Zimbabwe_EGAD_IEE_Amend_072511.pdf

INITIAL ENVIRONMENTAL EXAMINATION

USAID/ZIMBABWE ECONOMIC GROWTH PORTFOLIO

PROGRAM/ACTIVITY DATA

Program Number: TBD

Functional Objective: Economic Growth

Country: Zimbabwe

Assistance Objective 3: Economy Stabilized and Growing

Program Area 3.3: Social and Economic Services and Protection for Vulnerable Populations Program Element 3.3.2: Social Services Program Element 3.3.3: Social Assistance

Program Area 4.1: Macroeconomic Foundation for Growth Program Element: 4.1.1: Fiscal Policy

Program Area 4.2: Trade and Investment Program Element: 4.2.1: Trade and Investment Enabling Environment

Program Area 4.6: Private Sector Competitiveness Program Element 4.6.1: Business Enabling Environment Program Element 4.6.2: Private Sector Capacity

Assistance Objective 4: Increased Income and Employment Generated by Agricultural Sector

Program Area 4.5: Agriculture Program Element 4.5.1: Agriculture Enabling Environment Program Element 4.5.2: Agriculture Sector Capacity

Funding Period: FY 2009 – FY 2015

Life of Program Funding: $116,218,000

Components FY 2011 FY 2012 FY 2013 FY2014 FY2015 LOP

Livelihoods/Reintegration of Returnees and Strengthening of Safety Net Institutions

$0

$2,000,000

$5,000,000

$17,000,000

Macro-Economic Foundation

$2,458,000

$1,000,000

$18,458,000

Private Sector Development

$4,400,000

$19,400,000

Agriculture and Agribusiness

$9,120,000

$10,000,000

$14,120,000

$61,360,000

Trade 0 $1,600,000 $5,000,000

IEE Prepared By: Taurai Kambeu, USAID/Zimbabwe, MEO Camilien J.W. Saint-Cyr, USAID/SA, REA

Current Date: June 16, 2011

IEE Amendment (Y/N): Yes

ENVIRONMENTAL DETERMINATION RECOMMENDED

Categorical Exclusion: X Negative Determination: X Positive Determination: Deferral:

ADDITIONAL ELEMENTS (Place an X where applicable.)

EMMP: __________ CONDITIONS: _ X _ PVO/NGO: ____X_____

USAID’s strategy statement for Zimbabwe was revised in June 2009 to better reflect the programming priorities for a transition period. Economic growth prominently featured as a critical part of the transition strategy to assist the Government of National Unity (GNU) to achieve economic stabilization and recovery. Through the 18 months Livelihoods grant program, USG assistance in this realm has led to broad-based economic revitalization through employment and income generating activities benefiting 40,000 small holder farmers.

This IEE amends the current EGAD IEE dated June 1, 2009 by changing the life of program funding to 2015. This IEE, by reference, incorporates information from the previous IEE of June 1, 2009. The scope and nature of activities envisioned within USAID/Zimbabwe’s Economic Growth and Agriculture Development (EGAD) strategy and within the Mission’s evolving transitional strategy for 2009-2012 remain unchanged. The EGAD strategy has four key components: humanitarian interventions, macroeconomic policy, private sector development, and agricultural recovery.

This IEE is broad in scope, but does not go into detail for each sub-activity that will be implemented by any given partner. The IEE specifically anticipates the different types of interventions that are or might be implemented by USAID/Zimbabwe under AO 3: Economy Stabilized and Growing and AO4:

Increased Income and Employment Generated by Agricultural Sector.

This IEE does not supersede IEEs for complementary programs funded via USAID’s Office of Food for Peace (FFP), Office of Transition Initiatives (OTI), or Office of Foreign Disaster Assistance. Programs implemented by these offices operate under their own stand alone IEEs and/or environmental assessments.

All activities that are not yet fully defined under USAID/Zimbabwe’s EGAD strategy receive a deferral.

The deferrals will need to be removed once the details of these activities are known, and before obligation of funds takes place.

In addition to assessing potential environmental impacts of activities that fall under the EGAD strategy, outlining mitigation and monitoring requirements, and recommending determinations, this IEE establishes project-level procedures to ensure compliance with USAID regulations and USG law.

Recommended threshold determinations for activities included in this IEE are summarized in the following table:

MATRIX OF ACTIVITIES, RECOMMENDED DETERMINATIONS, AND CONDITIONS

Activity Recommended Determination

Potential Impacts (or categorical exclusion justification)

Recommended Conditions

Development of Policy, Legislation, and Institutional Capacity Building Macro-economic policy/trade and investment policy

Negative Determination with Conditions

In cases where trade and investment reform is expected to have environmental consequences, e.g. as a result of increased productivity, conditions apply.

Major legislation, policy, or regulations intended to facilitate trade and investment will include an analysis of the possible environmental effects and recommendations to mitigate these impacts.

