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Environmental and Social Safeguards Compliance Audit February 2012 PRC: Municipal Water Distribution Infrastructure Development Project Gao’an Water Affairs Limited Prepared by China Water Affairs Group Limited for the Asian Development Bank (ADB) This report has been submitted to ADB by China Water Affairs Group Limited and is made publicly available in accordance with ADB’s public communications policy (2005). It does not necessarily reflect the views of ADB.

Transcript of CAR: PRC: Municipal Water Distribution Infrastructure ... · PDF fileEnvironmental and Social...

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Environmental and Social Safeguards Compliance Audit February 2012

PRC: Municipal Water Distribution Infrastructure Development Project Gao’an Water Affairs Limited Prepared by China Water Affairs Group Limited for the Asian Development Bank (ADB) This report has been submitted to ADB by China Water Affairs Group Limited and is made publicly available in accordance with ADB’s public communications policy (2005). It does not necessarily reflect the views of ADB.

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Project of Gaoan Water Affairs Limited

February 2012

Environmental and Social Safeguards Compliance Audit

(and Corrective Action Plan)

China Water Affairs Group Limited

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ESMS AUDIT REPORT Document Number: ESMS/GAOAN/BP-AP/V1.0/02202012 Topic: Environmental and Social Safeguards Compliance Audit

(And Corrective Action Plan) Written and Prepared by ESMS Supervisor: Wen, Wei Verified by ESMS Manager: Li, Xing Ping Approved by Executive General Manager: Liu, Yong ESMS Committee Representative: Chan, Jacky

Contact Persons: Li, Xing Ping (ESMS Manager/ Deputy General Manager) Email: [email protected] Fax: +86 0755 33362493 (Office) Telephone: +86 0755 33360255 (Office)

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ABBREVIATIONS ADB – Asian Development Bank CAP – Corrective Action Plan CWA – China Water Affairs Group Limited DRC – Development and Reform Commission EDZ – Economic Development Zone EIA – Environmental Impact Assessment EPB – Environmental Protection Bureau LRB – Land Resources Bureau LA/A– Land Acquisition/Agreement PRC – People’s Republic of China RMB – The lawful currency of the PRC RWEP – Raw Water Extraction Point SPS – ADB’s Safeguards Policy Statement (2009) SR – ADB’s Safeguard Requirements SSD – Shanghai Silver Dragon Investment Limited WP/s – Water Plant/s WRB – Water Resources Bureau

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CONTENTS

I. INTRODUCTION ....................................................................................................... 1 A. Project Overviews ............................................................................................... 1 B. Objectives of the Report ...................................................................................... 2 C. Methodology ....................................................................................................... 3

II. AUDIT FINDINGS .................................................................................................... 4

A. Past and Present Related Safeguards Issues ........................................................ 4 i. Environment................................................................................................... 4 ii. Involuntary Resettlement .............................................................................. 6 iii. The Indigenous Peoples ............................................................................... 9

B. Other Social Matters............................................................................................ 9 i. Sustainable Development .............................................................................. 9 ii. Gender and Employment ............................................................................ 10 iii. Labor and Community Health and Safety .................................................. 11

III. CONCLUSIONS AND RECOMMENDATIONS .................................................. 12

A. Conclusions ....................................................................................................... 12 B. Recommendations and Corrective Action Plan ................................................. 13

ANNEX and Translations

Annex 1 Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7 Annex 8 Annex 9 Annex 10 Annex 11 Annex 12 Annex 13 Annex 14 Annex 15

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I. INTRODUCTION A. Project Overviews i. Project Company: Gaoan Water Affairs Limited (hereafter referred to as “Project Company”), a subsidiary China Water Affairs Group Limited (“CWA”), was acquired in 2007. The proposed New Project, located in City of Gaoan, Jiangxi Province (Figure_1), is being controlled by the CWA as CWA owns 60% shares of the Project Company.

Figure 1 – Jiangxi Province on the Map of China

ii. Background and the Necessity of the Proposed Project: (a) The City of Gaoan is located adjacent to the capital city of Jiangxi Province,

Nanchang, and covers urban area approximate 15km2 with a population over 200,000.

(b) Two(2) water plants (“WPs”), No.1 and No.2 WP, are currently under operation, supplying tap water to Gaoan urban residents with a total distribution capacity of 45,000m3/day - 30,000m3/day from No.1 WP and 15,000m3/day from No.2 WP. No.1 WP gets supply of raw water from BiShan Reservoir1, located approximate 15km north of the plant; and No. 2 WP gets supply of raw water from Jin River2, the biggest river cross through Gao’an city. (See Figure 2 and Annex 15 for more info.)

1 BiShan Reservoir – located at WanJia County, approximate 15km from city of Gao’an, with capacity of 15,000,000m3; water quality of BiShan Reservoir is classified Grade III based on national standards (GB3838-2002). 2 Jin River – the biggest river crossed Gao’an city with rain catchment area over 1607km2; the overall water quality of Jin River is classified between Grade II and Grade III (Grade I is referred as the best quality), based on national standards (GB3838-2002).

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(c) As a result of the fast paced economic growth and urbanization process in recent years, concerns associated with insufficient capacity and short of pipeline coverage are highlighted; he local communities urge the government to build new water plants and expand existing water distribution network, to fulfill the water demands not only from urban area, but also from suburban area. According to “Outline of Gaoan’s Overall Urban Planning Plan up to 2020”, city of Gaoan is projected to have a population over 300,000 due to further industrialization, and the water demands would hit 115,000m3/day by 2015.

(c) To address the issues, Gaoan Municipal Government has authorized the Project Company to initiate related water infrastructure projects since 2008. The details will be elaborated in the following paragraphs.

Figure 2 – Project Location in City of Gao’an

iii. Project Break Down: (a) According to “Feasibility Study of Gaoan Shahu WP and Associated Distribution

Pipeline Project”, issued by Nanchang Urban Planning Design Institute in March 2008, it indicated that the purification facility of Shahu WP was designed to have a distribution capacity of 80,000m3/day, and that the facility construction was divided equally into two phases: Phase I, which had started in 2009 and was completed in 2010, includes the first half 40,000m3/day facility construction; Phase II, started in January 2012 and expected to be completed in 2013, mainly the plant facility construction for the rest of 40,000m3/day capacity, for instance, the additional compartments of flocculation/ sedimentation tanks, V-shape filtration tank, sludge treatment compartment and clarification tank; as well as installation of associated electrical components such as pumps and automation control system.

(b) Beside water plant facility construction mentioned above, the Project also involves several peripheral constructions:

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(i) U/G ductworks of laying 25.5km DN1000 and 3.4km DN800 underground pipeline; renovation works of intermediate pressure boosting station (“ISBP”), upgrading its capacity to 70,000m3/day from original 30,000m3/day. As a result of such expansion, the water demand3 from the residential and industrial communities in the south of Gao’an City including the Provincial Construction Ceramics Industry Base will be fulfilled.

