Yuzana Company Ltd.

Land Development Policy

Corporate Policies and Procedures: Land Development

June 2015

“We are ready to adopt and implement corporate policies and compliance procedures that comply with international norms, support free markets, and embrace democracy.”

--U Htay Myint, Chairman of Yuzana Company Ltd.

 

 
This Yuzana Company Ltd. (“Yuzana”) Land Development Policy (“Policy”) memorializes our commitment to uphold and respect international norms pertaining to land acquisition, resettlement, and sustainable development. The formalization, adoption, and communication of this Policy provides a foundation for Yuzana to identify and manage its impact on affected communities and the environment, mitigate risks and maximize opportunities for the advancement of land rights, and promote sound and sustainable environmental and social performance. This Policy also addresses concerns about the environmental impact of proposed land development projects by providing for the review, analysis, and public release of Yuzana reports and findings on the topic. The Government of Myanmar, with the strong support of the international community has been actively promoting that local and foreign investors consider the environmental and social impact of their respective investments and Yuzana will look to lead the way on these topics.

Compliance with this Policy reduces the potential for negative reputational risks, and presents opportunities for engagement and collaboration with land rights, environmental, and sustainable development advocates. Any organizations or investors inquiring as to Yuzana’s approach to such issues, particularly those seeking to learn how Yuzana engages in land development, can look to this Policy for guidance.

Yuzana is committed to respecting, and upholding, land rights for all people, and to sustainable development practices in Myanmar. Yuzana will take measures to ensure conformity with international norms for land development, including the adaptation of newly drafted applicable laws and regulations of Myanmar, including the National Land Use Policy currently in draft with input from a variety of local and national stakeholders and public consultation; the law is expected to be finalized in 2015 or early 20161. In order to comply with international norms, this Policy adopts the World Bank Group International Finance Corporation’s “Performance Standards on Environmental and Social Sustainability,” which have become globally recognized as establishing the benchmarks for environmental and social risk management in the private sector. In particular, Performance Standards 1 and 5 clarify corporate responsibilities to address land acquisition and involuntary resettlement, as well as the assessment and management of environmental and social risks and impacts. Although this Policy predominately relates to Performance Standards 1 and 5, the “Performance Standards on Environmental and Social Sustainability” are incorporated into this Policy in their entirety, especially to the extent that references are made herein to Performance Standards other than 1 and 5.

This Policy applies to Yuzana, the entities that it owns, the entities in which it holds a majority interest, and the facilities that it manages. Yuzana is also committed to working with and encouraging its partners to uphold the principles of this Policy and to adopt similar policies.

Following substantial research and benchmarking of industry best practices, Yuzana has developed a formalized approach to land development. Although respect for and advancement of such development practices have always been integral to Yuzana’s business operations and relationships, this Policy is designed to supplement already existing policies. Yuzana is fully committed to adhering to such an approach over the long-term.

Upon the enactment of national legislation pertaining to land use development—in particular, the National Land Use Policy noted above—Yuzana will incorporate the legal mandates of such legislation into this Policy as part of their effort to support Myanmar’s ongoing legal reform.

Through incorporation of these laws, Yuzana will continue to advance the IFC Performance Standards to the extent permissible under local law. However, to the extent that such domestic laws are deficient, and not otherwise inconsistent with the Performance Standards detailed herein, Yuzana will continue to implement international best practices for land development.

I.                   I.     PURPOSE

 

Yuzana Company Ltd. (together with its subsidiaries, “Yuzana” or the “Company”) has adopted this Land Development Policy (“Policy”) in order to provide guidance to Yuzana’s employees, directors, contractors, partners, and vendors regarding land development, resettlement, and acquisition responsibilities, environmental and social risk protection standards, and to instruct those parties on the implementation of the Policy. It also provides affected landowners, land users, and the public at large with practical information pertaining to Yuzana’s land development and environmental protection processes.

This Policy is designed to ensure respect for the universally recognized property rights of those individuals impacted by the Company’s operations, to ensure compliance with applicable laws, and to outline sustainable development standards to protect the environment and resources of Myanmar.

With respect to this Policy, Yuzana operations include any aspect of the operations of the Company or its affiliates and subsidiaries. Under this Policy, a “contractor” or “third party service provider” is defined as an entity or individual providing and receiving payment for services or goods related to Yuzana operations. This definition includes subcontractors.

Yuzana complies with all applicable laws concerning land acquisition and compensation, and supports efforts to strengthen and reform such laws, while also aligning this Policy with international best practices and norms. Furthermore, Yuzana shall implement international best practices and norms for sustainable development in order to address any and all environmental and social risk concerns arising from its participation in land development projects.

The international best practices adopted by this Policy are those detailed in the World Bank Group International Finance Corporation’s “Performance Standards on Environmental and Social Sustainability”2 (“IFC PS”), as well as pertinent international treaties and conventions. In implementing this Policy, Yuzana may specifically refer to Performance Standards 1 and 5, as well as to other relevant standards in the IFC PS. These practices are intended to supplement the applicable laws and regulations of Myanmar. Yuzana shall to the extent possible work to achieve outcomes that are consistent with the IFC PS regardless of whether the relevant laws and regulations meet their requirements. This Policy is implemented in two separate but inter-related parts: (1) Land Acquisition and Involuntary Resettlement, and (2) Assessment and Management of Environmental and Social Risks and Impacts.

This Policy demands full compliance. Non-compliance may be addressed by Yuzana’s senior management or their designees (i.e., the Ethics Committee). Employees, suppliers, partners or any other stakeholders can communicate land development concerns through the same channels as they would with respect to any other ethical issue. This Policy is to be implemented and enforced in conjunction with other Yuzana policies.

  

II.                II.     Land Acquisition and Involuntary Resettlement

 

1.      Introduction

 
1.1.     
Yuzana respects the land rights of all individuals impacted by its operations. Yuzana recognizes that its land development projects can have adverse impacts on communities and persons that use the impacted land. Such adverse impacts include involuntary resettlement of impacted individuals.

1.2.      Involuntary resettlement refers both to physical displacement (relocation or loss of shelter) and to economic displacement (loss of assets or access to assets that leads to loss of income sources or other means of livelihood) as a result of project-related land acquisition and/or restrictions on land use.