The implementing partner must communicate these findings and recommendations to relevant government offices, and work to implement these recommendations when feasible. If there are reasons to believe effects may be significant, USAID/Zimbabwe’s MEO and the REA must be promptly informed.

In these circumstances, a full environmental assessment may be required.

Legal and regulatory reform/activities to improve ease of doing business (including business start up)

Negative Determination with Conditions

Streamlined business start-up policies that do not make enterprises aware of potentially negative environmental consequence could have significant adverse consequences.

Business should be informed of any environmental management obligations under Zimbabwean law.

Businesses should have the capacity to meet such obligations before permission for start up is granted.

Technical assistance to associations for purposes of improving analysis and advocacy

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Institutional strengthening of sector associations to improve production, marketing, etc.

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Institutional strengthening of safety net institutions

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Research and Information Transfer

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Financing DCA, microfinance, savings and lending schemes

Negative Determination with Conditions

The potential cumulative impact of micro and small enterprises can be significant and may include pollution of air and water, poor management of organic waste, drawdown of communal water resources, etc.

USAID/Zimbabwe-capitalized microfinance institutions (MFIs) will build basic environmental review into loan-making processes.

Business Development Agribusiness development and food processing

Negative Determination with Conditions

Agribusiness enterprises can be the source of significant adverse environmental impacts. Storage and sale of agricultural inputs pose hazards associated with improper disposal of containers.

Enterprises supported by USAID/Zimbabwe must employ adequate environmental management techniques to comply, at minimum, with Zimbabwean law and/or SADC policy.

The program must conduct environmental audits and, as appropriate, training of the targeted businesses to ensure environmentally sound practices are followed, both in the interest of environmental protection and of profitability. See Section 4 for more detail.

Technical assistance and training to build capacity and skills in research, productivity, competitiveness, market linkages, trade, etc.

(including extension services, business support services, conservation farming, study tours)

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Dissemination of market information (e.g., pricing)

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Trade promotion and facilitation for enterprises

Categorical Exclusion

Per 22 CFR 216.2.c.2.(i) “Education, technical assistance, or training programs, except to the extent such programs include activities directly affecting the environment” and/or (xiv) “studies, projects, or programs intended to develop the capacity of recipient countries to engage in development planning” are categorically excluded.

Support to use and procure seeds

Negative Determination with Conditions

Per 22 CFR 216.3(a)(2)(iii) for activities associated with seeds, seed supply, and planting materials (I.R.

8.1) See Section 4 for conditions.

Support to use and procure fertilizers

Negative Determination with Conditions

Misuse of fertilizers can damage soils and water.

Such assistance shall be confined to “small scale” endeavors where there is no potential adverse impact to threatened or endangered species or their habitats, including wetlands. Quantity imports are prohibited.

Fertilizer application should be considered in the context of the overall farming system (organic manures, crop rotation, etc.). An assessment of soil should be obtained before applying fertilizer.

Indiscriminate use of fertilizer should be avoided. Best practices for fertilizer use should be used (www.encapafrica.org).

An environmental mitigation and monitoring plan must be developed by the implementing partner to ensure that fertilizer is used in an environmentally safe manner.

Pesticide procurement and use

Deferral Numerous adverse impacts can occur on humans, animals, and ecosystems.

Pest resistance may also develop.

An IPPM-SUAP is required to enable the use of pesticides.

Germplasm conservation, genetically-engineered products, genetic engineering, biosafety issues

Deferral USAID’s biosafety procedures in ADS 201, 22 CFR 216.3(a)(7)(iii), must be met. This includes a biosafety assessment. The implementing partner must provide approval from the appropriate Zimbabwean authority for the activity to commence. Once USAID’s biosafety officer confirms that the biosafety procedures have been completed, this IEE should be amended to reflect the appropriate threshold decision.

Construction/Rehabilitation of Infrastructure Construction/rehabilitation of markets and related infrastructure, excluding roads and irrigation systems

Negative Determination with Conditions

Small scale construction/rehabilitation may result in deforestation, damage to protected areas, destruction of ecosystems, etc. Post-construction, markets have potential for health impacts resulting from accumulation of trash or disposal of waste water.

The implementing partner must identify and implement standards and procedures to ensure appropriate siting, sourcing of materials, design, drainage, sanitation, etc. See www.encapafrica.org.

Development of a practical environmental protocol must be put into place with local authorities. See section 4 for more details.

Construction/rehabilitation of dams and irrigation systems

Deferral Construction/rehabilitation of dams, irrigation systems, and other agricultural infrastructure can have serious negative impacts.

Depending on the size of the project, the determination might be a negative determination with conditions or a positive determination.

An environmental assessment may be required.

Small Grants Income generation/employment generation grants

Negative Determination with Conditions

Impact will vary according to the nature of the activity.

Since the nature of such activities is unknown, the Mission will ensure that grant proposals are screened using the Africa Bureau Environmental Review form (see Annex 2) as a means of determining any potential environmental consequences. The full set of guidelines can be found at www.encapafrica.org.

