Amendment 000001 Attachment 3- DCN_2022_GEO_003_IEE_Local Governance Program (4).pdf

DCN: 2022-GEO-003

USAID Georgia / USAID Local Governance Program 1 E&E Bureau IEE Template (Version 18 October 2021)

US Agency for International Development (USAID) USAID/Georgia

Initial Environmental Examination (IEE)

Program/Project/Activity Data Activity/Project Name: USAID Local Governance Program

Assistance Objective: DO 2: Enhanced Citizen-responsive Governance Consolidates Fragile Democratic Gains

Program Area:

IR 2.1: Civic Participation Catalyzed IR 2.2: Accountability and Accessibility of Governance Institutions

Country(ies) and/or Operating Unit: Georgia Originating Office: DRG Date: 12/7/2021

Original IEE/RCE Original IEE LOP Start Date: FY2022 IEE/RCE Amendment New Funding: 21,900,000

IEE/RCE History DCN LOP End Date Total Funding ($) Original IEE/RCE 2022-GEO-003 FY2026 21,900,000 Contract/Award Number (if known): N/A Recommended Environmental Determination (s):

Categorical Exclusion Positive Determination Negative Determination Deferral

Additional Elements:

Conditions Government to Government

No Conditions Public International Organization (PIO) environmental and social policies and procedures applicable

Local Procurement Sustainability Analysis (included)

Donor Co-Funded Climate Change Vulnerability Analysis (included) Climate Change Vulnerability Rating: Low

1. Background and Project Description

1.1 Purpose and Scope of IEE

The purpose of the IEE is to cover the USAID’s 5-year USAID Local Governance Program activity, estimated at $21,900,000. Recommended Environmental Determinations for this activity is Categorical Exclusions and Negative Determination with Conditions.

1.2 Project Description

The overall goal of the USAID Local Governance Program is to support Georgia's ongoing decentralization reform and enhance the effectiveness, accountability, and citizen-responsiveness of target local governments in Georgia. The Activity has four objectives, which are designed to advance the overall goal by strengthening national institutional capacities, legislative frameworks, and partnerships for meaningful decentralization; improving sub-national public administration and accountability systems, enhancing subnational capacity to deliver inclusive, accessible, and citizen-responsive public services in alignment with national

USAID Georgia / USAID Local Governance Program 2 E&E Bureau IEE Template (Version 18 October 2021) standards, and engaging and empowering communities, including CSOs, businesses, youth and other individuals, to hold subnational governments accountable. Thus, the Activity will support national institutions to manage the implementation of the Local Government Decentralization Strategy (2020-2025) as well as strengthen accountability across the local governance ecosystem, including through work with local communities.

Component 1 – Subnational public administration and accountability systems improved.

Sub-activity 1.1: Municipal councils’ (Sakrebulos) capacity to monitor and provide oversight of the municipal executive (Mayor’s Offices) increased.

Sub-activity 1.2: LSG (Local Self-Governments) systems, tools, and capacity for planning, management, implementation, and monitoring and evaluation strengthened, including those needed to effectively engage with the private sector.

Sub-activity 1.3: Operation of public finance management systems of LSGs improved as a result of implementation of national Public Financial Management Strategy reforms including implementation of International Public Sector Accounting Standards (IPSAS).

Sub-activity 1.4: LSG capacity to mobilize new revenue sources and utilize existing resources in more effective, efficient, and economic ways enhanced.

Sub-activity 1.5: LSG capacity to proactively and substantively engage citizens in participatory, oversight, and co-creation mechanisms, including through open government initiatives, increased.

Component 2 – Subnational capacity to deliver inclusive, accessible, and citizen-responsive public services, in alignment with national standards, enhanced.

Sub-activity 2.1: LSG capacity to collect, track, analyze, and use public service delivery data to improve evidence-driven management of targeted public services strengthened.

Sub-activity 2.2: LSG ability to mobilize private sector partnerships and investment for improved service delivery strengthened.

Sub-activity 2.3: LSG capacity and commitment to equitable access to quality public services for minority and marginalized communities expanded.

Sub-activity 2.4: Intermunicipal and intragovernmental coordination for effective subnational public service delivery improved.

