LAC-SS-17-02

REQUEST FOR APPROVAL OF SCOPING STATEMENT FORThe Environmental Assesment for USAID Colombia Artisanal Gold Mining Activity

ORO LEGAL

Activity Location: Colombia

Activity Title: USAID Colombia Artisanal Gold Mining Activity, ORO LEGAL

Activity Number: TBD

Life-of-Activity Funding: $20,000,000

Life-of-Activity: FY 2015 - FY 2020

Reference ETD and Scoping Statement: LAC-IEE-11-37, LAC-SS-14-01, LAC-EA-15-01, LAC-IEE-14-02, LAC-IEE-15-02

Date Prepared: 02/09/2017

i. Purpose and Scope

This is a request for approval of the Scoping Statement for the preparation of the Environmental Assessment for USAID Colombia Artisanal Gold Mining Activity - Oro Legal. The Scoping Statement is attached.

In November 2014, an Initial Environmental Examination (IEE), LAC-IEE-15-02, issued determinations for USAID/Colombia’s Environmental Program. This IEE issued a Positive Determination for activities involving large-scale infrastructure activities, irrigation systems, forestry, mining, or other activities that may cause significant adverse environmental impacts. It required that ongoing activities would continue to adhere to the requirements set out in the Programmatic Environmental Assessment (PEA) approved in April 2003. The 2015 IEE further stated that,

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“Any new Environment Program activities will be covered by the mission-wide Programmatic Environmental Assessment (PEA) currently being developed for USAID/Colombia’s portfolio, which will specifically include the proposed Environmental Program and any potential direct, indirect, and cumulative environmental impacts. The MEO will determine which activities/projects may use the environmental review process established under the PEA and which activities will require the preparation of site-specific or an activity-specific Environmental Assessments.”

This Scoping Statement and the subsequent Environmental Assessment are intended to fulfill the requirement for a new Environmental Assessment for the Oro Legal activities.

In March 2011 an IEE (LAC-IEE-11-37) was issued for the Mission’s previous Environment Program, BIOREDD+. A Positive Determination was issued for specific activities that were to be implemented consistent with the Mission’s 2003 PEA. In October 2013 an IEE was issued including a Positive Determination specifically for “reduction of mercury use by small informal mining units and work on recovering degraded areas by unauthorized mining activities” and it required adherence to a Scoping Statement and Environmental Assessment. The Scoping Statement (LAC-SS-14-01) was issued in August 2014 and the Environmental Assessment in October 2015 (LAC-EA-15-01) for the BIOREDD+ activities involving small-scale gold mining in the Antioquia and Chocó departments. In October 2013, an IEE (lAC-IEE-14-02) was issued, which amended the original IEE (LAC-IEE-11-37) to include new activities, among other changes.

ii. Background

Colombia has a long history of gold mining. Well before the arrival of the Spanish conquerors, indigenous populations were mining gold and, under the Spanish regime, gold was seen as an important source of revenue. The presence of gold in Colombia gave birth to the “El Dorado” legend and this tradition remains until today.

In recent times, mining has attracted public attention because of its social, environmental and economic implications. Since the price of gold started to increase significantly during 2010, a new gold rush started in Colombia. Gold prices rose from nearly $1,000/oz in 2009, to a peak of $1,900/oz in 2012. As a result, gold mining in Colombia has increased by over 300% since 2006. In 2006, Colombia was responsible for 0.63% of the world’s gold production, while in 2013 it accounted for 2.4% of global production. With this increase, the country ranks fifth in Latin America, exceeding Chile's production but still below that of Peru, Mexico, Argentina and Brazil (British Geological Survey, 2012). Today, Colombia produces around 54 tons/year of gold with Chocó (~24.5 tons/year) and Antioquia (~19 tons/year) the main producers followed by the department of Bolivar (~5.7 tons/year.). In total, these three departments account for 91% of the annual gold production in Colombia. (Ministry of Mines and Energy, 2011).

The scale of mining has grown faster than the institutional capacity to adequately control mining activities. The 2011 mining census states that in 2011 Colombia had 14,357 mining production units (MPU) and only 37% had required mining titles. Out of this total, 4,130 units are extracting gold and only 13.3% (549) of these units have a mining title. Of the total number of MPUs, 86% are unauthorized. The lack of an adequate institutional framework to support mining operations and a high level of informality are reflected in several ways. Most of the mining regions have not seen

2

expected improvements in social infrastructure, health or education. Almost 10% of people working in mining can’t read or write, 70% have not attended primary school, 28% are not enrolled in the national health care system, and 19% do not have any social security coverage. Informality is also reflected in the size of the PMUs: more than 65% have less than five employees, 30% of the units have between six and 100 employees, and less that 2% have more than 100 employees.

Gold mining is a growing source of revenue for the Government of Colombia and a pillar of many local economies. Nowhere is this truer than in northern Antioquia and along the San Juan and Atrato rivers in Chocó. Both departments have been gold-mining regions since pre-colonial times. Today, numerous stakeholders coexist in an intricate network of formal and informal arrangements, regulations, and traditions. Despite Artisanal Small Miners´ (ASM) community-level importance (Asociación de Agromineros del Cauca alone has 1,300 members) and the volume of cash in local gold-based economies, MPU cannot access new technology, credit, or legal assistance to institute safer practices, avoid child labor, mitigate environmental impacts, or become legalized and formalized to better insulate themselves from illegal groups that threaten to destabilize the country’s peace-building goals.

A 2014 study from Fedesarrollo and the Inter-American Development Bank reports that most small MPUs do not cover their operational costs and have negative margins of around 44%. On the other side of the scale, there are positive returns of more than 200% among the bigger operations. Currently, small mining units have little incentive to become legal and formal and paying taxes on their production that would further reduce their potential profit margins is a large disincentive to legalization and formalization.

This sector has complex social, governance and environmental challenges. Miners use mercury to extract gold by mixing mercury with concentrated ores extracted from underground gold-bearing seams and from 2 riverbeds and along floodplains. This process creates an amalgam that when burned, releases toxic mercury vapors, leaving the gold behind. The ASM industry emits an estimated annual average of 1,000 metric tons of inorganic mercury, about one-third of which is thought to go into the air while the rest winds up in piles of mining waste (“tailings”), soil, and waterways (Telmer and Veiga 2009). Some of the inorganic mercury that reaches aquatic ecosystems is converted by microbes into organic methyl mercury, which then enters aquatic food chains eventually accumulating in fish, including commercial species.

The environmental and health impacts of unauthorized mining activities are reflected mainly in poor water quality for human consumption, air and soil pollution with heavy metals, deforestation and soil degradation. Environmental deterioration is exacerbated by the illegality and informality of the activity. The lack of land and mining titles, the complexities in obtaining mining rights, and the investment uncertainties in the ASM sector combine to further promote environmental degradation with illegal operations leaving behind expensive environmental damages where no one is held legally responsible to remediate these impacts (pasivos ambientales). Gold mining also promotes deforestation. Fine woods from native forest are used as tunnels supports in subterranean or hard rock mining operations. At the same time, there are opportunities to rehabilitate lands degraded by mining operations through tested commercial forestry plantations. This would also contribute towards Government of Colombia (GOC) reforestation targets and its low carbon emission development strategy (Estrategia de Desarrollo Bajo en Carbono - ECDBC).

Legalization and formalization have a significant impact on reducing environmental degradation. When existing legislation is enforced, ASM operations will reduce or eliminate the use of mercury

3

(Colombia has passed legislation banning the use of mercury for mining by 2018) and will prompt environmental management planning to mitigate environmental impacts. Formalizing ASM operations will also contribute to consolidating peace in Colombia. Mining has fueled conflict in some regions and generated social unrest. Illegal armed groups have used the lack of state control to create opportunities for money laundering, extortion and intimidation.

The Artisanal Gold Mining – Environmental Impact Reduction Activity or Oro Legal project, funded by the United States Agency for International Development (USAID), is well-aligned with the overarching goal of USAID/Colombia’s 2014 Country Development and Cooperation Strategy (CDCS) to assist Colombia to implement a sustainable and inclusive peace. The CDCS development objectives are to: i) establish the effective presence of democratic institutions and processes in targeted areas; ii) advance reconciliation among victims, ex-combatants and others; iii) improve conditions for inclusive, rural economic growth and; iv) strengthen environmental resiliency and low emissions development.

Oro Legal was developed based on the successes of the Mining Component of the BioREDD+ program, a pilot initiative that identified tangible ways to improve the performance of the ASM sector and mitigate its environmental impacts. One of the main conclusions of the legalization effort during BioREDD+/Mining was that working alongside larger-scale mining companies provides a feasible pathway to legalization as well as a vehicle to transfer knowledge and clean technology to underpin positive change in the sector. BioREDD+/Mining also successfully field-tested a model for rehabilitating degraded mining land using Acacia mangium and associated honey production. In less than two-year, BioREDD+/Mining supported legalization of 84 MPUs and rehabilitated 786 ha of land, interacting with a wide array of stakeholders from the public, private, educational and non-governmental sectors.

This scoping statement (SS) for the Oro Legal environmental assessment expands on the SS and environmental assessment (EA) approved for BioREDD+/Mining and takes into account the achievements and lessons-learned during 22 months of implementation. The theory of change underlying Oro Legal is: 3 “If regional and local authorities are more effective in enforcing mining-related legislation and the right facilitating instruments (i.e. laws, regulations, policies, partnerships or projects) are in place to support environmental recuperation of degraded lands with the participation of land owners, the private sector and local communities, then regional and municipal authorities will gain legitimacy and support, improving social, environmental and economic performance of Artisanal Small Mining operations and advancing Colombia`s peace-building goals.”

Flowing directly from the theory of change, as illustrated in Annex 1, the Oro Legal Results Framework (Figure 1) underpins the project’s approach and shows how each expected result will contribute to achievement of Oro Legal’s two objectives and Development Objective 4 of the CDCS. The theory of change schematics for Oro Legal’s two objectives are in Annexes 1 and 2.

As such, it provides the framework for the SS and planned activities under each of the two objectives. Objective 1 – “Build effective governance capacity in gold mining activities in target municipalities” - is largely about supporting more responsible mining through improved governance in the sector by government entities, the private sector, and small mining operators with an aim to reduce the use of mercury and prevent other environmental impacts through more effective application of mining regulations, legalization and formalization of ASM operations, and promotion of non-mercury methods for refining gold. Objective 2 – “Increase the capacity of the

4

Colombian government, community and private sector to address the environmental impacts caused by illegal mining” - focuses on remediation of the environmental legacy of past irresponsible mining, improving livelihoods in non-mining activities, and conservation of natural resources.

As per the Initial Environmental Examination (IEE) for the USAID/Colombia Environmental Program (LAC-IEE-15-02 issued on September 26, 2014), a Positive Determination was issued for Environment Program activities associated with the reduction of mercury use by small, informal mining units and recuperation of areas degrades by unauthorized mining activities (Annex 5). Since these activities may cause significant environmental impacts, an approved SS and EA are required under the contract awarded to Chemonics International for Oro Legal.

This version of the SS includes revisions made in light of comments received from Paul Schmidt (USAID Regional Environmental Officer) and Daniel Lopez (Oro Legal Contract Officer Representative) to an earlier draft of the SS.

iii. Purpose of the Scoping Statement

The following citation is a summary of Title 22 of the Code of Federal Regulations (CFR) 216.3 (a) (4) which provides guidance on the preparation for the SS:

Method and contents. Once a "positive decision" becomes effective that requires an Environmental Assessment (EA), a scoping statement needs to first be prepared to identify the significant issues related to the proposed activity or project that will be addressed in the EA. People with relevant experience in the environmental aspects of the proposed action, shall be involved in the scoping process. Participants may be part of, but not be limited to the representatives of the host government, the public and private institutions, USAID Colombia staff, and contractors. The result of this process shall be a written statement that must include the following:

1. Determine the scope and importance of the issues to be analyzed in the EA, including the project’s direct and indirect effects on the environment.

2. Identification and elimination from the detailed study those issues that are not relevant or that have been previously covered by environmental review or consideration of approved design, allowing the discussion of these issues to be addressed to a brief presentation that supports why it will not have a significant effect on the environment.

3. The description of:a. The preparation time of the environmental analysis, including the phases if needed,b. The required changes in the format of the EA,c. A tentative plan and a schedule for decision making.

4. Description of how the analysis will be conducted and what disciplines will participate in it.

These written statements must be reviewed and approved by the Bureau Environmental Officer (BEO) of USAID Latin America and the Caribbean.

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The EA is a detailed study of the reasonably foreseeable environmental impacts, both positive and negative, of a proposed action funded by USAID. This includes alternatives that prevent, minimize and/or mitigate adverse effects and that enhance the environmental quality of the expected benefits expected under the project as weighed against any adverse impacts to humans or the environment, or irreversible impacts to natural resources.

Additionally, an EA should ensure that environmental factors and values are properly integrated into planning and implementation of the Oro Legal activity program that will be funded by USAID/Colombia in order to support the efforts of national, regional and local authorities in Colombia and local mining organizations to promote governance and economic and social development in target municipalities. The EA will: i) assess the environmental impacts of the proposed activities; ii) propose mitigation measures to avoid or reduce adverse impacts where possible and; iii) propose a practical monitoring plan to measure those impacts that cannot be completely avoided to determine their importance and additional measures, if needed.

This SS, and the subsequent EA, fulfill requirements to address possible impacts from reducing the use of mercury by ASM operators and restoration of areas affected by non-authorized mining activities as well 6 as other activities planned under Oro Legal to develop non-mining alternative livelihoods and improve management of water catchments that supply water to urban centers in target municipalities. Similarly, this SS describes: i) time needed to conduct the EA; ii) tentative plan and decision-making program; iii) description of how the EA will be carried out and by whom and; iv) outline of the EA. This SS fully incorporates the lessons learned from the BioREDD+/Mining activity and the findings of the trip by the Regional Environmental Officer following his visit to Oro Legal project areas in May 2016.

iv. Approval:

The BEO approves the Scoping Statement for the preparation of the environmental assesment for USAID Colombia Artisanal Gold Mining Activity - Oro Legal (attached).

________________________________ ________________Diana Shannon DateBureau Environmental OfficerBureau of Latin America & Caribbean

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i

USAID Colombia Artisanal Gold Mining - Environmental Impact Reduction

Activity (Oro Legal)ENVIRONMENTAL ASSESSMENT

SCOPING STATEMENTAWARD: AID-514-C-15-00003

Environmental Assessment Scoping Statement (Final)

AWARD: AID-514-C-15-00003

Submitted to: Martha Aponte, Contracting Officer; andDaniel López, Contracting Officer Representative U.S. Agency for International Development Carrera 45 No 24 – 27 Post 2, Bogotá

SUBMITTED BY: Chemonics International Inc.

September 13, 2016 (Final Revised Version)

Prepared for the United States Agency for International Development, USAID

Award No. 514-C-15-00003, Colombia Artisanal Gold Mining – Environmental Impact Reduction Activity (Oro Legal)

Implemented by: Chemonics International Inc.

This document was produced for review by the United States Agency for International Development (USAID). It was prepared by Chemonics International Inc. for the Oro Legal Program; contract number AID-514-C-15-00003.

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CONTENTS

ACRONYMS.......................................................................................................................... iv

I. BACKGROUND AND INTRODUCTION..........................................................................1

II. THE PURPOSE OF THE SCOPING STATEMENT..............................................................5

III. EXISTING CONDITIONS AND LOCATION......................................................................6

3.1 Gold Mining in Colombia.............................................................................................6

3.2 Illegal mining in Colombia...........................................................................................7

3.3. Impacts caused by illegal gold mining .......................................................................8

3.4 Restoration of areas degraded by mining, alternative livelihoods and water catchment management................................................................................................14

3.5 Geographic focus .....................................................................................................16

IV. PURPOSE AND NEED FOR AN ENVIRONMENTAL ASSESSMENT................................18

V. DESCRIPTION OF THE PROPOSED ACTION................................................................20

VI. POTENTIAL IMPACTS RELATED TO THE PROPOSED ACTION.....................................22

6.1 Significant issues.......................................................................................................23

6.2 Non-significant issues...............................................................................................24

6.3 Issues outside the scope of the Project.....................................................................26

Environmental Assessment Framework..........................................................................27

VII. EA’S PREPARATION SCHEDULE AND METHODOLOGY..............................................27

7.1 Consultations with stakeholders...............................................................................30

7.2 EA Team....................................................................................................................30

VII. REFERENCES.............................................................................................................33

ANNEX 1. Preliminary Theory of Change for Objective 1....................................................34

ANNEX 2. Preliminary Theory of Change for Objective 2....................................................35

ANNEX 3. Stakeholder Consultations Undertaken by Oro Legal Staff.................................36

ANNEX 4. Interviews Undertaken by SS Technical Team....................................................38

ANNEX 5. Oro Legal Activities Matrix for Year 1.................................................................39

ANNEX 6. Environmental Threshold Decision & IEE..........................................................47

ANNEX 7. REA Field Trip Report........................................................................................63

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ACRONYMS

ASM Artisanal Small Miner/Mining

ANL Argonne National Laboratory

ANLA National Environmental Licensing Agency

AMAP/UNEP Technical Background Report for the Global Mercury Assessment

BEO Bureau Environmental Officer

CDCS Country Development and Cooperation Strategy

DOC Dissolved organic carbon

DOM Dissolved organic matter

EA Environmental Assessment

EMP Environmental Management Plans

EMMP Environmental Mitigation and Monitoring Plan

GOC Government of Colombia

IEE Initial Environmental Examination

IWRM integrated water resources management

INCODER National Institute for Rural Development

LEDS Low Emissions Development Strategy

LOE Level of effort

LOP Life of program

MME Ministry of Mines and Energy

MADS Ministry of Environment and Sustainable Development

MPU Mining Production Unit

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MOU Memorandum of Understanding

NAMA National Appropriate Mitigation Action

NMA National Mining Agency

PMP Performance Management Plan

SS Scoping Statement

UNM Universidad Nacional Sede Medellin

UNIDO United Nations Industrial Development Organization

USEPA United States Environmental Protection Agency

WHO World Health Organization

WP Work Plans

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I. BACKGROUND AND INTRODUCTION Colombia has a long history of gold mining. Well before the arrival of the Spanish conquerors, indigenous populations were mining gold and, under the Spanish regime, gold was seen as an important source of revenue. The presence of gold in Colombia gave birth to the “El Dorado” legend and this tradition remains until today.