Small grants (see section on small grants for various types that may be funded)

Negative Determination with Conditions

Impact will vary according to the nature of the small grant.

Since the nature of small grants is unknown, the Mission will ensure that grant proposals are screened using the Africa Bureau Environmental Review form (see Annex 2) as a means of determining any potential environmental consequences. The full set of guidelines can be found at www.encapafrica.org.

MONITORING AND COMPLIANCE CONDITIONS

These procedures are intended to ensure that the IEE findings and conditions are implemented as a matter of routine project implementation. As described below, these procedures are themselves a general condition of approval for the IEE, and their implementation is therefore mandatory.

EGAD Team Requirements:

The EGAD Team Leader, in consultation with Mission COTR(s), activity managers, implementing partners, the Mission Environmental Officer (MEO), the Regional Environmental Advisor (REA), and the Bureau Environmental Officer (BEOs), as appropriate, will actively monitor and evaluate whether environmental consequences arise during implementation and will modify or end activities if they are deemed to be harmful to the environment. In the event that unforeseen environmental impacts are determined or that mitigation and control measures are insufficient, the EGAD team will consult promptly with the Regional Environmental Advisor in USAID/Southern Africa.

1. The EGAD Team Leader will ensure that new activities at either a program element or sub-element level are covered under an amended IEE before implementation occurs.

2. The EGAD team will provide to the prime contractor the IEE conditions and the activities to which they apply.

3. Selection of contractors and grantees should include consideration of the offeror’s ability to perform the mandatory environmental compliance requirements as set forth herein. The RCO shall include required environmental compliance and reporting language into each contract/grant. The EGAD team will subsequently ensure that appropriate budget resources, qualified staff, equipment, and reporting procedures are contained in proposals to conduct environmental compliance and that implementing partners undertake mitigation and monitoring measures as a routine course of program implementation.

4. The EGAD Team Leader, COTR(s), and activity mangers will undertake regular and timely field visits and consultations with implementing partners to jointly assess the environmental impacts of ongoing activities and associated mitigation and monitoring conditions.

5. In addition, and as appropriate, the EGAD team may facilitate and/or subsidize the delivery of activity-specific environmental training to the contractor.

Implementing Partner Requirements:

1. Implementing partners will develop an environmental management plan or environmental compliance memo describing how the project will, in particular terms, implement the conditions in the IEE that apply to project activities. This shall include training of contractor staff and sub-partners, when appropriate.

2. Implementing partners will undertake regular field visits to monitor and evaluate program activities and to assess their environmental impact.

3. Quarterly reports by implementing partners will include a brief update on mitigation and monitoring measures being implemented and results of environmental monitoring.

4. Implementing partners will complete an annual environmental mitigation and monitoring report of activities undertaken unless specified otherwise. This report is to be submitted to the appropriate COTR or activity manager by the end of September each year. This reporting requirement should be incorporated into performance monitoring plans and annual work plans. Environmental monitoring information shall then be compiled by the health team and submitted to the MEO for incorporation into the annual Performance Plan and Report.

5. Any grants or fund transfers from implementing partners to other organizations (sub-partners) must incorporate provisions stipulating that an annual environmental monitoring report will be completed; and that activities to be undertaken will be within the scope of the environmental determinations and recommendations of this IEE. This includes assurance that any mitigating measures required for those activities be followed.

6. The primary responsibility for adherence to this IEE falls principally on USAID’s grantees and contractors. USAID’s primary role is to monitor implementing partners to ensure that they are in compliance with this IEE.

As required by ADS 204.5.4, USAID/Zimbabwe EGAD Team will “actively monitor ongoing activities for compliance with approved IEE recommendations, and modify or end activities that are not in compliance” and ensure that adequate time and resources are available to bring all activities into compliance with the requirements of this IEE. If additional activities are added to this program and are not described in this document, an amended environmental examination will be prepared.

Upon completion of an environmental management plan by respective implementing partners, the REA and the MEO will develop an Environmental Mitigation & Monitoring Tracking System or checklist to ensure compliance with environmental regulations.

APPROVAL OF ENVIRONMENTAL ACTION RECOMMENDED

MISSION CLEARANCES:

Acting Mission Director: ___________________________ Date: _____________

Sheryl Stumbras

Acting Program Officer: ___________________________ Date: _____________ Taurai Kambeu

EGAD Team Leader: ___________________________ Date: _____________ Tina Dooley-Jones

Mission Environmental Officer: ___________________________ Date: _____________ Taurai Kambeu

OTHER CLEARANCES:

Regional Contracting Officer: _________________ Date: _____________ USAID/Southern Africa Martin Fisher

Regional Environmental Advisor: __________________ Date: _____________ USAID/Southern Africa Camilien Jean W. Saint-Cyr

CONCURRENCES:

AFR Bureau Environmental Officer: ___________________________ Date: _____________ Brian Hirsch

INITIAL ENVIRONMENTAL EXAMINATION:

Zimbabwe Economic Growth and Development Program (EGAD)

PROGRAM/ACTIVITY DATA

Program Number: TBD

Functional Objective: Economic Growth

Country: Zimbabwe

Assistance Objective 3: Economy Stabilized and Growing

Program Area 3.3: Social and Economic Services and Protection for Vulnerable Populations Program Element 3.3.2: Social Services Program Element 3.3.3: Social Assistance

Program Area 4.1: Macroeconomic Foundation for Growth Program Element: 4.1.1: Fiscal Policy

Program Area 4.2: Trade and Investment Program Element: 4.2.1: Trade and Investment Enabling Environment

Program Area 4.6: Private Sector Competitiveness Program Element 4.6.1: Business Enabling Environment Program Element 4.6.2: Private Sector Capacity

Assistance Objective 4: Increased Income and Employment Generated by Agricultural Sector

Program Area 4.5: Agriculture Program Element 4.5.1: Agriculture Enabling Environment Program Element 4.5.2: Agriculture Sector Capacity

Funding Period: FY 2009 – FY 2015

Life of Program Funding: $116,218,000

Components FY 2011 FY 2012 FY 2013 FY2014 FY2015 LOP

Livelihoods/Reintegration of Returnees and Strengthening of Safety Net Institutions

$2,000,000

$17,000,000

Macro-Economic Foundation

$2,458,000

$1,000,000

$18,458,000

Private Sector Development

$4,400,000

$19,400,000

Agriculture and Agribusiness

$9,120,000

$10,000,000

$61,360,000

Trade 0 $1,600,000 $5,000,000

IEE Prepared By: Taurai Kambeu, USAID/Zimbabwe, MEO Camilien J.W. Saint-Cyr, USAID/SA, REA

Current Date: June 16, 2011

IEE Amendment (Y/N): Yes

1. BACKGROUND AND PROGRAM/ACTIVITY DESCRIPTION

1.1 Background

The unity government has demonstrated progress on a number of levels to demonstrate that it is serious about economic stabilization. Prices have been liberalized, a multi-currency foreign exchange system has been introduced, quasi-fiscal activities of the Reserve Bank have ended, and a more realistic national budget based upon revised revenue and expenditure projections has been developed by the Ministry of Finance. However, due to the fluid political environment economic confidence remains extremely low.

Many businesses are still closed or are operating at dramatically reduced staff and production levels. The financial system is in disarray—savings denominated in Zimbabwe dollars have become worthless due to hyperinflation and the limited availability of foreign currency is causing hardship across the country, particularly in rural communities. Exports have declined to the lowest level of the last twenty years and remittances from the Diaspora have become the largest component of GDP.

1.2 Purpose and Scope of IEE

The formation of the GNU has provided new opportunities for the USG to assist progressive elements of the unity government to consolidate political and economic reforms and to bring about broad-based economic growth. This IEE has been prepared to provide environmental determinations for all activities that fall within the scope of USAID/Zimbabwe’s new Economic Growth and Development (EGAD) strategy. Programs span technical assistance for macro-economic and micro-economic policy formulation, private sector development, agricultural recovery, and safety net programs. Many of the envisioned programs complement those currently being implemented by USAID/OFDA and USAID/FFP.

This document does not supersede IEEs drafted for complementary programs being conducted by DCHA.

This IEE is broad in scope, but it does not go into detail for each sub-activity that will be implemented by any given partner. The IEE specifically anticipates the different types of interventions that are or might be implemented by USAID/Zimbabwe under AO 3: Economy Stabilized and Growing and AO4:

Increased Income and Employment Generated by Agricultural Sector under the Mission’s transition strategy.

All activities that are not yet fully defined under USAID/Zimbabwe’s EGAD strategy receive a deferral.

The deferrals will need to be removed once the details of these activities are known, and before obligation of funds occurs.

In addition to assessing potential environmental impacts of activities that fall under the EGAD strategy, outlining mitigation and monitoring requirements, and recommending determinations, this IEE establishes project-level procedures to ensure compliance with USAID regulations and USG law. These procedures are intended to ensure that the IEE findings and conditions are implemented as a matter of routine project implementation. Therefore, the procedures are a general condition of approval for the IEE, and their implementation is therefore mandatory.

1.3. Description of Illustrative Activities

The EGAD strategy is four-fold: to improve livelihoods and safety nets; to improve the macro-economic and micro-economic environment; to generate agricultural recovery (increased food security); and to promote private sector development. Together, these areas of focus will increase employment and incomes, restore investor confidence, and jump start the economy. Examples of illustrative activities are summarized below.

Component #1: Livelihoods/Safety Nets

Program Area: Social and Economic Services and Protection for Vulnerable Populations Program Element(s): Social Assistance/Social Services

Illustrative activities include:

Basic economic activity and livelihoods maintained/restored. Activities may include conservation farming, use of drought resistant crops and improved household crop storage systems, rehabilitation of dams in support of small scale agricultural production, and vocational training.