(ii) U/G ductworks of running 15km DN400, 5.8km DN300 and 4.7km DN100/200 ducts starting at the joint of the existing water network in city center toward “DaCheng - ChangXi”, a recent established industrial and commercial zone. The construction also comprises an intermediate ISBP, with a daily handling capacity of 10,000m3/day, to boost distribution pressure along the transmission pipeline.

iv. Project Accomplishment and ADB Facility Involvement: (a) Shahu WP construction started in January 2012, and expects to be completed in

2013. The overall peripheral ductwork constructions have achieved approximate 60%, and expect to be completed by the end of 2012.

(a) The Project Company decides to apply the ADB facility, accounts for 69.6% of the total investment, to settle the outstanding construction payables.

B. Objectives of the Report This Compliance Audit Report is being prepared to comply with the ADB’s SPS (2009), including Safeguards Requirements and aims to identify past and present concerns from the production and business activities of Project Company that related to impacts on environment, involuntary resettlement (physical or economic displacement) and ethnic/ indigenous people, determines whether actions were in accordance with the ADB’s SR1, SR2, SR3 principals, requirements and prepares a Corrective Action Plan (“CAP”), containing necessary remedial actions, approximate budget and time frame for resolution of any noncompliance. C. Methodology A delegation of Six (6) ESMS Commissioners from CWA headquarters has conducted a series of investigations of environmental and social aspects of the Project Company’s daily operation and project construction, methodologies include: i. Review of project feasibility study, EIA reports, Contracts and Agreements, check if they are comply with the related National/ Provincial Laws and Documents. Reviewed files consist of but not limited to the following: (a) “Feasibility Study of Gaoan Shahu WP and Associated Distribution Pipeline

Project”, issued by Nanchang Urban Planning Design Institute, March 2008; 3 Water Demand between Residential and Commercial users in South Gao’an has a ratio of 3:5, according to “Feasibility Study of Gaoan Shahu WP and Associated Distribution Pipeline Project”, issued by Nanchang Urban Planning Design Institute in March 2008.

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(b) “Approval of Feasibility Study of Gaoan Shahu WP and Associated Distribution Pipeline Project”, issued by Municipal DRC, June 2008;

(c) “EIA of Shahu WP (Phase I) Construction”, issued by Environmental Engineering Research Division of Institute of Yichuen, May 2008;

(d) “Approval of EIA of Shahu WP (Phase I) Construction”, issued by the Municipal EPB, June 2008;

(e) “EIA of Shahu WP (Phase II) Construction”, issued by Environmental Engineering Research Division of Institute of Yichuen, November 2011;

(f) “Approval of EIA of Shahu WP (Phase II) Construction”, issued by the Municipal EPB, November 2011;

(e) “Feasibility Study of Dacheng-Changxi District Distribution Pipeline Construction”, issued by Zhengjie Investment and Consulting Ltd., May 2011;

(f) “Approval of Feasibility Study of Dacheng-Changxi District Distribution Pipeline Construction”, issued by Municipal DRC, June 2008;

(g) Associated Land Certificates, Land Acquisition Agreements; (h) Memorandum of association and by-laws, labor contracts, operation manuals and

diary as well as historical records. ii. Interview with individuals who have involved with past and present production and activities of the Project Company, explore health and gender issues in the community; iii. Conduct onsite assessment, interview with affected people and local government authorities who have involvement with the land acquisition process. Obtain certificate letters if necessary; iv. Collect information from local government authorities, such as EPB, WRB etc.. Verify whether the Project Company has been reported because of environmental and social related safeguard issues. Obtain certificate letters if necessary.

II. AUDIT FINDINGS

A. Past and Present Related Safeguard Issues i. Environment a. Environment Impact Assessment: The EIA reports of the Project were prepared in the way that strictly complied with the National Laws and Provincial Regulations, for instance, “Environmental Protection Law of the PRC”, "Environment Protection Management Regulations for Project Construction", "Environmental Impact Assessment Law of the PRC” and so on. b. Environmental Influence vs. WP Construction: (i) There is no historical and environmental protected area around Shahu WP as well

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as no residential area, school, hospital, and other public services within area of 2km2. (Annex 1)

(ii) Noise Control: Shahu WP is located at suburban of City of Gaoan, there is few residential around construction site, moreover, the noise level was successfully controlled between 30dB(A) ~ 40dB(A) and fulfilled the requirements as Grade II of the “Construction Site Boundary Noise Limitation” (FN: GB12523-90) due to the application of the low-noise devices, therefore, very limited environment influence could cause as result of the WP phase II construction, no complaint has received from neighbors since construction started.

(iii) Dust Control: sprinklers would frequently water construction site throughout, preventing dusts from spreading.

(iv) Wastewater Control: equipment wash and sewage are the primarily sources of wastewater during construction. The project company has built a temporary sedimentation tank, allowing the wastewater being sufficiently settled before directed into city sewage system. The contamination of such wastewater will no long exist as soon as the completion of construction. Therefore, mere environmental influence could be caused.

c. Environmental Influence vs. Water Distribution Pipeline Construction: As a party of Municipal Urban Planning, distribution pipelines have to be constructed concurrently with city’s transportation infrastructure projects, as all underground pipes need to be laid along the road in the Right of Way (“ROW”) section reserved for the utilities infrastructure construction. Major influence comes from excavation works; the Project Company has constantly enforced mitigation measures on construction site, successfully controlled the side effects that might influence the neighbors around. (i) Noise and Dust Control: noise and dust are the primarily influences caused by

pipeline construction, however being minimized by limiting construction window from 8:00am to 8:00am; applying low-noise devices for construction conducted nearby the public services such as schools, hospitals and nursing homes; for dust control, sprinkler equipped throughout the construction site, watering regularly to prevent dust from spreading.

(ii) Traffic Influence Control: by bringing in more advanced torpedo jack and bore piping technology, it successfully avoids unnecessary trenching works which minimizes the interference to urban traffics and considerably reduces the impact on city’s transportation system. In case excavations cannot be avoided, the Project Company has to file application and paid Gaoan Municipal Administration Engineering Department for road recovery. The charge is determined based on “Charging Standard of Road Restoration over Urban Infrastructure Project”, listing a fixed rate that pre-determined by Municipal Price Bureau.

(iii) Vegetation Recovery: prior to construction, the Project Company would inform the local Landscape Administration Bureau, a department that maintains the municipal landscape property, for any possible effects on the vegetation. Professionals from Landscape Administration would transplant trees and lawns to designated area for future restoration. Related costs will be paid by the Project Company.