In recent times, mining has attracted public attention because of its social, environmental and economic implications. Since the price of gold started to increase significantly during 2010, a new gold rush started in Colombia. Gold prices rose from nearly $1,000/oz in 2009, to a peak of $1,900/oz in 2012. As a result, gold mining in Colombia has increased by over 300% since 2006. In 2006, Colombia was responsible for 0.63% of the world’s gold production, while in 2013 it accounted for 2.4% of global production. With this increase, the country ranks fifth in Latin America, exceeding Chile's production but still below that of Peru, Mexico, Argentina and Brazil (British Geological Survey, 2012). Today, Colombia produces around 54 tons/year of gold with Chocó (~24.5 tons/year) and Antioquia (~19 tons/year) the main producers followed by the department of Bolivar (~5.7 tons/year.). In total, these three departments account for 91% of the annual gold production in Colombia. (Ministry of Mines and Energy, 2011).

The scale of mining has grown faster than the institutional capacity to adequately control mining activities. The 2011 mining census states that in 2011 Colombia had 14,357 mining production units (MPU) and only 37% had required mining titles. Out of this total, 4,130 units are extracting gold and only 13.3% (549) of these units have a mining title. Of the total number of MPUs, 86% are unauthorized. The lack of an adequate institutional framework to support mining operations and a high level of informality are reflected in several ways. Most of the mining regions have not seen expected improvements in social infrastructure, health or education. Almost 10% of people working in mining can’t read or write, 70% have not attended primary school, 28% are not enrolled in the national health care system, and 19% do not have any social security coverage. Informality is also reflected in the size of the PMUs: more than 65% have less than five employees, 30% of the units have between six and 100 employees, and less that 2% have more than 100 employees.

Gold mining is a growing source of revenue for the Government of Colombia and a pillar of many local economies. Nowhere is this truer than in northern Antioquia and along the San Juan and Atrato rivers in Chocó. Both departments have been gold-mining regions since pre-colonial times. Today, numerous stakeholders coexist in an intricate network of formal and informal arrangements, regulations, and traditions. Despite Artisanal Small Miners´ (ASM) community-level importance (Asociación de Agromineros del Cauca alone has 1,300 members) and the volume of cash in local gold-based economies, MPU cannot access new technology, credit, or legal assistance to institute safer practices, avoid child labor, mitigate environmental impacts, or become legalized and formalized to better insulate themselves from illegal groups that threaten to destabilize the country’s peace-building goals.

1

A 2014 study from Fedesarrollo and the Inter-American Development Bank reports that most small MPUs do not cover their operational costs and have negative margins of around 44%. On the other side of the scale, there are positive returns of more than 200% among the bigger operations. Currently, small mining units have little incentive to become legal and formal and paying taxes on their production that would further reduce their potential profit margins is a large disincentive to legalization and formalization.

This sector has complex social, governance and environmental challenges. Miners use mercury to extract gold by mixing mercury with concentrated ores extracted from underground gold-bearing seams and from riverbeds and along floodplains. This process creates an amalgam that when burned, releases toxic mercury vapors, leaving the gold behind. The ASM industry emits an estimated annual average of 1,000 metric tons of inorganic mercury, about one-third of which is thought to go into the air while the rest winds up in piles of mining waste (“tailings”), soil, and waterways (Telmer and Veiga 2009). Some of the inorganic mercury that reaches aquatic ecosystems is converted by microbes into organic methyl mercury, which then enters aquatic food chains eventually accumulating in fish, including commercial species.

The environmental and health impacts of unauthorized mining activities are reflected mainly in poor water quality for human consumption, air and soil pollution with heavy metals, deforestation and soil degradation. Environmental deterioration is exacerbated by the illegality and informality of the activity. The lack of land and mining titles, the complexities in obtaining mining rights, and the investment uncertainties in the ASM sector combine to further promote environmental degradation with illegal operations leaving behind expensive environmental damages where no one is held legally responsible to remediate these impacts (pasivos ambientales). Gold mining also promotes deforestation. Fine woods from native forest are used as tunnels supports in subterranean or hard rock mining operations. At the same time, there are opportunities to rehabilitate lands degraded by mining operations through tested commercial forestry plantations. This would also contribute towards Government of Colombia (GOC) reforestation targets and its low carbon emission development strategy (Estrategia de Desarrollo Bajo en Carbono - ECDBC).

Legalization and formalization have a significant impact on reducing environmental degradation. When existing legislation is enforced, ASM operations will reduce or eliminate the use of mercury (Colombia has passed legislation banning the use of mercury for mining by 2018) and will prompt environmental management planning to mitigate environmental impacts. Formalizing ASM operations will also contribute to consolidating peace in Colombia. Mining has fueled conflict in some regions and generated social unrest. Illegal armed groups have used the lack of state control to create opportunities for money laundering, extortion and intimidation.

The Artisanal Gold Mining – Environmental Impact Reduction Activity or Oro Legal project, funded by the United States Agency for International Development (USAID),

2

is well-aligned with the overarching goal of USAID/Colombia’s 2014 Country Development and Cooperation Strategy (CDCS) to assist Colombia to implement a sustainable and inclusive peace. The CDCS development objectives are to: i) establish the effective presence of democratic institutions and processes in targeted areas; ii) advance reconciliation among victims, ex-combatants and others; iii) improve conditions for inclusive, rural economic growth and; iv) strengthen environmental resiliency and low emissions development.

Oro Legal was developed based on the successes of the Mining Component of the BioREDD+ program, a pilot initiative that identified tangible ways to improve the performance of the ASM sector and mitigate its environmental impacts. One of the main conclusions of the legalization effort during BioREDD+/Mining was that working alongside larger-scale mining companies provides a feasible pathway to legalization as well as a vehicle to transfer knowledge and clean technology to underpin positive change in the sector. BioREDD+/Mining also successfully field-tested a model for rehabilitating degraded mining land using Acacia mangium and associated honey production. In less than two-year, BioREDD+/Mining supported legalization of 84 MPUs and rehabilitated 786 ha of land, interacting with a wide array of stakeholders from the public, private, educational and non-governmental sectors.

This scoping statement (SS) for the Oro Legal environmental assessment expands on the SS and environmental assessment (EA) approved for BioREDD+/Mining and takes into account the achievements and lessons-learned during 22 months of implementation. The theory of change underlying Oro Legal is:

“If regional and local authorities are more effective in enforcing mining-related legislation and the right facilitating instruments (i.e. laws, regulations, policies, partnerships or projects) are in place to support environmental recuperation of degraded lands with the participation of land owners, the private sector and local communities, then regional and municipal authorities will gain legitimacy and support, improving social, environmental and economic performance of Artisanal Small Mining operations and advancing Colombia`s peace-building goals.”

Flowing directly from the theory of change, as illustrated in Annex 1, the Oro Legal Results Framework (Figure 1) underpins the project’s approach and shows how each expected result will contribute to achievement of Oro Legal’s two objectives and Development Objective 4 of the CDCS. The theory of change schematics for Oro Legal’s two objectives are in Annexes 1 and 2.

As such, it provides the framework for the SS and planned activities under each of the two objectives. Objective 1 – “Build effective governance capacity in gold mining activities in target municipalities” - is largely about supporting more responsible mining through improved governance in the sector by government entities, the private sector, and small mining operators with an aim to reduce the use of mercury and prevent other environmental impacts through more effective application of mining regulations, legalization and formalization of ASM operations,

3

and promotion of non-mercury methods for refining gold. Objective 2 – “Increase the capacity of the Colombian government, community and private sector to address the environmental impacts caused by illegal mining” - focuses on remediation of the environmental legacy of past irresponsible mining, improving livelihoods in non-mining activities, and conservation of natural resources.

As per the Initial Environmental Examination (IEE) for the USAID/Colombia Environmental Program (LAC-IEE-15-02 issued on September 26, 2014), a Positive Determination was issued for Environment Program activities associated with the reduction of mercury use by small, informal mining units and recuperation of areas degrades by unauthorized mining activities (Annex 5). Since these activities may cause significant environmental impacts, an approved SS and EA are required under the contract awarded to Chemonics International for Oro Legal.

This version of the SS includes revisions made in light of comments received from Paul Schmidt (USAID Regional Environmental Officer) and Daniel Lopez (Oro Legal Contract Officer Representative) to an earlier draft of the SS.

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Figure 1. Oro Legal Results Framework

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II. THE PURPOSE OF THE SCOPING STATEMENT The following citation is a summary of Title 22 of the Code of Federal Regulations (CFR) 216.3 (a) (4) which provides guidance on the preparation for the SS:

Method and contents. Once a "positive decision" becomes effective that requires an Environmental Assessment (EA), a scoping statement needs to first be prepared to identify the significant issues related to the proposed activity or project that will be addressed in the EA. People with relevant experience in the environmental aspects of the proposed action, shall be involved in the scoping process. Participants may be part of, but not be limited to the representatives of the host government, the public and private institutions, USAID Colombia staff, and contractors. The result of this process shall be a written statement that must include the following:

1. Determine the scope and importance of the issues to be analyzed in the EA, including the project’s direct and indirect effects on the environment.

2. Identification and elimination from the detailed study those issues that are not relevant or that have been previously covered by environmental review or consideration of approved design, allowing the discussion of these issues to be addressed to a brief presentation that supports why it will not have a significant effect on the environment.

3. The description of: a. The preparation time of the environmental analysis, including the

phases if neededb. The required changes in the format of the EA, c. A tentative plan and a schedule for decision making.

4. Description of how the analysis will be conducted and what disciplines will participate in it.

These written statements must be reviewed and approved by the Bureau Environmental Officer (BEO) of USAID Latin America and the Caribbean.

The EA is a detailed study of the reasonably foreseeable environmental impacts, both positive and negative, of a proposed action funded by USAID. This includes alternatives that prevent, minimize and/or mitigate adverse effects and that enhance the environmental quality of the expected benefits expected under the project as weighed against any adverse impacts to humans or the environment, or irreversible impacts to natural resources.

Additionally, an EA should ensure that environmental factors and values are properly integrated into planning and implementation of the Oro Legal activity program that will be funded by USAID/Colombia in order to support the efforts of national, regional and local authorities in Colombia and local mining organizations to promote governance and economic and social development in target municipalities. The EA will: i) assess the environmental impacts of the proposed

6

activities; ii) propose mitigation measures to avoid or reduce adverse impacts where possible and; iii) propose a practical monitoring plan to measure those impacts that cannot be completely avoided to determine their importance and additional measures, if needed.

This SS, and the subsequent EA, fulfill requirements to address possible impacts from reducing the use of mercury by ASM operators and restoration of areas affected by non-authorized mining activities as well as other activities planned under Oro Legal to develop non-mining alternative livelihoods and improve management of water catchments that supply water to urban centers in target municipalities. Similarly, this SS describes: i) time needed to conduct the EA; ii) tentative plan and decision-making program; iii) description of how the EA will be carried out and by whom and; iv) outline of the EA. This SS fully incorporates the lessons learned from the BioREDD+/Mining activity and the findings of the trip by the Regional Environmental Officer following his visit to Oro Legal project areas in May 2016.

III. EXISTING CONDITIONS AND LOCATION 3.1 Gold Mining in ColombiaSince 2008, mining has become one of the major drivers of the Colombian economy due to demand for commodities in international markets, particularly for gold and coal. The importance of mining to Colombia is such that the National Development Plan 2010-2014, "Prosperity for All", identifies the sector as one of the engines for growth and employment generation. As such, the national government has sought to renew the mining sector by reforming regulations and institutional structures and processes in order to meet development, economic growth and employment goals. Implementation of these reforms is made difficult by the numerous economic, environmental and social challenges arising from the magnitude of illegal gold mining.

Social challenges. Interactions among ASM operations, regional and national authorities, and larger companies are often highly conflictive. Informal miners’ lack of secure property rights is a traditional obstacle to formalization. Without clear routes to titling, miners are more likely to sell their gold in the informal market, which is frequently linked to money laundering and leaves miners vulnerable to extortion. Concentrations of male migrant workers in mining areas have resulted in increased prostitution, youth pregnancy, violence against women, and child labor. Governance challenges. Governance must be understood in its broadest context, extending from the government to ASM operations and mining associations. The Ministry of Mines and Energy (MME) and Ministry of Environment and Sustainable Development (MADS) have a solid legislative platform to underpin change, but opportunities for better regulation remain. For instance, credit facilities have yet to be created for legal miners to eliminate mercury use, per Article 10 of Mercury Law 1658/2013. Despite generally strong commitment by national authorities to apply legal norms, the scale of the gold boom has exceeded their capacity to respond. Although national entities are generally well-resourced (National Mining Agency’s

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2014 budget was about US$18 million), regional and local capacity, resources, and political vary widely. Municipalities are reluctant to undertake enforcement actions that might lead to jobs losses or votes. Although mining associations exist in Antioquia and BioREDD+ helped establish one in Chocó, few are as yet capable of offering services to their members. In Chocó, the growing presence of illegal mining operations in Afro-Colombian consejos comunitarios, indigenous resguardos, and forest reserves established under Law 2/1959 is destabilizing local governance. Environmental challenges. Four main impacts are associated with informal and illegal mining: i) severe alteration of landscapes; ii) uncontrolled discharge of sediment into natural drainages and wetlands, altering water flows and fragile benthic biology; iii) alteration of riverbeds and total elimination of riparian vegetation, leading to downstream flooding and; iv) contamination of soil, air, and water by toxic mercury used in the amalgamation process to extract gold from concentrated ores. In the Lower Cauca region of Antioquia alone, mining has caused the degradation of 42,000 ha of land or five percent of the department’s territory. Along the production chain, metallic mercury is converted into mobile forms that are inhaled and accumulate along the food chain, concentrating in fish and human tissue and causing a range of health problems from genetic malformations to cancers. Pregnant women and children are especially at risk.

In 2011, Colombia was one of the world’s largest per capita mercury polluters, mostly from artisanal gold mining. In 2014, the “Study of the Mercury Value Chain with an Emphasis on Gold Mining” published by the MME and the University of Córdoba identifies 29 “mercury hot spots” in seven departments (including Antioquia and Chocó) that represent 95% of national gold production. Likewise, according to the 2013 “Technical Background Report for the Global Mercury Assessment” (AMAP/UNEP), Colombia still ranks among the top five countries in overall mercury consumption. In a 2013 study (Cordy, et al, 2013), airborne mercury levels in five urban sites (Segovia, Remedios, Zaragoza, El Bagre, and Nechí) were up to 10 times the limit set by the World Health Organization. Although contamination levels vary across mining areas and types of mining operations, the absolute quantity of mercury used in the two project areas and consequent pollution levels remain extremely high. In the area of influence of Oro Legal, gold mining occurs at all scales ranging from large private sector operations to medium-sized operations with backhoes, heavy haul trucks, and large sluices to smaller artisanal operators consisting of two-man dredges and gold panners. Methods require different extraction processes and very different impacts. In Chocó, alluvial or placer mining predominates while both placer and hard-rock mining take place in Antioquia.

3.2 Illegal mining in Colombia The 2010 Mining Census reported that the majority (63%) of Colombia’s MPUs do not have or are not operating under a mining title and that 72% of the 14,000 MPUs counted are classified as small-scale. Only 19.6% of MOUs surveyed are fully legal and formalized with valid mining titles and approved operating and environmental plans. In Antioquia, of the 2025 units surveyed, 79% were illegal; of 527 units surveyed in Chocó, of 527 units surveyed, over 99% are illegal. These statistics

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reflect the fact that most mining titles are in the hands of a small number of companies and individuals, thus limiting avenues for illegal ASMs to enter the legalization process.

In order for small-scale MPUs to fulfill all formalization requirements, this complex yet mandatory process, cannot be carried out without first obtaining a mining title or an operating contract from the title holder. This is an essential requirement to promote responsible mining that is regulated by the GOC. There are a number of pathways for a mining operator to become legalized (see Figure 2). By the end of the BioREDD+/Mining March 2015 84 MPUs had been legalized; the life of project (LOP) target for Oro Legal is 220 MPUs legalized. A critical filter in the selection process of MPUs supported by Oro Legal is their eligibility to become legalized through one of these pathways.

Figure 2. Routes to Legalization

FormalizationSubcontract

Regulated by Decree 480 under Law 1658/2013. Four-year agreement between mining titleholder and ASM with consent of mining authorities. ASM may exploit parts of concession where titleholder is in exploration phase. ASM must formalize and comply with regulations, including submission of a modified PTO and EIA. Responsibility passes from the titleholder to ASM operator subject to inspection by authorities. Benefits include use of land for alluvial mining without restricting titleholder’s ability to later conduct hard rock mining. Four-year agreement guarantees stability for miners to formalize.

Operating ContractVoluntary agreement between titleholder and illegal operators on titled area without need for mining authority’s approval. Titleholder retains responsibility for environmental compliance, providing an incentive to work closely with ASMs in good management.

Devolution of Claims for Formalization

Prescribed under Article 11 of Law 1658/2013. However, corresponding regulation not yet finalized. When regulated will allow titleholder to return portion of concession to government for reassignment to pre-identified ASMs already working in the area.

Cession of ClaimsPrescribed under Article 25 of the Mining Code. Titleholder can divide the concession and transfer sections to new titleholders along with all legal rights and obligations. Not commonly used as original titleholder has no recourse to later reclaim ceded titles.

Concession in Free Areas

Title obtained and legalization process undertaken in untitled areas. Theoretically straightforward, utilization of route hampered by overlapping claims, incomplete mining and cadastral records, red tape and limited existence of unclaimed areas.

Special Reserve AreaContemplated under Law 685/2001. Traditional mining group or Government of Colombia can initiate process, provided there are no third-party claim applications or titles. The government must conduct necessary geological and mining surveys. Limited potential.

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Once legalized, an MPU can enter into the formalization process, which requires compliance with a number of regulatory requirements, including approved operating and environmental mitigation plans, compliance with social security and other payroll payments for workers, payment of royalties and taxes, compliance with labor laws, and industrial safety requirements, among others. 3.3. Impacts caused by illegal gold mining Illegal mining, especially alluvial mining, causes countless social and environmental impacts. In addition to the dramatic environmental impacts that deforestation and indiscriminate mining have on soils, flora, fauna, and water supply and hydrology, the use of mercury puts the safety and health of miners at risk as well as the general public when exposed to mercury vapors or consuming contaminated water and fish. Thousands of hectares of land in different regions of the country have been destroyed, stripped of the rich biodiversity that once flourished in these areas. Informal miners are exposed to numerous other health and safety risks due unsafe working conditions, substandard equipment and little or no oversight by responsible agencies.