Safety net institutions strengthened and national policy with regard to the provision of safety net support reviewed and improved.

Obstacles to return and reintegrate migrants addressed, including the identification of employment opportunities, care and protection during the transit period, and legal issues with regard to property rights, travel documents, etc.

Efficiency of food aid achieved through programs that begin to move away from vulnerable group feeding and toward market friendly approaches that include monetization, cash vouchers, food for assets, price subsidization, etc.

Component #2: Macro-economic Foundation

Program Area: Macroeconomic Foundation for Growth Program Element: Fiscal Policy

Technical assistance to evaluate and improve government policies and systems with respect to revenue collection, expenditure, and national level budgeting.

Technical assistance to develop the capacity of the Central Statistical Service to collect, analyze, and publish data and results.

Component #3: Private Sector Development

Program Area: Private Sector Competitiveness Program Element(s): Private Sector Enabling Environment/Private Sector Capacity

Technical support to a broad-based private sector association(s) to increase analytical capacity to identify constraints to business development for public debate and dialogue with the government.

Support will also be provided to the public sector to assist its stakeholders to draft position papers on necessary legislative and regulatory reforms for increased private sector competitiveness.

Technical support to the government to assist it to undertake reforms to achieve more efficient legal and regulatory systems, to reduce transaction costs for domestic and international business, to improve contract enforcement/dispute resolution, and to promote trade.

Improvement of the legal framework for micro-finance institutions (MFI’s) to provide credit to micro and small enterprises.

Micro-finance, group savings and lending, development credit authority.

Business support services related to management and technical skills, accounting and financial management, standards and quality assurance, pricing, market development.

Establishment of market linkages.

Trade promotion and facilitation.

Component #4: Agricultural Recovery

Program Area: Agriculture Program Element(s): Agriculture Enabling Environment/Agriculture Sector Productivity

Support for farming and agribusiness associations (e.g., national farmers unions, commodity and livestock associations) to help them conduct policy analysis and research, lobby for their interests, disseminate information, undertake arbitration, grade products, etc.

Skills recovery through the provision of training and agricultural extension and redeployment of expertise from the Diaspora to Zimbabwe.

Development Credit Authority to guarantee commercial bank loans to farmers for the purchase of agricultural inputs.

Contract farming and out grower schemes, and other means of recovering productivity in uncontested Lands.

Other interventions to revive the agricultural sector (e.g., conservation farming, livestock breeding, small ruminant farming, dam or irrigation rehabilitation).

Re-establishment of a private sector driven warehouse receipt and commodity exchange system.

1.4 Geographic Focus

USAID/Zimbabwe’s EGAD activities will be implemented countrywide. However, assistance to strengthen private sector organizations will likely be limited to urban areas, particularly Harare.

2.0 COUNTRY AND ENVIRONMENTAL BASELINE INFORMATION

2.1 Zimbabwe’s Physical Environment

Zimbabwe has a total land area of 390,000 km2, and lies wholly within the tropics. Four-fifths of the country's land terrain is over 600 meters above sea level, and most of the country has a sub-tropical climate. Seasonal rainfall patterns are erratic with cyclical droughts often span several years. Monthly rainfall is much less reliable than the seasonal totals, and generally decreases from north to south. The national rainfall averages in the past decade have been considerably lower than the averages for this century. The country has no natural lakes and has only a few perennial rivers.

Although some 43 percent of Zimbabwe's land area is comprised of indigenous woodlands and plantation forest, much of this vegetation has been degraded. In many areas, remaining vegetation consists of little more than sparse grazing areas with scattered trees and shrubs. Fuel wood accounts for about 90 percent of national energy needs and the major source of energy in rural areas. There are vast tracts of indigenous woodlands and bushes that have been decimated to meet this demand.

Zimbabwe faces a paradox of abundant and diverse natural resources abutting rural communities plagued with poverty, malnutrition, and under-development. Growing population pressures are exacting an increasing toll on wildlife habitats, due to land-use change caused by agricultural expansion. Also, wild animals traversing park boundaries wreak havoc on neighboring communities, damage their meager crop and livestock holdings, and further increase demands to eliminate marauding species. The competition and land-use conflicts between rural communities and wildlife habitats have created an environmental and development challenge.

2.2 Socio-Economic Profile

Over the past decade, Zimbabwe has endured a litany of economic, political, and social shocks resulting in severe deterioration of quality of life. Commercial farms lay fallow, smallholder farmers are regularly devastated by the vagaries of weather and scarce agricultural inputs, and unemployment is nearing 90 percent. This drastic decline has forced professionals, skilled artisans, and laborers to migrate to neighboring countries and abroad. Those remaining have little disposable income – if they have jobs at all – and most survive by a combination of informal trading and remittances from relatives working outside the country.