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c. Environmental Impact vs. WP Operation: The Shahu WP Phase I construction completed in 2010 and has been put into operation since then; by early 2012, the Project Company will have achieved Phase II construction. According to the site audit, potential environmental influences from water plant operation comprise the following aspects: (i) Noise: the primary sources of noise are the equipment on operation. Since all of

them are capped indoor with proper enclosures, so that majority noise can be significantly attenuated and successfully controlled within the noise emission requirement, according to “Environmental Noise Emission Standards for the Boundary of Industrial Enterprise” (FN: GB12348-2008). Besides, there are no residential and public service facilities within 2km around Shahu WP (both Phase I and II), thus, safeguard issues related noise of WP’s daily operation have never been complained by the neighbors.

(ii) Wastewater: the contaminated water, coming from cleaning process of flocculation tank and backwashing of sedimentation tank, is separated from the sludge after sludge treatment process and recycled by mixing with the raw water and re-entering the purification process. Wastewater has been regularly tested4 and classified as Grade I, according to “General Standard for Wastewater Discharge” (FN: GB8978-1996), which is allowed to be discharged into city sewage system.

Figure -3 Wastewater/Sludge Treatment Flow Diagram

(iii) Sludge: approximate 2.2 tons/day of dewatered sludge will be produced by Shahu

WP after phase II engaging into production. During early stage of WP construction, dewatered sludge would be used for land leveling and gardening purposes, however, most of them have to be delivered to Gaoan Waste Treatment Centre by local Sanitation Department for further treatment and landfilling. The landfilling site, located at Gaoan, Wangjiayu County, is relatively new and occupies 300mu land with filling capacity of 250 tons/day.

(iv) Green Coverage: Pursuant to the overall landscape design of Shahu WP, 30% of green coverage is planned to be accomplished upon the completion of Phase II construction. The landscape project was handled by vegetation professionals hired by the Project Company.

4 Wastewater Test Results : CODcr – 73.48mg/L ~ 96.17 mg/L; SS – 256~ 331mg/L

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(v) Chlorine Product: is used for water disinfection purposes. The procurement/ delivery of chlorine related materials (sodium chlorate and hydrochloric acid) are carried out in strict application procedures set forth by the local authorities, such as Administration of Work Safety, Administration of Transportation and local Police Department, with clear and detailed records according to the “High Toxic Chemical’s Procurement and Transportation License Management”, issued by Ministry of Public Security in August 1st, 2005. Shipment and logistics is handled by Nanchang Pesticide Factory, which is licensed with the “Toxic Chemicals Road Transport Permit”. Chlorine detectors, alarm, collection and absorption devices have been installed in all chlorine involved areas. Furthermore, the automation system would shut off the chlorine generation process once the leakage is detected. Meanwhile, the collection and absorption units would be initiated, preventing chlorine from spreading. ESMS audit team has verified that the recent inspection records shows all pieces of chlorine equipment in plants have been properly maintained and are in good condition. No chlorine leakage incidents have occurred since the Water Plants in Gaoan (No.1, 2 and Shahu Phase I) put into production.

ii. Involuntary Resettlement a. Centralized Land Acquisition Conducted by Government: (i) For the purpose of constructing Shahu WP (Phase I and II) and its associated ISBP,

Gaoan Municipal Land Resources Bureau (“MLRB”) conducted land acquisition twice in 2008 and 2009, and has acquired 65.9 mu from Junyan Street Committee (Annex 2) and 10.97 mu from Changsha Village Committee (Annex 5). (Refer to item-1 and item-2 in Table-1 for details). The Usage Rights of the land was assigned to the Project Company for sole purpose of industrial use in 2011.

(ii) For constructing additional 10,000m3/day ISBP, used for boosting pressure in Dacheng-Changxi water distribution system, People’s Government of Xiangfu Town acquired 6.387mu land from Shanlin Village, assigned to Project Company for related construction in 2011 (Annex 7). (Refer to item-3 in Table-1 for details).

(iii) There is total of 83.33mu land had been acquired, including 82.439mu cultivation land and 0.891mu woodland; Thirty-seven (37) households had been affected. The ESMS delegation has conducted interviews with affect Villages and obtained Certificate Letters accordingly (Annex 4, 6 and 8), confirming that all 37 affected households have been adequately compensated for their loss according to compensation standards stated in LAAs and re-distributed with same quality and quantity of land in the same village, so that living standard of affected villagers was not affected. Therefore, no outstanding Involuntary Resettlement cases were involved.

b. Structure Compensation: it is confirmed by ESMS audit team that there were no

commercial or residential structures permanently or temporarily affected during L.A. process.

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c. Temporary Occupation: During the Dacheng-Changxi underground pipeline construction, total 201.14mu

land in Xiangfu Township, DaCheng Township and DaCheng Development Zone was transitory affected (Annex 9, 11 and 13) (Refer to Table-2); ESMS team interviewed with associated government authorities and owners of the affected properties, and acquired Certificate Letters accordingly (Annex 10, 12 and 14), confirming affected parties have been generously compensated with satisfaction.

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Table 1 – Centralized Land Acquisition Conducted by Gaoan Municipal Government

Centralized Land Acquisition Time (yyyy.mm.dd)

Total Land (mu)

Cultivation Land (mu)

Woodland (mu)

Compensation (RMB)

Remarks

Item By From Dry Paddy 1 Gaoan MLRB Junyan Street

Committee 2008.10.21 65.973 21.991 43.982 0 1,273,278.90 Collective land owned by village

Collective Economic Origination 2 Gaoan MLRB Changsha Village

Committee 2009.12.21 10.97 1.891 8.188 0.891 232,362.61 Collective land owned by village

Collective Economic Origination 3 People’s Government

of XiangFu Town Shanlin Village Committee

2011.07.12 6.387 6.387 0 0 57,483.00 Collective land owned by village Collective Economic Origination

TOTAL LAND ACQUISITION: 83.33 mu

Note:

1. Item No. 1 and 2 are involved in Gaoan Shahu Water Plant (Phase I and II) and its associated underground distribution pipeline network construction. Refer to Table-2, Permanent Land Occupation for details.

2. Item No. 3 is involved in Dacheng-Changxi District Water Distribution Pipeline Construction. Refer to Table-2, Permanent Land Occupation for details. 3. Gaoan Municipal Land Resource Bureau (“MLRB”), the government entity, organizes Municipalities’ Land Reserves and handles land acquisition and allocation/

assignment events. 4. Refer to Annex 2, 5 and 7 for Land Acquisition Agreements (“LAA”). 5. Refer to Annex 4, 6 and 8 for corresponding Certificate Letters.

