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EXECUTIVE SUMMARY

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INTRODUCTION PT Lintas Marga Sedaya (LMS) is responsible for the construction and operation of the proposed Cikampek-Palimanan Toll Road Project (the “Project”) situated in the Province of West Java, Indonesia, The Project has gained approval through the Republic of Indonesia‟s legal process to assess environmental and social impacts and risks of the Project in the form of the Analisis Mengenai Dampak Linkungan (AMDAL). In order to secure Project financing from Equator Principles Financial Institutions this Environmental, Social and Health Impact Assessment (ESHIA) has been prepared to reflect the requirements of the International Finance Corporations (IFC) Performance Standards and the Equator Principles.

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PROJECT BACKGROUND

1.2.1

Proponent The proposed Toll Road is being developed under a build and operate contract between the Government of the Republic of Indonesia‟s Toll Road Regulatory Body (BPJT), Department of Public Works and PT Lintas Marga Sedaya (LMS). The Project, being part of the overall Trans Java Toll Road, is specifically to construct and operate a 116.4 km section of road from Cikampek to Palimanan in the east. The corridor selection, land acquisition and local regulatory permitting was undertaken by the BPJT, prior to LMS taking over the Project as part of the Build and Operate model that has been adopted for the Trans Java Toll Road. PT LMS will be the primary owner and operator of the Project. Throughout the construction phase, it is proposing to engage a specific project management firm to guide the process from the initial ground breaking, to delivery of the final operational road. This construction project management firm will in turn be responsible for the construction companies who are engaged to deliver the works. Due to the length of the Project, construction has been divided into six discrete sections, each of which will go through a separate tender process. The breakdown of these sections is shown within Figure 1.

Figure 1

Proposed Cikampek to Palimanan Toll Road Alignment

1.2.2

Area The Project is located wholly with the province of West Java. The western end of the Toll Road is located to the east of Jakarta at Cikampek, while the eastern end of the Toll Road is located approximately 50km from the border with Central Java, at Palimanan. The Toll Road once constructed will pass through and connect the Regencies of Puwakarta, Subang, Indramayu, Majalengka and Cirebon (Figure 1). The land elevation ranges between approximately 20 metres above sea level (mASL) on the eastern coastal plains to a maximum of 100 mASL at Subang further west on the Toll Road route. The proposed route of the Toll Road will traverse a range of diverse land types, across an area known predominately for agricultural production. Falling administratively within five Regencies, 24 Districts and 62 villages, the alignment passes through a variety of land types. These include irrigated rice fields, agricultural gardens, plantation forests, bare land, rain-fed rice fields, plantations and residential settlements. The predominant zonings within the vicinity of the alignment include Forest Plantation Areas, Agricultural Areas, Industrial Areas and Settlement Areas.

1.2.3

Project Description The Project is part of the overall Trans Java Toll Road, and will require the construction and operation of a 116.4 km section of road from Cikampek to Palimanan in the east. The project will be developed as six separate sections, each potentially being developed by separate construction companies. The Right of Way (ROW) acquired for all sections of the Toll Road is 60m wide. The road is expected to have a speed limit of up to 120km/hr and is proposed to accommodate two lanes of traffic in each direction, with each lane being 3.60m in width. A median strip of approximately 13m will separate the two directions of traffic. The outer shoulder width will be on average approximately 3m each side. Connections to local road networks will be provided via seven interchanges constructed along the route (Figure 1). To avoid impacts on the existing road and pedestrian networks, road overpasses and underpasses will be constructed along with pedestrian overpasses. Additionally, due to the large amount of both natural and man-made water bodies within the region, a network of bridges, box culverts and drainage tunnels have been incorporated into the design. Constructon is anticipated to take approximately 30 months and will require land clearing and earthworks prior to the commencement of construction. Prior to construction survey and final alignment selection will occur along with engineering

design, land acquisition, environmental and social impact assessment works, preliminary clearing of forestry and plantation vegetation and removal of structure on land already acquired. The operations stage will involve the general day to day running of the private toll road and any ongoing maintenance requirements. 1.2.4