The following is a summary of the impacts caused by informal gold mining in Colombia. It is important to point out that in the areas where Oro Legal will operate, two very different types of mining are done that lead to different environmental and other impacts: i) alluvial or placer mining is conducted in riverbeds, floodplains and perched sediment deposits where gold has washed down from upper watershed deposits through natural erosion processes and; ii) hard rock or underground mining gold is where gold is extracted from intrusions in igneous rock substrata.

Mercury contamination

Mercury is the oldest, cheapest and fastest means of extracting gold from concentrated ore, thus the amalgamation process is the method of choice for artisanal miners globally. Due to its unique properties, mercury is liquid at room temperature that when mixed in concentrated ore adheres to the finest gold particles to form an amalgam. The amalgam is collected in a thin fabric that, when pressed by hand, allows the removal of the excess of mercury. By applying mercury only to the concentrate, as is the case for most ASM, miners produce 50% less contamination than adding mercury to in the primary concentration step (such as a sluice) or to the mill in the case of hard rock mining. The application of mercury to all of the primary material without concentration is known as whole ore amalgamation. Both procedures cause mercury to be lost in the process and to eventually accumulated in tailings, sediments in settling ponds, rivers, streams, marshes, and lagoons. Mercury is widely used in illegal alluvial and hard rock mining in Colombia, including Chocó and Antioquia.

Regardless of the manner in which it is obtained, the amalgam must be heated to evaporate the mercury and separate it from the gold. Often this is done with a blowtorch at the mine site to get a sense of the quantity and

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quality of their gold before a sale; other times this is done in a retort that condenses and collects the mercury for reuse. When the amalgam is heated in gold shops that do not have mercury vapor recovery systems, the resulting emissions pose a significant risk to health of the general public in the vicinity of the gold shops, which are usually located in densely populated town centers for economic and security reasons.

Mercury occurs in four main forms - metallic liquid mercury (Hg0) used in gold mining, gas phase (Hg gas), oxidized mercury (Hg2+), and methyl mercury (CH3Hg+). The transformation of mercury through the environment is complex. When mercury is remobilized from soils or emitted in mining effluents, it adheres to fine clays that transport it the farthest, settle out slowest, and carry the highest concentrations of mercury. These conditions are also ideal for microbial activity that can generate methyl mercury compounds. Methyl‐mercury is formed when methyl groups (CH3‐) bind with oxidized mercury atoms (Hg2+). The result is an organic (methylated) mercury compound (CH3Hg+). Because methyl‐mercury binds strongly to proteins it is not readily eliminated by organisms but rather accumulates and is “bio‐magnified” in aquatic food chains moving from bacteria to plankton, through macro‐invertebrates to herbivorous fish and then piscivorous fish. At each level of the food the concentration of methyl‐mercury increases (bio‐magnification). Organisms which feed on piscivorous fish, including predatory fish, as well as birds, mammals and humans, ingest the largest amounts of methyl‐mercury accumulated by this process and are at highest risk of toxic exposure levels.

The strong binding of mercury to organic matter, particularly dissolved organic matter (DOM), is critically important to its behavior in the terrestrial environment (Meili, 1991). DOM plays a strong role in adsorption and desorption of mercury from tropical soils, which has ramifications for mercury flux. Waters with high DOM concentrations reduce the adsorption capacity of soils by as much as 40% in podzolic soils and slightly less in ferralitic soils.

Many streams and rivers in Bajo Cauca and Chocó have very high levels of DOM and tannins, evidenced by their dark brown color. Regularly inundated riparian zones and wetlands in Bajo Cauca contain large amounts of DOM and submerged vegetation, characteristics which have been shown to increase mercury methylation potential. Freshwater fish caught in local rivers and wetlands affected by mining is an important dietary source of protein in Bajo Cauca and Chocó. In Chocó, there have been over 30 reported cases of possible mercury intoxication from drinking water in Rio Quito. Likewise, small water retention or settling ponds associated with mining activities are ideal habitat for breeding mosquito and become foci for malaria outbreaks in mining districts in Chocó.

The use of mercury raises serious concerns for human health and natural resources. As part of Colombia’s international commitments under the Minamata Convention, Law No. 1658/2013 establishes that the use of mercury must be eradicated in Colombia from all industrial and production

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processes within no more than 10 years and, for use in mining, within five years.

Health impacts

Mercury vapor impacts human health most directly. Mercury vapors, generated by burning the gold-mercury amalgam, is inhaled by miners and often by their families, including children, causing permanent neurological damage. Mercury can be particularly harmful to children and pregnant women. Even short-term exposure to high levels of mercury vapor can cause serious problems to the respiratory tract. Symptoms of prolonged exposure include chronic chest pains, dyspnoea, cough, haemoptysis, impairment of pulmonary function, and interstitial pneumonitis (Stopford, 1979; Levin et al., 1988). Instantaneous exposure to mercury vapors at concentrations of 1200 to 8500 μgm-3 for several hours can be fatal (Jones, 1971, Solis et al. 2000). WHO (2003) states that mild subclinical signs of central nervous system toxicity can be observed among people who have been exposed occupationally to elemental mercury at a concentration of 20 μgm-3 or above for several years. While direct vapor exposure has been linked to physiological problems in miners (Tomicic et al. 2009), less is known about the effects of extremely acute, but intermittent exposure in non-miners.

On an ecosystem level, mercury vapor released into the atmosphere can be precipitated by rainfall and deposited in water sources. Once mercury enters bodies of water, it can enter the food chain through digestion by bacteria, which process and transform elemental mercury into methylmercury or dimethlymercury. These are highly toxic compounds that can then become increasingly concentrated in the tissue of living organisms as it moves to higher trophic levels of the food chain through a process called bioaccumulation. High concentrations of mercury accumulation in humans can cause long-term neurological and renal degeneration (Tschakert and Singha, 2007; Tschakert, 2010; Howard et al. 2011).

In Colombia, bioaccumulation of mercury is particularly problematic in rivers that flow through mining areas, especially in the Nechí and Cauca Rivers in Antioquia and the San Juan River, Atrato and Rio Quito, in Chocó, among other smaller water causes draining to these main river systems. Rather than being present in the water per se, it accumulates in sediments on river beds and in larger fish species that are consumed by residents in downstream communities.

In its different chemical expressions, mercury causes multiple diseases in humans, which are more severe congenitally and in children. Symptoms include cerebral damage, kidney failure, and neurodevelopmental deficits, among others.

Hydrological functions

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A large number of small-scale mining operations working on adjacent segments of streams and small rivers, or a smaller number of operations working larger areas of alluvial deposits will obviate hydrological function locally by redirecting water flow. Where hydrological function is impaired but not extinguished, the greatest impacts of sediment loading can be found immediately downstream by a plume of elevated turbidity (Hammond, D., 2013).

Alteration of channels can include changes in slope, stream velocity, discharge, depth and width produce scouring characteristics, stream length, pool-riffle ratio, ground-water/surface-water relationships, ground-water recharge characteristics, and water temperature alterations. When located in steeper topography, alterations mentioned above can lead to increases in downstream flash flooding and in lowland areas to flooding outside of established flood plains (Madison, R., 1981).

Changes in the stream bottom material, including changes in particle-size

composition which may change the rate of inter-gravel water flow, deposition of fine material and gravel on riffle areas, as well as changes in bedload movement.

Effects on trophic structure of aquatic and riverine terrestrial habitats

Alluvial mining consumes, processes, and releases riverbed and consolidated riverbank sediment where coarse sediments and intercalated rock are redistributed as in situ tailing piles, while clay, silt, and carbon element suspended in the water column are redeposited downstream. This process when repeated along rivers and feeder streams rapidly accelerates erosion and alters the type and relative abundance of aquatic micro-habitats (Hammond, D., 2013).

Suspension of clay particles reduces photosynthetic activity due to increased water turbidity, which consequently reduces the growth of algae and macrophytes and increased sedimentation and mobility of river and stream substrate disturbs plant life inhabiting the stream bottom that together underpin the broader trophic structure of aquatic and riverine terrestrial habitats.

Loss of available food supplies due to reductions in production at the lower trophic levels (plant life and benthic invertebrates) reduces available food supplies for fish. Disturbance of river banks, seasonal flood zones and river bottom can obliterate hiding or living areas for fish, temporarily or permanently destroy or modify spawning areas or lead to the avoidance of traditional spawning areas that can result in either failure to spawn or complete or partial mortality of eggs, alevins, or fry. Short-term exposure to very large concentrations of suspended sediment can cause fish mortality through damage to gill structure.

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Taken together, increased sedimentation and loss of habitat can lead to changes in community composition of fish from clean-water species to species more adaptable to higher sediment levels, but possibly less suitable as fish-food organisms (Madison, R., 1981; Hammond, D., 2013.)

Water quality

Illegal gold mining in Colombia pollutes water sources due to the washing of soil sediments into waterways, from the effluent of chemical compounds used in processing the gold, such as cyanide and mercury, and the generation of acidic liquids (mine acid drainage) that can also contain dangerous level of dissolved heavy metals such as mercury, lead, and cadmium.

It results in an increase in organic loading in the stream system from the introduction of overburden sediments or inundation of organic-rich topsoil. This may produce anaerobic conditions in the sediment, decreases in dissolved-oxygen levels in the water, and increases in color, iron, tannin, lignin, organic carbon, nutrients, dissolved solids, and chemical or biological oxygen demand (Madison, 1981)

It increases the minor-element content of water or sediments as a result of exposure and oxidation of metal-bearing materials, the leaching of tailing deposits, or chemical treatment of the ores, for example with cyanide.

Acid mine drainage results in the oxidation of sulfide minerals and the leaching of associated metals from sulfurous rock when exposed to air and water. The resulting sulfuric acid is transported from the mine by surface waters and then deposited in ponds, streams, rivers, lakes and nearby aquifers. These metals tend to dissolve and move more easily in the acid waters associated with acid mine drainage. When transported by water, the metals can travel considerable distances, contaminating surface and underground water sources.

Acid mine drainage can occur in alluvial as well as hard rock mining, but is mainly associated with the latter and large-scale open pit mining that facilitates oxidation of the sulfides in the rock.

Clearing of large areas for the extraction of alluvial gold and the subsequent contamination of soil and water resources due to the uncontrolled use of mercury, causes direct and indirect negative impacts on aquatic ecosystems and rivers (including wetlands and flood plains), which leads to the degradation of ecological and hydrological functions that can require significant periods of time (decades, even centuries) to be restored via natural processes.

Air pollution

Illegal gold mining pollutes the air due to the emission of mercury gases and other associated heavy metals from the amalgamation process when gold ore

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is mixed with mercury to concentrate fine gold particles and are recovered by burning off the mercury. This is usually carried out in gold shops located in densely populated commercial centers as well as on-site processing where retorts are used. Past studies and initial measurements by Oro Legal have shown that ambient mercury levels in proximity to these areas far exceed the limit if 20 μgm-3 set by WHO in rural areas.

Dust and other particulate matter is prevalent in and around mining operations, particularly after prolonged periods without rain.

Use of gas and diesel pumps and heavy machinery can cause locally significant pollution at mine sites.

Deterioration and loss of soil

Illegal gold mining causes negative impacts on soil, either from the partial or total loss of fertile soil horizons or from contamination with chemicals used to extract or process gold, such as mercury, fuel, lubricants, and other industrial substances.

Soil loss is mainly associated with alluvial mining since the overlying soil layers must be removed (overburden) to access the gold that is deposited in lower sediments. In some cases, this operation is carried out several times to the point that all fine soil material, such as silts and clays, has been washed away, leaving behind infertile soils composed of sands and gravel, often contaminated with mercury, that have very low organic matter, and water-holding capacity.

Alluvial mining includes two different methodologies: i) use of heavy machinery such as backhoes, loaders, and/or bulldozers to collect ore in deposits along river banks, floodplains and older perched river beds that is then washed through sluices to separate out the gold; and ii) use of mostly small dredges to suck up sediments from the bottom water courses that are then similarly processed through sluices. While the latter may cause short-term, localized impacts, the form methodology leads to significant deterioration of water course and loss of soils and riparian and other vegetation.

Impacts on the biotic component

Illegal gold mining generates deforestation both directly and indirectly. In Antioquia and Chocó, it is estimated that 22,000 ha and 43,000 ha, respectively, have been devastated by mining activities, mainly alluvial gold mining, where trees and other vegetation are complete stripped from the mining sites (UNODC, 2016). Hard rock mining required work beam to support mine tunnels. Vegetation surrounding mine sites can be affected by roads and other infrastructure and expansion of rural boom towns associated with the mining sector. Taken together, direct and indirect deforestation and forest degradation due to mining can cause significant impacts to the habitat of local fauna and biodiversity, especially in riparian zones.

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Economic impacts

Gold mining causes impacts to farming activities due to loss of soil, changes in land use, and effects on cattle productivity. However, it is also a source of income for the population, even though employment is informal.

Local economies can be highly distorted by the boom and bust nature of gold mining. During periods of high activity, population growth in local urban centers can be swift and immense, stretching the capacity of local authorities to provide basic services and causing local prices to rise for real estate, goods and services. Uncontrolled development and associated demands on water supplies and generation of liquid and solid waste can have locally significant negative impacts on land, water and biological resources.

Impacts to public order and security

Mining as a lucrative economic activity that attracts illegal groups to the sector for the purposes of extortion and kidnapping (Colombian Treasury Inspector's Office, 2013).

During 50 years of armed conflict, the last two decades have seen an increase in government attention to reduce illegal crop production coupled with increased international prices for raw materials. This has motivated illegal armed groups to delve into illegal gold mining by pressuring and recruiting traditional miners or becoming directly involved in illegal exploitation themselves (Colombian Treasury Inspector's Office, 2013, taken from Massé and Camargo, 2013).

According to data reported by the Colombian Treasury Inspector's Office (2013), organized crime launders approximately US$ 5 billion (10 trillion Colombian pesos) per year through mining, equivalent to 5.4% of GDP.

The following are the main methods used for money laundering:o Purchasing gold from an illegal mine and using a formal mine as a front o Importing gold smuggled from neighboring countries to appear as if it was

produced from a formal mine o Purchasing imported mining machinery with US dollars earned from drug

trafficking.

3.4 Restoration of areas degraded by mining, alternative livelihoods and water catchment management Distinctions between the pilot BioREDD+/Mining activity and Oro Legal include the scale of interventions to restore areas degraded by mostly alluvial mining and results related to promoting, non-mining economic opportunities to mining operators and their families and management of water catchment basins that supply potable water to local urban centers within the project areas in Antioquia and Chocó. On the whole, these interventions will have a net positive impact on the

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environment and human health; however, certain activities could cause negative impacts, if implemented incorrectly.

Rehabilitation of areas degraded by mining

Rehabilitating the damaged, desolate landscapes caused by indiscriminate alluvial mining for other productive uses seems daunting. However, during BioREDD+/Mining economically viable options have been tested to not only successfully rehabilitate the land, but also to incorporate an economic model that generates income outside mining. The aim of rehabilitation is to stabilize the site to reduce further sedimentation, prepare the site for planting by recontouring the land so it approximates – but not replicates - the original topography, return the area to productive/economic use, and reboot the long process of reestablishing ecological and hydrological functions on these sites. The incorporation of Acacia mangium — a leguminous tree native to Australia, Indonesia, and Papua New Guinea — combined with beekeeping in these plantations, has yielded positive results and offers a unique opportunity to rehabilitate degraded areas. Use of this exotic species was a non-significant issue identified in the EA prepared for BioREDD+/Mining activities. Results and benefits to date of using A. mangium and associated honey production have been exceptional given the species’ high tolerance to infertile, droughty soil conditions and varying weather conditions, ability to fix nitrogen in the soil, rapid growth of commercially valuable wood, and excretion of a sap or nectar at the leaf axle that is highly attractive to bees. Rehabilitation using A. mangium and other species will be expanded in Antioquia.

A. mangium has proven to be very tolerant in areas degraded by mining, demonstrating rapid growth that makes the plantations a viable commercial venture for wood production from trees that can be harvested on a 10 -15-year rotation. Because of the harsh edaphic conditions of sites degraded by mining, where soils horizons have been obliterated, clay and slit particles washed away, and organic matter is low or non-existence, it is estimated that it will take many decades before these site might be apt for agriculture or livestock. Once harvested, A. mangium naturally sprouts new stems from the stump (coppices), thereby providing a simple, cost-effective way of regenerating harvested sites. For these reasons, it is expected that the rehabilitated mining sites in Antioquia will remain under management with A. mangium plantations, or slowly revert to natural vegetation as site conditions become more favorable for native species to establish.

There are few studies on mercury concentration in soil and A. mangium and other vegetation on alluvial mine sites. As currently practiced, use of mercury at mine sites is limited to small areas where it is mixed with concentrated gold ore to form an amalgam. Thus, the dispersion of mercury in soils at mine sites is probably far more restricted than one may initially think. One study has shown mercury occurring in trace amounts in the soil naturally concentrates in the “neck” of trees where the roots and trunk merge, rarely reaching the aerial part of the plant (Universidad de Antioquia, 2013). Regardless, ad hoc sampling for mercury in soils and vegetative material will be undertaken.

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Very different ecological conditions in the Chocó require a different approach to rehabilitation of sites degraded by alluvial mining. High annual rainfall in some areas in excess of 6,000 mm and poorly drained soils preclude the use of A. mangium for reforestation of sites in Chocó (Orwa, 2009). In conjunction with minimum recontouring because of the high rainfall, revegetation of sites will rely on natural or assisted regeneration. Based on field observations, the presence of primary or well-established secondary forests in proximity to degraded areas allows native species to seed in and become quickly established. Oro Legal will develop a rehabilitation plan for Chocó that ensures natural regeneration will be augmented by enrichment planting at low densities to ensure good stocking of trees valuable to wildlife and for commercial purposes. Simple management practices like manual weeding, thinning, and pruning of more valuable species will also be carried out. The expansion of alternative economic options for local inhabitants, such as achiote, on non-degraded areas will provide livelihoods incentives to underpin community-level agreements to rehabilitate degraded areas, as well as conserving larger areas of forest under community council (CC) control. In sum, this model for the Chocó, is well-adapted to local conditions based on field observations and appears to be cost-effective.