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Table 1.1 – Centralized Land Acquisition Conducted by Gaoan Municipal Government (Unit: mu)

Committee Village Name

Number of Affected Households

Cultivation Land Area Previously Distributed to Affected Household

Average Cultivation Land Area Lost per Household

Average Cash Compensation Received by Household for Cultivation Land

Average Replacement Land Received After Redistribution (4)

Junyang Street - South Gate Wujia

South Gate Village

26 53.23 2.05 mu 11,600 2.06

Xiejia Village

5 12.75 2.55 mu 11,600 2.57

HuangSha Gang Changsha Village

4 10.97 2.75 mu 13034 2.77

XiangFu ShanLin Village

2 6.387 3.2 mu 5538.4 3.22

Total 37 --

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Table 2 – Permanent and Temporary Land Occupation by the Project

Land Occupation

Facility/ Activity Total Dry Paddy Woodland Road Others Remarks

Permanent Occupation

Raw Water Pipeline ROW 0 0 0 0 ROW Constructed in ROW along major avenue, no LA needed

Shahu WP Phase I and Phase II 65.973 21.991 43.982 0 0 0 Refer to Item-1 of Table-1 for details Distribution Pipeline ROW 0 0 0 0 ROW Constructed in ROW along major street, no LA needed ISBP 10.97 1.891 8.188 0.891 0 0 Refer to Item-2 of Table-1 for details

Dacheng-Changxi Distribution Pipeline ROW 0 0 0 0 ROW Constructed in ROW along major avenue, no LA needed ISBP 6.387 6.387 0 0 0 0 Refer to Item-3 of Table-1 for details

Access Roads 0 0 0 0 0 0 Sites beside roadway, land occupied can be neglected

TOTAL PERMANENT OCCUPATION: 83.33 mu

Temporary Occupation

Shahu WP Distribution Pipeline 0 0 0 0 0 0 Constructed in ROW, no land occupation needed

Dacheng-Changxi Distribution Pipeline

76.31 74.85 0 0 1.46 ROW Affected cultivation land and city road are properties of Xiangfu Township People’s Government, Refer to LAA (Annex 9) and Certificate letter (Annex 10)

92.52 90.00 0 0 2.52 ROW Affected cultivation land and city road are properties of DaCheng Township People’s Government, Refer to LAA (Annex 11) and Certificate letter (Annex 12)

32.31 31.50 0 0 0.81 ROW Affected cultivation land and city road are properties of DaCheng Development Zone Management Committee, Refer to LAA (Annex 13) and Certificate letter (Annex14)

TOTAL TEMPORARY OCCUPATION: 201.14 mu

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c. Based on the concept and standards of “Land Administration Law of the PRC”, “Regulations on Land Acquisition, Compensation and Resettlement of the Jiangxi Province”, “Overall Land Planning of the Jiangxi Province Gaoan City” and associated LAAs, total RMB 1,563,124.51 was compensated for land acquisitions and total RMB 455,000.00 was compensated for temporary occupations. Pursuant to the Certificate Letters acquired from the affected parties, all compensation funding was properly allocated and as all impacts associated with previous land acquisition and occupation were recovered correspondingly. No disputes have been reported or documented.

d. Consultation, Information Disclosure and Grievance Redress:

The Project Company has constantly devoted to disclose information in timely manner via various media channels, making the Project operation transparent; Compensation Affairs Office, established by the Project Company, actively gathering opinions from affected communities and consults individuals if necessary, trying to achieve bilateral consensus and ease the concerns in early stage. On the other hand, the affected people also entitle to file an appeal to the People’s Court in corresponding level, according to “Civil Laws of the PRC”, getting their legitimate interests protected. No land acquisition related disputes have ever been arisen so far.

iii. The Indigenous Peoples As few as 0.04% of ethnic minorities are registered in the City of Gaoan, all of them have adopted the lifestyle of the Han’s, so that they do not self-identify themselves as a distinct culture group. Furthermore, the Project have no involvement of any ethnic minorities in particular, therefore, it can be concluded that no IP safeguard issues associated with the Project.

B. Other Social Matters i. Sustainable Development. a. Water Tariff Affordability: the current water tariff of Gaoan is RMB 1.40/m3, as monthly volume of water consumption per person is approximate 7m3, making RMB 9.8 expenditure per capita, accounted for 0.82% of the total disposable incomes of Gaoan population which is substantially lower than the global average of 4%. Therefore, we shall conclude that water tariff has minor influence to residents’ daily living. On the other hand, the Project Company has taken a fair amount of consideration for the affordability of the vulnerable groups, for each low income household identified by the Gaoan People’s Government, preferential water tariff, RMB 1.15/m3 is applied accordingly. b. Water Tariff Mechanism: Request of tariff hike shall be proposed by the Project Company and submitted to municipal authorities for reviewing. Project Company would disclose all related information to general public, including the reasons and the amount of the price adjustment, by participating series of conferences called “Public

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Hearings”, which is hold by Municipal Pricing Bureau. Essentially, the board of municipal government will determine whether to approve the request of such tariff hike, based on the following factors: (i) the public opinions and (ii) whether the profits of the Project Company could adequately cover necessary capital expense for future pipeline inhabitation, facility upgrades and expansions; whether it capable to maintain reliable water distribution system so that the society of Gaoan can achieve healthy and sustainable growth. (iii) Furthermore, corresponding measurements or policies such as preferential subsidies shall be presented clearly during the Public Hearings, payment capability of vulnerable groups, like single parent families and low-income households, must be taken into consideration.

c. Corporate Social Responsibility: Through close cooperation with the Gaoan Government, the Project Company has achieved series of Water Projects, significantly improved the local water infrastructure. In addition, WP’s construction and operation have brought tremendous job opportunities to local communities, boosted the remuneration level of the local residence. On the other hand, the Project Company believes that, the water resource, as one of the most essential elements to human life, desired a mind of preservation from the public, especially in a water stressed country like China. Therefore, it keeps promoting water conservation idea through corporate campaign and establishes information session once a year in local communities, educating end-users directly and disseminating knowledge about how to improve the efficiency of water usage. ii. Gender and Employment a. Principal of Gender Equality: the Project Company currently employs 31 female staffs, accounting for 34% of the total. 22% of management positions are occupied by female. The company adheres to the principle of gender equality, does not differentiate employment and remuneration by sex and has always provided zero-tolerance discrimination environment for recruitment and promotion process.

Table 3 - Staff Distribution (disaggregated by sex)

Job Category Number of Staffs

Female Staffs Number (Percentage)

Male Staffs Number (Percentage)

Remarks

Managerial 36 8 (22%) 28 (78%) Senior and Mid-Level Managerial Positions

Administrative 25 14 (56%) 11 (44%) Administrative positions including Accounting, Human Resources, Customer Service, Secretary, etc.