Sub-activity 2.5: LSG capacity and commitment to employ social accountability models and utilize citizen feedback strengthened.

Component 3 - Communities, including CSOs, businesses, youth and other individuals, engaged and empowered to hold subnational governments accountable.

Sub-activity 3.1: Community understanding, appreciation, and capacity for engaging LSGs increased.

Sub-activity 3.2: Communities routinely utilize social accountability and transparency mechanisms to demand citizen-responsive local governance and service delivery.

Component 4 - National commitment, legislative frameworks, institutional capacities, and partnerships for decentralization strengthened.

USAID Georgia / USAID Local Governance Program 3 E&E Bureau IEE Template (Version 18 October 2021)

Sub-activity 4.1: Capacity of MRDI and other central-level stakeholders to implement, manage, and oversee the Decentralization Strategy and Action Plans enhanced.

Sub-activity 4.2: Constraints to implementing existing LSG competencies removed, and opportunities for decentralizing new competencies explored and piloted.

Sub-activity 4.3: Long-term, sustainable national partnerships (including civil society, private sector, municipal, and business associations) for decentralization established.

Additional Component 5 - Incentive Program for Local Self-Governments

USAID/Georgia is in the process of establishing an interagency agreement with the U.S.

Department of Defense’s Office of Defense Cooperation (ODC) in Georgia to address social sector infrastructure improvements. The goal of the interagency agreement is to help the Activity manage social sector infrastructure improvements in alignment with LSG service delivery authorities, including school and pre-school refurbishment, water and sanitation, shelter for the homeless, and infrastructure and facilities for the disabled. The infrastructure improvements will be well integrated into the Activity by serving as an incentive for LSGs to implement key public service delivery reforms, including introducing transparent and accountable service delivery management systems and ensuring citizen participation and feedback during the service delivery process. Within the agreement, ODC may provide approximately $900,000 to support LSGs to renovate and repair schools and other social sector infrastructure in target municipalities.

Sub-activity 5.1: Possible In-kind grants to municipalities for social sector infrastructural needs as part of the incentive program

2. Baseline Environmental Information

2.1 Locations Affected and Environmental Context

Georgia is situated along the Black Sea and borders the neighboring countries of Azerbaijan, Armenia, Turkey, and Russia. The population of Georgia is approximately 3.7 million people (2019). The capital city is Tbilisi with a population of 1.2 million people. Natural resources include iron ore, hydropower resources, manganese deposits, and forestry. Georgia is a small developing economy, with a gross national income (GNI) per capita of $4,440 in 2020.

Georgia’s main economic activities include tourism, mining, manufacturing, hydropower generation, trade and transport, construction, and agriculture. According to a 2020 World Bank report, 20.1 % of the population lives below the poverty line, with higher rates in rural areas. The Gini coefficient for Georgia is 35.9 (The World Bank), which puts the country behind most of its post-Soviet neighbors in terms of income equality. This has been fueled by the “jobless growth” occurring in Georgia, resulting from economic reforms benefitting primarily the elite and a small yet growing middle class, and a focus on investments in sectors such as banking and real estate, which creates few jobs.

The physical terrain of Georgia is primarily mountainous. Georgia has 22 microclimates varying from cool and dries to warm and humid. Georgia has a highly diverse physical geography, comprised of mountains, plateau, lowland-plains, glaciers, wetlands, arid areas (semi-deserts), lakes, and rivers. Approximately two-thirds of the country is mountainous and 20% of the country is located at 2,000 meters or more above sea level. Lower mountain areas include the country’s inter-mountain plain, which is bounded to the north and south by the Greater and Lesser Caucus Mountain ranges, respectively. The Georgian climate is largely a function of distance from the Black Sea coast and altitude. The western parts of Georgia experience a milder climate due to the influence of the Black Sea with average winter

USAID Georgia / USAID Local Governance Program 4 E&E Bureau IEE Template (Version 18 October 2021) temperatures well above freezing and relatively hot summers with higher humidity and higher average precipitation. Black Sea coastal areas average annual temperatures typically range from 9°C to 14°C, with 900–2,300 millimeters (mm) of precipitation per annum. Mountainous regions have a colder climate, with average annual temperatures of 2°C–10°C, very cold winter temperatures in some mountain towns and annual precipitation levels of 1,200–2,000

mm. In the eastern lowlands, the dry subtropical climate brings only 400–600 mm of rainfall per year and relatively high annual mean temperatures of 11°C–13°C.18 Average temperatures in Georgia vary with the seasons, from sub-zero levels in winter months (December to February) to a relatively warm levels in the summer (averaging 18°C in July and August). Precipitation is relatively consistent throughout the year, although average precipitation totals are at their highest in late spring and early summer.

