Cusco Regional Development (WB-P117318)

Countries
  • Peru
Where the impacts of the investment may be experienced.
Specific Location
Calca, Urubamba, and Cusco
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • World Bank (WB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Bank Risk Rating
A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Nov 22, 2013
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
GOVERNMENT OF PERU
The holder of the loan, grant, or other investment.
Sectors
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Potential Rights Impacts
  • Cultural Rights
  • Healthy Environment
  • Housing & Property
  • Indigenous Peoples
  • Right to Health
  • Right to Water
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 35.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 52.10 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Bank Documents
Primary Source

Original disclosure @ WB website

Updated in EWS Mar 12, 2018

Disclosed by Bank Feb 8, 2010


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Project Description

The Cusco Regional Development Project is located in the Cusco Region in Peru, specifically in the provinces of Calca, Urubamba, and Cusco. The project under consideration for financing by the World Bank consists of four components:

Component 1: Development and Consolidation of Tourism Services. The objective of this component is to improve the quality and coverage of tourism services in the Sacred Valley and surrounding areas. The component will achieve this through
consolidating "classic" tourist attractions by expanding and improving infrastructure, providing improved access to sites, internal walkways and signage, and by providing technical assistance and knowledge to position small and microenterprises in the market.

Component 2: Integrated Solid Waste Management. The objective of this component is to improve local capacity for cleaning of public spaces and to efficiently collect, transport and dispose of solid waste in the provinces of Cusco, Calca and Urubamba. The component includes investments in provincial municipal solid waste services to improve solid waste disposal and composting; investments in District level solid waste services to improve collection, recycling, and cleaning of streets and public spaces; technical assistance and capacity building for improved solid waste services; and communication on the implementation of project works and promoting adequate waste management practices in communities.

Component 3: Disaster Risk Management and Disaster Preparedness. The objective of this component is to increase the resilience of the local population, tourists, and infrastructure in touristic areas with high vulnerability to natural disasters. The component will achieve this through designing and implementing early warning systems for selected locations; designing and implementing an integrated approach to the reduction of geological and climactic risks, and integrated approach to mitigate external geodynamic risks in selected micro-basins; and development of an updated Disaster Risk Management Plan for the Sacred Valley.

Component 4: Institutional Strengthening, Management and Monitoring and Evaluation. This component will support the capacity building of the Project Coordination Unit within COPESCO and other principal institutions involved in the operation of tourism activities in the Sacred Valley. Activities will include commercialization and positioning of tourism products and services in the domestic and international markets; collection of baseline data for later evaluations and follow up analyses; and enhanced capacity for project management, project audits, and monitoring and evaluation of project results.

Early Warning System Project Analysis

RISK CATEGORIZATION: Category A

The project is classified as Category A under OP/BP 4.0 I based upon the one proposed moderate sized landfill in Cusco (part of Component 2). According to the World Bank, Most of the activities and investments of the Project are relatively small in nature and do not cause any anticipated significant impact, the only exception being the Cusco landfill. It is for this investment alone that the Project has been categorized as A. This level of categorization was given in relation to the irreversible nature of land use at the landfill site, as well as potential risks for water and soil contamination if technology, operational or infrastructure were to be inadequate."

According to The Bank, "The construction technique, by itself, will allow for the minimization of these risks, and for the re-utilization into non-habitational uses of the land once the facility is properly closed.

APPLICABLE SOCIAL AND ENVIRONMENTAL STANDARDS:

  • Environmental Assessment OP/BP 4.01
  • Natural Habitats OP/BP 4.04
  • Physical Cultural Resources OP/BP 4.11
  • Indigenous Peoples OP/BP 4.10
  • Involuntary Resettlement OP/BP 4.12
  • Safety of Dams OP/BP 4.37
People Affected By This Project

ENVIRONMENTAL AND HUMAN RIGHTS ASSESSMENT

Right to Culture

The Cusco region is world famous for its rich historic and cultural heritage. Although none of the landfill sites considered for the project are thought to be within close proximity to a known archaeological site, the project triggered the Bank's Physical Cultural Resources safeguard due to the cultural importance of the area. The Bank has stated that "Components 1 and 3 may take place directly within the limits or in the surrounding areas of archaeological sites such as Ollantaytambo (which was declared National Cultural Patrimony in 2002)." The Bank's Integrated Safeguards Data Sheet continues by adding that construction work related to Component 1 would be "within or near existing archaeological sites." It should also be mentioned that, due to the importance of the region's historic and cultural heritage, the Bank notes the importance of Peru's strict regulatory procedures and oversight related to projects near or within archaeological sites and that any work must be monitored and reported to the Ministry of Culture.

