December 2005

REPORT OF THE

EXTERNAL COMPLIANCE MONITORING GROUP (ECMG) SECOND SITE VISIT – POST-PROJECT COMPLETION NOVEMBER 2005

Chad Export Project Cameroon Petroleum Environment Capacity Enhancement Project Chad Petroleum Sector Management Capacity Building Project

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This report has been prepared by:

D'Appolonia S.p.A. ECMG members:

Roberto Carpaneto – Team Leader, Pipeline Engineering, HSE specialist Paolo Lombardo – Team Coordinator, Environmental engineer Frédéric Giovannetti - Socio-Economic specialist Jean Le Bloas - Environmental specialist William J. Johnson - Earth Science specialist Lori A. Conzo - Ecologist Eugenio Napoli - Environmental specialist

SUBJECT: SECOND POST-PROJECT COMPLETION VISIT OF THE D’APPOLONIA ECMG, NOVEMBER 2005

INTRODUCTION

1. This report summarizes observations made during the second Post-Project

Completion field visit (November 6 to November 17, 2005) of the Environmental Management Plan (EMP)1 External Compliance Monitoring Consultant for the Chad/Cameroon Oil Development and Transportation Project (referred to as the External Compliance Monitoring Group – ECMG)2 related to both assignments of monitoring the Chad/Cameroon Oil Development and Transportation Project and of monitoring the two World Bank Technical Assistance/Capacity Building (WBTA) projects for Chad and Cameroon.

1 The list of acronyms is at the end of the text. 2 Under contract by the International Finance Corporation (IFC), D’Appolonia S.p.A. (D’Appolonia) of Genoa, Italy,

as the Environmental Management Plan (EMP) External Compliance Monitoring Consultant for the Chad/Cameroon Oil Development and Transportation Project (referred to as the External Compliance Monitoring Group – ECMG), is responsible for providing an independent assessment of the compliance of the development Consortium [Esso Exploration and Production Chad Inc. (EEPCI), Petronas Carigali (Chad EP) Inc., and Chevron Petroleum Chad Company Ltd.], the Tchad Oil Transportation Company S.A. (TOTCO) and the Cameroon Oil Transportation Company S.A. (COTCO) with obligations under the EMP and the relevant Environmental Commitments in the Finance Documents and the World Bank Project documents. D’Appolonia is also responsible for monitoring performance on two World Bank Technical Assistance/Capacity Building (WBTA) projects. This monitoring is being conducted under a parallel agreement between the World Bank and D’Appolonia. Under this agreement D’Appolonia is monitoring the Petroleum Sector Management Capacity-Building Project for Chad and the Petroleum Environment Capacity Enhancement Project (CAPECE project) for Cameroon. The Lender Group and the World Bank will use the information provided by D’Appolonia, as well as other available relevant information, to determine, subject to provision of the Finance Documents and the World Bank Project Documents, whether it finds the Consortium, TOTCO and COTCO are in compliance with the EMP and the relevant Environmental Commitments. The World Bank, subject to provisions of the World Bank Project Documents, will similarly determine if the Capacity Building programs are being implemented in a timely manner and, in particular, if the specific EMP obligations of the respective Governments are being met. D’Appolonia’s engagement as the ECMG does not affect the continuation of the current practices of the World Bank Group and the Lender Group for consultation with Non-Governmental Organizations (NGOs), both local and international, universities, governmental agencies and other resources.

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2. Consistent with the ECMG Terms of Reference, D’Appolonia has been contracted to continue its monitoring during the operations phase and to conduct Post-Project Completion Services for the Chad Export Project. The scope includes one site visit to Chad and Cameroon facility sites per twelve month period following Project Completion Date until full repayment of the Senior Project Indebtedness. A second site visit may be conducted during the same period at the discretion of the Lender Group.

3. Under its contract between the Lender Group, the World Bank and the Consortium,

D’Appolonia, as the EMP Compliance Monitoring Consultant (ECMG), has also the obligation to continue to review, comment and report on WBTA project compliance throughout the lives of these projects. Activities include those carried out during the construction phase of the project with the following changes: 1) site visit frequency reduced to one per year (scheduled) and a second per year (discretionary); 2) reporting frequencies reduced accordingly.

4. The Chad/Cameroon Oil Development and Transportation Project (referred to as the

Chad Export Project) reached full production. The facilities in Cameroon are fully operational. In Chad, the Central Treatment Facility (CTF) and associated development facilities are now constructed and operational. On going activities relate primarily to the drilling of additional wells in the three fields (Komé, Bolobo and Miandoum) of the Oil Field Development Area (OFDA), and connecting them to the crude oil processing facilities. This process is called infilling, reportedly consisting of approximately 60 new oil wells. This second Post-Project Completion visit focused on the actions taken by COTCO in Cameroon and EEPCI/TOCTO in Chad for managing both social and biophysical aspects related to the Operations phase and to the additional construction activities on going in the OFDA. In addition, the visit also monitored the effectiveness of the EMP organizations in issue management and linking with the other Operations teams. Specific activities conducted during this mission included3:

• review the status of erosion control measures, revegetation, and induced access

management along various parts of the Pipeline Right-of-Way (ROW); • visit the sites of the Project fixed facilities in both Chad and Cameroon; • meet with CPSP and Ministry of Culture representatives from Cameroon; • visit Campo Ma’an National Park and some communities affected by the

implementation of the Indigenous People Plan (IPP), and meet with the Environmental Foundation (Foundation for Environment and Development in Cameroon [FEDEC]) in Cameroon;

• meet with NGO representatives in Cameroon and in Chad; • meet with Chad government representatives and with the FACIL (Fonds d’Actions

Concertées d’Initiative Locale) team in Chad; • meet with COTCO and EEPCI/TOCTO teams responsible for EMP compliance

monitoring and review relevant monitoring records in both countries; • conduct two closeout meetings covering the Chad Export Project, FEDEC, and the

two Capacity Building projects, with EEPCI/TOTCO and COTCO management and EMP personnel, Chadian Government officials, and Lender representatives from the International Finance Corporation (IFC) and the World Bank, focusing

3 See Appendix A for the detailed Daily Activity Summary

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on key findings, correction of any factual inaccuracies and possible corrective/upgrade actions.4

5. The closeout meeting for the Chad Export Project was conducted in N’Djaména,

Chad on November 16, 2005; the closeout meeting for the two Capacity Building projects was held on November 17, 2005. The information presented in these meetings has formed the basis for this report. The information, observations, and opinions presented in this document are those of D’Appolonia and are independent of those of the development Consortium, EEPCI/TOTCO, COTCO, the institutional stakeholders of Chad and Cameroon, and the Lenders and World Bank Group.

6. Project activities with the greatest potential direct environmental impact at the time of

this visit are effectively limited to the ongoing work in the OFDA associated with well pad construction and connecting gathering lines and flow lines, drilling, and associated access roads. In addition to this activity, the Consortium is conducting exploration of potential oil field opportunities and the development of additional discoveries (satellite fields of Nya, Moundouli and Poudouguem) near the OFDA, which involve additional pipeline routes and new well development. These latter activities are not included in the ECMG scope of work.

EMP OBSERVATIONS General The EMP organization for the Operations phase in both Chad and Cameroon is in place and a recent reorganization of both teams was completed by both EEPCI/TOCTO and COTCO. However, also based on the observations made in the OFDA, the ECMG is concerned that the available EMP staff and resources are stretched by the increasing number of sites where construction and production activities are ongoing, and by the lack of adequate technical counterparts in the main construction and maintenance contractors working in the OFDA. The Consortium has also made a decision to place Cameroonian and Chadian nationals in positions of responsibility. The ECMG certainly concurs with this objective, but is of the opinion that, particularly due to the magnitude and variety of construction and operations activities on going in the OFDA and the concurrent exploration and development of other fields, the Chad EMP team still needs support from additional experienced specialists, including expatriate staff. In Chad important compliance issues were observed, one year after Completion Certificate was issued, as follows:

• The overall footprint in the OFDA is remarkably larger than anticipated, with more significant land-related impacts. Return of land is slower than indicated in the EMP, although the pace of reclamation and return has recently improved. These conditions are an important EMP non-compliance, representing a major increase in actual impacts against impacts expected in the EMP:

o the permanent land take is about twice as big as the EMP estimates,

4 Cameroonian Government officials did not attend the closeout meeting.

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o the number of non-viable households is more than three times the EMP estimates.

• The livelihood restoration strategy implemented by the Consortium was found not to be properly monitored and a comprehensive evaluation, as per EMP obligations, is needed.

• Non-compliant conditions were observed at several borrow pits and well pads in the OFDA, which do not minimize risks and impacts to the health and safety of the local community.

• Due to the inconsistent implementation of the agreed mitigation measures along OFDA roads, dust generation was found to be significant in the area, with potential impacts on public health, air quality, vegetation, and transportation safety.

In both countries, ROW management was found to be adequately conducted. Erosion control and revegetation plans are in place, and relevant activities on going. Induced access management areas appear to be sufficiently monitored, although an increase in third party activities, namely logging, was reported in the Nanga Eboko to Belabo area. The Project should strengthen its approach in the field, in order to prevent this area from further degenerating and to minimize access opportunities to the ROW. In Cameroon, significant difficulties in FEDEC management and for the implementation of the two programs (IPP and Offsite Environmental Enhancement Program [OEEP]) were observed by the ECMG and pose a risk to the actual effectiveness of the planned mitigations. FEDEC is the tool and approach devised by the Project to meet the Bank’s Operational Policies related to Natural Habitats (OP 4.04) and Indigenous Peoples (OP 4.20). If FEDEC is not effective in reaching the objectives and principles stated in the EMP, the Project is at risk of not meeting the relevant Bank’s Operational Policies, and therefore could be considered a major non-compliance with the EMP commitments. The Chad Capacity Building Project and the FACIL project are in a critical situation. These programs have exhausted their funds in early 2005, and no agreement has been reached yet on additional World Bank financing, despite the negotiation of an additional credit of $10 million, which was accepted by the Bank to become a grant. No capacity building activities have taken place this past year, and the CTNSC personnel appeared to be unmotivated at both the headquarters and the Komé site. The same situation was observed for the FACIL personnel in Bébédjia. The current organization and field resources available for the CTNSC clearly are not able to adequately handle the extent of exploration, construction and production activities in the country, and specifically those related to the Doba oil project, the Nya-Moundouli satellite projects, and the exploration activities in other potential fields conducted by the Consortium and other Oil Companies. The overall result is very weak monitoring of the ongoing activities. Specific observations and issues of concern are highlighted in the following sections of this report.

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7. EMP Organization Observations: The EMP teams for the Operations phase in both Chad and Cameroon are in place and a recent reorganization of both teams was presented to the ECMG. The Cameroon EMP organization is staffed by Cameroonian specialists, with the exception of the EMP Manager. The transition from the Construction phase team was successful and the organization appears to be capable of providing sufficient oversight to Project EMP activities. Although some needs for improvement were identified for the Cameroon EMP program, as discussed in the following sections, the team appears to be motivated and resources appear to be sufficient for managing the known issues such that an adequate level of compliance with EMP principles can be maintained. In Chad, although the limited EMP issues relevant to the transportation system appear to be adequately managed, the situation is complicated in the OFDA as significant construction activities continue, particularly in the light of the ongoing well infilling program in the OFDA and the increased pace of the exploration activities and development of new additional fields. The EMP organization is fully mobilized in the field and recently underwent a substantial reorganization, with teams dedicated to Operations, Infill Construction and Exploration and Satellite Projects (i.e., Nya-Moundouli oil fields under development). The expatriate specialist staff however appears to be far too limited for the level and pace of activities ongoing in the OFDA and additional fields, and the national field staff appears to be still on the learning curve. Available resources are stretched by the increasing number of sites where construction and production activities are ongoing. In addition, the main Contractor organizations, with the exception of the drilling contractor, Pride Forasol, do not have an internal EMP team, in contrast with the organizations that were in place during the Construction phase. It is ECMG’s opinion that there is a disconnect or a weak integration between the different Operations organizations and the EMP team, particularly in Chad. It was also reported that there are no Contractor Management Plans, based on the Project EMP, as they were consistently available for all the Engineering, Procurement and Construction (EPC) contractors involved during the Construction phase. Because of the significance of the relevant observations, a specific section on the resources allocated to social aspects in both countries is presented in the following (Section 13). Recommendations: 7.1 EEPCI/TOCTO and COTCO should ensure common objectives and integration

between the EMP and Operations teams. 7.2 EEPCI must make sure that all contractors (and their subcontractors) involved in the

OFDA activities are cognizant of and implementing the EMP. 7.3 More power should be given to the EEPCI EMP organization in terms of

management and sufficient field oversight of the several construction and operations activities. This can also be achieved with additional expatriate staff to meet the increased pace of OFDA activities and increased workforce compared with the original plans made at the time the EMP was designed.

7.4 Meaningful and trained EMP organizations should be required for all main Contractors.

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Socio-economic Issues 8. Project Land Use and Return of Land Use Rights in the OFDA (Chad)

Project Strategy: Well Pads According to the EMP5, well pads are to be partially reclaimed. After final reclamation, their dimensions should be between 58m x 47m (2,700 m2) and 94m x 47m (4,400 m2). The reclaimed portion is to be returned to pre-construction users. Overall Project Footprint in the OFDA According to estimates presented in the EMP6, the project footprint in the OFDA was anticipated to be broken down as follows: • Total land needed: 2,133 ha • Land permanently needed for operations: 756 ha • Land reclaimed and made available to pre-construction customary

rights users: 1,377 ha Including: - Reclaimed land made available with some restrictions: 591 ha - Reclaimed land made available with no restrictions: 786 ha

Observations: Size and Reclamation of Well Pads The situation reported in previous ECMG reports has not changed, in spite of commitments made by the Consortium at the time when the Certificate of Completion was issued (August 2004) that a solution would be found to this non-compliance (see previous ECMG report for details on these commitments): • Those well pads that have been reclaimed are about twice the operations well pad

surface area committed to in the EMP by the Consortium (8,250 m2 as opposed to 4,400 m2);

• In addition: - The pace of reclaiming drilled well pads is slow, as discussed further in this

report (Section 16), - Several well pads built before 2005 and not drilled have not been reclaimed

yet, - The Project has reported that there is currently an internal debate with

Operations on potential restrictions to the reclaimed portion of the well pads (such as a prohibition for safety reasons of post-harvest crop burning).

Return of Land Rights As noted by the Consortium’s internal EMP organization, return of land rights to pre-construction users is progressing too slowly. Land that has been reclaimed long ago (such as the pipeline ROW) has not been yet formally returned to pre-construction users. EEPCI/TOTCO has therefore recently developed a “quitus” process to address this aspect, involving local chiefs and CTNSC in addition to the affected land user.

5 EMP, Chad Portion, Volume 3, section 3.4 6 EMP, Chad Portion, Volume 3, section 3, Table 3.1.

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The Consortium’s EMP organization has also filed a “Management of Change” request, to apply tree-planting restrictions to the whole width of the pipeline ROW in Chad (30 meters), instead of applying them to a 15-m wide strip as anticipated in the EMP. The rationale for this change is that the 15-m strip is not delineated, which is reportedly confusing to farmers, who do not know where the restrictions apply and where they do not apply. “Infilling” Oil production in the three fields of Komé, Bolobo and Miandoum has not reached initial estimated projections. The Consortium has therefore begun to implement an “infilling” program, whereby additional oil wells are drilled in these three fields (in addition to the satellite fields currently being developed at Nya-Moundouli and Poudouguem, this latter being located between Bolobo and Miandoum fields in the OFDA). It is projected that another 60 wells could be built as part of the “infilling” program. The current number of well pads in the three oil fields is 347, already higher than the estimate of approximately 300 wells indicated in the Project EMP. Overall Project Footprint in the OFDA According to figures provided by the Consortium during the ECMG’s November 2005 visit, the overall Project footprint is as follows: Land needed permanently for improvements and/or project facilities:

Actual – November 2005 1,395 ha EMP estimate 756 ha

Land used during construction, returned or to be returned to pre-construction users – Without restrictions

Actual – November 2005 341 ha EMP estimate 786 ha

Land used during construction, returned or to be returned to pre-construction users – With some restrictions

Actual – November 2005 1,181 ha EMP estimate 591 ha

This results in an overall footprint that is larger than anticipated, with more significant land-related impacts. In addition, return of land is slower than indicated in the EMP. These conditions are an important EMP non-compliance. The Project has issued a Level 2 non-compliance in relation with the slow return of land. The pace of reclamation and return has significantly improved since issuing this non-compliance. Non-viable Households The current number of households recognized as non-viable7 according to EMP criteria is reported by the Consortium to be 483 (initial EMP estimate: 150).

7 Households affected by land acquisition are deemed “non-viable” when their remaining land is not sufficient to

sustain them based on traditional agricultural practices. This is the case when the surface of land available is below the threshold of 2/3 of a “corde” per individual (about 3,300 square meters). A non-viable household is eligible to livelihood restoration measures, in addition to individual cash compensation served to any household that loses land to the Project.

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Current Impacts on Land and the EMP The findings reported above represent a significant increase in actual impacts against impacts expected in the EMP: • the permanent land take is about twice as big as the EMP estimates, • the number of non-viable households is more than three times the EMP estimates. Livelihood restoration strategies had been devised based on EMP estimates, which consider limited impacts on land and livelihoods. It is the ECMG’s opinion that these strategies now need to be revisited and revised due to the change of magnitude in the land-related impacts (detailed in the next section of this report). Recommendations: 8.1 Consortium to monitor land take as per recommendation of the previous

ECMG report (“Monitor the overall Project footprint on a quarterly basis using the table format provided in the EMP (Volume 3 – Table 3.1)”).

8.2 Consortium to rehabilitate well pads to the size committed to in the EMP. 8.3 Consortium to compensate land users for any additional restrictions imposed

on returned land (pipeline and well pads) beyond the normal period of time anticipated in the EMP, or not to apply such additional restrictions.

8.4 Consortium to expedite the process of formally returning land rights to pre-construction users, as per procedure agreed upon with CTNSC (“quitus”)

9. Livelihood Restoration in the OFDA (Chad)

Project Strategy: Based on estimates of impacts made at the time when the EMP was prepared, several livelihood restoration strategies have been devised and implemented, including the possibility for non-viable households to choose among the following options: • physical relocation (i.e. construction of a new house in a place of their choice in a

neighboring village), • access to an “improved agriculture techniques” training program, • off-farm training (i.e. training in a non-agricultural income generating activity),

and • on-the-job training. Observations: Organizational Arrangements The Consortium has recently hired JMN, a French consulting firm, to coordinate these different components under the general umbrella of the Consortium’s EMP organization. The international NGO Organisation internationale de Recherche et de formation Technique (ORT) remains in charge of the improved agriculture program.

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Breakdown by Program of the Eligible Farmers The total number of non-viable households is 483. The distribution of the numbers of eligible households by livelihood restoration program is shown in the table below:

Improved agriculture 212 Off-farm training 144 Physical relocation 39 ‘Conquered land’ 25 On-the-job training and employment 13 Currently being assessed 50

Physical Relocation The Consortium has recently taken a decision to replace old resettlement houses (those built from 2000 to 2003), which were of poor quality, by improved housing. These houses now include walls of stabilized bricks, and their overall quality is much improved. This is a positive step. Physically relocated households are not being monitored by the Project for actual livelihood restoration. Improved Agriculture Techniques Program This program is on-going, with ORT as the implementing agency. ORT now maintains a significant presence in the field, with dedicated animators based in the villages. An equipment grant of CFA Francs 500,000 is available for each eligible farmer to purchase agricultural equipment. Some results have already been obtained, particularly in the area of organic matter management. During the mission, it was reported again to the ECMG that ORT was short of cash. This is a recurrent issue, already observed in 2003 and 2004, which the Consortium had committed to finally resolve before issuance of the Certificate of Completion in August 2004. As a result, farmers declared as eligible in 2005 have not been distributed their small equipment yet while they have started their training; ORT also reports being hardly able to pay its staff. Farmers following the improved agriculture techniques program are not being monitored by the Project for actual livelihood restoration. Off-farm Training During this trip, the ECMG interviewed several former off-farm trainees, both male and female, in different villages of the OFDA. It was clear that not all of them were able to make a living out of their new activity. They generally tend to continue some farming, while experiencing various difficulties in establishing their new activity: there is no small-scale credit facility in the area for them to purchase equipment, and they have little if any technical assistance from either the Consortium or their training institutions. In addition, it was observed that the Consortium is not monitoring them for actual livelihood restoration.