Technical 29 9 (31%) 20 (69%) Electrical, Mechanical, Chemical Engineer, Technician and I.T. Supports

Overall 90 31 (34%) 59 (66%) --

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b. Protection of Female’s Rights: Project Company always pays adequate attention to the rights of female staff’s by maintaining beneficiary policies, for instance, four (4) months maternity leaves with 100% of the wage and welfares as well as optional breast-feeding leaves with 90% of wage and 50% of the welfare. It also provides annual gynecological examination to all female employees. iii. Labor and Community Health and Safety a. In full compliance with national policies, regulations and laws, such as “the Labor Contract law” (2008), “Trade Union Law” (1992), “Labor Law” (1995), “the Production Safety Law” (2002) and “the Provisions on Collective Contracts” (2004), (i) pension premium, unemployment insurance, industrial injury insurance, medical insurance, maternity insurance and housing accumulation fund would be paid by the Company on behalf of its employees. (ii) The maximum of forty (40) working hours per week and eight (8) hours per day was strictly enforced. In case that overtime works cannot be avoided, the employer should always obtain consent from employee and provide overtime salary and leaves accordingly. (iii) A transparent and consistent remuneration policy is maintained by corporate human resource department, assuring staffs the equal compensation for equivalent workload. (iv) The Project Company had established the Labor Union, which the board was elected by the members (the employees). It acts as a bridge between the company and the staffs, not only represents the company to conduct the employee consultation, making sure everyone fully understand corporate policies, but also represents the staffs, negotiating with the senior management team over the typical issues covered in a labor contract, such as working hours, wages, benefits, working conditions, and the rules of the workplace. The Union had played a significant role over the years, in addition to providing an effective channel for disputes; it has successfully protected the collective interests of the employees. (v) The Project Company does not engage in any force labor or child labor. b. Health and Social Safety Policies: The Project Company has a good reputation of providing a healthy and safe working environment by maintaining a series of regulations and policies, such as “Occupational Safety Management Procedures”, “Occupational Health Management Programs”, “Hazardous Levels of Chemical Safety Management Procedures” and etc.. Emergency simulation routine for major hazardous like explosion and chorine leakage would be practiced regularly, affirming proper reaction to be performed under such circumstances. To date, no safety incidents of injury and/or death have been reported and/or recorded since the Water Plants in City of Gaoan (WP No.1, 2 and Shahu WP Phase I) being put into operation. c. “Contingency Plans for Failure of Water Distribution” was prepared in 2009, and would be reviewed annually and revised upon necessity (the last revision was on Oct. 2010). It applies to the circumstances which ordinary operation cannot be engaged, incidents as chlorine leakage, equipment failure, blackouts and major pipeline broken as well as unexpected pollution at RWEPs due to extreme weathers or illegal pollutant discharge from the upstream industrial factories. This Contingency Plan has been approved by the corresponding municipal authorities.

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d. The Project Company has conducted regular training on health and safety for staff since 2007 with updated training materials, and has more than 40 staff trained every year by qualified experts/professionals.

III. CONCLUSIONS AND RECOMMENDATIONS A. Conclusions The project, Gaoan Shahu WP and Dacheng-changxi District Water Distribution Pipeline Construction, is considered a significant milestone improving the life quality of residence in the Greater Gaoan Area. Upon the completion, a more reliable urban water distribution system network will be established, equipped with expanded geographic coverage, boosted distribution volume and pressure. The Project has gained great traction from municipal administration, making the process of documents approval in a prompt and smooth manner. On the other hand, all construction contracts were granted through public biddings, made the process transparent and legally binding. i. Environmental Influence: based on the Audit Findings of environmental sector, necessary mitigation measurements were promptly and thoroughly addressed, besides, no environmental related complaints have been received since the first operating day of Gaoan Shahu Water Plant. Since neither environmental accidents nor safety incidents have been recorded and all aspects on potential impacts including noise, dust, wastewater, sludge and chlorine have been well managed within expected targets, no Corrective Action Plan is considered necessary. ii. Involuntary Resettlement: according to the Audit Findings, it shows necessary Land Certificates were legally granted. Since all lands involved were non-residential land, no households have been physically displaced. For those losing cultivation lands, they were compensated and can continue with their livelihood as lands were redistributed so there are no economic displacements. To date no complaints have been raised. Thus, there are no outstanding complaints or grievances associated with L.A. and/or I.R., and no CAP will be required. iii. Indigenous People: pursuant to Audit Findings on indigenous peoples, there are no safeguard issues associated with minority or indigenous people, so that no CAP will be required. iv. Other Social Dimensions: Project Company has always committed in providing a gender equal, healthy and safe working environment to the employees, promoting idea of water conservation to the public and contributing sufficient cap-ex on local water infrastructure projects so that the municipality could have accomplished a sustainable social development.

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B. Recommendations (Corrective Action Plan) Through the ESMS compliance audit, it has confirmed the related constructions and operation were fulfilled the requirements of ADB’s SPS (2009), including SR1, SR2, and SR3 principals. Thus, it is not necessary to prepare further corrective action plan at this present, however, pursuant to Facility Agreement, subsequent audits and monitoring reports will be prepared accordingly by Project Company and submitted to CWA and ADB for reviewing purposes

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Annex 1 – Shahu Water Plant Surrounding

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Annex 2 – LAA (65.973mu)

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Annex 2 – Translation_ LAA (65.973mu)

Land Acquisition Agreement

Land Acquired by: Gaoan Municipal Land Resources Bureau (Hereafter referred as “Party A”)

Land Acquired from: Junyang Street Community South Gate Wujia Village Committee

(Hereafter referred as “Party “B”)

For improving the tap water quality of the urban residential, further enhancing productivity of the provincial ceramic production zone, according to “Land Administration Law of the PRC”, Party A needs to acquired land from Party B for constructing urban water supply infrastructure, as under permission and understanding of Party B, and the following terms of agreement are achieved:

I. Geographic Location and Boundaries: The land is located at west of the South Gate Wujia

village, four boundaries specific as: east to Wujia Village irrigation channel; south to Xiejie Village; west to flood protection channel; north to Jin river. Refer to DWG for boundary details.

II. Total Acquired Area and Land Type: Total Acquired Land: 65.973 mu, including paddy field 43.982mu and day land 21.991mu.

III. Compensation for land acquisition and resettlement will adopt currency compensation methodology; existing attachments (agricultural products) will be handled in an agreed period.

IV. Details of Currency Compensation Methodology: Lump sum rate of RMB 19,000.00/mu, compensated for land acquisition and resettlement regardless the land types, total of RMB 1,253,487.00. Additional greenery (agricultural attachments) fee will be compensated at a rate of RMB 300/mu, sum to RMB 19,791.90. The overall compensation RMB 1,273,278.90 even.