The following questions may be relevant for community members and local NGOs:

  • Do you have reasons to believe the planned investment project could affect the cultural resources of your community?
  • Do you have reasons to believe that your ability to participate in cultural life could change as a result of the planned investment project?
  • Does this project have a procedure in the event that archaeological sites or other cultural artifacts are discovered or encountered during operations?

Right to a Healthy Environment

As part of Component 2, the project would consist of the development of three landfills in the provinces of Cusco, Calca, and Urumbamba. Although the Bank states that these landfills would improve the environmental health and sustainability of the region, there could still be impacts to local communities in terms of truck traffic and increased noise due to waste transportation, contamination of waters caused by leachate, slope erosion due to cuts in the terrain, release of waste and worker exposure in closing or relocating existing landfill sites, and security risks such as gas accumulation in the new landfills. Furthermore, there is potential that pesticides may be used during the operation of the landfills, which would require additional practices and procedures for pesticide use and storage. The Bank also noted that, during the June/July 2013 consultation process, "principal comments from the consultations included: not to repeat the history of the current management of waste in landfills (i.e., relatively poor management), concerns about the potential risks of water pollution and health risks for persons living near the new landfills, operation/effectiveness of landfill geomembranes as a barrier to protect/prevent contamination, employment opportunities in the construction and operational phases of the project, suggestions for expanding descriptive information about fauna, flora, social aspects, and application of other benefits to surrounding communities."

The Bank also states that streams and river banks could be impacted as part of construction works for components 1 and 3 (see project summary for a description of project components).

The following questions may be relevant for community members and local NGOs:

  • What means do you have to seek redress if the public health and/or environmental impact of the proposed operations become a problem for local communities and/or the local ecosystem?
  • Is your water quality likely to be affected by processing operations?
  • Do those implementing the project have a plan in place for preventing increases in disease or for providing health care should diseases proliferate?

Rights of Indigenous Peoples

The proposed landfills in Cusco, Calca and Urumbamba will affect Indigenous communities in the area. Both the Calca landfill and Cusco landfill would involve the acquisition of lands and involuntary resettlement; the Calca acquisition would be of community lands and the Cusco acquisition would be acquisition of an individual's land. The Urumbamba landfill would be built adjacent to community lands and may involve involuntary resettlement. According to the Bank, Abbreviated Resettlement Plans have been prepared for the landfills of Cusco and Calca. They were disclosed in country for Cusco on July 31, 2013 and for Calca on August 5, 2013.

The land acquisition for the Calca landfill will be from the community of Vista Alegre Yanahuaylla, which consists of 46 indigenous families. The Bank states that the project would require the acquisition of 0.48% of the community's land, of which there are no dwellings located on or near the project site. Additionally, there are potential impacts to the adjacent community of Parcco.

The Urumbamba landfill would be built adjacent to the community of Paca Huaynaccolca (40 families). According to The Bank, there are no dwellings on or near the proposed project site.

Although an Environmental and Social Impact Assessment (ESIA) and Indigenous Peoples Plan have been created and shared for consultation with affected communities, there are still potential impacts to the rights of these communities. The ESIA also identified visual impacts, temporary impacts during construction (dust, noise, etc.), increased traffic during construction and operation, and contamination of land and water (in the event that the landfill is not managed properly)."

The following questions may be relevant for community members and local NGOs:

  • Did the company seek to obtain free, prior, and informed consent of indigenous or other peoples living in the investment project area?
  • Have you, as indigenous peoples, been consulted about the investment project? Was the consultation done in good faith?
  • During the consultation process, was consideration given to your traditional decision-making processes?
  • Do the land or other sites affected by the investment project have cultural significance for your community?
  • Have your traditional practices or knowledge been affected since the beginning of the investment project?

