 19 6.1.15. Likewise, the operational services are yet to formulate an opinion on whether the Complainant falls within the category of APs pursuant to the Bank s Standards. The EIB-CM notes that the Complainant met the representative of the ADB in August 2016, who put him in contact with the EIB s operational services as the Complainant s claim relates to the road section financed by the EIB. In September 2016 the EIB s operational services informed the Complainant that the Promoter was preparing alternative routes to divert traffic from the road section concerned and encouraged the Complainant to explore possible solutions with the Promoter. 6.1.16. The facts of the case indicate that the Complainant may fall into the category of APs, eligible for income restoration under the Bank s Standards. The EIB-CM reiterates that the final LARP is being prepared by the Promoter, but that the draft LARP did not identify the Tufenkian Avan Dzoraget Hotel as a business affected by the project, and the Complainant as an AP. 6.1.17. The EIB-CM recommends that the Bank should assess, when granting its non-objection to the final LARP, whether the Complainant is listed among the APs and assigned to an appropriate mechanism. In the event that the list of APs does not include the Complainant, the Bank should check that the Promoter s decision is supported by a reasoned opinion based on the 19 EIB Environmental and Social Handbook (2013), page 61, paragraph 66; Finance Contract, Article 1.04B 14.
M6 Interstate Road - Armenia Bank s Standards. The monitoring arrangements at project level enable the Bank to follow up the complaint during the implementation phase of the LARP. 6.1.18. Article 8.01 of the Finance Contract and the draft LARP describe the monitoring duties of the Bank in relation to the LARP implementation. According to the draft LARP, LARP implementation will routinely be monitored internally by the TPIU ( ), with outcomes reported to EIB in Semiannual Environmental and Social Monitoring Progress Reports (SESMPR) reports that will be posted on the EIB website as well as in the Quarterly Progress Reports (QPR). The LARP implementation compliance will be monitored externally by an External Monitoring Agency (EMA), for reporting to EIB. The approval of EMA s Compliance Report(s) by EIB will be condition for commencement of civil works. Pursuant to Article 8.01 of the Finance Contract the Promoter must submit semi-annual project progress reports evidencing the implementation of the LARP. 7. CONCLUSIONS 7.1. Through a desk review of project documents and consultation with the Complainant and the EIB s operational services, the EIB-CM was able to reach a conclusion on the merits of the present complaint. 7.2. The EIB-CM notes that the draft LARP did not identify the Tufenkian Avan Dzoraget Hotel as a business affected by the project, and the Complainant as an AP. This is owing to the fact that the preliminary social impact assessment did not examine the project s temporary impact on businesses due to construction works. The final LARP is expected to account for the actual number of temporarily and permanently affected businesses. The LARP finalization is in progress at the time of writing of this report. 7.3. The EIB-CM considers, based on the facts of the case that the Complainant may fall into the category of APs, eligible for income restoration under the Bank s Standards. At the same time, the EIB-CM notes that the Promoter is currently preparing the final LARP. 7.4. The Bank is recommended to check whether the Complainant is listed among the APs and assigned to an appropriate mechanism in line with the standards and practice of the Bank when the Bank approves the final LARP. In addition, the monitoring arrangements at project level enable the Bank to follow up the complaint during the implementation phase of the LARP. 7.5. Based on the Bank s monitoring activity, the EIB-CM will submit a follow-up report to the Complainant 8 months after submitting the present conclusions report. F. Alcarpe Head of Division Complaints Mechanism 04.07.2017 A. Abad Deputy Head of Division Complaints Mechanism 04.07.2017 15
EIB Complaints Mechanism LIST OF ACRONYMS AMD AP CMPTR EMA DMS EIB-CM LARP MOTC TPIU QPR SESMPR Armenian dram Affected Person Complaints Mechanism Principles, Terms of Reference and Rules of Procedure External Monitoring Agency Detailed Measurement Survey European Investment Bank Complaints Mechanism Land Acquisition and Resettlement Plan Ministry of Transport and Communication Transport Projects Implementation Unit Quarterly Progress Reports Semiannual Environmental and Social Monitoring Progress Reports 16.