V. Payment Methods: all related compensation will be settled as onetime payment within ten (10) days after signing this agreement

VI. In case of any effects on irrigation, drainage and flood protection system of Party B that raised by infrastructure construction will be the responsibility of Party A, and Party A must ensure the usability of above facilities.

VII. Party B is responsible for general public consultation, must ensure smooth transaction without further excuses.

VIII. Any other uncommon attachments on acquired land should be settled separately. IX. Upon signing this agreement, the land indicated will be state-owned land resource, right of

usage will be assigned accordingly X. Totally of 6 executive copies will be signed and distributed accordingly.

Party A (signature) Party B (signature) Witness (signature) Junyang Street Community (signature) South Gate Village Committee (signature) Date: 2008. 10. 21

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Annex 3 –Land Certificate (65.973 mu)

Annex 3 –Land Certificate_ Translation (65.973 mu)

Right of Land Usage Assigned to Gaoan Water Affairs Limited Location Wujia Village, South of Jin River Lot Number 002-001-0213 Drawing No. Purpose of Usage Public Facility Price Category Type of usage Assignment Date of Termination Total Area 38576.80 m2 Exclusive use area

Notes: Under the "Constitution of the PRC", "Land Administration Law of the PRC" and "Urban Real Estate Administration Law of the PRC" and other related laws and regulations, for the protection of the legitimate interests and the land use right and for registration of the evidence listed in the land rights certificates of the authorized party, the registration is approved through examined and verified, hereby the issuance of this permit.

Gaoan Municipal People's Government (Seal) April 2nd, 2011

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Annex 4 – Certificate Letter (65.973 mu)

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Annex 4 – Translation_Certificate Letter (65.973mu)

Letter of Certificate To Whom It May Concern:

We issue this letter for confirmation the following matters: in October 2008, Gaoan Municipal

Land Resources Bureau acquired 65.973mu land from my village, consisting of 21.991mu dry field; 43.982mu paddy field, followed by assignment to Gaoan Water Affairs Limited for constructing Shahu Water Plant (Phase I and II). The negotiation and signing process was based on mature understanding of both Parties as well as related national, provincial regulations, and all compensation funds has paid and received my village community, total of RMB 1,273,278.90.

Prior to the acquisition, this land has assigned to 26 households in South Gate Village and 5

households in Xiejia Village. The village committees have allocated funding to the affected households and compensated adequately based on the agreement and redistributed with same quality and quantity lands. Major resources of incomes of affected households are from working labor jobs in urban area, small business and house rental etc., as agricultural incomes only contributes as few as 5%, thus, affects raised by LA has very mere impacts on livelihoods of affected peoples and has already been recovered accordingly. Despite the adequate compensation, the new jobs with better remuneration, provided by new constructed water plants, significantly boost the life quality of local communities. To date, no complaints and grievances have been raised by local residence as well as by related government authorities.

There are no residential structures on the acquired land, so that no involvement of any physical

displaced persons.

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Annex 5 – LAA (10.57mu)

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Annex 5 – Translation_ LAA (10.57mu)

Land Acquisition Agreement

Land Acquired by: Gaoan Municipal Land Resources Bureau (Hereafter referred as “Party A”)

Land Acquired from: HuangShaGang Changsha Village Committee, Yang and Liao Family Group

(Hereafter referred as “Party “B”)

For speeding up construction of the provincial ceramic production zone, boosting local economy, according to “Land Administration Law of the PRC”, Party A needs to acquired land from Party B for constructing supplementary Intermediate Pressure Boosting Station (“IPBS”) for Shahu WP, as under permission and understanding of Party B, and the following terms of agreement are achieved:

I. Geographic Location and Boundaries: According to the design of IPBS, the land is located

at Changsha Village, four boundaries specific as: east to Yangliao Village mountain field; south to Yangliao Village cultivation field; west to Yangliao Village mountain field; north to the old Qingao road.

II. Total Acquired Area and Land Type: Total Acquired Land: 10.97mu, including paddy field 8.188mu and day land 1.891mu, mountain field 0.891mu. Refer to DWG for boundary details.

III. Compensation Methodology: Paddy field RMB 23,156/mu, dry land RMB 15,051/mu, mountain field RMB 9,262/mu, total compensation RMB 226,315.21 even. Additional greenery (agricultural attachments) recovery fee RMB 6,047.40, total compensation RMB 232,362.61 even.

IV. Payment Methods: all related compensation will be settled as onetime payment within ten (10) days after signing this agreement

V. In case of any effects on irrigation, drainage and flood protection system of Party B that raised by infrastructure construction will be the responsibility of Party A, and Party A must ensure the usability of above facilities.

VI. Irrigation charging have to be waived, application will be filed by Huangshagang Township government, according to related nationals policies, in case of the charges cannot be waived, further Land Right owner will be responsible for associate charges.

VII. Party B is responsible for general public consultation, must ensure smooth transaction without further excuses.

VIII. Any other uncommon attachments on acquired land should be settled separately. IX. Upon signing this agreement, Party A will own the usage right of the land, as the land

indicated above will become state-owned land resource. X. Totally of 6 executive copies will be signed and distributed accordingly.

Party A (signature) Party B (signature) Witness (signature)

Date: 2009. 12. 21

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Annex 6 – Certificate Letter (10.57mu)

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Annex 6 – Translation_Certificate Letter (10.57mu)

Letter of Certificate To Whom It May Concern:

We issue this letter for confirmation the following matters: in December 2009, Gaoan Municipal

Land Resources Bureau acquired 10.97mu land from my village, consisting of paddy field 8.188mu dry field, 1.891mu dry land and 0.891mu mountain field, followed by land assignment to Gaoan Water Affairs Limited for constructing Shahu Water Plant IPBS. The negotiation and signing process was based on mature understanding of both Parties as well as related national, provincial regulations, and all compensation funds has paid and received my village community, total RMB 232,362.61.

Prior to the acquisition, this land has assigned to 4 households of my Village, including one (1)

household from Yang family group and three (3) households from Liao Family Village. The village communities have allocated funding to the affected households and compensated adequately based on the agreement and redistributed with same quality and quantity lands. Major resources of incomes of affected households are from working labor jobs in urban area, small business and house rental etc., thus, affects raised by LA has very mere impacts on livelihoods of affected peoples and has already been recovered accordingly. Despite the adequate compensation, the new jobs with better remuneration, provided by new constructed water plants, significantly boost the life quality of local communities. To date, no complaints and grievances have been raised by local residence as well as by related government authorities.

There are no residential structures on the acquired land, so that no involvement of any physical

displaced persons.