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‘Conquered Land’ This newly introduced category includes people who are deemed eligible (non-viable) to livelihood restoration but manage in some way to secure new land for cultivation, usually from relatives. After making sure that new land could be secured (‘conquered’) by these households, the Consortium appears to exclude them from any livelihood restoration benefit. These households are also not monitored by the Project for actual livelihood restoration. Other Programs Potentially Supporting Livelihood Restoration of Affected People As reported in December 2004, the FACIL micro-credit facility is still short of funds, and is unable to provide credit to farmers, for reasons detailed in the Capacity-Building Programs section of this report. It was reported that the IFC backed micro-credit facility may soon be ready to start a poultry breeding program in some villages of the OFDA and has been liaising with ORT in this respect. Evaluation of the Livelihood Restoration Strategy The EMP8 presents the Consortium’s monitoring and evaluation obligations. Specifically, it provides for an evaluation of resettlement and compensation activities « at the end of the first agricultural cycle after the construction of the fixed facilities has been completed ». This evaluation should be undertaken during this dry season, in conformance with the mechanism described in the EMP, which involves the Government of Chad. The OFDA should be given absolute priority in this evaluation9. This evaluation should take the following steps: • Take into account the increase in the magnitude of land-related impacts in the

OFDA, as well as the current Consortium plans to further increase the number of wells (“infilling”), and the number of access roads and flowlines accordingly.

• Evaluate the results of the livelihood restoration strategy, based on a comprehensive survey of affected households, particularly the non-viable ones who have gone through the different components of the livelihood restoration program.

• Review the current compensation / resettlement / livelihood restoration strategy applied in the OFDA against the objectives of the applicable international safeguard policies and of the EMP.

• Propose revisions to the compensation / resettlement / livelihood restoration strategy if need be.

• Propose remedial measures as appropriate, and reflect these in a recovery action plan, including implementation mechanisms, timelines and budget.

Terms of Reference for the evaluation should be developed as soon as practical and submitted to Lenders and the Government of Chad for approval. The evaluation itself should be planned for the first quarter of year 2006, and be carried out by a team of independent, experienced consultants including a lead social scientist to measure socio-economic indicators related with livelihood restoration, and a lead resettlement specialist to review the current strategy and plan remedial measures.

8 Volume 3, Chad, Chapter 8 9 The 2003 study by GEPFE is sufficient for villages outside of the OFDA.

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Recommendations: 9.1 Consortium to ensure that cash is made available in a timely manner to ORT’s

field team and to make sure that ORT budgets reflect the number of farmers they have to train.

9.2 Consortium to put an end to the ’Conquered Land‘ approach, and to enlist associated farmers into one of the livelihood restoration programs agreed upon in the EMP.

9.3 Consortium to implement as soon as practical a comprehensive evaluation of the compensation, resettlement and livelihood restoration strategy, as per requirements of the EMP and details above.

10. Regional/Community Compensation

Project Strategy: This component of the Project's compensation program is mainly intended to offset community losses such as impacts to non-timber forest products (e.g., nuts, fruits), other wild resources (e.g., honey) and various inconveniences. Observations: Cameroon The ECMG observed that a fair number of structures built under the regional compensation program in Cameroon is affected by various defects such as the following: • Poor construction of spring catchments, • Insufficient depth of open hand-dug wells, • Uncompleted classrooms and other community buildings. This causes widespread community dissatisfaction, which is founded in several cases observed by the ECMG, as contractors in charge of construction failed to deliver structures of sufficient and adequate quality. In addition, the intervention of one particular contractor, which was terminated by COTCO during the contract, because of its poor performance, has generated other open issues, related with absence of payment of local subcontractors and village workforce. Although COTCO terminated the contract, villagers perceive these open issues as COTCO’s responsibility and expect these structures to be fixed. There are however instances where villagers’ expectations may have been too high and were unlikely to be met by the budget allocation available for regional compensation projects. A typical example is Ebaka village near PS3, where the construction of a poorly leveled football field causes complaints because the villagers expected something much better, whereas the site provided by the community was not suitable to accommodate a proper football field without costly earthmoving works, which were not within the allocated budget. Many – but not all – of these issues have been identified, either directly by COTCO or through the NGOs now involved in the “social statement” process (see below). Most of those observed by the ECMG require limited and simple work to bring the structure to a fit-for-purpose condition (wells to be deepened during the dry season,

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complements to masonry works). Some will however require the procurement of experienced contractors (such as the systemic problems reported for spring catchments). Chad In Chad, the ECMG was pleased to visit community compensation projects that respond to obvious needs and are already well managed by the beneficiary community. Some defects were also observed, the Consortium usually being aware of these. A plan to fix defects affecting structures is in place; it remains to be expanded to other projects with reported deficiencies (such as drilled wells supplying low quality water). Recommendations: 10.1 Scan all regional compensation projects for defects and identify solutions for

each. Mobilize appropriate resources in both countries for this exercise. 10.2 Fix immediately defects that require only the use of local skills, possibly

allowing the Consortium’s Community Relation Officers (CROs) to directly hire local artisans. For instance: - Wells could be dug deeper during the next dry season by local well

diggers, - Small defects in structures could be fixed by local masons.

10.3 Identify more important problems that will require procurement of reliable contractors (notably improvement of spring catchments).

10.4 Identify and fix problems left behind by the local contractor that was dismissed in Cameroon because of its poor performance.

11. Grievances and Social Closure Project Strategy: The Project developed and implemented a social closure process in Cameroon, involving both the Government and the Consortium, and witnessed by independent NGOs. In Chad, this process has been prepared but not yet implemented in the field. Observations: Cameroon Social closure was completed in Cameroon in 2004. However, the ECMG observed that numerous grievances are still outstanding. In addition to community-level grievances related with regional compensation described in the previous section, individual grievances include deficiencies in agricultural land reclamation, alleged water point contamination or damage, and claims related with cash compensation of crops. Some of the grievances reviewed in the field by the ECMG appeared to be well founded. The ECMG checked that their receipt had been acknowledged by COTCO, sometimes long ago, but the aggrieved individual was not aware of the final outcome. It is therefore apparent that the social closure process has not effectively closed all construction-related grievances. In addition to these field observations, the ECMG also noticed the following: • Grievance management is highly centralized. The CROs in the field have no

flexibility and autonomy to resolve even the simplest problems. They report

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grievances to the Douala COTCO headquarters, and essentially remain uninvolved in the resolution process. The headquarters are not exposed to the pressure of the population, which avoids favoritism and ensures consistency, but results in long delays in resolving the issues. While this approach made sense during the construction phase, when grievances were many and consistency in resolution was essential, it is now felt that many of the smaller problems could more efficiently be resolved locally between the CROs and the aggrieved parties.

• Grievance logging is deficient: a grievance database exists in Douala, but it was observed that the CROs in the field do not always have an updated record of the status of grievances, and they cannot therefore inform adequately the aggrieved individual on the status of their grievances.

The Consortium has taken a positive initiative in associating five Cameroonian NGOs to grievance resolution and monitoring. This process, referred to as “Social Statement”, aims at reviewing on a periodic basis with these NGOs and the CPSP (Government of Cameroon) the status of grievances identified by NGOs as pending. Chad In Chad, there are fewer compensation- and construction-related grievances. It is also the ECMG’s opinion that at this particular point in time, the Consortium should give the highest priority to improving the livelihood restoration packages and to keeping land-related impacts under control in the OFDA. Social closure could be postponed until appropriate solutions have been identified and implemented to address these more important issues. Recommendations: 11.1 Consortium to improve grievance logging in Cameroon, and make grievance

records available to the CROs. 11.2 Consortium to empower the CROs in grievance related decision-making, and

to allow them to process and fix claims up to a certain financial amount.

12. Management of Community Relations in the Vicinity of Fixed Facilities in Cameroon Observations: Cameroon In comparison with previous visits, a certain deterioration of the relationship between the Project and neighboring facilities was observed near PS3 (Ebaka village). Another example of this deterioration is the fact that near PS2 at Dompta, a Project facility (the former Willbros camp) that was pending transfer to Government authorities was looted by unidentified individuals, some of whom may very well live in nearby communities. At present, community relations near fixed facilities (PS2, PS3, and PRS/FSO) are managed almost exclusively by the CROs, with little or no involvement of Operations senior staff such as the Maintenance Area (MA) Managers. While they interact with MA Managers, CROs have however no decision-making power and report to the EMP management team in Douala. From the point of view of community relations, the Project three fixed facilities are similar in nature to long-lasting mining or industrial

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operations, and very different from the pipeline, whose positive and negative impacts are perceived almost only during construction. It is ECMG’s opinion that a different approach to community relations should be adopted now for fixed facilities in Cameroon, whereby the Operations personnel should be more involved, and community related decision-making could be decentralized to a local team locally formed by the MA Manager and the CRO. Another recommended development is to pro-actively engage with neighboring communities rather than wait for grievances and claims to be file and react to them. To this aim, it is recommended, based on the experience of many mining operations in Africa, to establish neighborhood committees (“comité de voisinage”), involving the village chiefs and elders of neighboring communities, representatives of the CPSP (Government of Cameroon), the MA Manager and the CRO, and potentially at a later stage Cameroonian NGOs. Chad Although a similar approach could be a long-term objective in the OFDA, it seems premature at this stage. Recommendations: 12.1 Consortium to involve Operations senior staff (Maintenance Area Managers)

in relations with communities neighboring the Project’s fixed facilities (PS2, PS3, and PRS/FSO).

12.2 Consortium to propose and establish Neighborhood Committees with representatives of local communities, CPSP, senior management of the fixed facility and CROs.

13. Resources Allocated to Social Aspects in both Countries during Operations Phase Observations: Cameroon Overall, resources in Cameroon appear sufficient to tackle socio-economic issues. COTCO reports having hired an additional officer, who will be dedicated to grievance management. As mentioned above in the sections dealing with Regional/Community Compensation and with Grievances, it is the ECMG’s opinion that the EMP organization in Cameroon would gain from giving more autonomy to the CROs, in terms of grievance management (they should be allowed to fix smaller grievances themselves and report a posteriori rather than seek authorization for anything), and in terms of dealing with smaller deficiencies of the regional compensation projects. Chad The socio-economic department attached to the Chad EMP team is currently deployed over a vast area, including the pipeline from Komé to the Cameroonian border, the OFDA, the satellite fields in Nya Moundouli, and on-going exploration works in the Krim-Krim area to the north of Moundou, and to the east of Sahr in the Moyen Chari Province. Additional personnel (particularly dedicated Local Community Contacts [LCCs]) have been hired to take care of these expansions. The socio-economic department however appears to be understaffed given their current deployment over these different and distant areas. In addition, vehicle availability was observed to be an issue.

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The main contractor in charge of maintenance activities in the OFDA and along the pipeline ROW will soon be changed by the Consortium. Past experience of similar changes in contractors indicates that increased rigor will be required in the monitoring of recruitment and compliance with the EMP’s employment policies. The Consortium has also made a decision to place Chadian nationals in positions of responsibility, which particularly applies to the socio-economic department. The ECMG certainly concurs with this objective, but is of the opinion that, particularly due to the magnitude and variety of construction and operations activities on going in the OFDA and the concurrent exploration and development of other fields, the socio-economic department within the Chad EMP team still needs some support from experienced expatriate specialists. This could be obtained by bringing in specialists on short-term assignments. One of the first tasks of such specialists could be to develop livelihood restoration monitoring procedures, and to prepare ToRs for the evaluation mentioned above in this report. It is also recommended in addition to strengthen the training of the current socio-economic personnel, particularly of the young and dedicated Chadian professionals, who currently manage this department. Recommendations: 13.1 Consortium to give more autonomy to the CROs in Cameroon, in the

perspective of recommendations made above in this report (see Sections 0, 11 and 12).

13.2 Consortium to provide support to the socio-economic department within the Chad EMP team, in the form of: • short term assignments of experienced specialists, in the first place to

develop monitoring procedures and prepare Terms of Reference for the evaluation mentioned in Section 9 of this report,

• supplemental training for the Chadian professionals. 13.3 Consortium to allocate personnel to the monitoring of compliance with

employment policies of the new main contractor. 13.4 Consortium to reconsider the number of vehicles allocated to the socio-

economic team in Komé. 14. Temporary Facilities in Cameroon

Project Strategy: The EMP10 provides that “as the infrastructure, logistics and pipeline Contractors move from areas where construction has been completed, the support facilities will be decommissioned if no further use is warranted.” The EMP further states that these areas will be reclaimed except in cases where the Government or local communities wish to retain a Project facility for continued use (Environmental Assessment - Executive Summary and Update, Page 3-11). Temporary bridges built in defined ecologically sensitive areas in Cameroon to support pipeline construction should have been removed when works were complete, in accordance with the Induced Access Management Plan11 and/or because their design as temporary structures does not, in principle, allow for long-term safety and reliability.

10 EMP, Supporting documents, Volume 1, Section 8 11 EMP, Cameroon portion, Volume 1, Appendix D

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Observations: Camps, Storage Yards and Temporary Bridges An agreement between COTCO and CPSP for ceding back the Project temporary facilities installed during the Construction phase was reached in July 2004. These facilities include: • facilities situated on private property of the State, • facilities situated on National Domain, and • temporary bridges. As agreed with CPSP, COTCO completed the upgrades of the storage areas in Cameroon and the Meidougou airstrip in December 2004, involving surface soil reinstatement and leaving fences in place. The other temporary facilities, including the camps, have not been upgraded, after demobilization and clean-up at the end of the construction phase. They should be transferred in their current conditions to the Government. They usually consist of a laterite platform, with the main concrete buildings and some concrete platforms and the fences in place. A COTCO/CPSP joint field inspection of the temporary facilities was performed in June 2005, and a Cameroonian consultant was hired by CPSP to conduct an environmental assessment of these facilities. It is understood that this assessment was submitted to CPSP and made available to the World Bank, although its results are reportedly not known to COTCO. The ECMG visited several storage yards and camp sites (Ntoua, Lolodorf, Nanga Eboko, Belabo, and Dompta): • The former storage yards appeared to be sufficiently upgraded and generally

revegetated, with the exception of the Lolodorf storage yard, which shows minimal regrowth and large surface of bare soil.

• The former construction camps are not maintained, and many of the buildings are deteriorating. Some areas were found to be impacted by erosion (e.g. Lolodorf camp), and significant vandalism was also observed, especially at the former Willbros camp in Dompta. Despite this situation, there are still no clear plans on the future use of these areas, and the land has not been returned to previous use.

Temporary facilities also include three temporary bridges that were erected by COTCO during the Construction phase and are to be transferred to the Government. The transfer process is still not complete. The ECMG visited the bridge over Mougue River and found that it is rapidly deteriorating, posing a safety risk for vehicular and pedestrian traffic. Based on the information available, the agreement protocols for the transfer of the temporary facilities prepared by COTCO are still to be signed, formalizing the transfer of ownership to the Government of Cameroon. Since the ECMG’s last visit, almost a year ago (December 2004), closure has not been reached on this issue. The dossiers are two years old. Lom River Bridge The temporary bridge on Lom River was removed in June 2003 in compliance with the EMP and its Induced Access Management Plan. The local communities were

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opposed to the removal of the Lom River Bridge; therefore, the Government of Cameroon, the World Bank, and COTCO committed to provide compensation to the four villages impacted by the removal of the bridge. COTCO completed the compensation, providing the affected villages with a water well and pump, assistance in establishing a community forest, and the hand clearing of the old road between Lom and Mbitom. As discussed in the ECMG’s previous reports, before removal of the bridge, additional potential mitigations were discussed with the local communities and delineated by the Government and the World Bank, potentially through the use of Programme National de Développement Participatif (PNDP) funds. After more than two years, still no progress has been reported for these additional mitigations. Recommendations: 14.1 Government of Cameroon/World Bank should develop and implement the

additional measures committed to mitigate the socio-economic effects of the Lom River bridge removal – Repeated recommendation.

14.2 CPSP should expedite, facilitate and monitor of the ownership transfer process to the Government of Cameroon, in order to ensure the effective final use of the temporary facilities in accordance with the agreement protocols signed - Repeated recommendation.

14.3 Taking into consideration the Government delays in the ownership transfer process for the temporary facilities, COTCO and CPSP (in close coordination with the ministries concerned) should analyze again and update all documents related to the bridges, storage yards, camps and other facilities, preparing synthetic data sheets for each site. Meetings should then be held to process dossier by dossier, and work out decisions leading to immediate signing of Agreement Protocols. If this cannot be achieved in a reasonable amount of time, to be agreed by the parties, including the World Bank, the sites should be reinstated by COTCO and returned to the pre-Project conditions and uses, as per EMP commitments.

15. Mitigation of Archaeology-Related Level III Non-Compliances in Cameroon

Project Strategy: Following the two archaeology-related Level III non-compliances declared by the World Bank Group in mid-2003, COTCO was requested to develop and implement an acceptable mitigation program. As indicated by the World Bank Group Cover Note for Archaeology Non-Compliance/Cameroon, “COTCO is committed to do so in collaboration with the Government of Cameroon”. COTCO has made firm commitments to a three-part mitigation program. First, COTCO will publish a comprehensive scientific report that summarizes the findings and opportunities for future archaeological research in the regions traversed by the pipeline. This report will be peer reviewed locally and internationally. In addition, a seminar is to be held in Cameroon to discuss various aspects of the Project's archaeology program with the Cameroonian archaeology community. Second, COTCO will provide funding to support the post-graduate studies of two Cameroonian archaeology students, including some assistance for field studies and the further analysis of propitious sites discovered during pipeline construction. Third, a curation facility is to be established by COTCO to house the recovered artifacts and support future archaeological work in the country.

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Observations: The COTCO EMP Manager, the Ministry of Culture and the World Bank informed the ECMG that the status of the archaeological program in Cameroon is as follows: • The acceptance certificate for the curation facility in Cameroon was signed by the

Government on February 15, 2005. As part of the agreement, guards at the facility are paid by COTCO until December 31, 2005.

• COTCO has developed a draft Archaeology Book Publication Plan that will be discussed with CPSP and Ministry of Culture, as well as the Chad Party. The draft manuscript is available in both English and French. It was reported that the Ministry of Culture provided their comments to CPSP in November 2005. The report is now planned to be issued in 2006.

• Results of the work in Cameroon have not been presented yet to the Cameroon archaeology community in the required archaeological seminar. To date, COTCO plans to make a proposal on the organization of this seminar to the Ministry of Culture as soon as the issues relevant to the publication of the Archaeology Book are resolved.

• The two Cameroonian archaeology students who will benefit from the Fellowship have not yet been selected, although COTCO established the Fellowship at the Université Libre de Bruxelles (ULB) more then one year ago. A first student, who already started his fellowship sponsored by COTCO, is reportedly not recognized by the Ministry of Culture, which has committed to select four candidates by mid-December, based on their current needs.

Recommendations: 15.1 All parties (i.e., the Cameroon Ministry of Culture, CPSP, COTCO, ULB, and

the three Book authors), possibly with an external facilitator (e.g., from IFC) and the selected academic publisher, should meet to discuss and reach an agreement for the resolution of the outstanding Fellowships & Publication issues. The meeting could be held at the ULB as soon as practical and should allow to sign a memorandum of understanding, defining the two fellowships and all improvements of the draft publication, additional inputs to be provided to the publication, and conditions to finalize the book.

15.2 The Ministry of Culture should allow the first student trained through the fellowship already ongoing and sponsored by COTCO to complete his studies in Cameroon.

Health and Safety 16. Worker and Community Safety

Project Strategy: Health and safety procedures are currently implemented based on the Project Safety Management System and according to Project commitments to provide a safe working environment with appropriate Personal Protective Equipment (PPE) at all levels, including Contractors and their subcontractors. The Project has committed to implement construction safety signage, signals, and barricades around all construction areas and facilities to avoid injuries and accidents.