1.3.      Resettlement is considered involuntary when affected persons or communities do not have the right to refuse land acquisition or restrictions on land use that result in physical or economic displacement. This occurs in cases of: (i) lawful expropriation or temporary or permanent restrictions on land use; and (ii) negotiated settlements in which the buyer can resort to expropriation or impose legal restrictions on land use if negotiations with the seller fail.

1.4.      Unless properly managed by the parties involved, involuntary resettlement may result in long-term hardship and impoverishment for the affected communities and persons, as well as environmental damage, and adverse socio-economic impacts in those areas to which they have been displaced. Although involuntary resettlement should always be avoided, where it is unavoidable, it should be minimized, and appropriate measures to mitigate adverse impacts on displaced persons and host communities should be carefully planned and implemented.

1.5.      Although the government often plays a central role in the land acquisition and resettlement process, including the determination of compensation, Yuzana may be involved in compensation and resettlement activities. Therefore, it is important for Yuzana and its affiliates to actively engage in activities to improve the livelihoods of those affected by resettlement and aspire to create innovative and fair approaches for doing so.

1.6.      In order to avoid expropriation and eliminate the need to use governmental authority to enforce relocation, Yuzana will first use negotiated settlements, meeting the requirements of this Policy, even if it has the legal means to acquire land without consent.

 

2.      Objectives

 

2.1.      To avoid, and minimize when avoidance is not possible, displacement by exploring alternative project designs.

2.2.      To avoid forced eviction.

2.3.      To anticipate and avoid, or minimize where avoidance is not possible, adverse social and economic impacts from land acquisition or restrictions on land use by: (i) providing compensation for loss of assets at replacement cost; and (ii) ensuring that resettlement activities are implemented with appropriate disclosure of information, consultation, and the informed participation of those affected.

2.4.      To improve, or restore, the livelihoods and standards of living of displaced persons.

2.5.      To improve living conditions among physically displaced persons through the provision of adequate housing with security of tenure3 at resettlement sites.

 

3.      Scope of Application

 

3.1.      This Policy requires that all Yuzana employees (including affiliate or subsidiary employees) and third party service providers adhere to its provisions.

3.2.      Applicability of the Land Development Management System is established in the environmental and social risks and impacts identification process detailed in Part III below (See Paragraph 9.3).

3.3.      This Policy applies to physical and/or economic displacement resulting from the following types of land-related transactions:

1.                  Land rights or land use rights acquired through expropriation or other compulsory procedures in accordance with the laws of Myanmar;

2.                  Land rights or land use rights acquired through negotiated settlements if failure to reach settlement would have resulted in expropriation or other compulsory procedures;

3.                  Situations where involuntary restrictions on land use and access to natural resources cause a community or group within a community to lose access to resource usage where they have traditional or recognizable usage rights (irrespective of formal ownership by affected persons);

4.                  Certain situations requiring eviction of people occupying land without formal, traditional, or recognizable usage rights;4 or

5.               Restriction on access to land or use of other resources including communal property and natural resources such as marine and aquatic resources, timber and non-timber forest products, freshwater, medicinal plants, hunting and gathering grounds, and grazing and cropping areas.

3.4.      This Policy does not apply to resettlement resulting from voluntary land transactions (i.e., market transactions in which the seller is not obliged to sell and the buyer cannot resort to expropriation or other compulsory procedures sanctioned by the legal system of Myanmar if negotiations fail). It also does not apply to impacts on livelihoods where a project is not changing the land use of the affected groups or communities.

3.5.      If impact on land, assets, or access to assets becomes significantly adverse to a particular population at any stage of a project, Yuzana shall apply the requirements of this Policy, even where no land acquisition or land use restriction is involved.

3.6       It should also be noted that Myanmar’s regulatory and legal landscape as it relates to land use is changing and adapting, through multi-stakeholder engagement, appropriate and applicable standards. Yuzana will monitor and may implement changes to this Policy in accordance with legal developments in Myanmar to remain in compliance with local law.

 

4.      Requirements

 

4.1.      Project Design: Yuzana will consider feasible alternative project designs to avoid or minimize physical and/or economic displacement, while balancing environmental, social, and financial costs and benefits, paying particular attention to impacts on the poor and vulnerable.

4.2.      Compensation and Benefits for Displaced Persons: When displacement cannot be avoided, Yuzana will offer displaced communities and persons compensation for loss of assets at full replacement cost and other assistance5 to help them improve or restore their standards of living or livelihoods. Compensation standards will be transparent and applied consistently to all communities and persons affected by the displacement. Where livelihoods of displaced persons are land-based,6 or where land is collectively owned, Yuzana will, where feasible,7 offer land based compensation to those displaced. Yuzana will take possession of acquired land and related assets only after compensation has been made available8 and, where applicable, resettlement sites and moving allowances have been provided to the displaced persons in addition to compensation.9  Yuzana will also provide opportunities to displaced communities and persons to derive appropriate benefits from the project.

4.3.      Community Engagement: Yuzana will engage with affected communities, including host communities, through the process of stakeholder engagement described in Part III of this Policy, below (See Paragraphs 9.21-9.23). Decision-making processes related to resettlement and livelihood restoration should include options and alternatives, where applicable. Disclosure of relevant information and participation of affected communities and persons will continue during the planning, implementation, monitoring, and evaluation of compensation payments, livelihood restoration activities, and resettlement to achieve outcomes that are consistent with the objectives of this Policy.10

4.4.      Grievance Mechanism: Yuzana will establish a grievance mechanism to receive and facilitate resolution of affected communities’ concerns and grievances about Yuzana’s involvement in land acquisition or involuntary resettlement. The grievance mechanism will be scaled to the risks and adverse impacts of the project, and the affected communities will be its primary user. It should seek to resolve concerns promptly, using an understandable and transparent consultative process that is culturally appropriate, readily accessible, and at no cost and without retribution to the party that originated the issue or concern. The mechanism should not impede access to judicial or administrative remedies. Yuzana will inform affected communities about the mechanism in the course of the stakeholder engagement process.

4.5.      Resettlement and Livelihood Restoration Planning and Implementation: Where involuntary resettlement is unavoidable, either as a result of a negotiated settlement or expropriation, a census will be carried out to collect appropriate socio-economic baseline data to identify the persons who will be displaced by the project, determine who will be eligible for compensation and assistance, and discourage ineligible persons, such as opportunistic settlers from claiming benefits. In the absence of government procedures, Yuzana will establish a cut off date for eligibility. Information regarding the cut-off date will be well documented and disseminated throughout the project area.