Project Alternatives A range of Project alternatives have been explored throughout the pre feasibility and feasibility phases. This has included consideration of various Toll Road route options and ongoing consideration of route amendments following preferred route selection. The no go alternative has not been given serious consideration for some time owing to the strategic importance of an improved road transportation route. In addition the Project has been part of the social landscape for a number of year (primarily through the land acquisition process) and there would be a number of socio-economic benefits which have been planned for which would not go ahead. The first initial feasibility study for the project was undertaken between 1988 and 1990 and considered a number of environmental, social and engineering factors in the identification of possible road alignments. Following initial screening, detailed analysis was undertaken of three potential alignments with each of these scored against environmental and socio economic impacts, economic efficiency and financial efficiency. Based on the outcomes of this assessment, it was concluded that Alternative B-1 was the optimal route and this has been utilised in subsequent design work. Since this alignment was selected, the alternatives assessment has been ongoing to ensure that the best possible environmental and social outcomes are secured, whilst limiting the overall alignment changes required, and still ensuring that the Project meets its objectives Whilst there have been some changes to the location of interchanges, the selected alternative has remained primarily unchanged over the past 22 years and has formed the basis for National and Provincial level government strategic and spatial planning.

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BIO-PHYSICAL ENVIRONMENT BASELINE, IMPACTS AND MITIGATION MEASURES

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Terrestrial Biodiversity The Toll Road will primarily be routed through modified landscapes consisting of irrigated rice fields, agricultural gardens, production forest, bush, bare land, rain-fed rice fields, plantations, and residential settlements. Consistent with such landscapes, there are no large contiguous areas of natural vegetation within the Project area.

Most likely as a result of past human disturbance within the project area, baseline biodiversity studies did not find any significant biodiversity values to be associated with the proposed road alignment. Subsequently the project was considered unlikely to have the potential to significantly affect local biodiversity values. 1.4

PHYSICAL ENVIRONMENT BASELINE, IMPACTS AND MITIGATION MEASURES

1.4.1

Surface Water The Toll Road crosses more than 70 watercourses including rivers and drains of varying size and flow capacity. A large number of these watercourses are man made canals which supply irrigation water for rice production. Surface water quality indicated that the river systems are currently affected by domestic and farming wastes with many water quality parameters exceeding relevant standards. The assessment found that, while impacts to surface water flows and quality as a result of road construction and operation were likely, impacts were capable of being managed through the adoption of appropriate mitigation and measures.

1.4.2

Groundwater Aquifers along the Toll Road route were identified as a source of clean water for local residents however testing did indicate that quality is likely to have been affected by rice production in some areas. Only localised impacts to groundwater levels and quality were considered to have the potential to occur as a result of the proposal. These were considered unlikely to be significant while the potential for spills and leaks is capable of being effectively managed through the adoption of appropriate handling and spill response procedures.

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Air Quality The Project will introduce emission sources over its entire length during both the construction and operational phase which will have the potential to impact on local air quality. The Project area has historically been exposed to a number of air quality emissions sources such as traffic, industry and quarrying activities (particularly at the eastern end of the alignment). However, given the introduction of a continuous source of emissions in close proximity to a number of sensitive receptors, and also potential emissions sources during construction, an assessment of air quality impacts was considered necessary. For operations the impact assessment concluded that the maximum predicted concentrations for all considered species and averaging periods at all of the identified sensitive receptors were well within the adopted assessment criteria. In relation to construction it was concluded that emissions from dust and other fugitive sources could be effectively managed through the adoption of appropriate mitigation measures.