Alternative livelihoods

A large number of MPUs will not be eligible to become legalized or are marginally profitable. For this reason, support to development of alternative livelihoods, especially in agriculture and agroforestry is an integral part of Oro Legal. Reforestation in woodlots with smaller landholders offers new opportunities to involve poorer households in which members hold precarious mining jobs. In priority water catchments, where there are producer associations, tree planting will generate part-time employment. Beekeeping, introduced as part of the reforestation program in Antioquia, will benefit from nectar and pollen sources in native forests and vegetation that is commonly more intact in upper water catchments.

Overgrazing is a driver of forest and soil degradation in Antioquia, but a pillar of rural household economies. Simple silvopastoral practices can dovetail with other features which combine reforestation, alternative tree crops, and local organizational strengthening with practices such as cover crops to improve soil texture and fertility, alley forage crops, live fences, improved pasture, controlled grazing, and climate smart crop-livestock systems for smallholders.

Several agro-forestry production systems with rubber, cacao, achiote (annatto), and silvopastoral practices for livestock are generally appropriate in Antioquia and can be adapted depending on specific site conditions (slope, type of soils, rainfall, etc.), level of local organization, markets, and expressed interest by mining families. In Chocó, market-based value chains are incipient, and this region’s isolated geography makes transport extremely costly and market connections tenuous. This calls for value chains based on goods with a high value-to-volume ratio that are not highly perishable, and for which some value-added processing can be done locally. Under BioREDD+, business and investment plans were prepared and investors have expressed interest or are already investing in

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promising value chains such as achiote, coconut, cacao, naidí (açaí), and native freshwater fish.

Water catchment management

Contamination of water supplies from upstream degradation and inadequate potable water systems pose serious and immediate public health risks. These risks are caused by current or historical mining activities above water intakes and degradation caused by land uses and land use conversion from forest to agricultural, especially extensive livestock grazing. To improve water quality and secure sustainable water supplies for growing urban areas, a dual approach is needed that includes conservation of upper water catchment areas through protection and improved land use and improvements to water capture, storage, and treatment systems. Municipalities are largely responsible for the provision of water services to urban and peri-urban populations, but lack capabilities for effective planning, monitoring, and protection schemes. Therefore, an integrated water resources management (IWRM) approach is called whereby development and management of water, land and related resources are coordinated in order to maximize economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.

3.5 Geographic focus Oro Legal will operate in two departments - Antioquia and Chocó - since theses departments account for almost 75% of the gold mined in Colombia. The priority geographies in Antioquia and Chocó are presented in Figures 3 and 4 below.

Figure. 3 List of Priority Municipalities in Antioquia and Chocó

Department

Sub Region Municipalities

Antioquia

NortheastRemediosSan RoqueSegovia

Western Buriticá

Lower Cauca

NechíTarazáCaucasiaEl BagreCáceresZaragoza

Valle de Aburra BarbosaDon Matias

Chocó Middle and Upper Atrato River Rio QuitoAtrato (Yuto)QuibdóCertegui

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Cantón San Pablo

Lower, Middle and Upper San Juan River

CondotoUnión PanamericanaIstminaNóvitaTadó

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Figure 4. Geographic Location of Priority Municipalities in Antioquia and

Chocó

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IV. PURPOSE AND NEED FOR AN ENVIRONMENTAL ASSESSMENT

The purpose of this Environmental Assessment is: i) to comply with the requirements of Title 22 CFR 216 of the U.S. "Agency for international development" and; ii) to analyze the possible (negative and positive) environmental impacts arising from the proposed activities under the Oro Legal activity, which aims to address environmental issues the small illegal gold mining sector in two regions of Colombia.

There is a need to move informal and mostly illegal gold mining in specific regions of Colombia towards a more environmentally and socially sustainable, formalized and legal activity. The "need for action" for Oro Legal is aimed at reducing the environmental impacts of small scale gold mining, with special emphasis on eliminating the use of mercury and recuperating degraded areas left by gold mining. The successful implementation of the program will result in improved, legally compliant mining operations in the target geographies. The program builds on the results and processes initiated under the mining component of the USAID BioREDD+ program. Strong participation of the private sector is expected as well as involvement of relevant local, regional and national levels GOC counterparts. ASMs in selected municipalities of Antioquia and Chocó are the main target groups for Oro Legal.

The "desired future condition" of this activity is directed to the following areas: i) to build effective governance capacity for gold mining activities in target municipalities by strengthening public management functions and capacity building of local organizations with a stake in gold mining operations and; ii) to increase GOC, private sector and community capacity to address environmental degradation caused by illegal gold ASM operations, through delivering improved water and air quality, and transforming degraded areas through establishing productive commercial uses with a value chain approach.

USAID/Colombia’s development hypothesis underpinning the theory of change for Oro Legal is that if regional and local authorities are more effective in enforcing mining-related legislation and the right facilitating instruments (i.e. laws, regulations, policies, partnerships or projects) are in place to support environmental recuperation of degraded areas with the participation of land owners, private sector and local communities, then regional and municipal authorities will gain legitimacy and support, improving social, environmental and economic performance of ASM operations and advancing Colombia’s peacebuilding goals (see Annexes 1 and 2).

The "desired future condition" under Objective 1 to build effective governance capacity in gold mining activities will be achieved by:

Formal agreements with local, regional, and national government authorities. Support to the development and enforcement of legal regulatory framework

by the government of Colombia conducive to change. Field inspections, follow up, and monitoring by corresponding government

authorities.

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Better use of land using planning tools by local authorities to restrict certain types of contaminating activities in highly populated urban areas.

Alliances between informal miners and large, formal mining companies. Strong, legal and responsible MPUs. Support to the preparation, approval and implementation of mining Work

Plans (WP) for ASM operations. Support to the preparation, approval and implementation of Environmental

Management Plans (EMP) for ASM operations. Enforcement of environmental, social, industrial safety and occupational

health, and tax regulations by the State. Access by ASM to technical assistance and investment to implement gold

mining technologies that reduce or eliminate mercury from the production cycle while maintaining or increasing gold recovery.

Effective, continuous monitoring of: (i) airborne mercury emissions in 9 key municipalities; (ii) liquid mercury use and recovery in 45 selected gold shops and rustic processing centers (entables), and (iii) mercury mass balance in 25 MPU.

Monitoring of cyanide and other heavy metals in any gold processing centers that are recipients of direct support from Oro Legal.

The "desired future condition" under Objective 2 to address the environmental degradation caused by illegal ASM operations will achieved by:

Re-contouring lands degraded by informal and illegal gold mining. Reforesting mined areas with commercial forest plantations (Antioquia). Restoration of degraded mined area by natural or assisted regeneration

(Chocó). Adequate silvicultural practices applied to plantations and natural

regeneration on restored sites. Generating mid to long term economic benefits linked to rehabilitation

practices. Future benefits from plantations accruing to landowners, community and

mining organizations, etc. Assistance to landowners to obtain forest use permits for plantations to

authorize future harvest and generate income. Beekeeping and other productive activities associated with tree plantations

that generate income for former small miners and other rural families. Legalization of land titles. Alternative livelihoods in the rural sector for miners that cannot become

legalized. Significant public and private sector co-investment in restoration and

alternative value chains. Secure title and land tenure in degraded areas to be restored and water

catchments that supply water to regional urban centers A social and political environment that supports investment in water

catchment management and improvement of water supply systems. Monitoring of basic water quality parameters (in accord with Colombian

legislation, IRCA) in public water systems in all water pilots that are recipients of direct support from Oro Legal.

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V. DESCRIPTION OF THE PROPOSED ACTION Gold mined illegally in the departments of Chocó and Antioquia will be reduced using the different available options - public or private - for legalization and formalization. This formalization effort will go hand-in-hand with a reduction in the amount of mercury used per unit of gold mined and a decrease in the number of hectares identified as having legacy or “pasivo ambiental” issues. ASM operations that are not able to become legal will receive support in finding new economic opportunities for their associates, particularly in forestry and agricultural sectors within the promotion and establishment of alternative livelihoods using a value chain approach (see objective 2 below for more detail).

The aim of Oro Legal is not to promote or condemn mining operations. It aims at formalizing ASM activities and recovering degraded areas by building on the successful approaches and lessons learned during the implementation of the USAID BioREDD+ program under its mining component with innovative approaches that are feasible within time and resource constraints, adaptable to the Colombian context and sensitive to conflict and peace-building dynamics (http://www.bioredd.org/?q=biblioredd). Oro Legal is a five-year project with a budget of approximately US$20 million. To achieve its goal, expected results are organized under two components:

OBJECTIVE 1: Build effective governance capacity for gold mining activities in the departments of Antioquia and Chocó.

Objective 1 Problem Statement

The GOC has limited capacity to enforce regulation in the departments of Antioquia and Chocó. These two departments contain the majority of informal and illegal gold miners in Colombia. The GOC entities in charge of the regulatory function face several circumstances that limit their ability to enforce legislation: i) inadequate regulatory framework; ii) limited information on formalization programs; iii) budget, institutional capacity and staffing limitations; iv) administrative decisions that unintentionally create disincentives or obstacles to legalization; and; v) illegal miners demonstrate poor capacity and willingness to change their conditions.

This lack of enforcement capability on the part of the GOC encourages continued illegality and increases the negative environmental impacts of illegal mining, particularly the use of mercury and the pollution of air, water and soil that have significant impacts to human health. Technical assistance to ASMs to improve gold and mercury recovery is part of the solution. GOC entities at regional and municipal levels also face budget constraints that limit the human resources needed to manage basic administrative functions and do the required field inspections. As a general principle, this constraint will not be addressed directly by Oro Legal but rather by in-kind contributions by GOC counterparts. With USAID’s approval, temporary support to government authorities may be provided for specific actions by Oro Legal. Participation of mining titleholders and landowners is a requirement for the legalization program.

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Objective 1 Expected Results

Expected Result 1. Strengthened Capacity in GOC entities to enforce gold mining legislation.Oro Legal will work with relevant teams within the regional and municipal governments as well as with regional environmental authorities to build sustainable capacities for implementation and enforcement of mining regulation. This includes knowledge and understanding of the relevant existing legislation and GOC programs on ASM formalization and legalization and mercury use reduction programs as well as support in implementing the mechanisms for fast and effective processing of all requests for formalization. The project will facilitate interaction among mining companies and mining titleholders as a mechanism towards formalization.

Relevant GOC entities will be assisted at the national level (e.g. Ministry of Mines, Ministry of Environment, ANLA (National Environmental licensing Agency), ANM (National Mining Agency), INCODER (National Institute for Rural Development) in consolidating and updating the regulatory framework to create an enabling environment for ASM formalization and legalization. This includes support for designing incentive mechanisms, innovative financial instruments to provide finance for small scale informal miners, and control mechanisms.

Expected Result 2. Participation of ASM organizations, indigenous and Afro-Colombian communities in formalization programs strengthened. Oro Legal will assist ASM associations, indigenous and Afro-Colombian communities in accessing GOC formalization programs. Viable routes for formalization will be identified, according to conditions on the ground. To the extent possible, Oro Legal will support their transition towards legalization and formalization. Promoting and strengthening miners’ associations, building their administrative and technical capacities in ASM, and providing legal advice throughout the formalization process are key activities toward achieving results.

Expected Result 3. Technical assistance and training provided to ASMTraining and technical assistance will be provided to ASM operations, towards: i) reducing and ultimately eliminating the use of mercury for gold extraction and ii) minimizing and mitigating the environmental impacts of ASM operations. Support in preparing and implementing the environmental management plans, and best environmental, social and administrative practices must be provided.

OBJECTIVE 2: Increased GOC capacity to address environmental degradation by illegal gold ASM operationsObjective 2 Problem StatementLack of state presence and capacity to enforce legislation also contributes to the increased amount of areas degraded by illegal mining operations. Innovative approaches to recover degraded areas are needed. Participation of the GOC, private sector, community associations and land owners is required to address the problem. Experiences in the Bajo Cauca region of Antioquia department show that a joint venture approach is feasible to reclaim degraded areas for the establishment of commercial forestry plantations, while supporting community

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organizations in finding alternative income sources apart from mining. Joint venture approaches may include, but are not limited to participation of land owners, private companies, and municipal, regional and national level governments. Value chain approaches to wood and agricultural production will generate higher income for the joint venture. Forestry plantations are also aligned with the Colombian Low Emissions Development Strategy (LEDS) and reforestation has been identified as a National Appropriate Mitigation Action (NAMA) to mitigate climate change.Objective 2 Expected ResultsExpected Result 1. Reforestation NAMA supported in areas degraded by unauthorized ASM operations (Pasivos ambientales)

Oro Legal will facilitate the design and implementation of protocols and support mechanisms for the provision of technical, financial and legal assistance for land recuperation investments. This includes the identification of viable degraded area that are clustered to attain the minimum area needed to make the reforestation activity financially feasible. Oro Legal will build on the previous experiences of other USAID-funded forestry programs (Colombia Forestal, MIDAS, etc.) while proposing business models where landowners, communities, private sector and GOC can participate. Expected Result 2 Alternative livelihoods for ASM communities promotedA significant proportion of the population involved in ASM operations are not necessarily miners by training or tradition. Displaced and unemployed people are also involved in unauthorized mining because of a lack of alternative income generating activities. Oro Legal will work with mining associations, rural communities in gold mining areas and degraded areas, and land owners in the promotion and establishment of alternative livelihoods using a value chain approach. Activities will be aimed at eliminating manual labor, often working under inadequate conditions in unauthorized mining operations, thus improving quality of life of miners and their families living in ASM communities. Expected Result 3. Drinking water quality improvedIllegal mining deteriorates the quality, quantity and availability of water in several ways. Direct discharge of mercury and heavy metals into river streams, erosion of river beds and catchment deterioration are part of the problem. Poor access to safe water threatens local populations and impacts human health in urban areas, whether they are involved in mining or not. Oro Legal will support integrated water catchment management to improve water supply systems for local urban areas and the design and implementation of sustainable financial mechanisms to pay for it.

The draft results indicator table currently under review by USAID describes how progress toward achievement of each objective will be measured and monitored and includes Year 1 and LOP targets. In Annex 5, a Gantt chart describes the specific activities that will be developed during Year 1 that are indicative of the interventions that Oro Legal will undertake or support during its five-year period of performance.

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VI. POTENTIAL IMPACTS RELATED TO THE PROPOSED ACTION

Per the guidelines set forth in Title 22 of Code of Federal Regulations (CFR) 216.3 (a) (4), the USAID Bureau Environmental Officer (BEO) for Latin America and the Caribbean determined that the proposed action was likely to cause significant negative impacts on the environment and therefore issued a "Positive Determination", whereby an Environmental Assessment is required. The "Environmental Threshold Decision” LAC-IEE-14-02, issued on October 16, 2013 by the BEO for Latin America and the Caribbean stipulates a "Positive Determination" for the following proposed Program activities:

● Reduction of the use of mercury by small informal mining organizations.● Rehabilitation work in areas affected by unauthorized mining activities.

One of the main tasks of the EA process is to identify the significant environmental and social issues associated with Oro Legal. The current scoping process engaged representatives of the GOC, private companies, associations, USAID/Colombia staff, and the consultations conducted during preparation of the original Scoping Statement for the BioREDD+/Mining activity with the purpose of identifying:

● Significant issues. Issues within the scope of Oro Legal considered to have an important bearing on the environment and to the achievement project objectives

● Non-significant issues. Issues that are within the scope of Oro Legal but are considered to have a low risk of causing significant impacts and, therefore, will be assessed with less rigor

● Issues beyond the scope of Oro Legal. Issues that are directly linked to illegal mining and environmental liabilities that have a bearing on implementation of Oro Legal, but are considered to be outside the scope of the activity’s objectives.

Overall, correct implementation of Oro Legal and achievement of its two main objectives will result in net positive social and environmental impacts. Nonetheless, potential short-term impacts are recognized and will be analyzed by the EA.

6.1 Significant issues Informality in the possession, use, and exploitation of land subject to gold mining. The Oro Legal activity is not meant to directly resolve the issue of formalization in the possession, use, and exploitation of the land per se; however, in Colombia rights to subsoil minerals are separate from land tenure and property rights, a fact that must be taken into account during implementation of actions to legalize and formalize MPUs and rehabilitate land degraded by gold mining.

Informality in extracting, processing, and marketing gold. Informal gold mining causes serious impacts on the environment. The primary impacts from informality along the gold production chain to be addressed by Oro Legal include: degradation and loss of soil; damage to water resources and biodiversity; deforestation; failure

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to implement and uphold industrial safety and occupational health standards and; very poor organization of ASM operations.

Use of mercury in the gold mining process. Reducing the use of mercury in the departments of Antioquia and Chocó is one of the main goals of Oro Legal. By legalizing and formalizing gold ASMs and improving the technology used in gold extraction processes, the use of mercury is expected to decrease and gradually be eliminated, thus reducing emissions and exposure from mercury vapors, contamination of soils and water resources, negative impacts on biodiversity, and health risks to workers, their families, and communities.

Alternative livelihoods for ASM that cannot be legalized and formalized. Oro Legal will support small miners who cannot enter one of the legalization pathways by developing rural economic alternatives based on agricultural value chains such as cacao, rubber, achiote, and other agroforestry and tree crops and silvopastoral systems. By shifting into other livelihoods, the impacts of illegal, more marginal mining operations should have a net positive environmental impact. The risks of clearing new forests to establish tree crops is expected to be low as new cultivation or silvopastoral systems will be restricted to areas already used for agriculture. Low input cropping systems will be promoted and use of any pesticides will follow the requirements of the Pesticide Evaluation Report & Safe Use Action Plan approved for Colombia.

Management of water catchments. Contamination of water supplies from upstream degradation and inadequate potable water systems pose serious and immediate public health risks. In Antioquia, current or historically mining is not the main source of contamination, rather land use conversion from forest to agriculture and livestock grazing and poor agricultural practices on steep areas pose the greatest risks to quality and quantity of water, caused by soil erosion, sedimentation of waterways and animal and human waste. In Chocó, municipal water systems that source water by direct pumping from large rivers are at risk of contamination from many of the same causes as in Antioquia as well as from sediments, organics, oil and fuel, heavy metals and other pollutants originating from alluvial gold mining upstream from water intakes.