4.6.      In cases where affected persons reject compensation offers that meet the requirements of this Policy and, as a result, expropriation or other legal procedures are initiated, Yuzana will explore opportunities to collaborate with relevant government agencies, and, if permissible, play an active role in resettlement planning, implementation, and monitoring (See paragraphs 5.1-5.3).

4.7.      Yuzana will establish procedures to monitor and evaluate the implementation of a Resettlement Action Plan or Livelihood Restoration Plan (See Paragraphs 4.11 and 4.17), and take corrective action as necessary. The extent of monitoring activities will be commensurate with a project’s risks and impacts. For projects with significant involuntary resettlement risks, staggered compensation payments may be made where one-off cash payments would demonstrably undermine social and/or resettlement objectives, or where there are ongoing impacts to livelihood activities. Yuzana will retain competent resettlement professionals to provide advice on compliance with this Policy and to verify Yuzana’s monitoring information. Affected persons will be consulted during the monitoring process.

4.8.      Implementation of a Resettlement Action Plan or Livelihood Restoration Plan (See Paragraphs 4.11 and 4.17) will be considered complete when the adverse impacts of resettlement have been addressed in a manner that is consistent with the relevant plan, as well as with the objectives of this Policy. Depending on the scale and/or complexity of physical and economic displacement associated with a project, it may be necessary for Yuzana to commission an external audit upon completion of the Resettlement Action Plan or Livelihood Restoration Plan to assess whether the provisions have been met. This completion audit should be undertaken once all mitigation measures have been substantially completed and once displaced persons are deemed to have had adequate opportunity and assistance to sustainably restore their livelihoods. The completion audit will be conducted by competent resettlement professionals, and will include at a minimum a review of the totality of mitigation measures implemented by Yuzana, a comparison of implementation outcomes against agreed objectives, and a conclusion as to whether the monitoring process should resume and continue.

4.9.      Where the exact nature or magnitude of potential physical and/or economic displacement is unknown due to the stage of project development, Yuzana will develop a Resettlement and/or Livelihood Restoration Framework including general principles compatible with this Policy. Once the individual project components are defined and the necessary information becomes available, such a framework will be expanded into a specific Resettlement Action Plan or Livelihood Restoration Plan in accordance with Paragraphs 4.11 and 4.17 below.

4.10.    Displacement: Displaced persons may be classified as persons: (i) who have formal legal rights to the land or assets they occupy or use; (ii) who do not have formal legal rights to land or assets, but have a claim to land that is recognized or recognizable under the laws of Myanmar; or (iii) who have no recognizable legal right or claim to the land or assets they occupy or use. A census will establish the status of displaced persons. Project-related land acquisition and/or restrictions on land use may result in the physical displacement of people as well as their economic displacement. Consequently, the requirements of this Policy with respect to physical displacement and with respect to economic displacement may simultaneously apply.11

4.11.    Physical Displacement: In the case of physical displacement, Yuzana will develop a

  1. Resettlement Action Plan that covers, at a minimum, the applicable requirements of this Policy regardless of the number of people affected. This will include compensation at full replacement cost for land and other assets lost. The plan will be designed to mitigate the negative impacts of displacement; identify development opportunities; develop a resettlement budget and schedule; and establish the entitlements of all categories of affected persons (including host communities).
  2. Particular attention will be paid to the needs of the poor and the vulnerable. Yuzana will document all transactions to acquire land rights, as well as compensation measures and relocation activities.

4.12.    If people living in a project area are required to move to another location, Yuzana will: (i) offer displaced persons choices among feasible resettlement options, including adequate replacement housing or cash compensation where appropriate; and (ii) provide relocation assistance suited to the needs of each group of displaced persons. New resettlement sites built for displaced persons must offer improved living conditions. The preferences of displaced persons with respect to relocating in preexisting communities and groups will be taken into consideration. Existing social and cultural institutions of the displaced persons and host communities will be respected.

4.13.    In the case of physically displaced persons under Paragraph 4.10 (i) or (ii), Yuzana will offer the choice of replacement property with equal or higher value, security of tenure, equivalent or better characteristics, and advantages of location or, where appropriate, cash compensation. Compensation in kind should be considered in lieu of cash. Cash compensation levels should be sufficient to replace the lost land and other assets at full replacement cost in local markets.12

4.14.    In the case of physically displaced persons under Paragraph 4.10 (iii), Yuzana will offer a choice among options for adequate housing with security of tenure so that they can legally resettle without having to face the risk of forced eviction. Where these displaced persons own and occupy structures, Yuzana will compensate them for the loss of assets other than land, such as dwellings and other improvements to the land, at full replacement cost, provided that these persons have been occupying the project area prior to the cut-off date for eligibility. Based on consultation with such displaced persons, Yuzana will provide relocation assistance sufficient for purposes of restoring their standards of living at an adequate alternative site.13

4.15.    Yuzana is not required to compensate or assist those who encroach on the project area after the cut-off date for eligibility, provided the cut-off date has been clearly established and made public.

4.16.    Forced evictions14 will not be carried out except in accordance with applicable laws and the requirements of this Policy.

4.17.    Economic Displacement: In the case of projects involving only economic displacement,

  1. Yuzana will develop a Livelihood Restoration Plan to compensate affected persons and/or communities and offer other assistance that meets the objectives of this Policy. The Livelihood
  2. Restoration Plan will establish the entitlements of affected persons and/or communities and will ensure that these entitlements are provided in a transparent, consistent, and equitable manner.
  3. The mitigation of economic displacement will be considered complete when affected persons or communities have received compensation and other assistance according to the requirements of the Livelihood Restoration Plan and this Policy, and are deemed to have been provided with adequate opportunity to reestablish their livelihoods.

4.18.    If land acquisition or restrictions on land use result in economic displacement, defined as the loss of assets and/or means of livelihood, regardless of whether or not the impacted parties are physically displaced, Yuzana will meet the requirements in Paragraphs 4.19-4.21, as applicable.