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The Project has also committed to avoid the creation of incremental vector habitat, including limiting the creation of standing water ponds. Observations: The use of PPE is widespread and generally appropriate, particularly where significant work forces are present. During the ECMG site visit, a crew of a local subcontractor hired to cut grass at the valve station at KP 174 was observed by the ECMG to not be provided with basic PPE (safety glasses, gloves, etc.). Occupational health and safety measures have been implemented or are under implementation at several Project facilities and appear to be adequate. As already indicated in the previous report, non-compliant situations were observed at some borrow pits in the Komé area, including, inter alia, KBP6 and Doba Sand Pit 4. According to the OFDA borrow pit inventory table provided by the Project, these borrow pits are not in use and are restored or partially restored. Large water ponds due to rain water accumulation were observed at these sites. In order to be compliant with the EMP, standing water should be avoided as it creates a favorable environment for malaria and may promote the breeding of mosquitoes when other stagnant water deposits near villages have already dried up. In addition, borrow pits, which are not fully restored, must continue to be considered as active Project working sites, even when not in use, and should therefore be managed in terms of minimization of third party intrusion and potential hazards for local communities. The ECMG also visited several well pads in the OFDA. At several locations, fences of well heads were reportedly stolen, but found not to be replaced. Unprotected high tension cables were found to be present at several well pad locations. Several reserve pits were found to be not reinstated after several months from well drilling and completion. They were observed to be left unfenced and unguarded, either filled with water/mud or unused with near vertical slopes since more than one year after their excavation. A well head cellar was found to be left unfenced, unguarded, and filled with water. The current non-compliant conditions observed at several well pads do not minimize risks and impacts to the health and safety of the local community. Recommendations: 16.1 Avoid situations where the OFDA non-restored borrow pits can accumulate

large ponds of standing water by providing adequate backfill at the exploited portions of these extraction sites and ensuring that adequate site restoration and closure are timely implemented by the contractors and their subcontractors.

16.2 Adequate mitigation measures should be urgently and consistently undertaken at all OFDA well pads and unfenced facilities by EEPCI to minimize the community safety risks. Closure and reinstatement of open reserve pits should be considered a priority and expedited.

16.3 COTCO and TOCTO should ensure that local villagers recruited for ROW maintenance in both Chad and Cameroon are consistently provided with basic PPE (safety glasses, gloves, etc.).

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17. Dust Control in the OFDA Project Strategy: A Dust Control Strategy for the OFDA was issued by the Project following the CTNSC review in March 2004. The mitigation measures at the OFDA include watering, as a temporary mitigation measure, and the application of molasses or Double Bitumen Surface Treatment (DBST) as permanent measures. The portions of the OFDA to receive temporary or permanent treatment were selected by the Project according to specific criteria taking into account future construction activities, actual and anticipated traffic volumes, location of receptors and safety aspects. A joint committee was established by CTNSC and EEPCI to evaluate needs and negotiate effective dust control measures, based on Project development and site activities. Observations: Dust Control - Chad An updated Dust Control Strategy on OFDA roads (approximately 36 km) for 2005/2006 was provided by EEPCI. The plan includes the use of watering and application of molasses and envisions the application of a soil stabilizer (Soiltac™). This stabilizer is a chemical with no known health hazards (a polyvinyl acetate emulsion) and should last longer on roads than molasses, which was not found to adequately function after heavy rains. The new Dust Control Strategy has been developed by EEPCI only. CTNSC was informed of this new strategy only a few days before the ECMG’s visit. CTNSC also reported that molasses was not applied in 2005 although this statement is contradictory with information provided by EEPCI, that at least two molasses applications were done between November 2004 and March 2005. During the mission, the ECMG had the opportunity to assess road conditions in the OFDA between Doba, Komé 5, Komé Base and Miandoum. At the time of the ECMG visit, only some watering had been applied along the OFDA roads, because molasses, an agreed mitigation measure, was not available on-site (expected to be received late November 2005, several weeks after the end of the rainy season). The Project was also testing the soil stabilizer, for possible implementation, in a short road section in the Moundouli field. Dust control was a primary issue for issuance of Completion Certificate. Despite the EEPCI commitment that dust control on the OFDA roads would remain one of the priorities to be managed with special care as was done in previous years, major dust problems were observed in all of the OFDA, but especially along the spine road of the OFDA. As observed on several occasions, watering is not effective. Visibility was dangerously reduced along the roads used by the Project traffic, and the presence of dust was observed to physically extend outside the road, impacting vegetation and agricultural fields. An air quality impact was apparent in the OFDA during the ECMG visit. The ECMG considers the current situation as a significant non-compliance with commitments made by the Project at the time of the Completion Certificate issuance and specifically notes the following:

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• The EEPCI/CTNSC joint committee mechanism has not been implemented in

2005. • The agreed dust control measures were not found to be consistently and

sufficiently implemented. • The Project measurements exceed the maximum concentrations for the Particulate

Matter <10 µm (PM10) (annual arithmetic mean 71.2 ug/m3 versus 50 ug/m3), as agreed with Lenders in Schedule 17. The ECMG is concerned that the impact due to Project traffic along spine road and at some villages could be significantly above the limits for PM10 and international guide values for Total Suspended Particulates (TSP), Suspended Particle Matter (SPM) and dust deposition criteria.

• The current situation poses a significant risk to community and occupational safety and health, potentially causing respiratory distress, and impairing visibility, solar radiation, transportation safety. Potential impacts on community households and properties, as well as potential damage on crops, trees and shrubs should be also assessed.

Subsequently, the ECMG was informed that the soil stabilizer treatment was tested on seven kilometers of the OFDA road. A technical/economic review of dust suppression alternatives was reportedly underway. Recommendations: 17.1 EEPCI should consistently and timely implement effective dust mitigation

measures as was committed in 2004. 17.2 Taking into consideration the persisting visible dust generated by the

continued construction activities and related Project traffic in the OFDA, EEPCI should quantitatively assess potential dust impacts in the area, quantifying potential damages to local communities, and provide evidence that impacts are mitigated and compensated, as appropriate. The impact should be assessed based on applicable and relevant limits, including PM10, as well as international reference guide values for TSP/SPM, and dust deposition criteria.

17.3 The CTNSC/EEPCI joint committee needs to resume its activities to monitor conditions along the roads before and after implementation of the dust control measures planned by the Project and negotiate future dust control measures to be adopted, as needed.

18. Hygiene and Recreation Facilities in Camps

Project Strategy: The Project's strategy is to provide safe living quarters for Contractors’ employees and visitors. The General Project Specification GPS-001, which offers specifications for camps and facilities, requires that doors have locks (either keyed or automatic, punch-coded locks) and shall open from within (outwardly). The EMP establishes requirements for space between beds, but does not limit the number of occupants per building. It also establishes the minimum number of washrooms, as well as a number of other facilities, to satisfy the religious needs and customs of its work force. GPS-001, Camps and Facilities, also requires that recreation rooms be provided with books and periodicals in appropriate languages.

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Observations: The ECMG was informed that a Level II non-compliance was recorded by the EEPCI EMP organization at the end of October 2005, after an inspection conducted at Komé Base, which found camp maintenance and catering services out of EMP compliance, specifically at TCN (third-country nationals, according to Project definition) barracks, junior and senior mess halls. The non-compliance was mainly due to poor hygienic conditions found in the barracks and lack of repairs and maintenance of hygienic facilities. The ECMG visited the blocks of concern, particularly Block O (60-men building), P (60-men building), Q (60-men building), N (18-men building), and T (32-men building). The ECMG was provided with some figures relevant to the building occupancy and relevant ratios of hygienic facilities and occupants. In addition to the several non-compliance situations indicated by the EEPCI EMP organization, particularly for the 60-men buildings, the ECMG noted the following: • The current 60-men buildings are not compliant in terms of number of washbasins

available. • The workers living in the buildings visited were doing their laundry in the

hygienic facilities, reportedly to avoid allergic problems related to the dermal contact with cloths washed in the camp laundry and impregnated with anti-insecticide. The washing and hanging of clothes in the living space (their only alternative) is not hygienic.

• As reported by the EMP team, mosquito nets were found not to be always available (although the EMP personnel also stated that some workers opt not use their nets).

• The recreation room was found not to be provided with books and recent periodicals (the most recent newspaper found was dated August 2005).

• The conditions within the 60-men buildings were found to be very poor, with minimal comfort and basically no privacy from one another.

As indicated by the EMP team, ventilation of the container, where spraying of permethrin is reportedly done, was found to be clearly insufficient. The container is not a compliant facility to perform this operation. Recommendations: 18.1 EEPCI and CTNSC should more systematically monitor compliance with

Hygiene of Camps and Facilities (GPS-001) and Catering Services (GPS-002), and notify the contractors and subcontractors of any EMP non-compliance situations and make sure that corrective actions are taken.

18.2 The 60-men buildings should be split into two buildings, to allow a better maintenance and more adequate hygienic conditions.

18.3 The Contractor should arrange its laundry services to allow the undergarments or any other requested articles of clothing to be washed separately from the regular clothes, subject to impregnation.

18.4 An adequately ventilated room should be provided to the team conducting permethrin impregnation of cloths.

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Biophysical Environment and Environmental Management 19. Water Resource Protection

Project Strategy: The EMP contains requirements for groundwater resource protection that include the installation of monitoring wells around engineered solid waste landfills, as well as the monitoring of community water wells to assure that Project water supply wells and Project activities do not adversely affect local water quantity or quality. The EMP also has a requirement for limiting withdrawals of surface water to no more than 10 percent of a surface water body’s flow or volume. The Project has developed a Water Monitoring Program (WMP), which consists of the following eight components: 1 Surveying of local surface water and groundwater usage practices prior to the

commencement of Project-related surface water and/or groundwater withdrawals; 2 Monitoring of local surface water and groundwater resources while Project-related

construction phase water withdrawals are occurring; 3 Monitoring of water for human consumption obtained from Project-installed

groundwater source wells/boreholes; 4 Regional groundwater monitoring program in the OFDA (Chad) or at Permanent

Facilities (Cameroon); 5 Groundwater monitoring at the Project’s engineered solid waste landfill sites

(KWMF at Komé and PS3 Landfill in Bélabo); 6 Monitoring of liquid effluents discharged directly to onshore surface water bodies; 7 Monitoring of liquid effluents discharged directly from the Floating Storage and

Offloading (FSO) Vessel. Observations: Water resource protection is a key component for the entire Project. The water monitoring programs developed by the Project for the OFDA, the permanent facilities and the solid waste landfills in Cameroon and Chad were consistently implemented in 2005 and record-keeping is adequate. In the following sections a review of the data relevant to the sampling events performed in 2005 according to each different component of the WMP is conducted. The Project is reportedly performing surface water quality at four selected sampling points located close to Komé 5 area and between Miandoum and Bolobo oil fields. Liquid effluent monitoring activities relevant to components # 6 and # 7 of WMP are also discussed in the Waste Management Section. Surface water and groundwater withdrawals in the OFDA Records relevant to the water consumption at the OFDA have been provided by the Project. Overall, a total of approximately 205,000 m3 of groundwater have been withdrawn in 2005 for human consumption, mainly from the Komé 5 (50 percent) and the Komé Base (43 percent) camp wells. Withdrawals of both groundwater and surface water for dust control and construction purposes were reported at approximately 24,000 m3 in 2005, mainly from well K3

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(15,073 m3). The highest volume of surface water was withdrawn from Nya River (5,421 m3). Water withdrawals from other surface water streams used by the Project ranged between 400 and 1000 m3/year. Component # 3 – Monitoring of water for human consumption obtained from Project-installed groundwater source wells Monitoring of potable water quality has been performed in accordance with component # 3 of WMP. Testing for general parameters (pH, residual or free chlorine, conductivity, turbidity and fecal coliforms) has been performed at Project facilities in Chad and Cameroon once or twice a week where groundwater withdrawal for human consumption and subsequent purification treatment are performed. The results relevant to the period between the end of August and the beginning of October 2005 were made available to the ECMG for review. The facilities tested for potable water quality included the Komé 5 area, the Komé Base area, the Parker Esso facility, the Miandoum station, the non-resident kitchen, the Komé 4 landfill and the airport. Several low residual chlorine concentrations (ranging between 0.0 and 0.5 mg/L) were detected at the Parker Esso facility, at the Komé 4 landfill and at the airport sampling point. Relatively low pH values (ranging between 5.1 and 6.2) were also observed at the same locations, and at the Miandoum Station. These low values are likely related to the natural conditions with highly lateritic soils. Reference limits provided by the World Health Organization (WHO) Guideline for Drinking Water indicates that the preferred aesthetically-based range for residual chlorine is set at 0.6 -1 mg/L, while a maximum limit of 5 mg/l is set. Relevant WHO guide values for pH are set between 6.5 and 8.5. These values have been properly identified by the Project and mitigation measures have been implemented in order to comply with WHO standards: pH regulation agents such as caustic soda and sodium hypochlorite have been added, while calcium hypochlorite has been added to raise chlorine content. Component # 4 – Regional groundwater monitoring program in the OFDA (Chad) or at Permanent Facilities (Cameroon) Groundwater testing of regional groundwater at the OFDA or at the Permanent Facilities in Cameroon is required to be performed biannually for general parameters (water level, pH, conductivity, turbidity, temperature and iron), and every 2 years for a wider set of parameters, including metals, organics compounds (TerrAttesT® analytical method), Total Petroleum Hydrocarbons (TPH) and Polinuclear Aromatic Hydrocarbons (PAHs). Groundwater level measurements, collected on a monthly basis, were also provided by the Project. Measured groundwater levels at the Permanent Facilities reflect the fluctuations due to wet and rainy season. Groundwater sampling for general parameters is performed by the Project on a quarterly basis. Collected groundwater samples are tested on-site for general parameters (pH, temperature, conductivity, turbidity and iron), chlorine, sulfates,

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nitrates, nitrites, ammonia, manganese and fecal coliforms. Results relevant to the following sampling rounds performed in 2005 were made available by the Project: • January – March 2005: first round of sampling at the OFDA piezometers and

traditional wells located in Komé, Miandoum and Bolobo; • April – May 2005: second round at OFDA traditional wells; • June 2005: second round at the OFDA piezometers; • July 2005: third round at the OFDA traditional wells • August 2005: third round at the OFDA piezometers; • October 2005: fourth round of sampling at the OFDA traditional wells A site-specific groundwater sampling program was developed by the Project for the monitoring wells at the K223 well site (testing mud management facility). Groundwater samples were collected on a monthly basis and tested on-site for the same set of parameters monitored during the quarterly campaigns at the OFDA wells. Samples collected in October 2005 were also tested for TPH, as per ECMG recommendation. A groundwater characterization study was conducted by an international consultant firm in February 2005 as follows: • Groundwater sampling at OFDA piezometers and testing for general parameters,

TPH and metals; • Groundwater sampling at the K223 and former Komé Base Filling Station (FFS1

and FFS2 wells) sites and testing for general parameters, TPH and extended TerrAttesT® analytical method;

• Groundwater sampling at selected 17 (out of 29 in total) traditional wells and testing for general parameters, TPH and metals.

Chemical testing was performed by an external certified laboratory, while general parameters were tested on-site. This characterization study also included the chemical testing of four surface water sampling point located along Loule, Pende and Nya rivers and the chemical characterization of produced water at the reinjection wells in Miandoum and Komé oil fields. Based on the chemical testing results provided, all groundwater samples analyzed did not show any evidence of impact on the aquifer from Project activities. Particularly, TPHs were reported below the relevant method detection limit in all the collected groundwater samples. A comparison between the TPH testing results from the external laboratory, presented in the February 2005 campaign, and the results from on-site testing conducted by the Project (October 2005) indicated a significant inconsistency among the results. Particularly TPH concentrations ranging between 4.0 and 8.0 ppm (e.g. 4000-8000 µg/L) were reported by the Project through on-site testing, while the analyses performed by the external certified laboratory using gas chromatography showed non-detectable results below their relevant detection limit (100 µg/L). It appears that on-site testing equipment is not sufficiently accurate to provide usable groundwater data.

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Some concentrations above the reference WHO limits for general parameters (specifically nitrates, manganese and iron) were detected at a limited number of samples for some groundwater sampling locations, including both OFDA piezometers and traditional wells. Similarly to 2004 data, pH and turbidity values were found to exceed relevant WHO standards for drinking water quality at several locations. As already indicated, these values are likely due to local groundwater conditions, insufficient purging and/or inadequate design/maintenance of traditional wells (e.g., high suspended solid content with turbidity concentration higher than 1000 NTU at Karkou well). Component # 5 – Groundwater monitoring at the Project’s engineered solid waste landfill sites (KWMF at Komé and PS3 Landfill in Bélabo) Component 5 of WMP provides guidelines and commitments relevant to groundwater monitoring at the project’s engineered landfills. The sampling schedule anticipates one sampling event per year with a set of parameters that includes those monitored during regional or Permanent Facilities groundwater monitoring program. Piezometers located at the KWMF are included in the list of groundwater monitoring points to be sampled within the Component # 4 of WMP. No specific issues were reported for these monitoring points. Results from monitoring wells at PS3 landfill showed non-detectable concentrations of all tested parameters (extended TerrAttesT® analytical method), with the exception of dimethylphthalates (likely due to sample contamination from sampling equipment) and TPHs, which were detected in all samples taken from the four wells in a range from 130 to 330 µg/L. Although these results are indicative of potential contamination of the samples, either from site sources or from erroneous sampling, sample preservation, or decontamination procedures, further recent data were not collected from the PS3 wells. Component # 6 – Monitoring of liquid effluents discharged directly to onshore surface water bodies Most of the Project wastewater effluents derived from sewage treatment systems, as well as stormwater runoff collection systems, are discharged using leach field systems or open drainage ditches. Details concerning monitoring actions implemented for liquid effluents discharged through leach fields are discussed in the Waste Management section of this document. During the November 2005 visit only one potential direct discharge to surface water bodies was identified at the main outlet of the rainy water collection system for the Gathering Station, CTF and PS1 areas in Komé 5. Rain water at the site is managed through a double collection system: • an internal drainage system, provided with safety valves, oily water lift station

(OWLS) and oil water separators, is collecting potentially impacted stormwater runoff from the process facility areas;

• during the rainy season, and only after chemical testing for TPH in the effluent from the OWLS, the treated stormwater is discharged into an external drainage ditch which collects also stormwater from the surrounding unpaved areas and roads.

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The external ditch, which is provided with an interception sliding gate to be used in case of major uncontrolled spill event, is eventually connected to the Loule River. It is noted that, once discharged into the drainage ditch, the treated effluent may infiltrate into the ground before reaching the Loule River. A direct discharge of stormwater coming from the facilities could occur in case of heavy rain event only. According to Component #6 of WMP, a chemical characterization of non-continuously discharged effluents shall be performed prior to discharging the water to the surface water bodies for a set of parameters as listed in the WMP (pH, BOD5, COD, oil and grease, metals, etc.). Currently the Project is testing the effluent from the oily water lift station (OWLS) for the TPH only in order to evaluate the need of an additional oil/water separation through the oil water separator (OWS) system located downstream the main OWLS (if the concentration exceeds the limit of 20 mg/L indicated in the WMP and set by the World Bank Liquid Effluent Criteria). In Cameroon, during the second quarter of 2005, COTCO approved an OWS Monitoring Plan based on which effluent samples from all OWS at Operations facilities will be analyzed twice a year. Available results for TPH from PS2 and PRS OWS are significantly below the relevant limits. Component # 7 – Monitoring of liquid effluents discharged directly from the Floating Storage and Offloading (FSO) Vessel Component 7 of the WMP refers to liquid effluents discharged (e.g., produced water) from the FSO, derived from the on-board Oil-water separator unit. Compliance with MARPOL 73/78 standards for Oil and Grease shall be evaluated before allowing any overboard discharge. COTCO confirmed that no produced water was discharged since April 2004. A Management of Change procedure was initiated by COTCO in 2005 to modify the sampling and analytical procedure as set in the Component # 7, eliminating the provision for a composite sample collected twice a year and allowing for grab samples taken whenever effluent from the FSO OWS is discharged. A thorough assessment of produced water quality and calibration of the Oil Detection Monitoring Equipment (ODME) at the FSO was also conducted, and the available analytical equipment appears to be adequately calibrated. Recommendations: 19.1 Consider amending the existing WMP by adding TPH as a standard parameter

to be tested in selected monitoring points, other than the K223 site, during each groundwater sampling campaign at the OFDA and at Permanent Facilities (repeated recommendation). The selection of groundwater sampling points to be tested for TPH shall be conducted based on their location close to potential sources, such as the CTF and the process units, the injection wells, the gathering stations, and the manifolds.

19.2 Continue to periodically use external certified laboratories for the chemical characterization of collected groundwater samples, particularly for TPH and oil & grease. TPH and oil & grease testing equipment currently available on site seems to be not suitable, in terms of precision and accuracy, for the

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analysis of groundwater samples. Field handling procedures and maximum holding time requirements should be strictly followed.