The United Nations estimates that more than one million Zimbabweans are classified as Mobile and Vulnerable Persons; many of them were forcibly displaced by brutal GOZ policies. Food aid is required for almost 70 percent of the population in 2009. NGOs have augmented – or outright replaced – government health and social services, resulting in insidious desperation at all levels of society. Society has lost confidence in and respect for once-capable government institutions. Humanitarian aid organizations and remittances are keeping Zimbabwe from complete collapse.

Those worst affected are urban unemployed, youth, the rural poor, and people forcibly displaced from their homes and livelihoods. The aged, retired, orphans, and disabled suffer even more as previous services to support their needs have disappeared. This social suffering is overlaid by an HIV/AIDS epidemic with a 15.6 percent prevalence rate. A breakdown in sanitation services and water infrastructure has resulted in a serious cholera epidemic. Meanwhile, despite a political power sharing agreement, the threat of political violence remains as political factions wrestle for power.

2.3 Land Tenure and Use in Zimbabwe

Over the last ten years, there has been increasing political and social tension in Zimbabwe over land-distribution and compensation. In July 2000, President Mugabe stated that he would adopt a “fast track” land reform process in Zimbabwe where a national committee, the National Land Identification Committee, would identify tracks of land for redistribution. This fast-track model consisted of two approaches: model A1, to benefit 160,000 of the poor from the general landless population and model A2 aimed at creating 51,000 black commercial farmers.1 The process used has proven inefficient and has led to unsustainable farming techniques and over-exploitation of natural resources. Moreover, it has caused disruption to local communal and social structures by creating conflicts between indigenous people and

1 Human Constitutional Rights, 2002.

individuals that have benefited from the land distribution or that have been displaced because of it. The land redistribution scheme has been all the more confusing and upsetting because it was not monitored by the judicial system and has resulted in human rights violations and increasing corruption.

2.4 Zimbabwe Environmental Policies and Institutional Framework

In contrast to many African countries, the environmental legislation of Zimbabwe is quite comprehensive.

Acts relating to the environment are enforced by a number of different ministries. There are almost 20 acts and twice as many statutory instruments (subsidiary legislation) for the environment in Zimbabwe.

They include the Natural Resources Act, Forest Act, Parks and Wildlife Act, Trapping and Animals Control Act, Hazardous Substances and Articles Act, Atmospheric Pollution Prevention Act, Noxious Weeds Act, Plant, Pests and Diseases Act, Mines and Minerals Act, Water Act, Regional Town and Country Planning Act, Rural District Councils Act, Communal Land Act, and Communal Forest Product Act.2

One of the most important pieces of legislation is the Natural Resources Act, which aims to control the use of resources. However, it cannot be applied in the communal areas, about half of the total land area of Zimbabwe, since it is enforced by way of legal title to land.

Generally the enforcement of the above acts is difficult due to the provision of exemptions, which allow companies to pollute. In some cases, the various pieces of legislation are conflicting, which leads to further problems of implementation.

Below is a summary of government agencies that have responsibility for environmental policy. However, it should be noted that poor management and under-funding has severely weakened the effectiveness of these organizations.

The Department of Natural Resources is responsible for the promotion of standards for environmental quality and the provision of information on the environment. This department is the institution in charge of mitigating adverse environmental impacts of projects.

The Department of National Parks and Wildlife Management has responsibility for the management of parks and wildlife, and for the sustainable use of animal resources. The Communal Area Management Program for Indigenous Resources has facilitated sustainable wildlife production, and reduced the degradation of land by offering a viable alternative to the farmer. The revenue generated by the Communal Area Management Program is turned back to the local community and utilized in accordance with community-identified development priorities.

The Ministry of Lands Agriculture and Rural Resettlement implements its mandate through the Agriculture, Technical, and Extension Service (AGRITEX). AGRITEX has extension workers all over the country, and through its extension work, land use planning and soil and water conservation are emphasized. Therefore, the Ministry of Lands, Agriculture and Rural Resettlement has considerable influence on environmental matters. AGRITEX has established its own Soil and Water Conservation Unit.

The Ministry of Local Government Urban and Rural Development (MLGURD) is responsible for community development in a broad sense through the Department of Rural Development. The Ministry

2 African Development Bank Country Environmental Profile, Zimbabwe Environment and Social Policy Working Paper No. 2.

works with district and local authorities and village development committees to implement projects. The Ministry of Local Government Urban and Rural Development controls the District Development Fund.

Other ministries responsible for environmental related matters include The Ministry of Energy and Water Resources Development which implements the Water Act, and gives advice on issues related to surface and ground water.

3.0 EVALUATION OF PROGRAM WITH RESPECT TO POTENTIAL ENVIRONMENTAL

IMPACT

The majority of activities to be implemented under the Mission’s EGAD Strategy are unlikely to have direct and serious negative impact on the environment. However, a few of the proposed activities present potential concerns for the physical environment and human welfare if proper mitigation measures and best management practices are not implemented. See below for an environmental impact analysis.