4.19.    Economically displaced persons who face loss of assets or access to assets will be compensated for such loss at full replacement cost:

  1. In cases where land acquisition or restrictions on land use affect commercial structures, affected business owners will be compensated for the cost of reestablishing commercial activities elsewhere, for lost net income during the period of transition, and for the costs of the transfer and reinstallation of the plant, machinery, or other equipment;
  2. In cases affecting persons with legal rights or claims to land which are recognized or recognizable under the laws of Myanmar, replacement property (e.g., agricultural or commercial sites) of equal or greater value will be provided, or where appropriate, cash compensation will be paid at full replacement cost; and
  3. Economically displaced persons who are without legally recognizable claims to land will be compensated for lost assets other than land (such as crops, irrigation infrastructure, and other improvements made to the land), at full replacement cost. Yuzana is not required to compensate or assist opportunistic settlers who encroach on the project area after the cut-off date for eligibility.

4.20.    In addition to compensation for any lost assets, as required under Paragraph 4.19, economically displaced persons whose livelihoods or income sources are adversely affected will also be provided opportunities to improve, or at least restore, their income earning capacity, production levels, and standards of living:

  1. For persons whose livelihoods are land-based, replacement land that has a combination of productive potential, locational advantages, and other factors at least equivalent to the land being lost should be offered as a matter of priority;
  2. For persons whose livelihoods are natural resource-based and where project related restrictions on access described in Paragraph 3.3 apply, measures will be taken to either allow continued access to affected resources or provide access to alternative resources with equivalent livelihood-earning potential and accessibility. Where appropriate, benefits and compensation associated with natural resource usage may be collective in nature rather than oriented towards individuals or households.
  3. If circumstances prevent Yuzana from providing land or similar resources as described above, alternative income earning opportunities may be provided, such as credit facilities, training, cash, or employment opportunities. Cash compensation alone, however, is frequently insufficient to restore livelihoods.

4.21. Transitional support will be provided as necessary to all economically displaced persons based on a reasonable estimate of the time required to restore their income earning capacity, production levels, and standards of living.

 

5.      Yuzana’s Responsibilities Under Government-Managed Resettlement

 

5.1.      Where land acquisition and resettlement are the responsibility of the government, Yuzana will collaborate with the relevant government agencies, to the extent possible, in order to achieve outcomes that are consistent with this Policy. In addition, where government capacity is limited, Yuzana will play an active role during resettlement planning, implementation, and monitoring, as described below.

5.2.      In the case of acquisition of land rights or access to land through compulsory means or negotiated settlements involving physical displacement, Yuzana will identify and describe government resettlement measures.15 If these measures do not meet the relevant requirements of this Policy, Yuzana will prepare a Supplemental Resettlement Plan that, together with actions by the responsible government agency, will address the relevant requirements of this Policy (i.e., the General Requirements and requirements for Physical Displacement and Economic Displacement above). Yuzana will at a minimum include in its Supplemental Resettlement Plan: (i) identification of affected people and impacts; (ii) a description of regulated activities, including the entitlements of displaced persons provided under the applicable laws and regulations of Myanmar; (iii) the supplemental measures to be undertaken to fulfill the requirements of this Policy, as described in Paragraphs 4.11-4.21, in a way that is permitted by the responsible agency; and (iv) the financial and implementation responsibilities of Yuzana, including a time schedule, in the execution of its Supplemental Resettlement plan.

5.3.      In the case of projects involving only economic displacement, Yuzana will identify and describe the measures that the responsible government agency plans to use to compensate affected communities and persons. If these measures do not meet the relevant requirements of this Policy, Yuzana will develop an Environment and Social Action Plan to complement the government action. This may include additional compensation for lost assets, and additional efforts to restore lost livelihoods where applicable.

  

III.            III.     Assessment and Management of Environmental and Social Risks and Impacts

 

6.      Introduction

 

6.1.      This Policy underscores the importance of managing environmental and social risks and impacts throughout the full course of a project. An effective Environmental and Social Management System (“ESMS”) is a dynamic and continuous process initiated and supported by Yuzana management, and involves engagement between the Company, its workers, local communities directly affected by the project (“the affected communities”) and, where appropriate, other stakeholders.16 A good ESMS appropriate to the nature and scale of the project promotes sound and sustainable environmental and social performance, and can lead to improved financial, social, and environmental outcomes.

6.2.      At times, the assessment and management of certain environmental and social risks and impacts may be the responsibility of government or third parties over which Yuzana does not have control or influence. Examples include: (i) when early planning decisions are made by the government or third parties which affect the project site selection and/or design; and/or (ii) when specific actions directly related to the project are carried out by the government or third parties, such as providing land for a project which may have previously involved the resettlement of communities or individuals. While Yuzana cannot control these government or third party actions, an effective ESMS should identify the different entities involved and the roles they play, the corresponding risks they present to Yuzana, and opportunities to collaborate with these third parties in order to help achieve environmental and social outcomes that are consistent with this Policy. In addition, this Policy supports the use of an effective grievance mechanism to facilitate early identification of, and prompt remediation efforts for, those who believe that they have been harmed by Yuzana’s actions.

6.3.      Although this Policy focuses on land acquisition, resettlement, and environmental and social risk and impact issues, it is imperative that Yuzana also respect human rights in the course of its projects. The issues that are addressed by this Policy may also relate to human rights. Therefore, adequate due diligence also must be undertaken pursuant to Yuzana’s Human Rights Policy and other Yuzana policies.

 

7.      Objectives

 

7.1.      To identify and evaluate the environmental and social risks and impacts of Yuzana projects.

7.2.      To adopt a mitigation hierarchy to anticipate and avoid, or minimize where avoidance is not possible,17 environmental and social risks and impacts and, where residual impacts remain, compensate for and/or offset for risks and impacts to workers, affected communities, and the environment.

7.3.      To promote improvement of environmental and social performance by Yuzana through the effective use of management systems.

7.4.      To ensure that grievances from affected communities and external communications from other stakeholders are responded to and appropriately managed.

7.5.      To promote and provide means for adequate engagement with affected communities throughout project cycles on issues that could potentially affect them and ensure that relevant environmental and social information is disclosed and disseminated.