2.2 Description of Applicable Environmental and Natural Resource Legal Requirements Policies, Laws, and Regulations Georgia has a significant number of laws, Presidential orders and Government acts on environmental protection. Some examples include:

• The Law on Environmental Protection (1999 and updated)

• Law on Environmental Impact Permit (1991 and updated)

• Law on Environmental Assessment Code (2017)

• Law on Protected Areas

• Forestry code (2020)

• Water law (under the development)

• Red Book

Law on Environmental Assessment Code Introduces screening and scoping phases in the environmental impact assessment (EIA) process; mandates disclosure of documentation generated in the EIA process and public participation in decision-making; and introduces trans-boundary EIAs.

2.3 Environmental Capacity Analysis

Georgia’s legal framework for biodiversity has experienced some significant changes in recent years, most notably the introduction and passage of new legislation and a re-structuring of the government. Increasing attention from lawmakers in updating legislation has been driven mostly by requirements of the EU Association Agreement and associated free trade act.

Passage of draft legislation is required to finalize harmonization activities; additional work is also needed on integrating conservation considerations into legislation for other sectors (energy, tourism, etc.) Improved capacity for implementing both legislation and national strategies for biodiversity conservation is needed; Georgia continues to be heavily dependent on international actors and funding for development and implementation of many of its strategies and laws.

2.4 Sustainability Analysis

Sustainability of the Activity’s results will be monitored throughout the entire implementation period and will constitute one of the focal points of its interim and final evaluations. Illustrative approaches to sustainability may include the following types of interventions:

• Using locally available and appropriate technologies while ensuring these solutions are cost effective and can be supported by partner governments.

USAID Georgia / USAID Local Governance Program 5 E&E Bureau IEE Template (Version 18 October 2021)

• Prioritizing and using, to the greatest extent possible, local organizations to implement interventions, either through sub-grants or sub-contracts.

• Engaging local organizations to implement technical assistance and training whenever possible.

• Tailoring capacity building interventions to correspond with local policies and legal frameworks, national strategies, systems, and standards.

• Strengthening the capacity of targeted government institutions and local organizations to develop internal processes that increase their ability to address capacity building.

This will likely require longer periods of time and increased resources to achieve these results.

• Building local governments’ capacity to work with the private sector and improve the local business environment, creating long term opportunities for revenue mobilization

• Working extensively through Local Systems including engaging local government system actors in leading their own development as co-implementers of the program and encouraging local coalitions.

2.5 Climate Change Vulnerability Analysis

In accordance with Executive Order (EO) 13677 and Mandatory Reference for ADS Chapter 201 on Climate Risk Management for USAID Projects and Activities, USAID must conduct climate risk management screening for all new strategies, projects, and activities.

Climate Risk Ratings are defined as:

Low climate risk: Climate change is unlikely to significantly impact achievement of development outcomes relative to other stressors and development challenges.

NOTE: A low climate risk rating does not require the development of specific plans to address climate risk, however the rating should be documented here.

https://www.whitehouse.gov/the-press-office/2014/09/23/executive-order-climate-resilient-international-development https://www.usaid.gov/ads/policy/200/201mal https://www.usaid.gov/ads/policy/200/201mal

USAID Georgia / USAID Local Governance Program 6

3. Environmental Impacts and Recommended Mitigation Measures

Component 1 – Subnational public administration and accountability systems improved.

Sub-activities Potential Impacts Mitigation Measures Recommended Threshold Determinations

1.1: Municipal councils’ (Sakrebulos) capacity to monitor and provide oversight of the municipal executive (Mayor’s Offices) increased.