Rights to Housing and Property

Both the Calca and Cusco landfills would require the acquisition of lands. The Calca acquisition would be from a community and the Cusco acquisition from an individual.

The Cusco site would require the acquisition of 40 hectares of a 75.88 hectare plot owned by a member of the Association of Agroecological Producers of Pucara. The Bank reports that the acquired land is free of dwellings and other structures and that COPESCO and the affected landowner signed a pre-purchase agreement in May, 2013.

In addition to the land acquisition, the Bank states that, "The Area of Direct Influence (ADI) of the project is an area of 1,000 meters surrounding the project site and includes the population centers of Ccocha Ccochayoc, Huchuy Llanacancha, Huamacancha, the campesino communities of Huancabamba and Hayllacancha, and the Smallhorders Association of Haquira Grande. The Area of Indirect Influence (AII) of the project is a range of 1500 meters surrounding the project, to the east, west, south and southeast, and an area of 4.8 kilometers to the north and northeast along the boundary of Querahuayllo Quebrada, belonging to the Cachimayo micro-basin.

Due to the project's close proximity to other communities within the ADI and AII, and it's land acquisition from an individual, there are potential impacts to rights to housing and property.

Additionally, according to The Bank, "The interventions planned in the Sacred Valley as part of Component 1 and Component 3 may affect communities of Indigenous Peoples....[and that] An Indigenous Peoples Planning Framework has been prepared to address potential adverse impacts on these communities and to maximize project benefits for them."

The following questions may be relevant for community members and local NGOs:

  • Have you been informed of any potential changes that could affect your access to adequate housing?
  • Do you have reasons to believe that your access to adequate housing could change once the investment project begins?
  • Have you receive information regarding mechanisms through which you can file a complaint and/or obtain a remedy when your right to adequate housing has been affected?
  • Are there human settlements adversely affected by the presence of this project?
  • Have there been any complaints of forced evictions in the context of this investment project?
  • Will households resettled for this project actually be compensated properly, and will communities move voluntarily?
  • Will the resettlement area provide access to similar sources of livelihood as previous locations?
  • How will appropriate compensation for lost trees, facilities and other assets be determined?

Rights to Water

While the immediate project plans for the rehabilitation or construction of dams, the Bank states that disaster risk management works in two stream/river basins that have existing relatively small reservoirs located in their headwaters may be part of component 3. Although there are no concrete plans for this part of the project, dam projects have been known to affect water quality and access to water, especially downstream of a project.

Additionally, the potential risk of leachates contaminating community waters if landfills are not properly managed has also been identified as part of component 2 of the project.

The following questions may be relevant for community members and local NGOs:

  • Does the company or its subsidiaries have a policy or program to ensure that its activities do not affect communities' and individuals' right to water?
  • Do you have access to water that is safe, affordable and available in sufficient quantity?
  • Have you been informed of any potential changes that could affect your access to water?
  • Do you have reasons to believe that your access to water could change as a result of the planned investment project?
  • Have you been provided with information on mechanisms through which you can file a complaint and/or obtain a remedy when your right to water has been affected?
  • Where will waste water and other effluent be released and what impact is this likely to have on the local environment and water supply?
  • Does the company and/or industrial park have adequate safeguards in place to prevent stormwater drainage from carrying waste products into nearby rivers?

Right to Freedom of Expression, Assembly, and Association

Although The Bank has stated that proper consultation has taken place throughout project development and that the implementing agency COPESCO has "agreed to strengthen its environmental and social team to ensure adequate capacity during project implementation," concerns have been raised regarding suppression of community opposition to the Conga Mining project, an extraction project based in the Cusco region. Specifically, Human Rights Watch raised concerns in a letter to President Ollanta Humala dated September 20th, 2012 that unwarranted violence that suggests "violation of international human rights norms" occurred during these [protests regarding the Conga Mining Project] protests in July. Furthermore, a "STATEMENT BY HUMAN RIGHTS AND ENVIRONMENTAL ORGANIZATIONS REGARDING REPRESSION AND HUMAN RIGHTS ABUSES IN PERU" was signed by 88 international organizations in July, 2012 in response to violence surrounding the Conga Mining project, raising concerns that the government was suppressing community opposition to the project through violence. As the government has allegedly been involved in suppression of freedom of expression in the region, it is important that COPESCO and the regional government ensure the freedom of expression, assembly, and association throughout this process.