 

8.      Scope of Application

 

8.1.      This Policy applies to business activities with environmental and/or social risks and/or impacts. For the purposes of this Policy, the term “project” refers to a defined set of business activities, including those where specific physical elements, aspects, and facilities that are likely to generate risks and impacts have yet to be identified.18 Where applicable, this could include aspects of a Yuzana involved land development project from the early developmental stages through its full cycle (including design, construction, commissioning, operation, decommissioning, closure and, where applicable, post-closure). The requirements of this Policy apply to all business activities unless otherwise noted in the specific requirements described in each of the paragraphs below.

 

9.      Requirements

 

9.1.      Environmental and Social Assessment and Management System (“ESMS”): Yuzana, in appropriate coordination with relevant government agencies and third parties,19 will conduct environmental and social impact assessments, and establish and maintain an ESMS appropriate to the nature and scale of a project and commensurate with the level of its environmental and social risks and impacts. The ESMS will incorporate the following elements: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review.

9.2.      Policy: Yuzana will establish an overarching policy defining the environmental and social objectives and principles that guide sound environmental and social performance.20 The policy provides a framework for the environmental and social assessment and management process, and specifies that the project (or business activity, as appropriate) will comply with all applicable laws and regulations, including those laws implementing Myanmar’s obligations under international law. The policy should be in line with all Yuzana company policies. Under some circumstances, Yuzana may also subscribe to other internationally recognized standards, certification schemes, or codes of practice, and these too should be included in the policy. The policy will indicate the party or parties within Yuzana that will ensure conformance with the policy and be responsible for its execution (with reference to an appropriate responsible government agency or third party, as necessary). Yuzana will communicate the policy to all levels of the company.

9.3.      Identification of Risks and Impacts: Yuzana will establish and maintain a process for identifying the environmental and social risks and impacts of the project (See Paragraph 9.13 for competency requirements). The type, scale, and location of the project will guide the scope and level of effort devoted to the risks and impacts identification process. The scope of the risks and impacts identification process will be consistent with international industry practices,21 and will determine the appropriate and relevant methods and assessment tools. The process may comprise a full-scale environmental and social impact assessment, a limited or focused environmental and social assessment, or straightforward application of environmental siting, pollution standards, design criteria, or construction standards.22 When the project involves existing assets, environmental and/or social audits or risk/hazard assessments can be appropriate and sufficient to identify risks and impacts. If assets to be developed, acquired, or financed have yet to be defined, the establishment of an environmental and social due diligence process will identify risks and impacts at a point in the future when the physical elements, assets, and facilities are reasonably understood. The risks and impacts identification process will be based on recent environmental and social baseline data at an appropriate level of detail. The process will consider all relevant environmental and social risks and impacts of the project, including issues identified in the Land Acquisition and Involuntary Resettlement provisions of this Policy, and those who are likely to be affected by such risks and impacts.23 The risks and impacts identification process will consider the emissions of greenhouse gases, the relevant risks associated with a changing climate and the adaptation opportunities, and potential transboundary effects, such as pollution of air, or use or pollution of international waterways.

9.4.      Where the project involves specifically identified physical elements, aspects, and facilities that are likely to generate impacts, environmental and social risks and impacts will be identified in the context of the project’s area of influence. This area of influence encompasses, as appropriate:

1.       The area likely to be affected by: (i) the project24 and Yuzana’s activities and facilities that it owns, operates, and manages and that are a component of theproject;25 (ii) impacts from unplanned but predictable developments caused by the project that may occur later or at a different location; or (iii) indirect project impacts on biodiversity or on ecosystem services upon which affected communities’ livelihoods are dependent;

2.       Associated facilities, which are facilities that are not funded as part of the project and that would not have been constructed or expanded if the project did not exist and without which the project would not be viable;26 or

3.       Cumulative impacts that result from the incremental impact, on areas or resources used or directly impacted by the project, from other existing, planned, or reasonably defined developments at the time the risks and impacts identification process is conducted.

9.5.      In the event of risks and impacts in the project’s area of influence resulting from a third party’s actions, Yuzana will address those risks and impacts in a manner commensurate with Yuzana’s control and influence over the third parties and with due regard to conflict of interest.

9.6.      Where the project involves specifically identified physical elements, aspects, and facilities that are likely to generate environmental and social impacts, the identification of risks and impacts will take into account the findings and conclusions of related and applicable plans, studies, or assessments prepared by relevant government authorities or other parties that are directly related to the project and its area of influence.27

9.7.      Where the project involves specifically identified physical elements, aspects, and facilities that are likely to generate impacts, and as part of the process identifying risks and impacts, Yuzana will identify individuals and groups that may be directly and differently or disproportionately affected by the project because of their disadvantaged or vulnerable status.28 Where individuals or groups are identified as disadvantaged or vulnerable, Yuzana will propose and implement differentiated measures so that adverse impacts do not fall disproportionately on them and they are not disadvantaged in sharing development benefits and opportunities.

9.8.      Management Programs: Consistent with Yuzana’s policies and the objectives and principles described therein, Yuzana will establish management programs that, in sum, will describe mitigation and performance improvement measures and actions that address the identified environmental and social risks and impacts of the project.

9.9.      Depending on the nature and scale of the project, these programs may consist of some documented combination of operational procedures, practices, plans, and related supporting documents (including legal agreements) that are managed in a systematic way.29 The programs may apply broadly across Yuzana’s operations, including contractors and primary suppliers over which Yuzana has control or influence, or to specific sites, facilities, or activities. The mitigation hierarchy to address identified risks and impacts will favor the avoidance of impacts over minimization, and, where residual impacts remain, compensation/offset, wherever technically30 and financially feasible.31

9.10.    Where the identified risks and impacts cannot be avoided, Yuzana will identify mitigation and performance measures and establish corresponding actions to ensure the project will operate in compliance with applicable laws and regulations, and satisfy other Yuzana company policies. The level of detail and complexity of this collective management program and the priority of the identified measures and actions will be commensurate with the project’s risks and impacts, and will take account of the outcome of the engagement process with affected communities as appropriate.

9.11.    The management programs will establish environmental and social Action Plans,32 which will define desired outcomes and actions to address the issues raised in the risks and impacts identification process, as measurable events to the extent possible, with elements such as performance indicators, targets, or acceptance criteria that can be tracked over defined time periods, and with estimates of the resources and responsibilities for implementation. As appropriate, the management program will recognize and incorporate the role of relevant actions and events controlled by third parties to address identified risks and impacts. Recognizing the dynamic nature of the project, the management program will be responsive to changes in circumstances, unforeseen events, and the results of monitoring and review.