Gaoan HuangShaGang Changsha Village Committee (Seal) Date: 2012. 02. 21

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Annex 7 – LAA (6.387mu)

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Annex 7 – Translation_ LAA (6.387mu)

Land Acquisition and Transfer Agreement

Land Acquired by: Gaoan Water Affairs Limited (Hereafter referred as “Party A”)

Land Acquired from: XiangFu Town People’s Government

(Hereafter referred as “Party “B”) For constructing Intermediate Pressure Boosting Station, according to “Land Administration Law

of the PRC” and unified urban-rural planning, acquisition, land administration and land resources supply policies, Party A needs to acquired land from Party B, as under permission and understanding of Party B, and the following terms of agreement are achieved:

I. Geographic Location and Boundaries: the land is located at XiangFu Town Shanlin Village

and owned by Shanlin Village Committee, four boundaries specific as: east to land of my village; south to land of LongPoQiao; west to land of my village; north to No.320 National Roadway. Refer to DWG for boundary details.

II. Total Acquired Area and Land Type: Total Acquired Land 6.387mu, all dry land. III. Compensation for land acquisition and resettlement will adopt currency compensation

methodology; existing attachments (agricultural products) will be compensated and to be handled by Party B in an agreed specific period.

IV. Compensation Methodology: lump sum compensate rate for dry land RMB 9,000/mu, total compensation RMB 57,483.00 even.

V. Payment Methods: all related compensation will be settled as onetime payment within three (3) months after signing this agreement

VI. In case of any effects on irrigation, drainage and flood protection system of Party B that raised by infrastructure construction will be the responsibility of Party A, and Party A must ensure the usability of above facilities.

VII. Irrigation charging have to be waived, application will be filed by Huangshagang Township government, according to related nationals policies, in case of the charges cannot be waived, further Land Right owner will be responsible for associate charges.

VIII. Party B is responsible for general public consultation, must ensure smooth transaction without further excuses.

IX. Upon signing this agreement, Party B will own the land, as the land indicated above will become state-owned land resource, however Party A will be assigned with Usage Rights.

X. Totally of two (2) executive copies will be signed and distributed to Party A and Party B.

Party A (signature) Party B (signature)

Date: 2011. 07. 12

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Annex 8 – Certificate Letter (6.387mu)

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Annex 8 – Translation_Certificate Letter (6.387mu)

Letter of Certificate To Whom It May Concern:

We issue this letter for confirmation the following matters: in July 2011, Gaoan Municipal Land

Resources Bureau acquired 6.387mu dry land from my village, followed by assignment to Gaoan Water Affairs Limited for constructing Shahu Water Plant IPBS. The negotiation and signing process was based on mature understanding of both Parties as well as related national, provincial regulations, and all compensation funds has paid and received my village community, total RMB 57,483.00.

Prior to the acquisition, this land has assigned to 2 households of my Village. The village

communities have allocated funding to the affected households and compensated adequately based on the agreement and redistributed with same quality and quantity lands. Major resources of incomes of affected households are from working labor jobs in urban area, small business and house rental etc., thus, affects raised by LA has very mere impacts on livelihoods of affected peoples and has already been recovered accordingly. Despite the adequate compensation, the new jobs with better remuneration, provided by new constructed water plants, significantly boost the life quality of local communities. To date, no complaints and grievances have been raised by local residence as well as by related government authorities.

There are no residential structures on the acquired land, so that no involvement of any physical

displaced persons.

Gaoan XiangFu ShanLin Village Committee (Seal) Date: 2012. 02. 21

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Annex 9 – Temporary Occupation (1)

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Annex 9 – Translation_ Temporary Occupation (1)

Changxi-Culture Industrial Park Water Pipeline Construction Compensation Agreement

Party A: Gaoan Water Affairs Limited Party B: XiangFu Township People’s Government For coordination with Gaoan municipal government to establish Changxi-Culture Zone and Logistics base and optimize local investment environment, Party A will construct water pipeline from Gaoan to DaCheng Development Zone with total length of 17.2km, crossing New Century Industrial Zone, XiangFu Town, DaCheng Town, DaCheng Development Zone. Under pressures of local government and investors who request for a reliable water supply system, Party A has contributed sufficient amount of funding and human resource for pre-construction works. Prior to construction, Party A and Party B are trying to confirm the measurement regarding how many paddy field, dry land, mountain field and road will be affected. According to the spirit of Mayor’s Office Meeting on March 04, 2011 that all related compensation and resettlement have to be settled as soon as possible and to ensure the project being carried out smoothly:

I. Greenery Compensation: Affected area will be consider 10meter wide, regardless land types, all at a compensate rate of RMB 1,000.00/mu

II. Road Surface Recovery: Calculate based on real affected area, at compensate rate RMB 70.00/mu

III. According to above compensation, total compensation amount: RMB 155,000.00 IV. For items not mentioned during Mayor’s Office Meeting, if being affected during construction,

will be compensated based on further discussion. V. Additional affairs need to be consulted and negotiated will be conduct further time. VI. This agreement will be affected upon the signing. VII. Three (3) executed copies will be prepared, two (2) to Party A, one (1) to Party B.

Party A Representative (Signature):

Party B Representative (Signature):

Date: 2011. 04

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Annex 10 – Certificate Letter for Temp. Occupation (1)

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Annex 10 – Translation_ Certificate Letter for Temp. Occupation (1)

Gaoan Municipal XiangFu Township People’s Government XiangFu Town Dacheng-Changxi (Changxi-Culture) Water Distribution Construction Compensation Receipt:

1. Concrete Road Compensation: 810m x 1.2m (wide) x RMB 70/m2 = RMB 68,040.00;

2. Greenery Compensation: 4,990m x 10m (wide) x 0.0015 x RMB 1,000/mu = RMB 74,850.00;

Compensation for the two items above amounted to RMB 142,890.00, as per today, RMB 115,674.00 has been settled. Note: 1. Concrete road recovery and greenery compensation rates were pre-determined by

government. 2. Greenery compensation is settled completely as per today. 3. Concrete road recovery compensation only settled 60% as per today, the rest will be paid

upon project completion.