No adverse impacts are likely None Categorical

Exclusion

1.2: LSG systems, tools, and capacity for planning, management, implementation, and monitoring and evaluation strengthened, including those needed to effectively engage with the private sector.

No adverse impacts are likely None Categorical

Exclusion

1.3: Operation of public finance management systems of LSGs improved as a result of implementation of national Public Financial Management Strategy reforms including implementation of International Public Sector Accounting Standards (IPSAS).

No adverse impacts are likely None Categorical

Exclusion

1.4: LSG capacity to mobilize new revenue sources and utilize existing resources in more effective, efficient, and economic ways enhanced.

No adverse impacts are likely None Categorical

Exclusion

1.5: LSG capacity to proactively and substantively engage citizens in participatory, oversight, and co-creation mechanisms, including through open government initiatives, increased.

No adverse impacts are likely None Categorical

Exclusion

Component 2 – Subnational capacity to deliver inclusive, accessible, and citizen-responsive public services, in alignment with national standards, enhanced.

Sub-activities Potential Impacts Mitigation Measures Recommended Threshold Determination

2.1: LSG capacity to collect, track, analyze, and use public service delivery data to improve evidence-driven management of targeted public services strengthened.

No adverse impacts are likely None Categorical

Exclusion

2.2: LSG ability to mobilize private sector partnerships and investment for improved service delivery strengthened.

No adverse impacts are likely None Categorical

Exclusion

2.3: LSG capacity and commitment to equitable access to quality public services for minority and marginalized communities expanded.

No adverse impacts are likely None Categorical

Exclusion

2.4: Intermunicipal and intragovernmental coordination for effective subnational public service delivery improved.

No adverse impacts are likely None Categorical

Exclusion

2.5: LSG capacity and commitment to employ social accountability models and utilize citizen feedback strengthened.

No adverse impacts are likely None Categorical

USAID Georgia / USAID Local Governance Program 7

Component 3 – Communities, including CSOs, businesses, youth and other individuals, engaged and empowered to hold subnational governments accountable

Sub-activities Potential Impacts Mitigation

Measures Recommended Threshold Determination

3.1: Community understanding, appreciation, and capacity for engaging LSGs increased.

No adverse impacts are likely None Categorical

Exclusion

3.2: Communities routinely utilize social accountability and transparency mechanisms to demand citizen-responsive local governance and service delivery.

No adverse impacts are likely None Categorical

Component 4 – National commitment, legislative frameworks, institutional capacities, and partnerships for decentralization strengthened.

Sub-activities Potential Impacts Mitigation Measures

Recommended Threshold Determination

4.1: Capacity of MRDI and other central-level stakeholders to implement, manage, and oversee the Decentralization Strategy and Action Plans enhanced.

No adverse impacts are likely None Categorical

Exclusion

4.2: Constraints to implementing existing LSG competencies removed, and opportunities for decentralizing new competencies explored and piloted.

No adverse impacts are likely None Categorical

Exclusion

4.3: Long-term, sustainable national partnerships (including civil society, private sector, municipal, and business associations) for decentralization established.

No adverse impacts are likely None Categorical

Additional Component 5 – Incentive Program for Local Self-Governments

Sub-activities Potential Impacts

Mitigation Measures Recommended Threshold Determinations

5.1: Possible In-kind grants to municipalities for social sector infrastructural needs as part of the incentive program

Potential impacts on land, water, air and human health

In case of the in-kind grants under Incentive Program will be available, an Environmental Review Checklist (ERC) with Environmental Mitigation and Monitoring Plan (EMMP) or, depending on nature of grantee contribution, Simplified Environmental Review Form (SERF) shall be completed prior to start of the activities.

Negative Determination with Conditions

USAID Georgia / USAID Local Governance Program 8 E&E Bureau IEE Template (Version 18 October 2021)

4. Conclusions of the Environmental Review

4.1 Recommended Environmental Determinations:

Categorical Exclusions:

A categorical exclusion is recommended for the following sub-activities under 22 CFR 216.2(c)(2):

• All sub-activities under 1, 2, 3, 4 components under §216.2(c)(2)(i) Education, technical assistance, or training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.);

Negative Determination:

A negative determination is recommended for the following sub-activities under §216.3(a)(2)(iii).