Macro-economic Policy/Trade and Investment Policy:

Major legislation, policy, or regulations intended to facilitate trade and investment will include an analysis of the possible environmental effects and recommendations to mitigate these impacts. The implementing partner must communicate these findings and recommendations to relevant government offices, and work to implement these recommendations when feasible. If there are reasons to believe effects may be significant, USAID/Zimbabwe’s MEO must be promptly informed. In these circumstances, a full environmental assessment may be required.

Legal and Regulatory Reform/Activities to Improve Ease of Doing Business:

Streamlined business start-up policies that do not make enterprises aware of potentially negative environmental consequence could have significant adverse consequences. Business should be informed of any environmental management obligations under Zimbabwean law. Businesses should have the capacity to meet such obligations before permission for start up is granted.

Capitalization, Training, and Technical Assistance to Micro-Finance Institutions (MFIs), Group Savings and Loans Schemes, and Development Credit Authority:

The potential, cumulative environmental impact of micro, small, and medium enterprises is significant, and may include pollution of air and water, drawdown of communal water resources, and poor management of organic wastes. Without environmental due diligence in loan-making and technical assistance, increased finance for and technical assistance may increase the numbers of enterprises (and the scale of individual enterprises) that have potentially significant adverse impacts.

Production Activities:

It is important to distinguish between activities that build capacity in analysis and agricultural extension and those that seek to promote specific agricultural practices.

Activities in the former category do not of themselves have the potential for significant environmental impact; however, activities in the latter category do have such potential. In general, improved agricultural practices are intended to result in more sustainable farming methods and higher-yields. Inappropriate activities could result in soil depletion, salinization, other types of land degradation, eutrophication, nutrient pollution of water bodies, introduction of invasive species, and intensification of production or new cultivation on marginal lands. Each of these could have considerable impact. For example:

Even if USAID-funded activities are of only limited scale, they may be intended to result in or support a much wider adoption of a particular action.

Because much of the land in Zimbabwe is already degraded or marginal, further degradation is likely to have very significant impacts on rural welfare.

These impacts arise out of design or implementation failures; an agricultural program designed to identify and promote sustainable agricultural techniques in the specific circumstances of Zimbabwe should, by definition, prevent such impacts.

Specific activities that could pose problematic:

Introduction of exotic species: It is widely accepted that introducing a non-native species to a new ecosystem must be done with great care. Quarantine laws are set up to avoid potential adverse consequences. Introduced exotic species may spread diseases, out-compete native species for resources, become feral, act as predators or pests, or interbreed with native species.

Lack of local competition or predators may give rise to “weed species.”

Soil erosion: Unsustainable practices (such as badly managed open-furrow agriculture, a crop grown in the wrong way or place, deforestation, or draining wetlands) can cause soil erosion, which leads to less rainfall being absorbed and, in turn, excess runoff. This runoff removes the fertile topsoil necessary for crop production and can have disastrous off-site consequences, including gully formation, landslides, siltation and sedimentation of water bodies, downstream flooding, and damage to productive infrastructure.

Reduction of soil fertility: Soil fertility is dependent on three major nutrients (nitrogen, phosphorous, and potassium), various trace elements, and organic matter content. A productive soil contains sufficient quantities of each of these factors. The factors can be removed by repeated cropping without fertilization, rainfall leaching, lack of a restorative fallow, and removal or burning of crop residues. The subsequent decline in soil fertility often occurs in conjunction with soil erosion, with each problem exacerbating the other.

Reduction in water quality: Incorrectly applied agrochemicals, fertilizers, or manures can migrate from a farmer’s field to local water sources, causing environmental harm and adversely affecting human health and activities.3 Animal manure transported from fields into water bodies through rainfall, runoff, or irrigation can pollute local drinking water sources and spread human and animal diseases. Nutrients from manures/fertilizers can also cause nutrient loading in local water bodies, resulting in degraded water quality, reduced wildlife populations, and toxic algal blooms.

Moreover, reduced water quality can impact drinking water, sanitation, fishing, aquaculture, recreation and tourism, and other farms.

Food processing: Food processing workers often use too much water when cleaning equipment and food materials. This may cause others in the community to have less water and decrease the enterprise’s own future access to water. It may also mean that water costs are unnecessarily high, even with use of a well. New wells may have to be drilled more frequently as groundwater levels drop.

Procurement of Agricultural Inputs (including fertilizers and pesticides):

Whether and to what extent pesticides may be used or procured4 in Mission activities is unclear.

Therefore, this IEE does not provide a determination for programs that might use or procure pesticides.

3 The impacts of pesticides on the environment are discussed in the Guidelines chapters on integrated pest management and safer pesticides.

4 As in all Reg. 216 documentation, “pesticide procurement and use” is interpreted broadly. “Procurement” includes direct purchase, payment in kind, donations, provision of free samples, and other forms of subsidies. In addition, provision of credit to borrowers and guarantee of credit to banks or other credit providers could be considered procurement. “Use” includes sale, handling, transport, storage, mixing, loading, application, disposal, provision of fuel to transport pesticides, and technical assistance in pesticide management.

