Assessment of National Policy on Benefit Sharing Tender - 14399830

Procurement Summary

Country: Papua New Guinea

Summary: Assessment of National Policy on Benefit Sharing in Hydropower Projects

Deadline: 01 Jul 2017

Posting Date: 28 Jun 2017

Other Information

Notice Type: Tender

TOT Ref.No.: 14399830

Document Ref. No.: 1245583

Competition: ICB

Financier: World Bank (WB)

Purchaser Ownership: -

Tender Value: Refer Document

CPV Classification

71314000 - Energy and related services

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Tender Details

Expression of Interest are invited for Assessment of National Policy on Benefit Sharing in Hydropower Projects.
The objective of this consultancy is to undertake an assessment to inform proposals regarding a sector-wide institutional and policy framework for the Government of PNG to enable long-term sharing of part of the economic benefits of hydropower projects with the communities that are adversely affected by and/or are hosting such projects.
Background
Hydropower can play an important role in PNGs energy mix. In addition to natural gas, PNG has abundant, untapped hydropower resources. Available studies indicate a potential of at least 10, 000 MW, ranging from micro- to mega-project scales. A more comprehensive assessment would likely show a greater potential, taking into consideration the mountainous terrain and high rainfall in many parts of the country. Only a fraction of this hydropower potential - less than 250 MW - has been harnessed to date, yet about 90 percent of the population lacks access to electricity, and power supply in the urban centers is insufficient to reliably meet demand.
Hydropower has a transformative potential for PNG because (i) if exploited, it could eventually supply all or most of the electricity demand in PNG for decades to come, provided the economics work and keeping in mind that PNG is also very rich in natural gas; (ii) it would generate cheaper clean power for a country currently characterized by poor access, low reliability, and more expensive fuels; and (iii) power export projects could lead to significant Government revenues with the potential for expenditure on socioeconomic development.
However, the substantial benefits that hydropower schemes may generate are not automatically shared across different stakeholders within society. While the adverse environmental and social impacts of hydropower projects are usually local, the major benefits may largely occur outside the affected areas. At the same time, hydropower projects are difficult and controversial to execute in PNG because of the significant environmental and social impacts that such projects may entail, and because the social context in PNG is highly complex, particularly regarding land ownership. Effective development of any hydropower project would therefore require that the Government of PNG (GoPNG) embarks on an upfront engagement with the communities that are adversely affected by and/or hosting hydropower projects so that the benefits of such projects are also shared with them in ways that address their needs and support sustainable local development.
Naoro Brown HPP context
The World Bank is funding a consultancy for preparing the NB HPP for investment. A Transaction Advisor was hired and has submitted a report containing a section on options for obtaining access to land for the HPP. As per the recommendations, a company, established by the winning bidder (the HPP Company) to undertake the Project, will need to (i) lease approximately 577 hectares of land for the installation and operation of the Facility, and (ii) obtain rights-of-way for the installation and operation of a 66 km transmission line that connects the Facility to PPLs grid system. Virtually the entire Project site and transmission corridor fall under a classification of land tenure known as Customary Land where at least three traditional kinship groups or clans have customarily used the area for farming, fishing and other activities. Under the Land Act of 1996, customary land owners collectively hold a legal title over Customary Land and cannot dispose of such land to foreign investors. The HPP Company will have at least three options to acquire leasehold rights over Customary Land that falls within the Project site.
Objective
The objective of this consultancy is to undertake an assessment (as described below) to inform proposals regarding a sector-wide institutional and policy framework for the GoPNG to enable long-term sharing of part of the economic benefits of hydropower projects with the communities that are adversely affected by and/or are hosting such projects.
Tasks
The assessment to inform options regarding an institutional and policy framework for benefit sharing in the hydropower sector will comprise six main tasks in phases 1 and 2.
Phase 1

1. Review the approaches that have been used in natural resource extraction projects (e.g. gas, oil, minerals, timber) in PNG to establish benefit sharing mechanisms with customary landowning communities. Assess the lessons that can be drawn from these approaches with regard to (i) forms and inclusiveness of consultation with local communities (gender, age, poverty/vulnerability), (ii) types of benefits (incl. whether one-off or continuing long-term), (iii) equity of access to benefits (gender, age, poverty/vulnerability), (iv) durability of the benefit sharing agreements, and (v) role of local government.

2. Assess the existing laws, regulations and institutional frameworks relevant to the engagement by natural resource extraction projects with customary landowning communities and agreements on benefit sharing arrangements to identify (i) gaps, (ii) deficient or contradictory issues that need to be addressed, and (iii) lessons that would be relevant for policy, regulations, and institutional frameworks for benefit sharing in the hydropower sector.

3. Assess international experience on benefit sharing in the hydropower sector (e.g. World Bank, Asian Development Bank, Canada), and draw lessons of relevance for the establishment of policy, regulations, and institutional frameworks for benefit sharing in PNGs hydropower sector.

4. Based on the above assessments, make recommendations regarding (i) the sector-wide policy, regulatory, and institutional frameworks required to establish benefit sharing with communities adversely affected by and/or hosting hydropower projects in PNG, and (ii) a strategy for the process to achieve these recommendations.

5. The effective development of any hydropower project would require upfront engagement by the Government to address major environmental and social aspects, including gender issues. While the status of women varies widely across PNG, there are generally significant gender inequalities that have tended to increase over time. Women are often excluded when customary land is leased, or benefit sharing agreements are negotiated, and rarely have the right to claim a direct share of leases, royalties or compensation payments including for land acquisition. Particular efforts are therefore needed in project preparation and implementation to ensure that women are consulted and obtain access to compensation and benefits. The Consultant shall study these issues and recommend how to include the gender issue in benefit sharing.
Phase 2

6. Consultations will be undertaken as follows with relevant government entities, civil society organizations, and communities affected by/hosting the planned Naoro-Brown HPP:

a. Since the planned Naoro-Brown HPP is the first HPP in PNG that would include benefit sharing arrangements with communities affected by/hosting an HPP, consultations will be conducted with these communities to obtain their views and preferences regarding options for benefit sharing arrangements. These consultations should be conducted as part of the research process, but after the Consultant has reviewed PNG and international experience on such options and lessons learned so that they can be shared during the consultations, and the consultations should be comprehensive and inclusive with regard to the gender, age, and poverty/vulnerability differences in the communities consulted.

b. Consultation will be undertaken on the findings and recommendations of the Consultants Draft Report with relevant government entities and civil society organizations.

c. The Consultants Final Report should include description of the issues raised during the consultations and proposed options to address these.

Documents

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