Additional specific terms and conditions are presented below in Section 4.2.

• Sub-activity 5.1 requires an ERC/EMMP or SERF.

4.2 Negative Determination Terms and Conditions:

4.2.1 Prior to initiating any activity that has a Negative threshold determination, the IP shall prepare an environmental review document in the [ERC/EMMP] format provided by the MEO, unless the activity only includes sub-activities that require a SERF, in which case the IP may prepare an environmental review document in the SERF format provided by the MEO. After discussing with the BEO and with approval from the MEO, the IP may prepare a single environmental review document that covers multiple sub-activities that are similar in nature and potential impact on the environment. The COR/AOR and MEO shall approve the environmental review document prior to implementation. The BEO reserves the right to rescind the approval of an environmental review document due to environmental risks. For each site-specific activity, the environmental review document shall include a Certification of No Adverse Significant Effects on the Environment signed by the IP, COR/AOR; assigned a Document Control Number (DCN) and posted to the Environmental Compliance Database (ECD).

4.2.2 Preparation of environmental review documents shall be captured in annual work plans, and therefore budgeted for and reviewed for adequacy at least annually.

4.2.3 Changes in activities and their associated environmental reviews shall necessitate amending the IEE.

4.3 USAID Monitoring and Reporting

4.3.1 The AOR/COR, with the support of the MEO, is responsible for monitoring compliance of activities by means of desktop reviews and site visits.

4.3.2 The AOR/COR is responsible for confirming that the IP includes environmental compliance requirements and monitoring results as part of their routine project reporting to USAID.

4.3.3 If at any time the project is found to be out of compliance with the IEE, the AOR/COR or MEO shall immediately notify the BEO.

4.3.4 A summary report of Mission’s compliance relative to this IEE shall be sent to the BEO on an annual basis, normally in connection with preparation of the Mission’s annual environmental compliance report required under ADS 203.3.8.5 and 204.3.3.

4.3.5 The BEO or his/her designated representative may conduct site visits or request additional information for compliance monitoring purposes to ensure compliance with this IEE, as necessary.

4.4 Implementing Partner (IP) Environmental Compliance Monitoring and Reporting

4.4.1 If an individual activity is found to pose significant adverse environmental effects that have not been identified and addressed in the approved environmental review documents, new environmental review documents shall be developed to include environmental safeguards for such effects.

4.4.2 IPs shall report on environmental compliance requirements and monitoring results as part of their routine project reporting to USAID.

4.4.3 After the IP has finalized its activities at a specific site, the IP shall sign a Record of Compliance certifying that the organization met all applicable conditions and submit it to

USAID Georgia / USAID Local Governance Program 9 E&E Bureau IEE Template (Version 18 October 2021) the COR/AOR. The COR/AOR shall keep the original for the project files and provide a copy to the MEO and BEO. The ROC shall be assigned a DCN and posted to the ECD.

5. Mandatory Inclusion of Requirements in Solicitations, Awards, Budgets and Workplans

5.1 Appropriate environmental compliance language, including limitations defined in Section 6, shall be incorporated into solicitations and awards for this activity and projects budgets shall provide for adequate funding and human resources to comply with requirements of this IEE.

5.2 Solicitations shall include Statements of Work with tasks for meeting environmental compliance requirements and appropriate evaluation criteria.

5.3 Environmental mitigation and monitoring requirements, when available, shall also be included in solicitations and awards.

5.4 The IP shall incorporate conditions set forth in this IEE into their annual work plans.

5.5 The IP shall ensure annual work plans do not prescribe activities that are defined as limitations, as defined in Section 6.

5.6 The USAID Mission will include an indicator for environmental compliance as part of the project’s performance monitoring plan. (For example, if an IEE has a threshold determination of negative determination, then a possible indicator is if the IP complied with the ERC/EMMP.)