This being the case, Oro Legal will employ an integrated approach to improve water quality and secure sustainable water supplies for growing urban areas in selected pilot catchments based on: (i) conservation of upper water catchment areas; (ii) improved water capture, storage, and treatment systems and (iii) novel financing mechanisms to better link demand to supply. Improvement in land-use practices is a long-term endeavor that requires well-targeted planning to build consensus among landowners and political commitment by local authorities, complemented by the right mix of incentives and disincentives to encourage changes. Oro Legal will explore the feasibility of implementing small water funds as a mechanism to promote long term financial sustainability.

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6.2 Non-significant issuesPlanting of Acacia mangium. Acacia mangium, is a fundamental part of rehabilitation efforts of lands degraded by alluvial gold mining in Antioquia. A. mangium is an exotic, non-native species in Colombia, originally from Australia. The weighing of benefits and potential risks of its use in Oro Legal requires careful consideration and justification. The following references relate to A. mangium as a potential invasive species:

● “Cookies on Invasive Species Compendium” (http://www.cabi.org/isc/datasheet/2325 ) Introduced A. mangium has been found to be associated with invasion events in Africa, Western Australia, American Samoa, Chuuk (Federated States of Micronesia), Sabah (Malaysia), and Bangladesh (Haysom and Murphy, 2003). It is also recorded as invasive in Brazil (Haysom and Murphy, 2003).

● “Global Invasive Species Database” http://www.issg.org/database/species/ecology.asp?si=198&fr=1&sts=&lang=EN – and - http://www.kew.org/science-conservation/plants-fungi/acacia-mangium-brown-salwood) - A. mangium is a fast-growing tree that produces many seeds. Used for forestry and ecological restoration, it was widely planted and cultivated in many Pacific islands. It has naturalized in many cases and it is a threat to indigenous flora. Acacia mangium is a major plantation species in the humid tropical lowlands of Asia. Its success is due to its extremely vigorous growth rate, tolerance of highly acidic, low nutrient soils, ability to grow reasonably well where competition is severe (for example Imperata grasslands), relative freedom from disease, wood properties that make it suitable for a wide range of uses, and ease of establishment in cultivation. Plantations in Indonesia and Malaysia are the resource base for a large pulp and paper industry. Other uses include fuel wood and timber for building furniture and particle board.

● “Pacific Islands Ecosystems at Risk” (http://www.hear.org/pier/species/acacia_mangium.htm) Acacia mangium has a high risk to invade sites. Naturalized species in many places in the Pacific region and in the Caribbean region, including American Samoa, Hawaii, Palau, Singapore, Costa Rica, and the Dominican Republic. From the “Global Compendium of Weeds” - it is considered a naturalized, environmental weed.

A. mangium is highly tolerant of the harsh edaphic and other conditions found on extremely degraded sites targeted for rehabilitation by Oro Legal. The planting of A. mangium is considered a non-significant issue for the following reasons:

A. mangium has been widely planted in the Bajo Cauca region of Antioquia for more than 20 years; thus, as in the case of BioREDD+/Mining, it would not be newly introduced to the region during Oro Legal. During this time, it has not become a serious invasive species. Where A. mangium is grown on a commercial scale in Southeast Asia, there is no evidence the species has become established in intact, native forests to the exclusion of native species.

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● The Bajo Cauca region of Antioquia has climatic extremes that compound the already harsh physical and nutritional deficient edaphic conditions of degraded mined lands. The region has an extended, annual dry season (approximately four months per year) and average annual temperatures are high (28° C). This combination of climatic variations and harsh soil conditions creates conditions too severe for native species. Field trials have demonstrated that on degraded sites (without clay or loam soil fractions), A. mangium is the only species able to thrive under such harsh conditions and in this sense is a “species of last resort” since local native species hardwoods have little chance of survival.

● As a fast growing, pioneer species, A. mangium creates a closed canopy and matures very quickly. Based on field observations on degraded mining sites, as stands of A. mangium mature, understory conditions will create favorable for local native trees and other vegetative species to become established, replicating the process observed on better sites where A. mangium has been planted. Thus, A. mangium serves as a “nurse species” to improve site conditions favorable for the establishment of native vegetation as fine windblown soil particles and organic matter accumulates and the seeds of native species are deposited by wind, birds and other animals beneath the Acacia canopy. Scoping Statement authors saw a mature stand of A. mangium in Bajo Cauca with a well-developed understory composed entirely of native hardwood species; i.e. no natural regeneration of A. mangium.

A. mangium will be very limited in its ability to move beyond degraded mined lands because the species requires exposed mineral soils to germinate. In the Bajo Cauca region, landscapes surrounding degraded mined lands are composed of three primary land uses: i) pasture lands for cattle; ii) small to medium-sized stands of native hardwood species and; iii) tree plantations primarily composed of rubber trees. All three of these land uses maintain permanent vegetative cover and soil conditions that are unfavorable for germination of A. mangium seeds.

Extreme seasonal droughts and nutrient poor soils are other conditions that will prohibit the spread of A. mangium by seed outside of the degraded mined areas where it is planted. Even on a degraded mining site, successful establishment of Acacia seedlings requires incorporation of organic matter and fertilizer in the planting hole to aid survival, a “jump start” that seeds deposited outside the degraded mining areas would not have.

While virtually all potential sites where A. mangium might be used are degraded mining areas, soil quality nonetheless varies widely and will be taken into account in restoration efforts on a case-by-case basis. For this reason, and to give the process of reintroducing native species a head start, at least 10% of all trees planted will be native species that will be planted on the more favorable micro-sites (better soils and more adequate moisture).

There are few studies on mercury concentrations in soils and A. mangium and other vegetation on alluvial mine sites. As currently practiced, use of

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mercury at mine sites is limited to small areas where it is mixed with concentrated gold ore to form an amalgam. Thus, the dispersion of mercury in soils at mine sites may be more restricted than one would initially think. One study has shown that mercury occurring in trace amounts in the soil naturally concentrates in the “neck” of trees where the roots and trunk merge rarely reaching the aerial part of the plant (Universidad de Antioquia, 2013). Regardless, ad hoc sampling for mercury in soils and vegetative material will be undertaken.

● Many reforestation organizations and companies like Reforestadora Integral de Antioquia S.A., a primary BioREDD+/Mining partner have significant experience planting A. mangium in the Bajo Cauca region and its silvicultural practices well.

Figure 5. Acacia mangium on severely degraded, nutrient-poor soils typical of alluvial mined lands not apt for native hardwood species to germinate and survive

6.3 Issues outside the scope of the Project The follow issues associated with gold mining are considered outside the scope of Oro Legal Mining:

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High economic dependence on gold mining. In the project areas, local economies are highly dependent on gold mining. The other principle economic activity is agriculture, which in some places like Segovia and Remedios, has been largely displaced by mining. This makes local populations highly vulnerability to international commodity price swings and an over-reliance on non-renewable resources. Acid mine drainage and heavy metals. Acid mine drainage is the main issue associated with hard-rock mining and water resources. This contamination originates in the tailings left after primary processing of ore or in mine tunnels where leaching of metal sulfides and associated heavy metals such as cadmium, mercury, arsenic, and lead can acidify water systems with serious implications for human health and aquatic ecosystems. Despite this, it is deemed unfeasible for Oro Legal to take action given the very high cost of removing heavy metals from these enormous volumes of tailings.

Influence of armed groups in the informal gold mining activity. Criminal gangs and armed groups use the lack of State presence in mining areas to finance their activities by direct exploitation of gold, extortion of mining operators, and/or money laundering.

Government Policy on Mining. Policy which broadly supports legalization and responsibly ASM is highly desirable for the success of Oro Legal. While Oro Legal is in a position to support government legislation, it can only do so at the express request of the government itself and in accord with the Oro Legal stance on mining neutrality.

Environmental Assessment FrameworkThe preliminary identification of the potential impacts associated with the actions proposed under Oro Legal is founded on the Scoping Statement, Environmental Assessment, and experiences for BioREDD+/Mining, a review of available literature, field observations during site fields to the departments of Antioquia and Chocó, in-country consultations, and expert input by USAID, the Oro Legal team and GOC and private counterparts. A five-year time horizon will be used to evaluate the environmental impacts of the activities proposed by Oro Legal with capacity building for counterpart organizations to continue monitoring beyond the LOP. At a minimum, three alternatives will be considered to determine how each addresses the significant issues identified in the SS. A preferred alternative will be identified with an associated Environmental Mitigation and Management Plan (EMMP) for the activities proposed, which includes mitigation measures, monitoring, training, and a draft budget.

The alternatives to be considered in the EA will present how each significant issue is addressed and describe the impacts, positive or negative, expected during implementation and fully incorporate the lessons learned from the BioREDD+/Mining activity. The first alternative considers the result of taking no

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action to address the significant issues identified in the SS. The second alternative corresponds to actions proposed by Oro Legal. A third alternative will build from alternative two with a broader scope for actions in the area of alternative livelihoods for artisanal miners and management of water catchments. Other alternatives are not analyzed in detail based on the findings of the trip report by the Regional Environmental Officer following his visit to Oro Legal project areas in May 2016 (report annexed).

VII. EA’S PREPARATION SCHEDULE AND METHODOLOGY To meet the objectives and develop the final report of the EA, the team responsible for the evaluation shall perform the following specific tasks framed in the schedule as presented in Figure 6.

• A geographical analysis of the impacts and the identification of sensitive areas.

• Interviews conducted with stakeholders.

• Environmental Assessment and analysis of alternatives.

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Figure 6. Environmental Assessment Timeline

Tasks Responsible party Estimated completion date

1 Scoping Statement - preparation of draft

Chemonics International 12/23/2015

2 Scoping Statement - COR review

USAID 01/19/2016

3 Scoping Statement – REA review and comments

USAID 03/03/2016

4 Scoping Statement - preparation of final draft

Chemonics International 04/11/2016

5 Scoping Statement – REA field visit

USAID

Visit from REA, COR and MEO of the activity to the field in order to validate information provided in the document

Chemonics International

Preparation and setting of the agenda for meeting and visit to possible activity implementation sites.

Assistance during the visit.

05/01/2016 – 05/06/2016

6 Scoping Statement – final observations after field visit

USAID 06/02/2016

7 Scoping Statement – preparation of final draft

Chemonics International 07/14/2016

8 Environmental Assessment –

ACON 04/29/2016

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Tasks Responsible party Estimated completion date

draft Preparation of the Environmental Assessment, including geographic analysis, interviews with stakeholders, and analysis of alternatives.

Chemonics International

Scope of Work for the task order to ACON.

Advising on 22 CFR 216 procedures and oversight of Environmental Assessment preparation.

Setting the agenda for meetings with institutional and field level stakeholders.

Provision of mercury monitoring plan.

9 Environmental Assessment - review

Chemonics International 07/22/2016

10

Environmental Assessment – review

USAID 08/05/2016

11

Environmental Assessment - final

ACON

Preparation and delivery of the final Environmental Assessment report.

Chemonics International

Oversight of final Environmental Assessment

08/15/2016

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7.1 Consultations with stakeholders The stakeholder consultation is important in determining the scope and process for the EA. Three levels of stakeholder consultations were used to prepare this SS: i) extensive meetings with local stakeholders during BioREDD+/Mining that are still relevant for the current Oro Legal SS; ii) stakeholder consultations held by Oro Legal staff (see Annex 3) and; iii) consultations conducted by the SS technical team (see Annex 4).

7.2 EA Team Team Leader - Gabriel Medina

Management specialist for natural resources, civil engineering and environmental disaster prevention, with knowledge of the Reg. 216, Colombia environmental law and regulations, and legal and technical-environmental issues in extractive projects. As project manager for Ambiental Consultores & CIA LTDA, he has had the opportunity to apply his knowledge in Strategic Environmental Assessments, Environmental Impact Assessments, and Environmental Management Plans and modification and renewal of environmental licenses, Alternative Environmental Diagnostics, and planning, design and consulting services to various industrial environmental operations. Mr. Medina has over 24 years of general experience and over six years of experience in project evaluations and mining studies. He has consulted for public and private entities at the national, regional and local levels and to international organizations like the United Nations Development Program, Organization of Ibero-American States, and the World Bank, among others. He has extensive experience in the areas of environmental impact assessment, economic valuation of environmental impacts, and environmental plans and development programs.

Socio-Economist - Silvia Feria

A social communicator with a Masters in Strategic Communications, Ms. Feria brings over nine years of professional experience in community relations, social management procedures, social and communication research, and design and implementation of communication strategies. She has participated in mining projects and social development projects (economic enterprises, gender, citizen oversight and vulnerable populations) in Peru and Colombia. She is a specialist in citizen participation, in the evaluation of environmental and social impact, in corporate social responsibility, gender, multiculturalism, involuntary resettlement and intercultural dialogues.

Natural Resources Specialist - Luz Patricia Hernandez

Ms. Hernandez is natural resources management specialist with skills planning, development and implementation of activities related to forestry, environment and related sectors under the principles of sustainable development. Experienced in development and implementation of environmental

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management plans in physical - biotic diagnosis (flora inventories, climate, soil and geological characterization) and component evaluation, zoning and development. Also experienced in managing ArcMap and ArcView Cartographic tools and Access platforms, Excel and other MS Office components.

Environmental Specialist – Catalina Correa

Ms. Correa is a bilingual environmental engineer, with a Masters in Sustainable Environmental Management from Middlesex University in the United Kingdom. Experienced in carrying out environmental management plans and environmental studies for mining projects, including the analysis of the relationships between mining titles and national protected areas. Has worked with prominent Colombian environmental consulting firms such as OPTIM Consult and INERCO, as well as in projects for international development organizations such as the Inter-American Development Bank and the International Finance Corporation.

Environmental Expert - Bruce Bayle

Forest Engineer, with over 30 years’ experience in the field of natural resources and environmental analysis in the U.S. and various countries. He spent 11 years with USAID as a Mission and Regional Environmental Officer in Latin America and the Caribbean, and a biodiversity specialist in Latin America and the Caribbean; extensive experience in USAID regulations.

EA Oversight and Quality Control – Greg Minnick

Forester with over 30 years’ experience in natural resource and forest management, agroforestry, conservation, mining and Reg. 216 compliance, including programmatic and project EAs, EMMP and evaluations.

VII. REFERENCES British Geological Survey (2012) World mineral production 2006-2010 Keyworth, Nottingham.

Cannon, Phil; Davidson, Robert & McCarthy Camille (2014). A brief visit to Acacia mangium Plantations in the Mine Spoils of Caucasia, Colombia, Colombia

Colombian Treasury Inspector's Office, 2013, taken from Massé and Camargo, 2013.

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Comptroller General of the Republic (2012). The illegal exploitation of mineral resources in Colombia. Colombia

Comptroller General of the Republic (2013). Mining in Colombia. Colombia

Contraloría general de la Republica (2012). La explotación ilícita de recursos minerales en Colombia (The illegal exploitation of mineral resources in Colombia). Colombia

Cordy, P., Veiga, M., Crawford, B., Garcia O., …Wip, D. (2013). Characterization, mapping, and mitigation of mercury vapour emissions from artisanal mining gold shops. Environmental Research125, 82-91.

Hammond, David S., Judith Rosales, and Paul E. Ouboter, Managing the Freshwater Impacts of Surface Mining in Latin America, Inter-American Development Bank, 2013

Haysom, K.A. & Murphy, ST. “The status of invasiveness of forest tree species outside their natural habitat: a global review and discussion paper”. Forestry Department - Food and Agriculture Organization of the United Nations (2003).

Howard, J., Trotz, M. A., Thomas, K., Omisca, E., Chiu, H. T., Halfhide, T., ... & Stuart, A. L. (2011). Total mercury loadings in sediment from gold mining and conservation areas in Guyana. Environmental monitoring and assessment, 179(1-4), 555-573. (Colombian Treasury Inspector's Office, 2013)

Informal mining in Colombia (2013). Section IV. CDD+/Mining Quarterly reports. (1) September 2013. (2) December 2013.

Jones, H. R. (1971). Mercury pollution control. Jones, H. R. (1971). Mercury pollution control.

Kellogg, M. Scoping Statement for environmental assessment. Climate, nature and communities in Guatemala. Rainforest Alliance Inc. Sustainable Forestry Division. Cooperative Agreement No. AID-520-A-13-00001

Oficina de las Naciones Unidas contra la Droga y el Delito - UNDOC (2016). Explotación de oro en aluvión. Evidencias a partir de percepción remota.

Levin M, Jacobs J, Polos PG. 1988. Acute mercury poisoning and mercurial pneumonitis from gold ore purification. Chest, vol 94, pp. 554-56.

Madison, R. Effects of Placer Gold Mining in Alaska, U.S. Department of the Interior, Bureau of Land Management, 1981Meili, M. (1991). The coupling of mercury and organic matter in the biogeochemical cycle—towards a mechanistic model for the boreal forest zone. Water Air & Soil Pollution, 56(1), 333-347.

Ministry of Mines and Energy (2011). Mining Departmental Census in Colombia. Colombia

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Ombudsman (2010). Mining made in Colombia. Colombia

Orwa, et al. Agroforestry Database 4.0, World Agroforestry Center, 2009

Solis, Michael T., et al. "Family poisoned by mercury vapor inhalation." The American Journal of Emergency Medicine 18.5 (2000): 599-602.

Stopford, W. O. O. D. H. A. L. L. (1979). Industrial exposure to mercury. The biogeochemistry of mercury in the environment, 367-397.

Universidad de Antioquia (2013). Estudio para determinar la presencia de mercurio en suelos degradados por la minería y en plantaciones de Acacia Mangium en el Bajo Cauca para la Secretaría de Agricultura de Antioquia.

Telmer, K. and Veiga, M.M. (2009) World emissions of mercury from artisanal and small scale gold mining. In: Pirrone, N. and Mason, R. (eds) Mercury Fate and Transport in the Global Atmosphere Emissions, Measurements and Models. Springer-Verlag, Heidelberg, Germany, pp. 131–172.

Tomicic, C., Vernez, D., Belem, T., & Berode, M. (2011). Human mercury exposure associated with small-scale gold mining in Burkina Faso. International archives of occupational and environmental health, 84(5), 539-546.

Tschakert, P., & Singha, K. (2007). Contaminated identities: mercury and marginalization in Ghana’s artisanal mining sector. Geoforum, 38(6), 1304-1321.

Tschakert, P. (2010). Mercury in fish: a critical examination of gold mining and human contamination in Ghana. International Journal of Environment and Pollution, 41(3-4), 214-228.