19.3 In accordance with the requirements of component # 4 of WMP, perform the ‘special’ ongoing sampling event (every 2 years) by testing all the collected groundwater samples for the extended TerrAttesT® set, TPHs and PAHs.

19.4 It appears that COTCO has not assessed yet the source of TPH concentrations, detected in the samples collected from the monitoring wells at PS3 landfill in 2004. It is important to provide evidence that there is not groundwater impact from the presence of the PS3 landfill, testing again for TPH concentrations, and ensuring that sampling and decontamination procedures are adequate and quality control samples are consistently collected during sampling.

19.5 Consider applying the requirements of Component # 6 of WMP for the discharge of the treated rainy water from the CTF/Gathering Station collection system during the rainy season.

19.6 An assessment to determine if additional monitoring wells are needed should be conducted by EEPCI as soon as practical, based on the increased number of oil wells in the OFDA.

20. Waste Management Project Strategy: Waste management as defined in the EMP includes a comprehensive list of activities: education and training; recycling; transport, treatment, storage, disposal, and monitoring of non-hazardous and hazardous wastes; groundwater monitoring at engineered solid waste landfills; sewage collection, treatment and effluent monitoring. Several waste management facilities are currently employed by COTCO and EEPCI/TOTCO to dispose of all the produced wastes both in Cameroon and Chad. The main waste management collection and disposal facility in Chad is represented by the Komé Waste Management Facility (KWMF), which collects both hazardous and non-hazardous wastes generated in the OFDA. A domestic waste incinerator is still present at Komé Base. At Bélabo, COTCO is operating an engineered solid waste landfill for hazardous wastes (HW). A third-party hazardous waste incinerator (BOCOM) is being used by COTCO in Douala to dispose of its incinerable hazardous wastes. Innocuous solid wastes from facilities are disposed of in pits at designated locations, while hazardous wastes generated at the Permanent Facilities are currently stored in dedicated areas and then shipped to the approved hazardous waste treatment facilities (Bélabo landfill or Douala third party incinerator). Observations: Waste Management, Cameroon The ECMG visited the Bélabo Waste Management Facility (WMF) near PS3. The chemical testing of the untreated and treated leachate collected from the PS3 HW cell is conducted by COTCO and the results for both 2004 and 2005 were made available and appear to be compliant with relevant reference limits.

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The Bélabo WMF is currently organized into three main areas: • The hazardous waste temporary storage area, from where all segregated wastes

received from the Permanent Facilities (including the FSO) are sent to the Bélabo HW landfill or to the Douala third party incineration facility;

• The HW landfill; • An innocuous waste dump site, where non-hazardous, non-incinerable wastes

such as cement, debris, non-recyclable plastic and glass, scrap metals and tires, as well as ash from the domestic waste incinerator at PS3 are buried.

The WMF area was found to be properly fenced and guarded. The HW cell was observed to be adequately covered with impervious liners. The innocuous waste dumping site was found to be properly covered with a soil layer which is spread over the buried wastes at the end of the day. Housekeeping at the facility was good. Waste management at PS3 appeared to be adequately conducted. A small domestic waste incinerator is located at the facility and used to dispose of food and domestic incinerable wastes generated at PS3. The HW storage area and used oil storage area are adequately located within a containment basin. The hazardous wastes stored were found to be properly segregated using a double containment with metal barrels and lined containers. The drums were found to be sufficiently labeled. Spill kits and fire extinguishers were available. An OWS collects stormwater from the two areas and from the oil and lubricant storage area. The OWS was inspected and some oil sheen was found in the discharge chamber. Based on EMP requirements and the COTCO Waste Management Implementation and Stewardship Plan, the facility personnel are maintaining monthly records of collected waste quantities. In addition to the disposal of approximately 56.5 tons of hazardous waste at Bélabo landfill, approximately 17.5 tons of hazardous wastes (mainly oily debris and expired carboline products) was sent to the BOCOM facility for incineration up to September 2005. Waste Management, Chad Komé Waste Management Facility (KWMF) At the present time the KWMF represents, together with the municipal waste incinerator at the Komé Base, the waste management collection and disposal facility for the OFDA. The facility is provided with: • A waste segregation area, where collected waste are manually separated for

subsequent disposal or storage; • A waste compaction area; • A municipal waste incinerator; • A hazardous waste incinerator; • A landfarming area, where bioremediation activities of oil contaminated soil at the

OFDA are conducted;

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• A non-hazardous waste disposal cell, where the ash produced by the domestic waste incinerators is disposed of;

• A hazardous waste disposal cell; • Two landfill leachate collection tanks; • Recovered or used oil storage tanks; • Several unpaved storage areas. Records relevant to the amount of waste produced and disposed or recycled at the KWMF have been provided by the Project. According to the documentation available, up to October 2005 approximately 3,800,000 kg of wastes have been received at the KWMF and disposed of as follows: • 40 percent stored in drums or stockpiled; • 30 percent recycled; • 30 percent processed on site. Particularly, a total amount of 1,067,601 kg of municipal waste was incinerated through the two non hazardous waste incinerators located at the KWMF and at Komé Base. The hazardous waste incinerator continues to not be operational due to technical problems. The last batch of hazardous waste incinerated was in November 2004 (approximately 6000 kg of waste liquids, oily rags and spill pillows). At the time of the visit spare parts were still missing. Due to these recurring, unresolved problems, hazardous waste continues to accumulate at the KWMF. Both the non hazardous waste incinerators also experienced technical problems from February to August 2005. Maintenance of the waste processing equipment available at Komé is challenging due to several factors, including unavailability of spare parts, age and size of the two municipal waste incinerators, increased demand with respect to anticipated volumes at the stage of the Project development, inadequate design of some components (especially related to the hazardous waste incinerator). Procurement of spare parts appears also to be extremely slow. The non-hazardous waste cell is currently used to dispose of the ash produced by the municipal waste incinerators. It was reported by the KWMF personnel that, in 2005, the municipal waste incinerator has been also used to incinerate the exhausted sludge produced from the sewage treatment units serving the Komé 5 camp (see also the relevant section on Sewage Treatment Units below). No chemical characterization of the sludge has been reportedly performed before incineration. The hazardous waste cell is currently used to temporarily store the petroleum hydrocarbons contaminated sludge and soil excavated during the remediation and upgrade of K223 Well Testing Mud Management Facility. Chemical characterization of this contaminated material was never performed and its treatment option has not been determined yet. Reportedly, a new hazardous waste cell, twice as big as the existing one, will be constructed at the site.

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The leachate produced by the landfill is collected and temporarily stored at the site into dedicated tanks for subsequent disposal through the K223 injection well. Test performed on leachate in October 2005 were made available by the Project. The following additional observations were made: • As recommended, EEPCI has improved the waste segregation area by providing

adequate roof; • Hazardous and non hazardous wastes, except wood and iron scraps, are stored in

overpacked drums with inadequate or no labeling. The drums were found to be not always properly sealed and several overpack drums were found open;

• Due to inadequate drum labeling, the identification of the waste type contained in each drum is currently possible only based on a general identification sign for each waste stream. However, during the visit, some waste drums were checked and observed to be misplaced.

• The Material Safety Data Sheets (MSDS) are not easily accessible on site and the KWMF personnel seems not to be adequately trained on the use of the MSDS;

• A recycling program is under development, and the Project has initiated a cooperation with a local NGO, EPSO 2000, based in N’Djamena (see section below) to recycle metal scraps and plastic wastes;

• Used oil stored at the site is disposed through injection in the export pipeline. According to the data available 4,600 kg of used oil have been injected in 2005;

• Donation programs to local communities are in place and records relevant to the quantities of waste donated were made available. Overall approximately 1,150,000 kg of wastes, mainly wood, plastic materials and metal scraps, have been donated locally in 2005. Approximately 19,000 kg of food waste have been donated in 2005 to the Komé Atan village.

The ECMG is concerned that the recurrent, unresolved technical problems experienced with the available equipment (incinerators) at the KWMF, in addition to the higher pressure on this facility due to the increased workforce and pace of construction and exploration activities higher than planned at this stage of the Project, may impact the environmental risks related to waste management. Waste handling and safe storage at the KWMF also need improvements. EPSO 2000 – N’Djamena The local NGO EPSO 2000 in N’Djamena has recently received some waste from EEPCI, including 34 bales of crushed plastic. Plastic wastes (mainly used bottles), metal scraps and wood and paper waste are recycled through simple operations in order to generate products such as: • construction bricks for pavements, obtained through a heated mixture of sand and

plastic; • combustible bricks through compaction of papers and wood; • various household objects through the manipulation of glass and metal scraps. According to EPSO 2000, the local demand for these products is relatively high and the EEPCI donations would help to increase their business. It was also reported that IFC is considering to support this small business.

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EEPCI and EPSO 2000 are discussing the possibility to open an office in Bébédjia in order to minimize the road transportation of waste produced in Komé. Although the initiative has potential, the ECMG observed that the current situation in terms of hygiene and occupational safety and health is far from achieving basic standards, and would need strong support and technical assistance from external parties to meet IFC and Project standards. It is also noted that some drums collected from EEPCI operations contained poorly segregated waste, which increases health and safety hazards, and impacts production. Bioremediation of Hydrocarbon-Contaminated Soils at the KWMF The landfarming site is currently treating a mixture of the hydrocarbon-contaminated soil collected from past spills occurred at various Project work sites, and the oily sand collected from the K223 Well Testing Mud Management Facility before its upgrade. The quantity of treated soil is estimated around 300 m3, spread over a 3000 m2

compacted laterite pad (average thickness of spread soil around 10 cm). Based on information available, landfarming has been started in December 2004. In the following 6 months (until June 2005) watering and tilling activities were performed once or twice a week, limiting the watering to 50 to –80 percent of the capacity of the biotreated soil, in order to minimize percolation. Watering was suspended in June at the beginning of the rainy season, while tilling has been continued on a regular basis. In order to monitor the efficiency of the bioremediation process, a soil sampling campaign aimed at collecting representative composite samples from the landfarming area was planned to be performed on a quarterly basis. Due to holding time failures, all the results obtained from the analysis of the samples collected in December 2004, January and March 2005 (12 in total) and shipped to the EMP laboratory in Douala, were not validated. Results from only one round of sampling performed by an external laboratory in June 2005 are therefore available. An average TPH concentration of approximately 5,000 ppm was detected. Further activities to be performed at the site will include the periodical watering and tilling and additional composite samples collection in order to evaluate the efficiency of the biotreatment in accordance with the Project’s Guidelines for Treating Hydrocarbons Contaminated Soil using Bioremediation, which establishes that acceptable soil treatment end-point is reached if: • The cumulative decrease in soil TPH concentration during the latest 2-week

period is less than 10 percent of the cumulative decrease since the treatment began;

• The residual TPH concentration in soil does not pose any threat for human health and the environment.

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Wastewater Management at Permanent Facilities and OFDA Open Drain Systems and Oily Water Treatment Units Permanent Facilities in Cameroon and Chad have open drain systems to collect and treat stormwater potentially contaminated with oily discharges, spills and leaks with Oil-Water Separators (OWSs). The ECMG visited the systems at the Gathering Station, CTF and Pump Station 1 (PS1) areas in Komé 5 and at PS3 in Bélabo. The rainwater at the sites is managed through a double collection system; an internal drainage system, provided with an OWLS, OWS and safety valves, collects potentially impacted stormwater runoff from the process facility areas. An external ditch collects both treated stormwater from the internal drainage system and stormwater from the surrounding unpaved areas and roads, and conveys the collected water outside of the facilities. As recommended in 2004, the OWLS has been provided with a skimmer which collects any oil separated by gravity in the main chamber. Separated oil is collected for subsequent injection in the pipeline. Records relevant to the effluent testing results and volumes disposed at the Komé 5 OWLS in the period between July and October 2005 were provided by EEPCI. A total of approximately 12,800 bbls (~2,035 m3) of treated effluent was disposed through discharge to the external ditch. Effluent was consistently found to be compliant with the maximum 20 mg/L concentration set by the relevant World Bank Liquid Effluent Criteria. Komé Base Mobil Filling Station and Cement Batch Plant As indicated in the ECMG 11th Visit Report, several improvements in terms of management of potentially impacted stormwater have been implemented at the site. Following the installation of the safety and sampling valves downstream the OWS and the replacement of the underground leach field with an open drainage field to allow for direct monitoring of discharged wastewater, a canopy was installed at the site in 2005 as recommended. Oil/water separator inspection forms for the site relevant to the period between August and September 2005 were provided by the Project. Despite some minor observations reported by the EEPCI EMP monitors during their inspections, the facility has been significantly improved since the construction phase and its conditions were found to be adequately managed. TPH testing on the effluent has not been performed in 2005 before discharging the effluent to the open drainage field. Washwater from the cement batch plant, located at Komé Base, and which is currently operating for the significant construction activities still on going in the ODFA and the other fields, did not appear to be adequately managed. Washwater was found to be present in a drainage ditch outside the fence. Standing washwater is a potential risk since it may create a mosquito-breeding site, is highly basic, and may pose a risk to people and livestock.

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Sewage Treatment Units The sewage treatment facility located at Komé 5 camp, consisting of several sedimentation tanks and biological treatment units, was visited. Treated effluent is disposed through a leach field. A drying bed for the exhausted sludge is also present at the site; the dried sludge is sent at the KWMF for disposal, while wastewater collected below the filtering unit of the drying bed is pumped and sent to the treatment units. A similar configuration is operational at PS3 and appeared to be adequately managed and functional. The following observations were made: • Some upgrades were performed by EEPCI in 2005: the treatment units in Komé 5

have been fenced and the drying bed filtering unit improved. Particularly, the drying bed, not used in 2004, was found to be operational;

• Dried sludge is incinerated at KWMF through the municipal waste incinerator (reportedly 9,800 kg in 2005). Differently from what has been reported by COTCO in Cameroon, sludge is not tested by EEPCI before disposal, and the decision to incinerate the sludge is based on its visual inspection. The EMP team did not appear to be sufficiently involved in the selection of the disposal option;

• According to the effluent testing results between August and October 2005, fecal coliforms counts were reported to be “too numerous to count”, although the plant in Komé 5 is oversized in terms of capacity. Similar results were reported for the sewage treatment plants located at Miandoum Gathering Station and Komé Base camp. The sewage treatment systems at the OFDA, therefore, appear not to be able to reduce the bacterial load in the effluents;

• Chlorination was reported to be not effective and has been suspended by TCM (reportedly at the beginning of 2005), seemingly without informing the EMP management. Subsequently, EEPCI confirmed that the rationale provided by TCM for discontinuing chlorination was to promote further biodegradation in leach field, but this was not authorized by EMP management. EEPCI also informed the ECMG that chlorination was again underway and that proper chlorination should allow eliminating the fecal coliforms;

• High quantities of plastic materials dumped in toilets of the camp facilities were reported to impact on the efficiency of the treatment system;

• The leach field area was found to be not fenced. Although temporary barriers have been placed to prevent vehicular traffic from passing over the area, problems may occur in the rainy season when the compaction and drainage capability is weakened.

Management of Drilling Fluids Well pad closeout audit forms prepared by the Esso Rig Supervisors relevant to the well pads drilled in July, September and October 2005 were provided to the ECMG. All the tests performed on the drilling mud were reported to be compliant with the 3,000 ppm maximum allowable concentration for chloride. K223 Well Testing Mud Management Facility The K223 well testing mud management facility collects the first surge oily sand from OFDA wells. Once dried into an open pit, the sand is collected and sent to the KWMF for treatment and disposal, while the oily water recovered is pumped and stored into several tanks, before being reinjected through the injection well at a depth of approximately 1600 m below ground surface.

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During the December 2004 visit, an issue was raised by the ECMG due to the inadequacy of the single lined containment at the storage pit, where the oily mud is stored (washout pit). The need of a site-specific groundwater monitoring program that includes TPH as a standard parameter was also addressed. The facility has been upgraded in March 2005 as follows: • The former washout pit for temporary storage and sedimentation of drilling fluid

has been removed; • Impacted subsoil has been excavated below the former liner and transported to the

KWMF for storage and disposal. No chemical testing is available for the impacted soil, which is currently stored in the HW cell. Applicable remedial options have not been screened yet by EEPCI;

• A new coated concrete permanent washout pit has been installed. • Groundwater samples have been collected from the three piezometers installed at

the site (one up gradient and two down gradient) and tested for TPHs, which were never detected above the relevant Method Detection Limit (MDL) in all the collected samples.

Recommendations: 20.1 COTCO should consider to roof used waste oil storage area at PS3, to reduce

the load on the oil water separator. 20.2 EEPCI should consider to develop and implement an OWS Monitoring Plan,

similar to what developed by COTCO. 20.3 Waste segregation, containment and labeling at the KWMF should be

significantly improved, giving priority to hazardous waste, to comply with the EMP requirements.

20.4 The KWMF hazardous waste incinerator should be urgently repaired and made consistently operational, or alternative and compliant options for hazardous waste disposal should be urgently identified and implemented by EEPCI.

20.5 EEPCI, together with IFC, should consider developing a work plan and budget to bring EPSO 2000 into compliance with basic health and safety requirements. In addition EPSO 2000 should be supported to conduct a demand analysis for these products in Bébédjia.

20.6 Sample effluent and test them for TPH from the Komé Base Filling Station OWS before discharging treated rainwater to the drainage field in order to check the treatment system efficiency.

20.7 Adequately collect the cement batch plant washwater in Komé Base and prevent it from flowing outside the facility.

20.8 The existing sewage treatment systems installed at the OFDA facilities need to be adequately managed, upgraded or to be replaced, in order to effectively treat the bacterial load (fecal coliforms) in their effluents and comply with relevant criteria.

20.9 Implement specific environmental training/toolboxes for the OFDA personnel on the use of the camp facilities and to limit inadequate practice that impacts on the efficiency of the sewage treatment units.

20.10 Dried sludge from sewage treatment is currently disposed of through incineration and non-hazardous landfill disposal of ash. Alternative disposal options, such as landspreading or composting, should be evaluated, following

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an adequate chemical characterization, in order to reduce the load to be incinerated and disposed of at KWMF.

20.11 Fencing at the leach field area should be installed in order prevent third party access.

20.12 Appropriate remedial options for the impacted soil and sludge excavated during upgrade and clean up of K223 site should be screened and selected.

21. Oil Spill Prevention and Response Project Strategy: The EMP contains requirements for responding to fuel spills and mitigating the environmental impact of such spills. Area-Specific Oil Spill Response Plans (ASOSRPs) were developed by the Project in accordance with the EMP for each defined Project area and spill response teams in Chad and Cameroon are available on site and operational.

Observations: The ECMG visited the Oil Spill Prevention Equipment storage area in Komé 5. The equipment available appears to be adequate and oil spill response drills and personnel training sessions are periodically performed both at the OFDA and along the ROW. During the site visit, the oil spill response equipment deployed along the rainwater collection ditch at the CTF was also inspected. The external drainage ditch, which conveys stormwater from facility areas to the Loulé River, has been provided with a floating absorbent boom and an interception sliding gate which can be closed in case of a spill event. The list of reportable spills (e.g. greater than one barrel) occurred at the OFDA in 2005 was also provided. Only one reportable spill event is listed: in March 2005 a total of approximately 480 liters of crude oil spilled from a valve of the K-324 oil well. According to the record provided approximately 400 liters of crude oil were recovered. A close out report was emitted on March 17, 2005. EEPCI provided a copy of the draft Revision 2 of the OFDA ASOSRP. The final version of this revised Plan is expected for the second quarter of 2006. Based on ECMG review, the draft Plan does not include the additional tactical control points identified in 2004 by EEPCI, following a specific recommendation to improve the effectiveness and level of details presented in the ASOSRP. Reportedly, the revised OFDA ASOSRP will also include the Moundouli oil field. Recommendations: 21.1 Ensure that the revised OFDA ASOSRP will include, as a minimum, the

additional spill control points identified in 2004. However, EEPCI should consider to continue updating the number of spill control points, taking into consideration the increased number of oil wells and flowlines, due to the on going infilling program.