6. Limitations of the IEE: This IEE does not cover activities (and therefore should changes in scope implicate any of the issues/activities listed below, a BEO-approved amendment shall be required), that:

6.1 Normally have a significant effect on the environment under §216.2(d)(1), including:

• Programs of river basin development;

• Irrigation or water management projects, including dams and impoundments;

• Agricultural land leveling;

• Drainage projects;

• Large scale agricultural mechanization;

• New lands development;

• Resettlement projects;

• Penetration road building or road improvement projects;

• Powerplants;

• Industrial plants;

• Potable water and sewerage projects other than those that are small scale.

6.2 Support project preparation, project feasibility studies, engineering design for activities listed in §216.2(d)(1);

6.3 Affect endangered species;

6.4 Result in wetland or biodiversity degradation or loss;

6.5 Support extractive industries (e.g., mining and quarrying);

6.6 Promote timber harvesting;

6.7 Provide support for regulatory permitting;

6.8 Result in privatization of industrial or infrastructure facilities;

6.9 Assist the procurement (including payment in kind, donations, guarantees of credit) or use

(including handling, transport, fuel for transport, storage, mixing, loading, application, cleanup of spray equipment, and disposal) of pesticides or activities involving procurement, transport, use, storage, or disposal of toxic materials and /or pesticides (cover all insecticides, fungicides, rodenticides, etc. covered under the Federal Insecticide, Fungicide, and Rodenticide Act); and

6.10 Procure or use genetically modified organisms.

USAID Georgia / USAID Local Governance Program 10 E&E Bureau IEE Template (Version 18 October 2021)

7. Revisions

7.1 Under §216.3(a)(9), if new information becomes available that indicates that activities covered by the IEE might be considered major and their effect significant, or if additional activities are proposed that might be considered major and their adverse effect significant, this environmental threshold decision will be reviewed and, if necessary, revised by the Mission with concurrence by the BEO. It is the responsibility of the USAID COR/AOR to keep the MEO and BEO informed of any new information or changes in the activity that might require revision of this IEE.

8. Environmental Threshold Decision Clearances:

Approval:

Concurrence:

Poojan Tripathi, Bureau Environmental Officer Date USAID Europe and Eurasia Bureau

Distribution:

Activity File

AOR/COR

MEO

BEO

ECD

USAID Georgia / USAID Local Governance Program 11 E&E Bureau IEE Template (Version 18 October 2021)

Annex A: Climate Risk Screening and Management Tool USAID Local Governance Program

1: Components or Sub-activities 2: Time-frame and Geography 3: Climate Risks* 4: Climate

Risk Rating* 5: How Climate Risks are Addressed in the Activity*

6: Accepted Climate Risks*

Component 1:

Subnational public administration and accountability systems improved

FY 2022-

FY2026

Georgia

In 2017-2050: The average annual air temperature throughout Georgia will increase by 1.3 C to 1.6 C, the number of summer days (above 25°C) will increase; in contrast to all other cases, the temperature increase in West Georgia will be higher than in East Georgia. The absolute minimum air temperature by 1C is probable in the mountain zone; the overall tendency is for an increase. The number of frost days is decreasing throughout Georgia. The annual number of hot days will increase about 2.5 times. The percentage change of annual total precipitation is within a range from an 11% decrease to an 8% increase. A number of days of heavy rain will increase by 2 to 5 days; a decrease is more observable in the southeast, also in Adjara and a large part of Imereti; and an increase will take place in mountain regions, mostly within the Greater Caucasus.

low

Support facilities that maintain air conditioning and evacuation plans (in case of disaster) and increase awareness and advocacy.

While the services are provided the contractor should be mindful to gather any information related to climate change, if applicable.

Develop specific environmental criteria as part of the grants selection process to identify, avoid, or minimize impacts and raise environmental awareness.

Support opportunity to integrate Climate adaptation tools to MSMEs

None

Component 2:

Subnational capacity to deliver inclusive, accessible, and citizen-responsive public services, in alignment with national standards, enhanced low None

Component 3:

Communities, including CSOs, businesses, youth and other individuals, engaged and empowered to hold subnational governments accountable low None

Component 4:

National commitment, legislative frameworks, institutional capacities, and partnerships for decentralization strengthened low None

Component 5:

Incentive Program for Local Self-Governments low None