9.12.    Organizational Capacity and Competency: Yuzana, in collaboration with appropriate and relevant third parties, will establish, maintain, and strengthen as necessary an organizational structure that defines roles, responsibilities, and authority to implement the ESMS. Specific personnel, including management representative(s), with clear lines of responsibility and authority should be designated. Key environmental and social responsibilities should be well defined and communicated to the relevant personnel and to the rest of Yuzana’s operations. Sufficient management sponsorship and human and financial resources will be provided on an ongoing basis to achieve effective and continuous environmental and social performance.

9.13     Yuzana personnel with direct responsibility for the project’s environmental and social performance will have the knowledge, skills, and experience necessary to perform their work, including current knowledge of Myanmar’s legal and regulatory requirements and all applicable Yuzana company policies. Personnel will also possess the knowledge, skills, and experience to implement the specific measures and actions required under the ESMS and the methods required to perform the actions in a competent and efficient manner.

9.14.    The process of identifying risks and impacts will consist of an adequate, accurate, and objective evaluation and presentation, prepared by competent professionals. For projects posing potentially significant adverse impacts or where technically complex issues are involved, Yuzana may be required to involve external experts to assist in the risks and impacts identification process.

9.15.    Emergency Preparedness and Response: Where the project involves specifically identified physical elements, aspects, and facilities that are likely to generate impacts, The ESMS will establish and maintain an emergency preparedness and response system so that Yuzana, in collaboration with appropriate and relevant third parties, will be prepared to respond to accidental and emergency situations associated with the project in a manner appropriate to prevent and mitigate any harm to people and/or the environment. This preparation will include the identification of areas where accidents and emergency situations may occur, communities and individuals that may be impacted, response procedures, provision of equipment and resources, designation of responsibilities, communication, including that with potentially affected communities and periodic training to ensure effective response. The emergency preparedness and response activities will be periodically reviewed and revised as necessary, to reflect changing conditions.

9.16.    Where applicable, Yuzana will also assist and collaborate with the potentially affected communities and relevant local and other government agencies in their preparations to effectively respond to emergency situations, especially when their participation and collaboration are necessary to ensure effective response. If local government agencies have little or no capacity to respond effectively, Yuzana will play an active role in preparing for and responding to emergencies associated with the project. Yuzana will document its emergency preparedness and response activities, resources, and responsibilities, and will provide appropriate information to potentially affected community and relevant government agencies.

9.17.    Monitoring and Review: Yuzana will establish procedures to monitor and measure the effectiveness of the management program, as well as compliance with any related legal and/or contractual obligations and regulatory requirements. Where the government or another third party has responsibility for managing specific risks and impacts and associated mitigation measures, Yuzana will collaborate in establishing and monitoring such mitigation measures. Where appropriate, Yuzana will consider involving representatives from affected communities to participate in monitoring activities.33 Yuzana’s monitoring program should be overseen at an appropriate level in the organization. For projects with significant impacts, Yuzana will retain external experts to verify its monitoring information. The extent of monitoring should be commensurate with the project’s environmental and social risks and its impacts, and with compliance requirements.

9.18.    In addition to recording information to track performance and establishing relevant operational controls, Yuzana should use dynamic mechanisms, such as internal inspections and audits, where relevant, to verify compliance and progress toward the desired outcomes. Monitoring will normally include recording information to track performance and comparing this against the previously established benchmarks or requirements in the management program. Monitoring should be adjusted according to performance experience and actions requested by relevant regulatory authorities. Yuzana will document monitoring results and identify and reflect the necessary corrective and preventive actions in the amended management program and plans. Yuzana, in collaboration with appropriate and relevant third parties, will implement these corrective and preventive actions, and follow up on these actions in upcoming monitoring cycles to ensure their effectiveness.

9.19.    Senior management of Yuzana will receive periodic performance reviews of the effectiveness of the ESMS, based on systematic data collection and analysis. The scope and frequency of such reporting will depend upon the nature and scope of the activities identified and undertaken in accordance with Yuzana’s ESMS and other applicable project requirements. Based on results within these performance reviews, senior management will receive periodic performance reviews of the effectiveness of the ESMS, based on systematic data collection and analysis. The scope and frequency of such reporting will depend upon the nature and scope of the activities identified and undertaken in accordance with Yuzana’s ESMS and other applicable project requirements. Based on results within these performance reviews, senior management will take the necessary and appropriate steps to ensure the intent of this Policy is met, that procedures, practices, and plans are being implemented, and are seen to be effective.

9.20.    Stakeholder Engagement: Stakeholder engagement is the basis for building strong, constructive, and responsive relationships that are essential for the successful management of a project’s environmental and social impacts. Stakeholder engagement is an ongoing process that may involve, in varying degrees, the following elements: stakeholder analysis and planning, disclosure and dissemination of information, consultation and participation, a grievance mechanism, and ongoing reporting to affected communities. The nature, frequency, and level of effort of stakeholder engagement may vary considerably, and will be commensurate with the project’s risks and adverse impacts, and the project’s phase of development.

9.21.    Stakeholder Analysis and Engagement Planning: Yuzana will identify the range of stakeholders that may be interested in its actions and consider how external communications might facilitate a dialog with all stakeholders (See Paragraph 11.1 below). Where projects involve specifically identified physical elements, aspects, and/or facilities that are likely to generate adverse environmental and social impacts to affected communities, Yuzana will identify the affected communities and will meet the relevant requirements described below.

9.22.    Yuzana will develop and implement a Stakeholder Engagement Plan that is scaled to the project risks and impacts and development stage, and tailored to the characteristics and interests of the affected communities. Where applicable, the Stakeholder Engagement Plan will include differentiated measures to allow the effective participation of those identified as disadvantage or vulnerable. When the stakeholder engagement process substantially depends on community representatives,34 Yuzana will make every reasonable effort to verify that such persons do in fact represent the views of affected communities and that they can be relied upon to faithfully communicate the results of consultations to their constituents.

9.23.    In cases where the exact location of the project is not known, but it is reasonably expected to have significant impacts on local communities, Yuzana will prepare a Stakeholder Engagement Framework, as part of its management program, outlining general principles and a strategy to identify affected communities and other relevant stakeholders and plan for an engagement process compatible with this Policy that will be implemented once the physical location of the project is known.