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22. Land Resource Protection Project Strategy: EMP requirements relevant to the Operations phase include a continuous monitoring process of the land resources exploited by the Project. Specific design features should be implemented to address the use of lands already impacted by human activities in terms of locating Project infrastructure and oil production facilities. Interference with former land users to resume their activities on the Transportation System's land easement should be monitored as well. Project requirements have been generated to limit soil-related impacts, including management of construction and road maintenance material extraction sites, and land clearing, as well as to control and mitigate erosion and to reclaim lands disturbed by the Project along the pipeline ROW, at the OFDA and at temporary facilities. Observations: Site Reclamation and Closure Observations relevant to Project land use and return of land use rights in the OFDA, conditions of temporary facilities in Cameroon, oil well pad reclamation, and erosion control and mitigation along the ROW are discussed in Sections 8, 14, 16 and 25. OFDA Borrow Pit Management The ECMG visit was focused on the aggregate extraction sites located in the OFDA. EEPCI provided an updated summary table of the borrow pits status at the OFDA, which includes information relevant to the total surface, the surface to be restored and land restoration and return percentages. An assessment of the borrow pit conditions is currently being conducted by the EEPCI EMP team. Based on the available inventory, the number of borrow pits opened in the OFDA by the Project is 43, of which: • the borrow pits in use are 10, and • the borrow pits not reinstated and not in use are 19. Therefore, more than 65 percent of the opened borrow pits since the beginning of the Project is still to be reinstated. The size of the borrow pits varies, but 10 of those that are not reinstated are larger than 100,000 m2 and reach up to 500,000 m2 (e.g, KBP1, KBP4, KBP9, MBP8/16). Some borrow pits were opened in 2001 and have never been reinstated. Inconsistencies were still found in the current database, as also observed during the 2004 visit: borrow pits (e.g., Doba Sand Pit 4) reported as reinstated in the database were found not to be reinstated. The ECMG also observed that there are extraction sites, which were reinstated by a contractor and, subsequently, re-opened by another contractor. Sites with multiple extension requests approved by the Project were also observed (e.g., KBP6, located in the vicinity of Bero I village, was opened in 2002, never fully reinstated, reopened in 2004 and had two extensions in 2005 approved by the EMP organization). Environmental Baseline Assessments (EBAs), relevant to new borrow pits or to subsequent expansions of operational extraction sites, were made available and appear to be improving since the previous visit.

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The ECMG notes that in 2004 the Project indicated that a borrow pit reclamation plan for the OFDA was available to be implemented. The ECMG’s observation is, however, that borrow pit management in the OFDA is not compliant with the EMP footprint minimization principle. As already indicated in Section 16 of this report, some unattended open borrow pits with standing water were also found, which represent a community safety hazard. Recommendations: 22.1 EEPCI should develop, consistently implement and monitor a borrow pit

reinstatement plan, including a timeline, for the existing, not used borrow pits. 22.2 EEPCI should require and approve a reinstatement plan and timeline before

any additional permit to exploit an extraction site is given. 22.3 EEPCI personnel and OFDA contractors should be fully aware of the actual

status of the land reclamation at each OFDA borrow pit to minimize impacts on reclaimed pits.

22.4 EEPCI should continue to improve the EBAs for all the new sites, particularly the new extraction sites, in order to ensure an acceptable standard with senior supervision and review.

23. Air Quality Protection Project Strategy: Air quality protection commitments relevant to the permanent facilities in Cameroon and Chad are provided by the EMP and by the Schedule 17 of the Credit Coordination Agreement, which indicate the following routine monitoring activities to be performed starting from the Project Physical Completion Date (fixed at 28 October 2004 by the Project): • Stack emission monitoring campaign for sulfur dioxide, nitrogen oxides and

particulates once every third year; • Update of the air dispersion modeling of emissions from the Central Treating

Facility on a yearly basis; • A quarterly monitoring program of ambient air quality for sulfur dioxide and

particulates by the mobile Ambient Air Quality Monitoring units available in Chad and Cameroon;

• A continuous monitoring program of ambient air quality for nitrogen oxides by the by the mobile Ambient Air Quality Monitoring units.

Both stack emission and ambient air quality testing results need to be compliant with the limits for nitrogen oxides, sulfur dioxide and particulate matter (<10 µm) [PM10] specified in Schedule 17. If a non-compliance with the applicable limits is detected, the stack emission monitoring shall be performed on an annual basis until the non-compliance is detected. Observations: Source Emission Test Program A source emission test report was prepared by a specialized consultant between May and July 2004. All the tested emissions were found to be in compliance with the

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requirements set by the Schedule 17 of the Credit Coordination Agreement. No additional test is scheduled to be performed in 2005. CTF Air Dispersion Modeling Update An update of the air dispersion model relevant to the Chad and Cameroon permanent facilities will be started in November 2005. The model will incorporate the stack emission testing results from the June 2004 campaign and will provide maps showing the maximum predicted concentrations of pollutants at the ground level. These maps should be used by EEPCI and COTCO in order to properly locate the air monitoring trailers during the ambient air monitoring campaigns. Flaring Large amount of natural gas associated with the produced crude oil are still recovered at the OFDA: the gas is partially used to supply the OFDA power plant, and partially flared. Updated data relevant to the amount of natural gas flared in 2005 were provided. Based on the data available, the following observations are made: • Flare volumes are reported at 1.4 mscf/day versus a predicted estimate of 1.1

mscf/day. The prediction of a significant reduction of the volume of natural gas recovered by May 2005, as reported in the reservoir studies conducted in 2004, was found to be incorrect.

• It is likely that the volumes of recovered gas will not decrease in the immediate future, taking also into account the on going infilling activities and development of other fields.

• Reportedly, flare volumes are currently driven by the increase in low pressure gas from the Bolobo development. Some mitigation initiatives to reduce flare volumes are still under study, but no action has been implemented yet. Preliminary observations made were not conclusive.

It is an EMP commitment to minimize flaring and maximize recovery and utilization (as fuel) of natural gas associated with produced crude oil (EMP, Chad Portion, Volume 1, Chapter 2). Ambient Air Quality at Permanent Facilities in Cameroon Ambient air quality monitoring was conducted at both PS2 and PS3 locations. The available results show concentrations within the applicable and relevant limits for all measured parameters. Ambient Air Quality at the OFDA, Chad Reports relevant to the air quality monitoring performed at the OFDA during the first, second and third quarter of 2005 were provided to the ECMG. With reference to the ambient air quality limits for onshore project facilities, as set in Schedule 17 of the Credit Coordination Agreement, the annual arithmetic mean concentration of PM10 exceeded the relevant limit (71.2 µg/m3 vs. 50 µg/m3). Based on the documentation provided the following observations are made: • During the sampling campaigns, the air monitoring trailer was positioned inside

the fenced CTF area, instead of being located in proximity of the predicted

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maximum concentrations of pollutants at the ground level as derived from the latest air dispersion model available. Based on Section 1.0 of Schedule 17, the maximum concentrations are to be measured outside the property boundary of Project facilities. Although EEPCI stated that this decision was taken to guarantee a secure location for the trailer, the locations where concentrations were measured do not comply with Project requirements.

• No test for sulfur dioxide has been performed in 2005. The decision was taken by the EEPCI EMP management since the hazardous waste was not operational at the time of the sampling events. It is not possible to assess compliance with the Schedule 17 commitments relevant to the sulfur dioxide concentration in the ambient air at the OFDA.

• Based on the data interpretation provided by EEPCI, the non-compliant annual average concentration detected for PM10 is due to sand/dust storms occurred during measurements. The ECMG is concerned that the dust produced by the significant Project traffic along the OFDA roads did affect the measurements, confirming that the dust control is a priority issue to be addressed (Section 17 of this report).

Recommendations: 23.1 Flaring reduction study should be finalized in order to implement appropriate

flaring minimization measures, as per EMP commitments. 23.2 Sulfur dioxide should be reintroduced as a standard ambient air quality

parameter to be monitored on a quarterly basis from the next planned sampling round, as per EMP and environmental commitments.

23.3 Ambient air monitoring should be performed at the KWMF, as per EMP and environmental commitments.

23.4 Monitoring locations for the upcoming quarterly ambient air monitoring campaigns should be selected in order to measure representative maximum concentrations according to the updated air dispersion modeling results, outside the property boundary of Project facilities. If security constraints occur, continuous surveillance of the monitoring trailer should be arranged in order to collect at least one consecutive 24-hours set of measurements.

23.5 The impact of dust generated by heavy Project traffic along OFDA should be quantitatively measured in terms of PM10 concentrations by EEPCI in order to provide a baseline to assess the effectiveness of the dust mitigation measures.

24. Environmental Testing Facility and Management in the OFDA Observations: Following the data review relevant to both soil and waste water samples collected in 2005 for chemical testing, the ECMG observed that some problems with sample management and equipment available have been experienced by the EMP team. Specifically the results relevant to soil samples collected at the injection well K223 site following the excavation of the impacted subsoil performed during the upgrade of the facility were not validated due to holding time failure. Also, effluent wastewater testing for Total Petroleum Hydrocarbons (TPH) at the Mobil filling station in Komé Base was reportedly not performed due to technical problems with the TPH analyzer.

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According to the EMP personnel the EMP and the Central Treatment Facility (CTF) laboratories will be merged soon. This process should improve the capability of the EMP organization to perform a wider set of chemical testing due to availability of CTF laboratory equipment. Recommendations: 24.1 The EMP team should be involved in the design, management and activities of

the common laboratory facility in Komé. 24.2 Adequate segregation of fuel and environmental testing activities in terms of

laboratory equipment and sample management should be assured in order to avoid any potential cross contamination.

24.3 Because groundwater quality monitoring is a major component for the evaluation of potential environmental liabilities of the Project, the EMP organization should continue to use external certified laboratories for chemical testing of groundwater samples.

25. Erosion Control Management Project Strategy: Based on EMP requirements concerning erosion control management and following the implementation of the Erosion Control Monitoring and Maintenance Plan (Appendix H in the COTCO Operations ROW Plan [April 2004] and Appendix I in the TOTCO/EEPCI Operations ROW Plan [July 2004]), both monthly aerial surveillance and routine ground monitoring inspections of the ROW are conducted by the Project in both Cameroon and Chad. In particular, post-wet season erosion control monitoring is conducted by the Project that identifies corrective actions to be undertaken along the easement. Based on these surveys, erosion and sediment control measures for the entire length of the pipeline easement are being implemented or maintained by maintenance crews. The monthly aerial surveillance and routine ground monitoring inspections are conducted by COTCO and TOTCO/EEPCI EMP staff. In Cameroon, where erosion is more likely to be problematic, data collected during aerial surveillance and ground monitoring inspections are stored in the ‘COTCO Monitoring Database’. This database contains information related to erosion control and management, induced access management, and revegetation of the ROW. Follow-up corrective actions are specified, and the database is updated regularly. A status column shows if issues are open, closed, or being managed. This ‘action tracking system’ approach allows the Project to follow through on new and existing observations along the ROW. In Chad, information is also compiled by TOTCO/EEPCI staff. Observations: The ECMG visited several areas along the ROW for erosion control management. In Southern Cameroon (Maintenance Area [MA] 4; former Spread 2 during pipeline construction), riverbanks at Kienke River (KP 1066), Lokoundje River (KP 1010), and Mougue River (KP 997) appeared well stabilized with dense vegetation including woody species, and a predominance of pioneer species, such as Musanga. These river crossings are all defined as major river crossings in the Project EMP. Riprap, which was used to stabilize the riverbanks as part of reinstatement activities, is almost completely covered with sediment and vegetation regrowth.

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The ECMG also visited the Mbikiliki hills (in the vicinity of KP 990), which is one of the steepest areas in MA-4 where erosion problems had been observed in the past just after ROW reinstatement (aerial surveillance database output). Although, some patches of bare soil (laterite) were observed in this area, erosion berms are in place, and, in general, the slope appears stable with significant vegetation regrowth. The largest problem area for erosion control in Cameroon since the onset of Project activities has been the Mbere Rift Escarpment located at KP 255 (i.e., ‘the Big W’) in MA-2. In 2004, and as mentioned in the ECMG’s 1st Site Visit Post-Project Completion Report, the Project had decided to take a passive approach to erosion control in this sensitive area. Although significant erosion control measures were implemented as part of the initial reinstatement of this section of the ROW, maintenance and upgrade of erosion prevention and control measures was not on-going in the Operations phase. Upon the ECMG’s visit, the escarpment area showed serious gully erosion on several of its slopes, and some fiber optic exposures have been reported since the 2005 rainy season. Several erosion control measures have failed in this area (e.g., broken diversion dykes and gabions, torn and ineffective sandbags), and revegetation is minimal. In recent months, the Project has decided to take a proactive approach by producing the ‘Big W Erosion Repairs and Maintenance Proposals’, a draft document that proposes a three-year plan to both repair incurred erosion damage and prevent further erosion on these steep slopes. COTCO reported that the plan, which specifies erosion control measures such as the construction of diversion dikes, gabions and erosion blankets, back-filling and seeding for each of the six hills of the escarpment area, will be reviewed and implemented with a Cameroonian specialized consultant. Revegetation measures will be outlined in the EMP Revegetation Plan, which is a separate document that will elaborate revegetation techniques for the greater Mbere Rift Valley area. In the escarpment area, which is difficult to access, seeding will be performed manually. Also in Cameroon, some erosion problems were noted in some construction temporary facilities. This topic is covered under Section 14 of this report. In Chad, erosion was not noted to be a problem along the ROW. COTCO indicated that a new photographic device is available to facilitate aerial surveillance, as recommended. However, COTCO reported that the Government has not approved its use yet, and therefore, the device is still not being operational. Recommendations: 25.1 In Cameroon, implement the ‘Big W Erosion Repairs and Maintenance

Proposals’ as soon as possible with the local consultant. 25.2 The Project should consider the participation of villagers in revegetation and

erosion control activities as much as possible. 25.3 If the photographic device is available, the Project should seek to expedite the

approval of this piece of equipment by the Government to upgrade aerial surveillance methods along the ROW.

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26. Revegetation Project Strategy: The Project’s strategy to monitor revegetation of the ROW during the Operations phase is covered under several different sections of both the COTCO and TOTCO/EEPCI ROW Plan. For example, for Cameroon, the Erosion Control Monitoring and Maintenance Plan (Appendix H), the Induced Access Management Area Plan (Appendix N), and the ROW Maintenance Activities within Wetlands and Waterbodies (Appendix L) cover aspects of revegetation and can be found in the COTCO ROW Plan (April 2004). For Chad, the Erosion Control Monitoring and Maintenance Plan (Appendix I) and the ROW Maintenance Activities within Wetlands and Waterbodies (Appendix K) cover certain aspects of revegetation and can be found in the EEPCI/TOTCO ROW Plan (July 2004). Revegetation monitoring along the ROW was also supposed to take place as part of the Chromoleana Monitoring Plan (Appendix J in the COTCO ROW Plan) and the COTCO ROW Revegetation Plan for Northern Cameroon (July 2004), although the Project has changed their approach with respect to the objectives described in these documents, as discussed below. As described in Section 25 of this report for erosion control, revegetation along the ROW is monitored as part of quarterly aerial surveillance and routine ground monitoring inspections. Data collected along the entirety of the pipeline easement are compiled by COTCO and TOTCO/EEPCI EMP personnel as previously described in Section 25 of this report. For ROW maintenance, Operations maintenance personnel hire local contractors, who in turn hire local village (unskilled) workers, to cut the ROW vegetation growth to knee-height once a year. These activities reportedly take place just after the rainy season; in the first year (2004), vegetation was cut along the 10-meter system easement, and in the second year (2005), vegetation was cut just within a 2-meter strip immediately over the centerline. CROs in Cameroon and LCCs in Chad work with the contractor to assist with the hiring of local villagers and to ensure that they are hired according to EMP standards. Revegetation of former Project access roads and temporary facilities (e.g., worker’s camps and storage yards) was covered as part of the Project’s initial reinstatement measures (i.e., scarification and top soil replacement) that were carried out at the end of the Constructions phase. Observations: In Cameroon, the ECMG visited sections of the ROW between Kribi and Lolodorf (MA-4), Nanga Eboko and Belabo (MA-3), and near the Mbere Rift Valley (MA-2). Sites visited between Kribi and Lolodorf showed significant vegetation regrowth with good encroachment of woody pioneer species and shrubs well established. Between Nanga Eboko and Belabo, revegetation of grasses and shrubs is substantial, but in some areas thickets of invasive shrubs (Chromoleana odorata) completely dominate, with little or no accompanying encroachment of woody tree species. Two years after initial reinstatement measures in this area, patchy areas of bare soil, due to highly lateritic soil and minimal topsoil, are still present. Revegetation of the ROW near the Mbere Rift Valley, known to be one of the most difficult areas to reinstate in

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Cameroon, has improved since the ECMG’s December 2004 visit. Sites visited by the ECMG showed good regrowth of a variety grasses, shrubs and scattered woody tree species; grass cover was observed to be patchily distributed. Patches of invasive shrubs (C. odorata) were observed and appear to have spread in this area since the Operations phase. The presence of this plant, identified by COTCO EMP monitors, differs from previous assessments made two years ago by a Project’s specialist consultant, who concluded, just after initial reinstatement measures, that these invasive shrubs would not typically extend this far north. The plant appears to be establishing itself well, although its behavior as an invasive species is not fully understood in this climate. As mentioned above, COTCO had originally established a Chromoleana Monitoring Plan after the ECMG had raised the concern regarding the revegetation of the pipeline ROW with this invasive species. Upon the ECMG’s recommendation, the plan had defined a two-fold monitoring approach to determine 1) if this species was spreading north of Lom River, an area previously reported by the Project to be absent of C. odorata, and 2) if this species appeared to be inhibiting the regrowth of native pioneer trees species in the area between Nanga Eboko and Belabo, one of the most sensitive areas along the pipeline ROW with a recorded presence of gorilla and chimpanzees and with an historical presence of logging and poaching activities. As noted above, COTCO had reported that C. odorata was being identified north of Lom River, and even as far north as the Mbere Rift Valley area, although COTCO was no longer keeping tract of the replacement of C. odorata by other native species in the sensitive area between Nanga Eboko and Belabo. As also mentioned above, COTCO had developed a ROW Revegetation Plan for Northern Cameroon, which had taken an experimental approach to assess the extent of revegetation in northern Cameroon. Within ‘Areas of Concern’ (barren or poorly revegetated sections of the ROW), pilot-scale plots were to be treated using a variety of combinations of revegetation techniques (e.g., tilling, seeding, fertilizing). Although some action had been taken in late 2004 and early 2005, since then COTCO has abandoned the idea in favor of designing a three-year EMP Revegetation Plan for the Mbere Rift Valley area of the ROW. The new Revegetation Plan is still in the initial phases of development, but will consist of hydroseeding, manual seeding, and local species seed collection. The plan will accompany the ‘Big W Erosion Repairs and Maintenance Plan’ and will be implemented by the selected local consultant. Immediately proceeding the 2005 rainy season, the COTCO EMP was testing hydroseeding in certain sections of the ROW in the Mbere Rift Valley area, including some sections of the escarpment. Hydroseeding testing areas visited by the ECMG showed significant regrowth of grass cover, but overall efficiency of this method is to be determined with more time. COTCO had communicated to the ECMG that in areas inaccessible by vehicle, seeding should be performed manually with the assistance of locally hired villagers. Sections of the ROW visited between Mbere River and Komé in Chad showed considerable revegetation given the arid climate of this region. The ROW showed good ground cover of tall grasses with some encroachment of shrubs. Maintenance activities were on going, through locally hired maintenance crews.

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Recommendations: 26.1 For the area between Nanga Eboko and Belabo, the following is

recommended: • In areas where topsoil is poor and lateritic soil is exposed on surface, the

Project should work with a biorestoration specialist to perform an assessment on the success and rate of establishment of woody tree species especially where invasive shrubs have formed dense thickets.

• A restoration plan that considers seeding and seedling transplantation for these problem areas should be defined.

26.2 For the Mbere Rift Valley Area, the following is recommended: • The Revegetation Plan should be drafted as soon as possible in

cooperation with the local consultant. • It is recommended that COTCO not lose the spirit of the originally defined

ROW Revegetation Plan for Northern Cameroon. Although pilot scale plots will no longer be used, the Project should define a mechanism to track and assess the progress and success of the revegetation techniques applied in this area (e.g., hydroseeding versus manual seeding, duration of hydro-seeded grass cover over time, encroachment of woody species, presence of invasive shrubs, etc.).

• As part of the Revegetation Plan, in areas on the ROW where invasive shrubs (C. odorata) appear to be increasing in density such as those observed by the ECMG at KP 274, COTCO should define a strategy to replace these shrubs by selective removal and transplantation or seeding of native species.

• COTCO should support and favor the participation of local villagers in revegetation activities as much as possible.