The following questions may be relevant for community members and local NGOs:

  • Has your ability to peacefully gather or demonstrate ever been restricted?
  • What opportunities (legal or other) are available if you feel that your ability to peacefully gather or demonstrate has been restricted?
  • Are you able to freely give out, seek or receive information or ideas (including information or ideas about the company and/or the planned investment project)?
  • Do workers have the right to strike in your community and/or in this industry?
Investment Description
  • World Bank (WB)

The total cost of the project is expected to be $52.10 million USD. Of this amount, the International Bank for Reconstruction and Development (an institution of the World Bank Group) will finance $35 million USD with the remaining $17.10 financed by the Regional Government of Cusco. PLAN PER COPESCO will be responsible for project implementation.

Private Actors

Although the borrower for this project is the Cusco Regional Government, specifically the provincial municipality of Cusco (SEDACUSCO) implementation has been given to Plan COPESCO.

Plan COPESCO is a development plan that was created in 1969 as part of the Cusco Regional Government to improve the standard of living in potential tourist areas in the Cusco region, which is the main tourist destination in Peru (according to the World Bank it accommodates 88% of Peru's international tourist). The mission of Plan COPESCO is to create and expand tourism and economic infrastructure in areas of cultural and natural heritage.

The World Bank's project description states that COPESCO has previous experience with World Bank financing and has chosen an experienced project coordination unit for this regional development plan "with both environmental and social experts knowledgeable of Peru's and the Bank's requirements". Additionally, the project description states, "COPESCO has also agreed to strengthen its environmental and social team to ensure adequate capacity during project implementation."

COPESCO is also acting as the implementing agency for the Cusco Transport Improvement Project, which was approved by the World Bank on February 28th, 2014.

PAST HUMAN RIGHTS ABUSES

COPESCO has not been cited for any past human rights abuses. However, potential human rights abuses have been reported in the Cusco region. Particularly, the United States Department of State, Bureau of Democracy, Human Rights and Labor cited that between May 28th and July 4th, 2013 security forces allegedly killed six people in regards to protests against the Conga mining project, an extractive project based in the Cusco region. Please see the final section of project analysis ("Right to Freedom of Expression, Assembly, and Association") below for further details and documentation.

Contact Information

*No contacts available at time of writing

Zoe Elena Trohanis
World Bank Team Leader

CONSULTATION PROCESS:

The World Bank states project documentation, including an Environmental and Social Impact Assessments (ESIA) and Environmental and Social Management Plans (ESMP), are in the process of or have been previously disclosed to the public for consultation. The World Bank additionally states that, "COPESCO has undertaken constant dialogue and consultation with affected communities and stakeholders. As a result, the EIA'S and the Abbreviated Resettlement Plan include investments and other measures that respond to specific requests made by local communities. [The consultation process] has included briefings, participative diagnostic workshops, surveys, presentation and consultation meetings, meetings with focal groups, direct consultation through correspondence, and consultation through participation in public spaces."

Furthermore, the Bank describes that during the consultation process, "the communities in Calca and Urubamba support the project and have reached agreements with COPESCO. Most of the communities in Cusco also support the project and have done so in writing; however some members of a community in the District of Poroy have expressed concerns related to potential leachates that could pollute their waters, but have also reached initial agreements with the Cusco Regional Government in support of the project."

It should be noted that consultations with community members regarding the three proposed landfills occurred in June and July, 2013, six months after the initial draft ESIAs for the Cusco landfill was disclosed to the public. Furthermore, as the draft ESIA's for the Calca and Urumbamba landfills are not yet finalized, additional consultation with stakeholders is necessary. According to The Bank, consultation for each landfill draft ESIA is currently being scheduled.

ACCOUNTABILITY MECHANISM OF WORLD BANK

The World Bank Inspection Panel is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by a World Bank-financed project. If you submit a complaint to the Inspection Panel, they may investigate to assess whether the World Bank is following its own policies and procedures for preventing harm to people or the environment. You can contact the Inspection Panel or submit a complaint by emailing ipanel@worldbank.org. You can learn more about the Inspection Panel and how to file a complaint at: http://ewebapps.worldbank.org/apps/ip/Pages/Home.aspx.