9.24.    Disclosure of Information: Disclosure of relevant project information helps affected communities and other stakeholders understand the risks, impacts, and opportunities of the project. Yuzana will provide affected communities with access to relevant information35 on: (i) the purpose, nature, and scale of the project; (ii) the duration of proposed project activities; (iii) any risks to and potential impacts on such communities and relevant mitigation measures; (iv) the proposed stakeholder engagement process; and (v) the grievance mechanism.

9.25.    Consultation: When affected communities are subject to identified risks and adverse impacts from a project, Yuzana will undertake a process of consultation in a manner that provides the affected communities with opportunities to express their views on project risks, impacts and mitigation measures, and allows Yuzana to consider and respond to them. The extent and degree of engagement required by the consultation process should be commensurate with the project’s risks and adverse impacts and with the concerns raised by the affected communities. Effective consultation is a two-way process that should: (i) begin early in the process of identification of environmental and social risks and impacts and continue on an ongoing basis as risks and impacts arise; (ii) be based on the prior disclosure and dissemination of relevant, transparent, objective, meaningful, and easily accessible information which is in a culturally appropriate and local language format and is understandable to affected communities; (iii) focus inclusive36 engagement on those directly affected, as opposed to those not directly affected; (iv) be free of external manipulation, interference, coercion, or intimidation; (v) enable meaningful participation, where applicable; and (vi) be documented. Yuzana will tailor its consultation process to the language preferences of the affected communities, their decision making processes, and the needs of disadvantaged or vulnerable groups.

9.26.    Informed Consultation and Participation: For projects with potentially significant adverse impacts on affected communities, Yuzana will conduct an Informed Consultation and Participation (“ICP”) process that will build upon the steps outlined above in Consultation and will result in the affected communities’ informed participation. ICP involves a more in-depth exchange of views and information, and an organized iterative consultation, leading to Yuzana’s incorporating into their decision-making process the views of the affected communities on matters that affect them directly, such as the proposed mitigation measures, the sharing of development benefits and opportunities, and implementation issues. The consultation process should: (i) capture both men’s and women’s views, if necessary through separate forums or engagements; and (ii) reflect men’s and women’s different concerns and priorities about impacts, mitigation mechanisms, and benefits, where appropriate. Yuzana will document the process, in particular the measures taken to avoid or minimize risks to an adverse impacts on the affected communities, and will inform those affected about how their concerns have been considered.

 

10.  Yuzana’s Responsibilities Under Government-Led Stakeholder Engagement

 

10.1.    Where stakeholder engagement is the responsibility of the local, provincial, or federal government, Yuzana will collaborate with the responsible government agencies, both at the local and national levels, to the extent permitted by the agencies, to achieve outcomes that are consistent with the objectives of this Policy. In addition, where government capacity is limited,

Yuzana will play an active role during the stakeholder engagement planning, implementation, and monitoring. If the process conducted by the government does not meet the relevant requirements of this Policy, Yuzana will conduct a complementary process and, where appropriate, identify supplemental actions.

 

11.  External Communications and Grievance Mechanisms

 

11.1.    External Communications: Yuzana will implement and maintain a protocol for external communications that includes methods to: (i) receive and register external communications from the public; (ii) screen and assess the issues raised and determine how to address them; (iii) provide, track, and document responses, if any; and (iv) adjust the management program, as appropriate. In addition, Yuzana will make publicly available periodic reports on its environmental and social sustainability.

11.2.    Grievance Mechanism for Affected Communities: Where there are affected communities, Yuzana will establish a grievance mechanism to receive and facilitate resolution of affected communities’ concerns and grievances about Yuzana’s environmental and social performance. The grievance mechanism should be scaled to the risks and adverse impacts of the project, and the affected communities will be its primary user. It should seek to resolve concerns promptly, using an understandable and transparent consultative process that is culturally appropriate and readily accessible, and at no cost and without retribution to the party that originated the issue or concern. The mechanism should not impede access to judicial or administrative remedies. Yuzana will inform the affected communities about the mechanism in the course of the stakeholder engagement process.

 

12.  Ongoing Reporting to Affected Communities

 

12.1.    Yuzana will provide periodic reports to the affected communities that describe progress with implementation of project action plans on issues that involve ongoing risk to or impacts on affected communities and on issues that the consultation process or grievance mechanism had identified as a concern to those communities. If the management program results in material changes in, or additions to, the mitigation measures or actions described in the action plans on issues of concern to the affected communities, the updated relevant mitigation measures or actions will be communicated to them. The frequency of these reports will be proportionate to the concerns of the affected communities, but at a minimum, will be published on an annual basis.

  

IV.              IV.     Interaction with other Yuzana Policies

 
As specified elsewhere in this Policy, the respect for land rights and the practice of sustainable development also requires adherence to other relevant Company policies, including but not limited to the Yuzana Code of Ethics, Human Rights Policy, Transparency Policy, and Anti-Fraud and Corruption Policy.

 
 

V.                 Discipline

 
Any employee or director involved in a violation of this Policy, or violations of applicable laws, may face termination of employment. Any employee who has direct knowledge of such violations by other employees, or by third party suppliers or contractors, but fails to report such violations, may face termination. Any employee impairing an investigation into violations of this Policy may face termination.

 

 ____________________________________________________________________________________

1Myanmar Draft National Land Use Policy, available at,

http://www.burmalibrary.org/docs19/National_Land_Use_Policy-en.pdf.

2 International Finance Corporation (World Bank Group), IFC Performance Standards on Environmental and Social Sustainability, Jan. 1, 2012, available at,

http://www.ifc.org/wps/wcm/connect/c8f524004a73daeca09afdf998895a12/IFC_Performance_Standards.pdf?MOD=AJPERES

3 Security of tenure means that resettled individuals or communities are resettled to a site that they can legally occupy and where they are protected from the risk of eviction.

4 While some people do not have rights over the land they occupy, this Policy requires that non-land assets be retained, replaced, or compensated for; relocation take place with security of tenure; and lost livelihoods be restored.

5 As described in Paragraphs 4.11 & 4.17.

6 The term “land-based” includes livelihood activities such as subsistence cropping and grazing of livestock as well as the harvesting of natural resources.