• COTCO (and TOTCO) should evaluate the capacity and define a strategy for sustainable seed collection of native species to be used as part of revegetation activities in this area.

27. Induced Access Management Project Strategy: In accordance with the EMP, the Induced Access Management Plan (IAMP), designed specifically for the Constructions Phase, was updated for the Operations phase, and included as part of the COTCO’s ROW Plan (April 2004, Appendix N). The updated Plan, now referred to as the COTCO Induced Access Management Area Plan (IAMA Plan), was developed to “…continue to assess the effectiveness of access inhibition measures implemented immediately following pipeline construction and… …document the modifications made to the IAMA control measures in the initial period of the Operations phase.” The monitoring schedule for the induced access management areas (IAMAs) is similar to what was described in Sections 25 and 26 in this report for erosion and revegetation monitoring. Aerial surveillance and verification ground monitoring are performed monthly and a comprehensive ground survey of the induced access management areas and access roads is performed quarterly. Results from induced access monitoring are logged in the COTCO Monitoring Database and incidents are tracked through time until the issue is considered closed.

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Ground monitoring is jointly performed by EMP monitors and CPSP field inspectors. When an illegal activity such as logging or poaching is recorded on the ROW or on the access roads, the formal procedure is to send a letter to CPSP headquarters in Yaoundé, informing the Government of the incident and requesting their intervention on the issue. Observations: During the site visit, the ECMG visited several access roads and ROW sections in the induced access management areas of Nanga Eboko to Belabo and the Mbere Rift Valley area. The EMP team reported that, due to requests from villagers, they had decided to leave some access road gates permanently open in the Nanga Eboko to Belabo area (access roads KP 693, KP 687, and KP 656). The EMP team has observed commercial logging activities along the access roads in this area since the beginning of the Operations phase. Poaching was also occurring in this area (monitors recorded the presence of snares and cartridges), but this is reported to have somewhat decreased since initial observations made at the onset of the Operations phase. During the site visit, the ECMG observed evidence of recent commercial, large-scale logging in two distinct locations on Access Road KP 687. At one of these sites, loggers appeared to be reopening a Project access to the ROW that had previously been reinstated (KP 685/684). It has been reported that loggers are also using the ROW for the storage and stockpiling of planks as well as for access in other areas between Nanga Eboko and Lom River. In the Mbere Rift Valley area, access by third parties does not appear to be problematic. Instead, there have been some repeated unauthorized access problems with Operations personnel who have been driving through a schoolyard to avoid opening a gate at one access point. The Project had issued a non-compliance for this finding, and the problem appears to be resolved as the access through the school yard finally has been blocked. Two Management of Changes have recently been approved by the Project to re-open two additional access roads in this area that previously had been reinstated at the end of the Constructions phase. One of the roads (KP 257) will be used for maintenance access to the escarpment area, and the other (KP 232) will be used as an emergency exit for PS2. Gates have been installed at both roads. It was reported to the ECMG that there is better field coordination between the EMP and CPSP monitors for induced access management issues; however, CPSP headquarters have provided little or no formal feedback to letters submitted by COTCO regarding commercial logging activities or other illegal activities occurring along the ROW or access roads. COTCO indicated that when illegal activities are found along the ROW and access roads, the EMP and CPSP monitors are sometimes more successful at resolving the problem directly in the field rather than routing the complaint through the Government to obtain follow-up action. Recommendations: 27.1 The Nanga Eboko to Belabo induced access management area is one of the

most sensitive zones traversed by the Project ROW with known presence of nearby gorilla and chimpanzee habitat. This area suffers from poaching, logging, and invasive species encroachment along the ROW. In order to prevent this area from degenerating further, COTCO should strengthen its

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approach in the field in order to manage the cumulative impacts to this area. The following is recommended: • The gate at Access Road KP 687 should be left closed. The ECMG had

not observed sufficient reason why there is a need to keep it open, since the road appears not to be used for vehicular access as a large (old) log was found across the road soon after the open gate. Considering the scale and extent of logging in this area, COTCO should take all precautions necessary to discourage this type of activity, especially in light of the fact that loggers appear to be creating throughways to the ROW, using Project reinstated access roads.

• The gate at Access Road KP 656 should be moved so that it still can block entrance to the access road, but leave the trail, that junctions the access road, free for villagers to reach their farms.

• In order to provide incentive to the villagers to protect these forests, COTCO should consider supporting a Community Forest program in this area to raise the community’s interest in forest protection. This approach was done for the Lom River area by the Project, and could also be successful here.

• All and any related logging activities especially on the ROW itself should be strongly discouraged as best as possible in coordination with the Government.

• Field data should be analyzed and graphs should be included in Project quarterly reports that show cumulative trends of logging and signs of poaching/hunting along the ROW since the Operations phase.

27.2 Since the beginning of the Operations Phase, the Management of Change process has been used on numerous occasions to re-open access roads in the IAMAs that were reinstated at the end of the Construction phase and originally supposed to be left closed according to the EMP. The ECMG understands the needs for the two new accesses re-opened in the Mbere Rift Valley area, but the number of roads re-opened by the Project in EMP-defined induced access management areas is significant and represents an important change from the conditions established at the end of the Construction phase, where all the access roads were reinstated. Taking into consideration the difficult management of currently open accesses and the commitment to mitigate potential impacts in terms of increased poaching, logging or agricultural exploitation of these sensitive habitats, re-opening of additional roads is not advised in any of the induced access management areas.

28. Environmental Foundation Objectives and Responsibilities: As indicated in Section 7, “Impacts and Mitigation Measures”, of the Executive Summary and Update of the Environmental Assessment for the Chad Export Project, the Environmental Foundation (Foundation for Environment and Development in Cameroon [FEDEC]) is listed among the project’s plans for mitigating the potential impacts that cannot be avoided.

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The mitigations include the following: Development of the Indigenous People Plan (IPP) and its funding over a 28 year

period by a $600,000 contribution by COTCO; Offsite Environmental Enhancement Program (OEEP) for the two national parks

of Campo Ma’an and Mbam Djerem (additional $2,900,000 contribution by COTCO).

The EMP for Cameroon provides in Volume 4 details on FEDEC’s role, responsibilities and operation procedures, as well as COTCO’s capital contribution to FEDEC. FEDEC has the goal of providing long-term financial support for ecological conservation and enhancement programs in two newly established National Parks and for Bagyeli/Bakola (Pygmy) development programs. Observations: Foundation Although the COTCO financial contribution is clearly stated in the EMP and was timely made available, significant difficulties in FEDEC management and for the implementation of the two programs (IPP and OEEP) were observed by the ECMG and pose a risk to the actual effectiveness of the planned mitigations. FEDEC is the tool and approach devised by the Project to meet the Bank’s Operational Policies related to Natural Habitats (OP 4.04) and Indigenous Peoples (OP 4.20). If FEDEC is not effective in reaching the objectives and principles stated in the EMP, the Project is at risk of not meeting the relevant Bank’s Operational Policies. FEDEC is active since 3.5 years (from May 2002) and the ECMG has discussed the recurrent difficulties in the previous monitoring reports. However, during the November 2005 visit, a number of critical observations, that need a careful consideration by the Consortium and evaluation of a corrective action plan, was made: No additional funds have been raised by FEDEC as of November 2005. This was

an important aspect discussed in the EMP, and that was expected to contribute for the self-sustainability of this mitigation measure. To ECMG’s knowledge, no new contact with potential support/donor institution was developed during the last twelve months.

IPP: The 4 short-term actions (ID cards & citizenship, health, education, agriculture), which achieved important results up to April 2005, were found not to continue in the field since then, with serious adverse effects on the IPP and pygmy communities, although some funds were reportedly available in FEDEC. This is particularly critical, also taking into consideration that, despite there are periodic monitoring mechanisms that are supposed to be in place (by FEDEC itself, the Government, COTCO and the World Bank), the situation became apparent to all parties only during the joint ECMG/IFC mission in November 2005.

Campo-Ma’an Park: Financial constraints were pointed out by the implementing organization (World Wildlife Fund [WWF]), but an additional issue appears to be limited capacity of the parties to prioritize their actions, taking into consideration the limited budget available. As of September 2005, payment of salaries to the 25 eco-guards had 5 months arrears. This situation has had negative effects on

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poaching control. Although the situation has been recently corrected, it was due to late payment by FEDEC to WWF.

Mbam-Djérem Park: Financial constraints were pointed out by the implementing organization (Wildlife Conservation Society [WCS]), and negative effects on poaching control were also reported. The delay for the preparation and implementation of the management plan is another significant issue.

FEDEC financial constraints in terms of limited annual budget are also negatively impacted by the trend of the US Dollar exchange rate versus the Franc CFA in the past few years. This has had a serious impact on budget and action plan for 2005 and needs to be evaluated by the Consortium.

There is no evidence of improvements in cooperation between FEDEC and Cameroonian Government (CPSP), despite the Government involvement in the Management Board. This factor is also impacting the actual effectiveness of the mitigation. New difficulties in terms of effective relations were also reported with the recent split of responsibilities (formerly centralized in MINEF) between MINEP and MINFOF.

The next meeting of the FEDEC Management Board is scheduled for early December 2005. During this meeting, as reported by the Board chair person, important decisions should be taken, including budget constraints and priorities, managerial and accounting issues, replacement of one Board member. The FEDEC new Administrator has been in place since May 2005 (the former Administrator left in September 2004). Field observations and findings on the three ongoing Programs are detailed below. IPP program It was reported that the Community Development Facilitator (CDF) has stopped his field work since April 2005, at the end of his three year contract funded by COTCO. Since then, the CDF salary has been paid on FEDEC budget, but it apparently does not include provisions to cover the costs and expenses for field work. Although, as shown in the CDF report covering period May 2002 to April 2005, the four short-term actions (ID cards & Citizenship, health, education, agriculture) presented significant results up to April 2005, the current situation is that all the components have not progressed and relevant assistance has been stopped or significantly impaired. Specifically:

(1) Citizenship activity has stopped. Until April 2005 a total of 772 identity cards

was delivered to adult citizens of the Bagyeli/Bakola communities in the areas surrounding Bipindi, Lolodorf and Kribi. This activity was supported in the field by COE (Centre d’Orientation Educative, an Italian NGO specialized in education and integration) and receives financial support from the Embassy of Canada in addition to the one provided by FEDEC. Accomplishments over the period also included support to communities for the registration of 321 Bagyeli/Bakola citizens on the electoral register for voters set up in October 2004.

(2) FEDEC financial support to health care and medical diagnosis for the Bagyeli/Bakola has also stopped around the 2nd quarter of 2005. The Health Center of Bandevouri was found to be no longer provided with free drugs for

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Bagyeli/Bakola of this zone (about 500 persons in 10 camps). The financial support to the Ngovayan hospital and to its nurses (Les petites soeurs de Jésus) ended in December 2004. The hospital manager estimated that an amount of 5 to 6 Millions Francs CFA is needed to provide health care to the 500 Bagyeli/Bakola living in this zone. The two health centers of Nkouambpoer and Bidjouka which were reported in 2004 to be active in providing health care, vaccination and awareness campaigns on basic hygiene and STDs, may suffer for the same situation of lack of financial support from the IPP. This should be urgently verified.

(3) In the field of education, the designated project Projet pour l’éducation et l’intégration citoyenne des Bagyeli/Bakola is considered by FEDEC as the IPP priority. For school year 2004-2005 a total of 209 children were registered in different schools. However, FEDEC support for the current school year 2005-2006 has not been provided. The ECMG found, for example, that the public school of Bandevouri had only one Bagyeli child attending the classes, out of 15 registered. In another school managed by FONDAF, an NGO specialized in child care and education, the 118 pupils present are all Bagyeli children. FONDAF is reported to obtain better results with Bagyeli. The ECMG met with FONDAF deputy manager who reported that the school will be soon out of funds. At the Ngoyang public school, 70 Bagyeli children were reported to be still attending classes. However, the school manager reported that FEDEC has not provided any financial support since May 2005. Many students may not be able to apply for their exams because they may not be able to pay 5,000 Francs CFA for their application.

(4) A similar situation was found with the FEDEC support to agriculture

production, which has been active over almost three years, from 2003 to April 2005. Services provided included procurement of selected seeds, plants and tools, training and support for the development of fields around Bagyeli/Bakola camps and pilot houses in the Lolodorf, Bipindi and Kribi zones. Some sites received cooperation from the Governmental agriculture services of Lolodorf and Kribi. ECMG visited examples of fields and gardens well delineated, with rights recognized by Bantou neighbors, although it was reported that access to land remains a serious issue for the Bagyeli/Bakola communities.

Although the ECMG observed that funding of the IPP from FEDEC has been stopped since six months, it was found that the “monitoring of IPP activities” is still ongoing by ERE Development, under a CPSP/CAPECE financing. The fact that the IPP monitoring component has continued, while no IPP activities were actually implemented, is a clear indication of the weakness of the internal monitoring mechanisms and of the very weak relations between FEDEC and CPSP. This situation has not allowed the timely identification of the ongoing issues and implementation of adequate corrective actions after April 2005. The housing program, funded in parallel by COTCO, ended in December 2004 with a total of 25 pilot houses completed in 20 camps in Kribi, Bipindi and Lolodorf areas. The 25 houses constructed under this Project supported program have been very much appreciated by the Bagyeli/Bakola communities. There are many applications for other houses by the local communities, but these applications have not progressed in 2005, because of lack of funding and technical support. The absence of the FEDEC

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CDF from the field does not allow for such an additional program to progress forward.

With a support from IFC, FEDEC received a mission report in October 2004 from a senior anthropologist, Dr A. Froment, aimed at promoting a “Strategic Long Term Development Plan for the Bagyeli/Bakola Communities”. The report, “A reflexion about the role of FEDEC in the Plan for Autochtonous Vulnerable Peoples in Kribi-Lolodorf area, Cameroon”, addressed the key issues that the IPP program was facing in October 2004, providing a comprehensive set of conclusions on the situation of Bagyeli/Bakola communities, on IPP accomplishments and sound recommendations for FEDEC strategy. This report emphasized, among others, three key conditions for future long-term actions, as follows: “Pygmies must: be reassured about the ownership of the land they occupy; create activities generating money; be not only consulted on the aims of the IPP, but take part of it as actors, in a

steering committee”. The main recommendation from the analysis done was to prepare a baseline description of the current situation in order to monitor progress over the next three decades, and the progress of the IPP. It appears that no progress was made during the last twelve month period towards the development of this long term plan and recommendations from Dr. Froment’s report. Mbam-Djérem National Park The Wildlife Conservation Society (WCS) has been working as the implementing organization for the Mbam-Djérem National Park for almost three years (since February 2003). The ECMG had the opportunity to meet with the WCS Cameroon Program Director to discuss the status of the Park during the meeting at the FEDEC headquarters in Yaoundé. It was reported to the ECMG that commercial bushmeat hunting is serious within the park, and the ecoguards responsible for patrolling poachers and confiscating bushmeat are not being managed properly. It appears that ecoguards are receiving mixed instructions from both the WCS Project Director and the Conservateur with limited coordination between the two parties. As was reported to the ECMG, when confiscated bushmeat is being auctioned, there is no process in place to track money being obtained from these sales. The current Park Conservateur is rarely on the premises, and WCS does not have the power or leverage to manage this situation. WCS indicated that they are still having financial difficulty supporting the activities necessary to maintain a park of this size. Budget constraints are one of the main reasons preventing WCS from fulfilling its mandate, as reported in the most recent WCS progress report (January to June 2005). FEDEC funds for 2006 are available to cover only the very basic costs of the Park (ecoguards and director salaries, marginal operating costs). A draft Management Plan for the Park is planned to be submitted by late November 2005, but there appears to be still a long road ahead to its finalization; namely, the Plan must still be presented and agreed upon with local stakeholders within the vicinity of the Park, which will be likely a lengthy process.

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Communication is reported to be improved between the Environmental Ministries and WCS. The ECMG was informed that monthly meetings are held between WCS and the ministries MINEP and MINFOF where the park management activities are discussed and agreed upon. Campo-Ma’an National Park and UTO World Wildlife Fund (WWF) has been working as the implementing organization in the Campo-Ma’an National Park for approximately three years (since February 2003). The ECMG held two meetings with FEDEC, WWF and MINEP-MINFOF staff during their visit. The first meeting was held in the village of Campo at the MINEP-MINFOF post with the Park Conservateur and with WWF staff, and the second meeting was held with the WWF project Director in Kribi. Both the Park Conservateur and the WWF Project Director reported that as of September 2005, the salaries for the 25 ecoguards were five months late to be paid (three months paid by FEDEC only recently). According to both of these parties, this situation has had severe effects on poaching control within the Park. It appears that FEDEC funds for 2006 are available to cover only the very basic costs of the Park (ecoguards and director salaries, marginal operating costs). The ability of the guards to control poaching is critical. After HFC’s (La Forestière de Campo) departure in April 2004, concessions have been given to different logging companies, including SCIEB (UFA-025 west of the Park) and WIJMA (UFA-024 east of the Park). The logging concession of UFA-023 (east of the Park) has been given to another company (Bubinga). It was reported to the ECMG that over 300 employees were laid off from HFC, which was reported to have caused an increase in poverty in the surrounding areas, and, in turn, increased pressure on poaching within the park. In addition, community socioeconomic projects, which were part of the mitigation measures included in the Cahier des Charges for HFC, are no longer being pursued. The new companies (SCIEB and WIJMA) are providing minimum park protection due to the very vague mitigation measures contained in their Cahiers des Charges. The road that traverses the park is no longer being maintained (as it was by HFC) by the two new logging companies as they do not use this road. The ECMG went to visit the road and confirmed that its condition is poor; after the next rainy season, it is likely that the vegetation will overgrow some sections almost completely. WWF and the Park Conservateur indicated that this condition is impacting their activities, as the road was important for poaching surveillance activities. In addition, the two bridges located on the eastern side of the road (near Nyabissan and Ebianemyong villages) were reported to be broken, limiting the accessibility of the Park and poaching control by the ecoguards. Out of the ten former HFC ‘red guards’, only two for SCIEB are reportedly posted at the western gate of the park, and two for WIJMA at the eastern gate. Despite the logistical and budgeting difficulties of Campo Ma’an Park, WWF was found to be still moving ahead. In August 2005, WWF submitted a comprehensive and well-organized Draft Final Management Plan (in French) that was reported to be under final review by MINEP-MINFOF, CPSP, and the World Bank (Plan d’Aménagement du Parc National de Campo-Ma’an et de sa zone périphérique, août

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2005). FEDEC also had reported that the updated plan should still be presented to the Bagyeli/Bakola Communities before finalization. To accompany the Plan, WWF reported that a business plan is under preparation, which will present three types of budgeting scenarios: one that would allow WWF to carry out very basic ecoguard operations only; a second one that would allow partial implementation of the management activities; and a third one allowing full implementation of the management plan. Recommendations 28.1 General

1) After more than three years of FEDEC existence, the Consortium must perform a comprehensive assessment of the achievements, administrative and financial capacity of this Foundation to meet its originally defined EMP objectives.

2) The missing Board Member to be recruited should be a dedicated individual with time available, skills, energy and interest to increase the capacity of the Board.

3) FEDEC Board should make clear what are the respective roles and responsibilities of Foundation key personnel, as they are defined in the EMP (Volume 4, Part I, section 6.0), and more specifically the Administrator’s mandate and the CDF scope of work. Internal communication and working mechanisms in FEDEC should be significantly improved.

4) FEDEC should strengthen and improve its fund-raising efforts. Such a task should be clearly addressed in the scope of work of the Administrator (repeated recommendation).

5) FEDEC and CPSP should meet periodically to share information and coordinate their activities and responsibilities for the IPP program and the two offsets, as set forth in the CAPECE Project Appraisal Document (e.g., Paragraphs 10, 29, 36, 37 and 49). The World Bank should be more effective on this matter and improve its monitoring.

28.2 IPP Program

1) Next FEDEC Board Meeting should take immediate measures to re-start

priority activities in health and education; and to assure that the CDF is immediately back in the field.

2) COTCO should consider continuing financial support to a second phase of the housing program for the local communities.

3) FEDEC should renew the CDF contract and ensure that sufficient budget is made available for field costs and logistic support. As recommended in previous ECMG reports, the CDF should stay in the field for long periods, and preferably be based full time in Kribi with adequate equipment and facilities such that he can be the main focus of the IPP. It is recommended that a detailed scope of work be prepared for this position, taking into account the need for the development of a Long Term Development Plan (see below).