World Health Organization. (2003). Mercury and Health. Media Centre Fact Sheets.

http://www.eltiempo.com/archivo/documento/CMS-13371817

http://www.contraloriagen.gov.co/documents/10136/175971301/La+Explotaci%C3%B3n+I l%C3%ADcita+de+Recursos+Minerales+en+Colombia.+Casos+Dagua+y+San+Juan.pdf/49219b35-39ed-4aa0-881f-165be0fc6871?version=1.0

http://wsp.presidencia.gov.co/Normativa/Leyes/Documents/2013/LEY%201658%20DEL%2015%20DE%20JULIO%20DE%202013.pdf

http://www.mesadedialogopermanente.org/Mesa_de_Dialogo_Permanente/Mesa_de_Dialo go_Permanente/documentos_files/MERCURIO%20EN%20LA%20MINERIA%20DEL%20ORO%20MODULO%203.pdf

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http://www.minminas.gov.co/minminas/downloads/UserFiles/File/Minas/CensoMinero/Ce nsoMineroDptal3.pdf

http://www.elespectador.com/noticias/actualidad/vivir/articulo-421016-el-monstruodormido-de-segovia http://www.semana.com/nacion/articulo/no-mas-mercurio-mineria-colombiana/348105-3 http://miraalmundo.blogspot.com/2007/10/remedios-y-segovia-entre-los-ms.html

http://www.antioquia.gov.co/index.php/noticias-2011-marzo/5130-antioquia-reportareduccion-de-contaminacion-por-mercurio-en-la-explotacion-minera http://www.epa.gov/iris/subst/0370.htm http://water.epa.gov/scitech/swguidance/standards/criteria/health/methylmercury.cfm

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ANNEX 1. Preliminary Theory of Change for Objective 1

Key: ER: Expected result; GOC: Government of Colombia

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ANNEX 2. Preliminary Theory of Change for Objective 2

Key: ER: Expected result; GOC: Government of Colombia

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ANNEX 3. Stakeholder Consultations Undertaken by Oro Legal Staff

DATE STAKEHOLDER KEY ISSUES

02/02/2016 El Bagre Mayor’s office Program objectives were presented to mining and beekeeper associations. Both stakeholder groups were interested in the support that Oro Legal could provide.

02/02/2016 Fundación Mineros S.A El Bagre

Field visit to forestry plantation where beekeepers develop their activities. The main issue addressed during this visit was how the association would be incorporated into the activities to be developed by Oro Legal.

02/04/2016Beekeepers

associations: ASAPIBAS; ASCABIA; CARBEBIAS

As with other associations the main issue that arose during the meeting was how the program could provide technical assistance, beehives, and processing support.

02/04/2016 Urban Planning Office, Nechí

The office was concerned with how the program was to develop its activities, particularly rehabilitation, with support of the Mayor’s office.

02/09/2016

UMATA -Municipal Unit that supports

Agricultural and Livestock activities

They expressed their views regarding the potential and procedures for rehabilitation of degraded areas.

02/09/2016 Gender equality deputy office of Caucasia

They wanted to understand if the program had specific objectives regarding gender equality, since they represent women´s associations.

02/11/2016 Land owners in Lower Cauca

During the meeting they asked about the requirements to be eligible for the program and how would they benefit from the rehabilitation of degraded areas.

02/17/2016 Land Restitution Unit They expressed their interest to work with the program to identify possible territories for land rehabilitation.

03/03/2016 Ministry for Mining and Energy

Their main concerns related to the standard to be used for mining formalization. They expressed the view that they did not want the program to provide technical assistance to any illegal mining operation.

04/14/2016 SENA When SENA was told about the program and the education it would provide to beneficiaries, SENA expressed their interest to work with legal miners.

04/19/2016 Director, National Royalties Project They expressed interest in developing a project for land rehabilitation.

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04/22/2016 Ministry of Agriculture They asked the program to verify the possibilities to develop beekeeping Project under the Alliance for productive lands.

12/01/2015

Instituto de Investigaciones

Ambientales del Pacífico - IIAP

Since IIAP had done research and characterization of the Chocó they were interested in identifying commentary work areas and were particularly interested in how to rehabilitate degraded mining areas in Chocó.

01/27/2016 INCODER Indicated their interest in working together on the achiote value chain.

02/24/2016 National Mining Agency As with the MME, their main concern lies with the potential to support mines with potential to become legal, particularly in Chocó.

04/08/2016 Regional Environmental Corporations (CARs)

Corantioquia – Codechocó

Issues addressed with these corporations were related to the use of mercury, the mechanisms to be implemented to promote the reduction in its use, mechanisms and strategies to rehabilitate degraded areas and the consolidation of honey and achiote value chains.

03/09/16 Municipality of Tarazá Expressed interest in improving water quality in Tarazá via a micro-watershed restoration project, incorporating the use of municipal lands.

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ANNEX 4. Interviews Undertaken by SS Technical Team

INTERVIEWSDate Name of

Interviewee Role Institution Location

29/02/2016

Edgar Garrido / Leidy Johanna Marmolejo

Environment secretary/ Specialized Professional

Quibdó Mayor’s office. Environment secretary Quibdó, Chocó

29/02/2016

Francisco Javier Andrade

Economic development secretary Quibdó Mayor’s office Quibdó, Chocó

29/02/2016

Environmental technician – Water purification plant

Aguas del Atrato – subsidiary of EPM Group (Public service company)

Quibdó, Chocó

01/03/2016

Edwin Torres / Marcelo Torres

Planning secretary / Specialized Professional Condoto Mayor’s office. Condoto, Chocó

01/03/2016

Ervin Rentería / Jimmy Lozano

Director / Environmental technician

Corpomisan (Corporación Consejos Comunitarios del San Juan)

Condoto, Chocó

01/03/2016

Environmental Technician - Water purification plant

Empresas de servicios públicos. Empresa de Servicios Públicos Domiciliarios de Condoto

Condoto, Chocó

02/03/2016

Pedro Emiro Palacios

Farmer / beneficiary of land of the Community Council

Cantón de San Pablo Community Council

Cantón de San Pablo, Chocó

02/03/2016

José Ceberiano Palacios President Corpocantón (Agricultural

association)Cantón de San Pablo, Chocó

03/02/2016 Holver Arango Forest engineer “Tropico Diverso” organization El Bagre,

Antioquia

03/02/2016 Ruby Bermudez

Community Leader / “Forest and people” community council member

Vereda la Bonga, El bagre municipality

El Bagre, Antioquia

04/03/2016 Carlos Mesa Farm administrator Rio Rayo Farm Tarazá,

Antioquia

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ANNEX 5. Oro Legal Activities Matrix for Year 1

Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

Administrative StartupHome-office administrative startup team arrives in-country PMU/Startup Team

Confirm employment terms and sign employment agreements with key personnel (all already in country), long-term local professionals, and support staff PMU/Startup Team

Confirm terms of subcontract with Socya and ACON; sign subcontracts PMU/Startup TeamIdentify and sign lease for office in Medellin ; establish finance, accounting, and administrative systems PMU/Startup Team

Temporary project office in Medellin operational PMU/Startup Team

Submit draft Activity Fund Manual PMU/AFM

Prepare and submit final Activity Fund Manual PMU/AFM

Establish Activity Fund's grant and subcontracting systems; train staff AFM

Present final Branding and Marking Plan PMU/COP

Develop emergency action plan and security protocols HO/SC

Complete hiring of long term local staff Socya/ACON

Establish Antioquia ASM Service Center in Caucasia: Sign lease. PMU/Socya

Antioquia ASM Service Center operational Socya

Establish Chocó ASM Service Center in Quibdó: Sign lease. Socya

Chocó ASM Service Center operational Socya

Programmatic StartupParticipate in USAID's post-award debriefing PMU/COP

Conduct initial team/strategic planning meeting PMU/COP

Prepare and submit draft Year 1 Work Plan COP

Submit final Year 1 Work Plan COP

Present Program to key national government agencies COP/DCOPPresent Program to departmental and municipal stakeholders in Antioquia and Chocó COP/DCOP

Establish Program Coordination Committee (PCC) and conduct quarterly meetings COP/DCOP

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Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

Conduct regional coordination meetings DCOP

Prepare environmental impact assessment (EIA), based on approved EA for BioREDD+/Mining, to encompass the full range of anticipated Program activities PMU/ME&EM

Apply EA mitigation plan to site-specific actions ME&EM/STTA

Develop and implement a training program to build the environmental-management capacity of grantees, subcontractors, and other stakeholders ME&EM

Prepare and present a Gender, Child Labor, and Minorities Strategy HO

Conduct mercury baseline studies and gather M&E data ME&EM; STTA

Apply M&E system to Program PMU/STTA

Present Draft Performance Management Plan (PMP) PMU/STTA

Present Final PMP DCOP/ME&EM

Other Reports and Deliverables

Organize, in coordination with USAID, annual Strategic Reviews COP

Submit draft/final Annual Work Plans COP

Prepare Quarterly Activity and Financial Reports COP

Prepare and present success stories COP

Prepare and present bimonthly newsletter COP

Prepare and present biweekly bullets COPObjective 1: Build effective governance capacity for gold mining activities in the departments of Antioquia and ChocóExpected Result 1.1: Capacity in government entities to enforce gold mining legislation strengthenedMeet with government bodies to establish priorities/opportunities for regulatory reform COP/DCOP/OB1L

Support to reglamentation of mining articles in National Development Plan 2014-2018 OB1L/STTA

Support to reglamentation of Law 685 of 2001 (Mining Code) OB1L/STTA

Support to reglamentation of the Mercury Law OB1L/STTA

Support to environmental reglamentation for mining legalization OB1L/STTADevelop finance strategies to underpin investment in low/zero mercury gold processing equipment COP/DCOP/STTA

Initiate dialogue with MME on policy and regulations for small dredgers COP/DCOP/OB1L

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Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

Define strategic activities to be supported with the Chocó Permanent Mining Roundtable COP/DCOP/OB1L

Develop virtual training platforms with modules on mining legislation, industrial health and occupational safety, legalization routes, formalization options, and mercury reduction

COP/OB1L/STTA

Define with MADS plan for streamlining EIA and PMA procedures for ASMs OB1L/STTADefine with CORANTIOQUIA plan for streamlining EIA and PMA procedures for ASMs OB1L/STTA

Develop fiscal inspection protocols and manuals with ANM and Gov. Antioquia OB1L/STTA

Pilot remote-sensing monitoring application software with MME and ANM OB1L; STTA

Expedite process of mining applications in Chocó with ANM OB1L/STTA

Develop local registries for gold panners with municipalities OB1L/ARCLiaise with new departmental and municipal authorities to prioritize mining, rehabilitation and alternative livelihoods in regional and municipal development plans DCOP/OB1LExpected Result 1.2: Participation of ASM organizations and indigenous and Afro-Colombian communities in formalization programs strengthenedContinuously assess and update viable routes to legalization and transition toward formalization OB1L

Design and implement Program GIS to manage and map MPUs supported by Program DCOP/OB1L

Work with larger mining companies to identify potential for legalization via operations contracts and formalizations subcontracts within their titles. COP/DCOP/OB1L

Develop list of all MPUs with potential for legalization/formalization in Antioquia (including 160 UPMs already screened under BioREDD+) OB1L/ARC

Screen and select UPMs in Antioquia for legalization/formalization eligibility OB1L/ARC

Support legalization/formalization process for MPUs in Antioquia OB1L/ARC

Obtain and revise cadastral information for mining concessions in Chocó from ANM DCOP/OB1L/CRC

Screen and select UPMs for legalization/formalization eligibility in Chocó (including those previously identified by IIAP) OB1L/CRC

Support legalization/formalization process for MPUs in Chocó OB1L/CRCDesign and implement a mechanism for involving and informing Community Councils, including awareness raising regarding Instructivo de Derecho de Prelación and Protocolo de Relacionamiento

OB1L/CRC

Design and implement capacity building program for selected miners' associations in Antioquia, beginning with Lead Associations OB1L/STTA

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Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

Design and implement capacity building program for selected miners' associations in Chocó, including COMISAN, beginning with Lead Associations OB1L/STTA

Define and develop ASM Service Center model and begin to identify sources of revenue and PPPs for sustainability DCOP/OB1L/Socya

Develop virtual training platforms with modules on mining legislation, industrial health and occupational safety, legalization routes, formalization options, and mercury reduction

COP/OB1L/STTA

Monitor and record gold sales from legalized PMUs DCOP/OB1L/ARCIdentify options for marketing “certified gold” (better gold initiative or other mechanisms) PMU/COP/DCOP/STTA

Expected Result 1.3: Environmental impacts reduced through technical assistance and training

Establish baselines and methodologies to cost-effectively measure mercury used in gold processing, total reductions, sales, and level of contamination in water and air ME&EM/OB1L/STTA

Develop suite of technically and financially viable low or zero-mercury alternatives small-scale operators OB1L/STTA

Assess MPUs with potential to enter Better Gold Initiative (BGI) or other mechanisms OB1L/STTA

Support Colombia Responde in providing technical assistance to mining associations for the management of the three pilot zero-mercury technology (gravimetric) plants completed during BioREDD+/Mining (Guarumo, Jardín, Asotramiagro)

OB1L/ARC

Assess technical and financial viability of additional centralized, zero-mercury processing plants in Antioquia and Chocó, services that ASMs and barequeros could potentially access

OB1L; STTA

Work with gold shops and CARs to better capture mercury vapors and develop protocols for handling and disposal of recovered mercury DCOP/ME&EM/ACON

Provide technical assistance and training to MPUs entering the legalization process prepare EIAs or PMAs and PTOs

OB1L/ARC/CRC/ME&EM/STTA

Implement initial field-level training with MPUs OB1L; STTA

Objective 2: Increased government, community and private sector capacity to address environmental degradation by illegal ASM operationsExpected Result 2.1: Reforestation NAMA supported in areas degraded by unauthorized ASM operations

Undertake initial sourcing of potential reforestation partners DCOP

Engage RIA and if possible, develop an improved plan for implementing land rehabilitation projects DCOP

Engage INCODER to negotiate a special co-financed land tenancy unit dedicated to mining rehabilitation in target areas COP/DCOP

Identify potential community-level participants/beneficiaries and assess their

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Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

capacity to organize and contributeIdentify initial sources of financing for rehabilitation activities (both Colombian and foreign) COP/DCOP/PMU

Develop initial land bank of possible intervention areas in Antioquia, including legal analysis DCOP/STTA

Develop initial list of contributors to machinery bank in Antioquia DCOP/STTA/ARCSource potential areas for rehabilitation (forestry and/or sustainable agriculture) in Chocó DCOP/ARC

Develop macro-level plan for rehabilitation/reforestation DCOP/STTA

Implement first rehabilitation activity in Antioquia DCOP/STTA/ARC/Commercial Operator(s)

Legalization of first long term agreements for rehabilitation DCOP/STTA

Implement first rehabilitation activity in Chocó DCOP/STTA/CRC/Community Councils

Initial evaluation of Co2 generated DCOP/STTA

Expected Result 2.2: Alternative livelihoods for ASM communities promoted

Identification of areas with potential for expanding beekeeping linked to land rehabilitation in Antioquia DCOP/ARC/STTA

Development of first phase of beekeeping project, including identification of implementing partners and participating communities DCOP/ARC/STTA

Provide technical assistance to communities engaged in beekeeping to improve and expand production and build a proper value chain (including 250 miner families who initiated beekeeping under BioREDD+)

DCOP/ARC/STTA

Expand beekeeping including production of hives, basic training in production and harvesting and sales and marketing contracts DCOP/ARC/STTA

Evaluate feasibility of livelihood alternatives linked to value chain development in Chocó, based on work undertaken by BioREDD+ and with a special emphasis on achiote

DCOP/CRC/STTA

Initiate implementation of alternative livelihood project including identifying buyers and financing to leverage in Chocó

Expected Result 2.3: Drinking water quality improvedWork with local authorities to finalize selection of 10 priority water catchments per assessments described in 2.1; initial 4 then additional 6 catchments DCOP/ARC/CRC

Use water sampling protocol established under Colombian Law to evaluate water quality and to identify those municipalities/water providers needing support ME&EM/ARC/CRC/ACON

Engage municipal governments and water and sanitation companies to agree on scope of technical assistance. Sign MOUs to support efforts with in-kind and cash leverage

DCOP/STTA/ME&EMARC/CRC

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Activity Responsible Staff*/Partner

YEAR 1 (months)

1 2 3 4 5 6 7 8 9 10 11 12

Evaluate condition of water infrastructure upstream from the point of distribution. Determine specifications and costs to upgrade water capture, storage, and treatment plants to improve water quality

ME&EM/ACON

Work with municipal governments and water providers to develop projects to finance improved urban water infrastructure ME&EM/ARC/CRC/STTA

Undertake analysis of relevant national and international experience in the use of innovative financial mechanisms for watershed protection and securing safe water DCOP/ME&EM

Structure the first pilot for a Water Fund or similar mechanism, most probably in the Quebrada Villa watershed DCOP/ME&EM/STTA

* Abbreviations Key: HO: Home Office Support; PMU: Project Management Unit; COP: Chief of party; DCOP: Deputy Chief of party/Objective 2 leader; OB1L: Objective 1 leader; ME&EM: M&E/environmental management specialist; AFM: Activity Fund manager; OM: Operations manager; ARC: Antioquia regional coordinator; CRC: Chocó regional coordinator; FT: Field technician; GMFP: Gender/minorities focal point; SC: Security coordinator; STTA: Short-term technical assistance

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ANNEX 6. Environmental Threshold Decision & IEE

LAC-IEE-15-02

ENVIRONMENTAL THRESHOLD DECISION

Activity Location: Colombia

Activity Title: Environment Program

Activity Number: TBD

Life-of-Activity Funding: $175 million

Life-of-Activity: FY 2014 – FY 2020

IEE prepared by: Daniel Lopez, USAID/Colombia

Reference ETDs and EAs: None

Recommended Threshold Decision: Categorical Exclusion Negative determination with conditionsPositive determination

Bureau Threshold Decision: Concur with recommendation

Comments:

A Categorical Exclusion is issued to the following Environment Program activities:

a) Capacity building activities,

b) Support to the preparation of assessments, inventories and standards,

c) Support to institutional reform processes, and

d) Capacity development for the strengthening of community organizations part of the biodiversity, REDD+ or energy programs.