XiangFu Township Representative (Signature): Gaoan Water Affairs Limited Representative (Signature): Gaoan Municipal XiangFu People Government (Seal) Date: 2011.03.21

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Annex 11 – Temporary Occupation (2)

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Annex 11 – Translation_ Temporary Occupation (2)

Changxi-Culture Industrial Park Water Pipeline Construction Compensation Agreement

Party A: Gaoan Water Affairs Limited Party B: DaCheng People’s Government For coordination with Gaoan municipal government to establish Changxi-Culture Zone and Logistics Base and optimize local investment environment, Party A will construct water pipeline from Gaoan to DaCheng Development Zone with total length of 17.2km, crossing New Century Industrial Zone, XiangFu Town, DaCheng Town, DaCheng Development Zone. Under pressures of local government and investors who request for a reliable water supply system, Party A has contributed sufficient amount of funding and human resource for pre-construction works. Prior to construction, Party A and Party B are trying to confirm the measurement regarding how many paddy field, dry land, mountain field and road will be affected. According to the spirit of Mayor’s Office Meeting on March 04, 2011 that all related compensation and resettlement have to be settled as soon as possible and to ensure the project being carried out smoothly:

I. Greenery Compensation: Affected area will be consider 10meter wide, regardless land types, all at a compensate rate of RMB 1,000.00/mu

II. Road Surface Recovery: Calculate based on real affected area, at compensate rate RMB 70.00/mu

III. According to above compensation, total compensation amount: RMB 220,000.00 IV. For items not mentioned during Mayer’s Office Meeting, if being affected during construction,

will be compensated based on further discussion. V. Additional affairs need to be consulted and negotiated will be conduct further time. VI. This agreement will be affected upon the signing. VII. Three (3) executed copies will be prepared, two (2) to Party A, one (1) to Party B.

Party A (Seal) Party A Representative (Signature):

Party B (Seal) Party B Representative (Signature):

Date: 2011. 04

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Annex 12 – Certificate Letter for Temp. Occupation (2)

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Annex 12 – Translation_ Certificate Letter for Temp. Occupation (2)

Gaoan Municipal XiangFu Township People’s Government DaCheng Town Dacheng-Changxi (Changxi-Culture) Water Distribution Construction Compensation Receipt:

3. Concrete Road Compensation: 1400m x 1.2m (wide) x RMB 70/m2 = RMB 117,600.00;

4. Greenery Compensation: 6,000m x 10m (wide) x 0.0015 x RMB 1,000/mu = RMB 90,000.00;

Compensation for the two items above amounted to RMB 207,600.00, RMB and RMB 160,560.00 has been settled as per today, Note: 4. Concrete road recovery and greenery compensation rates were pre-determined by

government. 5. Greenery compensation is settled completely as per today. 6. Concrete road recovery compensation only settled 60% as per today, the rest will be

paid upon project completion.

DaCheng Township Representative (Signature): Gaoan Water Affairs Limited Representative (Signature): Date: 2011.03.21

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Annex 13 – Temporary Occupation (3)

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Annex 13 – Translation_ Temporary Occupation (3)

Changxi-Culture Industrial Park Water Pipeline Construction Compensation Agreement

Party A: Gaoan Water Affairs Limited Party B: DaCheng Development Zone Management Committee For coordination with Gaoan municipal government to establish Changxi-Culture Zone and Logistics Base and optimize local investment environment, Party A will construct water pipeline from Gaoan to DaCheng Development Zone with total length of 17.2km, crossing New Century Industrial Zone, XiangFu Town, DaCheng Town, DaCheng Development Zone. Under pressures of local government and investors who request for a reliable water supply system, Party A has contributed sufficient amount of funding and human resource for pre-construction works. Prior to construction, Party A and Party B are trying to confirm the measurement regarding how many paddy field, dry land, mountain field and road will be affected. According to the spirit of Mayor’s Office Meeting on March 04, 2011 that all related compensation and resettlement have to be settled as soon as possible and to ensure the project being carried out smoothly:

I. Greenery Compensation: Affected area will be consider 10meter wide, regardless land types, all at a compensate rate of RMB 1,000.00/mu

II. Road Surface Recovery: Calculate based on real affected area, at compensate rate RMB 70.00/mu

III. According to above compensation, total compensation amount: RMB 80,000.00 IV. For items not mentioned during Mayer’s Office Meeting, if being affected during construction,

will be compensated based on further discussion. V. Additional affairs need to be consulted and negotiated will be conduct further time. VI. This agreement will be affected upon the signing. VII. Three (3) executed copies will be prepared, two (2) to Party A, one (1) to Party B.

Party A (Seal) Party A Representative (Signature): Party B (Seal) Party B Representative (Signature): Date: 2011. 04

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Annex 14 – Certificate Letter for Temp. Occupation (3)

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Annex 14 – Translation_ Certificate Letter for Temp. Occupation (3)

Gaoan Municipal XiangFu Township People’s Government

DaCheng Development Zone Dacheng-Changxi (Changxi-Culture) Water Distribution Construction Compensation Receipt:

1. Concrete Road Compensation: 450m x 1.2m (wide) x RMB 70/m2 = RMB 37,800.00;

2. Greenery Compensation: 2,100m x 10m (wide) x 0.0015 x RMB 1,000/mu = RMB 31,500.00;

Compensation for the two items above amounted to RMB 69,300.00, RMB and RMB 54,180.00 has been settled as per today, Note: 1. Concrete road recovery and greenery compensation rates were pre-determined

by government. 2. Greenery compensation is settled completely as per today. 3. Concrete road recovery compensation only settled 60% as per today, the rest

will be paid upon project completion.

DaCheng Development Zone Management Committee (Seal) DaCheng Development Zone Management Committee Representative (Signature): Gaoan Water Affairs Limited Representative (Signature): Date: 2011.03.21

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Annex 15_Testing Result of Related Raw Water Source

[Unit: mg/L]

Note:

• Testing results based on data collected in July 2012. • SS and Turbidity tests are not mandatory required according to national standard GB3838-2002; however the Project Company has been

keeping close track on the test results on daily basis. • SS testing is carried out by the observers/testers through naked eye observation.

Raw Water Source PH SS Turbidity BOD5 COD DO Mineral Oil TP TN NH3-N Fecal Coliform

BiShan Reservoir

7.6 - 8.1

2.2 1.6 7.2

0.01 0.05 0.32 0.02 28

copper < 0.0075, zinc < 0.0025, selenium < 0.00005, arsenic < 0.00005, mercury < 0.000049, cadmium < 0.0025, chromium 6+ < 0.004, Pb < 0.00005, iron < 0.025; manganese < 0.025; cyanide < 0.002, play phenol < 0.002, sulfide < 0.02; fluoride: 0.22; chloride: 8.49; sulfate: 24; nitrate < 0.2.

Jin River 7.63 - 16.8

3.1 1.6 7.3 0.01 0.1 0.42 0.02 920

copper < 0.0075, zinc < 0.0025, selenium < 0.00005, arsenic < 0.00005, mercury < 0.000049, cadmium < 0.0025, chromium 6+ < 0.004, Pb < 0.00005, iron < 0.025; manganese < 0.025; cyanide < 0.002, play phenol < 0.002, sulfide < 0.02; fluoride: 0.23; chloride: 10.39; sulfate: 28; nitrate: 1.63.

Environmental Quality Standard for Surface Water [GB3838-2002]

Grade II 6-9

- - 3 15 6 0.05 0.1 0.5 0.5 2000

Grade III 6-9 -

- 4 20 5 0.05 0.2 1 1 10000