4) FEDEC and all parties involved in the IPP design should give priority to the preparation of the “Long Term Development Plan for the

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Bagyeli/Bakola Communities”, as recommended by the report prepared by Dr. Froment. FEDEC should take the lead of this task (repeated recommendation). The parties should discuss reasonable, pragmatic, and effective ways to incorporate long-term, sustainable objectives in the IPP.

5) FEDEC should give priority to the preparation of a baseline description of the current situation in order to monitor activities over the next three decades, as well as the progress of the IPP, as recommended in the senior anthropologist report (repeated recommendation).

28.3 Mbam-Djérem National Park

1) WCS should draft a schedule of activities necessary to finalize the

Management Plan, associated timeline and budget, to be reviewed by FEDEC in early 2006.

2) A process should be established to guarantee that money obtained from the sale of bushmeat are tracked, and channeled back into Park needs.

3) Environmental Ministries MINEP and MINFOF should help to guarantee that ecoguards are directly managed by WCS Project Director, in coordination with the Conservateur.

4) A funding plan to support a National Park of this size need to be revisited: • FEDEC should work with WCS to develop a three-tiered business plan

by early 2006 (as being done by WWF). • The Consortium should intervene to define a mechanism with FEDEC

and WCS for how funding for this Park could be improved. 5) With respect to Park management activities, the new roles of MINEP and

MINFOF should be clarified by the Cameroon Government and communicated to the parties.

28.4 Campo-Ma’an National Park

1) The Management Plan needs to be formalized: • Government ministries (MINEP/MINFOF), CPSP, and the World

Bank should finalize their review by early 2006 (over two years of development).

• WWF should present the plan to local stakeholders not yet consulted (i.e., Bagyeli/Bakola Communities) by December 2005.

2) WWF needs to budget costs based on priority- i.e., before any additional expenditure, the salaries and daily operating costs for the ecoguards needs to be ensured. FEDEC should provide a prompt review of WWF quarterly budget, and should ensure that ecoguards are paid before other activities.

3) The World Bank should intervene to ensure that the surrounding forestry concessions (especially SCIEB [UFA 25] and WIJMA [UFAs 24 and 21]) are actually implementing the agreements made in their Cahiers des Charges, and that their actions in the field are at least up to standard with those that were defined for HFC.

4) WWF has too limited resources to maintain a working National Park of this size, especially given the minimal Government contribution. Park protection needs additional support and a funding plan to support a National Park of this size need to be revisited: • WWF should finalize their business plan by December 2005 (in

progress).

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• the Consortium should intervene to define a mechanism with FEDEC and WWF for how funding for this Park could be improved.

5) With respect to Park management activities, the new roles of MINEP and MINFOF should be clarified by the Cameroon Government and communicated to the parties.

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CHAD CAPACITY-BUILDING PROJECT

29. Project Objectives and Requirements

The World Bank project for capacity-building of the petroleum sector of the government of Chad has three goals: Manage the development of its petroleum resources in an environmentally and

socially sound manner, beginning with the Doba Petroleum Project (i.e., the Chad Export Project) in southern Chad;

Minimize and mitigate the potential negative environmental and social impacts of the Doba Petroleum Project on the producing region, strengthen local capacity in the region, and provide opportunities for the region's residents to improve their living conditions; and

Establish an effective framework for further sound private sector investment in the petroleum sector, and engage effectively with such investors.

Among the key indicators of the effectiveness of the Capacity-Building Project are the following: • Effective Government monitoring of implementation of the Chad Export Project; • Effective implementation of the Chad Export Project’s Environmental

Management Plan; and • Social infrastructure improvements and employment generation in the producing

region12 (this indicator includes implicitly the implementation of the FACIL project and the Rapid Intervention Measures, as well as the preparation of the Regional Development Plan, RDP).

In the short-term, priority actions have included the mitigation of the impact of in-migration to the Project work sites in the form of social investments in health facilities, water supply, management of wood fuel resources, and STD/AIDS prevention.

30. Observations As of November 2005, the Chad Capacity Building Project and the FACIL component (Fonds d’Actions Concertées d’Initiative Locale) are both in a very critical situation. The Project has been out of funds since early 2005, and no agreement has been reached yet on additional World Bank financing. The Bank has indicated that a letter of request for supplemental financing was sent by the Government to the World Bank in July 2004, the structure and composition of the Supplemental Grant of 10 Million US Dollars was finalized only in the summer of 2005. Because of procedural requirements to be fulfilled by the Chad Government, the Bank has reported that formal negotiations of the Development Credit Agreement could not proceed until the end of October 2005. Awaiting the finalization of the Letter of Sector Policy for the Period 2005-2008, which the Bank has reported as a condition for negotiation of all additional financing, the closing date of the original credit was extended to April 30, 2006. The Bank has reported that the recent decision by the Chad Government to amend the Revenue Management Framework have added further complexities, and

12 Project Appraisal Document (PAD) March 2000, page 2

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have contributed to increasing the delay. No negotiation of the Supplemental Grant has reportedly taken place to date. The Chad Capacity Building Project has made no significant progress since the previous ECMG mission in December 2004. All FACIL activities are at a standstill since early 2005 due to the lack of funds. The unmanaged high expectations of local communities in terms of new schools, village infrastructure and micro-credits appear to have created an atmosphere of disappointment and distrust, with adverse effects on the willingness to reimburse credits. The World Bank reported that, because two new projects (World Bank Projet d'Appui au Développement Local [PROADEL] and IFC SME development project) were under preparation that would cover the activities carried out by the FACIL, it was agreed between the Government and the Bank that no further FACIL financing would be made available under the Supplemental Grant, except for completion of selected existing projects (among those approved by the Steering Committee). The Bank also reported that issues related to unrecovered funds will need to be addressed by the Government of Chad. The CTNSC personnel appeared to be unmotivated at both the headquarters and the Komé site. The same situation was observed for the FACIL personnel in Bébédjia. CTNSC and Doba Project Unit salaries are directly paid by the World Bank for seven staff officers; the salaries of other personnel in place are paid by Government budget. There is, to date, no operating budget available. In addition to the funding problem discussed above, the current organization and field resources available for the CTNSC clearly are not able to adequately handle the extent of exploration, construction and production activities in the country, and specifically those related to the Doba oil project, the Nya-Moundouli satellite projects, and the exploration activities in other potential fields conducted by the Consortium and other Oil Companies. Although the Consortium and the World Bank/IFC contributed to the development of “Guidelines to demonstrate compliance with the EMP principles for oil fields in Chad”, the overall result is very weak monitoring of the ongoing activities. In addition, no significant progress of the CTNSC training component has also been reported over 2005, with the exception of seminars and workshops organized by the Bank, whenever possible, on specific subjects requested by the Government. Some training was also directly provided by the Bank staff. The Regional Development Plan (RDP) was completed by the new consultant hired in late 2004 to amend and complete the previous text that had been prepared by a different consultant, but considered inadequate by all parties. At the time of the ECMG visit, the final version of RDP was still not available, since the new consultant had not yet been paid. A payment was reportedly submitted by CTNSC during this ECMG mission and this would allow CTNSC to hopefully receive the final RDP. CTNSC’s involvement in the oil sector management remains limited, and its capacity has declined over the past year. Coordination between CTNSC and the Ministry of Petroleum is clearly insufficient and needs substantial improvement. The World Bank Program Director, based in N’Djaména, is in charge of coordinating all oil-related projects. The Bank team has been strengthened through a Senior

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Energy Economist (from the World Bank Oil and Gas Policy Division), based in Washington, who has been working on this project since the Mid Term review in October 2003. She has replaced the previous Task Team Leader since October 2005. An Operations Officer has recently joined the team and carries out project administrative duties. The Task Team Leader is also supported by an environmental specialist. In addition, a Technical Advisor to the Petroleum Minister, contracted through IFC, arrived in late October 2005, and is also posted in N’Djaména. The World Bank reported that the Doba Petroleum Unit has been working on improving the ability of the Ministry of Petroleum to analyze price differentials and reporting requirements. The Unit's Project Manager, based in N'Djamena, coordinate both economic and technical aspects of the Project. The technical team is composed of a site supervisor and its staff, including 10 inspectors (Komé base and FSO). Status and Results of the Chad Capacity Building Project – General CTNSC Headquarters and Coordination Nationale in N’Djaména: After the

Executive Secretary left in September 2004 and until November 2005, the CTNSC President acted as Executive Secretary and the procedure to select and recruit a new Executive Secretary did not proceed due to the continued lack of funds. At the time of the ECMG visit, a team of four people was still in place, plus the President/Acting Executive Secretary. Subsequently, the World Bank reported to the ECMG that in November 2005 the Government appointed, as Executive Secretary, the same senior officer who covered this role up to September 2004. The Coordination Nationale still comprises a team of eleven: the National Coordinator, his deputy, four communication agents, three experts, one accountant and one administrative assistant. Both CTNSC and Coordination Nationale staff appeared to be very unmotivated due to the current financial uncertainties. The coordination between the various entities - Coordination Nationale, CTNSC Headquarters, CTNSC Field Team, and FACIL - is weak and has been aggravated in 2005 by the uncertainties for the expected additional World Bank funds. The Government is providing enough funding to cover salaries, but this funding may terminate at the end of December 2005. The persistent lack of internet access for the CTNSC Field Team is an obvious and significant impairment to the team’s ability to effectively and routinely communicate with N’Djaména (Coordination Nationale and CTNSC Headquarters). While most of the contacts with industry representatives (EEPCI and other oil companies) are held in N’Djaména, the CTNSC Field Team based in Komé is most knowledgeable of technical issues related to the oil development projects.

Training Program: The training program which was finalized in late 2004 in

cooperation with the Coordination Nationale, CTNSC and the support of the World Bank, had not made any progress in 2005. This is particularly relevant when compared with the several sessions of on-the-job training delivered by EEPCI to about 120 staff technicians over the second quarter 2005 in Komé and N’Djaména.

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National Oil Spill Response Plan (NOSRP): The version of the NOSRP which was submitted in September 2004, has been revised by the Canadian consultant on the basis of CTNSC’s comments. The NOSRP is still under review by the Government. Technical support would expedite and improve its review and subsequent approval by the Parliament. The administrative process needed to operationalize this document (decrees for practical organization and budget) is still to be conducted.

Environmental Management Information System (EMIS): There has been no

progress on this component since the delivery of the draft system by the consultant in early 2003. The World Bank environmental specialist conducted an assessment of the available system last March. The system is reported to not be usable and to not fulfill CTNSC’s needs. In addition, the trained operator left his position with CTNSC. The action plan and training of experts (with the support of the World Bank), that were expected to start in March 2005, did not take place.

Study of the Future of CTNSC: This component have not progressed in 2005.

The project for construction of Government offices in Komé 5 was also halted in January 2005.

Communications: No significant communication activities by the National

Coordination were reported in 2005, although the National Coordination team, which includes a team of four persons, is still having their salaries paid by the Government. In early 2005, CTNSC met with NGOs to discuss their participation in the social closure process. However, this effort was not continued further due to the lack of funds.

Working Relations between CTNSC and the Consortium EMP Team: Monthly

meetings between the CTNSC and EEPCI EMP field teams continue to be scheduled in N’Djamena or in Komé, although recent participation of CTNSC was reported to be less regular. Overall, communication with the Consortium were found to still be insufficient and should be made more effective in terms of follow-up to outstanding issues (e.g., dust control program; Bébédjia road improvement programs [internal urban section and by-pass]; communication of EEPCI health and safety statistics).

CTNSC Field Team and Activities Staffing: Since the ECMG’s last mission in December 2004, the staff has

increased from five to six persons including the Site Supervisor, two socio-economists, one health agent, one civil engineer and one cartographer. The cartographer was previously posted for two years at CTNSC’s headquarters in N’Djaména. The recruitment for the other field team positions has not been carried out due to the lack of funding. Most of field team appeared to be unmotivated, inactive and very critical of the current situation, justifying their inaction due to the continued lack of operating budget and per diem. The salaries of the field team, with the exception of the Site Supervisor position which is covered by the World Bank, have been paid by the Government since the beginning of 2005, although this financial support is likely to end in December 2005. The ECMG found that the team is no longer supporting

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their Site Supervisor in the field, to perform their mandated field monitoring responsibilities, and they are unwilling to coordinate their monitoring with EEPCI EMP team unless the per diem is guaranteed. Most of them are housed in Bébedjia and do not go to work in CTNSC office in Komé. This means that the only working field member of CTNSC is the Site Supervisor who is struggling with the current situation, but still trying to perform at least some of the monitoring and reporting activities on his own.

CTNSC Field Office: In December 2004, “the ECMG was disappointed to see

that the field team is still housed in the same inadequate office with a very poor work environment, despite commitments made in May 2004 by EEPCI representatives during the ECMG closeout meeting”. A Logistic Agreement signed in December 2000 between the Consortium and the Government of Chad committed the Consortium to provide “… offices with equipment for CTNSC and Directorate of Petroleum … through March 2006”. A new Logistic Support Agreement between EEPCI and the Government was signed on September 27, 2005, replacing the previous Agreement. The validity of Agreement is one year and it is renewable only for one additional year. A new office space had finally been made available to CTNSC by EEPCI at Komé 5 in early November 2005. However, at the time of the ECMG’s visit, basic office facilities, such as a meeting room or internet access, had still not yet been provided. The World Bank reported that the rehabilitation of the offices donated by the Consortium is planned to be covered under the Supplemental Grant.

• Dust Control in the OFDA: As discussed in Section 17 of this report, dust control is a critical issue and Government action is insufficient. Cooperation between CTNSC and the Ministry of Public Works is minimal on this matter.

Komé Atan: The CTNSC field team has provided some limited assistance to the

village and the two community management committees (for the two water wells and for solid waste management). Sanitation has not been improved and the recommended restructuring of the village has not progressed. In 2004, the CTNSC Site Supervisor prepared plans for a Centre Communautaire. This Project is still at the bidding stage for construction, as the CTNSC must still pay the Government Cadastre services and there are not funds available. In the health sector, EEPCI provided support for the rehabilitation and equipment of the Komé village health center.

Land Use Planning in the OFDA: The land use planning for the OFDA has not progressed since August 2003, with the limited exception of some services from the Government Cadastre. The Government control on land use in the OFDA is minimal and not effective enough to sufficiently manage the increasing footprints of the Project infrastructure and production facilities in this area. The ECMG found that even basic tools, such as OFDA maps with the oil production facilities and related infrastructure, are not yet available at CTNSC, despite the fact that a cartographer has been posted in Komé since early 2005.

Moundouli-Nya Satellite Fields: Communication between CTNSC and EEPCI on environmental and social management appeared to be formally taking place;

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however, since 2004, CTNSC has not been able to actually monitor the significant ongoing construction activities, being that they are not working in the field. EEPCI stated that they are willing to have the CTNSC staff join their team in charge of processing individual compensation and grievances.

Rapid Intervention Measures Most of the measures planned within this Project component have been

completed, but several contractors have not been fully paid. This has obvious adverse effects on the maintenance of some infrastructure (e.g, the Bébedjia water supply system).

Urban Sanitation in Doba and Bébédjia: Some corrective works are still to be performed for the urban sanitation project in Doba, including increasing the capacity of some sections of main drainage canals. As pointed out since 2003, the three waste management sites (two in Doba, one in Bébédjia), constructed as composting platforms, are not being used, due to the inadequacy of their design and the lack of municipality means. As part of the Capacity Building Project, it should be the responsibility of CTNSC, with the support of the World Bank, to advise the two municipalities in finding solutions for waste transfer and disposal, and to provide support to the NGOs hired for waste collection services. The World Bank and CTNSC agreed to have two budget lines covering the completion of sanitation work and solid waste management in Doba and Bébédjia within the additional 10 Million US Dollar grant.

Urban Water Supply System for Bébédjia: The water supply system completed in early 2004 is operational, but one of the two water pumps has been out of service for the last fourteen months. It has not been repaired because the contractor has yet to be paid (as already observed in December 2004). The water committee still needs substantial support, and a financial audit is yet to be conducted.

Health sector: The rehabilitation project and equipment for the Doba hospital is still in the bidding stage. The construction of the new health center in Doba was completed in September 2004, but the center cannot be connected to the electricity network and does not have a generator. The CTNSC health monitor participated in a vaccination campaign against poliomyelitis during the second quarter of 2005. This campaign received support from EEPCI. During the same quarter, EEPCI continued the implementation of the Community Health Outreach Program (CHOP) activities.

Sustainable Use of Natural (Forest) Resources: The Agence pour l’Energie Domestique (AEDE), the specialized NGO in charge of implementing the project, has completed the surveys in the six pilot villages of Békondjo, Bendoh, Djeun, Doungabo, Karoua and Mboh-Nya in 2004. A new assignment for the follow-up and additional activities by AEDE is planned for implementation when the additional World Bank funds are made available.

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Local Initiatives Fund – FACIL A FACIL team of four persons is still in place. The salaries for two of the staff

are covered by the World Bank funds (team leader and accountant), whereas the other salaries are covered by Government. There are no operating funds available. As a result, no monitoring or other field activities have taken place over the past 12 months. Some limited funds (i.e., 234,000 US Dollars) are expected from the additional credit from the Bank. This amount would cover about six month of operating costs. An additional credit for 1,193 Million CFA Francs was requested by CTNSC, but this was not approved by the Government as a result of the decisions on FACIL financing discussed above.

• The “Micro-credit” component is at a deadlock. FACIL financial problems have had a direct impact on beneficiaries’ willingness to reimburse their credits. As of November 2005, out of the total amount of 350 Million Francs CFA of credit allocated, only 80 Million Francs CFA have been reimbursed by the five intermediary agents. FACIL has sued one intermediary agent in order to recover their debt.

• It was reported that FACIL still owes about 80 Million Francs CFA to contractors that were hired to construct various infrastructure. It was reported that this amount would be covered by the residues of the original World Bank credit.

• As of December 2004, the FACIL portfolio of infrastructure projects already approved by the Steering Committee (Comité de Pilotage) included the following: (i) seven schools totaling 24 classrooms (constructed), plus four schools which were at the construction bidding stage; (ii) five small bridges / hydraulic structures at the bidding stage; (iii) three health centers; (iv) 29 water wells; (v) nine micro-credit centers in the Cantons. In terms of cost, this approved portfolio represented a total of about 950 Million Francs CFA (about 1.85 Million US Dollars). The total amount of infrastructure projects already completed is 586 Million Francs CFA. The portfolio above was created to benefit five Cantons (out of the 13 Cantons in the Project zone) that have not yet received any village infrastructure from FACIL. The cancellation of this portfolio will likely generate still more disappointment and distrust among the communities.

• The World Bank reported that an analysis of the implementation experience of the FACIL is proposed to be carried out, and lessons learnt and the transferability of know-how and experience to the new PROADEL and IFC SME Projects should be determined.

Regional Development Plan The consultant has completed the preparation of a final version of the RDP, although this had not yet been submitted to CTNSC at the time of the ECMG visit, because the consultant was still to be paid. CTNSC reported that a partial payment had just been submitted and that the consultant was willing to deliver the document as soon as this payment was received. The ECMG was subsequently informed that the report was delivered to the Government in December 2005.

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31. Recommendations 31.1 In order to rescue what is left of the Capacity Building Project, it is urgent that

the Government (National Coordination and the Ministry of Petroleum) meet with the World Bank to carry out the following two objectives: (i) to discuss and resolve the issues not allowing the supplemental grant of US$10 Million to be in place; and (ii) take all required measures to allow a meaningful use of the remainders of the original credit for the urgent matters (e.g., the payment of the contractor for the Bébedjia water supply infrastructure which is waiting for repair of a pump; the submittal of the RDP final report; support for Government approval of the NOSRP and preparation of an operational plan; support for some field monitoring, particularly for social closure process, etc.).

31.2 The Government of Chad should immediately intervene and resolve the

current issues with the CTNSC field team. Field activities need to resume as soon as possible and the Site Supervisor should be supported by some staff member that are actually willing to work. The current inaction and limited capacity is a serious matter, especially given the increasing pace of Consortium activities in the satellite fields, the exploration of new potential fields (e.g., Sahr zone, Lake Chad, and Bongor regions), and the commitment to monitor compliance of the oil development activities with the EMP principles.