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This is in accordance with 22 CFR 216.2(c)(2):

(i) Education, technical assistance, or training programs except to the extent such training programs includes activities directly affecting the environment (such as construction of facilities, etc.);

(iii) Analyses, studies, academic or research workshops and meetings;

(xiv) Studies, projects or programs intended to develop the capability of recipient countries to engage in development planning, except to the extent designed to result in activities directly affecting the environment (such as construction of facilities, etc.).

A Negative Determination with conditions is issued to the Environment Program for all ‘on- the-ground’ REDD+ related activities (including capacity building and technical assistance) that would lead to an impact on the management of natural resources and activities involving assistance with implementation of priority actions identified in land use strategies that affect forests, for example, by addressing the most influential drivers of deforestation and forest degradation, or restoring degraded lands through enhanced tree cover.

A Negative Determination with conditions is issued to the Environment Program for activities related to technical assistance to producing or processing crops and for small productive infrastructure. The Mission Environmental Officer (MEO) and the Contracting Officer's Representative -COR/ Agreement Officer's Representative AOR will oversee the implementation of appropriate environmental guidelines. Reports on these matters will be submitted by the Mission to LAC/BEO in Washington periodically.

A Negative Determination with conditions is issued to the Environment Program for the use of pesticides in the agricultural production, being the condition the full use and application of the Mission’s approved Pesticide Evaluation Report and Safe Use Action Plan (PERSUAP). Any modification of the PERSUAP will have to be approved before the implementation of the program, and will require an approved IEE amendment. The MEO and the COR/AOR will oversee the implementation of the PERSUAP. Reports on these matters will be submitted by the Mission to LAC/BEO periodically.

A Negative Determination with conditions is issued to the Environment Program for activities needing small-scale infrastructure for climate change adaptation and small-scale construction for clean energy. The condition is that the relevant USAID Sector Environmental Guidelines http://www.usaidgems.org/sectorGuidelines.htm (which replace the Environmental Guidelines for Development Activities in Latin America and Caribbean) will be used in the implementation of these activities. The MEO, COR/AOR, and implementing partners will oversee the use of these Guidelines and their implementation. Reports on these matters will be submitted by the Mission to the LAC/BEO on an annual basis.

A Positive Determination is issued to the Environment Program for large-scale infrastructure activities (e.g., any building over 1,000 m2), irrigation systems over 100 ha, forestry, mining, or other activities that may cause significant adverse

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environmental impacts.  For ongoing activities only, the Mission will follow the environmental review procedures established in the Programmatic Environmental Assessment PEA approved by LAC/BEO on April 28, 2003.  Any new Environment Program activities will be covered by the mission-wide Programmatic Environmental Assessment (PEA) currently being developed for USAID/Colombia’s portfolio, which will specifically include the proposed Environmental Program and any potential direct, indirect, and cumulative environmental impacts.  The MEO will determine which activities/projects may use the environmental review process established under the PEA and which activities will require the preparation of site-specific or an activity-specific Environmental Assessments.  Environmental considerations, including monitoring and training, will be included in all contractual documents and awards.

Additional Responsibilities and Conditions:

New activities eventually implemented under this PAD will be subjected to Initial Environmental Examinations (IEE) and Environmental Threshold Decisions (ETD) prior to obligation, according to ADS 201, ADS 204 and 22 CFR 216.

Each activity manager or Contracting (or Agreement) Officer Representative (COR or AOR) is responsible for making sure environmental conditions are met (ADS 204.3.4). In addition, CORs/AORs are responsible for ensuring that appropriate environmental guidelines are followed, mitigation measures in the IEE are funded and implemented, and that adequate monitoring and evaluation protocols are in place to ensure implementation of mitigation measures.

To ensure compliance with the USAID environmental regulation 22 CFR 216, the Implementing Partner (IP) is responsible for using the Monitor system as instructed by the Mission Environment Officer. The IP shall ensure that appropriate environmental guidelines are followed and that mitigation measures described in the pertinent Threshold Decision for each of these activities are funded and implemented, including any necessary training or capacity building, and adequate monitoring. The IP will have the environmental expertise on staff to be able to perform environmental compliance functions.

Applicable best management practices can be found in the Environmental Guidelines for Development Activities in Latin America and Caribbean available at the following web site: http://www.usaidgems.org/sectorGuidelines.htm

An amendment of this IEE is required for any activity resulting in policy changes that have the potential to affect negatively the environment, large scale irrigation and other activities not yet designed and therefore not described in this document. Any use, or training for the use, of pesticides in other projects listed in this IEE would require a PERSUAP and IEE amendment.

The MEO, and/or his designee, reserves the right to conduct spot monitoring checks for all of the activities listed in this IEE to ensure that

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the conditions listed in the IEE, ETD, and subsequent environmental management plans from Monitor are being followed.

The implementing contractor or partner will ensure that all activities conducted under this instrument comply with all relevant ETDs. Also, through its regular performance monitoring and reporting requirements, a section on environmental compliance (e.g. mitigation monitoring results) will be included.

Language from “Environmental Compliance: Language for Use in Solicitations and Awards – An Additional Help for ADS Chapter 204” must be included, as appropriate, in award documents (see: http://www.usaid.gov/policy/ads/200/204sac.pdf). It is the responsibility of the Assistance Objective (AO) Team and/or Contracts/Agreements Officer to ensure that environmental compliance language from the ETD is added to procurement and obligating documents.

Amendments

Amendments to Initial Environmental Examinations (IEE) shall be submitted for LAC Bureau Environmental Officer (BEO) approval for any activities not specifically covered in the IEE, which include:

o Funding level increase beyond ETD amount,o Time period extension beyond ETD dates (even for no cost extension), or o A change in the scope of work, such as the use of pesticides or activities

subject to Foreign Assistance Act sections 118 and 119 (e.g. procurement of logging equipment), among others.

Amendments to IEEs may require an Environmental Assessments (EA) and approval of these documents by the LAC BEO could require an annual evaluation for environmental compliance.

In addition, language from “Environmental Compliance: Language for Use in Solicitations and Awards – An Additional Help for ADS Chapter 204” must be included, as appropriate, in award documents (see: http://www.usaid.gov/policy/ads/200/204sac.pdf) .

Date Victor H. BullenBureau Environmental OfficerBureau for Latin America & the Caribbean

Copy to: Peter Natiello, Mission Director, USAID/Colombia

Lawrence Rubey, DMDChris Abrams, ENVDaniel Lopez, MEO

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Gina Cady, REA South AmericaPaul Schmidtke, REA Caribbean

Copy to: Dora Plavetic, Mary Bliss, LAC/OLAJessica Rosen, Christine Pendzich, Liza Cushion, Christy Johnson, Ana Villegas, LAC/RSD/E

Copy to: IEE File

Attachments: Initial Environmental Examination

File: P:\LAC.RSD.PUB\RSDPUB\ENV\Reg 216\IEE\IEE15 LAC-IEE-15-02 ETD (CO - Environment Program).docx

INITIAL ENVIRONMENTAL EXAMINATIONProject Appraisal Document Environment Program (PAD)

PROJECT LOCATION: Colombia

TITLE: Environment Program

ACTIVITY NUMBER: TBD

LOP FUNDING: US$ 175,000,000

LIFE OF STRATEGIC OBJECTIVE: FY14 to FY20

IEE DRAFTED BY: Daniel Lopez, USAID/Colombia

Recommended Threshold Decision: Categorical Exclusion, Negative Determination with Conditions, Positive Determination

Date prepared September 26, 2014

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I. Background

This Initial Environmental Evaluation (IEE) requests from the Latin America and Caribbean LAC Bureau Environmental Officer (BEO), approval for the new Environment Program (EP) under the PAD for the DO4, approved in August 2014. Through the Mission’s Country Development Cooperation Strategy’s Development Objective (DO) 4, “Environmental Resiliency and Low Emissions Development Strengthened,” USAID/Colombia expects to invest $170 million, during fiscal years 2014-2020 to support the achievement of a sustainable and inclusive peace in Colombia. In addition, these investments will implement the Presidential Initiative for Global Climate Change, conserve critical biodiversity, increase state presence, formalize illegal mining, and recuperate degraded mining sites.

II. Project Description

While a Government of Colombia (GOC) and Fuerzas Armadas Revolucionarias de Colombia –FARC- agreement would open up economic opportunities in rural territories and bring benefits, it would carry added challenges to sustainable natural resource management and response to a changing climate. Possible consequences include irresponsible natural resource management, an unfettered expansion of the agricultural frontier leading to degradation of forests and watersheds, and low capacity at the department level to manage anticipated climate change impacts. GOC commitment to providing and enforcing ecosystem protection and sustainable land use practice would be vital. As security concerns will undoubtedly persist, environmental factors related to climate change, such as weather related displacement, drought, and flooding, could put vulnerable communities further at risk, placing additional stress on pre-existing conditions leading to social and environmental instability. Land use and the management of legal, illegal, and informal mining are intimately connected to a sustainable peace and may be scaled up as rural areas become more secure. Likewise, failure to recognize and mediate environmental conflicts through a rational framework would further exacerbate existing tensions, particularly between marginalized rural populations and the state. Sustainable environmental management is critical to protecting Colombia’s welfare and economic future.

Colombia is a highly bio-diverse country and its natural systems provide water and energy that greatly contribute to Colombia’s economic productivity. The country’s capacity to store carbon offers the possibility of capturing significant international revenue from the nascent carbon market, revenue that can be channeled to local development. Efforts to strengthen environmental resiliency and low-emissions development are primarily driven by the U.S. Presidential Initiative for Global Climate Change and the growing imperative to protect Colombia’s rich biological diversity. The Environmental Program will seek to focus its strategy within limited geographic areas1 as agreed with the GOC.The Project’s purpose will be achieved through the three Program sub-purposes, which correspond to the three intermediate results IRs for DO4:

1 Output 1: Caquetá, Orinoquia, Pacific, Bajo Cauca; Output 2: National + Choco, Cauca, Sierra Nevada; Output 3: Rio Magdalena + selected cities

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Sub-purpose 1, “Natural resource management improved,” which corresponds to results for IR 1.1:

1) Legality, rehabilitation, and mercury reduction use in artisanal mining operations improved; and

2) Conservation of biodiversity promoted.

Sub-purpose 2, “Mitigation of greenhouse gas (GHG) emissions increased,” which correspond to results for IR 1.2:

1) Development of Colombian Low Carbon Development Strategy fostered;2) Low emission rural development supported; and3) Increased access to clean and efficient energy.

Sub-purpose 3, “Increased resilience to the consequences of a changing climate,’ which corresponds to results for IR 1.3:

1) Use of forecast technologies, tools, and approaches for building climate change resilience increased; and

2) Use of ecosystem-based adaptation for decision-making at the regional level increased.

Overview of EP Activities

The EP is designed with a threats based approach. The main identified threats are 1) habitat destruction and deforestation, 2) advancement of the agricultural frontier, 3) mining, 4) lack of effective governance and 5) infrastructure. In order to address these threats, the EP will implement a three-pronged strategy. Below a short description of what the EP will do under each sub purpose:

1. Natural resource management improved: Colombia’s internal conflict and lack of state presence in many protected

areas and other biodiversity hotspots, has created an opportunity for illegal mining, illegal crop production, illegal logging and settlement of internally displaced persons in biologically sensitive areas. A lack of adequate land planning has resulted in an improper management and depletion of natural resources. Possible peace agreements are likely to increase pressure on these areas as demobilized combatants are reinserted into Colombian society and displaced people return. Moreover, peace accords also open new regions of the country for economic development which requires strong institutions, robust land planning and effective land management to guarantee ecosystem services and natural resources are conserved for future generations.

The EP will support the GOC’s efforts to meet its biodiversity conservation targets under the Convention of Biological Diversity and improve development of regions currently depopulated or previously

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under armed conflict with best practices for agriculture, extractive activities and infrastructure. USAID will focus on strengthening local and regional government institutions to guarantee development and enforcement of policies and regulations on natural resource management. USAID will involve the private sector as an advocate and role model of best practices focused on avoiding deforestation and compensating biodiversity loss. USAID will work directly with civil society organizations at the local, regional and national level on protected area management and development of environmentally sound productive systems. With respect to mining, USAID will seek to reduce the influence of illegal mining through miner’s legalization and formalization process, diminish use of mercury and other environmental pollutants, and remediate contaminated soils from mining to use the land for other productive purposes.

2. Mitigation of greenhouse gas emissions increased: The mitigation of greenhouse gases is a high priority for the Presidential

Initiative for Global Climate Change.2 Investing in clean energy and promoting sustainable landscapes are two key pillars of this policy. Reducing emissions is a global effort and the EP will continue to work with Colombia to follow a low carbon growth trajectory that does not stall or hinder economic development.

Colombia is a focal point in international efforts to stem the emissions of global greenhouse gas emissions. With more than 40 percent of its territory covered in native forest, strong institutional support for market-based emissions reduction programs as well as commitments to international norms, Colombia has strong potential to help curb future climate change. Although Colombia contributes less than 1 percent of global emissions, the country is a strong part of the global solution. Colombia is a leader in the region in the development of a reduced emissions footprint, through the work under the La Estrategia Colombiana de Desarrollo Bajo en Carbono (ECDBC).

The Program will address mitigation efforts through three fronts: 1) continued assistance under the whole of government Enhancing Capacity for Low Emissions Development (ED-LEDS) program, 2) low emission rural development, and 3) increased access to energy efficiency and renewable energy resources. Efforts will complement activities to support Colombia’s resiliency to climate change in cities and a joint mitigation/adaptation planning at the sub-national level. While efforts under Sub-purpose 2 will be national and sub-national in focus,

2 “The absence of strong global action to reduce greenhouse gas emissions will hinder future development; conversely, smart climate policies can drive cleaner growth, resulting in a range of economic and social benefits.”

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efforts will be made to consolidate activities in strategic geographic areas, like Choco, Caquetá, and the Sierra Nevada.

3. Increased resilience to the consequences of a changing climate: Climate change poses serious threats to Colombia, especially poor and

marginalized groups that live in high risk areas.  Devastating floods in 2011 and 2012 affected 4 million people with an estimated loss of $2.6 billion for reconstruction and resettlement alone.  Our current and future program will focus on supporting the Colombian National Adaptation Strategy providing planning tools to local and regional authorities to enable them to conduct vulnerability assessments and to identify and implement means of reducing such threats due to climate change. 

Current program activities support “water management under climate change” with a particular focus upon the upper, middle and lower areas of the Magdalena River Basin. Refinement of these analytical tools improves the accuracy of modeling programs that project impact of rainfall, run-off and erosion and river water levels under various scenarios…intensity, duration, accumulation, etc. to assist communities, municipalities and regional authorities to design climate change adaptation plans.

Future assistance will support application of these tools to assist municipal planners to improve design and placement of infrastructure (roads, bridges), social infrastructure (schools, hospitals, and water storage and treatment facilities), building codes and proper location of shelters. An important aspect of the adaptation strategy will be to create synergies with mitigation actions in the cities, where adaptation and mitigation planning will be combined to strengthen interventions at a city-level while enhancing resilient development.

Under sub-purpose 1) Natural resource management improved, the main activities to be implemented are:

Provide technical and legal assistance to GOC entities and miner associations to support formalization and legalization of Artisanal Small-scale Mining (ASM) operations.

Support to the construction of small demonstration pilot plants for gold processing without using mercury or heavy metals.

Support land recuperation of degraded lands by unauthorized mining operations through the establishment of commercial forestry plantations.

Build the capacity of the GOC to enforce existing legislation, through training and capacity development of field staff.

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Support the development of Geographic Information Systems -GIS - platforms for improved natural resources management.

With a threats-based approach, support small land owners in buffer zones of protected areas with income generating activities, like cocoa and cattle ranching.

Improve the consultation process for policy formulation to include local community, civil society and professional environmental organizations, and the private sector in formulation of policies to improve biodiversity conservation and respond to climate change.

Develop/strengthen institutional capacities of entities charged with management of protected areas, buffer zones, and ethnic reserves. Activities would include training/technical assistance to set/strengthen administrative/internal control systems, develop operating plans, monitoring and evaluation systems, and other related activities.

Develop management plans for priority biodiversity areas identified in assessment/inventory exercises.

Carry out assessments/inventories of biodiversity and sustainable forest management in selected areas to determine areas of priority importance, based on various criteria, including geographic locations (ethnic areas and protected areas have priority), threat levels to biodiversity, and carbon sequestration potential.

Support the GOC and particularly, ethnic communities and communities located near parks or protected areas, in the development of plans for conserving or expanding habitats of selected species of biodiversity, especially those with the propensity to sequester carbon or help vulnerable communities adapt to climate change. This includes technical assistance, community strengthening and support to improving sustainable livelihoods through productive activities (agriculture, forestry plantations, fisheries, non-forest timber products, handcrafts, ecotourism) with a market-based approach.

Support initiatives to motivate and train local community members to manage protected areas and those areas under the purview of ethnic communities. Managing protected areas includes developing the aforementioned plans, raising funds for the implementation of the plans, recruiting personnel to patrol and protect the areas, and acquiring the requisite knowledge of natural resources, their uses, and the measures needed to protect and conserve them.

Under Sub-purpose 2) Mitigation of greenhouse gas emissions increased, the main activities will be:

Develop GHG monitoring and analysis systems at the national and, possibly, local levels that will permit better understandings of quantitative and qualitative emission trends throughout the country.

Collaborate with government institutions, private sector entities, and civil society to advance REDD+ program planning and implementation phases. Support on the

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ground REDD+ programs from their design to issuance of carbon certificates, and commercialization and income distribution among community members (Afro-Colombian, indigenous and campesino communities).

Technical assistance and support to improved sustainable livelihoods linked to productive activities with a market-based approach. Agricultural activities to be supported are coconut, acai, achiote and chontaduro.

Implementation of a variety of carbon inventory, registration, trading, and tracking activities that pertain to management and conservation of forest carbon stocks. This can include improving GOC capacity to use forest and terrestrial carbon monitoring and management methodologies and technologies.

Collaborate with GOC entities in implementing the LEDS program that will seek to redress emissions problems from a broad range of economic sectors. The Mission will be sure to make use of the State/AID/W-originated EC-LEDS program.

Development of Monitoring, Reporting, and Verification (MRV) protocols for greenhouse gas and forest inventories.

Support for the development of Nationally Appropriate Mitigation Actions (NAMA) in the agriculture sector.

Carry out assessments/studies in selected rural areas and then use the results of those studies to develop public/private development partnerships that will work to establish more efficient (i.e., lower emissions) off-grid energy systems in rural areas.