7 As described in Paragraph 4.18.

8 In certain cases, it may not be feasible to pay compensation to all those affected before taking possession of the land (for example, if ownership of the land in question is in dispute). Such circumstances shall be identified and resolved on a case-by-case basis, and compensation funds shall be made available before displacement takes place (for example, through deposit of funds into an escrow account).

9 If government-managed resettlement is involved, Yuzana may have no direct influence over the timing of compensation payments. Such cases should be handled in accordance with Paragraphs 4.19-4.21 of this Policy.

10 The consultation process should ensure that the perspective of women in the impacted are is obtained and their interests are factored into all aspects of resettlement planning and implementation. Addressing livelihood impacts may require intra-household analyses in cases where women’s and men’s livelihoods are affected differently.

11 Where a project results in both physical and economic displacement, the requirements of Paragraphs 4.17 and

4.18 (Economic Displacement) should be incorporated into the Resettlement Action Plan or Framework (i.e., there is no need to have a separate Resettlement Action Plan and Livelihood Restoration Plan).

12 Payment of cash compensation for lost assets may be appropriate where: (i) livelihoods are not land-based; (ii) livelihoods are land-based, but the land taken for the project is a small fraction of the affected asset and the residual land is economically viable; or (iii) active markets for land, housing, and labor exist, displaced persons have access to such markets, and there is sufficient supply of land and housing.

13 Relocation of informal settlers in urban areas may involve trade-offs. For example, relocated families may gain security of tenure, but they may lose advantage of location. Changes in location that may affect livelihood opportunities should be addressed in accordance with the principles of this Policy (See in particular Paragraph 4.17).

14 That is, the permanent or temporary removal against their will of individuals, families, and/or communities from the homes and/or lands which they occupy without the provision of, and access to, appropriate forms of legal and other protections.

15 Government documents, where available, may be used to identify such measures.

16 Other stakeholders are those not directly affected by the project, but that nevertheless have an interest in it. They could include national and local government authorities, those involved in neighboring projects, and/or nongovernmental organizations.

17 Acceptable options to minimize environmental and social risks and impacts will vary, and could include efforts to abate, rectify, and/or repair impacts, as appropriate.

18 For example, corporate entities that have portfolios of existing physical assets, and/or intend to develop or acquire new facilities, and investment funds or financial intermediaries with existing portfolios of assets and/or that intend to invest in new facilities. For Yuzana, many such projects include land development activities, which will also need to be addressed by the land acquisition and involuntary resettlement provisions detailed in this Policy.

19 That is, those parties legally obligated and responsible for assessing and managing specific risks and impacts (e.g., in government-led resettlements).

20 This requirement is a stand-alone, project-specific policy, and is not intended to affect (or require alteration of) existing Yuzana policies for non-related projects, business activities, or higher-level corporate activities.

21 That is, the exercise of professional skill, diligence, prudence, and foresight that would reasonably be expected from skilled and experienced professionals engaged in the same type of undertaking under the same or similar circumstances globally or regionally.

22 For greenfield developments or large expansions with specifically identified physical elements, aspects, and facilities that are likely to generate potential significant environmental or social impacts, Yuzana will conduct a comprehensive Environmental and Social Impact Assessment, including an examination of alternatives, where appropriate.

23 In limited high risk circumstances, Yuzana may complement its environmental and social risks and impacts identification process with specific human rights due diligence, as relevant to the particular business, under the

Yuzana Human Rights Policy.

24 Examples include the project’s sites, the immediate airshed and watershed, or transport corridors.

25 Examples include power transmission corridors, pipelines, canals, tunnels, relocation and access roads, borrow and disposal areas, construction camps, and contaminated land (e.g., soil, groundwater, surface water, and sediments).

26 Associated facilities may include railways, roads, captive power plants or transmission lines, pipelines, utilities, warehouses, and logistics terminals.

27 Yuzana will take these into account by focusing on the project’s incremental contribution to selected impacts generally recognized as important on the basis of scientific concern or concerns from the affected communities within the area addressed by these larger scope regional studies or cumulative assessments.

28 This disadvantaged or vulnerable status may stem from an individual’s or group’s race, color, sex, language, religion, political or other opinion, national or social origin, property, birth, or other status. Yuzana will also consider factors such as gender, age, ethnicity, culture, literacy, sickness, physical or mental disability, poverty or economic disadvantage, and dependence on unique natural resources.

29 Existing legal agreements between Yuzana and third parties that address mitigation actions with regard to specific impacts constitute part of a program, including government-managed resettlement responsibilities specified in an agreement.

30 Technical feasibility is based on whether the proposed measures and actions can be implemented with commercially available skills, equipment, and materials, taking into consideration prevailing local factors such as climate, geography, demography, infrastructure, security, governance, capacity, and operational reliability.

31 Financial feasibility is based on commercial considerations, including relative magnitude of the incremental cost of adopting such measures and actions compared to the project’s investment, operating, and maintenance costs, and on whether this incremental cost could make the project nonviable to Yuzana.

32 Actions plans may include an overall Environmental and Social Action Plan necessary for carrying out a suite of mitigation measures or thematic action plans, such as resettlement Action Plans. Actions plans may be plans designed to fill in the gaps of existing management programs to ensure consistency with this Policy, or they may be stand alone plans that specify the project’s mitigation strategy. Examples are numerous and include various types of environmental and social management plans.

33 For example, participatory water monitoring.

34 For example, community and religious leaders, local government representatives, civil society representatives, politicians, school teachers, and/or others representing one or more affected stakeholder groups.

35 Depending on the scale of the project and significance of the risks and impacts, relevant documents could range from full Environmental and Social Assessments and Action Plans (i.e., Stakeholder Engagement Plan, Resettlement

Action Plans, Biodiversity Action Plans, Hazardous Materials Management Plans, Emergency Preparedness and

Response Plans, Community Health and Safety Plans, Ecosystem Restoration Plans, and Indigenous Peoples Development Plans, etc.)  to easy-to-understand summaries of key issues and commitments. These documents could also include Yuzana’s environmental and social policy and any supplemental measures and actions defined as a result of independent due diligence conducted by financiers.

36 Such as men, women, the elderly, youth, displaced persons, and vulnerable and disadvantaged persons or groups.



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