31.3 As soon as the staff issues are resolved, on-the-job technical training for

CTNSC field staff should be implemented as soon as possible, with the direct technical support of World Bank specialists, as needed. Trainees should include only motivated and committed staff and the training should cover the following aspects: office and field work procedures (basic methods and rules), land use planning, socio-economic monitoring and socio-economic surveys, basics of the oil and gas industry, and environmental management in the oil industry.

31.4 The Government, in collaboration with the World Bank, needs to come to a

clear statement on the future role and real capacity of CTNSC beyond December 2005. It is ECMG’s opinion that, at least for the short term, the CTNSC should be downsized to include only motivated staff managed by the current Site Supervisor.

31.5 No additional investment should be devoted to the EMIS until a Chadian

trained and motivated technical staff is available.

31.6 EEPCI needs to fulfill their obligations as defined in the Logistic Support Agreement for the CTNSC office, by providing some basic support to the CTNSC office, such as internet access, etc.

31.7 CTNSC’s communication with the Consortium needs to be improved.

Monthly meetings should be held regularly, and minutes of meeting written in French should be forwarded to all parties (CTNSC, National Coordination, EEPCI).

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31.8 The preparation of a Land Use Plan for the OFDA should be prioritized, after

the numerous pending issues with current CTNSC situation and staff, as described above, are resolved. The need for the development of a simple land use management plan has been raised by the ECMG since June 2003, but to date even basic maps are not available within CTNSC. The lack of Government action and understanding in this respect is a critical issue, taking into consideration the growing footprint of the Project in the OFDA and satellite fields.

31.9 CTNSC should be held responsible for the sustainable management, operation

and maintenance of new facilities (water supply systems, sanitation and solid waste management) constructed with Project funds in the Municipalities of Doba and Bébédjia. This is particularly important for the Bébédjia water supply system and the functioning of the relevant water committee.

31.10 It is apparent that the FACIL project is falling apart. At this stage, the

CTNSC, National Coordination, and the World Bank should work together to salvage whatever results and components remain, so that the Regional Development Plan implementation can benefit from them. As part of this effort, the construction projects, already approved by the Steering Committee and located in the five Cantons which have not yet received any FACIL community projects (Donia, Miladi, Komé, Béboni and Mbaïsaï), should also be carried out as soon as possible.

31.11 The CTNSC environmental and social monitoring responsibilities over new oil

exploration zones need to be clearly defined by the National Coordination, and brought to the attention of all oil companies acting in the country. This process should be conducted in accordance with and supported by the Ministry of Petroleum. The World Bank should prioritize and facilitate this process, in order to ensure that environmental and social guidelines are followed and that potential future oil developments meet the environmental and social requirements for the use of the Chad-Cameroon Transportation System.

31.12 The Capacity Building Project can help correct the situation observed by the

ECMG in the OFDA, but in the longer-term Government funding of CTNSC activities, most likely from petroleum revenue, is essential and to be planned. The Government of Chad should work to ensure funding of the CTNSC beyond the 12 month period of the WBTA Project.

32. Note on NGOs in Chad

During this visit a meeting was held in N’Djaména with GRAMP/TC (Groupe de Recherches Alternatives et de Monitoring du Projet Pétrole Tchad-Cameroun) and with CPPN (Coordination Projet Pétrole - Nationale), attended also by the CTNSC Site Supervisor. In addition to some clarifications with respect to the ECMG mandate, the following main topics were discussed: • Social closure, individual and community compensation: In late 2004,

recommendations were made to EEPCI, Government of Chad and World Bank to set up a sound mechanism for social closure. In early 2005, the Coordination

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Nationale requested GRAMP and CPPN to participate actively in the overall social closure process. The ECMG found that activities have been discontinued due to the CTNSC’s inability to cover operating costs and per diem.

• National Oil Spill Response Plan (NOSRP): The NGOs reviewed the Plan,

organized meetings and defined recommendations. They expressed concerns for the delay of the Government in completing the review and approving the Plan, in preparing an operational plan and the relevant decrees for Plan implementation.

The ECMG observed that NGOs appear to have better working relations with both the CTNSC and the Consortium. Exchange of information and documents between NGOs and other parties, especially with the CTNSC field team, has been improved. Despite financial constraints, the collaboration between EEPCI, CTNSC, and the NGOs on social closure should resume as soon as possible. Lessons learned from COTCO and Cameroonian NGOs on treatment of grievances and outstanding issues should be made available to the Chadian party.

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CAMEROON CAPACITY-BUILDING PROJECT (CAPECE) 33. Project Objectives and Requirements

The World Bank Cameroon Petroleum Environment Capacity Enhancement Project (CAPECE) was founded to develop and establish a national capacity in Cameroon for the environmental management and monitoring of the Chad Export Project. Specifically, CAPECE aims to accomplish the following: National environmental standards and norms in the petroleum sector are

established; The Petroleum Development Pipeline Project meets environmental standards and

norms; The Government of Cameroon develops its capacity to monitor and mitigate the

environmental impacts of large infrastructure/energy projects, a condition for continued sound foreign investment in the country, and

Information on the environmental and social safeguards implementation is disseminated to all relevant stakeholders.

The Government of Cameroon established, by Decree 97-116 of July 7, 1997, the Comité de Pilotage et de Suivi du Pipeline (CPSP) under the trusteeship of the Société Nationale des Hydrocarbures (SNH), the national oil company. The CPSP is an interministerial body mandated to oversee and monitor all environmental and social aspects of pipeline construction and operation. The CPSP has two branches, the Comité de Suivi (CS) which is the steering, monitoring and administrative arm and the Secrétariat Permanent (SP), which is the operational arm of the CPSP. In addition to monitoring the construction of the pipeline, with the associated requirements for protecting the public and the environment, the Cameroon Government also has responsibility for developing a National Oil Spill Response Plan (NOSRP). It is also responsible for the monitoring of the Indigenous Peoples Plan (IPP) for the forest dwelling peoples living in the area crossed by the Atlantic Forest part of the pipeline route and the implementation and monitoring of two Offsite Environmental Enhancement Projects (OEEP) established to compensate for generalized biodiversity loss in the Atlantic Coastal Forest and the semi-deciduous forest zones, respectively in the Campo-Ma’an and Mbam-Djérem National Parks.

34. Observations The observations presented hereafter are based on the limited information that the ECMG was able to collect during a short visit, which mainly consisted of a CPSP- COTCO-ECMG joint meeting held in Douala on November 10, 2005. This meeting was attended by the CPSP Permanent Secretary and two of the Permanent Secretariat staff members, the COTCO EMP manager and three members of his staff. A CAPECE evaluation was carried out by the World Bank in mid-October 2005. The results of this evaluation were not made available to the ECMG. It was however reported that the CAPECE closing date of December 31, 2005 would be extended up to December 2006.

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The main observations on the status of the Cameroon Capacity Building Project are as follows: The implementation of the CAPECE Training Plan has made little progress in

2005. It was reported that, during the CAPECE evaluation by the World Bank in last October, the CPSP and the Bank have agreed that the training plan would need to be focused on the Government agents actually involved in pipeline field supervision. The plan should be implemented in 2006.

The National Oil Spill Response Plan (NOSRP), which was submitted by the consultant in charge in the second quarter of 2003, was improved and finalized during a period of two years. This included two seminars held in Yaoundé and Douala in 2004, as well as supports from various oil companies and the Institut Français du Pétrole (IFP). Still under CAPECE financing, the final phase of preparation of an Operational Handbook is being contracted by CPSP to a French center (CEDRE) specialized in marine/water pollution control. CPSP reported that this Handbook would be available at the end of the first quarter of 2006.

The final release of the Environmental Management Information System (EMIS)

was delivered in 2004, but still has room for improvement. The EMIS is installed in the CPSP offices and is being used with the data collected in the field by the Government monitors. The improvements are being implemented by a local sub-contractor of the consultant, through processing of available field data.

The Implementing Decrees (Décrets d’Application), related to the Law on

Petroleum Environmental Protection, have not yet been finalized, despite the fact that the transportation system has been in operation since October 2003. CPSP cancelled the contract with the selected consultant. In agreement with the Bank, CPSP has decided to hire the services of a local consultant who should complete the Decrees with the support of the relevant ministries, particularly MINEP.

Based on the limited information available, the Plan for environmental monitoring

and management of impacts on the coastal and the marine zone is not yet available, in spite of the fact that the FSO has been operating for over more than two years. Government environmental monitoring is, therefore, not adequately implemented in this zone.

The ECMG was informed that, for the health sector, during the CAPECE

evaluation by the World Bank last October, CPSP and the Bank have agreed that health activities will focus on aspects relevant to the control of HIV-AIDS along the pipeline corridor.

As discussed in Section 14 of this report, the Government has delayed the agreed

transfer of temporary Project facilities from COTCO to the Government, local authorities and/or communities to such an extent that the deterioration of structures and other losses are now apparent. As a result, the land is also not available for former uses by the local communities, and there appears to be growing community discontent regarding this issue. After the removal of the Lom River Bridge in June 2003, no progress was reported on other mitigation measures discussed by Government and World Bank representatives with the four affected local communities. The ECMG observed that the World Bank team stated, after

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the mission in December 2004, that they would have reviewed the status of the proposed Community Development Plan, based on a mission report from the team working on the PNDP.

Regarding the program for the Bagyeli/Bakola communities, the service contract to support and monitor the implementation of the IPP is still being conducted by the local consulting firm ERE Développement. During this mission, the ECMG made a field visit to the IPP zone (Kribi, Bipindi, Lolodorf) with FEDEC Community Development Facilitator (CDF). Several serious issues were observed, which occurred since April 2005, as discussed in Section 28 of this report. The weak coordination and collaboration between CPSP and FEDEC and the inadequate management of the consultant monitoring the IPP program have not allowed the identification of the ongoing issues or the implementation of timely corrective measures.

Collaboration between CPSP, FEDEC and MINEP/MINFOF regarding the two environmental offsets (Campo-Ma’an and Mbam Djérem National Parks) appeared to be still insufficient.

35. Recommendations

35.1 CPSP should take the necessary measures to accelerate the implementation of

the CAPECE Training Plan for the Government field monitors. The ECMG recommends again that the plan should give priority to on-the-job training, including environmental monitoring of coastal and FSO marine zones, management of the NOSRP, and induced access management.

35.2 The Implementing Decrees (Décrets d’Application) related to the law on

Petroleum Environmental Protection should be finally completed and enacted. The ECMG was informed by CPSP that their finalization is underway.

35.3 The CPSP should conduct compliance monitoring with special attention given

to the monitoring of the Kribi coastal zone, in particular the marine zone around the FSO.

35.4 Regarding the health sector, (1) reliable baseline data are still needed, and

should be based on an effective sero-epidemiological survey of selected infectious and parasitic diseases in the districts affected by the Project; (2) Ministry MINSANTE and CPSP should ensure that the five health focal points along the corridor are operational; and (3) they should effectively implement the HIV/AIDS and STD awareness campaigns along the corridor and take all necessary measures to control the risk of extension of HIV/AIDS along the corridor (repeated recommendation).

35.5 Working relations between CPSP and FEDEC are not satisfactory. CPSP

needs to improve their commitment and collaboration with FEDEC for the effective implementation of the IPP program and with MINEP and MINFOF for the long-term support of the two environmental offsets. CPSP (and the World Bank team) should be aware that these EMP mitigation measures are seriously impaired, and that there is a commitment of Government to effectively support these actions. Unless the IPP program and the Parks are

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carrying out real, long-term, sustainable, and worthwhile activities, the Project and the Government are at risk of being at serious non-compliance with respect to basic EMP objectives.

35.6 CPSP, in collaboration with COTCO, should accelerate the transfer process of

the Project temporary facilities. CPSP should ensure that the temporary facilities are effectively and adequately used for the selected purposes and, specifically, to the benefit of the local communities. If this cannot be achieved in a reasonable amount of time, to be set by the parties, including the World Bank, the sites should be reinstated by COTCO and returned to the pre-Project conditions and uses, as per EMP commitments.

36. Note on NGOs in Cameroon

During this visit to Cameroon, the ECMG had the opportunity to meet with Cameroonian NGOs, at the headquarters of the Centre pour l’Environnement et le Développement (CED). This meeting was also attended by three representatives from COTCO, including the EMP manager. The NGOs who participated in the meeting are the following: CED; FOCARFE (Fondation Camerounaise pour une Action Rationalisée des Femmes sur l’Environnement); CIPRE (Centre International de la Promotion de la Récupération); CEW (Cameroon Environmental Watch); RELUFA, Global Village, PECUSA and CARFAD (Centre Africain de Recherche Forestière Appliquée au Développement). In addition to some concerns expressed on the annual periodicity of the independent monitoring mechanism implemented by the Lenders during the Operations phase, the main issues discussed during the meeting included the following: • Regarding social closure, the NGOs expressed their concerns that there are

numerous grievances that have not yet been processed. During the meeting, COTCO submitted a draft agreement for the participation of NGOs in the social statement process (see Section 11 of this report), including ways for the ranking and processing of grievances.

• With respect to the NOSRP, the NGOs pointed out the fact that it is not yet operational, and that there are demands for public information and consultation, especially for the coastal and the marine zones.

• The NGOs expressed their concerns about CAPECE being behind schedule and about the results on Project monitoring. The following examples were mentioned: delays related to the transfer of temporary facilities; delays for the implementing decrees of the law on petroleum environment.

• Regarding the IPP program for the Bagyeli/Bakola communities, the NGOs stated that several important points have not yet been correctly addressed, such as access to land, health services, and needs for a long term plan for these communities. It was also said that FEDEC communication on the IPP has been insufficient.

• The NGOs stated that communication regarding the Completion Certificate issued by the ECMG in 2004 was insufficient.

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List of Acronyms and Abbreviations

AEDE: Agence pour l’Energie Domestique et l’Environnement (Chad) ASOSRP: Area-Specific Oil Spill Response Plan CAPECE: Cameroon Petroleum Environment Capacity Enhancement Project CARFAD: Centre Africain de Recherche Forestière Appliquée au Développement CDF: Community Development Facilitator CED: Centre pour l’environnement et le Développement CEW: Cameroon Environmental Watch CHOP: Community Health Outreach Program CIPRE : Centre International de la Promotion de la Récupération COTCO: Cameroon Oil Transportation Company S.A. COE : Centre d’Orientation Educative (NGO active in Cameroon) CPSP: Comité Permanent de Pilotage et de Suivi du Pipeline CPPN: Coordination Projet Pétrole - Nationale (Chad) CRO: Community Relations Officer CTF : Central Treatment Facility CTNSC: Comité Technique National pour le Suivi et le Contrôle (CTNSC Chad) DBST: Double Bitumen Surface Treatment EBA: Environmental Baseline Assessment ECMG: External Compliance Monitoring Group EEPCI: Esso Exploration and Production Chad Inc. EMIS: Environmental Management Information System EMP: Environmental Management Plan (PGE in French) EPC: Engineering, Procurement and Construction FACIL: Fonds d’Actions Concertées d’Initiative Locale FEDEC: Foundation for Environment and Development in Cameroon FOCARFE : Fondation Camerounaise pour une Action Rationalisée des Femmes sur l’Environnement FSO: Floating Storage and Offloading (vessel) GPS: General Project Specification GRAMP/TC: Groupe de Recherches Alternatives et de Monitoring du Projet Pétrole Tchad-Cameroun HW: Hazardous Waste IFC: International Finance Corporation IPP: Indigenous Peoples Plan (IPP Cameroon) KWMF: Komé Waste Management Facility LCC: Local Community Contacts MA: Maintenance Area MINEF: Ministère de l’Environnement et des Forêts (MINEF Cameroon) MINEP : Ministère de l’Environnement et la Protection de la Nature (Cameroon) MINFOF : Ministère des Forêts et de la Faune (Cameroon) MSDS: Material Safety Data Sheets NGO: Non-Governmental Organization NOSRP: National Oil Spill Response Plan OEEP: Offsite Environmental Enhancement Projects OFDA: Oil Field Development Area ORT: Organisation internationale de Recherche et de formation Technique OWLS: Oily Water Lift Station OWS: Oil/Water Separator PAH: Polinuclear Aromatic Hydrocarbons

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PM10: Particulate Matter (<10 µm) PNDP: Plan National de Développement Participatif PPE: Personal Protective Equipment PRS: Pressure Reducing Station PS1: Pump Station No. 1 PS2: Pump Station No. 2 PS3: Pump Station No. 3 RDP: Regional Development Plan (RDP Chad) ROW: (pipeline) Right-of-Way SNH: Société Nationale des Hydrocarbures SP: Secretariat Permanent (SP of CPSP, Cameroon) SPM: Suspended Particle Matter STD: Sexually Transmitted Disease TCM: Tchad Cameroun Maintenance TOTCO: Tchad Oil Transportation Company S.A. TPH: Total Petroleum Hydrocarbons TSP: Total Suspended Particulates UFA: Unité Forestière d’Aménagement ULB: Université Libre de Bruxelles UTO: Unité Technique Opérationnelle (UTO Campo-Ma’an) WB: World Bank WBTA: World Bank Technical Assistance/Capacity Building WCS: Wildlife Conservation Society WHO: World Health Organization WMF: Waste Management Facility WMP: Water Monitoring Program WWF: World Wildlife Fund

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APPENDIX A DAILY ACTIVITY SUMMARY

Between November 5 and November 17, 2005, the D’Appolonia ECMG conducted the twelfth mission to monitor the Chad Export Project in Chad and Cameroon and the Capacity Building programs in Chad and Cameroon. Activities are specified below:

November 5 — Three members of the ECMG arrived in Douala, Cameroon. November 6 — Depart from Douala and travel to visit Campo Ma’an National

Park, with IFC, COTCO, FEDEC and WWF representatives. November 7 —Meeting in Kribi with the COTCO EMP team in the morning and

with FEDEC and WWF in the afternoon. The ECMG socio-economist arrived in Cameroon.

November 8 — Visit Bagyeli camps and ROW from Kribi to Lolodorf. COTCO socioeconomic update in Douala.

November 9 — Meeting in Yaoundé with FEDEC and WCS on Mbam Djerem National Park and IPP in the morning. The ECMG socioeconomist visited the ROW in the Yaoundé area (Mbankomo-Ngoumou) and then drove to Douala. Two ECMG members drove to Nanga Eboko in the afternoon, while another member met the national NGOs in Yaoundé.

November 10 — The ECMG member in Yaoundé drove to Douala to meet with CPSP and Ministry of Culture. Two members visited the ROW from Nanga Eboko to Belabo. The ECMG socioeconomist flew from Douala to PS3 and spent the day visiting the potentially affected communities in Belabo area. A fifth ECMG member arrived in N’Djamena, Chad, in the evening

November 11– Three ECMG members flew in the morning from PS3 to PS2, then the group split, visiting the ROW south of PS2 and visiting the potentially affected communities in Dompta area. The ECMG member in Douala met with CPSP and Ministry of Culture. The ECMG member in N’Djamena conducted a document review at EEPCI EMP office.

November 12 — Three ECMG members drove from PS2 to Komé, visiting ROW locations. The ECMG member in Douala flew to N’Djamena. The fifth ECMG member flew from N’Djamena to Komé in the morning and visited the CTF/PS1 facilities.

November 13 — The entire team joined in Komé. Four members of the ECMG team attended a meeting with EEPCI EMP in the morning. In the afternoon the socioeconomist visited OFDA communities, whereas the other three members visited the OFDA construction and production sites. One ECMG member attended a meeting with CTNSC field team and FACIL in Bebedjia.

November 14 —The ECMG socioeconomist continued the OFDA field visits, whereas the other three members continued the visit of the OFDA construction and production sites. One ECMG member attended a meeting with CTNSC field supervisor and flew to N’Djamena to meet local NGOs.

November 15 —Four ECMG members continued their OFDA field visits. One ECMG member attended meetings in N’Djamena with CTNSC and Coordination Nationale, and Ministère du Petrole.

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November 16 — The ECMG team flew from Komé to N’Djamena. The Chad

Export Project closeout meeting was held in N’Djamena in the afternoon, to present the ECMG review of the status of FEDEC and the Chad Export Project. Attendants included CTNSC, Consortium senior management and EMP management, representatives from the World Bank Group / IFC. Cameroon government officials were unable to attend this meeting. Three ECMG members departed from Chad.

November 17 —The Capacity Building Project closeout meeting was held in N’Djamena in the afternoon, to present the ECMG review of the status of the two projects. Attendants included Chad Government officials (CNPP, CTNSC and Directorate of Petroleum), an EEPCI EMP representative, representatives from the World Bank Group / IFC. Cameroon government officials were unable to attend this meeting.