Expanding access to renewable energy sources in currently underserved areas. Energy Efficiency and Renewable Energy Investment Promotion. This could

include studies and assessments as well as project implementation. Promoting and integrating renewable energy and energy efficiency development

through policy support and capacity development.

Under Sub-purpose 3) Increased resilience to the consequences of a changing climate, the main activities would be:

Work with the GOC to identify and implement appropriate adaptation strategies for addressing climate change impacts, to include such activities as strengthening of institutions charged with managing these issues (or related issues such as natural resources management and disaster risk reduction).

On-the-ground activities in which GOC entities collaborate with local communities on adaptation responses to identified climate vulnerabilities. This could include the construction of small infrastructure, like ditches or dikes among others to be identified.

Development, refinement and application of forecasting tools to inform decision-making processes.

After implementation of the EP, by 2019, selected Colombian institutions, communities and private organizations will be more able to protect and manage biodiversity, ecosystem services and natural resources, while implementing a low-carbon development plan that mitigates climate change and helps achieve sustained economic growth.

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III. Justification for Environmental Determination

Activities not expected to have significant impacts on the environment: a) Capacity development activities aiming at building capacity of the GOC to

formulate and implement policies, support to policy consultation processes, support to institutional reform, preparation of protected areas management plans and conservation standards, development of GHG monitoring and analysis systems, REDD+ capacity development activities, preparation of biodiversity, forest and carbon inventories and energy-related assessments. These classes of actions are not subject to the procedures set forth in 216.3, except to the extent provided herein: The following activities qualify for a categorical Exclusion under 22 CFR 216.2(c)(2):(i) Education, technical assistance, or training programs except to the extent such training programs include activities directly affecting the environment (such as construction of facilities, etc.);(ii) Controlled experimentation exclusively for the purpose of research and field education which are confined to small areas and carefully monitored;(iii) Analyses, studies, academic or research workshops and meetings;(xiv) Studies, projects or programs intended to develop the capability of recipient countries to engage in development planning.

Activities that could have impacts on the environment

Certain activities of the EP could have potential environmental impacts. These include the activities related to the production of fruit/vegetables as part of food security programs, short- and long-term crops like cocoa, açai, chontaduro, coconut, forestry and agro forestry, and cattle ranching. These productive activities will be supported with a market-based approach. These productive activities will be always linked to biodiversity conservation activities or as part of the REDD+ programs.

Agricultural production may involve the use of pesticides although stronger focus will put in organic production. USAID/Colombia prepared a Pesticides Evaluation Report and Safer Use Action Plan (PERSUAP), which covers more than 80 different crops. LAC BEO approved such PERSUAP with Environmental Threshold Decisions Nos. LAC-IEE-04-03 and LAC-IEE-04-24 dated January 27, 2004 and May 31, 2004.

On the ground REDD+ related activities would lead to an impact on the management of natural resources and activities involving assistance with implementation of priority actions identified in land use strategies that affect forests, for example, by addressing the most influential drivers of deforestation and forest degradation, or restoring degraded lands through enhanced tree cover.

Implementation of adaptation strategies may include the construction of small-scale infrastructure like dikes, water holes or infiltration ditches.

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Implementation of community-scale renewable energy activities and other off-grid energy systems in rural areas may also include the construction of small infrastructure.

The mining activity under the Environment Program was given a positive determination. As such, all activities related to mining are included under the Environmental Impact Assessment EIA prepared for that component and is currently under review by the BEO. All the recommended mitigation measures included in the environmental management plan will be implemented and monitored. However, mining –related activities are not discussed under the following section of this IEE since it will be addressed in the EIA

IV. RecommendationBased on the above discussion, it is recommended that the LAC/ BEO approve:

1) A categorical exclusion for the following activities of the EP: a) Capacity building activities, b) Support to the preparation of assessments, inventories and standards, c) Support to institutional reform processes, and d) Capacity development for the strengthening of community organizations part of the biodiversity, REDD+ or energy programs

2) A Negative Determination with conditions is recommended for all ‘on- the-ground’ REDD+ related activities (including capacity building and technical assistance) that would lead to an impact on the management of natural resources and activities involving assistance with implementation of priority actions identified in land use strategies that affect forests, for example, by addressing the most influential drivers of deforestation and forest degradation, or restoring degraded lands through enhanced tree cover.

3) A Negative Determination with conditions is recommended for activities related to technical assistance to producing or processing crops and for small productive infrastructure. The Mission Environmental Officer (MEO) and the Contracting Officer's Representative -COR/ Agreement Officer's Representative AOR will oversee the implementation of appropriate environmental guidelines. Reports on these matters will be submitted by the Mission to LAC/BEO in Washington periodically.

4) A Negative Determination with conditions is recommended for the use of pesticides in the agricultural production, being the condition the full use and application of the approved PERSUAP. Any modification of the PERSUAP will have to be approved before the implementation of the program. The MEO and the COR/AOR will oversee the implementation of the PERSUAP. Reports on these matters will be submitted by the Mission to LAC/BEO periodically.

5) A Negative Determination with conditions is recommended for activities needing small-scale infrastructure for climate change adaptation and small-scale construction for clean energy. The condition is that the relevant USAID Environmental Guidelines for Development Activities in Latin America and Caribbean will be used in the implementation of these activities. The MEO,

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COR/AOR, and implementing partners will oversee the use of these Guidelines and their implementation. Reports on these matters will be submitted by the Mission to the LAC/BEO on an annual basis.

6) A Positive Determination for other infrastructure or activities that may cause significant environmental impacts. Following the present determination, the Mission will take special care to follow the ER procedures established in the Programmatic Environmental Assessment PEA approved by LAC/BEO on April 28, 2003 and the ones coming up under the PEA currently being developed. Based on these procedures, the MEO will determine which activities/projects may use the ER process and which activities will require the preparation of an EIA. Environmental considerations, including monitoring and training, will be included in contractual documents.

New activities eventually implemented under this PAD will be subjected to Initial Environmental Evaluations (IEE) and Environmental Threshold Decisions (ETD) prior to obligation, according to ADS 201, ADS 204 and 22 CFR 216.

Additional Responsibilities and Conditions:

Each activity manager or Contracting (or Agreement) Officer Technical Representative (COR or AOR) is responsible for making sure environmental conditions are met (ADS 204.3.4). In addition, CORs/AORs are responsible for ensuring that appropriate environmental guidelines are followed, mitigation measures in the IEE are funded and implemented, and that adequate monitoring and evaluation protocols are in place to ensure implementation of mitigation measures.

To ensure compliance with the USAID environmental regulation 22 CFR 216, the Implementing Partner (IP) is responsible for utilizing the performance monitoring system MONITOR as instructed by the MEO. The IP shall ensure that appropriate environmental guidelines are followed and that mitigation measures described in the Threshold Decision for each of these activities are funded and implemented, including any necessary training or capacity building, and adequate monitoring.

Applicable best management practices can be found in the Environmental Guidelines for Development Activities in Latin America and Caribbean available at the following web site:http://www.usaidgems.org/sectorGuidelines.htm

An amendment of this IEE is required for any activity resulting in policy changes that have the potential to affect negatively the environment, large scale irrigation and other activities not yet designed and therefore not described in this document. Any use, or training for the use, of pesticides in other projects listed in this IEE would require a PERSUAP and IEE amendment.

The MEO, and/or his designee, reserves the right to conduct spot monitoring checks for all of the activities listed in this IEE to ensure that the conditions listed in the IEE, ETD, and subsequent fichas ambientales within MONITOR are being followed.

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The implementing contractor or partner will ensure that all activities conducted under this instrument comply with all relevant ETDs. Also, through its regular performance monitoring and reporting requirements, a section on environmental compliance (e.g. mitigation monitoring results) will be included.

Language from “Environmental Compliance: Language for Use in Solicitations and Awards – An Additional Help for ADS Chapter 204” must be included, as appropriate, in award documents (see: http://www.usaid.gov/policy/ads/200/204sac.pdf). It is the responsibility of the Assistance Objective (AO) Team and/or Contracts/Agreements Officer to ensure that environmental compliance language from the ETD is added to procurement and obligating documents.

Approval:

________________________________ Date: ______________________Daniel López

Mission Environmental Officer

Concurrence:

_________________________________ Date: _____________Peter Natielllo

Director USAID/Colombia

Approval:

______ __________________ Date: _____________Gina Cady

Regional Environmental Advisor

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CLEARANCE PAGE FOR: Initial Environmental Examination for ENV PAD

Drafted by:DLopez Date: _9/26/14

Clearances:

ENV/CAbrams________ Date: ________

DMD LRubey_______ Date: ________

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ANNEX 7. REA Field Trip ReportMay 1-6, 2016Paul Schmidtke – REA/South AmericaSubmitted: June 2, 2016

Executive Summary

Oro Legal is a new activity being conducted under the current USAID/Colombia Country Development Cooperation Strategy (CDCS), 2014-2018 within Development Objective 4 (DO4) “Environmental resiliency and low-emissions development strengthened”. A Positive Determination was issued for activities associated with the reduction of mercury use by small informal mining units and work on recovering degraded areas by unauthorized mining activities. Since these activities may cause significant environmental impacts, an approved Scoping Statement and Environmental Assessment are required and are a requirement under the contract awarded to Chemonics International for the Oro Legal activity.

A draft scoping statement was prepared and submitted for review on March 3, 2016 and subsequently amended on April 11, 2016. The purpose of this field visit was to validate the information provided in the Scoping Statement so as to facilitate the approval process and effectively guide the completion of the forthcoming Environmental Assessment.

Recommendations

1) Approve the Scoping Statement as written with the two suggested alternatives. Add a statement incorporating the lessons learned from the BIOREDD activity and the findings of this report as a justification for not analyzing other alternatives in detail.

2) Continue to focus efforts to support miners and communities who are interested and able to pursue a path to legalization.

3) Provide data-based justification that ambient mercury is not nor will be a health concern for implementing neither partners nor beneficiaries.

4) Prioritize, to the extent possible, acacia reforestation and apiculture activities in areas at greatest risk for erosion.

5) Include specific description of alternative livelihood to be supported, potential impacts, and associated mitigation measures in the EA

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Trip Report Caucasia, Quibdó- Colombia

May 1-6, 2016Paul Schmidtke – REA/South America

Background

Oro Legal is a new activity being conducted under the current USAID/Colombia Country Development Cooperation Strategy (CDCS), 2014-2018 within Development Objective 4 (DO4) “Environmental resiliency and low-emissions development strengthened”. A Positive Determination was issued for activities associated with the reduction of mercury use by small informal mining units and work on recovering degraded areas by unauthorized mining activities. Since these activities may cause significant environmental impacts, an approved Scoping Statement and Environmental Assessment are required and are a requirement under the contract awarded to Chemonics International for the Oro Legal activity.

A draft scoping statement was prepared and submitted for review on March 3, 2016 and subsequently amended on April 11, 2016. The purpose of this field visit was to validate the information provided in the Scoping Statement so as to facilitate the approval process and effectively guide the completion of the forthcoming Environmental Assessment.

At issue, the Scoping Statement instructs the interdisciplinary team conducting the EA to focus on two alternatives only, the proposed action (which includes mine tailing restoration using Acacia species, alternative livelihoods, and water catchment management) and the no action alternative. This guidance was arrived at based on a number of factors including scoping conducted in association with the current activity and experience gained by the implementing partner while conducting the pilot project for this under the former BIOREDD mechanism implemented in Caucasia area. However, the current Oro Legal mechanism intends to expand the program to the Quibdó area, which has significantly different issues and challenges, raising concerns that the proposed action (a replica of activities conducted under BIOREDD) may not be appropriate in the Quibdó context and as such, could warrant the development of a third alternative.

To resolve this issue, the Regional Environmental Advisor (REA), Mission Environmental Officer (MEO) and Contracting Officers Representative (COR) for Oro Legal accompanied officials from Oro Legal, including the Chief of Party (COP), Deputy Chief of Party (DCPO) and others key personnel to both the

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Caucasia area and the Quibdó area to review results of the BIOREDD activity and evaluate their replicability under the new program. The field trip occurred from May 3-5, 2016.

Observations and FindingsOn Tuesday, May 3rd, the review team travelled to Caucasia in the Antioquia Department. The team visited the Las Palmas Mine, an alluvial, open-air mine that is in the process of legalization; assisted in part by the BIOREDD activity. The mine operator demonstrated gold recovery methods that are mercury free as well as mercury recycling unit. The operator also showed the team areas where Acacia.(Acacia mangium) is being planted to restore mine tailings. The mine operator appears to be compliant with local laws and policies and is making significant strides to improve environmental protection and worker health and safety.

Photo 1: Active alluvial extraction area Photo 2: Re-contouring and Acacia planting site

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Photo 3: Recently completed reforestation Photo 4: Mercury recovery device

Subsequently, the team visited the Santacruz corporative that is currently receiving assistance from USAID under the CELI Norte-Sur alternative livelihoods activity. This area was previously impacted by illegal mining operations and is a candidate for reforestation and restoration under the Oro Legal activity. It was noted that the sites in question appear to be healing under a natural succession process and the cooperative is making significant income from a variety of aquaculture activities.

The final stop on Tuesday was a Dagadi S.A.S gold buyer in Caucasia. This shop only accepts mercury free gold although it does have a mercury recovery system for capturing residual mercury obtained in the refining process. It was noted however, that many gold buyers still operate mercury burners in their facilities. According to officials from Dagadi, they receive no price premium for mercury-free gold.

Photo 5. One Kilogram of gold worth about $60,000.

On Wednesday May 4th, the team visited the Guarumo cooperative, an association of miners that use in- river drags to extract gold-laden sediments from the river bottom. This association was also provided with technical assistance towards legalization under the BIOREDD Program. As with the Las Palmas mine, this group has replaced mercury with specialized machinery that allows them to separate gold from sediments by gravity. Of particular utility is the centrifuge seen in Photo 7.

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Photo 6: Sediment separator Photo 7: Sediment centrifuge

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Photo 8: Gravity table Photo 9: Artisanal river drag

The final stop of the day was the Hacienda “La Leyenda”, which has a robust sustainable forest management program using Acacia species combined with apiculture, much of it occurring on residual mine tailings. Photo 10 below shows a six year old Acacia planation on former grazing land. Note the size of the trees; ready for harvest. Photo 11 shows a two-year old plantation on residual mine tailings. Note the size, with only an initial application of fertilizer.

Photo 10: Acacia and apiculture Photo 11: Two year old Acacia plantation on former mine tailings

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Obviously, the Acacia/Apiculture restoration activity is highly successful in areas where it is appropriately implemented.

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On Thursday May 5th, the focus of the trip shifted to the Quibdó area of the Choco Department. Due to security concerns, the team was not allowed to leave the city of Quibdó and so a helicopter fly-over was organized. Environmental degradation is significant, much of it occurring in areas having some level of legal protected area status. Because of this and other considerations, only about 10% of the illegal mining activity in Quibdó is eligible for a path to legalization. However, given the scope of the problem, 10 % is still significant. It was noted that some Acacia reforestation is already occurring on the area.

Photo 12: Quibdó River and Choco Rain Forest before exploitation Photo 13: After exploitation

Photo 14: Industrial-scale river drags Photo 15: A wider view

The last event was a meeting in Quibdó with potential partners including Gobernación del Chocó, Alcaldia de Quibdó, Instituto de Investigaciones Ambientales del Pacífico, Consejo Comunitario de San Isidro, Consejo

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Comunitario de Condoto, and CorpoCantón. Discussions focused on specific program elements related implementation of Oro Legal’s three main activities in the Quibdó context, including the importance of the achiote value chain, paths to legalization, and land restoration. Based on this feedback, observations from the overflight, and the success achieved in the Caucasia area under the BIOREDD project, it is clear that the proposed actions outlined in the scoping statement are replicable in the Quibdó context.

Recommendations

1) Approve the Scoping Statement as written with the two suggested alternatives. Add a statement incorporating the lessons learned from the BIOREDD activity and the findings of this report as a justification for not analyzing other alternatives in detail.

2) Continue to focus efforts to support miners and communities who are interested and able to pursue a path to legalization.

3) Provide data-based justification that ambient mercury is not nor will be a health concern for implementing neither partners nor beneficiaries.

4) Prioritize, to the extent possible, acacia reforestation and apiculture activities in areas at greatest risk for erosion.

5) Include specific description of alternative livelihood to be supported, potential impacts, and associated mitigation measures in the EA.

Key Contacts

Peter Doyle – COP, Oro LegalMiguel Angel Molano – DCOP, Oro LegalCatalina Correa – Environmental Specialist, Oro LegalJuan Diego Roldan – Degraded areas recuperation specialist, Oro Legal. Jorge Garzon – Rehabilitation Specialist, Oro LegalDiana Cardenas Rodriguez – Mining Specialist, Oro Legal Juan Carlos Gonzalez – Security Specialist, Oro Legal Eduardo Arias – Operator of La Palma MineLuis Eduardo Chima-DrageroNatalia Castillo-Quibdó staff, Oro Legal Germán Díaz- Quibdó community leader

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LAC-IEE-15-02Reg. 216 mini course

attendees

# Name Role Organization1 Jose Luis Astorquia Environmental Expert Tetra Tech2 Gabriel jaime Restrepo Environmental Expert ACDI/VOCA3 Alejandro Suarez Environmental Expert Colombia Responde4 Beatriz Gallego Environmental Expert Patrimonio Natural5 Juliana Monsalve Environmental Expert Patrimonio Natural6 Andrea Montero Environmental Expert Fondo Acción7 Andrea Pombo Environmental Expert OIM8 Diana Navarro Environmental Expert OIM9 Isabel Cristina Campos Environmental Expert CCEP

10 Juanita Gonzalez Environmental Expert TNC11 Paula Cubillos OAA USAID12 Sandra Pabon OVP USAID13 Gustavo Vargas ENV USAID14 Marcela Chavez CLL USAID15 David Alejandro Huertas CLL USAID16 Ana Maria Florez OVP USAID17 Catalina Correa Environmental Expert Chemonics18 Edgar Prieto CLL USAID19 Francisco Gonzalez DRG USAID20 Omar Lopez PRO USAID21 Martha Albanese CLL USAID22 Hillery Midkiff PRO USAID23 Leonardo Reales DRG USAID24 Lucy Malo DRG USAID25 María Hermosillo DRG USAID26 Marisol Gonzalez Environmental Expert CCEP27 Sol Alejandra Gaitan DRG USAID

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