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Noise and Vibration The Project will be introducing a new linear noise source over its entire length, with noise impacts expected to be felt during both the construction and operational phases. Whilst the West Java Province is a heavily populated area and therefore subject to a range of noise and vibration generating activities, there will be areas the Project bisects which have been isolated from such activities and will therefore be introducing the first major noise source into these areas. Additionally, there are a number of sensitive receptors which will be in close proximity which whilst already exposed to noisy activities, may be impacted upon by the introduction of a continuous noise source. Additional noise studies are being undertaken to ensure that potential impacts are adequately quantified and to ensure that proposed mitigation measures are capable of bringing noise levels to within acceptable limits. Based on the results of the impact assessment completed so far, it is considered that impacts as a result of construction and operation are manageable.

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SOCIO-ECONOMIC ENVIRONMENT BASELINE, IMPACTS AND MITIGATION MEASURES

1.5.1

Community Health and Safety Impacts as a result of the project on community health, community safety during construction and operations, labour rights and standards and workplace incidents and injuries were considered as part of the social impact assessment. The impact assessment found that potential impacts were likely to be effectively mitigated through the adoption of appropriate health and safety standards, effective contractor management processes and also the development and implementation of other project wide procedures and manuals.

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Cultural Heritage Impacts to tangible and intangible cultural heritage values were considered as part of the social impact assessment. Two cultural heritage sites are located within the toll road corridor and will be directly impacted by the project. These two sites were not considered to be archaeologically significant but are considered to be of cultural and historic value to the local community. Consultation with local communities is continuing to ensure that access to these sites will be maintained, either through relocation to another location or provision of access as part of the road design. A chance find procedure will be implemented during construction to manage any artefacts identified during construction. The „ruwatan bumi‟ ritual was identified as an important cultural practice associated with farming activities along the toll road route. This practise was considered to be most important within the Subang Regency given the prominence of agricultural activity within this area. While this practice will continue it is expected that this

ritual may become less commonly practiced owing to the potential for agricultural lands to be transformed into industrial lands as a result of the Project. 1.5.3

Land Acquisition A land acquisition process was established for the Project in accordance with Presidential Regulation No. 36 and No. 65 year 2006, with the process of acquisition and compensation led by the Land Acquisition Team (TPT) in the province level and coordinated by the Land Acquisition Committee (P2T). The P2T is comprised of representatives of various Government Agencies in the level of regency, sub district, and village, acting on behalf of the Indonesian Government. During the Land Acquisition Audit process, it was identified that total of 1,011.73 Ha of land was documented for land acquisition. The scope of area which is affected by the Project, includes five regencies, 25 sub districts, and 62 villages. A land valuation methodology was adopted for the project to provide a fair and equitable process for determine compensation for affected land holders. This included ongoing public consultation and negotiation as well as establishment of a grievance mechanism. The following impacts associated with land acquisition for the project were considered; 

loss of asset;

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loss of income;

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change in land valuation;

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land dislocation; and

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changes in social networks.

The Project and land acquisition process was identified as causing considerable impacts to local communities. While ongoing benefits of the project have been documented it was considered that impacts as a result of the land acquisition process can be adequately managed through the community consultation and grievance mechanism process established for the Project. In addition to this appropriate management of the construction process and contractor management would assist in reducing impacts to local communities. 1.6

CUMULATIVE IMPACTS Both adverse and beneficial cumulative impacts were identified and considered in relation to the project. Potential adverse cumulative impacts include the flow on affect from immigration from people seeking employment, the development of illegal business hubs around construction site camps and elements of the operational road, air and noise impacts, and biodiversity loss. It is considered that through the

implementation of all the mitigation measures within this document that any potential adverse cumulative impacts are capable of being effectively managed. There are however a range of potential beneficial cumulative impacts, such as the spatial planning consequences as a result of the development of the road, flow on business and economic impacts, improvement of local traffic flow and impacts to the broader national road network and economy. 1.7

ENVIRONMENTAL AND SOCIAL MANAGEMENT A framework Environmental and Social Management Plan (ESMP) has been developed to provide information and instruction as to how the environmental, health and safety (EHS), security and community aspects of the Project will be managed. This document has been developed to ensure that all the management and mitigation measures developed within the ESHIA are implemented such that all identified impacts can be successfully ameliorated.