An amendment will need to be made to this IEE, and an Integrated Pesticide & Pesticide Management and Safer Use Action Plan (IPPM-SUAP) developed, before any such program can commence.

The use of fertilizers poses a number of potential impacts, principally related to long-term health of soil and to water quality. These impacts are preventable with protocols that assure appropriate use. Such protocols should be a part of any “sustainable agricultural program,” as discussed above. Pesticides have a large number of potential impacts, including, but not limited to, damage to non-target ecosystems, adverse effects on health, and development of resistance (and therefore resurgence) in the pests they are meant to control. Environmental impact of pesticides cannot be evaluated without specific information about proposed use and chemicals.

Aspects of environmental impact from fertilizers can be illustrated as follows:

Because fertilizers and pesticides could be resold by beneficiaries, appropriate use of fertilizers (even beyond the immediate beneficiaries) must be addressed.

Physical Expansion of Enterprises and Markets:

The extent to which the Mission will support construction activities at the enterprise level is unclear.

Small-scale construction itself has the potential for a set of impacts such as erosion, contamination of water supplies, depletion of standing timber/deforestation, damage to protected areas, and creation of habitat for disease vectors. Experience shows that these impacts are controllable with safeguards to assure 1) appropriate siting, 2) appropriate sourcing of materials, 3) appropriate designs, and 4) appropriate construction/worksite practices.

In addition to potential impact arising from construction, Mission implementing partners must consider any environmental consequences posed by the economic activity to be undertaken within the constructed facility, even if USAID’s role ends upon completion of the infrastructure. Markets and transport yards (two key parts of “market infrastructure”) have significant potential environmental and health impacts associated with their operation. These facilities generate significant quantities of wastewater as well as human and organic waste, which, if improperly managed, can contaminate water supplies and/or provide ready habitat for disease vectors such as flies, mosquitoes, and rats. The result is an increase in disease.

These potential impacts are controllable, and must be addressed with proper design (e.g., adequate provision of latrines, wash water, and drainage) and with proper operation and maintenance.

Agribusiness enterprises, particularly agricultural processing, can be the source of significant adverse environmental impacts, particularly Biological Oxygen Demand loading of surface waters, water source depletion, odor, and creation of habitat for disease vectors through improper waste disposal. Storage and sale of agricultural inputs poses hazards associated with improper disposal of containers (including chemical contamination of soil and ground and surface waters, worker and customer hazards, etc.).

Without appropriate environmental management practices at the facility level, assistance that increases the scale or number of such enterprises will tend to result in/increase such adverse impacts.

A streamlined system for business start-up that does not make enterprises aware of their environmental management obligations—or which authorizes the start-up of environmentally problematic enterprises lacking appropriate environmental management plans, infrastructure or equipment—can increase the diverse adverse impacts associated with economic sectors such as industry, extraction, agriculture, and livestock development. These impacts can be cumulatively or individually significant.

Small Grants/Income and Employment Generation Grants:

Grants will be provided to communities, groups, or associations of farmers and to entrepreneurs. Key concerns are that these grants may support activities with potential impacts on the biophysical environment. For instance, boosting production of selected commodities may lead to negative impacts associated with agricultural expansion or intensification, including land conversion, soil depletion, and erosion. Support for agricultural activities such as irrigation schemes and introduction of alternate crops and agricultural techniques can degrade lands and soils over the long term.

Other types of sub-grants that may be funded include those that return and reintegrate migrants (i.e., incorporate them into the workforce, provide for care and protection during the transit period, and address legal issues with regard to property rights, etc.). Another category of potential sub-grants are those related to food aid, as a means of generating employment (e.g., through food for assets, food for work, monetization, subsidized commodities, etc.).

Experience indicates that the potential impact of small-scale grants can be contained with appropriate screening procedures to identify higher-risk activities, and a mechanism to specify best practices and mitigation measures, when appropriate. The Environmental Review Form and Procedures for Small Grants (see Annex 2) will be utilized for this purpose. Any sub-grants proposed must be brought to the attention of the Regional Environmental Advisor (REA’s) to assess the extent to which the review process is appropriate or not. Following the REA’s determination that the review process is adequate, the Mission Environmental Officer will be able to approve the activity.

Should any of the following activities be considered, then an Environmental Assessment will be called for, pursuant to 22CFR216: 1) river basin development, 2) significant irrigation or water management projects (including dams and impoundments), 3) agricultural land leveling, 4) major drainage projects, 5) large scale agricultural mechanization, 6) new lands development, 7) resettlement projects, 8) penetration road building or road improvement projects, 9) construction of power plants or industrial plants, or 10) large scale potable water and sewerage projects.

4.0 RECOMMENDED THRESHOLD DECISIONS AND MITIGATIVE MEASURES

Based on the discussion above, this section presents both recommended threshold…